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AB-1229 Senior Citizen Rent Increase Exemption Program.(2015-2016)

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AB1229:v98#DOCUMENT

Amended  IN  Assembly  April 09, 2015

CALIFORNIA LEGISLATURE— 2015–2016 REGULAR SESSION

Assembly Bill
No. 1229


Introduced by Assembly Member Campos

February 27, 2015


An act to amend Section 214 of the Revenue and Taxation Code, relating to taxation, to take effect immediately, tax levy. add and repeal Section 1954.532 of the Civil Code, and to add and repeal Section 17503 of the Revenue and Taxation Code, relating to rent control.


LEGISLATIVE COUNSEL'S DIGEST


AB 1229, as amended, Campos. Property taxation: welfare exemption: rental housing and related facilities. Senior Citizen Rent Increase Exemption Program.
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 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 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. law authorizes local jurisdictions to establish controls on the price of residential units that may be offered for rent. Existing law, the Costa-Hawkins Rental Housing Act, prescribes statewide limits on the application of local rent control with regard to certain properties, including those that have a certificate of occupancy issued after February 1, 1995.
This bill would specify that “related facilities” does not include any portions of the overall development that are occupied commercial space. bill, until January 1, 2019, would enact the Senior Citizen Rent Increase Exemption Program (SCRIE program), a demonstration project to be implemented in the County of Alameda, the City and County of San Francisco, the County of Ventura, and the County of Santa Clara. The program would permit an eligible head of household in a rent-controlled property to apply to be exempt from rent increases for a 12-month period, with the associated loss of rent to be offset by a tax credit to be claimed by the landlord, as provided. The bill would define an eligible head of household as having certain characteristics, including being 62 years of age or older, and having a combined annual household income of $50,000 or less, more than 1/3 of which is spent on rent. The bill would require the Department of Housing and Community Development to provide advisory guidance to local rent control boards regarding the implementation and administration of the SCRIE program, to publicize the SCRIE program to senior citizens in rent-controlled properties in the jurisdictions to which the program applies, and to apply for federal funding for the program.
This bill would permit an eligible head of household, on and after April 1, 2016, to apply annually to the appropriate local rent control board, to be defined as a supervising agency, for a rent increase exemption order and, if the relevant criteria are met, would require the agency to issue the order to the head of household, with a copy to his or her landlord along with information on the right to claim a related tax credit. By increasing the duties of local officials, the bill would impose a state-mandated local program.
The Personal Income Tax Law allows various credits against the tax imposed by that law.
This bill would allow a credit against those taxes, for taxable years beginning on or after January 1, 2016, and before January 1, 2020, for an amount equivalent to the rent a landlord does not receive as a result of a tenant’s participation in the SCRIE program. The bill would prescribe the conditions pursuant to which the landlord could claim the tax credit, including the requirement that the credit be allowed only for the taxable year in which the taxpayer incurred the loss of the rent resulting from the increase exemption order. The bill would require the Department of Housing and Community Development to make a specified report to the Legislature on the program, which would include the feasability of establishing the program statewide. The bill would make a statement of legislative findings.
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, but its operative date would depend on its effective date.

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

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


SECTION 1.

 (a) The Legislature finds and declares all of the following:
(1) According to a Kaiser Family Foundation study, California’s seniors have the nation’s highest poverty rate.
(2) Twenty percent of California adults over 65 years of age live below the poverty threshold of about $16,000, when the higher cost of housing and health care are taken into account.
(3) Nationally, homelessness among seniors is projected to rise by 33 percent between 2010 and 2020, and by 100 percent between 2010 and 2050, according to a 2010 report from the Homelessness Research Institute.
(4) The Los Angeles Homeless Services Authority reports that from 2011 to 2013, inclusive, Los Angeles County had a 29.1 percent increase in the number of homeless people 62 years of age and older.
(5) According to a March 2013 report of the National Low Income Housing Coalition, California is the second least affordable state behind Hawaii.
(6) According to the federal Department of Housing and Urban Development, fair market rent in California for a two-bedroom apartment is $1,341 a month. In order to afford this level of rent and utilities, without paying more than 30 percent of income on housing, a household needs to earn $4,470 monthly or $53,640 annually.
(7) Three out of the 10 most expensive metropolitan areas and six out of the 10 most expensive counties nationally are in California.
(8) In order to slow the growing numbers of homeless senior citizens being priced out of their homes, California must begin to explore practical means to slow this disaster.
(b) The Legislature hereby enacts the Senior Citizen Rent Increase Exemption Program to test whether the program is a viable method to help California seniors remain in their homes.

