BILL NUMBER: ACA 6 INTRODUCED
BILL TEXT
INTRODUCED BY Assembly Member Brown
APRIL 20, 2015
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: 2/3. Appropriation: no. Fiscal committee: no. State-mandated
local program: no.
Resolved by the Assembly, the Senate concurring, That the
Legislature of the State of California at its 2015-16 commencing on
the first day of December 2014, two-thirds of the membership of each
house concurring, hereby proposes to the people of the State of
California, that the Constitution of the State be amended as follows:
That Section 2 of Article XIII A thereof is amended to read:
SEC. 2. (a) (1) The "full cash value"
means the county assessor's valuation of real property as shown on
the 1975-76 tax bill under "full cash value" or, thereafter, the
appraised value of real property when purchased, newly constructed,
or a change in ownership has occurred after the 1975 assessment. All
real property not already assessed up to the 1975-76 full cash value
may be reassessed to reflect that valuation. For purposes of this
section, "newly constructed" does not include real property that is
reconstructed after a disaster, as declared by the Governor, where
the fair market value of the real property, as reconstructed, is
comparable to its fair market value prior to the disaster. For
purposes of this section, the term "newly constructed" does not
include that portion of an existing structure that consists of the
construction or reconstruction of seismic retrofitting components, as
defined by the Legislature.
However,
(2) However, the Legislature may
provide that, under appropriate circumstances and pursuant to
definitions and procedures established by the Legislature, any person
over the age of 55 years who resides in property that is eligible
for the homeowner's exemption under subdivision (k) of Section 3 of
Article XIII and any implementing legislation may transfer the base
year value of the property entitled to exemption, with the
adjustments authorized by subdivision (b), to any replacement
dwelling of equal or lesser value located within the same county and
purchased or newly constructed by that person as his or her principal
residence within two years of the sale of the original property. For
purposes of this section, "any person over the age of 55 years"
includes a married couple one member of which is over the age of 55
years. For purposes of this section, "replacement dwelling" means a
building, structure, or other shelter constituting a place of abode,
whether real property or personal property, and any land on which it
may be situated. For purposes of this section, a two-dwelling unit
shall be considered as two separate single-family dwellings. This
paragraph shall apply to any replacement dwelling that was purchased
or newly constructed on or after November 5, 1986.
In
(3) In addition, the Legislature
may authorize each county board of supervisors, after consultation
with the local affected agencies within the county's boundaries, to
adopt an ordinance making the provisions of this subdivision relating
to transfer of base year value also applicable to situations in
which the replacement dwellings are located in that county and the
original properties are located in another county within this State.
For purposes of this paragraph, "local affected agency" means any
city, special district, school district, or community college
district that receives an annual property tax revenue allocation.
This paragraph applies to any replacement dwelling that was purchased
or newly constructed on or after the date the county adopted the
provisions of this subdivision relating to transfer of base year
value, but does not apply to any replacement dwelling that was
purchased or newly constructed before November 9, 1988.
The
(4) The Legislature may extend
the provisions of this subdivision relating to the transfer of base
year values from original properties to replacement dwellings of
homeowners over the age of 55 years to severely
either of both of the following:
(A) Severely disabled homeowners,
but only with respect to those replacement dwellings purchased or
newly constructed on or after the effective date of this
paragraph. June 6, 1990.
(B) Homeowners with a severely disabled child, but only with
respect to those replacement dwellings purchased or newly constructed
on or after the effective date of this paragraph.
(b) The full cash value base may reflect from year to year the
inflationary rate not to exceed 2 percent for any given year or
reduction as shown in the consumer price index or comparable data for
the area under taxing jurisdiction, or may be reduced to reflect
substantial damage, destruction, or other factors causing a decline
in value.
(c) For purposes of subdivision (a), the Legislature may provide
that the term "newly constructed" does not include any of the
following:
(1) The construction or addition of any active solar energy
system.
(2) The construction or installation of any fire sprinkler system,
other fire extinguishing system, fire detection system, or
fire-related egress improvement, as defined by the Legislature, that
is constructed or installed after the effective date of this
paragraph.
(3) The construction, installation, or modification on or after
the effective date of this paragraph of any portion or structural
component of a single- or multiple-family dwelling that is eligible
for the homeowner's exemption if the construction, installation, or
modification is for the purpose of making the dwelling more
accessible to a severely disabled person.
(4) The construction, installation, removal, or modification on or
after the effective date of this paragraph of any portion or
structural component of an existing building or structure if the
construction, installation, removal, or modification is for the
purpose of making the building more accessible to, or more usable by,
a disabled person.
