BILL NUMBER: SB 87	CHAPTERED
	BILL TEXT

	CHAPTER  180
	FILED WITH SECRETARY OF STATE  AUGUST 24, 2007
	APPROVED BY GOVERNOR  AUGUST 24, 2007
	PASSED THE ASSEMBLY  JULY 20, 2007
	PASSED THE SENATE  AUGUST 21, 2007
	AMENDED IN ASSEMBLY  JULY 19, 2007
	AMENDED IN ASSEMBLY  JULY 16, 2007

INTRODUCED BY   Committee on Budget and Fiscal Review

                        JANUARY 17, 2007

   An act to amend Sections 441 and 452 of, to add Section 5368 to,
to add Article 7 (commencing with Section 1160) to Chapter 5 of Part
2 of Division 1 of, and to repeal Section 17052.2 of, the Revenue and
Taxation Code, relating to taxation, and declaring the urgency
thereof, to take effect immediately.



	LEGISLATIVE COUNSEL'S DIGEST


   SB 87, Committee on Budget and Fiscal Review. Taxation:
fractionally owned aircraft: teacher retention credit.
   Existing property tax law requires that aircraft, other than
certificated aircraft, be valued and assessed only in the county in
which it is habitually situated. Existing property tax law requires
owners, as well as operators, of private and public airports, to
provide the assessor of the county in which the airport is situated,
with specified information regarding aircraft using the airport as a
base, to be used by the assessor in the assessment of aircraft at
market value.
   This bill would instead provide a formula, based upon the number
of landings in and departures from a county in proportion to landings
and departures worldwide, to assess a fleet of fractionally owned
aircraft, as defined, that would be taxed by the counties where the
fleet lands. This bill would require that the fleet be assessed to
the manager in control of the fleet, as specified. This bill would
specify that this fleetwide assessment applies for the 2007-08 fiscal
year and each fiscal year thereafter, and also to specified prior
fiscal years. This bill would authorize the Aircraft Advisory
Subcommittee of the California Assessors' Association to designate a
lead county assessor's office for each manager of a fleet of
fractionally owned aircraft in this state in an assessment year. If a
lead county assessor's office is designated and that office accepts
this designation, this bill would require this lead county assessor
to calculate the value of a fleet of fractionally owned aircraft and
to transmit these calculations to other county assessors, but would
specify that each county assessor is responsible for assessing and
enrolling the taxable value of the aircraft that has situs in his or
her county, as provided. This bill would provide that fractionally
owned aircraft would be assessed under the provisions of the bill
only if a designated lead county assessor's office accepts that
designation. This bill would also authorize the lead county assessor'
s office to lead an audit team to audit each manager of a fleet of
fractionally owned aircraft, and would require these managers to file
a property statement solely with the lead county assessor's office,
as provided. This bill would also require owners, as well as
operators, of private and public airports to provide, upon the
request of the assessor of the county in which the airport is
situated, with specified information regarding aircraft utilizing the
airport facilities.
   Existing law requires taxpayers that meet certain criteria to file
a property statement with the county assessor. Existing law requires
the State Board of Equalization to prescribe the contents of this
statement and to notify property tax assessors of these contents.
   This bill would require the board to specify that these property
statements contain information regarding the payment of California
use tax and a notice to taxpayers that information provided on the
statement may be shared with the board. This bill would require the
board to implement this change in a manner that does not increase
local costs.
   The Personal Income Tax Law authorizes various credits against the
taxes imposed by that law, including a credit, calculated on the
basis of either years of service or a specified formula, to a
credentialed teacher for each taxable year beginning on or after
January 1, 2007.
   This bill would repeal the provision that authorizes this credit.
   This bill, by repealing an existing personal income tax credit,
would result in a change in state taxes for the purpose of increasing
revenue within the meaning of Section 3 of Article XIII A of the
California Constitution, and thus would require, for passage, the
approval of 2/3 of each house of the Legislature.
   This bill would declare that it is to take effect immediately as
an urgency statute.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

