AB 2167: Property tax: documentary transfer tax: exemptions: corporations chartered under tribal law.

(1)The California Constitution authorizes the Legislature to exempt from taxation, in whole or in part, property that is used exclusively for religious, hospital, or charitable purposes, and is owned or held in trust by a nonprofit entity. Pursuant to that authority, existing law provides for a welfare exemption under which property used exclusively for an exempt purpose and owned and operated by specified entities, including foundations, limited liability companies, or corporations meeting certain statutory requirements, is exempt from taxation. Chapter 2 of the Statutes of 2026 (AB 1485) provides that, for purposes of the exemption for property used exclusively for the preservation of specified natural resources or open-space lands, for the property tax lien dates for the 202627 fiscal year to the 203132 fiscal year, inclusive, property may be owned and operated by a federally recognized Indian tribe or a wholly owned subsidiary of a federally recognized Indian tribe meeting certain requirements.

This bill would expand the above-described authorization, for purposes of the exemption for property used exclusively for the preservation of specified natural resources or open-space lands, to include property owned and operated by a corporation chartered pursuant to tribal law.

(2)Existing law authorizes counties and cities and counties to impose a documentary transfer tax at a specified rate upon deeds, instruments, or other writings by which specified property is transferred. AB 1485 exempts from that tax, until January 1, 2031, the transfer of any deed, instrument, or other writing that makes effective a tribal land return transaction. AB 1485 defines a tribal land return transaction to mean a land return acquisition that transfers ownership of land to a federally recognized tribe or a wholly owned subsidiary of a federally recognized Indian tribe in fee simple and that includes specified restrictive covenants.

This bill would, for these purposes, expand the definition of tribal land return transaction to include a land return acquisition that transfers ownership of land to a corporation chartered under tribal law.

(3)Existing law requires any bill authorizing a new tax expenditure to contain, among other things, specific goals, purposes, and objectives that the tax expenditure will achieve, detailed performance indicators, and data collection requirements.

This bill would include additional information required for any bill authorizing a new tax expenditure.

(4)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.

(5)This bill would take effect immediately as a tax levy.