SEC. 2.

 Section 1954.532 is added to the Civil Code, to read:

1954.532.
 (a) This section establishes the Senior Citizen Rent Increase Exemption Program, a demonstration project to be implemented in the County of Alameda, the City and County of San Francisco, the County of Ventura, and the County of Santa Clara in order to permit an eligible head of household in a rent-controlled property to apply for an exemption from rent increases and to provide his or her landlord a tax credit in an amount equivalent to the rent increase that the landlord otherwise would have received if not for that exemption.
(b) For the purposes of this section:
(1) “Department” means the Department of Housing and Community Development.
(2) “Eligible head of household” means a person with all of the following characteristics:
(A) He or she is 62 years of age or older.
(B) He or she rents a property as his or her primary residence that is rent controlled and he or she is named on the lease for that property.
(C) His or her combined annual household income is fifty thousand dollars ($50,000) or less, more than one third of which is spent on rent.
(3) “Qualifying residence” means a property that is subject to rent control, not sublet, in compliance with the local rent control ordinance, and rent for which is not paid with a federal housing choice voucher, commonly referred to as a Section 8 voucher.
(4) “Rent increase exemption order” is an order issued by a supervising agency that exempts an eligible head of household renting a qualifying residence from increases in rent for a period of 12 months and entitles the landlord to a tax credit in an amount equivalent to the rent not received.
(5) “SCRIE program” means the Senior Citizen Rent Increase Exemption Program established by this section.
(6) “Supervising agency” means the local rent control board or other local entity that administrates a rent control program with jurisdiction over a potentially qualifying residence.
(c) The department shall provide advisory guidance to supervising agencies regarding the implementation and administration of the SCRIE program and is authorized to promulgate the necessary rules and regulations to carry out this section. The department shall publicize the SCRIE program to senior citizens in rent-controlled properties in the jurisdictions to which the program applies.
(d) On and after April 1, 2016, an eligible head of household renting a qualifying residence may apply to a supervising agency for a rent increase exemption order pursuant to the SCRIE program. The supervising agency shall review the application and, upon confirming that the applicant is an eligible head of household and that the property is a qualifying residence, shall issue to the applicant a rent increase exemption order. The supervising agency shall issue a copy of the order to the landlord of the qualifying residence and shall notify the landlord of his or her right to make a claim for a tax credit under Section 17053 of the Revenue and Taxation Code for rent not received pursuant to the order. The rent increase exemption order shall be in effect for a 12-month period commencing the month following its issuance. A rent increase exemption order shall not renew automatically and an eligible head of household shall be required to reapply to the supervising agency and make the appropriate demonstrations in order to qualify for a subsequent order. A rent increase exemption order validly issued before the repeal of this section shall remain effective for its full 12-month term.
(e) The department shall seek federal funding to support the SCRIE program.
(f) (1) On or before July 1, 2017, the department shall report to the Legislature regarding the effectiveness of the SCRIE program. The report shall address, but not be limited to, the following:
(A) The number of eligible heads of household participating in the SCRIE program, their combined household incomes, and the rent increases actually exempted.
(B) The extent to which the SCRIE program significantly decreases the rental burden on eligible heads of household.
(C) The household and community impact of the rent increase exemption for eligible heads of household and the rent increase exemption tax credit for affected landlords.
(D) The feasability of implementing the SCRIE program throughout the state.
(2) The report required by paragraph (1) shall be made in compliance with Section 9795 of the Government Code.
(g) This section shall remain in effect only until January 1, 2019, and as of that date is repealed.

SEC. 3.

 Section 17053 is added to the Revenue and Taxation Code, to read:

17053.
 (a) For each taxable year beginning on or after January 1, 2016, and before January 1, 2020, there shall be allowed as a credit against the “net tax,” as defined in Section 17039, an amount equal to the amount of rent not received for that taxable year by a taxpayer, who is a landlord, as a consequence of a tenant receiving a rent increase exemption order under the Senior Citizen Rent Increase Exemption Program established pursuant to Section 1954.532 of the Civil Code.
(b) In the case where the credit allowed by this section exceeds the “net tax,” the excess may be carried over to reduce the “net tax” in the following year, and succeeding seven years if necessary, until the total credit is exhausted.
(c) This section shall remain in effect only until December 1, 2020, and as of that date is repealed.

