(a)  Except as otherwise provided in subdivisions (b) and (c), no city or county shall be eligible to receive funds pursuant to this chapter if the city or county has adopted a general plan, ordinance, or other measure which directly limits, by number, either of the following:

(1)  The building permits that may be issued for residential construction.

(2)  The buildable lots which may be developed for residential purposes.

(b)  Subdivision (a) shall not apply to either of the following:

(1)  An ordinance adopted by a city or county which does any of the following:

(A)  Imposes a moratorium, to protect the public health and safety, on residential construction for a specified period of time, if, under the terms of the ordinance, the moratorium will cease when the public health and safety is no longer jeopardized by the construction.

(B)  Creates agricultural preserves pursuant to Chapter 7 (commencing with Section 51200) of Part 2 of Division 1 of Title 5 of the Government Code.

(C)  Was adopted pursuant to a specific requirement of a state or multistate board, agency, department, or commission.

(2)  A city or county which has a housing element that the department has found to be adequate pursuant to subdivision (c) of Section 65585 or which is deemed to be in compliance with the requirements of Article 10.6 (commencing with Section 65580) of Chapter 3 of Division 1 of Title 7 of the Government Code pursuant to Section 65586 of the Government Code at the time the city or county applies for funds under the program, unless a final order has been issued by a court in which the court determined that the housing element is not in compliance with Article 10.6 (commencing with Section 65580) of Chapter 3 of Division 1 of Title 7 of the Government Code.

(c)  A city or county which has adopted a general plan, ordinance, or other measure subject to the restrictions of subdivision (a), which are not exempted by subdivision (b), may, notwithstanding subdivision (a), receive funds pursuant to this chapter if the use of the funds is restricted for housing for persons and families of low or moderate income. However, applications from cities or counties which have not adopted a general plan, ordinance, or other measure subject to the restrictions of subdivision (a) shall, to the extent that eligible applications for grants exceed the amount available for distribution pursuant to this chapter, have priority over applications from cities or counties which have adopted such a general plan, ordinance, or other measure which are not exempted by subdivision (b).

(Added by Stats. 1983, Ch. 963, Sec. 1.)