Current through Register 2024 Notice Reg. No. 38, September 20, 2024
(a) Possessory Interests. "Possessory
interests" are interests in real property that exist as a result of:
(1) A possession of real property that is
independent, durable, and exclusive of rights held by others in the real
property, and that provides a private benefit to the possessor, except when
coupled with ownership of a fee simple or life estate in the real property in
the same person; or
(2) A right to
the possession of real property, or a claim to a right to the possession of
real property, that is independent, durable, and exclusive of rights held by
others in the real property, and that provides a private benefit to the
possessor, except when coupled with ownership of a fee simple or life estate in
the real property in the same person; or
(3) Taxable improvements on tax-exempt
land.
(b) Taxable
Possessory Interests. "Taxable possessory interests" are possessory interests
in publicly-owned real property. Excluded from the meaning of "taxable
possessory interests", however, are any possessory interests in real property
located within an area to which the United States has exclusive jurisdiction
concerning taxation. Such areas are commonly referred to as federal
enclaves.
(c) Definitions. For
purposes of this regulation:
(1) "Real
property" is defined in section
104
of the Revenue and Taxation Code and includes public waters such as tidelands
and navigable waters and waterways.
(2) "Possession" of real property means
actual physical occupation. "Possession" requires more than incidental benefit
from the public property, but requires actual physical occupation of the
property pursuant to rights not granted to the general public; thus, the use of
property such as hallways, common areas, and access roads at airports,
stadiums, convention centers, or other public facilities by customers or
employees of those who may lease other public property at the public facility
of which they have exclusive use does not constitute "possession" of those
hallways, common areas, or access roads by the lessee of the public
property.
(3) A "right," or a
"claim to a right," to the possession of real property means the right, or
claim to a right, to actual physical occupation of real property. For purposes
of this subdivision, a right, or a claim to a right, to the possession of real
property may exist as a result of the possessor having or claiming to have:
(i) a leasehold estate, an easement, a profit
a prendre, or any other legal or equitable interest in real property of less
than fee simple or life estate, regardless of how the interest may be
identified in a deed, lease, or other document; or
(ii) a use permit or agreement, such as a
federal grazing permit, a permit to use a berth at a harbor, or a county use
permit authorizing professional rafting outfitters to commercially operate on a
river, that creates a legal or equitable interest in real property of less than
fee simple or life estate.
(4) "Possessor" means the party or parties
who hold the possessory interest, and any successors or assigns to such party
or parties.
(5) "Independent" means
a possession, or a right or claim to possession, if the possession or operation
of the real property is sufficiently autonomous to constitute more than a mere
agency. To be "sufficiently autonomous" to constitute more than a mere agency,
the possessor must have the right and ability to exercise significant authority
and control over the management or operation of the real property, separate and
apart from the policies, statutes, ordinances, rules, and regulations of the
public owner of the real property. For example, the control of an airport
runway or taxiway by the Federal Aviation Administration (FAA) or another
government agency or its agent is so complete that it precludes the airlines
from exercising sufficient authority and control over the management or
operation of the runways or taxiway and does not constitute sufficient
"independence" to support a possessory interest.
(6) "Durable" means for a determinable period
with a reasonable certainty that the possession of the real property by the
possessor, or the possessor's right or claim with respect to the possession of
the real property, will continue for that period.
(7) "Exclusive of rights held by others in
the real property" means the enjoyment of an exclusive use of real property, or
a right or claim to the enjoyment of an exclusive use together with the ability
to exclude from possession by means of legal process others who may interfere
with that enjoyment.
(A) For purposes of this
subdivision, "exclusive uses" include the following types of uses of real
property, as well as rights and claims to such types of uses of real property:
(1) The sole possession, occupancy, or use of
real property,
(2) The possession,
occupancy, or use of real property by co-tenants or co-owners as to leaseholds,
easements, profits a prendre, or any other legal or equitable interests in real
property of less than fee simple or life estate, where the uses constitute but
a single use jointly enjoyed.
