SB 1093, as amended, Hancock. Property taxes: assessment: commercial and industrial property.
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 the assessor’s valuation of real property as shown on the 1975-76 tax bill under “full cash value” or, thereafter, the appraised value of that real property when purchased, newly constructed, or a change in ownership has occurred.
begin insertSenate Constitutional Amendment 5 of the 2015-16 Regular Session, if approved by the voters, commencing on the lien date for the 2018-19 fiscal year, would require the full cash value of commercial and industrial property to be the fair market value of that property as of the lien date, and would require the Legislature to enact legislation to phase in the reassessment of commercial and industrial property as so described in order to ensure a reasonable workload and implementation period for county assessors and taxpayers.
end insertbegin insertThis bill, pursuant to that constitutional requirement, for the 2018-19 fiscal year, would require only 50% of those properties that have not been reassessed at fair market value, as specified, to be assessed at fair market value, and by the 2019-20 fiscal year, would require all other properties that have not been brought to fair market value to be assessed at fair market value. The bill would require owners of property subject to reassessment to pay only a portion, as provided, of any increase in property tax due in the first and 2nd years after initial reassessment to fair market value.
end insertbegin insertThis bill would take effect immediately as a tax levy, but would become operative only if SCA 5 is approved by the voters.
end insertThis bill would state the intent of the Legislature to enact legislation necessary to implement the transition to the assessment of commercial and industrial property on a periodic basis as would be provided pursuant to Senate Constitutional Amendment 5 of the 2015-16 Regular Session, as provided.
end deleteVote: majority.
Appropriation: no.
Fiscal committee: begin deleteno end deletebegin insertyesend insert.
State-mandated local program: no.
The people of the State of California do enact as follows:
begin insertSection 54 is added to the end insertbegin insertRevenue and Taxation
2Codeend insertbegin insert, to read:end insert
For the purpose of phasing in the reassessment of
4commercial and industrial property as required pursuant to
5subdivision (b) of Section 2.5 of Article XIII A of the California
6Constitution, both of the following shall apply:
7
(a) (1) For the 2018-19 fiscal year only, the requirement that
8those commercial and industrial properties subject to reassessment
9under subdivision (a) of Section 2.5 of Article XIII A of the
10California Constitution be assessed at fair market value shall apply
11only to the 50 percent of those properties that have not been
12brought to fair market value for any part of their property for the
13greatest number of years prior to the 2018-19 lien date.
14
(2) Owners of
property subject to this subdivision shall pay
15one-third of the amount of any increase in property tax due and
16payable resulting from initial assessment to fair market value in
17the first year upon receiving the new valuation required by
18paragraph (1), two-thirds of the amount of any increase in property
19tax due and payable in the second year, and the full amount of any
20property tax due and payable in the third year after initial
21reassessment to fair market value and in subsequent years
22thereafter. The balance of the amounts due for the first and second
P3 1years following initial assessment to full market value are hereby
2forgiven.
3
(3) For the 2019-20 and 2020-21 fiscal years only, the assessed
4value of properties assessed at full market value pursuant to
5paragraph (1) shall be increased by the rate of inflation, but not
6more than 2 percent. In no event, however, shall the assessed value
7of a property exceed the fair market value as of the lien
date during
8this period.
9
(b) (1) All other commercial and industrial properties subject
10to reassessment under subdivision (a) of Section 2.5 of Article
11 XIII A of the California Constitution shall be assessed at fair market
12value by the 2019-20 lien date.
13
(2) Owners of property subject to this subdivision shall pay
14one-half of the amount of any increase in property tax due and
15payable resulting from initial assessment to fair market value in
16the first year upon receiving the new valuation required by
17paragraph (1) and the full amount of any property tax due and
18payable in the year following initial reassessment and in
19subsequent years thereafter. The balance of the amount due for
20the first year following initial assessment to full market value are
21hereby forgiven.
22
(3)
For the 2020-21 fiscal year only, the assessed value of
23properties assessed at full market value pursuant to paragraph
24(1) shall be increased by the rate of inflation, but not more than
252 percent. In no event, however, shall the assessed value of a
26property exceed the fair market value as of the lien date during
27this period.
begin insertThis act provides for a tax levy within the meaning of
29Article IV of the California Constitution and shall go into
30immediate effect. However, the provisions of this act shall become
31operative only if Senate Constitutional Amendment 5 of the
322015-16 Regular Session is approved by the voters and, in that
33event, shall become operative on January 1, 2018.end insert
It is the intent of the Legislature to enact
35legislation necessary to implement the transition to the assessment
36of commercial and industrial property on a periodic basis as would
37be provided pursuant to Senate Constitutional Amendment 5 of
38the 2015-16 Regular Session, so as to ensure that the owners of
P4 1those properties pay their fair share of property taxes for local
2education and other community services.
O
98