Bill Text: CA AB1229 | 2015-2016 | Regular Session | Amended
Bill Title: Senior Citizen Rent Increase Exemption Program.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Failed) 2016-02-01 - From committee: Filed with the Chief Clerk pursuant to Joint Rule 56. [AB1229 Detail]
Download: California-2015-AB1229-Amended.html
BILL NUMBER: AB 1229 AMENDED
BILL TEXT
AMENDED IN ASSEMBLY APRIL 9, 2015
INTRODUCED BY Assembly Member Campos
FEBRUARY 27, 2015
An act to amend Section 214 of the Revenue and Taxation
Code, relating to taxation, to take effect immediately, tax levy.
add and repeal Section 1954.532 of the Civil Code, and
to add and repeal Section 17503 of the Revenue and Taxation Code,
relating to rent control.
LEGISLATIVE COUNSEL'S DIGEST
AB 1229, as amended, Campos. Property taxation: welfare
exemption: rental housing and related facilities.
Senior Citizen Rent Increase Exemption Program.
Existing property tax law establishes a partial welfare
exemption for property used exclusively for rental housing and
related facilities, as defined, that are owned and operated by either
of any certain types of nonprofit entities or veterans'
organizations that meet specified exemption requirements, if either
of certain qualifying criteria are met. Existing law requires the
partial exemption to be equal to that percentage of the value of the
property that is equal to the percentage that the number of units
serving lower income households represents of the total number of
residential units in any year. For purposes of the exemption,
existing law defines "related facilities" to, among other things,
exclude any portions of the overall development that are nonexempt
commercial space. law authorizes local jurisdictions
to establish controls on the price of residential units that may be
offered for rent. Existing law, the Costa-Hawkins Rental Housing Act,
prescribes statewide limits on the application of local rent control
with regard to certain properties, including those that have a
certificate of occupancy issued after February 1, 1995.
This bill would specify that "related facilities" does not
include any portions of the overall development that are occupied
commercial space. bill, until January 1, 2019, would
enact the Senior Citizen Rent Increase Exemption Program (SCRIE
program), a demonstration project to be implemented in the County of
Alameda, the City and County of San Francisco, the County of Ventura,
and the County of Santa Clara. The program would permit an eligible
head of household in a rent-controlled property to apply to be exempt
from rent increases for a 12-month period, with the associated loss
of rent to be offset by a tax credit to be claimed by the landlord,
as provided. The bill would define an eligible head of household as
having certain characteristics, including being 62 years of age or
older, and having a combined annual household income of $50,000 or
less, more than 1/3 of which is spent on rent.
The bill would require the Department of Housing and Community
Development to provide advisory guidance to local rent control boards
regarding the implementation and administration of the SCRIE
program, to publicize the SCRIE program to senior citizens in
rent-controlled properties in the jurisdictions to which the program
applies, and to apply for federal funding for the program.
This bill would permit an eligible head of household, on and after
April 1, 2016, to apply annually to the appropriate local rent
control board, to be defined as a supervising agency, for a rent
increase exemption order and, if the relevant criteria are met, would
require the agency to issue the order to the head of household, with
a copy to his or her landlord along with information on the right to
claim a related tax credit. By increasing the duties of local
officials, the bill would impose a state-mandated local program.
The Personal Income Tax Law allows various credits against the tax
imposed by that law.
This bill would allow a credit against those taxes, for taxable
years beginning on or after January 1, 2016, and before January 1,
2020, for an amount equivalent to the rent a landlord does not
receive as a result of a tenant's participation in the SCRIE program.
The bill would prescribe the conditions pursuant to which the
landlord could claim the tax credit, including the requirement that
the credit be allowed only for the taxable year in which the taxpayer
incurred the loss of the rent resulting from the increase exemption
order. The bill would require the Department of Housing and Community
Development to make a specified report to the Legislature on the
program, which would include the feasability of establishing the
program statewide. The bill would make a statement of legislative
findings.
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, but its
operative date would depend on its effective date.
Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no yes .
