BILL NUMBER: SB 882	CHAPTERED  10/09/01

	CHAPTER  609
	FILED WITH SECRETARY OF STATE  OCTOBER 9, 2001
	APPROVED BY GOVERNOR  OCTOBER 7, 2001
	PASSED THE SENATE  SEPTEMBER 6, 2001
	PASSED THE ASSEMBLY  AUGUST 31, 2001
	AMENDED IN ASSEMBLY  JULY 16, 2001

INTRODUCED BY   Senator O'Connell

                        FEBRUARY 23, 2001

   An act to add Section 236.5 to the Revenue and Taxation Code,
relating to taxation, to take effect immediately, tax levy.


	LEGISLATIVE COUNSEL'S DIGEST


   SB 882, O'Connell.  Property taxation:  welfare exemption.
   Existing property tax law establishes, pursuant to the
authorization of the California Constitution, a welfare exemption
under which property is exempt from taxation if, among other things,
that property is used exclusively for religious, hospital,
scientific, or charitable purposes and is owned and operated by an
entity, as provided, that is itself organized and operated for those
purposes.
   This bill would apply the welfare exemption to any otherwise
taxable interest in real property that is leased for a term of 35
years or more by a charitable foundation, exempt from federal
taxation, if, among other things, the real property is used
exclusively by the lessee for operation as a public park of a
uniquely governmental character, as specified, and the lessee
foundation is, under the terms of the lease, to obtain fee ownership
of the property on or before the end of the lease term.
   Section 2229 of the Revenue and Taxation Code requires the
Legislature to reimburse local agencies annually for certain property
tax revenues lost as a result of any exemption or classification of
property for purposes of ad valorem property taxation.
   This bill would provide that, notwithstanding Section 2229 of the
Revenue and Taxation Code, no appropriation is made and the state
shall not reimburse local agencies for property tax revenues lost by
them pursuant to the bill.
   This bill would take effect immediately as a tax levy.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:


  SECTION 1.  Section 236.5 is added to the Revenue and Taxation
Code, to read:
   236.5.  Any otherwise taxable interest in real property, leased
for an original term of 35 years or more and used exclusively by the
lessee for the operation of a public park that is uniquely of a
governmental character, as described in paragraph (4) of subdivision
(b) of Section 231, is, during the term of the lease, within the
exemption provided for in subdivision (b) of Section 4 and Section 5
of Article XIII of the California Constitution, if all of the
following conditions are met:
   (a) The lessee is a charitable foundation that has received a
determination that it is a charitable organization as described in
Section 501(c)(3) of the Internal Revenue Code.
   (b) The operation of the public park by the lessee is within the
tax exempt purposes of the lessee.
   (c) The lessee acquired the leasehold in the property by means of
a charitable donation.
   (d) Under the terms of the lease, the lessee will acquire the
entire ownership interest in the property on or before the end of the
lease term.
  SEC. 2.  Notwithstanding Section 2229 of the Revenue and Taxation
Code, no appropriation is made by this act and the state shall not
reimburse any local agency for any property tax revenues lost by it
pursuant to this act.
  SEC. 3.  This act provides for a tax levy within the meaning of
Article IV of the Constitution and shall go into immediate effect.