Amended in Senate June 15, 2016

Amended in Assembly April 25, 2016

Amended in Assembly April 12, 2016

California Legislature—2015–16 Regular Session

Assembly Bill No. 2450

Introduced by Assembly Member Achadjian

February 19, 2016

An act to amend begin delete Section end delete begin insert Sections 402.1 and end insert 5091 of the Revenue and Taxation Code, relating to property tax.

LEGISLATIVE COUNSEL’S DIGEST

AB 2450, as amended, Achadjian. Property begin delete taxation: property acquired for public use: notice. end delete begin insert taxation. end insert

begin insert

Existing property tax law requires the county assessor to consider, when valuing real property for property taxation purposes, the effect of any enforceable restrictions to which the use of the land may be subjected. Under existing law these restrictions include, but are not limited to, zoning, recorded contracts with governmental agencies, and various other restrictions imposed by governments.

end insert begin insert

This bill would require contracts with governmental agencies that restrict the use of the property to owner-occupied housing available at affordable housing cost to be recorded.

end insert

The California Constitution exempts from property taxation property that is owned by the state or, with certain exceptions, by local governments. Existing property tax law establishes a procedure by which a public entity may cancel property taxes on property that it acquires. Under existing law, if a public entity proposes to acquire property for public use that will make the property exempt from taxation, the public entity is required to give notice to the county tax collector and to other public entities whose taxes are not collected by the county tax collector, as provided.

This bill would additionally require the public entity to give notice to the county assessor.

By adding to the duties of local government begin delete officials with regard to the cancellation of property taxes, end delete begin insert officials, end insert this bill would impose a state-mandated local program.

The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that, if the Commission on State Mandates determines that the bill contains costs mandated by the state, reimbursement for those costs shall be made pursuant to these statutory provisions.

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

The people of the State of California do enact as follows:

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begin insert SECTION 1. end insert   

end insert

begin insert Section 402.1 of the end insert begin insert Revenue and Taxation Code end insert

begin insert is amended to read: end insert

402.1.  

(a) In the assessment of land, the assessor shall consider
the effect upon value of any enforceable restrictions to which the
use of the land may be subjected. These restrictions shall include,
but are not limited to, all of the following:

(1) Zoning.

(2) Recorded contracts with governmental agencies other than
those provided in Sections 422, 422.5, and 422.7.

(3) Permit authority of, and permits issued by, governmental
agencies exercising land use powers concurrently with local
governments, including the California Coastal Commission and
regional coastal commissions, the San Francisco Bay Conservation
and Development Commission, and the Tahoe Regional Planning
Agency.

(4) Development controls of a local government in accordance
with any local coastal program certified pursuant to Division 20
(commencing with Section 30000) of the Public Resources Code.

(5) Development controls of a local government in accordance
with a local protection program, or any component thereof, certified
pursuant to Division 19 (commencing with Section 29000) of the
Public Resources Code.

(6) Environmental constraints applied to the use of land pursuant
to provisions of statutes.

(7) Hazardous waste land use restriction pursuant to Section
25226 of the Health and Safety Code.

(8) (A) A recorded conservation, trail, or scenic easement, as
described in Section 815.1 of the Civil Code, that is granted in
favor of a public agency, or in favor of a nonprofit corporation
organized pursuant to Section 501(c)(3) of the Internal Revenue
Code that has as its primary purpose the preservation, protection,
or enhancement of land in its natural, scenic, historical, agricultural,
forested, or open-space condition or use.

(B) A recorded greenway easement, as described in Section
816.52 of the Civil Code, that is granted in favor of a public
agency, or in favor of a nonprofit corporation organized pursuant
to Section 501(c)(3) of the Internal Revenue Code that has as its
primary purpose the developing and preserving of greenways.

(9) A solar-use easement pursuant to Chapter 6.9 (commencing
with Section 51190) of Part 1 of Division 1 of Title 5 of the
Government Code.

(10) A contract where the following apply:

(A) The contract is with a nonprofit corporation organized
pursuant to Section 501(c)(3) of the Internal Revenue Code that
has received a welfare exemption under Section 214.15 for
properties intended to be sold to low-income families who
participate in a special no-interest loan program.