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. (a) The Legislature finds and declares
all of the following:
(1) According to a Kaiser Family Foundation study, California's
seniors have the nation's highest poverty rate.
(2) Twenty percent of California adults over 65 years of age live
below the poverty threshold of about $16,000, when the higher cost of
housing and health care are taken into account.
(3) Nationally, homelessness among seniors is projected to rise by
33 percent between 2010 and 2020, and by 100 percent between 2010
and 2050, according to a 2010 report from the Homelessness Research
Institute.
(4) The Los Angeles Homeless Services Authority reports that from
2011 to 2013, inclusive, Los Angeles County had a 29.1 percent
increase in the number of homeless people 62 years of age and older.
(5) According to a March 2013 report of the National Low Income
Housing Coalition, California is the second least affordable state
behind Hawaii.
(6) According to the federal Department of Housing and Urban
Development, fair market rent in California for a two-bedroom
apartment is $1,341 a month. In order to afford this level of rent
and utilities, without paying more than 30 percent of income on
housing, a household needs to earn $4,470 monthly or $53,640
annually.
(7) Three out of the 10 most expensive metropolitan areas and six
out of the 10 most expensive counties nationally are in California.
(8) In order to slow the growing numbers of homeless senior
citizens being priced out of their homes, California must begin to
explore practical means to slow this disaster.
(b) The Legislature hereby enacts the Senior Citizen Rent Increase
Exemption Program to test whether the program is a viable method to
help California seniors remain in their homes.
SEC. 2. Section 1954.532 is added to the
Civil Code , to read:
1954.532. (a) This section establishes the Senior Citizen Rent
Increase Exemption Program, a demonstration project to be implemented
in the County of Alameda, the City and County of San Francisco, the
County of Ventura, and the County of Santa Clara in order to permit
an eligible head of household in a rent-controlled property to apply
for an exemption from rent increases and to provide his or her
landlord a tax credit in an amount equivalent to the rent increase
that the landlord otherwise would have received if not for that
exemption.
(b) For the purposes of this section:
(1) "Department" means the Department of Housing and Community
Development.
(2) "Eligible head of household" means a person with all of the
following characteristics:
(A) He or she is 62 years of age or older.
(B) He or she rents a property as his or her primary residence
that is rent controlled and he or she is named on the lease for that
property.
(C) His or her combined annual household income is fifty thousand
dollars ($50,000) or less, more than one third of which is spent on
rent.
(3) "Qualifying residence" means a property that is subject to
rent control, not sublet, in compliance with the local rent control
ordinance, and rent for which is not paid with a federal housing
choice voucher, commonly referred to as a Section 8 voucher.
(4) "Rent increase exemption order" is an order issued by a
supervising agency that exempts an eligible head of household renting
a qualifying residence from increases in rent for a period of 12
months and entitles the landlord to a tax credit in an amount
equivalent to the rent not received.
(5) "SCRIE program" means the Senior Citizen Rent Increase
Exemption Program established by this section.
(6) "Supervising agency" means the local rent control board or
other local entity that administrates a rent control program with
jurisdiction over a potentially qualifying residence.
(c) The department shall provide advisory guidance to supervising
agencies regarding the implementation and administration of the SCRIE
program and is authorized to promulgate the necessary rules and
regulations to carry out this section. The department shall publicize
the SCRIE program to senior citizens in rent-controlled properties
in the jurisdictions to which the program applies.
(d) On and after April 1, 2016, an eligible head of household
renting a qualifying residence may apply to a supervising agency for
a rent increase exemption order pursuant to the SCRIE program. The
supervising agency shall review the application and, upon confirming
that the applicant is an eligible head of household and that the
property is a qualifying residence, shall issue to the applicant a
rent increase exemption order. The supervising agency shall issue a
copy of the order to the landlord of the qualifying residence and
shall notify the landlord of his or her right to make a claim for a
tax credit under Section 17053 of the Revenue and Taxation Code for
rent not received pursuant to the order. The rent increase exemption
order shall be in effect for a 12-month period commencing the month
following its issuance. A rent increase exemption order shall not
renew automatically and an eligible head of household shall be
required to reapply to the supervising agency and make the
appropriate demonstrations in order to qualify for a subsequent
order. A rent increase exemption order validly issued before the
repeal of this section shall remain effective for its full 12-month
term.
