Amended in Assembly June 23, 2016

Amended in Assembly June 8, 2016

Amended in Senate April 21, 2016

Senate Bill No. 1304

Introduced by Senator Huff

(Coauthors: Senators De León, Pavley, and Runner)

February 19, 2016

An act to amend Section 170 of the Revenue and Taxation Code, relating to taxation, and declaring the urgency thereof, to take effect immediately.

LEGISLATIVE COUNSEL’S DIGEST

SB 1304, as amended, Huff. Property taxation: disaster relief: Porter Ranch methane gas leak.

Existing property tax law authorizes the board of supervisors of a county to provide that every assessee or person liable for taxes on any taxable property whose property was damaged or destroyed without his or her fault may apply for reassessment of that property, as provided. To be eligible for reassessment, existing law requires that the damage or destruction of the property be caused by specified circumstances, including a major misfortune or calamity in an area or region subsequently proclaimed by the Governor to be in a state of disaster.

This bill would additionally authorize the board of supervisors of a county to provide for reassessment of property destroyed or damaged by a major misfortune or calamity in an area or region subsequently proclaimed by the Governor to be in a state of emergency. The bill would specify that “damage” includes a diminution in the value of property as a result of environmental contamination. The bill would also provide that the amendments made by its provisions would apply retroactively to property located in the Porter Ranch neighborhood in the City of Los Angeles that was affected by the methane gas leak in that area in 2015 and 2016 and that, with respect to these properties, the application for reassessment may be filed within 12 months of the enactment of this bill or within the time specified in the ordinance, whichever is later.

begin insert

Existing law requires the assessed value of the property in its damaged condition, determined as specified, to be the taxable value of the property until it is restored, repaired, reconstructed, or other provisions of the law require the establishment of a new base year value. Existing law, if partial reconstruction, restoration, or repair has occurred on any subsequent lien date, requires the taxable value to be increased by a specified amount.

end insert begin insert

This bill, for property destroyed or damaged in an area or region proclaimed by the Governor to be in a state of emergency, on the 3rd lien date following the calamity, if partial reconstruction, restoration, or repair is not progressing in a timely fashion, would require the assessed value of the property to be determined, as specified.

end insert

This bill would make legislative findings and declarations as to the necessity of a special statute for the County of Los Angeles.

This bill would declare that it is to take effect immediately as an urgency statute.

Vote: ²⁄₃. Appropriation: no. Fiscal committee: no. State-mandated local program: no.

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

SECTION 1.  

Section 170 of the Revenue and Taxation Code
is amended to read:

170.  

(a) Notwithstanding any other law, the board of
supervisors, by ordinance, may provide that every assessee of any
taxable property, or any person liable for the taxes on that property,
whose property was damaged or destroyed without his or her fault,
may apply for reassessment of that property as provided in this
section. The ordinance may also specify that the assessor may
initiate the reassessment where the assessor determines that within
the preceding 12 months taxable property located in the county
was damaged or destroyed.

To be eligible for reassessment the damage or destruction to the
property shall have been caused by any of the following:

(1) A major misfortune or calamity, in an area or region
subsequently proclaimed by the Governor to be in a state of
emergency or disaster, if that property was damaged or destroyed
by the major misfortune or calamity that caused the Governor to
proclaim the area or region to be in a state of emergency or disaster.
As used in this paragraph, “damage” includes a diminution in the
value of property as a result of restricted access or environmental
contamination to the property where that restricted access or
environmental contamination was caused by the major misfortune
or calamity.

(2) A misfortune or calamity.

(3) A misfortune or calamity that, with respect to a possessory
interest in land owned by the state or federal government, has
caused the permit or other right to enter upon the land to be
suspended or restricted. As used in this paragraph, “misfortune or
calamity” includes a drought condition such as existed in this state
in 1976 and 1977.

The application for reassessment may be filed within the time
specified in the ordinance or within 12 months of the misfortune
or calamity, whichever is later, by delivering to the assessor a
written application requesting reassessment showing the condition
and value, if any, of the property immediately after the damage or
destruction, and the dollar amount of the damage. The application
shall be executed under penalty of perjury, or if executed outside
the State of California, verified by affidavit.

