AB 2818, as amended, Chiu. Property taxation: community land trust.
Existing law requires the county assessor to consider, when valuing real property for property taxation purposes, the effect of any enforceable restrictions to which the use of the land may be subjected, including, but not limited to, zoning, recorded contracts with governmental agencies, and various other restrictions imposed by governments.
Thisbegin delete bill would prohibit the county assessor, when valuingend deletebegin insert bill, for lien dates occurring on and after January 1, 2017, in assessingend insert an owner-occupied single-family dwelling or owner-occupied unit in a multifamilybegin delete dwellingend deletebegin insert
dwelling,end insert and the land on whichbegin delete itend deletebegin insert the dwelling or unitend insert is situatedbegin delete that isend delete required for the convenient occupation and use of that dwelling orbegin delete unit, if the dwelling or unit is on land leased to the owner by a community land trust, as defined, from valuing the dwelling or unit and the land at any value greater than the purchase price for that dwelling or unit. The bill would apply this
prohibition only to a dwelling or unit and land that is owned and occupied by persons and families of low or moderate income, as defined.end deletebegin insert unit by persons and families of low or moderate income, would require the value of the dwelling or unit and the land to be presumed to be the purchase price of the dwelling or unit.end insert
This bill, for lien dates occurring on and after January 1, 2017, in assessing a dwelling or unit owned by a limited equity housing cooperative or by a member-occupant or resident shareholder of the limited equity housing cooperative, and the land on which the dwelling or unit is situated required for the convenient occupation and use of the dwelling or unit by persons and families of low or moderate income, would also require the value of the dwelling or unit and the land to be presumed to be the purchase price of the share conveying an exclusive right to occupancy and possession of that dwelling or unit.
end insertExisting property tax law, in accordance with the California Constitution, provides for a “welfare exemption” for property used exclusively for religious, hospital, scientific, or charitable purposes and that is owned or operated by certain types of nonprofit entities, if certain qualifying criteria are met.
This bill, on and after January 1, 2017, would provide that property is within the welfare exemption if that property is owned and operated by a nonprofit corporation, otherwise qualifying for the welfare exemption, thatbegin delete is organized for the specific and primary purpose ofend deletebegin insert has as
one of its primary purposes theend insert
creating and maintainingbegin insert ofend insert permanently affordable single-family or multifamily residences to which specified conditions apply.begin delete Thisend deletebegin insert Theend insert bill, in the case of property not previously designated as open space, would prohibit this exemption from being denied on the basis that the subject property does not currently include a single-family or multifamily residence as so described or a single-family or multifamily residence as so described that is in the course of construction.begin insert The bill would require the exemption to apply to a property for no more than 5 years from the date any of certain restrictions are recorded against the
property.end insert
By imposing new duties upon local government officials, this bill would impose a state-mandated local program.
The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.
This bill would provide that, if the Commission on State Mandates determines that the bill contains costs mandated by the state, reimbursement for those costs shall be made pursuant to these statutory provisions.
Section 2229 of the Revenue and Taxation Code requires the Legislature to reimburse local agencies annually for certain property tax revenues lost as a result of any exemption or classification of property for purposes of ad valorem property taxation.
This bill would provide that, notwithstanding Section 2229 of the Revenue and Taxation Code, no appropriation is made and the state shall not reimburse local agencies for property tax revenues lost by them pursuant to the bill.
This bill would take effect immediately as a tax levy.
Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: yes.
The people of the State of California do enact as follows:
Section 401.21 is added to the Revenue and
2Taxation Code, to read:
(a) begin deleteWhen valuing end deletebegin insertIn assessing end insertan owner-occupied
4single-family dwelling or owner-occupied unit in a multifamily
5begin delete dwellingend deletebegin insert dwelling,end insert and the land on whichbegin delete itend deletebegin insert
the dwelling or unitend insert
6 is situated that is required for the convenient occupation and use
7of that dwelling orbegin delete unit, if the dwelling or unit is on land leased to begin insert
unit by persons and
8the owner by a community land trust, the assessor shall not value
9the dwelling or unit and the land at any value greater than the
10purchase price for that dwelling or unit.end delete
11families of low or moderate income, the value of the dwelling or
12unit and the land shall be presumed to be the purchase price of
13the dwelling or unit.end insert
14(b) This section shall only apply to a dwelling or unit and land
15that is owned and occupied by persons and families of low or
16moderate income.