(3)
The concurrent use of real property, not amounting to co-tenancy or
co-ownership under subdivision (A)(2) above, by a person who has a primary or
prevailing right to use the real property and/or to have its designees use the
real property. For example, a public marina leases boat slips with a lease
provision that allows the marina to rent a leased boat slip to a short-term
user if the primary lessee is away; subject to the primary lessee's right to
exclude the short-term user on the primary lessee's return. Under these facts,
the primary lessee has a primary and prevailing right to use the leased boat
slip. For purposes of this subdivision, concurrent use of real property
demonstrating a primary or prevailing right also includes alternating uses of
the same real property by more than one party, such as the case when certain
premises are used by a professional basketball team on certain days of each
week while a professional hockey team uses the same premises on certain other
days.
(4) Concurrent uses of real
property, not amounting to co-tenancy or co-ownership under subdivision (A)(2)
above, by persons making qualitatively different uses of the real property. For
purposes of this subdivision, qualitatively different uses of real property
include:
(i) those by persons making
different kinds of uses of the same real property, such as the case when one
person is developing mineral resources on real property while others are
concurrently enjoying recreational uses on the same real property;
and
(ii) those where different
persons have the right to concurrently enter onto and take different things
from the same real property.
(5) Concurrent uses of real property, not
amounting to co-tenancy or co-ownership under subdivision (A)(2) above, by
persons engaged in qualitatively similar uses that diminish the quantity or
quality of the real property. For purposes of this subdivision, uses that
diminish the quantity and/or quality of the real property include:
(i) grazing cattle;
(ii) mining;
(iii) the extraction of oil or gas;
and
(iv) the extraction of
geothermal energy.
(6)
Concurrent uses of real property, not amounting to co-tenancy or co-ownership
under subdivision (A)(2) above, by persons engaged in qualitatively similar
uses that do not diminish the quantity or quality of the real property,
provided that the number of concurrent use grants is restricted. For purposes
of this subdivision: "concurrent use grants" includes grants, permits, deeds,
agreements, and other documents providing rights to the concurrent use of real
property; and the number of concurrent use grants is "restricted" when the
number of concurrent use grants is restricted either by law or pursuant to the
policies or management decisions of the public owner of the real property or
other public agency.
Example 1: Commercial rafting outfitters have a county use
permit to commercially operate on a river. While any private recreational user
may raft on the river without limitation or regulation, only approximately 80
commercial rafting outfitters are presently allowed to operate under permit on
the river. The commercial rafting outfitters' use of the river is exclusive for
purposes of this regulation since the number of commercial use permits issued
by the county to commercial rafting outfitters is restricted, regardless of
whether or not the commercial rafting outfitters' use of the river diminishes
its quantity or quality.
Example 2: X operates a shuttle van service, picking up
passengers at their homes and other locations, and transporting them to the
airport. When the shuttle van reaches the airport, it utilizes the public
street which surrounds the airport to drop passengers off at the various
terminals at the airport. The street around the airport is available to all
licensed drivers, for commercial and noncommercial uses. Neither the traffic
laws, nor the policies or management decisions of the public owner of the
airport facility restrict the number of users of the public street. In
addition, under the assumed facts of this hypothetical, X's use of the public
street surrounding the airport does not diminish the quantity or quality of the
real property.
Given that (i) the shuttle vans using the public street are
making qualitatively similar uses of that real property; (ii) there are no
facts indicating that the quality or quantity of the real property is being
diminished; and (iii) the number of users of the real property is not
restricted, X's right to use the public street surrounding the airport is not
exclusive, and X does not have a possessory interest in the public street
surrounding the airport.
(B) A use of real property, or a right or
claim to a use of real property, that does not contain one of the elements in
subdivisions (A)(1) to (6) above, inclusive, shall be rebuttably presumed to be
nonexclusive.
(C) In no event shall
the presence of occasional trespassers or occasional interfering uses be
sufficient in and of itself to make nonexclusive a use, or a right or claim to
a use, that is otherwise exclusive for purposes of this
regulation.
(8) "Private
benefit" means that the possessor has the opportunity to make a profit, or to
use or be provided an amenity, or to pursue a private purpose in conjunction
with its use of the possessory interest. The use should be of some private or
economic benefit to the possessor that is not shared by the general public. The
fact that a possession of real property is not for a business or commercial
purpose or that the possessor is a non-profit corporation does not preclude the
possessor from being found to have received a "private benefit" from that
possession.
1. New section
filed 4-6-98; operative 5-6-98 (Register 98, No.
15).
Note: Authority cited: Section
15606(c),
Government Code. Reference: Section
107,
Revenue and Taxation Code.
