BILL ANALYSIS Ó AB 2450 Page 1 Date of Hearing: May 11, 2016 ASSEMBLY COMMITTEE ON APPROPRIATIONS Lorena Gonzalez, Chair AB 2450 (Achadjian) - As Amended April 25, 2016 ----------------------------------------------------------------- |Policy |Local Government |Vote:|9 - 0 | |Committee: | | | | | | | | | | | | | | ----------------------------------------------------------------- Urgency: No State Mandated Local Program: YesReimbursable: Yes SUMMARY: This bill requires a public entity proposing to acquire tax exempt property to provide specified notice to the county assessor. FISCAL EFFECT: Minor, if any, costs to local entities to give notice to county assessors. Potentially a reimbursable state mandate, but it is unlikely any local entity would make a claim with the Commission AB 2450 Page 2 on State Mandates. COMMENTS: Purpose and Background. According to the author, "Assessors are required to consider the effect of any enforceable restrictions on a property's value. For low income housing, also known as below market rate (BMR) properties, governmental agencies execute contracts to restrict the use of the land for owner occupied housing, which are sold at affordable or below market prices. These contracts come with governmentally imposed restrictions to ensure compliance with the terms of the affordable housing program. "During the past several years, it has been increasingly difficult for assessors to properly assess BMR properties because property owners, and governmental agencies do not always disclose the existence of BMR contracts at the time of transfer. Currently, only the homeowner is required to disclose, and local housing agencies are not legally mandated to inform the assessors of the existence of these BMR contracts even though they maintain records for the purpose of enforcing the restrictions. The result is low-income homeowners are incorrectly over taxed. Correcting an overpayment is expensive, time consuming and may not result in a complete refund. This change will help the governmental agency achieve their objective of assisting low-income families by ensuring BMR families do not pay more property taxes than required." AB 2450 Page 3 This bill requires a public entity proposing to acquire tax exempt property to provide specified notice to the county assessor, in the same manner that existing law requires that notice be provided to the county tax collector. The California Assessors Association, sponsor of the bill, argues that this bill "will help assessors provide accurate and timely property tax relief to low-income homeowners. Moreover, it will assist cities and counties in assisting low-income families by ensuring these families do not pay more property taxes than required." Analysis Prepared by:Jennifer Swenson / APPR. / (916) 319-2081