BILL ANALYSIS Ó
SENATE COMMITTEE ON APPROPRIATIONS
Senator Ricardo Lara, Chair
2015 - 2016 Regular Session
AB 681 (Ting) - State Board of Equalization: surveys: assessment
procedures and practices: county assessor.
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|Version: July 15, 2015 |Policy Vote: GOV. & F. 7 - 0 |
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|Urgency: No |Mandate: No |
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|Hearing Date: August 17, 2015 |Consultant: Robert Ingenito |
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This bill meets the criteria for referral to the Suspense File.
Bill
Summary: AB 681 would make specified modifications to the Board
of Equalization's (BOE's) county assessment practices survey
cycle.
Fiscal
Impact: BOE indicates that it would require additional staff to
complete the proposed surveys and samples within one year, as
the bill requires. These costs are estimated to be $629,000 in
2016-17 and $571,000 annually thereafter (General Fund). The
bill would not impact property tax revenues.
AB 681 (Ting) Page 1 of
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Background: In 1850, the Legislature first directed county assessors to tax
property; however, assessors in different counties often applied
different tax rates and methodologies. Inconsistencies were
especially acute between counties dominated by mining and
agriculture. In 1879, BOE was created to equalize rates and
assessment practices among counties. Additionally, the Board
enacts rules and regulations which generally bind county
assessors.
As part of its oversight role, BOE surveys each county assessor
to assess that county's practices, procedures, and general
performance. The results of BOE's survey are published into
public documents known as "Assessment Practices Surveys." BOE's
survey must include a review with respect to the uniformity of
treatment of all classes of property to ensure that no class
receives a systematic overvaluation or undervaluation.
Additionally, BOE's survey may include a statistical sampling
from a county's assessment rolls to determine adequate
representation of the several classes of property within the
county. Specifically, BOE staff draws a sample of representative
parcels, assesses the property on its own, and then compares its
value to the assessor's.
BOE staff, during the course of a survey, can access and make
copies of any of the assessor's records, or audit any book or
record provided by a taxpayer. Assessors have a right to appeal
BOE appraisals within his or her county where differences
haven't been resolved before a field review.
Current law directs BOE to complete survey reports as rapidly as
possible, but requires surveys of all counties every five years.
BOE must sample assessments from the ten largest counties or
cities and counties in the State each year plus three other
counties selected at random, determined by level of assessed
value of property. BOE must sample assessments from a county if
it finds that it has significant problems as a result of the
last survey instead of a large county selected at random.
BOE sends the survey report to the assessor once complete,
setting forth specific findings and recommendations; however,
before preparing the survey report, BOE must meet with the
assessor to discuss matters included therein. After receiving
AB 681 (Ting) Page 2 of
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the survey report, the assessor may file a written response with
BOE within 30 days, unless the BOE extends the period for good
cause, which is included in the final survey report. The survey
report, the assessor's response, and any additional BOE notes
constitute the final report, which must be completed within two
years after BOE begins the survey.
After the survey is complete, BOE is required to prepare a
written survey report setting forth its findings and
recommendations. Before preparing its written survey report, the
law requires the BOE to meet with the assessor to discuss and
confer on those matters that may be included in the written
survey report. Existing law requires the BOE to issue the final
survey report within two years after the date the BOE begins the
survey.
Current law does not require BOE to meet with the former county
assessor if the survey reviews the former assessor's
administration. In addition, it does not provide a process for
the former assessor to formally respond to a BOE survey.
Proposed Law: This bill would make several changes to BOE's
survey process. First, it would require the Board, for surveys
started on or after July 1, 2017, to issue a final survey report
within 12 months after the date the survey was begun. The bill
would permit a gradual transition from 24 months down to 12
months, as specified. Second, the bill would make specified
modifications to the survey cycle to reduce the number of
surveys that BOE is required to conduct. Finally, the bill would
(1) require BOE to notify and meet with the former assessor
whose administration is being reviewed upon request, prior to
publishing its written survey report, and (2) allow the former
assessor to prepare a written response to the BOE report that
must be published as an addendum to the final survey report.
Related
Legislation: AB 2234 (Ting) would have made similar changes to
survey requirements applicable to BOE in determining the
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adequacy of the procedures and practices by used by county
assessors. The bill was held on the Assembly Appropriations
Committee's Suspense File.
Staff
Comments: Without modifying the survey schedule, publishing
written surveys within one year would not be possible. The bill
would ultimately shorten the time to complete the written survey
report from two years to one year. To mitigate this impact, the
bill would reduce the number of county surveys that BOE must
complete over a 5-year cycle, from 58 to 30. The bill reduces
the number of county samplings the BOE must undertake as well.
To complete the surveys in the allotted time using existing
staff resources would require the BOE to curtail each audit's
scope and depth. Thus, additional staff would be needed to meet
the compressed schedule and maintain the audit's scope. BOE
notes that hiring and retaining qualified staff could be
difficult, as the state's compensation package for individuals
with the proper skill set has lagged behind those offered at the
county level.
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