Amended in Assembly August 15, 2016

Amended in Assembly June 23, 2016

Amended in Assembly June 8, 2016

Amended in Senate April 21, 2016

Senate BillNo. 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 The bill would specify that these provisions do not alter existing law regarding claims or defenses related to diminution of property values or establish a presumption that property values have declined or that any property is in any way “damaged or destroyed” or otherwise “contaminated” for purposes of a civil action related to the methane gas leak end insertbegin insert in the Porter Ranch neighborhood.end 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.

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.

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: 23. Appropriation: no. Fiscal committee: no. State-mandated local program: no.

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

P2    1

SECTION 1.  

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

3

170.  

(a) Notwithstanding any other law, the board of
4supervisors, by ordinance, may provide that every assessee of any
5taxable property, or any person liable for the taxes on that property,
6whose property was damaged or destroyed without his or her fault,
P3    1may apply for reassessment of that property as provided in this
2section. The ordinance may also specify that the assessor may
3initiate the reassessment where the assessor determines that within
4the preceding 12 months taxable property located in the county
5was damaged or destroyed.

6To be eligible for reassessment the damage or destruction to the
7property shall have been caused by any of the following:

8(1) A major misfortune or calamity, in an area or region
9subsequently proclaimed by the Governor to be in a state of
10emergency or disaster, if that property was damaged or destroyed
11by the major misfortune or calamity that caused the Governor to
12proclaim the area or region to be in a state of emergency or disaster.
13As used in this paragraph, “damage” includes a diminution in the
14value of property as a result of restricted access or environmental
15contamination to the property where that restricted access or
16environmental contamination was caused by the major misfortune
17or calamity.

18(2) A misfortune or calamity.

19(3) A misfortune or calamity that, with respect to a possessory
20interest in land owned by the state or federal government, has
21caused the permit or other right to enter upon the land to be
22suspended or restricted. As used in this paragraph, “misfortune or
23calamity” includes a drought condition such as existed in this state
24in 1976 and 1977.

25The application for reassessment may be filed within the time
26specified in the ordinance or within 12 months of the misfortune
27or calamity, whichever is later, by delivering to the assessor a
28written application requesting reassessment showing the condition
29and value, if any, of the property immediately after the damage or
30destruction, and the dollar amount of the damage. The application
31shall be executed under penalty of perjury, or if executed outside
32the State of California, verified by affidavit.

33An ordinance may be made applicable to a major misfortune or
34calamity specified in paragraph (1) or to any misfortune or calamity
35specified in paragraph (2), or to both, as the board of supervisors
36determines. An ordinance shall not be made applicable to a
37misfortune or calamity specified in paragraph (3), unless an
38ordinance making paragraph (2) applicable is operative in the
39county. The ordinance may specify a period of time within which
P4    1the ordinance shall be effective, and, if no period of time is
2specified, it shall remain in effect until repealed.

3(b) Upon receiving a proper application, the assessor shall
4appraise the property and determine separately the full cash value
5of land, improvements, and personalty immediately before and
6after the damage or destruction. If the sum of the full cash values
7of the land, improvements, and personalty before the damage or
8destruction exceeds the sum of the values after the damage by ten
9thousand dollars ($10,000) or more, the assessor shall also
10separately determine the percentage reductions in value of land,
11improvements, and personalty due to the damage or destruction.
12The assessor shall reduce the values appearing on the assessment
13roll by the percentages of damage or destruction computed pursuant
14to this subdivision, and the taxes due on the property shall be
15adjusted as provided in subdivision (e). However, the amount of
16the reduction shall not exceed the actual loss.

17(c) (1) As used in this subdivision, “board” means either the
18county board of supervisors acting as the county board of
19equalization, or an assessment appeals board established by the
20county board of supervisors in accordance with Section 1620, as
21 applicable.

22(2) The assessor shall notify the applicant in writing of the
23amount of the proposed reassessment. The notice shall state that
24the applicant may appeal the proposed reassessment to the board
25within six months of the date of mailing the notice. If an appeal is
26requested within the six-month period, the board shall hear and
27decide the matter as if the proposed reassessment had been entered
28on the roll as an assessment made outside the regular assessment
29period. The decision of the board regarding the damaged value of
30the property shall be final, provided that a decision of the board
31regarding any reassessment made pursuant to this section shall
32create no presumption as regards the value of the affected property
33subsequent to the date of the damage.