SEC. 4.

 Pursuant to Section 41 of the Revenue and Taxation Code, the following applies to Section 17053 of the Revenue and Taxation Code:
(a) The specific goal, purpose, and objective of Section 17053 of the Revenue and Taxation Code is to provide a landlord a means by which the landlord may recoup the loss in rent incurred as a result of the participation of a tenant in the Senior Citizen Rent Increase Exemption Program (SCRIE program) established pursuant to Section 1954.532 of the Civil Code, thus making the program function equitably for both landlords and tenants. The fundamental goal, purpose, and objective of the SCRIE program is to provide financial relief to tenants in specified counties who are heads of household 62 years of age or older, with combined household incomes of $50,000 or less, more than one-third of which is spent on rent.
(b) The performance indicator for Section 17053 of Revenue and Taxation Code will be the actual savings in rent by senior citizen tenants participating in the SCRIE program, particularly as it reflects a percentage of their combined household incomes. This amount will be reflected, if imperfectly, in the amounts of the tax credits allowed.
(c) In order to determine the relative success of the SCRIE program in meeting its goal, and the economic success of the tax credit provided by Section 17053 of the Revenue and Taxation Code, it is necessary to establish the number of participants in the SCRIE program, their combined household incomes, and the amount of rent increases that were exempted pursuant to the program. Information on participating senior citizen tenants, their combined household incomes, and the amount of rent increases that were exempted will be available from the Department of Housing and Community Development in its report to the Legislature pursuant to subdivision (f) of Section 1954.532 of the Civil Code and from the local rent control boards implementing the SCRIE program.

SEC. 5.

 If the Commission on State Mandates determines that this act contains costs mandated by the state, reimbursement to local agencies and school districts for those costs shall be made pursuant to Part 7 (commencing with Section 17500) of Division 4 of Title 2 of the Government Code.
SECTION 1.Section 214 of the Revenue and Taxation Code is amended to read:
214.

(a)Property used exclusively for religious, hospital, scientific, or charitable purposes owned and operated by community chests, funds, foundations, limited liability companies, or corporations organized and operated for religious, hospital, scientific, or charitable purposes is exempt from taxation, including ad valorem taxes to pay the interest and redemption charges on any indebtedness approved by the voters prior to July 1, 1978, or any bonded indebtedness for the acquisition or improvement of real property approved on or after July 1, 1978, by two-thirds of the votes cast by the voters voting on the proposition, if:

(1)The owner is not organized or operated for profit. However, in the case of hospitals, the organization shall not be deemed to be organized or operated for profit if, during the immediately preceding fiscal year, operating revenues, exclusive of gifts, endowments and grants-in-aid, did not exceed operating expenses by an amount equivalent to 10 percent of those operating expenses. As used herein, operating expenses include depreciation based on cost of replacement and amortization of, and interest on, indebtedness.

(2)No part of the net earnings of the owner inures to the benefit of any private shareholder or individual.

(3)The property is used for the actual operation of the exempt activity, and does not exceed an amount of property reasonably necessary to the accomplishment of the exempt purpose.

(A)For the purposes of determining whether the property is used for the actual operation of the exempt activity, consideration shall not be given to use of the property for either or both of the following described activities if that use is occasional:

(i)The owner conducts fundraising activities on the property and the proceeds derived from those activities are not unrelated business taxable income, as defined in Section 512 of the Internal Revenue Code, of the owner and are used to further the exempt activity of the owner.

(ii)The owner permits any other organization that meets all of the requirements of this subdivision, other than ownership of the property, to conduct fundraising activities on the property and the proceeds derived from those activities are not unrelated business taxable income, as defined in Section 512 of the Internal Revenue Code, of the organization, are not subject to the tax on unrelated business taxable income that is imposed by Section 511 of the Internal Revenue Code, and are used to further the exempt activity of the organization.

(B)For purposes of subparagraph (A):

(i)“Occasional use” means use of the property on an irregular or intermittent basis by the qualifying owner or any other qualifying organization described in clause (ii) of subparagraph (A) that is incidental to the primary activities of the owner or the other organization.

(ii)“Fundraising activities” means both activities involving the direct solicitation of money or other property and the anticipated exchange of goods or services for money between the soliciting organization and the organization or person solicited.