  SECTION 1.  The Legislature finds and declares the following:
   (a) A substantial portion of business aviation aircraft is now
owned and operated under fractional ownership programs.
   (b) Aircraft in fractional ownership programs have a significant
presence in California.
   (c) The size of some fractional ownership program fleets is quite
large and the mix of ownership interests and unscheduled usage
imposes a significant burden on both taxpayers and county assessors
to assess and tax these fleets on an aircraft-by-aircraft basis; in
order to reduce this burden, a simplified assessment approach is
warranted.
   (d) Section 1 of Article XIII of the California Constitution
specifies that all nonexempt property is taxable. Therefore,
fractionally owned aircraft are constitutionally required to be
assessed.
   (e) The purpose of Sections 2 and 4 of this act is to establish a
simplified procedure for assessing fractionally owned aircraft that
is appropriate and fair, that allocates assessed value among counties
in a reasonable manner, and that reduces the administrative burden
on taxpayers and county assessors.
  SEC. 2.  Section 441 of the Revenue and Taxation Code is amended to
read:
   441.  (a) Each person owning taxable personal property, other than
a manufactured home subject to Part 13 (commencing with Section
5800), having an aggregate cost of one hundred thousand dollars
($100,000) or more for any assessment year shall file a signed
property statement with the assessor. Every person owning personal
property that does not require the filing of a property statement or
real property shall, upon request of the assessor, file a signed
property statement. Failure of the assessor to request or secure the
property statement does not render any assessment invalid.
   (b) The property statement shall be declared to be true under the
penalty of perjury and filed annually with the assessor between the
lien date and 5 p.m. on April 1. The penalty provided by Section 463
applies for property statements not filed by May 7. If May 7 falls on
a Saturday, Sunday, or legal holiday, a property statement that is
mailed and postmarked on the next business day shall be deemed to
have been filed between the lien date and 5 p.m. on May 7. If, on the
dates specified in this subdivision, the county's offices are closed
for the entire day, that day is considered a legal holiday for
purposes of this section.
   (c) The property statement may be filed with the assessor through
the United States mail, properly addressed with postage prepaid. For
purposes of determining the date upon which the property statement is
deemed filed with the assessor, the date of postmark as affixed by
the United States Postal Service, or the date certified by a bona
fide private courier service on the envelope containing the
application, shall control. This subdivision shall be applicable to
every taxing agency, including, but not limited to, a chartered city
and county, or chartered city.
   (d) (1) At any time, as required by the assessor for assessment
purposes, every person shall make available for examination
information or records regarding his or her property or any other
personal property located on premises he or she owns or controls. In
this connection details of property acquisition transactions,
construction and development costs, rental income, and other data
relevant to the determination of an estimate of value are to be
considered as information essential to the proper discharge of the
assessor's duties.
   (2) (A) This subdivision shall also apply to an owner-builder or
an owner-developer of new construction that is sold to a third party,
is constructed on behalf of a third party, or is constructed for the
purpose of selling that property to a third party.
   (B) The owner-builder or owner-developer of new construction
described in subparagraph (A), shall, within 45 days of receipt of a
written request by the assessor for information or records, provide
the assessor with all information and records regarding that
property. The information and records provided to the assessor shall
include the total consideration provided either by the purchaser or
on behalf of the purchaser that was paid or provided either, as part
of or outside of the purchase agreement, including, but not limited
to, consideration paid or provided for the purchase or acquisition of
upgrades, additions, or for any other additional or supplemental
work performed or arranged for by the owner-builder or
owner-developer on behalf of the purchaser.
   (e) In the case of a corporate owner of property, the property
statement shall be signed either by an officer of the corporation or
an employee or agent who has been designated in writing by the board
of directors to sign the statements on behalf of the corporation.
   (f) In the case of property owned by a bank or other financial
institution and leased to an entity other than a bank or other
financial institution, the property statement shall be submitted by
the owner bank or other financial institution.
   (g) The assessor may refuse to accept any property statement he or
she determines to be in error.
   (h) If a taxpayer fails to provide information to the assessor
pursuant to subdivision (d) and introduces any requested materials or
information at any assessment appeals board hearing, the assessor
