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AB-1288 Property tax: exemptions: personal property used for space flight activities.(2021-2022)

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Date Published: 02/19/2021 09:00 PM
AB1288:v99#DOCUMENT


CALIFORNIA LEGISLATURE— 2021–2022 REGULAR SESSION

Assembly Bill
No. 1288


Introduced by Assembly Member Quirk-Silva
(Coauthors: Assembly Members Lackey and Muratsuchi)
(Coauthors: Senators Allen, Gonzalez, and Umberg)

February 19, 2021


An act to amend Section 242 of the Revenue and Taxation Code, relating to taxation, to take effect immediately, tax levy.


LEGISLATIVE COUNSEL'S DIGEST


AB 1288, as introduced, Quirk-Silva. Property tax: exemptions: personal property used for space flight activities.
The California Constitution authorizes the Legislature to classify personal property for differential taxation or for exemption by means of a statute approved by a 2/3 vote of the membership of each house. Pursuant to this constitutional authorization, existing property tax law, for the January 1, 2014, lien date to and including the January 1, 2024, lien date, exempts qualified property, as defined, for use in space flight, including tangible personal property that has space flight capacity, as specified. Existing law repeals this exemption as of July 1, 2025. Existing law requires any bill authorizing a new tax expenditure to contain, among other things, specific goals, purposes, and objectives the tax expenditure will achieve, detailed performance indicators, and data collection requirements.
This bill, on or after January 1, 2022, would expand the exemption for qualified property used in space flight to include tangible personal property used for space flight activities, including tangible personal property that has a role as ground support infrastructure for space flight launch preparation and operations, as specified, or that has role in testing space flight engines and components at a test site, as specified. The bill would also extend the operation of this exemption indefinitely. The bill would state the intent of the Legislature to comply with the additional information requirement for any bill authorizing a new tax expenditure.
By expanding the scope of this exemption, and by extending the operation of this exemption indefinitely, 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 the statutory provisions noted above.
Existing law requires the state 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 those provisions, 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.
Vote: 2/3   Appropriation: NO   Fiscal Committee: YES   Local Program: YES  

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


SECTION 1.

 Section 242 of the Revenue and Taxation Code is amended to read:

242.
 (a) There is exempted from the taxes imposed by this part qualified property for use in used for space flight. flight activities.
(b) For purposes of this section:
(1) “Qualified property” means any of the following:
(A) Tangible personal property, whether raw materials, work in process or finished goods, that has, or upon manufacture, assembly, or installation has, space any of the following:
(i) Space flight capacity, including, but not limited to, an orbital space facility, space propulsion system, space vehicle, launch vehicle, satellite, or space station of any kind, and any component thereof, regardless of whether that property is to be ultimately returned to this state.
(ii) A role as ground support infrastructure for space flight launch preparation and operations, including, but not limited to, any of the following:
(I) Equipment necessary to distribute commodities to the launch site, space propulsion system, space vehicle, or launch vehicle.
(II) Housing data and communication support systems.
(III) Testing space propulsion systems, space vehicles, or launch vehicles, or any component thereof.
(iii) A role in testing space flight engines and components at a test site, including, but not limited to, any of the following:
(I) Test stands for testing liquid propulsion rocket engines, rocket structural elements, and integrated rocket assemblies, including all propellant and commodity delivery systems.
(II) Instrumentation, command, and control systems for operating test stands.
(III) Environmental protection, safety, and occupational health equipment.
(B) Fuel of a quality that is not adaptable for use in ordinary motor vehicles, but is produced, sold, and used exclusively for space flight.
(2) “Space flight” means any flight designed for suborbital, orbital, or interplanetary travel by a space vehicle, satellite, space facility, or space station of any kind.
(c) The exemption established by this section shall not be denied by reason of failure, postponement, or cancellation of a launch of a space vehicle, satellite, space facility, or space station of any kind, or the destruction of any launch vehicle vehicle or ground support infrastructure, or any component thereof, but the exemption shall not apply to any material that is not intended to be launched into space. of a launch vehicle or ground support infrastructure.
(d) This section shall be operative from the January 1, 2014, lien date to, and including, the January 1, 2024, lien date, and is inoperative for any and for every lien date thereafter.
(e) A taxpayer shall provide, upon request of the assessor, evidence that the qualified property exempted from the taxes imposed by this part pursuant to this section has been or will be used as described in subparagraph (A) of paragraph (1) of subdivision (b).
(f) The exemption provided by this section from the taxes imposed by this part shall be limited to taxpayers that have a primary business purpose in space flight activities.

(g)This section shall remain in effect only until July 1, 2025, and as of that date is repealed.

(g) The amendments made to this section by the act adding this subdivision shall apply commencing with the January 1, 2022, lien date and for every lien date thereafter.

SEC. 2.

 It is the intent of the Legislature to comply with Section 41 of the Revenue and Taxation Code.

SEC. 3.

 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.

SEC. 4.

 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. 5.

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