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.
This bill, for lien dates occurring on and after January 1, 2017, in assessing an owner-occupied single-family dwelling or owner-occupied unit in a multifamily dwelling, and the land on which the dwelling or unit is situated required for the convenient occupation and use of that dwelling or 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.
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.
Existing 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, that has as one of its primary purposes the creating and maintaining of permanently affordable single-family or multifamily residences to which specified conditions apply. The 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. 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.
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) In assessing an owner-occupied single-family
4dwelling or owner-occupied unit in a multifamily dwelling, and
5the land on which the dwelling or unit is situated that is required
6for the convenient occupation and use of that dwelling or
unit by
7persons and families of low or moderate income, the value of the
8dwelling or unit and the land shall be presumed to be the purchase
9price of the dwelling or unit.
10(b) In assessing a dwelling or unit owned by a limited equity
11housing cooperative or by a member-occupant or resident
12shareholder of the limited equity housing cooperative, and the land
13on which the dwelling or unit is situated that is required for the
14convenient occupation and use of the dwelling or unit by persons
15and families of low or moderate income, the value of the dwelling
16or unit and the land shall be presumed to be the purchase price of
17the share conveying an exclusive right to occupancy and possession
18of that dwelling or unit.
19(c) For purposes of this section, all of the
following definitions
20shall apply:
21(1) “Affordability restrictions” include, but are not limited to,
22any of the following:
23(A) The dwelling or unit can only be rented, sold, or resold to
24persons and families of low or moderate income to be occupied
25as a principal place of residence.
26(B) The sale or resale price of the dwelling or unit is determined
27by a formula that ensures the dwelling or unit has a purchase price
28that is affordable to persons and families of low or moderate
29income.
30(C) The rent collected from the dwelling or unit does not exceed
31the maximum rent allowable to be collected from persons and
32families of low or moderate income.
P4 1(D) There is a purchase option for the dwelling or unit in favor
2of the community land trust intended to preserve the dwelling or
3unit as affordable to persons and families of low or moderate
4income.
5(E) Any restriction that ensures the dwelling or unit 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 andbegin delete preservesend delete
12begin insert
preserveend insert the affordability of residential housing for persons and
13families of low or 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) “Community land trust” means a nonprofit corporation,
21otherwise qualifying for exemption under Section 214, that
has as
22one of its primary purposes thebegin delete creating and maintainingend deletebegin insert creation
23and maintenanceend insert of permanently affordable single-family or
24multifamily residences to which both of the following conditions
25apply:
26(A) All residences on the land are sold to a qualified owner to
27be occupied by persons and families of low or moderate income
28as their primary residence, and the land on which the dwelling or
29unit is situated is leased by the nonprofit corporation to the
30qualified owner for the convenient occupation and use of that
31dwelling or unit for a renewable term of 99 years.
32(B) The dwelling or unit is subject to affordability restrictions.
33(3) “Limited equity housing cooperative” has the same meaning
34as that term is defined in Section 817 of the Civil Code.
35(4) “Persons and families of low or moderate income” has the
36same meaning as that term is defined in Section 50093 of the
37Health and Safety Code.
38(5) “Qualified owner” means either of the following:
39(A) A limited equity housing cooperative.
40(B) Persons and families of low or moderate income.
P5 1(6) “Purchase price” means a price that does not exceed the sale
2or resale formula that ensures the dwelling
or unit has a purchase
3price that is affordable to persons and families of low or moderate
4income.
5(d) This section shall apply to lien dates occurring on and after
6January 1, 2017.
Section 214.17 is added to the Revenue and Taxation
8Code, to read:
(a) Property is within the exemption provided by
10Sections 4 and 5 of Article XIII of the California Constitution if
11that property is owned and operated by a nonprofit corporation,
12otherwise qualifying for exemption under Section 214, that has as
13one of its primary purposes thebegin delete creating and maintainingend deletebegin insert creation
14and maintenanceend insert of permanently affordable single-family or
15multifamily residences in which both of the following conditions
16apply:
17(1) All residences on the land are intended for ownership by a
18qualified owner to be occupied by persons and families of low or
19moderate income as their primary residence, and the land on which
20the residence is situated is leased by the nonprofit corporation to
21the qualified owner for the convenient occupation and use of that
22residence for a renewable term of 99 years.
23(2) The residence is subject to affordability restrictions.
24(b) In the case of property not previously designated as open
25space, the exemption provided by subdivision (a) may not be
26denied to a property on the basis that the property does not
27currently include a single-family or multifamily residence, as
28described in subdivision (a), or a single-family or multifamily
29residence, as described in subdivision (a), that is in the course of
30construction.
31(c) The exemptionbegin delete requiredend deletebegin insert authorizedend insert pursuant to this section
32shall apply to a property for no more than five years from the date
33any restriction described in subparagraph (E) or (F) of paragraph
34(1) of subdivision (d) is recorded against the property.
35(d) For purposes of this section, all of the following shall apply:
36(1) “Affordability restrictions” include, but are not limited to,
37any of the following:
38(A) The residence can only be rented, sold, or resold to persons
39and families of low or moderate income to be occupied
as a
40principal place of residence.
P6 1(B) The sale or resale price of the residence is determined by a
2formula that ensures the residence has a purchase price that is
3affordable to persons and families of low or moderate income.
4(C) The rent collected from the residence does not exceed the
5maximum rent allowable to be collected from persons and families
6of low or moderate income.
7(D) There is a purchase option for the residence in favor of the
8nonprofit organization intended to preserve the residence as
9affordable to persons and families of low or moderate income.
10(E) Any restriction that ensures the residence is to remain
11affordable to persons and families of low or moderate income by
12recorded deed, deed restriction, ground lease, covenant,
13memorandum, or other recorded instrument.
14(F) Any restriction in a recorded instrument from which one of
15the following public agencies or officials has made a finding that
16the restriction serves the public interest to create and preserve the
17affordability of residential housing for persons and families of low
18or moderate income:
19(i) The director of the local housing authority or equivalent
20agency.
21(ii) The county counsel.
22(iii) The director of a county housing department.
23(iv) The city attorney.
24(v) The director of a city housing department.
25(2) “Limited equity housing cooperative” has the same meaning
26as that term is defined in Section 817 of the Civil Code.
27(3) “Persons and families of low or moderate income” has the
28same meaning as that term is defined in Section 50093 of the
29Health and Safety Code.
30(4) “Qualified owner” means either of the following:
31(A) A limited equity housing cooperative.
32(B) Persons and families of low or moderate income.
33(e) This section shall apply to lien dates occurring on and after
34January 1, 2017.
If the Commission on State Mandates determines that
36this act contains costs mandated by the state, reimbursement to
37local agencies and school districts for those costs shall be made
38pursuant to Part 7 (commencing with Section 17500) of Division
394 of Title 2 of the Government Code.
Notwithstanding Section 2229 of the Revenue and
2Taxation Code, no appropriation is made by this act and the state
3shall not reimburse any local agency for any property tax revenues
4lost by it pursuant to this act.
This act provides for a tax levy within the meaning of
6Article IV of the Constitution and shall go into immediate effect.
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