BILL NUMBER: SB 1250	INTRODUCED
	BILL TEXT


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 introduced, Ducheny. 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.
   This bill would, for a contract entered into on or after January
1, 2005, delete the requirement that the housing be for military
personnel and their dependents, and instead specify that the housing
be for military personnel or their dependents, or both.
   This bill would make a legislative finding and declaration
relating to the public purpose served by the bill.
   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.
   By requiring county officials to apply the property tax relief
provided by this bill retroactively, this bill would impose a
state-mandated local program.
   The California Constitution requires the state to reimburse local
agencies and school districts for certain costs mandated by the
state. Statutory provisions establish procedures for making that
reimbursement.
   This bill would provide that, if the Commission on State Mandates
determines that the bill contains costs mandated by the state,
reimbursement for those costs shall be made pursuant to these
statutory provisions.
   Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: yes.


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   or  their dependents,  or both,  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
  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) 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. 
   (p) The amendments made to this section by the act adding this
subdivision and the property tax relief provided by this section
shall apply retroactively to any housing project where the contract
for the possession or use of land or improvements was entered into on
or after January 1, 2005. 
  SEC. 2.  The Legislature finds and declares that Section 1 of this
act fulfills a statewide public purpose because of the following:
   This act provides necessary property tax relief to contractors who
entered into a contract with the military on or after January 1,
2005, for the possession or use of land or improvements for housing
projects for military personnel only, so that these contractors can
provide affordable housing to military personnel.
  SEC. 3.  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. 4.  If the Commission on State Mandates determines that this
act contains costs mandated by the state, reimbursement to local
agencies and school districts for those costs shall be made pursuant
to Part 7 (commencing with Section 17500) of Division 4 of Title 2 of
the Government Code.