(e) The department shall seek federal funding to support the SCRIE
program.
(f) (1) On or before July 1, 2017, the department shall report to
the Legislature regarding the effectiveness of the SCRIE program. The
report shall address, but not be limited to, the following:
(A) The number of eligible heads of household participating in the
SCRIE program, their combined household incomes, and the rent
increases actually exempted.
(B) The extent to which the SCRIE program significantly decreases
the rental burden on eligible heads of household.
(C) The household and community impact of the rent increase
exemption for eligible heads of household and the rent increase
exemption tax credit for affected landlords.
(D) The feasability of implementing the SCRIE program throughout
the state.
(2) The report required by paragraph (1) shall be made in
compliance with Section 9795 of the Government Code.
(g) This section shall remain in effect only until January 1,
2019, and as of that date is repealed.
SEC. 3. Section 17053 is added to the
Revenue and Taxation Code , to read:
17053. (a) For each taxable year beginning on or after January 1,
2016, and before January 1, 2020, there shall be allowed as a credit
against the "net tax," as defined in Section 17039, an amount equal
to the amount of rent not received for that taxable year by a
taxpayer, who is a landlord, as a consequence of a tenant receiving a
rent increase exemption order under the Senior Citizen Rent Increase
Exemption Program established pursuant to Section 1954.532 of the
Civil Code.
(b) In the case where the credit allowed by this section exceeds
the "net tax," the excess may be carried over to reduce the "net tax"
in the following year, and succeeding seven years if necessary,
until the total credit is exhausted.
(c) This section shall remain in effect only until December 1,
2020, and as of that date is repealed.
SEC. 4. Pursuant to Section 41 of the Revenue and
Taxation Code, the following applies to Section 17053 of the Revenue
and Taxation Code:
(a) The specific goal, purpose, and objective of Section 17053 of
the Revenue and Taxation Code is to provide a landlord a means by
which the landlord may recoup the loss in rent incurred as a result
of the participation of a tenant in the Senior Citizen Rent Increase
Exemption Program (SCRIE program) established pursuant to Section
1954.532 of the Civil Code, thus making the program function
equitably for both landlords and tenants. The fundamental goal,
purpose, and objective of the SCRIE program is to provide financial
relief to tenants in specified counties who are heads of household 62
years of age or older, with combined household incomes of $50,000 or
less, more than one-third of which is spent on rent.
(b) The performance indicator for Section 17053 of Revenue and
Taxation Code will be the actual savings in rent by senior citizen
tenants participating in the SCRIE program, particularly as it
reflects a percentage of their combined household incomes. This
amount will be reflected, if imperfectly, in the amounts of the tax
credits allowed.
(c) In order to determine the relative success of the SCRIE
program in meeting its goal, and the economic success of the tax
credit provided by Section 17053 of the Revenue and Taxation Code, it
is necessary to establish the number of participants in the SCRIE
program, their combined household incomes, and the amount of rent
increases that were exempted pursuant to the program. Information on
participating senior citizen tenants, their combined household
incomes, and the amount of rent increases that were exempted will be
available from the Department of Housing and Community Development in
its report to the Legislature pursuant to subdivision (f) of Section
1954.532 of the Civil Code and from the local rent control boards
implementing the SCRIE program.
SEC. 5. If the Commission on State Mandates
determines that this act contains costs mandated by the state,
reimbursement to local agencies and school districts for those costs
shall be made pursuant to Part 7 (commencing with Section 17500) of
Division 4 of Title 2 of the Government Code.