An ordinance may be made applicable to a major misfortune or
calamity specified in paragraph (1) or to any misfortune or calamity
specified in paragraph (2), or to both, as the board of supervisors
determines. An ordinance shall not be made applicable to a
misfortune or calamity specified in paragraph (3), unless an
ordinance making paragraph (2) applicable is operative in the
county. The ordinance may specify a period of time within which
the ordinance shall be effective, and, if no period of time is
specified, it shall remain in effect until repealed.

(b) Upon receiving a proper application, the assessor shall
appraise the property and determine separately the full cash value
of land, improvements, and personalty immediately before and
after the damage or destruction. If the sum of the full cash values
of the land, improvements, and personalty before the damage or
destruction exceeds the sum of the values after the damage by ten
thousand dollars ($10,000) or more, the assessor shall also
separately determine the percentage reductions in value of land,
improvements, and personalty due to the damage or destruction.
The assessor shall reduce the values appearing on the assessment
roll by the percentages of damage or destruction computed pursuant
to this subdivision, and the taxes due on the property shall be
adjusted as provided in subdivision (e). However, the amount of
the reduction shall not exceed the actual loss.

(c) (1) As used in this subdivision, “board” means either the
county board of supervisors acting as the county board of
equalization, or an assessment appeals board established by the
county board of supervisors in accordance with Section 1620, as
applicable.

(2) The assessor shall notify the applicant in writing of the
amount of the proposed reassessment. The notice shall state that
the applicant may appeal the proposed reassessment to the board
within six months of the date of mailing the notice. If an appeal is
requested within the six-month period, the board shall hear and
decide the matter as if the proposed reassessment had been entered
on the roll as an assessment made outside the regular assessment
period. The decision of the board regarding the damaged value of
the property shall be final, provided that a decision of the board
regarding any reassessment made pursuant to this section shall
create no presumption as regards the value of the affected property
subsequent to the date of the damage.

(3) Those reassessed values resulting from reductions in full
cash value of amounts, as determined above, shall be forwarded
to the auditor by the assessor or the clerk of the board, as the case
may be. The auditor shall enter the reassessed values on the roll.
After being entered on the roll, those reassessed values shall not
be subject to review, except by a court of competent jurisdiction.

(d) (1) If no application is made and the assessor determines
that within the preceding 12 months a property has suffered damage
caused by misfortune or calamity that may qualify the property
owner for relief under an ordinance adopted under this section,
the assessor shall provide the last known owner of the property
with an application for reassessment. The property owner shall
file the completed application within 12 months after the
occurrence of that damage. Upon receipt of a properly completed,
timely filed application, the property shall be reassessed in the
same manner as required in subdivision (b).

(2) This subdivision does not apply where the assessor initiated
reassessment as provided in subdivision (a) or (l).

(e) The tax rate fixed for property on the roll on which the
property so reassessed appeared at the time of the misfortune or
calamity, shall be applied to the amount of the reassessment as
determined in accordance with this section and the assessee shall
be liable for: (1) a prorated portion of the taxes that would have
been due on the property for the current fiscal year had the
misfortune or calamity not occurred, to be determined on the basis
of the number of months in the current fiscal year prior to the
misfortune or calamity; plus, (2) a proration of the tax due on the
property as reassessed in its damaged or destroyed condition, to
be determined on the basis of the number of months in the fiscal
year after the damage or destruction, including the month in which
the damage was incurred. For purposes of applying the preceding
calculation in prorating supplemental taxes, the term “fiscal year”
means that portion of the tax year used to determine the adjusted
amount of taxes due pursuant to subdivision (b) of Section 75.41.
If the damage or destruction occurred after January 1 and before
the beginning of the next fiscal year, the reassessment shall be
utilized to determine the tax liability for the next fiscal year.
However, if the property is fully restored during the next fiscal
year, taxes due for that year shall be prorated based on the number
of months in the year before and after the completion of restoration.

(f) Any tax paid in excess of the total tax due shall be refunded
to the taxpayer pursuant to Chapter 5 (commencing with Section
5096) of Part 9, as an erroneously collected tax or by order of the
board of supervisors without the necessity of a claim being filed
pursuant to Chapter 5.