(d) For purposes of this section, the term "change in ownership"
does not include the acquisition of real property as a replacement
for comparable property if the person acquiring the real property has
been displaced from the property replaced by eminent domain
proceedings, by acquisition by a public entity, or governmental
action that has resulted in a judgment of inverse condemnation. The
real property acquired shall be deemed comparable to the property
replaced if it is similar in size, utility, and function, or if it
conforms to state regulations defined by the Legislature governing
the relocation of persons displaced by governmental actions. This
subdivision applies to any property acquired after March 1, 1975, but
affects only those assessments of that property that occur after the
provisions of this subdivision take effect.
(e) (1) Notwithstanding any other provision of this section, the
Legislature shall provide that the base year value of property that
is substantially damaged or destroyed by a disaster, as declared by
the Governor, may be transferred to comparable property within the
same county that is acquired or newly constructed as a replacement
for the substantially damaged or destroyed property.
(2) Except as provided in paragraph (3), this subdivision applies
to any comparable replacement property acquired or newly constructed
on or after July 1, 1985, and to the determination of base year
values for the 1985-86 fiscal year and fiscal years thereafter.
(3) In addition to the transfer of base year value of property
within the same county that is permitted by paragraph (1), the
Legislature may authorize each county board of supervisors to adopt,
after consultation with affected local agencies within the county, an
ordinance allowing the transfer of the base year value of property
that is located within another county in the State and is
substantially damaged or destroyed by a disaster, as declared by the
Governor, to comparable replacement property of equal or lesser value
that is located within the adopting county and is acquired or newly
constructed within three years of the substantial damage or
destruction of the original property as a replacement for that
property. The scope and amount of the benefit provided to a property
owner by the transfer of base year value of property pursuant to this
paragraph shall not exceed the scope and amount of the benefit
provided to a property owner by the transfer of base year value of
property pursuant to subdivision (a). For purposes of this paragraph,
"affected local agency" means any city, special district, school
district, or community college district that receives an annual
allocation of ad valorem property tax revenues. This paragraph
applies to any comparable replacement property that is acquired or
newly constructed as a replacement for property substantially damaged
or destroyed by a disaster, as declared by the Governor, occurring
on or after October 20, 1991, and to the determination of base year
values for the 1991-92 fiscal year and fiscal years thereafter.
(f) For the purposes of subdivision (e):
(1) Property is substantially damaged or destroyed if it sustains
physical damage amounting to more than 50 percent of its value
immediately before the disaster. Damage includes a diminution in the
value of property as a result of restricted access caused by the
disaster.
(2) Replacement property is comparable to the property
substantially damaged or destroyed if it is similar in size, utility,
and function to the property that it replaces, and if the fair
market value of the acquired property is comparable to the fair
market value of the replaced property prior to the disaster.
(g) For purposes of subdivision (a), the terms "purchased" and
"change in ownership" do not include the purchase or transfer of real
property between spouses since March 1, 1975, including, but not
limited to, all of the following:
(1) Transfers to a trustee for the beneficial use of a spouse, or
the surviving spouse of a deceased transferor, or by a trustee of
such a trust to the spouse of the trustor.
(2) Transfers to a spouse that take effect upon the death of a
spouse.
(3) Transfers to a spouse or former spouse in connection with a
property settlement agreement or decree of dissolution of a marriage
or legal separation.
(4) The creation, transfer, or termination, solely between
spouses, of any coowner's interest.
(5) The distribution of a legal entity's property to a spouse or
former spouse in exchange for the interest of the spouse in the legal
entity in connection with a property settlement agreement or a
decree of dissolution of a marriage or legal separation.
(h) (1) For purposes of subdivision (a), the terms "purchased" and
"change in ownership" do not include the purchase or transfer of the
principal residence of the transferor in the case of a purchase or
transfer between parents and their children, as defined by the
Legislature, and the purchase or transfer of the first one million
dollars ($1,000,000) of the full cash value of all other real
property between parents and their children, as defined by the
Legislature. This subdivision applies to both voluntary transfers and
transfers resulting from a court order or judicial decree.
(2) (A) Subject to subparagraph (B), commencing with purchases or
transfers that occur on or after the date upon which the measure
adding this paragraph becomes effective, the exclusion established by
paragraph (1) also applies to a purchase or transfer of real
property between grandparents and their grandchild or grandchildren,
as defined by the Legislature, that otherwise qualifies under
paragraph (1), if all of the parents of that grandchild or those
grandchildren, who qualify as the children of the grandparents, are
deceased as of the date of the purchase or transfer.
