Metropolitan District Leases & Property Tax Exemptions

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:

• The metropolitan district's use of the leased property;
• The metropolitan district's authority to use the leased property for the metropolitan district's purposes;
• Any use of the leased property by a private person for private purposes; and
• 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.

(Note: This summary applies to this bill as introduced.)