SB 1126, as introduced, Stone. Property taxation: inflation factor: senior citizens.
The California Constitution generally limits ad valorem taxes on real property to 1% of the full cash value, as defined, of that property, and provides that the full cash value base may be adjusted each year by an inflationary rate not to exceed 2% for any given year. Existing property tax law implementing this constitutional authority provides that the taxable value of real property is the lesser of its base year value compounded annually by the inflation factor not to exceed 2%, as provided, or its full cash value.
This bill would provide that the inflation factor shall not apply to the principal place of residence of a “qualified taxpayer,” defined by the bill to mean a taxpayer who is 65 years of age or older who meets specified requirements.
By changing the manner in which local tax officials calculate the taxable value of real property owned by senior citizens, this bill would impose a state-mandated local program.
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.
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.
This bill would take effect immediately as a tax levy.
Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: yes.
The people of the State of California do enact as follows:
Section 51 of the Revenue and Taxation Code is
2amended to read:
(a) For purposes of subdivision (b) of Section 2 of Article
4XIII A of the California Constitution, for each lien date after the
5lien date in which the base year value is determined pursuant to
6Section 110.1, the taxable value of real property shall, except as
7otherwise provided in subdivision (b) or (c), be the lesser of:
8(1) Its base year value, compounded annually since the base
9year by an inflation factor, which shall be determined as follows:
10(A) For any assessment year commencing prior to January 1,
111985, the inflation factor shall be the percentage change in the cost
12of living, as defined in Section 2212.
13(B) For any assessment year commencing after January 1, 1985,
14and prior to January 1, 1998, the inflation factor shall be the
15percentage change, rounded to the nearest one-thousandth of 1
16percent, from December of the prior fiscal year to December of
17the current fiscal year in the California Consumer Price Index for
18all items, as determined by the California Department of Industrial
19Relations.
20(C) For any assessment year commencing on or after January
211, 1998, the inflation factor shall be the percentage change, rounded
22to the nearest one-thousandth of 1 percent, from October of the
23prior fiscal year to October of the current fiscal year in the
24California Consumer Price Index for all items, as determined by
25the California Department of Industrial Relations.
P3 1(D) begin deleteIn no event shall the end deletebegin insertTheend insert
percentage increase for any
2assessment year determined pursuant to subparagraph (A), (B), or
3(C)begin insert shall notend insert exceed 2 percent of the prior year’s value.
4(E) (i) Notwithstanding any other law, for any assessment year
5commencing on or after January 1, 2017, the percentage increase
6for an assessment year determined pursuant to subparagraph (A),
7(B), or (C) shall not apply to the principal place of residence of a
8qualified taxpayer.
9(ii) For purposes
of this subparagraph, both of the following
10shall apply:
11(I) “Qualified taxpayer” means a taxpayer who is 65 years of
12age or older and satisfies either of the following:
13(ia) If the qualified taxpayer is single, his or her annual
14household income is twenty-five thousand dollars ($25,000) or
15less.
16(ib) If the qualified taxpayer is married, his or her combined
17annual household income is fifty
thousand dollars ($50,000) or
18less.
19(II) A qualified taxpayer who is 65 years of age or older includes
20a married couple, one member of which is 65 years of age or older.
21(2) Its full cash value, as defined in Section 110, as of the lien
22date, taking into account reductions in value due to damage,
23destruction, depreciation, obsolescence, removal of property, or
24other factors causing a decline in value.
25(b) If the real property was damaged or destroyed by disaster,
26misfortune, or calamity and the board of supervisors of the county
27in which the real property is located has not adopted an ordinance
28pursuant to Section 170, or any portion of the real property has
29been removed by voluntary
action by the taxpayer, the taxable
30value of the property shall be the sum of the following:
31(1) The lesser of its base year value of land determined under
32paragraph (1) of subdivision (a) or full cash value of land
33determined pursuant to paragraph (2) of subdivision (a).
34(2) The lesser of its base year value of improvements determined
35pursuant to paragraph (1) of subdivision (a) or the full cash value
36of improvements determined pursuant to paragraph (2) of
37subdivision (a).
38In applying this subdivision, the base year value of the subject
39real property does not include that portion of the previous base
40year value of that property that was attributable to any portion of
P4 1the property that has been destroyed or removed. The sum
2determined under this subdivision shall then become the base year
3value of the real property until that property is
restored, repaired,
4or reconstructed or other provisions of law require establishment
5of a new base year value.
6(c) If the real property was damaged or destroyed by disaster,
7misfortune or calamity and the board of supervisors in the county
8in which the real property is located has adopted an ordinance
9pursuant to Section 170, the taxable value of the real property shall
10be its assessed value as computed pursuant to Section 170.
11(d) For purposes of this section, “real property” means that
12appraisal unit that persons in the marketplace commonly buy and
13sell as a unit, or that is normally valued separately.
14(e) Nothing in this section shall be construed to require the
15assessor to make an annual reappraisal of all assessable property.
16However, for each lien date after the first lien date for which the
17taxable value of
property is reduced pursuant to paragraph (2) of
18subdivision (a), the value of that property shall be annually
19reappraised at its full cash value as defined in Section 110 until
20that value exceeds the value determined pursuant to paragraph (1)
21of subdivision (a). In no event shall the assessor condition the
22implementation of the preceding sentence in any year upon the
23filing of an assessment appeal.
Notwithstanding Section 2229 of the Revenue and
25Taxation Code, no appropriation is made by this act and the state
26shall not reimburse any local agency for any property tax revenues
27lost by it pursuant to this act.
If the Commission on State Mandates determines that
29this act contains costs mandated by the state, reimbursement to
30local agencies and school districts for those costs shall be made
31pursuant to Part 7 (commencing with Section 17500) of Division
324 of Title 2 of the Government Code.
This act provides for a tax levy within the meaning of
34Article IV of the Constitution and shall go into immediate effect.
O
99