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 partial exemption to be equal to that percentage of the value of the property that the portion of the property serving lower income households represents of the total property in any year. 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 define "related facilities" for purposes of the exemption. This bill would provide that the partial exemption 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. 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 that is eligible for the exemption described above, and would make any PILOT agreement entered into in violation of this provision void and unenforceable. The bill would require any outstanding ad valorem tax, interest, or penalty that was levied between January 1, 2012, and January 1, 2015, inclusive, as a result of a PILOT agreement to be canceled, and any tax, interest, or penalty, as so levied, that was paid prior to January 1, 2015, to be refunded. The bill would prohibit an escape or supplemental assessment from being levied on the basis that payments made under a PILOT agreement were, or are being, used in a manner incompatible with the certification requirement. This bill would become operative only if AB 1761 of the 2013–14 Regular Session is enacted and takes effect on or before January 1, 2015.