California Legislature—2015–16 Regular Session

Assembly Constitutional AmendmentNo. 6


Introduced by Assembly Member Brown

April 20, 2015


Assembly Constitutional Amendment No. 6—A resolution to propose to the people of the State of California an amendment to the Constitution of the State, by amending Section 2 of Article XIII A thereof, relating to taxation.

LEGISLATIVE COUNSEL’S DIGEST

ACA 6, as introduced, Brown. Property taxation: base year value transfers: persons with a severely disabled child.

The California Constitution generally limits ad valorem taxes on real property to 1% of the full cash value of that property. For purposes of this limitation, “full cash value” is defined as the assessor’s valuation of real property as shown on the 1975-76 tax bill under “full cash value” or, thereafter, the appraised value of that real property when purchased, newly constructed, or a change in ownership has occurred. The California Constitution authorizes the Legislature to provide that persons over the age of 55 and persons who are severely disabled may transfer the base year value, as defined, of property to a replacement dwelling, if certain conditions are met.

This measure would additionally authorize the Legislature to provide for transfer of base year value of property to a replacement dwelling for persons who have a severely disabled child.

Vote: 23. Appropriation: no. Fiscal committee: no. State-mandated local program: no.

P2    1Resolved by the Assembly, the Senate concurring, That the
2Legislature of the State of California at its 2015-16 commencing
3on the first day of December 2014, two-thirds of the membership
4of each house concurring, hereby proposes to the people of the
5State of California, that the Constitution of the State be amended
6as follows:

7

  

That Section 2 of Article XIII A thereof is amended to read:

8

SEC. 2.  

(a) begin insert(1)end insertbegin insertend insert The “full cash value” means the county
9assessor’s valuation of real property as shown on the 1975-76 tax
10bill under “full cash value” or, thereafter, the appraised value of
11real property when purchased, newly constructed, or a change in
12ownership has occurred after the 1975 assessment. All real property
13not already assessed up to the 1975-76 full cash value may be
14reassessed to reflect that valuation. For purposes of this section,
15“newly constructed” does not include real property that is
16reconstructed after a disaster, as declared by the Governor, where
17the fair market value of the real property, as reconstructed, is
18comparable to its fair market value prior to the disaster. For
19purposes of this section, the term “newly constructed” does not
20include that portion of an existing structure that consists of the
21construction or reconstruction of seismic retrofitting components,
22as defined by the Legislature.

begin delete

23However,

end delete

24begin insert(2)end insertbegin insertend insertbegin insertHowever, end insertthe Legislature may provide that, under appropriate
25circumstances and pursuant to definitions and procedures
26established by the Legislature, any person over the age of 55 years
27who resides in property that is eligible for the homeowner’s
28exemption under subdivision (k) of Section 3 of Article XIII and
29any implementing legislation may transfer the base year value of
30the property entitled to exemption, with the adjustments authorized
31by subdivision (b), to any replacement dwelling of equal or lesser
32value located within the same county and purchased or newly
33constructed by that person as his or her principal residence within
34two years of the sale of the original property. For purposes of this
35section, “any person over the age of 55 years” includes a married
36couple one member of which is over the age of 55 years. For
37purposes of this section, “replacement dwelling” means a building,
38structure, or other shelter constituting a place of abode, whether
39real property or personal property, and any land on which it may
40be situated. For purposes of this section, a two-dwelling unit shall
P3    1be considered as two separate single-family dwellings. This
2paragraph shall apply to any replacement dwelling that was
3purchased or newly constructed on or after November 5, 1986.

begin delete

4In

end delete

5begin insert(3)end insertbegin insertend insertbegin insertInend insert addition, the Legislature may authorize each county board
6of supervisors, after consultation with the local affected agencies
7within the county’s boundaries, to adopt an ordinance making the
8provisions of this subdivision relating to transfer of base year value
9also applicable to situations in which the replacement dwellings
10are located in that county and the original properties are located
11in another county within this State. For purposes of this paragraph,
12“local affected agency” means any city, special district, school
13district, or community college district that receives an annual
14property tax revenue allocation. This paragraph applies to any
15replacement dwelling that was purchased or newly constructed on
16or after the date the county adopted the provisions of this
17subdivision relating to transfer of base year value, but does not
18 apply to any replacement dwelling that was purchased or newly
19constructed before November 9, 1988.

