BILL ANALYSIS Ó
AB 681
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Date of Hearing: May 13, 2015
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Jimmy Gomez, Chair
AB
681 (Ting) - As Amended April 22, 2015
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|Policy |Revenue and Taxation |Vote:|7 - 0 |
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Urgency: No State Mandated Local Program: NoReimbursable: No
SUMMARY:
This bill makes the following changes to the survey requirements
applicable to the Board of Equalization (BOE) in determining the
adequacy of procedures and practices employed by county
assessors in their valuation of property:
1)Requires BOE to proceed with surveys of the assessment
procedures and practices in the 10 largest counties as rapidly
as feasible, and requires the BOE to repeat or supplement each
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survey at least once in 5 years. For purposes of the bill,
county size must be determined based on the total value of
locally assessed property.
2)Requires BOE, commencing on or after January 1, 2016, and for
each of the next 4 calendar years, to survey the assessment
procedures of 1 county from the next 10 largest counties and 3
counties from the remaining counties, and conduct a sample of
assessments on the local assessment roll of 1 county from the
next 10 largest counties and 2 counties from the remaining
counties. The bill requires that counties be selected at
random.
3)Requires BOE, before preparing its written survey report, to
notify the former assessor if the survey reviews the former
assessor's procedures and practices, meet with the former
assessor to discuss and confer on those matters that may be
included in the survey report, and publish an addendum to the
final survey report with the former assessor's written
response to the findings and recommendations.
4)Requires BOE to issue the final survey report within the
following periods from the date BOE commences the survey:
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a) For surveys commenced on or before June 30, 2016, within
two years.
b) For surveys commenced after July 1, 2016 to June 30,
2017, within 15 months.
c) For surveys commenced on or after July 1, 2017, within 12
months.
5)Requires that changes to the survey to remain in effect until
January 1, 2021, and as of that date is repealed.
FISCAL EFFECT:
Annual GF costs of approximately $400,000 to BOE to increase
staffing needed to comply with the compressed periods for
issuing the final reports.
COMMENTS:
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1)Purpose. According to the author, this bill will improve the
efficiency of performance audits conducted on county assessors
by having BOE focus its energy on a larger portion of the
assessment roll and complete audits in a shorter period of
time. Under the proposed three-tiered system, the author
believes BOE will be able to reduce the time needed to
complete a survey report to one year. The author asserts
performance audits will be further improved by providing
former assessors an opportunity to address issues relating to
their procedures and practices in the audits. The author
believes AB 681 will result in more meaningful and timely
information for assessors, enhancing assessment practices
statewide.
2)Existing Law on Assessor Surveys and Reports. Current law
requires BOE to conduct surveys in each county and city to
determine the adequacy of practices and procedures used by the
county assessor in the valuation of property for purposes of
taxation. BOE is required to conduct those surveys "as
rapidly as feasible" and repeat or supplement each survey at
least once every five years.
Current law requires BOE to prepare a written report that
details its findings and recommendations upon completion of
the survey, and meet with the assessor to discuss and confer
on those matters that may be included in the report prior to
publication. BOE is required to produce the final survey
report within two years of the date it began the survey.
3)BOE Improvements to Survey Audits. Over the past year, BOE
has been working to improve the manner in which surveys are
conducted and complete them faster. In 2014, BOE implemented
the following changes to reduce completion time to 18 months:
(i) reduced the size of the survey report; (ii) provided
questionnaires to assessors prior to commencement of field
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work; (iii) simultaneously conducted BOE division and county
division reviews; and (iv) shortened review times where
appropriate. In light of BOE efforts to address audit review
times and survey report quality, the Committee may wish to
consider whether mandating potentially redundant requirements
in statute is necessary or appropriate.
4)Related Legislation. AB 2234 (Ting) of 2014 would have made
similar changes to survey requirements applicable to BOE in
determining the adequacy of the procedures and practices
employed by county assessors in their valuation of property.
AB 2334 was held on the Suspense File of this committee.
Analysis Prepared by:Joel Tashjian / APPR. / (916)
319-2081