This bill introduces additional transparency and oversight requirements for property tax exemptions claimed by metropolitan districts for leased property used for public purposes.
Key Provisions:
Expanded Filing Requirements:
Metropolitan districts must submit a statement to the county assessor detailing:
How they use the leased property.
Their legal authority to use it.
Any private use of the property.
Any conflict-of-interest disclosures filed by board members.
Assessment of Public Purpose:
If a board member’s conflict-of-interest disclosure relates to the leased property, the county assessor must send the statement to the metropolitan district’s governing body.
The governing body must issue a decision within 180 days on whether the leased property serves a public purpose.
Impact on Tax Exemption:
If the governing body determines the property is not used for a public purpose, the tax exemption is denied.
The governing body's decision is final, with no right to appeal or private legal action.
Taxation of Leasehold Interests:
If a private person owns property, leases it to a public entity, and then subleases it for private use, the owner remains responsible for property taxes.
Transparency & Accountability: Public disclosures help prevent conflicts of interest.
Finality of Decision: The bill prevents legal challenges, potentially reducing prolonged tax disputes.
Possible Tax Revenue Increase: Some previously exempt properties may become taxable if found to be used for private purposes.
Here’s a tailored summary for taxpayers and policymakers:
For Taxpayers:
This bill increases transparency in how metropolitan districts claim property tax exemptions. It requires districts to disclose how they use leased property and whether private businesses benefit from tax-exempt land. If a district’s governing body determines a property is not used for a public purpose, the exemption is revoked, potentially increasing tax revenue. This change aims to prevent misuse of tax breaks and ensure fairness in property taxation.
For Policymakers:
The bill strengthens oversight of property tax exemptions for metropolitan districts by requiring detailed disclosures and conflict-of-interest statements. It establishes a clear process for assessing whether leased properties are used for public purposes and removes tax exemptions if they are not. The governing body’s decision is final, streamlining administrative processes and preventing legal disputes. This reform could increase local tax revenue and enhance public trust in tax exemption policies.
Summary
Current law grants a property tax exemption to a part of real
property that is used by the state, a political subdivision, or a state-supported institution of higher education (public entity) for purposes of the public entity pursuant to a lease or rental agreement. Current law requires a public entity claiming a property tax exemption to file a copy of the lease or rental agreement with the county assessor's office. The bill requires a metropolitan district to also file with the county
assessor's office a statement (statement) describing:
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The metropolitan district's use of the leased property;
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The metropolitan district's authority to use the leased property for the metropolitan district's purposes;
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Any use of the leased property by a private person for private purposes; and
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Any disclosure filed by a member of the board of directors of the metropolitan district in accordance with certain laws that govern disclosures of conflicts of interest.
If the statement includes a disclosure that relates to the leased
property and is filed by a member of the board of directors of the metropolitan district in accordance with certain laws that govern disclosures of conflicts of interest, the county assessor shall, within 30 days of receipt of the statement, submit the statement to the metropolitan district's governing body. Within 180 days of receipt of the statement, the governing body shall issue a written decision including findings of fact and a conclusion as to whether the leased property is used for a public purpose. If the governing body concludes that the leased property is not used for a public purpose, the leased property is not exempt from taxation. The decision of the governing body is not subject to appeal and does not give rise to any private right of action.
A leasehold interest in real or personal property that is owned by
a private person and that has been leased to the state or a political subdivision of the state, the use and possession of which has been leased back to a private person for private purposes, is taxable to the owner.