(C)Subparagraph (A) shall have no application in determining whether paragraph (3) has been satisfied unless the owner of the property and any other organization using the property as provided in subparagraph (A) have filed with the assessor a valid organizational clearance certificate issued pursuant to Section 254.6.

(D)For the purposes of determining whether the property is used for the actual operation of the exempt activity, consideration shall not be given to the use of the property for meetings conducted by any other organization if the meetings are incidental to the other organization’s primary activities, are not fundraising meetings or activities as defined in subparagraph (B), are held no more than once per week, and the other organization and its use of the property meet all other requirements of paragraphs (1) to (5), inclusive, of this subdivision. The owner or the other organization also shall file with the assessor a copy of a valid, unrevoked letter or ruling from the Internal Revenue Service or the Franchise Tax Board stating that the other organization, or the national organization of which it is a local chapter or affiliate, qualifies as an exempt organization under Section 501(c)(3) or 501(c)(4) of the Internal Revenue Code or Section 23701d, 23701f, or 23701w.

(E)Nothing in subparagraph (A), (B), (C), or (D) shall be construed to either enlarge or restrict the exemption provided for in subdivision (b) of Section 4 and Section 5 of Article XIII of the California Constitution and this section.

(4)The property is not used or operated by the owner or by any other person so as to benefit any officer, trustee, director, shareholder, member, employee, contributor, or bondholder of the owner or operator, or any other person, through the distribution of profits, payment of excessive charges or compensations, or the more advantageous pursuit of their business or profession.

(5)The property is not used by the owner or members thereof for fraternal or lodge purposes, or for social club purposes except where that use is clearly incidental to a primary religious, hospital, scientific, or charitable purpose.

(6)The property is irrevocably dedicated to religious, charitable, scientific, or hospital purposes and upon the liquidation, dissolution, or abandonment of the owner will not inure to the benefit of any private person except a fund, foundation, or corporation organized and operated for religious, hospital, scientific, or charitable purposes.

(7)The property, if used exclusively for scientific purposes, is used by a foundation or institution that, in addition to complying with the foregoing requirements for the exemption of charitable organizations in general, has been chartered by the Congress of the United States (except that this requirement shall not apply when the scientific purposes are medical research), and whose objects are the encouragement or conduct of scientific investigation, research, and discovery for the benefit of the community at large.

The exemption provided for herein shall be known as the “welfare exemption.” This exemption shall be in addition to any other exemption now provided by law, and the existence of the exemption provision in paragraph (2) of subdivision (a) of Section 202 shall not preclude the exemption under this section for museum or library property. Except as provided in subdivision (e), this section shall not be construed to enlarge the college exemption.

(b)Property used exclusively for school purposes of less than collegiate grade and owned and operated by religious, hospital, or charitable funds, foundations, limited liability companies, or corporations, which property and funds, foundations, limited liability companies, or corporations meet all of the requirements of subdivision (a), shall be deemed to be within the exemption provided for in subdivision (b) of Section 4 and Section 5 of Article XIII of the California Constitution and this section.

(c)Property used exclusively for nursery school purposes and owned and operated by religious, hospital, or charitable funds, foundations, limited liability companies, or corporations, which property and funds, foundations, limited liability companies, or corporations meet all the requirements of subdivision (a), shall be deemed to be within the exemption provided for in subdivision (b) of Section 4 and Section 5 of Article XIII of the California Constitution and this section.

(d)Property used exclusively for a noncommercial educational FM broadcast station or an educational television station, and owned and operated by religious, hospital, scientific, or charitable funds, foundations, limited liability companies, or corporations meeting all of the requirements of subdivision (a), shall be deemed to be within the exemption provided for in subdivision (b) of Section 4 and Section 5 of Article XIII of the California Constitution and this section.

(e)Property used exclusively for religious, charitable, scientific, or hospital purposes and owned and operated by religious, hospital, scientific, or charitable funds, foundations, limited liability companies, or corporations or educational institutions of collegiate grade, as defined in Section 203, which property and funds, foundations, limited liability companies, corporations, or educational institutions meet all of the requirements of subdivision (a), shall be deemed to be within the exemption provided for in subdivision (b) of Section 4 and Section 5 of Article XIII of the California Constitution and this section. As to educational institutions of collegiate grade, as defined in Section 203, the requirements of paragraph (6) of subdivision (a) shall be deemed to be met if both of the following are met:

(1)The property of the educational institution is irrevocably dedicated in its articles of incorporation to charitable and educational purposes, to religious and educational purposes, or to educational purposes.

