Property tax: welfare exemption.

Plain English Breakdown

The official source material does not provide specific details about additional duties imposed on local tax officials or the exact nature of these duties.

Property Tax: Welfare Exemption Extension

AB-1668 extends an existing property tax exemption for welfare-related uses of land until January 1, 2033.

What This Bill Does

• Extends the property tax exemption that applies to properties used exclusively for religious, hospital, charitable, or natural resource preservation purposes up to and including the lien date in 2032.
• Repeals the provision on January 1, 2033.

Who It Names or Affects

• Entities like foundations, LLCs, and corporations that own or operate land used exclusively for welfare purposes.
• Local tax officials who must enforce the property tax exemption rules.

Terms To Know

Welfare Exemption

A type of property tax exemption given to properties used exclusively for religious, hospital, charitable, or natural resource preservation purposes and owned by nonprofit entities.

Lien Date

The date by which a property tax must be paid to avoid penalties.

Limits and Unknowns

• It is not clear how much additional work local tax officials will have due to the extension.
• The bill does not specify what happens after January 1, 2033, when the exemption ends.

Official Summary Text

AB 1668, as amended, Pellerin.
Property tax: welfare exemption.
The California Constitution authorizes the Legislature to exempt from taxation, in whole or in part, property that is used exclusively for religious, hospital, or charitable purposes, and is owned or held in trust by a nonprofit entity. Pursuant to that authority, existing law provides for a welfare exemption under which property used exclusively for an exempt purpose and owned and operated by specified entities, including foundations, limited liability companies, or corporations meeting certain statutory requirements is exempt from taxation. Existing law also provides that property used exclusively for the preservation of specified natural resources or open-space lands owned or operated by a specified entity meeting specified criteria is deemed to be included within the welfare exemption. Existing law makes that provision operative up to, and including, the lien date in 2027 and
repeals that provision on January 1, 2028.
This bill would extend the above-described operative date up to, and including, the lien date in 2032 and would extend the corresponding repeal date to January 1, 2033. By imposing additional duties upon local tax officials, this bill would impose a state-mandated local program.
Existing law requires any bill authorizing a new tax expenditure to contain, among other things, specific goals, purposes, and objectives that the tax expenditure will achieve, detailed performance indicators, and data collection requirements.
This bill would state that it is the intent of the Legislature to apply those requirements to the bill and would set forth specified information relating to those requirements.
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 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.

Current Bill Text

Download Bill PDF