BILL ANALYSIS Ó
AB 2450
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CONCURRENCE IN SENATE AMENDMENTS
AB
2450 (Achadjian)
As Amended August 2, 2016
Majority vote
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|ASSEMBLY: | 76-0 |(May 19, 2016) |SENATE: |38-0 |(August 16, |
| | | | | |2016) |
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Original Committee Reference: L. GOV.
SUMMARY: Requires contracts with government agencies
restricting the use of property for owner-occupied housing
available at affordable cost to be recorded.
The Senate amendments:
1)Require contracts with government agencies restricting the use
of property for owner-occupied housing available at affordable
cost to be recorded.
2)Provide that nothing in this bill shall be construed to
prevent the assessor from considering a contract that
restricts the use of the property to owner-occupied housing
available at affordable housing cost, including under any
locally adopted inclusionary housing program, for purposes of
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applying existing law.
AS PASSED BY THE ASSEMBLY, this bill required a public entity,
if the public entity proposes to acquire property for a public
use that will make the property exempt from taxation, to give
notice to the county assessor, in the same manner as the notice
provided to the county tax collector.
FISCAL EFFECT: According to the Senate Appropriations
Committee, pursuant to Senate Rule 28.8, negligible state costs.
COMMENTS:
1)Property Tax and County Assessors. California Constitution
Article XIII Section One provides that all property is
taxable, unless explicitly exempted by the Constitution or
federal law. The Constitution limits the maximum amount of
any ad valorem tax on real property at 1% of full cash value,
and growth in the value of the property to 2% per year.
Pursuant to existing law, assessors must consider enforceable
restrictions, such as zoning, environmental restrictions, and
recorded contracts with government entities when valuing
property. Assessors subsequently estimate the value of the
property based on its legal uses allowed by the enforceable
restriction.
2)Bill Summary. This bill requires contracts with government
agencies restricting the use of property for owner-occupied
housing available at affordable cost to be recorded.
Additionally, 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. This
bill is sponsored by the California Assessors Association.
3)Author's Statement. According to the author, "Assessors are
required to consider the effect of any enforceable
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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."
4)Arguments in Support. The California Assessors Association
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. In Santa Clara County, for
example, the Assessor discovered that more than 200 property
owners had been paying more property taxes than they owed -
some, for as long as 18 years. When discovered in August
2015, the Assessor manually processed over 2,000 roll
corrections, and worked with [the] County Board of Supervisors
and the County Finance Agency to refund more than $3 million
to taxpayers. All of this could have been avoided, had the
Assessor been properly notified when the transactions
occurred."
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5)Arguments in Opposition. None on file.
Analysis Prepared by:
Misa Lennox / L. GOV. / (916) 319-3958 FN:
0003911