(2)The articles of incorporation of the educational institution provide for distribution of its property upon its liquidation, dissolution, or abandonment to a fund, foundation, or corporation organized and operated for religious, hospital, scientific, charitable, or educational purposes meeting the requirements for exemption provided by Section 203 or this section.

(f)Property used exclusively for housing and related facilities for elderly or handicapped families and financed by, including, but not limited to, the federal government pursuant to Section 202 of Public Law 86-372 (12 U.S.C. Sec. 1701q), as amended, Section 231 of Public Law 73-479 (12 U.S.C. Sec. 1715v), Section 236 of Public Law 90-448 (12 U.S.C. Sec. 1715z), or Section 811 of Public Law 101-625 (42 U.S.C. Sec. 8013), and owned and operated by religious, hospital, scientific, or charitable funds, foundations, limited liability companies, or corporations meeting all of the requirements of this section shall be deemed to be within the exemption provided for in subdivision (b) of Section 4 and Section 5 of Article XIII of the California Constitution and this section.

The amendment of this paragraph made by Chapter 1102 of the Statutes of 1984 does not constitute a change in, but is declaratory of, existing law. However, no refund of property taxes shall be required as a result of this amendment for any fiscal year prior to the fiscal year in which the amendment takes effect.

Property used exclusively for housing and related facilities for elderly or handicapped families at which supplemental care or services designed to meet the special needs of elderly or handicapped residents are not provided, or that is not financed by the federal government pursuant to Section 202 of Public Law 86-372 (12 U.S.C. Sec. 1701q), as amended, Section 231 of Public Law 73-479 (12 U.S.C. Sec. 1715v), Section 236 of Public Law 90-448 (12 U.S.C. Sec. 1715z), or Section 811 of Public Law 101-625 (42 U.S.C. Sec. 8013), shall not be entitled to exemption pursuant to this subdivision unless the property is used for housing and related facilities for low- and moderate-income elderly or handicapped families. Property that would otherwise be exempt pursuant to this subdivision, except that it includes some housing and related facilities for other than low- or moderate-income elderly or handicapped families, shall be entitled to a partial exemption. The partial exemption shall be equal to that percentage of the value of the property that is equal to the percentage that the number of low- and moderate-income elderly and handicapped families represents of the total number of families occupying the property.

As used in this subdivision, “low and moderate income” has the same meaning as the term “persons and families of low or moderate income” as defined by Section 50093 of the Health and Safety Code.

(g)(1)Property used exclusively for rental housing and related facilities and owned and operated by religious, hospital, scientific, or charitable funds, foundations, limited liability companies, or corporations, including limited partnerships in which the managing general partner is an eligible nonprofit corporation or eligible limited liability company, meeting all of the requirements of this section, or by veterans’ organizations, as described in Section 215.1, meeting all the requirements of paragraphs (1) to (7), inclusive, of subdivision (a), shall be deemed to be within the exemption provided for in subdivision (b) of Section 4 and Section 5 of Article XIII of the California Constitution and this section and shall be entitled to a partial exemption 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 in which any of the following criteria applies:

(A)The acquisition, rehabilitation, development, or operation of the property, or any combination of these factors, is financed with tax-exempt mortgage revenue bonds or general obligation bonds, or is financed by local, state, or federal loans or grants and the rents of the occupants who are lower income households do not exceed those prescribed by deed restrictions or regulatory agreements pursuant to the terms of the financing or financial assistance.

(B)The owner of the property is eligible for and receives low-income housing tax credits pursuant to Section 42 of the Internal Revenue Code of 1986, as added by Public Law 99-514.

(C)In the case of a claim, other than a claim with respect to property owned by a limited partnership in which the managing general partner is an eligible nonprofit corporation, that is filed for the 2000–01 fiscal year or any fiscal year thereafter, 90 percent or more of the occupants of the property are lower income households whose rent does not exceed the rent prescribed by Section 50053 of the Health and Safety Code. The total exemption amount allowed under this subdivision to a taxpayer, with respect to a single property or multiple properties for any fiscal year on the sole basis of the application of this subparagraph, may not exceed twenty thousand dollars ($20,000) of tax.

