Property taxation: welfare exemption: nonprofit corporation: low-income families.

Existing property tax law, in accordance with the California Constitution, provides for a "welfare exemption" for property used exclusively for religious, hospital, scientific, or charitable purposes and that is owned or operated by certain types of nonprofit entities, if certain qualifying criteria are met. Existing property tax law states that property is within that welfare exemption if the property is owned and operated by a nonprofit corporation, otherwise qualifying for the welfare exemption, that is organized and operated for the specific and primary purpose of building and rehabilitating single or multifamily residences for sale at cost to low-income families, with financing in the form of a zero interest rate loan and without regard to religion, race, national origin, or the sex of the head of household. This bill would also provide, for lien dates occurring on or after January 1, 2023, and before January 1, 2028, that property is fully exempt from property taxation and is also within that welfare exemption if that property is owned and operated by a nonprofit corporation, as described, that is organized and operated for the specific and primary purpose of building and rehabilitating single or multifamily residential units and the property has units that meet specified requirements. The bill would limit the exemption to the portion of the property proposed to be built or rehabilitated with units meeting the requirements and would limit, following completion of construction, the exemption to the portion of the property with units that meet the requirements, as specified. The bill would prohibit the denial of this exemption for property not previously designated as open space on the basis that the property does not currently include a single or multifamily residential unit, as described, or a single or multifamily residential unit, as described, that is in the course of construction. This bill would require a nonprofit corporation that utilizes this welfare exemption to be subject to an annual independent audit and to make the audit available to specified entities in order to continue to qualify for the exemption. The bill would make a nonprofit corporation liable for property tax for the years for which the property was exempt from taxation pursuant to the bill's provisions if the property was not developed or rehabilitated, or if the development or rehabilitation is not in the course of construction, by specified dates depending on the date the nonprofit corporation acquired the property. The bill would require an officer of the nonprofit corporation claiming the exemption to sign under penalty of perjury an affidavit affirming to the county assessor that the property owned and operated by the nonprofit corporation is for the future construction of single or multifamily residential units on that property, as described. By adding to the duties of local tax officials and expanding the crime of perjury, the bill would impose a state-mandated local program. This bill would require the State Board of Equalization to annually collect and report to the Legislature, by June 1, 2025, and every June 1 thereafter until June 1, 2028, data from county assessors to quantify the amount of assessed value exempted and the number of owner-occupied dwelling units created by nonprofits granted the exemption in the bill. The bill would require nonprofits to provide information to county assessors about the additional dwelling units created under the exemption. 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 with regard to certain mandates no reimbursement is required by this act for a specified reason. With regard to any other mandates, this bill would provide that, if the Commission on State Mandates determines that the bill contains costs so mandated by the state, reimbursement for those costs shall be made pursuant to the statutory provisions noted above. 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.