By Saleem A. Shareef, Esq., Checkpoint News
On February 10, 2026, California Governor Gavin Newsom signed legislation providing new property and transfer tax exemptions for land owned and operated by federally recognized Indian tribes. (L. 2026, A1485 (c. 2), effective 02/10/2026.)
Property Tax Exemption
Applicable to lien dates for fiscal years 2026–2027 through 2031–2032 and repealed as of January 1, 2033, the legislation includes within the welfare exemption provisions land that is used exclusively for the preservation of native plants or animals, biotic communities, geological or geographical formations of scientific or educational interest, tribal traditional knowledge, or open-space lands used solely for recreation and scenic enjoyment. To qualify, the property must be open to the general public (subject to reasonable restrictions for land needs) and owned and operated by a federally recognized Indian tribe or wholly owned subsidiary of a federally recognized Indian tribe. The exemption does not apply to property reserved for future development.
Determination of use. For purposes of determining whether the property is used for the actual operation of the exempt activity, consideration cannot be given to the use of the property for either of the following: (1) 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 (i.e., includes those revenues derived from grazing leases, hunting and camping permits, rents from persons performing caretaking activities who reside in dwellings on the property, and parking and admission fees collected for purposes of public enjoyment); or (2) 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. The activities and leases cannot generate unrelated business income.
A “qualified conservation management plan” must: (1) identify 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, tribal traditional knowledge, or as open-space lands used solely for recreation and for the enjoyment of scenic beauty; and the overall conservation management goals, including, but not limited to, identification of permitted activities, and actions necessary to achieve those goals; (2) describe the natural resources, tribal traditional knowledge, and recreational attributes of the property; and the potential threats to the conservation values or areas of special concern; and (3) contain a timeline for planned management activities and for regular inspections of the property, including existing structures and improvements.
Transfer Tax Exemption
Also, until January 1, 2031, the legislation exempts from the documentary transfer tax any deed, instrument, or other writing to make effective a tribal land return transaction. “Tribal land return transaction” means a land return acquisition that transfers ownership of land to a federally recognized tribe or wholly owned subsidiary of a federally recognized Indian tribe in fee simple and that includes restrictive covenants that prohibit that tribe from engaging in commercial activities on the land and restricts the uses to cultural, educational, recreational, or conservation purposes.
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