BILL NUMBER: AB 1344 AMENDED
BILL TEXT
AMENDED IN ASSEMBLY MAY 5, 2009
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 amended, 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 and any interest earned on the unexpended
property tax savings 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. This bill would require the private contractor
to expend the reasonable estimate of property tax savings for an
assessment year through the construction of improvements or to
service debt incurred to fund the construction of improvements within
the period of tim e the county assessor may make an
escape assessment, as specified. This bill would require the period
of time to expend the property tax savings, and the period of time to
make an escape assessment, to be extended if certain conditions
occur, as provided.
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 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 by contract or other means,
including control of reserve account distributions or withdrawals
, 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 et seq.) and any
interest earned on the unexpended property tax savings, shall
inure solely to the benefit of the current or future residents of the
military housing through any of the following current or future
improvementsprovided by the private contractor with the
approval under the terms of a contract between the
private contractor and the military or with the prior written
approval or direction 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) and
any interes t earned on the unexpended property tax
savings may be used to fund the construction of improvements or
to service debt incurred to fund the construction of improvements.
(3) (A) Except as provided in subparagraph (B), the private
contractor shall expend the property tax savings specified in
paragraph (1) for an assessment year through the construction of
improvements or to service debt incurred to fund the construction of
improvements within the period of time the county assessor may make
an escape assessment under Section 532.
(B) The period of time described in subparagraph (A) to expend the
property tax savings shall be extended if any of the following
conditions occur:
(i) The private contractor is required, under the terms of the
contract between the private contractor and the military, to retain
the property tax savings for a specified period of time and for a
specified purpose, including, but not limited to, future housing
renovations and rehabilitations.
(ii) The military has directed the private contractor, in writing,
to retain the property tax savings in a reserve account for a
specified period of time and for a specified purpose.
(C) Any unexpended property tax savings shall be deposited in
secure accounts and invested in interest bearing instruments until
withdrawn for authorized expenditures.
(D) The period of time the county assessor may make an escape
assessment under Section 532 shall be extended by a period of time
equal to the extension authorized pursuant to subparagraph (B).
(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.