Senate BillNo. 803


Introduced by Committee on Governance and Finance (Senators Hertzberg (Chair), Bates, Beall, Hernandez, Lara, Nguyen, and Pavley)

March 24, 2015


An act to amend Section 7510 of the Government Code, and to amend Sections 63.1, 68, 401.10, 423.3, 2609, and 3726 of the Revenue and Taxation Code, relating to taxation.

LEGISLATIVE COUNSEL’S DIGEST

SB 803, as introduced, Committee on Governance and Finance. Property taxation.

(1) Existing law requires the state or any local government entity, when entering into a written contract with a private party whereby a possessory interest subject to property taxation may be created, to include, or cause to be included, in that contract a statement that the property interest may be subject to property taxation if created, and that the party in whom the possessory interest is vested may be subject to the payment of property taxes levied on the interest.

Existing law requires a lease of real property that is owned by a state retirement system to provide, for purposes of property taxation, that the full cash value of the possessory interest created by the lease shall be the greater of either the full cash value of the possessory interest or, if the lease covers less than the entire real property, the lessee’s allocable share of the full cash value that would be determined for that real property if it were subject to tax.

This bill would delete those provisions relating to the full cash value of the possessory interest created by the aforementioned lease and would instead specify that the lease be valued in accordance with regulations adopted by the State Board of Equalization for the valuation of taxable possessory interests.

(2) The California Constitution generally limits ad valorem taxes on real property to 1% of the full cash value of that property. For purposes of this limitation, “full cash value” is defined as, among other things, the appraised value of that real property when a change in ownership has occurred. Existing property tax law provides that specified transfers are not deemed a change in ownership for which a claim is filed, as provided.

The California Constitution and existing property tax law exclude from a “change in ownership” real property transfers of a principal residence and the first $1,000,000 of the value of other real property between parents and their children, as defined by the Legislature. For the purposes of these provisions, existing property tax law defines “real property” to include, among other things, an interest in a unit or lot within a cooperative housing cooperation, as defined. Existing property tax law requires the parties to a parent-child transfer of real property under these provisions to make specified written certifications under penalty of perjury.

This bill would specify that, for the purposes of the parent-child principal residence exclusion, “real property” also includes a pro rata ownership interest in a mobilehome park and a pro rata interest in a floating home marina, as those terms are defined.

By changing the manner in which local assessors assess property for purposes of the parent-child principal residence exclusion, and by expanding the crime of perjury by requiring that certain information required be verified under oath, this bill would impose a state-mandated local program.

(3) The California Constitution and existing property tax law exclude from a “change in ownership” the acquisition of real property as a replacement for property from which the person has been displaced by eminent domain proceedings, acquisition by a public entity, or judgment of inverse condemnation. Existing property tax law requires the person acquiring replacement property on and after January 1, 1983, to request assessment within 4 years of the date that the property was acquired by these means.

This bill would specify that an above-described request for assessment made following this 4 year period applies commencing with the lien date of an assessment year in which the request is made. The bill would prohibit the refund or cancellation of taxes prior to the date the request is made. The bill would also require the assessor, in granting an assessment under these provisions, to adjust the base year value of the replacement property and make adjustments, as specified.

By adding to the duties of county assessors with respect to assessing these replacement properties, this bill would impose a state-mandated local program.

(4) Existing law requires the county assessor to assess all property that is subject to taxation at its full value. Existing law establishes, for any of the 1984-85 to 2015-16 tax years, a rebuttable presumption in favor of a full cash value assessment for an intercounty pipeline right-of-way, inclusive, provided that certain specified valuation standards are met in determining that assessed value. Existing law prohibits the county from imposing any late payment penalty or interest if payment of any taxes due upon the valuation of intercounty pipeline rights-of-way is made within 45 days of demand by the tax collector for payment. Existing law requires taxes not paid within 45 days of demand by the tax collector to become delinquent at that time, and requires delinquent penalty, redemption penalty, or other collection procedures to apply.

This bill would instead require, if the tax remains unpaid at the time set for the declaration of default for delinquent taxes, the tax together with any penalty and costs as may have accrued on the secured roll to be transferred to the unsecured roll. This bill would also extend the application of this rebuttable presumption through the 2020-21 fiscal year.

By imposing new duties upon local tax officials with respect to the collection of unpaid taxes for intercounty pipeline rights-of-way, this bill would impose a state-mandated local program.

(5) Existing law establishes the California Land Conservation Act of 1965, otherwise known as the Williamson Act, and authorizes a city or county to enter into a contract with an owner of land devoted to agricultural use, whereby the owner agrees to continue using the property for that purpose, and the city or county agrees to value the land accordingly for purposes of property taxation, as specified. Existing law authorizes a city or county to allow land subject to a Williamson Act contract to be assessed pursuant to specified formulas consistent with the restrictions on the land.

This bill would modify these provisions to clarify or correct cross-references relating to the valuation of prime agricultural land and land that is devoted to open-space uses of statewide significance.

(6) Existing property tax law requires the tax collector to publish a notice on or before the day when taxes are payable including specified information related to the payment of the property tax on the secured roll.

This bill would clarify that the notice should be published on or before November 1 of each year, the day upon which half the taxes on real property, and all taxes on personal property, on the secured roll, are due and payable.

(7) Existing property tax law generally authorizes a county tax collector to sell tax-defaulted property 5 years or more, or 3 years or more, as applicable, after that property has become tax defaulted. Existing property tax law provides that a defense based on the alleged invalidity or irregularity of any sale of tax-defaulted property can be maintained only in a proceeding commenced within one year after the date of execution of the tax collector’s deed.