begin delete

20The

end delete

21begin insert(4)end insertbegin insertend insertbegin insertTheend insert Legislature may extend the provisions of this subdivision
22relating to the transfer of base year values from original properties
23to replacement dwellings of homeowners over the age of 55 years
24tobegin delete severelyend deletebegin insert either of both of the following:end insert

25begin insert(A)end insertbegin insertend insertbegin insertSeverely end insertdisabled homeowners, but only with respect to
26those replacement dwellings purchased or newly constructed on
27or afterbegin delete the effective date of this paragraph.end deletebegin insert June 6, 1990.end insert

begin insert

28(B) Homeowners with a severely disabled child, but only with
29respect to those replacement dwellings purchased or newly
30constructed on or after the effective date of this paragraph.

end insert

31(b) The full cash value base may reflect from year to year the
32inflationary rate not to exceed 2 percent for any given year or
33reduction as shown in the consumer price index or comparable
34data for the area under taxing jurisdiction, or may be reduced to
35reflect substantial damage, destruction, or other factors causing a
36decline in value.

37(c) For purposes of subdivision (a), the Legislature may provide
38that the term “newly constructed” does not include any of the
39following:

P4    1(1) The construction or addition of any active solar energy
2system.

3(2) The construction or installation of any fire sprinkler system,
4other fire extinguishing system, fire detection system, or fire-related
5egress improvement, as defined by the Legislature, that is
6constructed or installed after the effective date of this paragraph.

7(3) The construction, installation, or modification on or after
8the effective date of this paragraph of any portion or structural
9component of a single- or multiple-family dwelling that is eligible
10for the homeowner’s exemption if the construction, installation,
11or modification is for the purpose of making the dwelling more
12accessible to a severely disabled person.

13(4) The construction, installation, removal, or modification on
14or after the effective date of this paragraph of any portion or
15structural component of an existing building or structure if the
16construction, installation, removal, or modification is for the
17purpose of making the building more accessible to, or more usable
18by, a disabled person.

19(d) For purposes of this section, the term “change in ownership”
20does not include the acquisition of real property as a replacement
21for comparable property if the person acquiring the real property
22has been displaced from the property replaced by eminent domain
23proceedings, by acquisition by a public entity, or governmental
24action that has resulted in a judgment of inverse condemnation.
25The real property acquired shall be deemed comparable to the
26property replaced if it is similar in size, utility, and function, or if
27it conforms to state regulations defined by the Legislature
28governing the relocation of persons displaced by governmental
29actions. This subdivision applies to any property acquired after
30March 1, 1975, but affects only those assessments of that property
31that occur after the provisions of this subdivision take effect.

32(e) (1) Notwithstanding any other provision of this section, the
33Legislature shall provide that the base year value of property that
34is substantially damaged or destroyed by a disaster, as declared
35by the Governor, may be transferred to comparable property within
36the same county that is acquired or newly constructed as a
37replacement for the substantially damaged or destroyed property.

38(2) Except as provided in paragraph (3), this subdivision applies
39to any comparable replacement property acquired or newly
40constructed on or after July 1, 1985, and to the determination of
P5    1base year values for the 1985-86 fiscal year and fiscal years
2thereafter.