may request and shall be granted a continuance for a reasonable
period of time. The continuance shall extend the two-year period
specified in subdivision (c) of Section 1604 for a period of time
equal to the period of the continuance.
   (i) Notwithstanding any other provision of law, every person
required to file a property statement pursuant to this section shall
be permitted to amend that property statement until May 31 of the
year in which the property statement is due, for errors and omissions
not the result of willful intent to erroneously report. The penalty
authorized by Section 463 does not apply to an amended statement
received prior to May 31, provided the original statement is not
subject to penalty pursuant to subdivision (b). The amended property
statement shall otherwise conform to the requirements of a property
statement as provided in this article.
   (j) This subdivision shall apply to the oil, gas, and mineral
extraction industry only. Any information that is necessary to file a
true, correct, and complete statement shall be made available by the
assessor, upon request, to the taxpayer by mail or at the office of
the assessor by February 28. For each business day beyond February 28
that the information is unavailable, the filing deadline in
subdivision (b) shall be extended in that county by one business day,
for those statements affected by the delay. In no case shall the
filing deadline be extended beyond June 1 or the first business day
thereafter.
   (k) The assessor may accept the filing of a property statement by
the use of electronic media. In lieu of the signature required by
subdivision (a) and the declaration under penalty of perjury required
by subdivision (b), property statements filed using electronic media
shall be authenticated pursuant to methods specified by the assessor
and approved by the board. Electronic media includes, but is not
limited to, computer modem, magnetic media, optical disk, and
facsimile machine.
   () (1) After receiving the notice required by Section 1162, the
manager in control of a fleet of fractionally owned aircraft shall
file with the lead county assessor's office one signed property
statement for all of its aircraft that have acquired situs in the
state, as described in Section 1161.
   (2) Flight data required to compute fractionally owned aircraft
allocation under Section 1161 shall be segregated by airport.
   (m) (1) After receiving the notice required by paragraph (5) of
subdivision (b) of Section 1153.5, a commercial air carrier whose
certificated aircraft is subject to Article 6 (commencing with
Section 1150) of Chapter 5 shall file with the lead county assessor's
office designated under Section 1153.5 one signed property statement
for its personal property at all airport locations and fixtures at
all airport locations.
   (2) Each commercial air carrier may file one schedule for all of
its certificated aircraft that have acquired situs in this state
under Section 1151.
   (3) Flight data required to compute certificated aircraft
allocation under Section 1152 and subdivision (g) of Section 202 of
Title 18 of the California Code of Regulations shall be segregated by
airport location.
   (4) Beginning with the 2006 assessment year, a commercial air
carrier may file a statement described in this subdivision
electronically by means of the California Assessor's Standard Data
Record (SDR) network. If the SDR is not equipped to accept electronic
filings for the 2006 assessment year, an air carrier may file a
printed version of its property statement for that year with its lead
county assessor's office.
   (5) This subdivision shall remain in effect only until December
31, 2010, and as of that date is repealed.
  SEC. 3.  Section 452 of the Revenue and Taxation Code is amended to
read:
   452.  (a) For the assessment year beginning in 1968 and each
assessment year thereafter, the board shall prescribe in detail the
content of property statements, including the specific wording, to be
used by all assessors in the several counties, and cities and
counties, and shall notify assessors of those specifications no later
than the August 31 prior to the tax lien date on which they become
effective. Each assessor shall incorporate the specifications on the
exact form he or she proposes to use and submit that form to the
board for approval prior to use. The property statement shall not
include any question that is not germane to the assessment function.
   (b) (1) For property statements to be filed in the 2008 assessment
year and each assessment year thereafter, the board shall prescribe
that the property statement also include the following:
   (A) A brief statement noting the obligation to pay use tax on
taxable purchases for which sales tax was not applicable.
   (B) Information regarding payment of use tax, which information
may be limited to the board's phone number and a Web site address at
which specific information and forms for use tax payment may be
obtained.
   (C) A statement advising the taxpayer that information provided on
a property statement may be shared with the board.
   (2) The board shall implement paragraph (1) in a manner that does
not increase local costs.
  SEC. 4.  Article 7 (commencing with Section 1160) is added to
Chapter 5 of Part 2 of Division 1 of the Revenue and Taxation Code,
to read:

