SB 588: Property taxation: welfare exemption: lower income households: cap.

The California Constitution authorizes the Legislature to exempt from taxation, in whole or in part, property that is used exclusively for religious, hospital, or charitable purposes, and is owned or held in trust by a nonprofit entity. Pursuant to this constitutional authority, existing law partially exempts, as described, from property taxation property that is used exclusively for rental housing and related facilities and that is owned and operated by specified entities if any of specified criteria are met. Under existing law, one of those criteria requires, except in the case of a limited partnership in which the managing general partner is a nonprofit corporation eligible for the exemption, that 90% or more of the occupants of the property be lower income households whose rents do not exceed the rent limits prescribed by a specified law. Existing law limits the total exemption amount allowed to a taxpayer under that criteria, with respect to a single property or multiple properties for any fiscal year on the sole basis of the application of that criterion, to $20,000,000 of assessed value.

This bill would remove remove, for the 202425 fiscal year through the 202829 fiscal year, the above-described limit on the total exemption amount for any property for which a claim is filed and granted for the 202425 fiscal year or any fiscal year thereafter if, in addition to the above-described requirement, at least 90% of the propertys units are made continuously available to, as defined, or are occupied by lower income households, as defined, at a rent that does not exceed the rent for lower income households, as prescribed by specified law. law, the property is owned and operated by an eligible nonprofit corporation, and the claimant provides an affidavit, signed under penalty of perjury, that any additional moneys that would have been used to pay any ad valorem property taxes on the property if not for the removal of the exemption cap will be used for the construction or rehabilitation of single or multifamily residential units on specified properties. The bill would require the claimant seeking an exemption pursuant to the bills provisions to provide to the county assessor any additional documents and materials requested by the county assessor necessary to evaluate the claimants eligibility for the exemption. The bill would also provide that the claimant is liable for property tax for the years for which the property received the bills tax benefit if single or multifamily residential units were not constructed or rehabilitated or were not in the course of construction or rehabilitation by specified dates, as specified. By expanding the crime of perjury and imposing additional duties on local tax officials, the bill would impose a state-mandated local program.

Existing law requires any bill authorizing a new tax expenditure to contain, among other things, specific goals, purposes, and objectives that the tax expenditure will achieve, detailed performance indicators, and data collection requirements.

This bill would state the intent of the Legislature to comply with that requirement with respect to the above-described removal of the exemption cap. include findings and reporting requirements in compliance with this requirement.

Existing law requires the state 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 those provisions, 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.