This bill would instead provide that a defense, as described above, can be maintained only in a proceeding commenced within one year after the date of execution of the tax collector’s deed or within one year of the date the board of supervisors determines that a tax deed that was sold should not be rescinded, whichever is later.

(8) 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 with regard to certain mandates no reimbursement is required by this act for a specified reason.

With regard to any other mandates, this bill would provide that, if the Commission on State Mandates determines that the bill contains costs so mandated by the state, reimbursement for those costs shall be made pursuant to the statutory provisions noted above.

(9) Section 2229 of the Revenue and Taxation Code requires the Legislature to reimburse local agencies annually for certain property tax revenues lost as a result of any exemption or classification of property for purposes of ad valorem property taxation.

This bill would provide that, notwithstanding Section 2229 of the Revenue and Taxation Code, no appropriation is made and the state shall not reimburse local agencies for property tax revenues lost by them pursuant to the bill.

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

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

P5    1

SECTION 1.  

Section 7510 of the Government Code is amended
2to read:

3

7510.  

(a) (1) Except as provided in subdivision (b), a public
4retirement system, which has invested assets in real property and
5improvements thereon for business or residential purposes for the
6production of income, shall pay annually to the city or county, in
7whose jurisdiction the real property is located and has been
8removed from the secured roll, a fee for general governmental
9services equal to the difference between the amount that would
10have accrued as real property secured taxes and the amount of
11possessory interest unsecured taxes paid for that property. The
12governing bodies of local entities may adopt ordinances and
13regulations authorizing retirement systems to invest assets in real
14property subject to the foregoing requirements.

15(2) This subdivision shall not apply to any retirement system
16which is established by a local governmental entity if that entity
17is presently authorized by statute or ordinance to invest retirement
18assets in real property.

19(3) This subdivision shall not apply to property owned by any
20state public retirement system.

21(b) (1) Whenever a state public retirement system, which has
22invested assets in real property and improvements thereon for
23business or residential purposes for the production of income,
24leases the property, the lease shall provide, pursuant to Section
25107.6 of the Revenue and Taxation Code, that the lessee’s
26possessory interest may be subject to property taxation and that
27the party in whom the possessory interest is vested may be subject
28to the payment of property taxes levied on that interest.begin delete The lease
29shall also provide that the full cash value, as defined in Sections
30110 and 110.1 of the Revenue and Taxation Code, of the possessory
31interest upon which property taxes will be based shall equal the
32greater of (A) the full cash value of the possessory interest, or (B),
33if the lessee has leased less than all of the property, the lessee’s
34allocable share of the full cash value of the property that would
35have been enrolled if the property had been subject to property tax
36upon acquisition by the state public retirement system. The full
37cash value as provided for pursuant to either (A) or (B) of the
38preceding sentence shall reflect the anticipated term of possession
P6    1if, on the lien date described in Section 2192 of the Revenue and
2Taxation Code, that term is expected to terminate prior to the end
3of the next succeeding fiscal year. The lessee’s allocable share
4shall, subject to the preceding sentence, be the lessee’s leasable
5square feet divided by the total leasable square feet of the property.end delete

6begin insert The lease shall be valued in accordance with regulations adopted
7by the State Board of Equalization for the valuation of taxable
8possessory interests.end insert

9(2) Except as provided in this subdivision, the property shall be
10assessed and its taxes computed and collected in the same manner
11as privately owned property. The lessee’s possessory interest shall
12be placed on the unsecured roll and the tax on the possessory
13interest shall be subject to the collection procedures for unsecured
14property taxes.

15(3) An investment by a state public retirement system in a legal
16entity that invests assets in real property and improvements thereon
17shall not constitute an investment by the state public retirement
18system of assets in real property and improvements thereon. For
19purposes of this paragraph, “legal entity” includes, but is not
20limited to, partnership, joint venture, corporation, trust, or
21association. When a state public retirement system invests in a
22legal entity, the state public retirement system shall be deemed to
23be a person for the purpose of determining a change in ownership
24under Section 64 of the Revenue and Taxation Code.

25(4) Notwithstanding any other provision of law, fees charged
26pursuant to this section and collected prior to July 1, 1992, shall
27be deemed valid and not refundable under any circumstance.
28Notwithstanding any other provision of law, fees, interest and
29penalties, if any, asserted to be due pursuant to this section that
30were not charged or collected prior to July 1, 1992, shall be deemed
31invalid and not collectable under any circumstance.

32(5) This subdivision shall apply to the assessment, computation,
33and collection of taxes for the fiscal year beginning on July 1,
341992, and each fiscal year thereafter. For the 1992-93 and 1993-94
35fiscal years, in the case where a lessee’s possessory interest existed
36for less than the full fiscal year for which the tax was levied, the
37amount of tax shall be prorated in accordance with the number of
38months for which the lessee’s interest existed.

39

SEC. 2.  

Section 63.1 of the Revenue and Taxation Code is
40amended to read:

P7    1

63.1.  

(a) Notwithstanding any other provision of this chapter,
2a change in ownership shall not include the following purchases
3or transfers for which a claim is filed pursuant to this section:

4(1) (A) The purchase or transfer of real property which is the
5principal residence of an eligible transferor in the case of a purchase
6or transfer between parents and their children.

7(B) A purchase or transfer of a principal residence from a foster
8child to the child’s biological parent shall not be excluded under
9subparagraph (A) if the transferor child received that principal
10residence, or interest therein, from a foster parent through a
11purchase or transfer that was excluded under subparagraph (A).

