Property taxation: welfare exemption: course of construction.

(1) Pursuant to authorization in the California Constitution, existing property tax law establishes a welfare exemption under which property is exempt from taxation if, among other things, that property is used exclusively for religious, hospital, scientific, or charitable purposes and is owned and operated by an entity, as provided, that is itself organized and operated for those purposes. The California Constitution specifies that this exemption applies to buildings under construction, the land on which the buildings are situated, and equipment in the buildings if their intended use is exclusively for exempt purposes. Existing property tax law specifies that property used exclusively for religious, hospital, or charitable purposes includes facilities in the course of construction, as defined, and the land on which the facilities are located. This bill would, pursuant to these constitutional provisions, additionally specify that property used exclusively for those purposes includes equipment in those facilities, as provided. This bill would also define "facilities in the course of construction" to include prospective construction or rehabilitation of a new or existing building or improvement, evidenced by an application for a building permit, if that building or improvement will be used exclusively for religious, hospital, or charitable purposes and if construction commences within 12 months of the date that the permit is approved, as provided. (2) 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. (3) This bill would take effect immediately as a tax levy, but its operation would commence with the lien date for the 2013–14 fiscal year.