SECTION 1. Section 214 of the Revenue and
Taxation Code is amended to read:
214. (a) Property used exclusively for religious, hospital,
scientific, or charitable purposes owned and operated by community
chests, funds, foundations, limited liability companies, or
corporations organized and operated for religious, hospital,
scientific, or charitable purposes is exempt from taxation, including
ad valorem taxes to pay the interest and redemption charges on any
indebtedness approved by the voters prior to July 1, 1978, or any
bonded indebtedness for the acquisition or improvement of real
property approved on or after July 1, 1978, by two-thirds of the
votes cast by the voters voting on the proposition, if:
(1) The owner is not organized or operated for profit. However, in
the case of hospitals, the organization shall not be deemed to be
organized or operated for profit if, during the immediately preceding
fiscal year, operating revenues, exclusive of gifts, endowments and
grants-in-aid, did not exceed operating expenses by an amount
equivalent to 10 percent of those operating expenses. As used herein,
operating expenses include depreciation based on cost of replacement
and amortization of, and interest on, indebtedness.
(2) No part of the net earnings of the owner inures to the benefit
of any private shareholder or individual.
(3) The property is used for the actual operation of the exempt
activity, and does not exceed an amount of property reasonably
necessary to the accomplishment of the exempt purpose.
(A) For the purposes of determining whether the property is used
for the actual operation of the exempt activity, consideration shall
not be given to use of the property for either or both of the
following described activities if that use is occasional:
(i) The owner conducts fundraising activities on the property and
the proceeds derived from those activities are not unrelated business
taxable income, as defined in Section 512 of the Internal Revenue
Code, of the owner and are used to further the exempt activity of the
owner.
(ii) The owner permits any other organization that meets all of
the requirements of this subdivision, other than ownership of the
property, to conduct fundraising activities on the property and the
proceeds derived from those activities are not unrelated business
taxable income, as defined in Section 512 of the Internal Revenue
Code, of the organization, are not subject to the tax on unrelated
business taxable income that is imposed by Section 511 of the
Internal Revenue Code, and are used to further the exempt activity of
the organization.
(B) For purposes of subparagraph (A):
(i) "Occasional use" means use of the property on an irregular or
intermittent basis by the qualifying owner or any other qualifying
organization described in clause (ii) of subparagraph (A) that is
incidental to the primary activities of the owner or the other
organization.
(ii) "Fundraising activities" means both activities involving the
direct solicitation of money or other property and the anticipated
exchange of goods or services for money between the soliciting
organization and the organization or person solicited.
(C) Subparagraph (A) shall have no application in determining
whether paragraph (3) has been satisfied unless the owner of the
property and any other organization using the property as provided in
subparagraph (A) have filed with the assessor a valid organizational
clearance certificate issued pursuant to Section 254.6.
(D) For the purposes of determining whether the property is used
for the actual operation of the exempt activity, consideration shall
not be given to the use of the property for meetings conducted by any
other organization if the meetings are incidental to the other
organization's primary activities, are not fundraising meetings or
activities as defined in subparagraph (B), are held no more than once
per week, and the other organization and its use of the property
meet all other requirements of paragraphs (1) to (5), inclusive, of
this subdivision. The owner or the other organization also shall file
with the assessor a copy of a valid, unrevoked letter or ruling from
the Internal Revenue Service or the Franchise Tax Board stating that
the other organization, or the national organization of which it is
a local chapter or affiliate, qualifies as an exempt organization
under Section 501(c)(3) or 501(c)(4) of the Internal Revenue Code or
Section 23701d, 23701f, or 23701w.
(E) Nothing in subparagraph (A), (B), (C), or (D) shall be
construed to either enlarge or restrict the exemption provided for in
subdivision (b) of Section 4 and Section 5 of Article XIII of the
California Constitution and this section.
(4) The property is not used or operated by the owner or by any
other person so as to benefit any officer, trustee, director,
shareholder, member, employee, contributor, or bondholder of the
owner or operator, or any other person, through the distribution of
profits, payment of excessive charges or compensations, or the more
advantageous pursuit of their business or profession.
(5) The property is not used by the owner or members thereof for
fraternal or lodge purposes, or for social club purposes except where
that use is clearly incidental to a primary religious, hospital,
scientific, or charitable purpose.