12(2) The purchase or transfer of the first one million dollars
13($1,000,000) of full cash value of all other real property of an
14eligible transferor in the case of a purchase or transfer between
15parents and their children.

16(3) (A) Subject to subparagraph (B), the purchase or transfer
17of real property described in paragraphs (1) and (2) of subdivision
18(a) occurring on or after March 27, 1996, between grandparents
19and their grandchild or grandchildren, if all of the parents of that
20grandchild or those grandchildren, who qualify as the children of
21the grandparents, are deceased as of the date of purchase or transfer.
22Notwithstanding any other provision of law, for the lien date for
23the 2006-07 fiscal year and each fiscal year thereafter, in
24determining whether “all of the parents of that grandchild or those
25grandchildren, who qualify as the children of the grandparents,
26are deceased as of the date of purchase or transfer,” a son-in-law
27or daughter-in-law of the grandparent that is a stepparent to the
28grandchild need not be deceased on the date of the transfer.

29(B) A purchase or transfer of a principal residence shall not be
30excluded pursuant to subparagraph (A) if the transferee grandchild
31or grandchildren also received a principal residence, or interest
32therein, through another purchase or transfer that was excludable
33pursuant to paragraph (1) of subdivision (a). The full cash value
34of any real property, other than a principal residence, that was
35transferred to the grandchild or grandchildren pursuant to a
36purchase or transfer that was excludable pursuant to paragraph (2)
37of subdivision (a) and the full cash value of a principal residence
38that fails to qualify for exclusion as a result of the preceding
39sentence shall be included in applying, for purposes of paragraph
P8    1(2) of subdivision (a), the one million dollar ($1,000,000) full cash
2value limit specified in paragraph (2) of subdivision (a).

3(b) (1) For purposes of paragraph (1) of subdivision (a),
4“principal residence” means a dwelling that is eligible for a
5homeowners’ exemption or a disabled veterans’ exemption as a
6result of the transferor’s ownership and occupation of the dwelling.
7“Principal residence” includes only that portion of the land
8underlying the residence that consists of an area of reasonable size
9that is used as a site for the residence.

10(2) For purposes of paragraph (2) of subdivision (a), the
11one-million-dollar ($1,000,000) exclusion shall apply separately
12to each eligible transferor with respect to all purchases by and
13transfers to eligible transferees on and after November 6, 1986, of
14real property, other than the principal residence, of that eligible
15transferor. The exclusion shall not apply to any property in which
16the eligible transferor’s interest was received through a transfer,
17or transfers, excluded from change in ownership by the provisions
18of either subdivision (f) of Section 62 or subdivision (b) of Section
1965, unless the transferor qualifies as an original transferor under
20subdivision (b) of Section 65. In the case of any purchase or
21transfer subject to this paragraph involving two or more eligible
22transferors, the transferors may elect to combine their separate
23one-million-dollar ($1,000,000) exclusions and, upon making that
24election, the combined amount of their separate exclusions shall
25apply to any property jointly sold or transferred by the electing
26transferors, provided that in no case shall the amount of full cash
27value of real property of any one eligible transferor excluded under
28this election exceed the amount of the transferor’s separate unused
29exclusion on the date of the joint sale or transfer.

30(c) As used in this section:

31(1) “Purchase or transfer between parents and their children”
32means either a transfer from a parent or parents to a child or
33children of the parent or parents or a transfer from a child or
34children to a parent or parents of the child or children. For purposes
35of this section, the date of any transfer between parents and their
36children under a will or intestate succession shall be the date of
37the decedent’s death, if the decedent died on or after November
386, 1986.

39(2) “Purchase or transfer of real property between grandparents
40and their grandchild or grandchildren” means a purchase or transfer
P9    1on or after March 27, 1996, from a grandparent or grandparents
2to a grandchild or grandchildren if all of the parents of that
3grandchild or those grandchildren who qualify as the children of
4the grandparents are deceased as of the date of the transfer. For
5purposes of this section, the date of any transfer between
6grandparents and their grandchildren under a will or by intestate
7succession shall be the date of the decedent’s death.
8Notwithstanding any other provision of law, for the lien date for
9the 2006-07 fiscal year and each fiscal year thereafter, in
10determining whether “all of the parents of that grandchild or those
11grandchildren, who qualify as the children of the grandparents,
12are deceased as of the date of purchase or transfer,” a son-in-law
13or daughter-in-law of the grandparent that is a stepparent to the
14grandchild need not be deceased on the date of the transfer.

15(3) “Children” means any of the following:

16(A) Any child born of the parent or parents, except a child, as
17defined in subparagraph (D), who has been adopted by another
18person or persons.

19(B) Any stepchild of the parent or parents and the spouse of that
20stepchild while the relationship of stepparent and stepchild exists.
21For purposes of this paragraph, the relationship of stepparent and
22stepchild shall be deemed to exist until the marriage on which the
23relationship is based is terminated by divorce, or, if the relationship
24is terminated by death, until the remarriage of the surviving
25stepparent.

26(C) Any son-in-law or daughter-in-law of the parent or parents.
27For the purposes of this paragraph, the relationship of parent and
28son-in-law or daughter-in-law shall be deemed to exist until the
29marriage on which the relationship is based is terminated by
30divorce, or, if the relationship is terminated by death, until the
31remarriage of the surviving son-in-law or daughter-in-law.

32(D) Any child adopted by the parent or parents pursuant to
33statute, other than an individual adopted after reaching the age of
3418 years.