(B) A purchase or transfer of a principal residence shall not be
excluded pursuant to subparagraph (A) if the transferee grandchild or
grandchildren also received a principal residence, or interest
therein, through another purchase or transfer that was excludable
pursuant to paragraph (1). The full cash value of any real property,
other than a principal residence, that was transferred to the
grandchild or grandchildren pursuant to a purchase or transfer that
was excludable pursuant to paragraph (1), and the full cash value of
a principal residence that fails to qualify for exclusion as a result
of the preceding sentence, shall be included in applying, for
purposes of subparagraph (A), the one-million-dollar ($1,000,000)
full cash value limit specified in paragraph (1).
(i) (1) Notwithstanding any other provision of this section, the
Legislature shall provide with respect to a qualified contaminated
property, as defined in paragraph (2), that either, but not both, of
the following apply:
(A) (i) Subject to the limitation of clause (ii), the base year
value of the qualified contaminated property, as adjusted as
authorized by subdivision (b), may be transferred to a replacement
property that is acquired or newly constructed as a replacement for
the qualified contaminated property, if the replacement real property
has a fair market value that is equal to or less than the fair
market value of the qualified contaminated property if that property
were not contaminated and, except as otherwise provided by this
clause, is located within the same county. The base year value of the
qualified contaminated property may be transferred to a replacement
real property located within another county if the board of
supervisors of that other county has, after consultation with the
affected local agencies within that county, adopted a resolution
authorizing an intercounty transfer of base year value as so
described.
(ii) This subparagraph applies only to replacement property that
is acquired or newly constructed within five years after ownership in
the qualified contaminated property is sold or otherwise
transferred.
(B) In the case in which the remediation of the environmental
problems on the qualified contaminated property requires the
destruction of, or results in substantial damage to, a structure
located on that property, the term "new construction" does not
include the repair of a substantially damaged structure, or the
construction of a structure replacing a destroyed structure on the
qualified contaminated property, performed after the remediation of
the environmental problems on that property, provided that the
repaired or replacement structure is similar in size, utility, and
function to the original structure.
(2) For purposes of this subdivision, "qualified contaminated
property" means residential or nonresidential real property that is
all of the following:
(A) In the case of residential real property, rendered
uninhabitable, and in the case of nonresidential real property,
rendered unusable, as the result of either environmental problems, in
the nature of and including, but not limited to, the presence of
toxic or hazardous materials, or the remediation of those
environmental problems, except where the existence of the
environmental problems was known to the owner, or to a related
individual or entity as described in paragraph (3), at the time the
real property was acquired or constructed. For purposes of this
subparagraph, residential real property is "uninhabitable" if that
property, as a result of health hazards caused by or associated with
the environmental problems, is unfit for human habitation, and
nonresidential real property is "unusable" if that property, as a
result of health hazards caused by or associated with the
environmental problems, is unhealthy and unsuitable for occupancy.
(B) Located on a site that has been designated as a toxic or
environmental hazard or as an environmental cleanup site by an agency
of the State of California or the federal government.
(C) Real property that contains a structure or structures thereon
prior to the completion of environmental cleanup activities, and that
structure or structures are substantially damaged or destroyed as a
result of those environmental cleanup activities.
(D) Stipulated by the lead governmental agency, with respect to
the environmental problems or environmental cleanup of the real
property, not to have been rendered uninhabitable or unusable, as
applicable, as described in subparagraph (A), by any act or omission
in which an owner of that real property participated or acquiesced.
(3) It shall be rebuttably presumed that an owner of the real
property participated or acquiesced in any act or omission that
rendered the real property uninhabitable or unusable, as applicable,
if that owner is related to any individual or entity that committed
that act or omission in any of the following ways:
(A) Is a spouse, parent, child, grandparent, grandchild, or
sibling of that individual.
(B) Is a corporate parent, subsidiary, or affiliate of that
entity.
(C) Is an owner of, or has control of, that entity.
(D) Is owned or controlled by that entity.
If this presumption is not overcome, the owner shall not receive
the relief provided for in subparagraph (A) or (B) of paragraph (1).
The presumption may be overcome by presentation of satisfactory
evidence to the assessor, who shall not be bound by the findings of
the lead governmental agency in determining whether the presumption
has been overcome.
(4) This subdivision applies only to replacement property that is
acquired or constructed on or after January 1, 1995, and to property
repairs performed on or after that date.
(j) Unless specifically provided otherwise, amendments to this
section adopted prior to November 1, 1988, are effective for changes
in ownership that occur, and new construction that is completed,
after the effective date of the amendment. Unless specifically
provided otherwise, amendments to this section adopted after November
1, 1988, are effective for changes in ownership that occur, and new
construction that is completed, on or after the effective date of the
amendment.