3(3) In addition to the transfer of base year value of property
4within the same county that is permitted by paragraph (1), the
5Legislature may authorize each county board of supervisors to
6adopt, after consultation with affected local agencies within the
7county, an ordinance allowing the transfer of the base year value
8of property that is located within another county in the State and
9is substantially damaged or destroyed by a disaster, as declared
10by the Governor, to comparable replacement property of equal or
11lesser value that is located within the adopting county and is
12acquired or newly constructed within three years of the substantial
13damage or destruction of the original property as a replacement
14for that property. The scope and amount of the benefit provided
15to a property owner by the transfer of base year value of property
16pursuant to this paragraph shall not exceed the scope and amount
17of the benefit provided to a property owner by the transfer of base
18year value of property pursuant to subdivision (a). For purposes
19of this paragraph, “affected local agency” means any city, special
20district, school district, or community college district that receives
21an annual allocation of ad valorem property tax revenues. This
22paragraph applies to any comparable replacement property that is
23acquired or newly constructed as a replacement for property
24substantially damaged or destroyed by a disaster, as declared by
25the Governor, occurring on or after October 20, 1991, and to the
26determination of base year values for the 1991-92 fiscal year and
27fiscal years thereafter.

28(f) For the purposes of subdivision (e):

29(1) Property is substantially damaged or destroyed if it sustains
30physical damage amounting to more than 50 percent of its value
31immediately before the disaster. Damage includes a diminution in
32the value of property as a result of restricted access caused by the
33disaster.

34(2) Replacement property is comparable to the property
35substantially damaged or destroyed if it is similar in size, utility,
36and function to the property that it replaces, and if the fair market
37value of the acquired property is comparable to the fair market
38value of the replaced property prior to the disaster.

39(g) For purposes of subdivision (a), the terms “purchased” and
40“change in ownership” do not include the purchase or transfer of
P6    1real property between spouses since March 1, 1975, including, but
2not limited to, all of the following:

3(1) Transfers to a trustee for the beneficial use of a spouse, or
4the surviving spouse of a deceased transferor, or by a trustee of
5such a trust to the spouse of the trustor.

6(2) Transfers to a spouse that take effect upon the death of a
7spouse.

8(3) Transfers to a spouse or former spouse in connection with
9a property settlement agreement or decree of dissolution of a
10marriage or legal separation.

11(4) The creation, transfer, or termination, solely between
12spouses, of any coowner’s interest.

13(5) The distribution of a legal entity’s property to a spouse or
14former spouse in exchange for the interest of the spouse in the
15legal entity in connection with a property settlement agreement or
16a decree of dissolution of a marriage or legal separation.

17(h) (1) For purposes of subdivision (a), the terms “purchased”
18and “change in ownership” do not include the purchase or transfer
19of the principal residence of the transferor in the case of a purchase
20or transfer between parents and their children, as defined by the
21Legislature, and the purchase or transfer of the first one million
22dollars ($1,000,000) of the full cash value of all other real property
23between parents and their children, as defined by the Legislature.
24This subdivision applies to both voluntary transfers and transfers
25resulting from a court order or judicial decree.

26(2) (A) Subject to subparagraph (B), commencing with
27purchases or transfers that occur on or after the date upon which
28the measure adding this paragraph becomes effective, the exclusion
29established by paragraph (1) also applies to a purchase or transfer
30of real property between grandparents and their grandchild or
31grandchildren, as defined by the Legislature, that otherwise
32qualifies under paragraph (1), if all of the parents of that grandchild
33or those grandchildren, who qualify as the children of the
34grandparents, are deceased as of the date of the purchase or transfer.

35(B) A purchase or transfer of a principal residence shall not be
36excluded pursuant to subparagraph (A) if the transferee grandchild
37or grandchildren also received a principal residence, or interest
38therein, through another purchase or transfer that was excludable
39pursuant to paragraph (1). The full cash value of any real property,
40other than a principal residence, that was transferred to the
P7    1grandchild or grandchildren pursuant to a purchase or transfer that
2was excludable pursuant to paragraph (1), and the full cash value
3of a principal residence that fails to qualify for exclusion as a result
4of the preceding sentence, shall be included in applying, for
5purposes of subparagraph (A), the one-million-dollar ($1,000,000)
6full cash value limit specified in paragraph (1).

