Property taxation: welfare exemption: rental housing and related facilities.

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 certain types of nonprofit entities or veterans' organizations that meet specified exemption requirements if 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. This bill would include in the definition of "related facilities" commercial space that is less than 10,000 square feet; that is unoccupied, or if occupied by a retail chain, is occupied by a retail chain with no more than 3 stores; that occupies no more than 20% of the total square footage of the development; and that is in a development that is no more than 10 years old. By requiring local officials to apply additional tax exemption criteria, this bill would impose a state-mandated local program. 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.