AMENDED IN ASSEMBLY MAY 22, 2026

AMENDED IN ASSEMBLY APRIL 20, 2026

CALIFORNIA LEGISLATURE— 2025–2026 REGULAR SESSION

97

TAX LEVY

Introduced by Assembly Member Pellerin

January 29, 2026

An act to amend Section 214.02 of the Revenue and Taxation Code, relating to taxation, to take effect immediately, tax levy.

Vote: majority   Appropriation: no   Fiscal committee: yes   Local program: yes

LEGISLATIVE COUNSEL’S DIGEST

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. Existing law also provides that property used exclusively for the preservation of specified natural resources or open-space lands owned or operated by a specified entity meeting specified criteria is deemed to be included within the welfare exemption. Existing law makes that provision operative up to, and including, the lien date in 2027 and repeals that provision on January 1, 2028.

This bill would extend the above-described operative date up to, and including, the lien date in 2032 and would extend the corresponding repeal date to January 1, 2033. By imposing additional duties upon local tax officials, this bill would impose a state-mandated local program.

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 state that it is the intent of the Legislature to apply those requirements to the bill and would set forth specified information relating to those requirements.

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.

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

SECTION 1.

Section 214.02 of the Revenue and Taxation Code is amended to read:

214.02.

(a) Except as provided in subdivision (b) or (c), property that is used exclusively for the preservation of native plants or animals, biotic communities, geological or geographical formations of scientific or educational interest, or open-space lands used solely for recreation and for the enjoyment of scenic beauty, is open to the general public subject to reasonable restrictions concerning the needs of the land, and is owned and operated by a scientific or charitable fund, foundation, limited liability company, or corporation, the primary interest of which is to preserve those natural areas, and that meets all the requirements of Section 214, shall be deemed to be within the exemption provided for in subdivision (b) of Sections 4 and 5 of Article XIII of the Constitution of the State of California and Section 214.

(b) The exemption provided by this section shall not apply to any property of an organization that owns in the aggregate 30,000 acres or more in one county that were exempt under this section prior to March 1, 1983, or that are proposed to be exempt, unless the nonprofit organization that holds the property is fully independent of the owner of any taxable real property that is adjacent to the property otherwise qualifying for tax exemption under this section. For purposes of this section, the nonprofit organization that holds the property shall be considered fully independent if the exempt property is not used or operated by that organization or by any other person so as to benefit any officer, trustee, director, shareholder, member, employee, contributor or bondholder of the exempt organization or operator, or the owner of any adjacent property, or any other person, through the distribution of profits, payment of excessive charges or compensations, or the more advantageous pursuit of their business or profession.

(c) The exemption provided by this section shall not apply to property that is reserved for future development.

(d) (1) For the purposes of determining whether the property is used for the actual operation of the exempt activity as required by subdivision (a), consideration shall not be given to the use of the property for either of the following:

(A) Activities resulting in direct or in-kind revenues provided that the activities further the conservation objectives of the property as provided in a qualified conservation management plan for the property. These revenues include those revenues derived from grazing leases, hunting and camping permits, rents from persons performing caretaking activities who reside in dwellings on the property, and admission fees collected for purposes of public enjoyment.

(B) Any lease of the property for a purpose that furthers the conservation objectives of the property as provided in a qualified conservation management plan for the property.

(2) The activities and lease described in paragraph (1) may not generate unrelated business income.

(3) For purposes of this subdivision, a “qualified conservation management plan” means a plan that satisfies all of the following:

(A) Identifies both of the following:

(i) That the foremost purpose and use of the property is for the preservation of native plants or animals, biotic communities, geological or geographical formations of scientific or educational interest, or as open-space lands used solely for recreation and for the enjoyment of scenic beauty.

(ii) The overall conservation management goals, including, but not limited to, identification of permitted activities, and actions necessary to achieve the goals.

(B) Describes both of the following:

(i) The natural resources and recreational attributes of the property.

(ii) Potential threats to the conservation values or areas of special concern.

(C) Contains a timeline for planned management activities and for regular inspections of the property, including existing structures and improvements.

(e) This section shall be operative from the lien date in 1983 to and including the lien date in 2032, after which date this section shall become inoperative, and as of January 1, 2033, this section is repealed.

(f) The amendments made by Section 4 of Chapter 354 of the Statutes of 2004 shall apply with respect to lien dates occurring on and after January 1, 2005.

(g) The amendments made to this section by the act adding this subdivision shall apply commencing with the lien date for the 2013–14 fiscal year.

SEC. 2.

It is the intent of the Legislature to apply the requirements of Section 41 of the Revenue and Taxation Code to this act. Therefore, the Legislature finds and declares the following with respect to the tax exemption provided by Section 214.02 of the Revenue and Taxation Code, as amended by Section 1 of this act.

(a) The specific goals, purposes, and objectives of the exemption are to do both of the following:

(1) Eliminate Reduce financial barriers that inhibit nonprofit land conservation organizations from preserving California’s natural resources.

(2) Promote environmental preservation by enabling nonprofit organizations to hold and maintain land in its natural state without incurring additional tax burdens.

(b) The detailed performance indicators for the Legislature to use in determining whether the exemptions provided by Section 1 of this act meet the goals, purposes, and objectives described in subdivision (a) shall be all of the following:

(1) The total number of properties that qualify for the exemption provided by Section 1 of this act.

(2) The total assessed value of properties that qualify for the exemption provided by Section 1 of this act which are preserved by nonprofit land conservation organizations. act.

(3) The total acreage of land on properties that qualify for the exemption under Section 1 of this act which are preserved by nonprofit land conservation organizations. act.

(c) (1) On or before January 1 of each year prior to January 1, 2034, the State Board of Equalization shall publish, and submit to the relevant committees of the Legislature, an annual report that does both of the following:

(A) Summarizes the annual total acreage described in paragraph (2) (3) of subdivision (b), to the extent that data is available from the counties.

(B) Summarizes the annual total assessed value of the properties described in paragraph (1) (2) of subdivision (b), to the extent that data is available from the counties.

(2) A report submitted pursuant to this subdivision shall be submitted pursuant to Section 9795 of the Government 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.