35(E) Any foster child of a state-licensed foster parent, if that child
36was not, because of a legal barrier, adopted by the foster parent or
37foster parents before the child aged out of the foster care system.
38For purposes of this paragraph, the relationship between a foster
39child and foster parent shall be deemed to exist until terminated
40by death. However, for purposes of a transfer that occurs on the
P10   1date of death, the relationship shall be deemed to exist on the date
2of death.

3(4) “Grandchild” or “grandchildren” means any child or children
4of the child or children of the grandparent or grandparents.

5(5) “Full cash value” means full cash value, as defined in Section
62 of Article XIII A of the California Constitution and Section 110.1,
7with any adjustments authorized by those sections, and the full
8value of any new construction in progress, determined as of the
9date immediately prior to the date of a purchase by or transfer to
10an eligible transferee of real property subject to this section.

11(6) “Eligible transferor” means a grandparent, parent, or child
12of an eligible transferee.

13(7) “Eligible transferee” means a parent, child, or grandchild
14of an eligible transferor.

15(8) “Real property” means real property as defined in Section
16104. Real property does not include any interest in a legal entity.
17For purposes of this section, real property includesbegin delete anend deletebegin insert any of the
18following:end insert

19begin insert(A)end insertbegin insertend insertbegin insertAnend insert interest in a unit or lot within a cooperative housing
20corporation, as defined in subdivision (i) of Section 61.

begin insert

21(B) A pro rata ownership interest in a mobilehome park, as
22provided in subdivision (b) of Section 62.1.

end insert
begin insert

23(C) A pro rata ownership in a floating home marina, as provided
24in subdivision (b) of Section 62.5.

end insert

25(9) “Transfer” includes, and is not limited to, any transfer of
26the present beneficial ownership of property from an eligible
27transferor to an eligible transferee through the medium of an inter
28vivos or testamentary trust.

29(10) “Social security number” also includes a taxpayer
30identification number issued by the Internal Revenue Service in
31the case in which the taxpayer is a foreign national who cannot
32obtain a social security number.

33(d) (1) The exclusions provided for in subdivision (a) shall not
34be allowed unless the eligible transferee, the transferee’s legal
35representative, the trustee of the transferee’s trust, or the executor
36or administrator of the transferee’s estate files a claim with the
37assessor for the exclusion sought and furnishes to the assessor each
38of the following:

39(A) A written certification by the transferee, the transferee’s
40legal representative, the trustee of the transferee’s trust, or the
P11   1executor or administrator of the transferee’s estate, signed and
2made under penalty of perjury that the transferee is a parent, child,
3or grandchild of the transferor and that the transferor is his or her
4parent, child, or grandparent. In the case of a
5grandparent-grandchild transfer, the written certification shall also
6include a certification that all the parents of the grandchild or
7grandchildren who qualify as children of the grandparents were
8deceased as of the date of the purchase or transfer and that the
9grandchild or grandchildren did or did not receive a principal
10residence excludable under paragraph (1) of subdivision (a) from
11the deceased parents, and that the grandchild or grandchildren did
12or did not receive real property other than a principal residence
13excludable under paragraph (2) of subdivision (a) from the
14deceased parents. The claimant shall provide legal substantiation
15of any matter certified pursuant to this subparagraph at the request
16of the county assessor.

17(B) A written certification by the transferor, the transferor’s
18 legal representative, the trustee of the transferor’s trust, or the
19executor or administrator of the transferor’s estate, signed and
20made under penalty of perjury that the transferor is a grandparent,
21parent, or child of the transferee and that the transferor is seeking
22the exclusion under this section and will not file a claim to transfer
23the base year value of the property under Section 69.5.

24(C) A written certification shall also include either or both of
25the following:

26(i) If the purchase or transfer of real property includes the
27purchase or transfer of residential real property, a certification that
28the residential real property is or is not the transferor’s principal
29residence.

30(ii) If the purchase or transfer of real property includes the
31purchase or transfer of real property other than the transferor’s
32 principal residence, a certification that other real property of the
33transferor that is subject to this section has or has not been
34previously sold or transferred to an eligible transferee, the total
35amount of full cash value, as defined in subdivision (c), of any
36real property subject to this section that has been previously sold
37or transferred by that transferor to eligible transferees, the location
38of that real property, the social security number of each eligible
39transferor, and the names of the eligible transferees of that property.

P12   1(D) If there are multiple transferees, the certification and
2signature may be made by any one of the transferees, if both of
3the following conditions are met:

4(i) The transferee has actual knowledge that, and the certification
5signed by the transferee states that, all of the transferees are eligible
6transferees within the meaning of this section.

7(ii) The certification is signed by the transferee as a true
8statement made under penalty of perjury.

9(E) In the case of a transfer between a foster parent and foster
10child, the claim filed with the assessor shall include a certified
11copy of the court decision regarding the foster child status of the
12individual and a certified statement from the appropriate county
13agency stating that the foster child was not, because of a legal
14barrier, adopted by the foster parent or foster parents. Upon a
15request by the county assessor, the claimant also shall provide to
16the assessor legal substantiation of any matter certified under this
17subparagraph.

18(2) If the full cash value of the real property purchased by or
19transferred to the transferee exceeds the permissible exclusion of
20the transferor or the combined permissible exclusion of the
21transferors, in the case of a purchase or transfer from two or more
22joint transferors, taking into account any previous purchases by
23or transfers to an eligible transferee from the same transferor or
24transferors, the transferee shall specify in his or her claim the
25amount and the allocation of the exclusion he or she is seeking.
26Within any appraisal unit, as determined in accordance with
27subdivision (d) of Section 51 by the assessor of the county in which
28the real property is located, the exclusion shall be applied only on
29a pro rata basis, however, and shall not be applied to a selected
30portion or portions of the appraisal unit.

