GENERAL ASSEMBLY OF NORTH CAROLINA

SESSION 2009

H                                                                                                                                                    1

HOUSE BILL 1586

Short Title:        Community Land Trust Property Taxation.		(Public)
Sponsors:	Representatives Luebke and Hall (Primary Sponsors).
Referred to:	Finance.

May 6, 2009

A BILL TO BE ENTITLED

AN ACT to modify the valuation of community land trust property.

The General Assembly of North Carolina enacts:

SECTION 1.  Article 12 of Subchapter II of Chapter 105 of the General Statutes is amended by adding a new section to read:

"§ 105‑277.17.  Taxation of community land trust property.

(a) Classification. – Community land trust property is designated a special class of property under Article V, Section 2(2) of the North Carolina Constitution and must be appraised, assessed, and taxed in accordance with this section.

(b) Definitions. – The following definitions apply in this section:

(1) Community land trust developer. – A nonprofit housing development entity that is an exempt organization under section 501(c)(3) of the Code and that conveys an interest in community land trust property to a qualifying owner.

(2) Community land trust property. – Improved real property that meets all of the following conditions:

a. The property is conveyed to a qualifying owner subject to resale restrictions contained in a deed of conveyance or in a long‑term ground lease of not less than 30 years.

b. The community land trust developer retains an interest in the property pursuant to the deed of conveyance or the long‑term ground lease of not less than 30 years.

(3) Ground lease. – A lease between the owner of a dwelling site, as landlord, and the owner of a permanent residence constructed on the dwelling site, as tenant. The leasehold interest of the tenant in the dwelling site includes an undivided interest and nonexclusive easement for ingress and egress to the dwelling site and for the use and enjoyment of the common areas and community facilities, if any. A ground lease includes a lease in which ownership of the permanent residence on the dwelling site may pass to the owner of the dwelling site at the end of the lease term for nominal or no additional consideration.

(4) Qualifying owner. – A North Carolina resident who owns and occupies community land trust property as a permanent residence and who is part of a household, the annual income of which at the time of purchase and adjusted for family size is not more than eighty percent (80%) of the local area median family income as defined by the most recent figures published by the U.S. Department of Housing and Urban Development.

(5) Resale restrictions. – Binding restrictions that limit the price at which community land trust property can be resold to a price that would be affordable to another qualifying owner.

(c) Valuation. – The assessor shall take resale restrictions that apply to community land trust property into consideration in determining the value of the property."

SECTION 2.  This act is effective for taxable years beginning on or after July 1, 2009.