(g)  begin insert (1) end insert begin insert   end insert The assessed value of the property in its damaged
condition, as determined pursuant to subdivision (b) compounded
annually by the inflation factor specified in subdivision (a) of
Section 51, shall be the taxable value of the property until it is
restored, repaired, reconstructed, or other provisions of the law
require the establishment of a new base year value.

begin delete

If

end delete

begin insert (2) end insert begin insert   end insert begin insert If end insert partial reconstruction, restoration, or repair has occurred
on any subsequent lien date, the taxable value shall be increased
by an amount determined by multiplying the difference between
its factored base year value immediately before the calamity and
its assessed value in its damaged condition by the percentage of
the repair, reconstruction, or restoration completed on that lien
date.

begin insert

(3) (A) On the third lien date following the calamity, if partial
reconstruction, restoration, or repair is not progressing in a timely
fashion, the assessed value of the property shall be determined
pursuant to subdivision (a) of Section 51.

end insert begin insert

(B) This paragraph shall only apply to property destroyed or
damaged in an area or region proclaimed by the Governor to be
in a state of emergency.

end insert

(h) (1) When the property is fully repaired, restored, or
reconstructed, the assessor shall make an additional assessment or
assessments in accordance with subparagraph (A) or (B) upon
completion of the repair, restoration, or reconstruction:

(A) If the completion of the repair, restoration, or reconstruction
occurs on or after January 1, but on or before May 31, then there
shall be two additional assessments. The first additional assessment
shall be the difference between the new taxable value as of the
date of completion and the taxable value on the current roll. The
second additional assessment shall be the difference between the
new taxable value as of the date of completion and the taxable
value to be enrolled on the roll being prepared.

(B) If the completion of the repair, restoration, or reconstruction
occurs on or after June 1, but before the succeeding January 1,
then the additional assessment shall be the difference between the
new taxable value as of the date of completion and the taxable
value on the current roll.

(2) On the lien date following completion of the repair,
restoration, or reconstruction, the assessor shall enroll the new
taxable value of the property as of that lien date.

(3) For purposes of this subdivision, “new taxable value” shall
mean the lesser of the property’s (A) full cash value, or (B) factored
base year value or its factored base year value as adjusted pursuant
to subdivision (c) of Section 70.

(i) The assessor may apply Chapter 3.5 (commencing with
Section 75) of Part 0.5 in implementing this section, to the extent
that chapter is consistent with this section.

(j) This section applies to all counties, whether operating under
a charter or under the general laws of this state.

(k) Any ordinance in effect pursuant to former Section 155.1,
155.13, or 155.14 shall remain in effect according to its terms as
if that ordinance was adopted pursuant to this section, subject to
the limitations of subdivision (b).

(l) When the assessor does not have the general authority
pursuant to subdivision (a) to initiate reassessments, if no
application is made and the assessor determines that within the
preceding 12 months a property has suffered damage caused by
misfortune or calamity, that may qualify the property owner for
relief under an ordinance adopted under this section, the assessor,
with the approval of the board of supervisors, may reassess the
particular property for which approval was granted as provided in
subdivision (b) and notify the last known owner of the property
of the reassessment.

(m) The amendments made to this section by the act adding this
subdivision shall apply retroactively to the County of Los Angeles
with respect to property located in the Porter Ranch neighborhood
in the City of Los Angeles that was affected by the methane gas
leak in that area in 2015 and 2016. Notwithstanding any other law,
in the case of these properties, the application for reassessment
may be filed within 12 months of the enactment of this subdivision
or within the time specified in the ordinance, whichever is later.

SEC. 2.  

The Legislature finds and declares that a special law
is necessary and that a general law cannot be made applicable
within the meaning of Section 16 of Article IV of the California
Constitution because of the unique circumstances related to the
methane gas leak that occurred in the Porter Ranch neighborhood
of the City of Los Angeles in 2015 and 2016.

SEC. 3.  

This act is an urgency statute necessary for the
immediate preservation of the public peace, health, or safety within
the meaning of Article IV of the Constitution and shall go into
immediate effect. The facts constituting the necessity are:

In order to as soon as possible provide necessary relief to the
residents of the Porter Ranch neighborhood in the City of Los
Angeles that were affected by the methane gas leak that occurred
there in 2015 and 2016, it is necessary that this act take effect
immediately.