31(e) (1) The State Board of Equalization shall design the form
32for claiming eligibility. Except as provided in paragraph (2), any
33claim under this section shall be filed:

34(A) For transfers of real property between parents and their
35children occurring prior to September 30, 1990, within three years
36after the date of the purchase or transfer of real property for which
37the claim is filed.

38(B) For transfers of real property between parents and their
39children occurring on or after September 30, 1990, and for the
40purchase or transfer of real property between grandparents and
P13   1their grandchildren occurring on or after March 27, 1996, within
2three years after the date of the purchase or transfer of real property
3for which the claim is filed, or prior to transfer of the real property
4to a third party, whichever is earlier.

5(C) Notwithstanding subparagraphs (A) and (B), a claim shall
6be deemed to be timely filed if it is filed within six months after
7the date of mailing of a notice of supplemental or escape
8assessment, issued as a result of the purchase or transfer of real
9property for which the claim is filed.

10(2) In the case in which the real property subject to purchase or
11transfer has not been transferred to a third party, a claim for
12exclusion under this section that is filed subsequent to the
13expiration of the filing periods set forth in paragraph (1) shall be
14considered by the assessor, subject to all of the following
15conditions:

16(A) Any exclusion granted pursuant to that claim shall apply
17commencing with the lien date of the assessment year in which
18the claim is filed.

19(B) Under any exclusion granted pursuant to that claim, the
20adjusted full cash value of the subject real property in the
21assessment year described in subparagraph (A) shall be the adjusted
22base year value of the subject real property in the assessment year
23in which the excluded purchase or transfer took place, factored to
24the assessment year described in subparagraph (A) for both of the
25following:

26(i) Inflation as annually determined in accordance with
27paragraph (1) of subdivision (a) of Section 51.

28(ii) Any subsequent new construction occurring with respect to
29the subject real property.

30(3) (A) Unless otherwise expressly provided, the provisions of
31this subdivision shall apply to any purchase or transfer of real
32property that occurred on or after November 6, 1986.

33(B) Paragraph (2) shall apply to purchases or transfers between
34parents and their children that occurred on or after November 6,
351986, and to purchases or transfers between grandparents and their
36grandchildren that occurred on or after March 27, 1996.

37(4) For purposes of this subdivision, a transfer of real property
38to a parent or child of the transferor shall not be considered a
39transfer to a third party.

P14   1(f) The assessor may report quarterly to the State Board of
2Equalization all purchases or transfers, other than purchases or
3transfers involving a principal residence, for which a claim for
4exclusion is made pursuant to subdivision (d). Each report shall
5contain the assessor’s parcel number for each parcel for which the
6exclusion is claimed, the amount of each exclusion claimed, the
7social security number of each eligible transferor, and any other
8information the board may require in order to monitor the
9one-million-dollar ($1,000,000) limitation in paragraph (2) of
10subdivision (a). In recognition of the state and local interests served
11by the action made optional in this subdivision, the Legislature
12encourages the assessor to continue taking the action formerly
13mandated by this subdivision.

14(g) This section shall apply to both voluntary transfers and
15transfers resulting from a court order or judicial decree. Nothing
16in this subdivision shall be construed as conflicting with paragraph
17(1) of subdivision (c) or the general principle that transfers by
18reason of death occur at the time of death.

19(h) (1) Except as provided in paragraph (2), this section shall
20apply to purchases and transfers of real property completed on or
21after November 6, 1986, and shall not be effective for any change
22in ownership, including a change in ownership arising on the date
23of a decedent’s death, that occurred prior to that date.

24(2) This section shall apply to purchases or transfers of real
25property between grandparents and their grandchildren occurring
26on or after March 27, 1996, and, with respect to purchases or
27transfers of real property between grandparents and their
28grandchildren, shall not be effective for any change in ownership,
29including a change in ownership arising on the date of a decedent’s
30death, that occurred prior to that date.

31(i) A claim filed under this section is not a public document and
32is not subject to public inspection, except that a claim shall be
33available for inspection by the transferee and the transferor or their
34respective spouse, the transferee’s legal representative, the
35transferor’s legal representative, the trustee of the transferee’s
36trust, the trustee of the transferor’s trust, and the executor or
37administrator of the transferee’s or transferor’s estate.

38(j) (1) If the assessor notifies the transferee in writing of
39potential eligibility for exclusion from change in ownership under
40this section, a certified claim for exclusion shall be filed with the
P15   1assessor within 45 days of the date of the notice of potential
2eligibility. If a certified claim for exclusion is not filed within 45
3days, the assessor may send a second notice of potential eligibility
4for exclusion, notifying the transferee that a certified claim for
5exclusion has not been received and that reassessment of the
6property will commence unless a certified claim for exclusion is
7filed within 60 days of the date of the second notice of potential
8eligibility. The second notice of potential eligibility shall indicate
9whether a certified claim for exclusion that is not filed within 60
10days will be subject to a processing fee as provided in paragraph
11(2).

12(2) If a certified claim for exclusion is not filed within 60 days
13of the date of the second notice of potential eligibility and an
14eligible transferee subsequently files a claim and qualifies for the
15exclusion, the assessor may, upon authorization by a county board
16of supervisors, require an eligible transferee to pay a one-time
17processing fee, collected at the time the claim is submitted, and
18reimbursed by the assessor if the claim is ineligible. The fee shall
19be subject to the provisions of Chapter 12.5 (commencing with
20Section 54985) of Part 1 of Division 2 of Title 5 of the Government
21Code and shall not exceed the amount of the actual and reasonable
22costs incurred by the assessor for reassessment work done due to
23failure to file the claim for exclusion or one hundred seventy-five
24dollars ($175), whichever is less.

