Bill Text: CA AB1791 | 2021-2022 | Regular Session | Amended

California Assembly Bill 1791 (Prior Session Legislation)

Bill Title: Rent control: local ordinances: residential units.

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Introduced - Dead) 2022-04-18 - Re-referred to Com. on H. & C.D. pursuant to Assembly Rule 96. [AB1791 Detail]

Download: California-2021-AB1791-Amended.html

Amended IN Assembly April 18, 2022

Amended IN Assembly March 24, 2022

CALIFORNIA LEGISLATURE— 2021–2022 REGULAR SESSION

Assembly Bill

No. 1791

Introduced by Assembly Member Nazarian

February 03, 2022

~~An act to add Part 16 (commencing with Section 35004) to Division 2 of the Revenue and Taxation Code, relating to taxation, to take effect immediately, tax levy.~~ An act to amend Sections 1954.51 and 1954.52 of the Civil Code, relating to residential rental housing.

LEGISLATIVE COUNSEL'S DIGEST

AB 1791, as amended, Nazarian. ~~Excise tax:~~ Rent control: local ordinances: residential units.

Existing law, the Costa-Hawkins Rental Housing Act, prescribes statewide limits on the application of local rent control with regard to certain properties. That act, among other things, authorizes an owner of residential real property to establish the initial and all subsequent rental rates for a dwelling or unit that has been issued a certificate of occupancy after February 1, 1995, has already been exempt from a residential rent control ordinance as of February 1, 1995, pursuant to a local exemption for newly constructed units, or is alienable separate from the title to any other dwelling unit or is a subdivided interest in a subdivision and meets specified requirements, subject to certain exceptions.
This bill would prevent the application of the above-described limitation on local rent control measures where the property is owned by an applicable large business, defined as a business entity that owns 10 or more single-family residential properties and has annual gross receipts of $1 billion or more.
~~Under existing law, the Franchise Tax Board collects and administers various taxes.~~
This bill would require the Franchise Tax Board to collect and administer a fee of $500 per residential unit owned by a business, as defined. The bill would state the intent of the Legislature that the moneys collected from this fee will be used for the development of affordable housing. The bill would also require the Franchise Tax Board to report annually to the Legislature the number of businesses that have paid the fee.
~~Existing law provides for the valuation of real property for property tax purposes.~~
This bill would require a county assessor to report annually to the Legislature the number of residential units owned by a business and the total number of residential units in that county. By imposing a duty on county assessors, 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 the statutory provisions noted above.
This bill would include a change in state statute that would result in a taxpayer paying a higher tax within the meaning of Section 3 of Article XIII A of the California Constitution, and thus would require for passage the approval of 23 of the membership of each house of the Legislature.
~~This bill would take effect immediately as a tax levy.~~

Vote: ~~TWO_THIRDS~~MAJORITY Appropriation: NO Fiscal Committee: ~~YES~~NO Local Program: ~~YES~~NO

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

SECTION 1.

Section 1954.51 of the Civil Code is amended to read:

1954.51.

As used in this chapter, the following terms have the following meanings:

(a) (1) “Applicable large business” means a business entity, however formed, that owns 10 or more single-family residential properties and has annual gross receipts of one billion dollars ($1,000,000,000) or more.
(2) For purposes of this subdivision, gross receipts and holdings of a business include the gross receipts and holdings of any affiliated company.
~~(a)~~

(b) “Comparable units” means rental units that have approximately the same living space, have the same number of bedrooms, are located in the same or similar neighborhoods, and feature the same, similar, or equal amenities and housing services.

~~(b)~~

(c) “Owner” includes any person, acting as principal or through an agent, having the right to offer residential real property for rent, and includes a predecessor in interest to the owner, except that this term does not include the owner or operator of a mobilehome park, or the owner of a mobilehome or ~~his or her~~ their agent.

~~(c)~~

(d) “Prevailing market rent” means the rental rate that would be authorized pursuant to 42 U.S.C.A. 1437 (f), as calculated by the United States Department of Housing and Urban Development pursuant to Part 888 of Title 24 of the Code of Federal Regulations.

~~(d)~~

(e) “Public entity” has the same meaning as set forth in Section 811.2 of the Government Code.

~~(e)~~

(f) “Residential real property” includes any dwelling or unit that is intended for human habitation.

~~(f)~~

(g) “Tenancy” includes the lawful occupation of property and includes a lease or sublease.

SEC. 2.

Section 1954.52 of the Civil Code is amended to read:

1954.52.