(6) The property is irrevocably dedicated to religious,
charitable, scientific, or hospital purposes and upon the
liquidation, dissolution, or abandonment of the owner will not inure
to the benefit of any private person except a fund, foundation, or
corporation organized and operated for religious, hospital,
scientific, or charitable purposes.
(7) The property, if used exclusively for scientific purposes, is
used by a foundation or institution that, in addition to complying
with the foregoing requirements for the exemption of charitable
organizations in general, has been chartered by the Congress of the
United States (except that this requirement shall not apply when the
scientific purposes are medical research), and whose objects are the
encouragement or conduct of scientific investigation, research, and
discovery for the benefit of the community at large.
The exemption provided for herein shall be known as the "welfare
exemption." This exemption shall be in addition to any other
exemption now provided by law, and the existence of the exemption
provision in paragraph (2) of subdivision (a) of Section 202 shall
not preclude the exemption under this section for museum or library
property. Except as provided in subdivision (e), this section shall
not be construed to enlarge the college exemption.
(b) Property used exclusively for school purposes of less than
collegiate grade and owned and operated by religious, hospital, or
charitable funds, foundations, limited liability companies, or
corporations, which property and funds, foundations, limited
liability companies, or corporations meet all of the requirements of
subdivision (a), shall be deemed to be within the exemption provided
for in subdivision (b) of Section 4 and Section 5 of Article XIII of
the California Constitution and this section.
(c) Property used exclusively for nursery school purposes and
owned and operated by religious, hospital, or charitable funds,
foundations, limited liability companies, or corporations, which
property and funds, foundations, limited liability companies, or
corporations meet all the requirements of subdivision (a), shall be
deemed to be within the exemption provided for in subdivision (b) of
Section 4 and Section 5 of Article XIII of the California
Constitution and this section.
(d) Property used exclusively for a noncommercial educational FM
broadcast station or an educational television station, and owned and
operated by religious, hospital, scientific, or charitable funds,
foundations, limited liability companies, or corporations meeting all
of the requirements of subdivision (a), shall be deemed to be within
the exemption provided for in subdivision (b) of Section 4 and
Section 5 of Article XIII of the California Constitution and this
section.
(e) Property used exclusively for religious, charitable,
scientific, or hospital purposes and owned and operated by religious,
hospital, scientific, or charitable funds, foundations, limited
liability companies, or corporations or educational institutions of
collegiate grade, as defined in Section 203, which property and
funds, foundations, limited liability companies, corporations, or
educational institutions meet all of the requirements of subdivision
(a), shall be deemed to be within the exemption provided for in
subdivision (b) of Section 4 and Section 5 of Article XIII of the
California Constitution and this section. As to educational
institutions of collegiate grade, as defined in Section 203, the
requirements of paragraph (6) of subdivision (a) shall be deemed to
be met if both of the following are met:
(1) The property of the educational institution is irrevocably
dedicated in its articles of incorporation to charitable and
educational purposes, to religious and educational purposes, or to
educational purposes.
(2) The articles of incorporation of the educational institution
provide for distribution of its property upon its liquidation,
dissolution, or abandonment to a fund, foundation, or corporation
organized and operated for religious, hospital, scientific,
charitable, or educational purposes meeting the requirements for
exemption provided by Section 203 or this section.
(f) Property used exclusively for housing and related facilities
for elderly or handicapped families and financed by, including, but
not limited to, the federal government pursuant to Section 202 of
Public Law 86-372 (12 U.S.C. Sec. 1701q), as amended, Section 231 of
Public Law 73-479 (12 U.S.C. Sec. 1715v), Section 236 of Public Law
90-448 (12 U.S.C. Sec. 1715z), or Section 811 of Public Law 101-625
(42 U.S.C. Sec. 8013), and owned and operated by religious, hospital,
scientific, or charitable funds, foundations, limited liability
companies, or corporations meeting all of the requirements of this
section shall be deemed to be within the exemption provided for in
subdivision (b) of Section 4 and Section 5 of Article XIII of the
California Constitution and this section.
The amendment of this paragraph made by Chapter 1102 of the
Statutes of 1984 does not constitute a change in, but is declaratory
of, existing law. However, no refund of property taxes shall be
required as a result of this amendment for any fiscal year prior to
the fiscal year in which the amendment takes effect.
