BILL ANALYSIS Ó
AB 1534
Page 1
Date of Hearing: April 27, 2015
ASSEMBLY COMMITTEE ON REVENUE AND TAXATION
Philip Ting, Chair
AB 1534
(Committee on Revenue and Taxation) - As Introduced March 25,
2015
Majority vote. Fiscal committee.
SUBJECT: Assessment analyst: certification
SUMMARY: Prohibits any state, county, or municipal employee
from making any decision regarding a "change in ownership" issue
or a property tax exemption without holding a valid assessment
analyst certificate issued by the State Board of Equalization
(BOE) Specifically, this bill:
1)Includes the legislative findings and declarations stating
legislative intent to do all of the following:
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a) Protect the interests of taxpayers by ensuring that
decisions regarding eligibility of a property for exemption
or whether a transaction constitutes a "change in
ownership" (COI) be made by staff who is certified;
b) Ensure that education and certification requirements be
implemented in the most efficient and economical manner,
utilizing existing resources of California county assessors
with advice and counsel of the Board of Equalization;
c) Not impede assessors in managing their staff resources
in an efficient manner and in a way that allows
non-certificated staff to prepare and work with exemption
applications and COI documents, provided that the staff is
not making COI or exemption decisions; and,
d) Clarify that this act shall be construed as an act
necessary for the implementation of Article XIII A of the
California Constitution and, as such, is not a program or
higher level of service mandated by the state.
2)Prohibits a person, who is an employee of the state, a county,
or a city and county, from making decisions regarding changes
in ownership or a property tax exemption, other than a
homeowner's exemption, unless he/she is the holder of a valid
assessment analyst certificate issued by the BOE.
3)Requires the BOE to provide for the examination of applicants
for an assessment analyst certificate and authorizes the BOE
to contract with the Department of Human Resources to give the
examinations.
4)Provides that the examinations must be prepared by the BOE,
with the advice and assistance of a committee of five
assessors selected by the California Assessors' Association
for this purpose.
5)Prohibits the issuance of a certificate to a person who has
not attained a passing grade in the examination or
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demonstrated that he/she is competent to make the change in
ownership (CIO) and exemption decisions, as specified.
6)Grants any applicant who is denied a certificate the right to
a review of that denial in accordance with the Administrative
Procedure Act [Chapter 5 (commencing with Section 11500) of
Part 1 of Division 3 of Title 2 of the Government Code (GC)]
("APA").
7)Does not apply to a person holding a valid appraiser's or
advanced appraiser's certificate issued by the BOE.
8)Prohibits the BOE from imposing any charge upon a county or
city and county or an applicant for an examination or
certification required by this bill or training conducted by
the BOE.
9)Requires the BOE to do both of the following:
a) Issue an advanced assessment analyst certificate for an
applicant that has held a valid assessment analyst
certificate for at least three years and has either
successfully completed an advanced study course or passed
an advanced level examination; and,
b) Prescribe an advanced course of study and prepare the
advanced level examination, with the advice and assistance
of five assessors selected by the California Assessors'
Association.
10)Requires a certified assessment analyst, in order to retain a
valid certificate, to complete at least 24 hours of training
conducted or approved by the BOE in each one-year period.
Allows any training time in excess of the 24-hour minimum that
is accumulated in any one year to be carried over as credit
for future training requirements, with a limit of three years
in which the carryover time may be credited.
11)Requires an advanced assessment analyst to complete at least
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12 hours of training in each one-year period in order to
retain a valid certificate and allows any training time that
is in excess of the 12-hour minimum accumulated in any one
year to be carried over as a credit for future training
requirements, with a limit of two years in which the carryover
time may be credited.
12)Requires training for both regular and advanced assessment
analyst certificates to include new developments in applicable
case law, statutory law, and administrative rules.
13)Specifies that failure to complete additional training, as
provided, shall constitute grounds for revocation of a
certificate. A proceeding to revoke shall be conducted in
accordance with the APA.
14)Requires each applicant to disclose, at the time of
certification, on forms provided by the BOE, his or her
financial interest in any legal entity.
15)Provides that, if an applicant is required to annually file
with the Fair Political Practices Commission pursuant to
Article 3 (commencing with Section 87300) of Chapter 7 of
Title of the GC), a duplicate of that filing must meet the
requirements of this bill.
16)Allows the BOE to do both of the following:
a) Issue a temporary certificate to a person who is newly
employed by the state, a county, or a city and county in
order to afford the person the opportunity to apply for,
and take, an examination.
b) Issue an interim certificate to a current employee of
the state, county, or a city and county, who is making CIO
or exemption decisions, in order to afford that person the
opportunity to apply for and take an exemption for a
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certificate.
17)Prohibits the BOE from issuing a temporary or interim
certificate if its duration exceeds one year or four years,
respectively, unless the person has been duly elected or
appointed to the office of assessor.
18)Prohibits the BOE from renewing either a temporary or an
interim certificate.
