AN UPDATE ON TVC’S BILL AB 1788

Committee Votes on AB 1788 on MAY 14!

We Have More Time to Take Action!

Dear TVC Supporters:

On April 16^th TVC’s bill to stop the unfair taxation of vacant land owned by churches was heard before the Assembly Revenue & Taxation Committee in the California State Assembly.

Committee member Jim Beall, a Democrat from San Jose, expressed support for the bill but had a couple minor reservations that he hoped TVC and Assemblyman Mike Morrell, the legislator who is authoring the bill for TVC, could meet to iron out. All parties agreed to sit down to address those concerns. Indications are that the committee will be inclined to pass the bill once amendments are made. The committee will vote on AB 1788 on May 14^th.

TVC’s lead advocate in California, Ben Lopez, testified before the committee and laid out the need for AB 1788.

Ben shared how under current law county assessors can bill churches and non-profits for high property tax amounts simply because they claim they do not know how the church or non-profit intends to use the land. As you know, TVC’s bill aims to spare churches and non-profits the extra tax bill the moment they file a building permit and intent to build. This will save these donation-dependent organizations much needed financial resources.

Joining Ben to testify was long-time TVC friend and supporter, Pastor Jim Willoughby of Echos of Faith World Outreach Ministries in Ontario, CA. Pastor Willoughby shared how more than half of the churches today are 100 members or less and that up to 80% of churches have had their income drastically cut due to low donations. He proved the point that churches simply cannot afford to pay taxes on vacant land in these difficult economic times.

Ontario Councilman Alan Wapner, also a friend of TVC’s and a devout Jewish man, spoke about how the local Chahab of the Inland Empire (a Jewish charity that serves all people of all ages and various faiths) purchased land, uses it for temple services and is still taxed because the land is not developed. Wapner reminded the committee that it is the state that pushes more and more responsibility to local government as it slashes it owns budget, yet it doesn’t offer any tax relief in return. Wapner shared how local charities help address the needs that cities are left to provide.

TVC will be in discussions with Assemblyman Morrell and Assemblyman Beall in the days leading up to the May 14^th vote on AB 1788. The vote looks promising as no member of the committee spoke out against AB 1788 and no representatives from those groups who sent in letters to the committee opposing AB 1788 came to the hearing to testify.

Traditional Values Coalition has sponsored AB 1788 that would ensure all non-profits, including churches, are no longer hit with property taxes for vacant land owned. Assembly Bill 1788 is being carried for us by Assemblyman Mike Morrell of Rancho Cucamonga.

We need your help right away to pass a bill TVC has sponsored in the California State Legislature. We need you to take action immediately!!

AB 1788 is set for a hearing and vote on April 16th before the Assembly Revenue & Taxation Committee. We must get this bill through its first hurdle.

CURRENT LAW:

AB 1788 is vital because churches and other non-profits are being unfairly taxed if they own vacant land.

Under current law any church, soup kitchen, homeless shelter and other non-profit entities that own vacant land are hit with property taxes. Non-profits become exempt from paying these property taxes only when physical construction and changes to the property are made. We feel this imposes a financial burden on non-profits.

The law provides a tax exemption for property used exclusively for religious, hospital, scientific or charitable purposes. This exemption was created by the passage of Proposition 4 in 1944 in order to encourage the proliferation of private, non-profit entities that operate for the public good. It was not designed to hinder them. The health, citizenship, and welfare services provided by these groups, such as churches, homeless shelters, food banks, soup kitchens and the like are of great benefit to their communities, and the property tax exemption has helped to encourage these efforts for nearly 70 years.

Currently, county assessors may tax vacant land owned by non-profit and charitable organizations because it is not known by the county what the intended future usage of the land would be. Organizations are taxed for vacant land even if intent to develop the land for charitable purposes is expressed. The exemption is not granted until construction on a project has physically begun.

This property tax exemption is only granted during "the course of construction." However, a property is not eligible until construction has resulted in "changes to the property visible to an individual visiting the site." In the years since Proposition 4's passage, the permitting process for construction projects has grown dramatically, increasing costs and delaying construction projects. As a result, the entities that California voters intended to insulate from taxation in order to foster their growth are being increasingly hit with substantial property tax obligations. 

THE PROBLEM:

While a non-profit may be attempting to raise funds to build a new church, facility or school on nearby vacant land, the property taxes continue even if the non-profit has expressed to the county what they intend to build. It's unfair that local government can continue to tax non-profit entities (remember not just churches, but all non-profits) while they are trying to raise the necessary funds to build. Non-profits should not be forced to pay property taxes and take away funds from their current operations while they are trying to raise money for the building fund. 

WHAT AB 1788 WOULD DO:

AB 1788 simply seeks to exempt ALL non-profits from vacant property taxation the moment they file an intent to build with the local building department. The property tax exemption will be applied once it is confirmed that construction has taken place on the property for charitable purposes in keeping with the non-profit's mission.

Churches and all non-profits are being unfairly taxed if they own vacant land. 

ACTION NEEDED TO PASS AB 1788!!

Remember, Committee Vote Set for May 14th, 2012!

1. Special Action Needed! Send A Letter into the Committee!!

We need for churches and businesses to send in a letter of support on church stationary or business letterhead to the Assembly Revenue & Taxation Committee IMMEDIATELY!!

Please click here to send a message.

2. Call ALL members of the Assembly Revenue & Taxation Committee!  Ask them to VOTE YES on AB 1788!!

VOTE TO HAPPEN MAY14th, 2012!!

3. Contact TVC if your church or another church could benefit from AB 1788!

We need to hear of situations where churches are trying to build or expand. Please email TVC’s Legislative Advocate Benjamin Lopez with your story and contact information at: blopez@traditionalvalues.org.