BILL NUMBER: SB 1880 CHAPTERED 07/27/04 CHAPTER 200 FILED WITH SECRETARY OF STATE JULY 27, 2004 APPROVED BY GOVERNOR JULY 27, 2004 PASSED THE SENATE JULY 12, 2004 PASSED THE ASSEMBLY JULY 2, 2004 AMENDED IN ASSEMBLY JUNE 10, 2004 AMENDED IN SENATE APRIL 1, 2004 INTRODUCED BY Committee on Revenue and Taxation (Senators Cedillo (Chair), Alpert, Bowen, and Burton) FEBRUARY 26, 2004 An act to amend Section 24002.5 of the Government Code, and to amend Sections 217, 217.1, 220.5, 533, and 5365 of, and to repeal Sections 218.1 and 5180 of the Revenue and Taxation Code, relating to taxation. LEGISLATIVE COUNSEL'S DIGEST SB 1880, Committee on Revenue and Taxation. Property taxation: county assessors: exemptions: assessments: technical code maintenance. (1) Existing law provides for the manner in which property is to be valued and assessed. Existing law requires a county assessor to possess a valid appraiser's certificate issued by the State Board of Equalization. Notwithstanding this requirement, existing law authorizes a duly elected or appointed person to exercise the duties of county assessor for one year, if the person obtains a temporary appraiser's certificate from the board within 30 days of this election or appointment. This bill would instead specify that a duly elected or appointed person may exercise the duties of county assessor for one year, if the person obtains a temporary appraiser's certificate from the board no later than 30 days after taking office. (2) Existing law also authorizes the exemption of specified property, in accordance with the California Constitution, from the imposition of the property tax, including specified works of art displayed in publicly owned galleries and museums, personal property displayed in specified aerospace museums, and aircraft of historical significance, as defined. Existing law requires a taxpayer that claims these exemptions to file an affidavit with the county assessor, a designee of the assessor, or a notary, as specified. This bill would eliminate the requirement that the taxpayer sign this affidavit before a notary public, the assessor, or the assessor' s designee and instead would require a taxpayer that claims these exemptions to sign the affidavit under penalty of perjury. (3) Existing property tax law requires certain assessments to be entered on the roll for the current assessment year, as defined, and in the case of escape assessments, to be entered with a notation, as specified. This bill would remove that requirement and a requirement relating to the 1981-82 fiscal year for the business inventory exemption. (4) Existing property tax law requires an owner of an aircraft to file a statement with a county assessor, setting forth the make, model, and year of manufacture of the aircraft. This bill would require disclosure of additional information about the aircraft necessary to ascertain the full value of the aircraft, as specified. (5) This bill would make technical, nonsubstantive changes to the property tax law by eliminating obsolete provisions. (6) This bill, by requiring a taxpayer to sign affidavits under penalty of perjury, would create a new crime and thereby impose a state-mandated local program. 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 no reimbursement is required by this act for a specified reason. THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS: SECTION 1. Section 24002.5 of the Government Code is amended to read: 24002.5. (a) A person may not exercise the powers and duties of the office of assessor unless he or she holds a valid appraiser's certificate issued by the State Board of Equalization pursuant to Article 8 (commencing with Section 670) of Chapter 3 of Part 2 of Division 1 of the Revenue and Taxation Code. (b) Notwithstanding subdivision (a), a duly elected or appointed person may exercise the powers and duties of assessor, for a period not to exceed one year, if he or she acquires a temporary appraiser's certificate from the State Board of Equalization no later than 30 days after taking office. (c) This section does not apply to any person holding the office of assessor on January 1, 1997. SEC. 2. Section 217 of the Revenue and Taxation Code is amended to read: 217. (a) Except as provided in subdivision (d), the following articles of personal property that have been made available for display in a publicly owned art gallery or museum, or a museum that is regularly open to the public and that is operated by a nonprofit organization that qualifies for exemption pursuant to Section 23701d, shall be exempt from taxation: (1) Original paintings in oil, mineral, water, vitreous enamel, or other colors, pastels, original mosaics, original drawings and sketches in pen, ink, pencil, or watercolors, or works of the free fine arts in any other media including applied paper and other materials, manufactured or otherwise, that are used on collages, artists' proof etchings unbound, and engravings and woodcuts unbound, lithographs, or prints made by other hand transfer processes unbound, original sculptures or statuary. As used in this subdivision: (A) "Sculpture" and "statuary" shall include professional productions of sculptors only whether in round or in relief, in bronze, marble, stone, terra cotta, ivory, wood, metal, or other materials, or whether cut, carved, or otherwise wrought by hand from the solid block or mass of marble, stone, alabaster, or from metal, or other materials, or cast in bronze or other metal or substance, or from wax or plaster, or constructed from any material or made in any form as the professional productions of sculptors, only. (B) "Original" when used to modify the words "sculptures" and "statuary" shall include the original work or model and the first 10 castings, replicas, or reproductions made from the sculptor's original