Property taxation: welfare exemption: rental housing and related facilities: payment in lieu of taxes agreement.

Existing property tax law establishes a partial welfare exemption for property used exclusively for rental housing and related facilities 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 owner of the property, in order to be eligible for the exemption, to 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. This bill would, on or after January 1, 2015, prohibit a local government from entering into a payment in lieu of taxes (PILOT) agreement with a property owner of a low-income housing project, and would make any PILOT agreement entered into in violation of this provision void and unenforceable. The bill would establish a conclusive presumption that any payments made under a PILOT agreement entered into before January 1, 2015, comply with the certification requirement described above and were or are used to maintain the affordability of, or reduce rents otherwise necessary for, the units occupied by lower income households. The bill would define a PILOT agreement to mean any agreement entered into between a local government and a property owner of a low-income housing project that requires the owner of the low-income housing project to pay the local government a charge, as provided, and would define a "low-income housing project" to mean a low-income housing project that is eligible for the exemption described above. This bill would become operative only if SB 1203 of the 2013–14 Regular Session is enacted and takes effect on or before January 1, 2015.