BILL ANALYSIS Ó
AB 703
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Date of Hearing: May 27, 2011
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Felipe Fuentes, Chair
AB 703 (Gordon) - As Amended: May 24, 2011
Policy Committee: Revenue and
Taxation Vote: 7-0
Urgency: No State Mandated Local Program:
No Reimbursable:
SUMMARY
This bill repeals the sunset date of the property tax welfare
exemption that applies to certain specified nature resources and
open-space lands. Specifically, this bill:
1)Repeals the January 1, 2012 inoperative date and the January
1, 2013 repeal date of the property tax welfare exemption for
property that is used exclusively for the preservation of
specified nature resources and open-space lands, thereby
extending it indefinitely.
2)Establishes a new inoperative date of January 1, 2023.
3)States that no appropriation is made by this bill and that the
state will not reimburse any local agency for any property tax
revenues lost by it pursuant to this bill's provisions.
4)Takes effect immediately as a tax levy.
FISCAL EFFECT
The State Board of Equalization's (BOE) staff estimates that
hundreds of properties throughout the state are currently exempt
from property tax pursuant to R&TC Section 214.02. It is
tentatively estimated that this bill will result in the annual
property tax loss of $10 million or less once the current
exemption expires and the assessments on the properties are
revised. Because of these lost property taxes, the state would
continue to incur General Fund expenditures of about $4 million
to backfill property revenues that otherwise would go to
AB 703
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schools.
COMMENTS
1)Purpose . The author argues that open-spaces and parklands are
vitally important to the quality of life in communities across
California, whether for the protection of wildlife, for the
outdoor education of urban youth, or for recreation. The
author notes that many of these green spaces are owned and
operated by charitable organizations for the public benefits
they provide, which is why existing law has acknowledged the
value of this charitable service since 1971, affording these
lands an exemption from property taxes.
2)History of the Exemption. The exemption was enacted in 1971
in response to concerns that property taxes were preventing
preservation of open space areas. The intent of the original
legislation was to assist nonprofit organizations that
purchased open-space and similar lands, held the lands
temporarily, and then sold or donated the lands to public
agencies for permanent use as park facilities. A sunset date
was included in the original legislation to ensure that the
charitable organizations sold or donated the lands rather than
hold then indefinitely. Since that time, it appears that many
charitable organizations may be the permanent owners of lands
due, in part, to the limited ability of public agencies to
acquire additional parklands." The original exemption expired
after the lien date in 1982. It has been extended, in 10-year
increments, three times.
3)There is no registered opposition to this bill.
Analysis Prepared by : Roger Dunstan / APPR. / (916) 319-2081