work or model, with or without a change in scale, regardless of whether or not the sculptor is alive at the time the castings, replicas, or reproductions are completed. (C) "Painting," "mosaic," "drawing," "work of the free fine arts," "sketch," "sculpture," and "statuary" shall not include any articles of utility, articles designed for industrial use, or any articles that are made wholly or in part by stenciling or any other mechanical process. (D) "Etchings," "engravings," and "woodcuts," "lithographs," or "prints made by other hand transfer processes," shall include only works that are printed by hand from plates, stones or blocks etched, drawn, or engraved with handtools and do not include works that are printed from plates, stones or blocks etched, drawn or engraved by photochemical or other mechanical processes. (2) Original works of the free fine arts, that are not described in paragraph (1) of this subdivision, are subject to regulations, as the board may prescribe, to prove that the article represents some school, kind, or medium of the free fine arts. As used in this paragraph "original works of the free fine arts" shall not include any article of utility or any article designed for industrial use. (b) When making a claim for an exemption pursuant to this section, a person claiming the exemption shall provide all information required and answer all questions in an affidavit, under penalty of perjury. The assessor may require other proof of the facts stated before allowing the exemption. The affidavit shall be accompanied by a certificate of the director or other officer of the art gallery or museum in which the property for which an exemption is claimed under this section was made available for display that the property was available for public display in the art gallery or museum for the period specified in subdivision (e). (c) The provisions of Sections 255 and 260 shall be applicable to the exemption provided by this section. (d) The exemption provided by subdivision (a) shall not apply to any work of art loaned by any person who holds works of art primarily for purposes of sale. (e) The exemption provided by this section shall not apply unless the property was made available for public display in the art gallery or museum for a period of 90 days during the 12-month period immediately preceding the lien date for the year for which the exemption is claimed. If the property was first made available for public display less than 90 days prior to the lien date, the exemption may be granted if the person claiming the exemption certifies in writing that the property will be made available for public display for at least 90 days during the 12-month period commencing with the first day the property was made available for public display. (f) For purposes of this section "regularly open to the public" means that the gallery or museum was open to the public not less than 20 hours per week for not less than 35 weeks of the 12-month period immediately preceding the lien date for the year for which the exemption is claimed. If the gallery or museum has been open for less than 35 weeks during the 12-month period immediately preceding the lien date or for less than 20 hours per week during that period, the exemption may be granted if the director or other officer of the gallery or museum certifies in writing that the gallery or museum will be open for not less than 20 hours per week for not less than 35 weeks during the 12-month period beginning with the day the gallery or museum was first opened. (g) If a person certifies in writing that the property will be made available and the gallery or museum open for the periods specified in subdivisions (e) and (f), and the property is not so made available or the gallery or museum is not so opened, the exemption shall be canceled, and an escape assessment may be made as provided in Section 531.1. SEC. 3. Section 217.1 of the Revenue and Taxation Code is amended to read: 217.1. (a) Except as provided in subdivision (d), the following articles of personal property that are made available for display in a publicly owned aerospace museum, or an aerospace museum that is regularly open to the public and that is operated by a nonprofit organization that qualifies for exemption pursuant to Section 23701d, shall be exempt from taxation: (1) Aircraft that have been restored or maintained, whether currently certified or not for flight purposes. (2) Aircraft donated in perpetuity to the aerospace museum. (b) When making a claim for an exemption pursuant to this section, a person claiming the exemption shall give all information required and answer all questions in an affidavit, and shall subscribe and swear to the affidavit, under penalty of perjury. The assessor may require other proof of the facts stated before allowing the exemption. The affidavit shall be accompanied by a certificate of the director or other officer of the aerospace museum in which the property for which an exemption is claimed under this section was made available for display that the property was available for public display in the aerospace museum for the period specified in subdivision (e). (c) For the 1984-85 assessment year and each assessment year thereafter, the provisions of Sections 255 and 260 shall be applicable to the exemption provided by this section. (d) The exemption provided by subdivision (a) shall not apply to any aircraft loaned by any person who holds aircraft primarily for purposes of sale. (e) The exemption provided by this section shall not apply unless the property was made available for public display in the aerospace museum for a period of 90 days during the 12-month period immediately preceding the lien date for the year for which the exemption is claimed. If the property was first made available for public display