House committee substitute to the 1st edition makes the following changes.

Makes technical changes to GS 105-278.6 (charitable use exemption from real and personal property taxes). Defines public agency (state, county, municipal, housing authority, and federal agencies or departments overseeing the described government-sponsored affordable rental housing) in new GS 105-278.7A. Modifies the U.S. Department of Housing and Urban Development publication date on median income and family size referenced in income limit.

Modifies the exemption for government supported affordable rental housing as follows. Now describes the required agreement between a public agency and the owner which requires that the property receiving public financing support be operated as affordable housing for fifteen years as a “regulatory agreement” (was, “agreement”). Requires that deed restrictions or regulatory agreement accompanying any support for financing affordable rental housing in a locality by a municipality, county, or housing authority must be recorded with the register of deeds in the county where the property is located. Specifies that the rights under those instruments endure for the full term of the agreement and are not defeasible without the government’s written agreement.

Modifies the exemption for non-government supported affordable rental housing as follows. Defines “100% owned” when describing the ownership and operation of a nonprofit corporation that has owned and operated affordable housing for at least five years as follows. Either the nonprofit is the sole record owner of the property or if title is held by a single-purpose entity, the eligible nonprofit corporation, either directly or through one or more wholly-owned disregarded entities, solely owns 100% of the legal and equitable ownership interest in the title-holding entity as specified. Removes the one-year transition period pertaining to the exemption amount. Now requires that an eligible owner receiving an exemption under the statute reapply every year, as described (was, certify eligibility for the exemption annually). Specifies that property ineligible for the exemption under new GS 105-278.7A because it has been designated a special class under GS 105-277.16 can now qualify for the exemption if a new Low-Income Housing Credit Allocation and Certification has been awarded for newly financed improvements at the property and separately applied for and qualified under GS105-278.7A.