BILL NUMBER: SB 1400	CHAPTERED  09/14/06

	CHAPTER  251
	FILED WITH SECRETARY OF STATE  SEPTEMBER 14, 2006
	APPROVED BY GOVERNOR  SEPTEMBER 14, 2006
	PASSED THE SENATE  AUGUST 16, 2006
	PASSED THE ASSEMBLY  AUGUST 10, 2006
	AMENDED IN ASSEMBLY  JUNE 20, 2006
	AMENDED IN ASSEMBLY  JUNE 13, 2006

INTRODUCED BY   Senator Kehoe

                        FEBRUARY 22, 2006

   An act to amend Section 107.4 of the Revenue and Taxation Code,
relating to taxation.


	LEGISLATIVE COUNSEL'S DIGEST


   SB 1400, Kehoe  Property taxation: military housing.
   Existing property tax law requires that all property subject to
tax be assessed at its full value, and includes certain possessory
interests among those property interests that are subject to tax.
Existing property tax law defines a taxable possessory interest to be
a use that is independent, durable, and exclusive. Existing property
tax law specifies that, for purposes of the definition of a taxable
possessory interest, a possession or use is not independent if it is
pursuant to a contract that includes, but is not limited to, a
long-term lease for the private construction, renovation,
rehabilitation, replacement, management, or maintenance of housing
for active duty military personnel and their dependents, if the
housing units and the private contractor constructing the housing
meet specified criteria.  Among this criteria is a requirement that
the military family housing constructed by the private contractor is
situated on a military facility under military control.
   This bill would define military facility under military control as
a military base that restricts public access to the military base.


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


  SECTION 1.  Section 107.4 of the Revenue and Taxation Code is
amended to read:
   107.4.  For purposes of paragraph (1) of subdivision (a) of
Section 107, there is no independent possession or use of land or
improvements if that possession or use is pursuant to a contract that
includes, but is not limited to, a long-term lease, for the private
construction, renovation, rehabilitation, replacement, management, or
maintenance of housing for active duty military personnel and their
dependents, if all of the following criteria are met:
   (a) The military family housing constructed and managed by private
contractor is situated on a military facility under military
control, and the construction of that housing is performed under
military guidelines in the same manner as construction that is
performed by the military.
   (b) All services normally provided by a municipality are required
to be purchased from the military facility or a provider designated
by the military.
   (c) The private contractor is not given the right and ability to
exercise any significant authority and control over the management or
operation of the military family housing, separate and apart from
the rules and regulations of the military.
   (d) The number of units, the number of bedrooms per unit, and the
unit mix are set by the military, and may not be changed by the
contractor without prior approval by the military.
   (e) Tenants are designated by a military housing agency.
   (f) Financing for the project is subject to the approval of the
military in its sole discretion.
   (g) Rents charged to military personnel or their dependents are
set by the military.
   (h) The military controls the distribution of revenues from the
project to the private contractor, and the private contractor is
allowed only a predetermined profit or fee for constructing the
military family housing.
   (i) Evictions from the housing units are subject to the military
justice system.
   (j) The military prescribes rules and regulations governing the
use and occupancy of the property.
   (k) The military has the authority to remove or bar persons from
the property.
   (l) The military may impose access restrictions on the contractor
and its tenants.
   (m) Any reduction or, if that amount is unknown, the private
contractor's reasonable estimate of savings, in property taxes on
leased property used for military housing under the Military Housing
Privatization Initiative (10 U.S.C. Sec. 2871 and following) shall
inure solely to the benefit of the residents of the military housing
through improvements, such as a child care center provided by the
private contractor.
   (n) The military family housing is constructed, renovated,
rehabilitated, remodeled, replaced, or managed under the Military
Housing Privatization Initiative, or any successor to that law.
   (o) For purposes of this section, "military facility under
military control" means a military base that restricts public access
to the military base.