Property used exclusively for housing and related facilities for
elderly or handicapped families at which supplemental care or
services designed to meet the special needs of elderly or handicapped
residents are not provided, or that is not financed by the federal
government pursuant to Section 202 of Public Law 86-372 (12 U.S.C.
Sec. 1701q), as amended, Section 231 of Public Law 73-479 (12 U.S.C.
Sec. 1715v), Section 236 of Public Law 90-448 (12 U.S.C. Sec. 1715z),
or Section 811 of Public Law 101-625 (42 U.S.C. Sec. 8013), shall
not be entitled to exemption pursuant to this subdivision unless the
property is used for housing and related facilities for low- and
moderate-income elderly or handicapped families. Property that would
otherwise be exempt pursuant to this subdivision, except that it
includes some housing and related facilities for other than low- or
moderate-income elderly or handicapped families, shall be entitled to
a partial exemption. The partial exemption shall be equal to that
percentage of the value of the property that is equal to the
percentage that the number of low- and moderate-income elderly and
handicapped families represents of the total number of families
occupying the property.
As used in this subdivision, "low and moderate income" has the
same meaning as the term "persons and families of low or moderate
income" as defined by Section 50093 of the Health and Safety Code.
(g) (1) Property used exclusively for rental housing and related
facilities and owned and operated by religious, hospital, scientific,
or charitable funds, foundations, limited liability companies, or
corporations, including limited partnerships in which the managing
general partner is an eligible nonprofit corporation or eligible
limited liability company, meeting all of the requirements of this
section, or by veterans' organizations, as described in Section
215.1, meeting all the requirements of paragraphs (1) to (7),
inclusive, of subdivision (a), shall be deemed to be within the
exemption provided for in subdivision (b) of Section 4 and Section 5
of Article XIII of the California Constitution and this section and
shall be entitled to a partial exemption equal to that percentage of
the value of the property that is equal to the percentage that the
number of units serving lower income households represents of the
total number of residential units in any year in which any of the
following criteria applies:
(A) The acquisition, rehabilitation, development, or operation of
the property, or any combination of these factors, is financed with
tax-exempt mortgage revenue bonds or general obligation bonds, or is
financed by local, state, or federal loans or grants and the rents of
the occupants who are lower income households do not exceed those
prescribed by deed restrictions or regulatory agreements pursuant to
the terms of the financing or financial assistance.
(B) The owner of the property is eligible for and receives
low-income housing tax credits pursuant to Section 42 of the Internal
Revenue Code of 1986, as added by Public Law 99-514.
(C) In the case of a claim, other than a claim with respect to
property owned by a limited partnership in which the managing general
partner is an eligible nonprofit corporation, that is filed for the
2000-01 fiscal year or any fiscal year thereafter, 90 percent or more
of the occupants of the property are lower income households whose
rent does not exceed the rent prescribed by Section 50053 of the
Health and Safety Code. The total exemption amount allowed under this
subdivision to a taxpayer, with respect to a single property or
multiple properties for any fiscal year on the sole basis of the
application of this subparagraph, may not exceed twenty thousand
dollars ($20,000) of tax.
(D) (i) The property was previously purchased and owned by the
Department of Transportation pursuant to a consent decree requiring
housing mitigation measures relating to the construction of a freeway
and is now solely owned by an organization that qualifies as an
exempt organization under Section 501(c)(3) of the Internal Revenue
Code.
(ii) This subparagraph shall not apply to property owned by a
limited partnership in which the managing partner is an eligible
nonprofit corporation.
(2) In order to be eligible for the exemption provided by this
subdivision, the owner of the property shall do both of the
following:
(A) (i) For any claim filed for the 2000-01 fiscal year or any
fiscal year thereafter, certify and ensure, subject to the limitation
in clause (ii), that there is an enforceable and verifiable
agreement with a public agency, a recorded deed restriction, or other
legal document that restricts the project's usage and that provides
that the units designated for use by lower income households are
continuously available to or occupied by lower income households at
rents that do not exceed those prescribed by Section 50053 of the
Health and Safety Code, or, to the extent that the terms of federal,
state, or local financing or financial assistance conflicts with
Section 50053, rents that do not exceed those prescribed by the terms
of the financing or financial assistance.