17
(b) In assessing a dwelling or unit owned by a limited equity
18housing cooperative or by a member-occupant or resident
19shareholder of the limited equity housing cooperative, and the
20land on which the dwelling or unit is situated that is required for
21the convenient
occupation and use of the dwelling or unit by
22persons and families of low or moderate income, the value of the
23dwelling or unit and the land shall be presumed to be the purchase
P4 1price of the share conveying an exclusive right to occupancy and
2possession of that dwelling or unit.
3(c) For purposes of this section, all of the following definitions
4shall apply:
5(1) “Affordability restrictions” include, but are not limited to,
6any of the following:
7(A) The dwelling or unit can only bebegin delete sold orend deletebegin insert rented, sold, orend insert
8 resold to persons and families of low or moderate
income to be
9occupiedbegin delete by the owner as his or herend deletebegin insert
as aend insert principal place of
10residence.
11(B) Thebegin insert sale orend insert resale price of the dwelling or unit is determined
12by a formula that ensuresbegin delete affordabilityend deletebegin insert the dwelling or unit has a
13purchase price that is affordableend insert to persons and families of low
14or moderate income.
15
(C) The rent collected from the dwelling or unit does not exceed
16the maximum rent allowable to be collected from persons and
17families of low or moderate income.
18(C)
end delete
19begin insert(D)end insert There is a purchase optionbegin insert for the dwelling or unitend insert in favor
20of the community landbegin delete trust.end deletebegin insert trust intended to preserve the dwelling
21or unit as affordable to persons and families of low or moderate
22income.end insert
23
(E) Any restriction that ensures the dwelling or unit is to remain
24affordable to persons and families of low or moderate income by
25recorded deed, deed restriction, ground lease,
covenant,
26memorandum, or other recorded instrument.
27
(F) Any restriction in a recorded instrument from which one of
28the following public agencies or officials has made a finding that
29the restriction serves the public interest to create and preserves
30the affordability of residential housing for persons and families
31of low or moderate income:
32
(i) The director of the local housing authority or equivalent
33agency.
34
(ii) The county counsel.
35
(iii) The director of a county housing department.
36
(iv) The city attorney.
37
(v) The director of a city housing department.
38(2) “Community land trust” means a nonprofit corporation,
39otherwise qualifying for exemption under Section 214, thatbegin delete is begin insert
has as one of
40organized for the specific and primary purpose ofend delete
P5 1its primary purposes theend insert creating and maintainingbegin insert ofend insert permanently
2affordable single-family or multifamily residences to which both
3of the following conditions apply:
4(A) All residences on the land are soldbegin delete to, and occupied by,end deletebegin insert to
5a qualified owner to be occupied byend insert persons and families of low
6or moderatebegin delete income,end deletebegin insert income as their primary residence,end insert and the
7land on whichbegin delete itend deletebegin insert
the dwelling or unitend insert is situatedbegin delete that is requiredend deletebegin insert is
8leased by the nonprofit corporation to the qualified ownerend insert for the
9convenient occupation and use of that dwelling or unitbegin delete is leased
10to those owners by the nonprofit
corporationend delete
11of 99begin delete years, including renewal option.end deletebegin insert years.end insert
12(B) Thebegin delete leasehold interest is limited byend deletebegin insert dwelling or unit is
13subject toend insert affordabilitybegin delete restrictions recorded on the land lease or begin insert
restrictions.end insert
14other similar recorded instrument.end delete
15
(3) “Limited equity housing cooperative” has the same meaning
16as that term is defined in Section 817 of the Civil Code.
17(3)
end delete
18begin insert(4)end insert “Persons and families of low or moderate income” has the
19same meaning as that term is defined in Section 50093 of the
20Health and Safety Code.
21
(5) “Qualified owner” means either of the following:
22
(A) A limited equity housing cooperative.
23
(B) Persons and families of low or moderate income.
24
(6) “Purchase price” means a price that does not exceed the
25sale or resale formula that ensures the dwelling or unit has a
26purchase price that is affordable to persons and families of low
27or moderate income.
28(d) This section shall apply to lien
dates occurring on and after
29January 1, 2017.
