The words “develop, construct, or acquire,” as used in Section 1 of Article XXXIV of the State Constitution, shall not be interpreted to apply to activities of a state public body when that body does any of the following:

(a) Provides financing, secured by a deed of trust or other security instrument to a private owner of existing housing; or acquires a development, for which financing previously has been provided, as a temporary measure to protect its security and with an intention to change the ownership so that it will not continue to be the owner of a low-rent housing project.

(b) Acquires or makes improvements to land which is anticipated to be sold, ground leased, or otherwise transferred to a private owner prior to its development as a low-rent housing project, provided (1) the land and improvements thereon are not subject to an exemption from property taxation by reason of public ownership for more than five years following acquisition or improvement by the state public body, or (2) such an exemption from property taxation persists beyond the five-year period and no alternative use is designated for the land or improvements, but any property tax revenues lost by affected taxing agencies on account of the exemption of land or improvements from property taxes by reason of public ownership of the property, or any interest in the property after the five-year period, are fully reimbursed by payments in lieu of taxes following the expiration of the five-year period.

(c) Leases existing dwelling units from the private owner of such units, provided the lease or a subtenancy thereunder does not result in a decrease of property tax revenues with respect to the dwelling units leased.

(d) Provides assistance to the private owner or occupant of existing housing which enables an occupant to live in decent, safe, and sanitary housing at a rent he or she can afford to pay.

(e) Provides assistance to a low-rent housing project and monitors construction or rehabilitation of that project and compliance with conditions of that assistance to the extent of:

(1) Carrying out routine governmental functions.

(2) Performing conventional activities of a lender.

(3) Imposing constitutionally mandated or statutorily authorized conditions accepted by a grantee of assistance.

(f) Provides assistance to a development prior to its becoming a low-rent housing project without intending or expecting that the development will become a low-rent housing project, as defined.

(g) Provides financing for a low-rent housing project pursuant to Chapter 6.7 (commencing with Section 51325) of Part 3 of Division 31.

(h) Provides financing for a low-rent housing project pursuant to Article 3.2 (commencing with Section 987.001) and Article 5y (commencing with Section 998.540) of Chapter 6 of Division 4 of the Military and Veterans Code. This subdivision shall apply to all low-rent housing projects that convert the project’s financing to permanent financing after January 1, 2017.

(Amended by Stats. 2016, Ch. 344, Sec. 5. (SB 835) Effective September 13, 2016.)