25(3) The failure to file a certified claim for exclusion within the
26filing periods specified by this subdivision shall not be construed
27to limit any exclusion from being granted pursuant to a claim filed
28within the filing periods specified by subdivision (e).

29

SEC. 3.  

Section 68 of the Revenue and Taxation Code is
30amended to read:

31

68.  

begin insert(a)end insertbegin insertend insertFor purposes of Section 2 of Article XIII A of the
32Constitution, the term “change in ownership” shall not include the
33acquisition of real property as a replacement for comparable
34property if the person acquiring the real property has been displaced
35from property in this state by eminent domain proceedings, by
36acquisition by a public entity, or by governmental action which
37has resulted in a judgment of inverse condemnation.

38The adjusted base year value of the property acquired shall be
39the lower of the fair market value of the property acquired or the
40value which is the sum of the following:

begin delete

P16   1(a)

end delete

2begin insert(1)end insert The adjusted base year value of the property from which the
3person was displaced.

begin delete

4(b)

end delete

5begin insert(2)end insert The amount, if any, by which the full cash value of the
6property acquired exceeds 120 percent of the amount received by
7the person for the property from which the person was displaced.

8The provisions of this section shall apply to eminent domain
9proceedings, acquisitions, or judgments of inverse condemnation
10after March 1, 1975, and shall affect only those assessments of
11 that property which occur after June 8, 1982.

begin delete

12Persons acquiring replacement property between March 1, 1975,
13and January 1, 1983, shall request assessment under this section
14with the assessor on or before January 1, 1987. Persons

end delete

15begin insert(b)end insertbegin insertend insertbegin insert(1)end insertbegin insertend insertbegin insertA person end insertacquiring replacement property begin delete on and after
16January 1, 1983,end delete
shall request assessmentbegin delete within four years of the
17date the property was acquired by eminent domain or purchase or
18the date the judgment of inverse condemnation becomes final.end delete

19begin insert under this section. A request made after four years following the
20date the property was acquired by eminent domain or purchase,
21or the date the judgment of inverse condemnation becomes final,
22shall be subject to subdivision (c).end insert

begin delete

23 Any

end delete

24begin insert(2)end insertbegin insertend insertbegin insertA end insertchange in the adjusted base year value of the replacement
25property acquired, resulting from the application of the provisions
26of this section, shall be deemed to be effective on the first day of
27the month following the month in which the property is acquired.
28The change in value shall be treated as a change in ownership for
29the purpose of placing supplemental assessments on the
30supplemental roll pursuant to Chapter 3.5 (commencing with
31Section 75). The assessor shall, however, appraise the replacement
32property acquired in accordance with the provisions of this section
33rather than the provisions of Section 75.10. The provisions of
34Chapter 3.5 shall be liberally construed in order to provide the
35benefits of this section and Section 2 of Article XIII A of the
36California Constitution to affected property owners at the earliest
37possible date.

begin insert

38(c) A request for assessment under this section that is made
39after four years following the date the property was acquired by
40eminent domain or purchase, or the date the judgment of inverse
P17   1condemnation becomes final, shall apply commencing with the
2lien date of assessment year in which the request is made. There
3shall be no refund or cancellation of taxes prior to the date that
4the request is made. Under an assessment granted pursuant to that
5request, the assessor shall adjust the base year value of the
6replacement property acquired in accordance with this section
7and make adjustments for both of the following:

end insert
begin insert

8(1) Inflation, as annually determined in accordance with
9paragraph (1) of subdivision (a) of Section 51.

end insert
begin insert

10(2) Any subsequent new construction occurring with respect to
11the subject real property.

end insert
12

SEC. 4.  

Section 401.10 of the Revenue and Taxation Code is
13amended to read:

14

401.10.  

(a) Notwithstanding any otherbegin delete provision ofend delete law relating
15to the determination of the values upon which property taxes are
16based, values for each tax year from the 1984-85 tax year to the
17begin delete 2015-16end deletebegin insert 2020-end insertbegin insert21end insert tax year, inclusive, for intercounty pipeline
18rights-of-way on publicly or privately owned property, including
19those rights-of-way that are the subject of a change in ownership,
20new construction, or any other reappraisable event during the
21period from March 1, 1975, to June 30,begin delete 2016,end deletebegin insert 2021,end insert inclusive,
22shall be rebuttably presumed to be at full cash value for that year,
23if all of the following conditions are met:

24(1) (A) The full cash value is determined to equal a 1975-76
25base year value, annually adjusted for inflation in accordance with
26subdivision (b) of Section 2 of Article XIII A of the California
27Constitution, and the 1975-76 base year value was determined in
28accordance with the following schedule:

29(i) Twenty thousand dollars ($20,000) per mile for a high density
30property.

31(ii) Twelve thousand dollars ($12,000) per mile for a transitional
32density property.

33(iii) Nine thousand dollars ($9,000) per mile for a low density
34property.

35(B) For purposes of this section, the density classifications
36described in subparagraph (A) are defined as follows:

37(i) “High density” means Category 1 (densely urban) as
38established by the State Board of Equalization.

39(ii) “Transitional density” means Category 2 (urban) as
40established by the State Board of Equalization.