7(i) (1) Notwithstanding any other provision of this section, the
8Legislature shall provide with respect to a qualified contaminated
9property, as defined in paragraph (2), that either, but not both, of
10the following apply:

11(A) (i) Subject to the limitation of clause (ii), the base year
12value of the qualified contaminated property, as adjusted as
13authorized by subdivision (b), may be transferred to a replacement
14property that is acquired or newly constructed as a replacement
15for the qualified contaminated property, if the replacement real
16property has a fair market value that is equal to or less than the
17fair market value of the qualified contaminated property if that
18property were not contaminated and, except as otherwise provided
19by this clause, is located within the same county. The base year
20value of the qualified contaminated property may be transferred
21to a replacement real property located within another county if the
22board of supervisors of that other county has, after consultation
23with the affected local agencies within that county, adopted a
24resolution authorizing an intercounty transfer of base year value
25as so described.

26(ii) This subparagraph applies only to replacement property that
27is acquired or newly constructed within five years after ownership
28in the qualified contaminated property is sold or otherwise
29transferred.

30(B) In the case in which the remediation of the environmental
31problems on the qualified contaminated property requires the
32destruction of, or results in substantial damage to, a structure
33located on that property, the term “new construction” does not
34include the repair of a substantially damaged structure, or the
35construction of a structure replacing a destroyed structure on the
36qualified contaminated property, performed after the remediation
37of the environmental problems on that property, provided that the
38repaired or replacement structure is similar in size, utility, and
39function to the original structure.

P8    1(2) For purposes of this subdivision, “qualified contaminated
2property” means residential or nonresidential real property that is
3all of the following:

4(A) In the case of residential real property, rendered
5uninhabitable, and in the case of nonresidential real property,
6rendered unusable, as the result of either environmental problems,
7in the nature of and including, but not limited to, the presence of
8toxic or hazardous materials, or the remediation of those
9environmental problems, except where the existence of the
10environmental problems was known to the owner, or to a related
11individual or entity as described in paragraph (3), at the time the
12real property was acquired or constructed. For purposes of this
13subparagraph, residential real property is “uninhabitable” if that
14property, as a result of health hazards caused by or associated with
15the environmental problems, is unfit for human habitation, and
16nonresidential real property is “unusable” if that property, as a
17result of health hazards caused by or associated with the
18environmental problems, is unhealthy and unsuitable for
19occupancy.

20(B) Located on a site that has been designated as a toxic or
21environmental hazard or as an environmental cleanup site by an
22agency of the State of California or the federal government.

23(C) Real property that contains a structure or structures thereon
24prior to the completion of environmental cleanup activities, and
25that structure or structures are substantially damaged or destroyed
26as a result of those environmental cleanup activities.

27(D) Stipulated by the lead governmental agency, with respect
28to the environmental problems or environmental cleanup of the
29real property, not to have been rendered uninhabitable or unusable,
30as applicable, as described in subparagraph (A), by any act or
31omission in which an owner of that real property participated or
32acquiesced.

33(3) It shall be rebuttably presumed that an owner of the real
34property participated or acquiesced in any act or omission that
35rendered the real property uninhabitable or unusable, as applicable,
36if that owner is related to any individual or entity that committed
37that act or omission in any of the following ways:

38(A) Is a spouse, parent, child, grandparent, grandchild, or sibling
39of that individual.

40(B) Is a corporate parent, subsidiary, or affiliate of that entity.

P9    1(C) Is an owner of, or has control of, that entity.

2(D) Is owned or controlled by that entity.

3If this presumption is not overcome, the owner shall not receive
4the relief provided for in subparagraph (A) or (B) of paragraph
5(1). The presumption may be overcome by presentation of
6satisfactory evidence to the assessor, who shall not be bound by
7the findings of the lead governmental agency in determining
8whether the presumption has been overcome.

9(4) This subdivision applies only to replacement property that
10is acquired or constructed on or after January 1, 1995, and to
11property repairs performed on or after that date.

12(j) Unless specifically provided otherwise, amendments to this
13section adopted prior to November 1, 1988, are effective for
14changes in ownership that occur, and new construction that is
15completed, after the effective date of the amendment. Unless
16specifically provided otherwise, amendments to this section
17adopted after November 1, 1988, are effective for changes in
18ownership that occur, and new construction that is completed, on
19or after the effective date of the amendment.



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