19)Provides that this bill only applies to counties and cities
that adopt a resolution upon the recommendation of the
assessor to require a valid assessment analyst certification.
EXISTING LAW:
1)Provides that all property is taxable, unless otherwise
provided by the California Constitution or federal laws.
[Section 1(a), Article XIII, California Constitution.] Limits
ad valorem taxes on real property to 1% of the full cash value
of that property (Proposition 13).
2)Requires real property to be reassessed to its current fair
market value whenever a "change in ownership" occurs.
[California Constitution, Article XIII A, Section 2; Revenue
and Taxation Code (R&TC) Sections 60 - 69.5.]
3)Provides that "change in ownership" includes a transfer of any
interest in real property between a corporation, partnership,
or other legal entity and a shareholder, partner or any other
person. [R&TC Section 61(j).]
4)Specifies in RT&C Sections 60 through 69.5 what constitutes "a
change in ownership."
5)States that, generally, when real property is owned by a
homeowner, the purchase or transfer or ownership interests in
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that entity triggers a change in ownership of the property.
However, specific exemptions from reassessment are provided
for intra-family transfers, replacement residences of senior
citizens and disabled persons, and specific types of home
improvements.
6)Provides a homeowners' exemption from property taxes equal to
$7,000 in assessed value (at a one percent property tax rate,
the exemption reduces property taxes by roughly $70) for
owner-occupied homes. Once granted, homeowners' exemptions
are generally permanent. However, an assessor may deny a
homeowner's exemption if the property becomes vacant or is
under construction as of the January 1st lien date
FISCAL EFFECT: According to the BOE, "[t]his bill has no impact
on property tax revenues."
COMMENTS:
1)The Purpose of this Bill . Current law does not require any
certification or training for employees who make change in
ownership or exemption decisions. Yet, their decisions can
potentially add or eliminate millions of dollars each year
from tax rolls statewide. Both CIO and exemption decisions
have become highly complex, requiring a deep understanding of
many different legal documents and a variety of statutes,
regulations, court decisions. This bill ensures that state
and local employees making CIO and property tax exemption
decisions are adequately trained and educated.
2)Arguments in Support . The California Assessor's Association
states, "Despite the extreme complexity of determining whether
a property has changed ownership, or is eligible for
exemption, and the millions of dollars in property tax value
impact such decisions have, no training is required for
[employees making those decisions]." The California
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Assessor's Association emphasizes that it is time to
"recognize the need for these [employees] to be certified,"
especially in light of new legal and regulatory changes.
Current law already requires appraisers to be certified. This
bill is needed to create similar certification procedures for
state and local government employees making decisions with
regard to property tax exemptions and CIO transactions.
3)Background: Proposition 13 and "Change in Ownership" . The
property tax applies to all classes of property and is one of
the major general revenue sources for local governments in
California. The property tax is imposed on the property
owners and is based on the value of the property. Much of the
law pertaining to taxation of property is prescribed by the
California Constitution, Article XIII and Article XIII A.
Since the adoption of Proposition 13 in 1978, real property
has generally been taxed based on its value at the time of its
acquisition, with increases for inflation limited to 2% per
year. The property is reassessed to its market value when the
ownership of property is changed. While the requirement to
reassess property upon a change in ownership is contained in
the California Constitution, the phrase "change in ownership"
is not defined. There have been hundreds of court cases
relating to interpretation of "change in ownership" and
exemption issues, and attorneys with years of training still
scrutinize statutory language and argue as to its meaning and
intended interpretation.
4)What Does this Bill Do ? This bill proposes to create a
training program required for any state, county, or municipal
employee who is involved in making decisions regarding a
"change in ownership" or property tax exemption, except for
homeowners' exemption claims. The annual training program
will be administered by the BOE, which will provide for the
training and examination of applicants. Once certified, an
employee will also have to complete additional training, in
order to retain a valid certificate. Each year, a certified
employee will have to complete either 24 hours or 12 hours of
training, depending on whether he/she is an assessment analyst
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or an advanced assessment analyst.
5)Addressing the Governor's Veto Message : This bill is
substantially similar to AB 2756 (Revenue and Taxation
Committee), of the 2013-14 Legislative Session. AB 2756 was
vetoed. The Governor provided the following in his veto
message:
This measure requires employees in county Assessor offices
who decide change in ownership issues affecting the real
property tax to receive state provided training and
certification.
This is something the Assessors can and should be doing
without a state mandate.
In order to address the concerns of the Governor, this bill
creates an opt-in provision requiring the counties and cities
to first adopt a resolution upon the recommendation of the
assessor before any of the valid assessment analyst
certification requirements go into effect. By requiring
counties and cities to opt in, this bill does not create a
state mandate.
REGISTERED SUPPORT / OPPOSITION:
Support
California Assessor's Association
AB 1534
Page 9
Opposition
None on file
Analysis Prepared by:Carlos Anguiano / REV. & TAX. / (916)
319-2098