This client alert discusses some of the more significant changes that could affect issuers and borrowers in connection with awards of volume cap if the proposed regulations were adopted in their current form.

The California Debt Limit Allocation Committee (CDLAC) released proposed revisions to its regulations on September 23, 2016. Major changes include (i) requiring applicants to adopt written bond issuance and compliance policies (ii) changing the required form of compliance certificates, (iii) requiring certain new provisions to be added to bond regulatory agreements associated with qualified residential rental projects (QRRP) (iv) requiring that CDLAC receive a copy of the recorded regulatory agreement for a QRRP before releasing the associated performance deposit, (v) providing for greater post-issuance monitoring of the terms and conditions of an award of volume cap; and (vi) imposing conditions on certain types of subordinate cash-flow bonds paid with residual payments.