Section 214.17 is added to the Revenue and Taxation
31Code, to read:
(a) Property is within the exemption provided by
33Sections 4 and 5 of Article XIII of the California Constitution if
34that property is owned and operated by a nonprofit corporation,
35otherwise qualifying for exemption under Section 214, thatbegin delete is begin insert has as one of
36organized for the specific and primary purpose ofend delete
37its primary purposes theend insert creating and maintainingbegin insert ofend insert permanently
38affordable single-family or multifamily residences in which both
39of the following conditions
apply:
P6 1(1) All residences on the land are intended for ownershipbegin delete and bybegin insert a qualified owner to be
2occupancy as a primary residenceend delete
3occupied byend insert persons and families of low or moderatebegin delete income,end delete
4begin insert income as their primary residence,end insert and the land on whichbegin delete itend deletebegin insert the
5residenceend insert is situatedbegin delete that is requiredend deletebegin insert
is leased by the nonprofit
6corporation to the qualified ownerend insert for the convenient occupation
7and use of thatbegin delete residence is leased to those owners by the nonprofit begin insert residenceend insert for abegin insert renewableend insert term
of 99
8corporationend deletebegin delete years, including begin insert years.end insert
9renewal options.end delete
10(2) Thebegin delete leasehold interest is limited byend deletebegin insert residence is subject toend insert
11 affordabilitybegin delete restrictions recorded on the land lease or other similar begin insert restrictions.end insert
12recorded instrument.end delete
13(b) In the case of property not previously
designated as open
14space, the exemption provided by subdivision (a) may not be
15denied to a property on the basis that the property does not
16currently include a single-family or multifamily residence, as
17described in subdivision (a), or a single-family or multifamily
18residence, as described in subdivision (a), that is in the course of
19construction.
20
(c) The exemption required pursuant to this section shall apply
21to a property for no more than five years from the date any
22restriction described in subparagraph (E) or (F) of paragraph (1)
23of subdivision (d) is recorded against the property.
24(c)
end delete
25begin insert(d)end insert For purposes of this section,begin delete bothend deletebegin insert allend insert of the following shall
26apply:
27(1) “Affordability restrictions” include, but are not limited to,
28any of the following:
29(A) The residence can only bebegin delete soldend deletebegin insert rented, sold,end insert or resold to
30persons and families of low or moderate income to be occupied
31begin delete by the owner as his or herend deletebegin insert
as aend insert
principal place of residence.
32(B) Thebegin insert
sale orend insert resale price of the residence is determined by
33a formula that ensuresbegin delete affordabilityend deletebegin insert the residence has a purchase
34price that is affordableend insert to persons and families of low or moderate
35income.
36
(C) The rent collected from the residence does not exceed the
37maximum rent allowable to be collected from persons and families
38of low or moderate income.
39(C)
end delete
P7 1begin insert(D)end insert There is a purchase optionbegin insert for the residenceend insert in favor of the
2
begin delete community land trust.end deletebegin insert nonprofit organization intended to preserve
3the residence as affordable to persons and families of low or
4moderate income.end insert
5
(E) Any restriction that ensures the residence is to remain
6affordable to persons and families of low or moderate income by
7recorded deed, deed restriction, ground lease, covenant,
8memorandum, or other recorded instrument.
9
(F) Any restriction in a recorded instrument from which one of
10the following public agencies or officials has made a finding that
11the restriction serves the public interest to create and preserve the
12affordability of residential housing for persons and families of low
13or moderate income:
14
(i) The director of the local housing authority or equivalent
15agency.
16
(ii) The county counsel.
17
(iii) The director of a county housing department.
18
(iv) The city attorney.
19
(v) The director of a city housing department.
20
(2) “Limited equity housing cooperative” has the same meaning
21as that term is defined in Section 817 of the Civil Code.
22(2)
end delete
23begin insert(3)end insert “Persons and families of low or moderate income” has the
24same meaning as that term is defined in Section 50093 of the
25Health
and Safety Code.
26
(4) “Qualified owner” means either of the following:
27
(A) A limited equity housing cooperative.
28
(B) Persons and families of low or moderate income.
29(d)
end delete
30begin insert(e)end insert This section shall apply to lien dates occurring on and after
31January 1, 2017.
If the Commission on State Mandates determines that
33this act contains costs mandated by the state, reimbursement to
34local agencies and school districts for those costs shall be made
35pursuant to Part 7 (commencing with Section 17500) of Division
364 of Title 2 of the Government Code.
Notwithstanding Section 2229 of the Revenue and
38Taxation Code, no appropriation is made by this act and the state
39shall not reimburse any local agency for any property tax revenues
40lost by it pursuant to this act.
This act provides for a tax levy within the meaning of
2Article IV of the Constitution and shall go into immediate effect.
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