(B) The contract restricts the use of the land for at least 30 years
to owner-occupied housing available at affordable housing cost in
accordance with Section 50052.5 of the Health and Safety Code.

(C) The contract includes a deed of trust on the property in favor
of the nonprofit corporation to ensure compliance with the terms
of the program, which has no value unless the owner fails to
comply with the covenants and restrictions of the terms of the
home sale.

(D) The local housing authority or an equivalent agency, or, if
none exists, the city attorney or county counsel, has made a finding
that the long-term deed restrictions in the contract serve a public
purpose.

(E) The contract is recorded and provided to the assessor.

(b) There is a rebuttable presumption that restrictions will not
be removed or substantially modified in the predictable future and
that they will substantially equate the value of the land to the value
attributable to the legally permissible use or uses.

(c) Grounds for rebutting the presumption may include, but are
not necessarily limited to, the past history of like use restrictions
in the jurisdiction in question and the similarity of sales prices for
restricted and unrestricted land. The possible expiration of a
restriction at a time certain shall not be conclusive evidence of the
future removal or modification of the restriction unless there is no
opportunity or likelihood of the continuation or renewal of the
restriction, or unless a necessary party to the restriction has
indicated an intent to permit its expiration at that time.

(d) In assessing land with respect to which the presumption is
unrebutted, the assessor shall not consider sales of otherwise
comparable land not similarly restricted as to use as indicative of
value of land under restriction, unless the restrictions have a
demonstrably minimal effect upon value.

(e) In assessing land under an enforceable use restriction wherein
the presumption of no predictable removal or substantial
modification of the restriction has been rebutted, but where the
restriction nevertheless retains some future life and has some effect
on present value, the assessor may consider, in addition to all other
legally permissible information, representative sales of comparable
lands that are not under restriction but upon which natural
limitations have substantially the same effect as restrictions.

begin insert

(f) Contracts with governmental agencies that restrict the use
of the property to owner-occupied housing available at affordable
housing cost, including under any locally adopted inclusionary
housing program, shall be recorded.

end insert begin delete

(f)

end delete

begin insert (g) end insert  For the purposes of this section the following definitions
apply:

(1) “Comparable lands” are lands that are similar to the land
being valued in respect to legally permissible uses and physical
attributes.

(2) “Representative sales information” is information from sales
of a sufficient number of comparable lands to give an accurate
indication of the full cash value of the land being valued.

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(g)

end delete

begin insert (h) end insert  It is hereby declared that the purpose and intent of the
Legislature in enacting this section is to provide for a method of
determining whether a sufficient amount of representative sales
information is available for land under use restriction to ensure
the accurate assessment of that land. It is also hereby declared that
the further purpose and intent of the Legislature in enacting this
section and Section 1630 is to avoid an assessment policy which,
in the absence of special circumstances, considers uses for land
that legally are not available to the owner and not contemplated
by government, and that these sections are necessary to implement
the public policy of encouraging and maintaining effective land
use planning. This statute shall not be construed as requiring the
assessment of any land at a value less than as required by Section
401 or as prohibiting the use of representative comparable sales
information on land under similar restrictions when this information
is available.

begin delete SECTION 1. end delete

begin insert SEC. 2. end insert   

Section 5091 of the Revenue and Taxation Code is
amended to read:

5091.  

(a) If a public entity proposes to acquire property for a
public use that will make the property exempt from taxation, the
public entity shall give notice to the county assessor, the county
tax collector, and to any public entities whose taxes are not
collected by the county tax collector but who at the time exercise
the right of assessment and taxation.

(b) The notice shall be given within a reasonable time following
the initial budgeting of funds for the proposed acquisition, and
shall state all of the following:

(1) The approximate extent of the proposed project.

(2) The estimated time of completion of all acquisitions
necessary for the proposed project.

(c) This section creates no rights or liabilities and does not affect
the validity of any property acquisitions by negotiated purchase
or eminent domain.

begin delete SEC. 2. end delete

begin insert SEC. 3. end insert   

If the Commission on State Mandates determines that
this act contains costs mandated by the state, reimbursement to
local agencies and school districts for those costs shall be made
pursuant to Part 7 (commencing with Section 17500) of Division
4 of Title 2 of the Government Code.