P18   1(iii) “Low density” means Category 3 (valley-agricultural),
2Category 4 (grazing), and Category 5 (mountain and desert) as
3established by the State Board of Equalization.

4(2) The full cash value is determined utilizing the same property
5density classifications that were assigned to the property by the
6State Board of Equalization for the 1984-85 tax year or, if density
7 classifications were not so assigned to the property for the 1984-85
8tax year, the density classifications that were first assigned to the
9property by the board for a subsequent tax year.

10(3) (A) If a taxpayer owns multiple pipelines in the same
11right-of-way, an additional 50 percent of the value attributed to
12the right-of-way for the presence of the first pipeline, as determined
13under paragraphs (1) and (2), shall be added for the presence of
14each additional pipeline up to a maximum of two additional
15pipelines. For any particular taxpayer, the total valuation for a
16multiple pipeline right-of-way shall not exceed 200 percent of the
17value determined for the right-of-way of the first pipeline in the
18right-of-way in accordance with paragraphs (1) and (2).

19(B) If the State Board of Equalization has determined that an
20intercounty pipeline, located within a multiple pipeline right-of-way
21previously valued in accordance with subparagraph (A), has been
22abandoned as a result of physical removal or blockage, the assessed
23value of the right-of-way attributable to the last pipeline enrolled
24in accordance with subparagraph (A) shall be reduced by not less
25than 75 percent of that increase in assessed value that resulted from
26the application of subparagraph (A).

27(4) If all pipelines of a taxpayer located within the same pipeline
28right-of-way, previously valued in accordance with this section,
29are determined by the State Board of Equalization to have been
30abandoned as the result of physical removal or blockage, the
31assessed value of that right-of-way to that taxpayer shall be
32determined to be no more than 25 percent of the assessed value
33otherwise determined for the right-of-way for a single pipeline of
34that taxpayer pursuant to paragraphs (1) and (2).

35(b) If the assessor assigns values for any tax year from the
361984-85 tax year to thebegin delete 2015-16end deletebegin insert 2020-end insertbegin insert21end insert tax year, inclusive, in
37accordance with the methodology specified in subdivision (a), the
38taxpayer’s right to assert any challenge to the right to assess that
39property, whether in an administrative or judicial proceeding, shall
40be deemed to have been raised and resolved for that tax year and
P19   1the values determined in accordance with that methodology shall
2be rebuttably presumed to be correct. If the assessor assigns values
3for any tax year from the 1984-85 tax year to thebegin delete 2015-16end deletebegin insert 2020-end insertbegin insert21end insert
4 tax year, inclusive, in accordance with the methodology specified
5in subdivision (a), any pending taxpayer lawsuit that challenges
6the right to assess the property shall be dismissed by the taxpayer
7with prejudice as it applies to intercounty pipeline rights-of-way.

8(c) Notwithstanding any change in ownership, new construction,
9or decline in value occurring after March 1, 1975, if the assessor
10assigns values for rights-of-way for any tax year from the 1984-85
11tax year to thebegin delete 2015-16end deletebegin insert 2020-end insertbegin insert21end insert tax year, inclusive, in accordance
12with the methodology specified in subdivision (a), the taxpayer
13may not challenge the right to assess that property and the values
14determined in accordance with that methodology shall be rebuttably
15presumed to be correct for that property for that tax year.

16(d) Notwithstanding any change in ownership, new construction,
17or decline in value occurring after March 1, 1975, if the assessor
18does not assign values for rights-of-way for any tax year from the
191984-85 tax year to thebegin delete 2015-16end deletebegin insert 2020-end insertbegin insert21end insert tax year, inclusive, at
20the 1975-76 base year values specified in subdivision (a), any
21assessed value that is determined on the basis of valuation standards
22that differ, in whole or in part, from those valuation standards set
23forth in subdivision (a) shall not benefit from any presumption of
24correctness, and the taxpayer may challenge the right to assess that
25property or the values for that property for that tax year. As used
26herein, a challenge to the right to assess shall include any
27assessment appeal, claim for refund, or lawsuit asserting any right,
28remedy, or cause of action relating to or arising from, but not
29limited to, the following or similar contentions:

30(1) That the value of the right-of-way is included in the value
31of the underlying fee or railroad right-of-way.

32(2) That assessment of the value of the right-of-way to the owner
33of the pipeline would result in double assessment.

34(3) That the value of the right-of-way may not be assessed to
35the owner of the pipeline separately from the assessment of the
36value of the underlying fee.

37(e) Notwithstanding any other provision of law, during a
38four-year period commencing on January 1, 1996, the assessor
39may issue an escape assessment in accordance with the specific
P20   1valuation standards set forth in subdivision (a) for the following
2taxpayers and tax years:

3(1) Any intercounty pipeline right-of-way taxpayer who was a
4plaintiff in Southern Pacific Pipe Lines, Inc. v. State Board of
5Equalization (1993) 14 Cal. App. 4th 42, for the tax years 1984-85
6to 1996-97, inclusive.

7(2) Any intercounty pipeline right-of-way taxpayer who was
8not a plaintiff in Southern Pacific Pipe Lines, Inc. v. State Board
9of Equalization (1993) 14 Cal. App. 4th 42, for the tax years
101989-90 to 1996-97, inclusive.

