BILL NUMBER: AB 2857 CHAPTERED 09/24/04 CHAPTER 768 FILED WITH SECRETARY OF STATE SEPTEMBER 24, 2004 APPROVED BY GOVERNOR SEPTEMBER 24, 2004 PASSED THE ASSEMBLY AUGUST 17, 2004 PASSED THE SENATE AUGUST 10, 2004 AMENDED IN SENATE JUNE 10, 2004 AMENDED IN ASSEMBLY APRIL 26, 2004 INTRODUCED BY Assembly Member Laird FEBRUARY 20, 2004 An act to amend Section 1604 of the Revenue and Taxation Code, relating to taxation. LEGISLATIVE COUNSEL'S DIGEST AB 2857, Laird. Property taxation: assessment reduction applications. Existing property tax law authorizes a taxpayer to apply to a county assessment appeals board for an assessment reduction under a variety of circumstances, including for a reduction of the base year value, as defined, of real property. Existing property tax law requires that the taxpayer's opinion of value, as reflected on a timely filed application for reduction in an assessment of property, be the basis for the calculation of property taxes, where the county assessment appeals board has failed to hear evidence and make a final determination on that application within either 2 years of the filing of that application or an extension of that 2-year period. Existing law requires that the taxpayer's opinion of value be the basis for taxing the property described in the application for all succeeding tax years until the board acts upon the application, as provided. This bill would provide that, under these circumstances, the taxpayer's opinion of value shall be the basis for taxing the property for all succeeding tax years until the board acts, but only for applications for a reduction of real property's base year value. For all other applications for a reduction in an assessment under these circumstances, the bill would provide that the taxpayer's opinion of value shall be the basis for taxing the property described in the application only for the tax year or years for which the application was filed, as specified. THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS: SECTION 1. Section 1604 of the Revenue and Taxation Code is amended to read: 1604. (a) (1) In counties of the first class, annually, on the fourth Monday in September, the county board shall meet to equalize the assessment of property on the local roll. The board shall continue to meet for that purpose, from time to time, until the business of equalization is disposed of. (2) In all other counties, annually, on the third Monday in July, the county board shall meet to equalize the assessment of property on the local roll. It shall continue to meet for that purpose, from time to time, until the business of equalization is disposed of. (b) (1) Any taxpayer may petition the board for a reduction in an assessment by filing an application pursuant to Section 1603. An application for a reduction in an assessment shall also constitute a sufficient claim for refund, if the applicant states in the application that the application is also intended to constitute a claim for refund pursuant to the provisions of Section 5097. (2) The county board shall have no power to receive or hear any petition for a reduction in an escaped assessment made pursuant to Section 531.1 nor a penal assessment levied in respect thereto, nor to reduce those assessments. (c) If the county assessment appeals board fails to hear evidence and fails to make a final determination on the application for reduction in assessment of property within two years of the timely filing of the application, the taxpayer's opinion of market value as reflected on the application for reduction in assessment shall be the value upon which taxes are to be levied for the tax year covered by the application, unless either of the following occurs: (1) The taxpayer and the county assessment appeals board mutually agree in writing, or on the record, to an extension of time for the hearing. (2) The application for reduction is consolidated for hearing with another application by the same taxpayer with respect to which an extension of time for the hearing has been granted pursuant to paragraph (1). In no case shall the application be consolidated without the taxpayer's written agreement after the two-year time period has passed or after an extension of the two-year time period previously agreed to by the taxpayer has expired. The reduction in assessment reflecting the taxpayer's opinion of market value shall not be made, however, until two years after the close of the filing period during which the timely application was filed. Further, this subdivision shall not apply to applications for reductions in assessments of property where the taxpayer has failed to provide full and complete information as required by law or where litigation is pending directly relating to the issues involved in the application. This subdivision is only applicable to applications filed on or after January 1, 1983. (d) (1) When the applicant's opinion of value, as stated on the application, has been placed on the assessment roll pursuant to subdivision (c), and the application requested a reduction in the base year value of an assessment pursuant to subdivision (a) of Section 80, the applicant's opinion of value shall remain on the roll until the county board makes a final determination on the application. The value so determined by the county board, plus appropriate adjustments for the inflation factor, shall be entered on the assessment roll for the fiscal year in which the value is determined. No increased or escape taxes other than those required by a purchase, change in ownership, or new construction, or resulting from application of the inflation factor to the applicant's opinion of value shall be levied for the tax years during which the county board failed to act. (2) When the applicant's opinion of value has been placed on the assessment roll pursuant to subdivision (c) for any application other than an application filed pursuant to subdivision (a) of Section 80, the applicant's opinion of value shall be enrolled on the assessment roll for the tax year or tax years covered by that application. (e) The county board shall notify the applicant in writing of any decision by that board not to hold a hearing on his or her application for reduction in assessment within the two-year period specified in subdivision (c). This notice shall also inform the applicant that the taxpayer's opinion of value as reflected on the application for reduction in assessment shall, as a result of the county board's failure to hold a hearing within the prescribed time period, be the value upon which taxes are to be levied in the absence of the application of either paragraph (1) or (2) of subdivision (c).