House Bill 0395c1

    Florida House of Representatives - 2000              CS/HB 395

        By the Committee on Real Property & Probate and
    Representative Patterson





  1                      A bill to be entitled

  2         An act relating to ad valorem tax exemptions;

  3         amending s. 196.012, F.S.; providing that, for

  4         purposes of determining eligibility for

  5         exemption, property which is leased to an

  6         exempt entity under a capital lease shall be

  7         deemed "owned" by the entity; defining "capital

  8         lease"; amending s. 196.198, F.S.; providing

  9         that property leased from a governmental agency

10         is eligible for the exemption for educational

11         property if the agency continues to use the

12         property exclusively for educational purposes;

13         providing an effective date.

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15  Be It Enacted by the Legislature of the State of Florida:

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17         Section 1.  Subsection (20) is added to section

18  196.012, Florida Statutes, to read:

19         196.012  Definitions.--For the purpose of this chapter,

20  the following terms are defined as follows, except where the

21  context clearly indicates otherwise:

22         (20)  For purposes of determining if property is

23  "owned" by an exempt entity, property leased to an entity

24  under a capital lease shall be deemed to be owned by that

25  entity. A "capital lease" is a lease which meets at least one

26  of the following criteria:

27         (a)  Ownership of the property transfers to the lessee

28  at the end of the lease term.

29         (b)  The lease contains a bargain purchase option which

30  allows the lessee, at his or her option, to buy the leased

31  property for a price which is sufficiently lower than the

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    Florida House of Representatives - 2000              CS/HB 395

    605-137-00






  1  expected fair market value of the property on the date the

  2  option becomes exercisable that exercise of the option

  3  appears, at the inception of the lease, to be reasonably

  4  assured.

  5         (c)  The lease term is equal to 75 percent or more of

  6  the estimated useful economic life of the property.

  7         (d)  At the inception of the lease, the present value

  8  of the minimum lease payments is at least 90 percent of the

  9  fair market value of the leased property. As used in this

10  paragraph, "minimum lease payments" has the same meaning as is

11  contained in Statements and Interpretations of the Financial

12  Accounting Standards Board in regard to capital-type leases.

13  The interest rate used to calculate the present value shall be

14  the Prime Rate published in the "Money Rates" section of the

15  Wall Street Journal on the same date as the inception of the

16  lease.

17         Section 2.  Section 196.198, Florida Statutes, is

18  amended to read:

19         196.198  Educational property exemption.--Educational

20  institutions within this state and their property used by them

21  or by any other exempt entity or educational institution

22  exclusively for educational purposes shall be exempt from

23  taxation.  Sheltered workshops providing rehabilitation and

24  retraining of disabled individuals and exempted by a

25  certificate under s. (d) of the federal Fair Labor Standards

26  Act of 1938, as amended, are declared wholly educational in

27  purpose and shall be exempted from certification,

28  accreditation, and membership requirements set forth in s.

29  196.012.  Those portions of property of college fraternities

30  and sororities certified by the president of the college or

31  university to the appropriate property appraiser as being

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    Florida House of Representatives - 2000              CS/HB 395

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  1  essential to the educational process, shall be exempt from ad

  2  valorem taxation. The use of property by public fairs and

  3  expositions chartered by chapter 616 is presumed to be an

  4  educational use of such property and shall be exempt from ad

  5  valorem taxation to the extent of such use.  Property used

  6  exclusively for educational purposes shall be deemed owned by

  7  an educational institution if the entity owning 100 percent of

  8  the educational institution is owned by the identical persons

  9  who own the property. If legal title to property is held by a

10  governmental agency which leases such property to a lessee,

11  such property shall be deemed to be owned by the governmental

12  agency and used exclusively for educational purposes if the

13  governmental agency continues to use such property exclusively

14  for educational purposes pursuant to a sublease or other

15  contractual agreement with that lessee. If the title to land

16  is held by the trustee of an irrevocable inter vivos trust and

17  if the trust grantor owns 100 percent of the entity that owns

18  an educational institution that is using the land exclusively

19  for educational purposes, the land is deemed to be property

20  owned by the educational institution for purposes of this

21  exemption. Property owned by an educational institution shall

22  be deemed to be used for an educational purpose if the

23  institution has taken affirmative steps to prepare the

24  property for educational use.  Affirmative steps means

25  environmental or land use permitting activities, creation of

26  architectural plans or schematic drawings, land clearing or

27  site preparation, construction or renovation activities, or

28  other similar activities that demonstrate commitment of the

29  property to an educational use.

30         Section 3.  This act shall take effect January 1, 2001.

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