less than 90 days prior to the lien date, the exemption may be granted if the person claiming the exemption certifies in writing that the property will be made available for public display for at least 90 days during the 12-month period commencing with the first day the property was made available for public display. (f) For purposes of this section, "regularly open to the public" means that the aerospace museum was open to the public not less than 20 hours per week for not less than 35 weeks of the 12-month period immediately preceding the lien date for the year for which the exemption is claimed. If the aerospace museum has been open for less than 35 weeks during the 12-month period immediately preceding the lien date or for less than 20 hours per week during that period, the exemption may be granted if the director or other officer of the aerospace museum certifies in writing that the aerospace museum will be open for not less than 20 hours per week for not less than 35 weeks during the 12-month period beginning with the date the aerospace museum was first opened. (g) If a person certifies in writing that the property will be made available and the aerospace museum open for the periods specified in subdivisions (e) and (f), and the property is not so made available or the aerospace museum is not so opened, the exemption shall be canceled, and an escape assessment may be made as provided in Section 531.1. (h) The exemption provided by this section shall be applicable for the 1979-80 fiscal year and each fiscal year thereafter. SEC. 4. Section 218.1 of the Revenue and Taxation Code is repealed. SEC. 5. Section 220.5 of the Revenue and Taxation Code is amended to read: 220.5. (a) Aircraft of historical significance shall be exempt from taxation. (b) The exemption provided in subdivision (a) applies only if all of the following conditions are satisfied: (1) The assessee is an individual owner who does not hold the aircraft primarily for purposes of sale. (2) The assessee does not use the aircraft for commercial purposes or general transportation. (3) The aircraft is available for display to the public at least 12 days during the 12-month period immediately preceding the lien date for the year for which the exemption is claimed. If the aircraft was first made available for public display less than 12 days prior to the lien date, the exemption may be granted if the claimant certifies in writing that the aircraft will be made available for public display at least 12 days during the 12-month period commencing with the first day the property was made available for public display. When applying for an exemption pursuant to this section, the claimant shall attach to that application a certificate of attendance from the event coordinator of the event at which the aircraft was displayed as required by this paragraph. (c) When claiming an exemption pursuant to this section, the claimant shall provide all information required and answer all questions contained in an affidavit furnished by the assessor. The claimant shall sign the affidavit, under penalty of perjury. The assessor may require additional proof of the information or answers provided in the affidavit before allowing the exemption. (d) For purposes of this section, "aircraft of historical significance" means any aircraft that is an original, restored, or replica of a heavier than air powered aircraft that is 35 years or older or any aircraft of a type or model of which there are fewer than five in number known to exist worldwide. (e) A fee of thirty-five dollars ($35) shall be charged and collected by the assessor upon the initial application for an exemption pursuant to this section. SEC. 6. Section 533 of the Revenue and Taxation Code is amended to read: 533. (a) If an escape assessment is made as a result of an audit that discloses that property assessed to the party audited has been incorrectly assessed either for a past tax year for which taxes have been paid and a claim for refund is not barred by Section 5097 or for any tax year for which the taxes are unpaid, the tax refunds resulting from the incorrect assessments shall be an offset against proposed tax liabilities, including accumulated penalties and interest, resulting from escaped assessments for any tax year covered by the audit. (b) If a tax refund, authorized under this section exceeds any proposed tax liabilities, including accumulated penalties and interest, the party audited shall be notified by the tax collector of the amount of the excess and of the fact that a claim for cancellation or refund may be filed with the county as provided by Section 5096 or 5096.7. SEC. 7. Section 5180 of the Revenue and Taxation Code is repealed. SEC. 8. Section 5365 of the Revenue and Taxation Code is amended to read: 5365. Upon request of the assessor of the county in which an aircraft is habitually based, the owner shall file with the assessor a statement setting forth information about the aircraft that is necessary to ascertain the full value of the aircraft, including, but not limited to, the serial number, the make, model, year of manufacture of the aircraft, and engine and maintenance information, including the total hours logged on the aircraft following the last major overhaul of the engine of the aircraft. SEC. 9. No reimbursement is required by this act pursuant to Section 6 of Article XIII B of the California Constitution because the only costs that may be incurred by a local agency or school district will be incurred because this act creates a new crime or infraction, eliminates a crime or infraction, or changes the penalty for a crime or infraction, within the meaning of Section 17556 of the Government Code, or changes the definition of a crime within the meaning of Section 6 of Article XIII B of the California Constitution.