(a) Notwithstanding any other ~~provision of~~ law, an owner of residential real property may establish the initial and all subsequent rental rates for a dwelling or a unit about which any of the following is true:

(1) It has a certificate of occupancy issued after February 1, 1995.

(2) It has already been exempt from the residential rent control ordinance of a public entity on or before February 1, 1995, pursuant to a local exemption for newly constructed units.

(3) (A) It is alienable separate from the title to any other dwelling unit or is a subdivided interest in a subdivision, as specified in subdivision (b), (d), or (f) of Section 11004.5 of the Business and Professions Code.

(B) This paragraph does not apply to either of the following:

(i) A dwelling or unit where the preceding tenancy has been terminated by the owner by notice pursuant to Section 1946.1 or has been terminated upon a change in the terms of the tenancy noticed pursuant to Section 827.

(ii) A condominium dwelling or unit that has not been sold separately by the subdivider to a bona fide purchaser for value. The initial rent amount of the unit for purposes of this chapter shall be the lawful rent in effect on May 7, 2001, unless the rent amount is governed by a different provision of this chapter. However, if a condominium dwelling or unit meets the criteria of paragraph (1) or (2) of subdivision (a), or if all the dwellings or units except one have been sold separately by the subdivider to bona fide purchasers for value, and the subdivider has occupied that remaining unsold condominium dwelling or unit as ~~his or her~~ their principal residence for at least one year after the subdivision occurred, then subparagraph (A) ~~of paragraph (3)~~ shall apply to that unsold condominium dwelling or unit.

(C) Where a dwelling or unit in which the initial or subsequent rental rates are controlled by an ordinance or charter provision in effect on January 1, 1995, the following shall apply:

(i) An owner of real property as described in this paragraph may establish the initial and all subsequent rental rates for all existing and new tenancies in effect on or after January 1, 1999, if the tenancy in effect on or after January 1, 1999, was created between January 1, 1996, and December 31, 1998.

(ii) Commencing on January 1, 1999, an owner of real property as described in this paragraph may establish the initial and all subsequent rental rates for all new tenancies if the previous tenancy was in effect on December 31, 1995.

(iii) The initial rental rate for a dwelling or unit as described in this paragraph in which the initial rental rate is controlled by an ordinance or charter provision in effect on January 1, 1995, may not, until January 1, 1999, exceed the amount calculated pursuant to subdivision (c) of Section 1954.53. An owner of residential real property as described in this paragraph may, until January 1, 1999, establish the initial rental rate for a dwelling or unit only where the tenant has voluntarily vacated, abandoned, or been evicted pursuant to paragraph (2) of Section 1161 of the Code of Civil Procedure.

(b) Subdivision (a) does not apply where the owner has otherwise agreed by contract with a public entity in consideration for a direct financial contribution or any other forms of assistance specified in Chapter 4.3 (commencing with Section 65915) of Division 1 of Title 7 of the Government Code.

(c) Nothing in this section shall be construed to affect the authority of a public entity that may otherwise exist to regulate or monitor the basis for eviction.

(d) (1) This section does not apply to any dwelling or unit that contains serious health, safety, fire, or building code violations, excluding those caused by disasters for which a citation has been issued by the appropriate governmental agency and which has remained unabated for six months or longer preceding the vacancy.

(2) This section does not apply to any dwelling or unit owned by an applicable large business.

SECTION 1.Part 16 (commencing with Section 35004) is added to Division 2 of the Revenue and Taxation Code, to read:
16.Residential Units
35004.
~~(a)A business that owns residential property shall pay an annual fee of five hundred dollars ($500) per residential unit.~~
~~(b)The Franchise Tax Board shall administer and collect the fee imposed by this section.~~
~~(c)It is the intent of the Legislature that moneys collected pursuant to this section will be used for the development of affordable housing.~~
~~(d)Both of the following entities shall submit the following information in an annual report to Legislature, pursuant to Section 9795 of the Government Code:~~
~~(1)The Franchise Tax Board shall report the number of businesses who have paid the fee required by subdivision (a).~~
~~(2)A county assessor shall report the number of residential units owned by a business and the total number of residential units owned in that county.~~
~~(e)For purposes of this section, “business” means a sole proprietorship, partnership, limited liability company, corporation, trust, or other association.~~
SEC. 2.
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.
SEC. 3.
~~This act provides for a tax levy within the meaning of Article IV of the California Constitution and shall go into immediate effect.~~