BILL NUMBER: AB 1344	INTRODUCED
	BILL TEXT


INTRODUCED BY   Assembly Member Fletcher

                        FEBRUARY 27, 2009

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


	LEGISLATIVE COUNSEL'S DIGEST


   AB 1344, as introduced, Fletcher. 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. Existing law specifies that one of these
criteria is a requirement that any reduction, as specified, in
property taxes on leased property used for military housing, as
defined, inures solely to the benefit of the residents of the
military housing through improvements.
   This bill would clarify that, for the purpose of the definition of
a taxable possessory interest, any reduction, as specified, in
property taxes on leased property used for military housing, as
defined, would inure solely to the benefit of the current or future
residents of the military housing through current or future
improvements, including project serving facilities, as specified, and
housing improvements, as specified, provided by the contractor with
the approval of the military. This bill would specify that these
property tax savings may be used to fund the construction of
improvements or to service debt incurred to fund the construction of
improvements.
   Vote: majority. Appropriation: no. Fiscal committee: no.
State-mandated local program: no.


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  
shall  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.
   () The military may impose access restrictions on the contractor
and its tenants.
   (m)  (1)    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)   et seq.)  shall inure
solely to the benefit of the  current or future  residents
of the military housing through  any of the following current or
future  improvements  , such as a child care center
 provided by the private contractor  . 
 with the approval of the military:  
   (A) Project serving facilities, including, but not limited to, day
care centers, recreation or community centers, fitness centers,
parks or playgrounds, parking, and outdoor lighting, and any
furnishings, fixtures, and equipment for those facilities.  

   (B) Housing improvements, including, but not limited to, the
construction of additional housing units, the renovation of housing
units, and the upgrade of housing units.  
   (2) The property tax savings specified in paragraph (1) may be
used to fund the construction of improvements or to service debt
incurred to fund the construction of improvements. 
   (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.