      Article 7.  Fractionally Owned Aircraft


   1160.  For purposes of this article, all of the following apply:
   (a) The following terms have the following meanings:
   (1) "Aircraft" has the same meaning as specified in Section 5303.
   (2) "Fleet" means all aircraft operated by a manager of a
fractional ownership program.
   (3) "Fleet type" means aircraft classified by make, model, and
series operated by a manager of a fractional ownership program.
   (4) "Fractionally owned aircraft" or "aircraft operated in
fractional ownership programs" means those aircraft registered with
the Federal Aviation Administration as fractionally owned aircraft.
   (5) "Landing" means physical contact involving the embarking or
disembarking of crew, passengers, or freight, and that physical
contact did not arise unintentionally as the result of an emergency.
   (b) Revenues derived from the taxation of fractionally owned
aircraft under this article shall be distributed in accordance with
Chapter 6 (commencing with Section 5451) of Part 10 of this division.

   (c) Fractionally owned aircraft shall be assessed under this
article only if a lead county assessor accepts a designation as lead
county assessor under Section 1162.
   1161.  (a) Notwithstanding any other law, fractionally owned
aircraft that has situs in this state shall be assessed on a
fleetwide basis to the manager in control of the fleet and a notice
of that assessment shall be issued to that manager.
   (1) Any fractionally owned aircraft that has been annually
assessed for the fiscal years preceding the 2007-08 fiscal year shall
be assessed under this article commencing with the 2007-08 fiscal
year.
   (2) For fractionally owned aircraft that have not been annually
assessed for the fiscal years preceding the 2007-08 fiscal year,
assessment under this article applies for the 2007-08 fiscal year and
for each fiscal year thereafter, and for preceding fiscal years for
which an assessment was not made, and for which a statute of
limitations either does not apply or has been waived.
   (b) A fleet of fractionally owned aircraft establishes situs in
this state if an aircraft within the fleet makes a landing in the
state.
   (c) A fleet of fractionally owned aircraft shall be assessed on an
allocated basis. An allocation factor shall be established in each
county for each fleet type of fractionally owned aircraft for which
situs in this state has been established as described in subdivision
(b). This allocation factor is a fraction, the numerator of which is
the total number of landings and departures made by the fleet type in
the county during the previous calendar year and the denominator of
which is the total number of landings and departures made by the
fleet type worldwide during the previous calendar year.
   1162.  (a) On or before October 1, 2007, the Aircraft Advisory
Subcommittee of the California Assessors' Association may designate a
lead county assessor's office for each manager in control of a fleet
of fractionally owned aircraft.
   (b) If a lead county assessor's office is designated under
subdivision (a), and that assessor's office accepts that designation,
the lead county assessor's office described in subdivision (a) shall
do all of the following:
   (1) Notify, in writing, each manager in control of a fleet of
fractionally owned aircraft for which the lead county assessor has
been designated of this designation on or before the first October 15
that follows that designation.
   (2) Receive the property statement, as described in subdivision
(l) of Section 441, of each manager in control of a fleet of
fractionally owned aircraft for which the lead county assessor has
been designated.
   (3) Calculate, pursuant to Sections 5363 and 5364, an unallocated
value of all fractionally owned aircraft for each manager in control
of a fleet of fractionally owned aircraft for which the lead county
assessor has been designated.
   (4) Electronically transmit to the assessor of each county in
which a fleet of fractionally owned aircraft has situs for the
assessment year the value determined by the lead county assessor's
office under paragraph (3) and the allocation factor described in
subdivision (c) of Section 1161.
   (5) Lead the audit team described in subdivision (d) when that
team is conducting an audit of each manager in control of a fleet of
fractionally owned aircraft for which the lead county assessor has
been designated.
   (c) (1) Notwithstanding subdivision (b), the county assessor of
each county in which a fleet of fractionally owned aircraft has situs
for an assessment year is solely responsible for assessing that
property by multiplying the unallocated value of each fleet type by
the allocation factor described in subdivision (c) of Section 1161,
and enrolling the total allocated value for the fleet type. In
appraising the unallocated value of the fleet type, the assessor may
consult with the lead county assessor's office designated for that
fleet.
   (2) The lead county assessor's office is subject to Section 322 of
Title 18 of the California Code of Regulations and Sections 408,
451, and 1606 to the same extent as the assessor described in
paragraph (1).
   (d) Notwithstanding Section 469, an audit of each manager in
control of a fleet of fractionally owned aircraft may be conducted
once every four years on a centralized basis by an audit team of
auditor-appraisers from at least one, but not more than three,
counties, as determined by the Aircraft Advisory Subcommittee of the
California Assessors' Association. An audit, so conducted, shall
encompass all of the California personal property and fixtures of the
manager of the fleet of fractionally owned aircraft and is deemed to
be made on behalf of each county for which an audit would otherwise
be required under Section 469.
  SEC. 5.  Section 5368 is added to the Revenue and Taxation Code, to
read:
   5368.  Owners, as well as operators, of private and public
airports shall provide, upon the request of the assessor of the
county in which the airport is situated, a statement containing the
make, model, aircraft registration number, and arrival and departure
information of all aircraft utilizing the airport facilities.
  SEC. 6.  Section 17052.2 of the Revenue and Taxation Code is
repealed.
  SEC. 7.  This act is an urgency statute necessary for the immediate
preservation of the public peace, health, or safety within the
meaning of Article IV of the Constitution and shall go into immediate
effect. The facts constituting the necessity are:
   In order to timely and properly implement the Budget Act of 2007.