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SB-218 Property taxation: college exemption.(1997-1998)

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Senate Bill No. 218
CHAPTER 562

An act to amend Section 203 of the Revenue and Taxation Code, relating to taxation, to take effect immediately, tax levy.

[ Filed with Secretary of State  September 18, 1998. Approved by Governor  September 17, 1998. ]

LEGISLATIVE COUNSEL'S DIGEST


SB 218, Knight. Property taxation: college exemption.
The California Constitution exempts from property taxation those buildings, land, equipment, and securities used exclusively for educational purposes by a nonprofit institution of higher education. Existing statutory provisions that specifically implement this exemption describe a qualifying institution as, among other things, an institution that confers upon its graduates at least one academic or professional degree, based on a course of at least 2 years in liberal arts and sciences, or on a course of at least 3 years in professional studies, as provided.
This bill would, for purposes of this exemption, additionally describe an academic or professional degree conferred by a qualifying institution as a degree based on a course of at least one year in flight test technology or flight test science, for which the master’s degree program has been approved by the California Council for Private Postsecondary and Vocational Education or the Bureau for Private Postsecondary and Vocational Education.
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.
This bill would take effect immediately as a tax levy.

The people of the State of California do enact as follows:


SECTION 1.

 Section 203 of the Revenue and Taxation Code is amended to read:

203.
 (a)  The college exemption is as specified in subdivision (e) of Section 3 and Section 5 of Article XIII of the California Constitution.
(b)  An educational institution of collegiate grade is an institution incorporated as a college or seminary of learning that requires for regular admission the completion of a four-year high school course or its equivalent, and confers upon its graduates at least one academic or professional degree, based on a course of at least one year in flight test technology or flight test science, for which the master’s degree program has been approved by the California Council for Private Postsecondary and Vocational Education or the Bureau for Private Postsecondary and Vocational Education, on a course of at least two years in liberal arts and sciences, or on a course of at least three years in professional studies, such as law, theology, education, medicine, dentistry, engineering, veterinary medicine, pharmacy, architecture, fine arts, commerce, or journalism.
(c)  An educational institution of collegiate grade is not conducted for profit when it is conducted exclusively for scientific or educational purposes and no part of its net income inures to the benefit of any private person.
(d)  Without prejudice to the right to assert an exemption otherwise available under subdivision (a), (d), or (e) of Section 3 of Article XIII of the Constitution, a property tax under this division shall be imposed upon that portion of the bookstore property determined to be generating the unrelated business taxable income, as defined in Section 512 of the Internal Revenue Code, to the extent property is both of the following:
(1)  Owned by an educational institution of collegiate grade or used by a nonprofit corporation operating a student bookstore affiliated with an educational institution of collegiate grade.
(2)  Primarily devoted to bookstore use that produces income that is taxable as unrelated business taxable income.
This tax shall be determined by establishing a ratio of the unrelated business taxable income to the bookstore’s gross income as defined by the Internal Revenue Code. That percent shall be the maximum percentage of the bookstore property on which a property tax can be levied.
At the end of a fiscal year when unrelated business income has been generated, the nonprofit organization shall file with the assessor copies of the organization’s most recent tax return filed with the Internal Revenue Service.

SEC. 2.

 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. 3.

 This act provides for a tax levy within the meaning of Article IV of the Constitution and shall go into immediate effect.