BILL NUMBER: SB 1250	AMENDED
	BILL TEXT

	AMENDED IN ASSEMBLY  AUGUST 9, 2010
	AMENDED IN SENATE  JUNE 2, 2010

INTRODUCED BY   Senator Ducheny

                        FEBRUARY 19, 2010

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


	LEGISLATIVE COUNSEL'S DIGEST


   SB 1250, as amended, Ducheny. Taxation: military housing. 

   Existing 
    (1)     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.
   This bill would specify that  a possession or use is not
independent if, under a contract described above, the housing is
solely for active duty military personnel and their dependents
  the definition does not apply to a military housing
unit managed by a private contractor, under a contract described
above, that is rented to a tenant who is an unaffiliated member of
the general public, as defined, and would require the private
contractor to be responsible for any property taxes on housing units
rented to unaffiliated members of the general public  .
   Vote: majority. Appropriation: no. Fiscal committee:  no
  yes  . 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.   (a)    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  solely
 for active duty military personnel or their dependents, or
both, if all of the following criteria are met: 
   (a) 
    (1)  The military 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) 
    (2)  All services normally provided by a municipality
are required to be purchased from the military facility or a provider
designated by the military. 
   (c) 
    (3)  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 housing, separate and apart
from the rules and regulations of the military. 
   (d) 
    (4)  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) 
    (5)  Tenants are designated by a military housing
agency. 
   (f) 
    (6)  Financing for the project is subject to the
approval of the military in its sole discretion. 
   (g) 
    (7)  Rents charged to military personnel or their
dependents are set by the military. 
   (h) 
    (8)  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 housing. 
   (i) 
    (9)  Evictions from the housing units are subject to the
military justice system. 
   (j) 
    (10)  The military prescribes rules and regulations
governing the use and occupancy of the property. 
   (k) 
    (11)  The military has the authority to remove or bar
persons from the property. 
   (l) 
    (12)  The military may impose access restrictions on the
contractor and its tenants. 
   (m) 
    (13)  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.) 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) 
    (14)  The military housing is constructed, renovated,
rehabilitated, remodeled, replaced, or managed under the Military
Housing Privatization Initiative, or any successor to that law. 
   (b) This section shall not apply to a military housing unit
managed by a private contractor that is rented to a tenant who is an
unaffiliated member of the general public.  
   (1) "Unaffiliated member of the general public" means a person who
is not a current member of the military. A housing unit rented to or
occupied by a person employed as management or maintenance personnel
for the military housing property shall not be considered to be a
unit rented to an unaffiliated member of the general public. 

   (2) The private contractor shall annually notify the assessor by
February 15 of any housing units rented to unaffiliated members of
the general public as of the immediately preceding lien date. The
private contractor shall be responsible for any property taxes on
housing units rented to unaffiliated members of the general public.
 
   (o) 
    (c)  For purposes of this section, "military facility
under military control" means a military base that restricts public
access to the military base.