(D)(i)The property was previously purchased and owned by the Department of Transportation pursuant to a consent decree requiring housing mitigation measures relating to the construction of a freeway and is now solely owned by an organization that qualifies as an exempt organization under Section 501(c)(3) of the Internal Revenue Code.

(ii)This subparagraph shall not apply to property owned by a limited partnership in which the managing partner is an eligible nonprofit corporation.

(2)In order to be eligible for the exemption provided by this subdivision, the owner of the property shall do both of the following:

(A)(i)For any claim filed for the 2000–01 fiscal year or any fiscal year thereafter, certify and ensure, subject to the limitation in clause (ii), that there is an enforceable and verifiable agreement with a public agency, a recorded deed restriction, or other legal document that restricts the project’s usage and that provides that the units designated for use by lower income households are continuously available to or occupied by lower income households at rents that do not exceed those prescribed by Section 50053 of the Health and Safety Code, or, to the extent that the terms of federal, state, or local financing or financial assistance conflicts with Section 50053, rents that do not exceed those prescribed by the terms of the financing or financial assistance.

(ii)In the case of a limited partnership in which the managing general partner is an eligible nonprofit corporation, the restriction and provision specified in clause (i) shall be contained in an enforceable and verifiable agreement with a public agency, or in a recorded deed restriction to which the limited partnership certifies.

(B)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.

(3)As used in this subdivision:

(A)“Lower income households” has the same meaning as the term “lower income households” as defined by Section 50079.5 of the Health and Safety Code.

(B)“Related facilities” means any manager’s units and any and all common area spaces that are included within the physical boundaries of the rental housing development, including, but not limited to, common area space, walkways, balconies, patios, clubhouse space, meeting rooms, laundry facilities and parking areas, except any portions of the overall development that are occupied commercial space.

(C)“Units serving lower income households” shall mean units that are occupied by lower income households at an affordable rent, as defined in Section 50053 of the Health and Safety Code or, to the extent that the terms of federal, state, or local financing or financial assistance conflicts with Section 50053, rents that do not exceed those prescribed by the terms of the financing or financial assistance. Units reserved for lower income households at an affordable rent that are temporarily vacant due to tenant turnover or repairs shall be counted as occupied.

(h)Property used exclusively for an emergency or temporary shelter and related facilities for homeless persons and families and owned and operated by religious, hospital, scientific, or charitable funds, foundations, limited liability companies, or corporations meeting all of the requirements of this section shall be deemed to be within the exemption provided for in subdivision (b) of Section 4 and Section 5 of Article XIII of the California Constitution and this section. Property that otherwise would be exempt pursuant to this subdivision, except that it includes housing and related facilities for other than an emergency or temporary shelter, shall be entitled to a partial exemption.

As used in this subdivision, “emergency or temporary shelter” means a facility that would be eligible for funding pursuant to Chapter 11.5 (commencing with Section 50800) of Part 2 of Division 31 of the Health and Safety Code.

(i)Property used exclusively for housing and related facilities for employees of religious, charitable, scientific, or hospital organizations that meet all the requirements of subdivision (a) and owned and operated by funds, foundations, limited liability companies, or corporations that meet all the requirements of subdivision (a) shall be deemed to be within the exemption provided for in subdivision (b) of Section 4 and Section 5 of Article XIII of the California Constitution and this section to the extent the residential use of the property is institutionally necessary for the operation of the organization.

(j)For purposes of this section, charitable purposes include educational purposes. For purposes of this subdivision, “educational purposes” means those educational purposes and activities for the benefit of the community as a whole or an unascertainable and indefinite portion thereof, and do not include those educational purposes and activities that are primarily for the benefit of an organization’s shareholders. Educational activities include the study of relevant information, the dissemination of that information to interested members of the general public, and the participation of interested members of the general public.

(k)In the case of property used exclusively for the exempt purposes specified in this section, owned and operated by limited liability companies that are organized and operated for those purposes, the State Board of Equalization shall adopt regulations to specify the ownership, organizational, and operational requirements for those companies to qualify for the exemption provided by this section.

(l)The amendments made by Chapter 354 of the Statutes of 2004 shall apply with respect to lien dates occurring on and after January 1, 2005.

SEC. 2.

Notwithstanding Section 2229 of the Revenue and Taxation Code, no appropriation is made by this act and the state shall not reimburse any local agency for any property tax revenues lost by it pursuant to this act.

SEC. 3.

This act provides for a tax levy within the meaning of Article IV of the Constitution and shall go into immediate effect.