2023 California Code › Health and Safety Code - HSC › DIVISION 31 - HOUSING AND HOME FINANCE › PART 1 - STATE HOUSING POLICY AND GENERAL PROVISIONS › CHAPTER 3.6 - Low-Income Housing Credit › Section 50199.23.

50199.23. (a) For the purposes of this section, the following definitions apply:
(1) “Control” means exercising the power to make policy decisions and active involvement in the day-to-day management of a business enterprise. Being an officer or director does not alone demonstrate active involvement.
(2) “Disabled veteran business enterprise” has the same meaning as defined in Section 999 of the Military and Veterans Code.
(3) “LGBT business enterprise” means a business enterprise that is at least 51-percent owned by a lesbian, gay, bisexual, or transgender person or persons; or, in the case of any publicly owned business, at least 51 percent of the stock of which is owned by one or more lesbian, gay, bisexual, or transgender persons; and whose management and daily business operations are controlled by one or more of those individuals.
(4) “Minority business enterprise” means a business enterprise that is at least 51-percent owned by a minority group or groups, or, in the case of any publicly owned business, at least 51 percent of the stock of which is owned by one or more minority groups, and whose management and daily business operations are controlled by one or more of those individuals. The contracting utility shall presume that minority includes African Americans, Hispanic Americans, Native Americans, and Asian Pacific Americans.
(5) “Women business enterprise” means a business enterprise that is at least 51-percent owned by a woman or women, or, in the case of any publicly owned business, at least 51 percent of the stock of which is owned by one or more women, and whose management and daily business operations are controlled by one or more of those individuals.
(b) (1) Subject to subdivision (c), a housing sponsor that receives an allocation on or after January 1, 2024, shall annually submit a report to the committee, in a form that the committee shall require, and at the time that the committee shall annually designate.
(2) The reporting period shall cover all contract activities directly related to the development and construction of a housing project from the first day following receipt of the credit allocation with an option for the housing sponsor to include prior contracting activities. The final report shall cover the year that the project is placed in service.
(3) The report shall include all of the following:
(A) A detailed and verifiable plan for increasing procurement opportunities for women, minority, disabled veteran, and LGBT business enterprises in all categories used in the development and construction of the housing projects, including technology, goods, services, and construction.
(B) In the second year of reporting, short- and long-term diversity goals and timetables, but not quotas, related to contractor race and ethnicity, contractor gender, and contractor census-tract income distribution.
(C) In the third year of reporting, aggregate level data for contractors headquartered or having a primary location in low-income census tracts in the state.
(D) Proposed methods and strategies for increasing the diversity of suppliers and subcontractors engaged by housing sponsors and prime contractors, such as women, minority, disabled veteran, and LGBT business enterprises.
(E) Procurement data for the year and the aggregate data for each project funded in whole or in part with moneys raised by a credit allocated on or after January 1, 2024. The data shall include all of the following:
(i) The number and dollar amount of all contracts in all categories, and by each category of contract, that was issued during the year. The categories of contracts shall include technology, goods, services, and construction.
(ii) The number and dollar amount of all contracts in all categories, and by each category of contract, that was issued during the year to each business-owner group, including women business enterprises, minority business enterprises, disabled veteran business enterprises, and LGBT business enterprises.
(iii) The total number and dollar amount of contracts issued to subcontractors for each business-owner group, including women business enterprises, minority business enterprises, disabled veteran business enterprises, and LGBT business enterprises, by each category of contract.
(iv) The number and dollar amount of all contracts, including subcontracts, and by each category of contract issued during the year, for businesses headquartered or having a primary location in a low-income census tracts in the state.
(v) The number and dollar amount of all contracts in all categories, and by each category of contract, that were issued for a project funded in whole or in part through moneys raised by notice of allocation of a credit on or after January 1, 2024. This may include information on contracts related to the project that were issued prior to the credit allocation.
(vi) The number and dollar amount of all contracts in all categories, and in each category of contract, that were issued for a project specified in clause (v) to each business-owner group, including women business enterprises, minority business enterprises, disabled veteran business enterprises, and LGBT business enterprises.
(vii) The total number and dollar amount of contracts issued to subcontractors for each business-owner group specified in clause (vi) by each category of contract.
(viii) The number and dollar amount of all contracts, including subcontracts, for a project specified in clause (iv) for businesses headquartered or having a primary location in low-income census tracts in the state.
(4) Commencing in 2029, the goals established by the committee pursuant to paragraph (3) of subdivision (d) shall be incorporated into the annual reports. Housing sponsors may adopt higher goals for their own activities.
(c) (1) The requirement to develop a plan and submit a report pursuant to subdivision (b) applies to all housing sponsors that have completed five or more housing projects by January 1, 2023, or that have received an annual low-income housing tax credit allocation of one million dollars ($1,000,000) or more. For housing sponsors that have not completed five or more housing projects by January 1, 2023, or have not received an annual low-income housing tax credit allocation of one million dollars ($1,000,000) or more, the plan and reporting requirements shall begin in the year following the commencement of construction on their fifth housing project for which they have received public money or in the year following the receipt of an annual low-income housing tax credit allocation of one million dollars ($1,000,000) or more, as applicable.
(2) It is the Legislature’s intent that housing sponsors that are not required to adopt a supplier and contractor diversity plan, pursuant to this section, are encouraged to voluntarily adopt a plan and report on the outcomes of those plans for increasing women, minority, disabled veteran, and LGBT business enterprise procurement in all categories of contracts, including technology, goods, services, and construction.
(d) (1) The committee shall develop guidelines, consistent with the requirements of this section, for housing sponsors that have received a credit allocation on or after January 1, 2024, except as provided in subdivision (c), to use in preparing detailed and verifiable supplier and contractor diversity plans required in subdivision (b).
(A) The guidelines shall include a requirement that women, minority, disabled veteran, and LGBT business enterprises be certified by a third party. The committee may align its certification policies with those used by the Public Utilities Commission in implementing Article 5 (commencing with Section 8281) of Chapter 7 of Division 4 the Public Utilities Code.
(B) When developing the reporting guidelines, the committee shall consider the reporting frameworks, forms, and definitions used in other supplier and contractor diversity programs in which housing sponsors may be reporting.
(C) The purpose of the guidelines is to encourage greater economic opportunity for women, minority, disabled veteran, and LGBT business enterprises.
(2) The committee shall annually consider the information and data from the reports submitted pursuant to this section and may modify the guidelines adopted pursuant to this subdivision.
(3) By March 1, 2028, the committee shall establish supplier and contractor participation goals for women, minority, disabled veteran, and LGBT business enterprises.
(4) The committee shall post the individual reports received from the housing sponsors, as required pursuant to subdivision (b), on the committee internet website.
(e) This section shall not limit or otherwise affect eligibility for any credit under, or the requirements for compliance with, Section 12206, 17058, or 23610.5 of the Revenue and Taxation Code.
(f) The provisions of this section are severable. If any provision of this section or its application is held invalid, that invalidity shall not affect other provisions or applications that can be given effect without the invalid provision or application.
(Amended by Stats. 2023, Ch. 131, Sec. 123. (AB 1754) Effective January 1, 2024. Conditionally inoperative as provided in Section 50199.18.)