(ii) In the case of a limited partnership in which the managing
general partner is an eligible nonprofit corporation, the restriction
and provision specified in clause (i) shall be contained in an
enforceable and verifiable agreement with a public agency, or in a
recorded deed restriction to which the limited partnership certifies.
(B) Certify that the funds that would have been necessary to pay
property taxes are used to maintain the affordability of, or reduce
rents otherwise necessary for, the units occupied by lower income
households.
(3) As used in this subdivision:
(A) "Lower income households" has the same meaning as the term
"lower income households" as defined by Section 50079.5 of the Health
and Safety Code.
(B) "Related facilities" means any manager's units and any and all
common area spaces that are included within the physical boundaries
of the rental housing development, including, but not limited to,
common area space, walkways, balconies, patios, clubhouse space,
meeting rooms, laundry facilities and parking areas, except any
portions of the overall development that are occupied commercial
space.
(C) "Units serving lower income households" shall mean units that
are occupied by lower income households at an affordable rent, as
defined in Section 50053 of the Health and Safety Code or, to the
extent that the terms of federal, state, or local financing or
financial assistance conflicts with Section 50053, rents that do not
exceed those prescribed by the terms of the financing or financial
assistance. Units reserved for lower income households at an
affordable rent that are temporarily vacant due to tenant turnover or
repairs shall be counted as occupied.
(h) Property used exclusively for an emergency or temporary
shelter and related facilities for homeless persons and families and
owned and operated by religious, hospital, scientific, or charitable
funds, foundations, limited liability companies, or corporations
meeting all of the requirements of this section shall be deemed to be
within the exemption provided for in subdivision (b) of Section 4
and Section 5 of Article XIII of the California Constitution and this
section. Property that otherwise would be exempt pursuant to this
subdivision, except that it includes housing and related facilities
for other than an emergency or temporary shelter, shall be entitled
to a partial exemption.
As used in this subdivision, "emergency or temporary shelter"
means a facility that would be eligible for funding pursuant to
Chapter 11.5 (commencing with Section 50800) of Part 2 of Division 31
of the Health and Safety Code.
(i) Property used exclusively for housing and related facilities
for employees of religious, charitable, scientific, or hospital
organizations that meet all the requirements of subdivision (a) and
owned and operated by funds, foundations, limited liability
companies, or corporations that meet all the requirements of
subdivision (a) shall be deemed to be within the exemption provided
for in subdivision (b) of Section 4 and Section 5 of Article XIII of
the California Constitution and this section to the extent the
residential use of the property is institutionally necessary for the
operation of the organization.
(j) For purposes of this section, charitable purposes include
educational purposes. For purposes of this subdivision, "educational
purposes" means those educational purposes and activities for the
benefit of the community as a whole or an unascertainable and
indefinite portion thereof, and do not include those educational
purposes and activities that are primarily for the benefit of an
organization's shareholders. Educational activities include the study
of relevant information, the dissemination of that information to
interested members of the general public, and the participation of
interested members of the general public.
(k) In the case of property used exclusively for the exempt
purposes specified in this section, owned and operated by limited
liability companies that are organized and operated for those
purposes, the State Board of Equalization shall adopt regulations to
specify the ownership, organizational, and operational requirements
for those companies to qualify for the exemption provided by this
section.
( l ) The amendments made by Chapter 354 of
the Statutes of 2004 shall apply with respect to lien dates occurring
on and after January 1, 2005.
SEC. 2. Notwithstanding Section 2229 of the
Revenue and Taxation Code, no appropriation is made by this act and
the state shall not reimburse any local agency for any property tax
revenues lost by it pursuant to this act.
SEC. 3. This act provides for a tax levy within
the meaning of Article IV of the Constitution and shall go into
immediate effect.