11(f) Any escape assessment levied under subdivision (e) shall
12not be subject to penalties or interest under the provisions of
13Section 532. If payment of any taxes due under this section is made
14within 45 days of demand by the tax collector for payment, the
15county shall not impose any late payment penalty or interest. Taxes
16not paid within 45 days of demand by the tax collector shall
17become delinquent at that begin delete time, and the delinquent penalty,
18redemption penalty, or other collection provisions of this code
19shall thereafter apply.end delete
begin insert time. If the tax thereon remains unpaid at
20the time set for declaration of default for delinquent taxes, the tax
21together with any penalty and costs as may have accrued thereon
22while on the secured roll shall be transferred to the unsecured
23roll.end insert

24(g) For purposes of this section, “intercounty pipeline
25right-of-way” means, except as otherwise provided in this
26subdivision, any interest in publicly or privately owned real
27property through which or over which an intercounty pipeline is
28placed. However, “intercounty pipeline right-of-way” does not
29include any parcel or facility that the State Board of Equalization
30originally separately assessed using a valuation method other than
31the multiplication of pipeline length within a subject property by
32a unit value determined in accordance with the density category
33of that subject property.

34(h) This section shall remain in effect only until January 1,begin delete 2016,end delete
35begin insert 2022,end insert and, as of that date is repealed, unless a later enacted statute,
36that is enacted before January 1,begin delete 2016,end deletebegin insert 2022,end insert deletes or extends
37that date.

38

SEC. 5.  

Section 423.3 of the Revenue and Taxation Code is
39amended to read:

P21   1

423.3.  

Any city or county may allow land subject to an
2enforceable restriction under the Williamson Act or a migratory
3waterfowl habitat contract to be assessed in accordance with one
4or more of the following:

5(a) Land specified inbegin insert paragraph (1) ofend insert subdivision (a) of Section
616142 of the Government Code shall be assessed at the value
7determined as provided in Section 423, but not to exceed a
8uniformly applied percentage of its base year value pursuant to
9Section 110.1, adjusted to reflect the percentage change in the cost
10of living not to exceed 2 percent per year. In no event shall that
11percentage be less than 70 percent.

12(b) Prime commercial rangeland shall be assessed at the value
13determined as provided in Section 423, but not to exceed a
14uniformly applied percentage of its base year value pursuant to
15Section 110.1, adjusted to reflect the percentage change in the cost
16of living not to exceed 2 percent per year. In no event shall that
17percentage be less than 80 percent.

18For purposes of this subdivision, “prime commercial rangeland”
19means rangeland which meets all of the following
20physical-chemical parameters:

21(1) Soil depth of 12 inches or more.

22(2) Soil texture of fine sandy loam to clay.

23(3) Soil permeability of rapid to slow.

24(4) Soil with at least 2.5 inches of available water holding
25capacity in profile.

26(5) A slope of less than 30 percent.

27(6) A climate with 80 or more frost-free days per year.

28(7) Ten inches or more average annual precipitation.

29(8) When managed at potential, the land generally requires less
30than 17 acres to support one animal unit per year.

31Property owners of land specified in this subdivision, shall
32demonstrate that their land falls within the above definition when
33requested by the city or county.

34(c) Land specified inbegin insert paragraph (2) ofend insert subdivisionbegin delete (b)end deletebegin insert (a)end insert of
35Section 16142 of the Government Code shall be assessed at the
36value determined as provided in Section 423, but not to exceed a
37uniformly applied percentage of its base year value pursuant to
38Section 110.1, adjusted to reflect the percentage change in the cost
39of living not to exceed 2 percent per year. In no event shall that
40percentage be less than 90 percent.

P22   1(d) Waterfowl habitat shall be assessed at the value determined
2as provided in Section 423.7 but not to exceed a uniformly applied
3percentage of its base year value pursuant to Section 110.1,
4adjusted to reflect the percentage change in the cost of living not
5to exceed 2 percent per year. In no event shall that percentage be
6less than 90 percent.

7

SEC. 6.  

Section 2609 of the Revenue and Taxation Code is
8amended to read:

9

2609.  

On or beforebegin delete the day when taxes are payableend deletebegin insert November
101 of each year,end insert
the tax collector shall publish a notice specifying:

11(a) The dates when taxes on the secured roll will be due.

12(b) The times when these taxes will be delinquent.

13(c) The penalties and costs for delinquency.

14(d) That all taxes may be paid when the first installment is due.

15(e) The times and places at which payment of taxes may be
16made.

17

SEC. 7.  

Section 3726 of the Revenue and Taxation Code is
18amended to read:

19

3726.  

A defense based on the alleged invalidity or irregularity
20of any proceeding instituted under this chapter can be maintained
21only in a proceeding commenced within one year after the date of
22execution of the tax collector’s deedbegin insert or within one year of the date
23the board of supervisors determines that a tax deed sold under
24this part should not be rescinded pursuant to Section 3731,
25whichever is laterend insert
.

26

SEC. 8.  

No reimbursement is required by this act pursuant to
27Section 6 of Article XIII B of the California Constitution for certain
28costs that may be incurred by a local agency or school district
29because, in that regard, this act creates a new crime or infraction,
30eliminates a crime or infraction, or changes the penalty for a crime
31or infraction, within the meaning of Section 17556 of the
32Government Code, or changes the definition of a crime within the
33meaning of Section 6 of Article XIII B of the California
34Constitution.

35However, if the Commission on State Mandates determines that
36this act contains other costs mandated by the state, reimbursement
37to local agencies and school districts for those costs shall be made
38pursuant to Part 7 (commencing with Section 17500) of Division
394 of Title 2 of the Government Code.

P23   1

SEC. 9.  

Notwithstanding Section 2229 of the Revenue and
2Taxation Code, no appropriation is made by this act and the state
3shall not reimburse any local agency for any property tax revenues
4lost by it pursuant to this act.



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