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AB-723 Transactions and use taxes: City of Fremont: County of Alameda.(2019-2020)

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Date Published: 07/01/2019 09:00 PM
AB723:v96#DOCUMENT

Amended  IN  Senate  July 01, 2019
Amended  IN  Assembly  April 29, 2019
Amended  IN  Assembly  March 25, 2019

CALIFORNIA LEGISLATURE— 2019–2020 REGULAR SESSION

Assembly Bill
No. 723


Introduced by Assembly Members Wicks and Bonta Member Quirk

February 19, 2019


An act to add Chapter 9 (commencing with Section 51299) to Part 1 of Division 1 of Title 5 of the Government Code, relating to housing. amend Section 7292.2 of, and to add Chapter 3.71 (commencing with Section 7292.1) to Part 1.7 of Division 2 of, the Revenue and Taxation Code, relating to taxation.


LEGISLATIVE COUNSEL'S DIGEST


AB 723, as amended, Wicks Quirk. Low-income housing incentives: leased rental housing: Counties of Alameda and Contra Costa. Transactions and use taxes: City of Fremont: County of Alameda.
Existing law authorizes various specified cities and counties, subject to certain limitations and approval requirements, to levy a transactions and use tax for general or specific purposes, in accordance with the procedures and requirements set forth in the Transactions and Use Tax Law. A provision of the Transactions and Use Tax Law prohibits the combined rate of all taxes that may be imposed in accordance with that law in a county from exceeding 2%.
This bill would authorize the City of Fremont to impose a transactions and use tax in conformity with the Transactions and Use Tax Law for general or specific purposes at a rate of no more than 1% that, in combination with other transactions and use taxes, would exceed the above-described combined rate limit of 2% if certain requirements are met, including a requirement that the ordinance proposing the transactions and use tax be submitted to, and approved by, the voters.
Existing law authorizes the County of Alameda to impose a transactions and use tax for general or specific purposes at a rate of no more than 0.5% that, in combination with other transactions and use taxes, would exceed the above-described combined rate limit of 2%, if the county adopts an ordinance proposing the tax and the ordinance proposing the tax is approved by the voters, subject to applicable voter approval requirements. Existing law repeals this authorization on December 31, 2022, for the county if an ordinance proposing the tax has not been approved by that date in that county.
This bill would increase the maximum rate of tax that the County of Alameda may impose under this authority from 0.5% to 1%.
This bill would make legislative findings and declarations as to the necessity of a special statute for the City of Fremont and the County of Alameda.

Existing law, until January 1, 2024, authorizes a county, city and county, or city to establish a capital investment incentive program, pursuant to which the county, city and county, or city is authorized to pay, upon request, a capital investment incentive amount, that does not exceed the amount of property tax derived from that portion of the assessed value of a qualified manufacturing facility, as defined, that exceeds $150,000,000, to a proponent of a qualified manufacturing facility for up to 15 years.

This bill would additionally authorize the Counties of Alameda and Contra Costa, or any city located within the territorial boundaries of either of those counties, to provide the lessor of an eligible property located within its territorial boundaries with a low-income rental housing incentive. The bill, among other requirements, would require that an eligible property be used exclusively for rental housing that is rented for no more than 30 percent of the income level of persons of low income to tenants occupying the property at the commencement of the lease and that the lease commence on or after January 1, 2020, and before January 1, 2024. The bill would require that the amount of incentive payment be based on the amount of property taxes with respect to the eligible property that are apportioned to the county or the city, as applicable, in which the eligible property is located.

This bill would make legislative findings and declarations as to the necessity of a special statute for the Counties of Alameda and Contra Costa.

Vote: MAJORITY   Appropriation: NO   Fiscal Committee: NO   Local Program: NO  

The people of the State of California do enact as follows:


SECTION 1.

 Chapter 3.71 (commencing with Section 7292.1) is added to Part 1.7 of Division 2 of the Revenue and Taxation Code, to read:
CHAPTER  3.71. Local Government Finance in the City of Fremont

7292.1.
 The City of Fremont may impose a transactions and use tax at a rate not to exceed 1 percent for general or specific purposes that, in combination with all taxes imposed in accordance with the Transactions and Use Tax Law (Part 1.6 (commencing with Section 7251)), exceeds the limit established in Section 7251.1 if all of the following requirements are met:
(a) The city adopts an ordinance proposing the transactions and use tax subject to any applicable voting approval requirement.
(b) The ordinance proposing the transactions and use tax is submitted to the electorate and is approved by the voters voting on the ordinance pursuant to Article XIII C of the California Constitution.
(c) The transactions and use tax conforms to the Transactions and Use Tax Law (Part 1.6 (commencing with Section 7251)) other than Section 7251.1.

SEC. 2.

 Section 7292.2 of the Revenue and Taxation Code is amended to read:

7292.2.
 Notwithstanding any other law, the County of Alameda may impose a transactions and use tax for general or specific purposes to support countywide programs at a rate of no more than 0.5 1 percent that would, in combination with all taxes imposed in accordance with the Transactions and Use Tax Law (Part 1.6 (commencing with Section 7251)), exceed the limit established in Section 7251.1, if all of the following requirements are met:
(a) The county adopts an ordinance proposing the transactions and use tax by any applicable voting approval requirement.
(b) The ordinance proposing the transactions and use tax is submitted to the electorate and is approved by the voters voting on the ordinance pursuant to Article XIII C of the California Constitution.
(c) The transactions and use tax conforms to the Transactions and Use Tax Law (Part 1.6 (commencing with Section 7251)), other than Section 7251.1.

SEC. 3.

 The Legislature finds and declares that a special statute is necessary and that a general statute cannot be made applicable within the meaning of Section 16 of Article IV of the California Constitution because of the unique fiscal pressures being experienced in the City of Fremont and the County of Alameda.
SECTION 1.Chapter 9 (commencing with Section 51299) is added to Part 1 of Division 1 of Title 5 of the Government Code, to read:
9.Low-Income Rental Housing Incentives
51299.

(a)For purposes of this section:

(1)“Eligible property” means a residential property that satisfies all of the following:

(A)The property is located within the territorial boundaries of either the County of Alameda or the County of Contra Costa.

(B)The property is leased for a term of 35 years or more, or is transferred with a remaining term of 35 years or more.

(C)The lessor is not qualified for the exemption provided under Section 214 of the Revenue and Taxation Code.

(D)The property is used exclusively and solely for rental housing that is rented for no more than 30 percent of the income level of persons of low income, as defined in Section 50093 of the Health and Safety Code, to tenants occupying the property at the commencement of the lease, regardless of the actual income of those tenants.

(E)The property is leased and operated by an entity that is either of the following:

(i)A religious, hospital, scientific, or charitable fund, foundation, or corporation, or a limited partnership in which the managing general partner has received a determination that it is a charitable organization under Section 501(c)(3) of the Internal Revenue Code and is operating the property in accordance with its exempt purpose throughout the term of the lease.

(ii)A public housing authority or a public agency.

(F)The commencement date of the lease occurs on or after January 1, 2020, and before January 1, 2024.

(2)“Property tax rate” means the ad valorem property tax rate limited by subdivision (a) of Section 1 of Article XIII A of the California Constitution. “Property tax rate” does not include any property tax rate approved by the voters pursuant to subdivision (b) of Section 1 of Article XIII A of the California Constitution and levied in addition to the property tax rate limited by subdivision (a) of Section 1 of Article XIII A of the California Constitution.

(b)(1)The County of Alameda or the County of Contra Costa, or any city located within the territorial boundaries of either of those counties, may provide the lessor of an eligible property located within its territorial boundaries with a low-income rental housing incentive, in an amount determined pursuant to subdivision (c).

(2)Each new tenant occupying the eligible property after the initial commencement of the property lease shall meet the income restrictions specified in subparagraph (D) of paragraph (1) of subdivision (a) at the time of that tenant’s initial occupancy. Subsequent to the initial occupancy of each tenant, qualification of the eligible property for a low-income rental housing incentive under this section shall be based on the rents set in the amount specified in this section.

(c)The amount of low-income rental housing incentive for an eligible property shall be in the following amounts:

(1)In the case of a low-income rental housing incentive provided by the County of Alameda or the County of Contra Costa, the incentive shall be in an amount equal to the portion of the amount of revenue derived from the imposition of the property tax rate upon the eligible property that was apportioned to the county.

(2)In the case of a low-income rental housing incentive provided by a city, the incentive shall be in an amount equal to the portion of the amount of revenue derived from the imposition of the property tax rate upon the eligible property that was apportioned to the city.

SEC. 2.

The Legislature finds and declares that a special statute is necessary and that a general statute cannot be made applicable within the meaning of Section 16 of Article IV of the California Constitution because of the unique circumstances in the Counties of Alameda and Contra Costa relating to the provision of adequate rental housing in those counties.