34(3) Those reassessed values resulting from reductions in full
35cash value of amounts, as determined above, shall be forwarded
36 to the auditor by the assessor or the clerk of the board, as the case
37may be. The auditor shall enter the reassessed values on the roll.
38After being entered on the roll, those reassessed values shall not
39be subject to review, except by a court of competent jurisdiction.

P5    1(d) (1) If no application is made and the assessor determines
2that within the preceding 12 months a property has suffered damage
3caused by misfortune or calamity that may qualify the property
4owner for relief under an ordinance adopted under this section,
5the assessor shall provide the last known owner of the property
6with an application for reassessment. The property owner shall
7file the completed application within 12 months after the
8occurrence of that damage. Upon receipt of a properly completed,
9timely filed application, the property shall be reassessed in the
10same manner as required in subdivision (b).

11(2) This subdivision does not apply where the assessor initiated
12reassessment as provided in subdivision (a) or (l).

13(e) The tax rate fixed for property on the roll on which the
14property so reassessed appeared at the time of the misfortune or
15calamity, shall be applied to the amount of the reassessment as
16determined in accordance with this section and the assessee shall
17be liable for: (1) a prorated portion of the taxes that would have
18been due on the property for the current fiscal year had the
19misfortune or calamity not occurred, to be determined on the basis
20of the number of months in the current fiscal year prior to the
21misfortune or calamity; plus, (2) a proration of the tax due on the
22property as reassessed in its damaged or destroyed condition, to
23be determined on the basis of the number of months in the fiscal
24year after the damage or destruction, including the month in which
25the damage was incurred. For purposes of applying the preceding
26calculation in prorating supplemental taxes, the term “fiscal year”
27means that portion of the tax year used to determine the adjusted
28amount of taxes due pursuant to subdivision (b) of Section 75.41.
29If the damage or destruction occurred after January 1 and before
30the beginning of the next fiscal year, the reassessment shall be
31utilized to determine the tax liability for the next fiscal year.
32However, if the property is fully restored during the next fiscal
33year, taxes due for that year shall be prorated based on the number
34of months in the year before and after the completion of restoration.

35(f) Any tax paid in excess of the total tax due shall be refunded
36to the taxpayer pursuant to Chapter 5 (commencing with Section
375096) of Part 9, as an erroneously collected tax or by order of the
38board of supervisors without the necessity of a claim being filed
39pursuant to Chapter 5.

P6    1(g) (1) The assessed value of the property in its damaged
2condition, as determined pursuant to subdivision (b) compounded
3annually by the inflation factor specified in subdivision (a) of
4Section 51, shall be the taxable value of the property until it is
5restored, repaired, reconstructed, or other provisions of the law
6require the establishment of a new base year value.

7(2) If partial reconstruction, restoration, or repair has occurred
8on any subsequent lien date, the taxable value shall be increased
9by an amount determined by multiplying the difference between
10its factored base year value immediately before the calamity and
11its assessed value in its damaged condition by the percentage of
12the repair, reconstruction, or restoration completed on that lien
13date.

14(3) (A) On the third lien date following the calamity, if partial
15reconstruction, restoration, or repair is not progressing in a timely
16fashion, the assessed value of the property shall be determined
17pursuant to subdivision (a) of Section 51.

18(B) This paragraph shall only apply to property destroyed or
19damaged in an area or region proclaimed by the Governor to be
20in a state of emergency.

21(h) (1) When the property is fully repaired, restored, or
22 reconstructed, the assessor shall make an additional assessment or
23assessments in accordance with subparagraph (A) or (B) upon
24completion of the repair, restoration, or reconstruction:

25(A) If the completion of the repair, restoration, or reconstruction
26occurs on or after January 1, but on or before May 31, then there
27shall be two additional assessments. The first additional assessment
28shall be the difference between the new taxable value as of the
29date of completion and the taxable value on the current roll. The
30second additional assessment shall be the difference between the
31new taxable value as of the date of completion and the taxable
32value to be enrolled on the roll being prepared.

33(B) If the completion of the repair, restoration, or reconstruction
34occurs on or after June 1, but before the succeeding January 1,
35then the additional assessment shall be the difference between the
36 new taxable value as of the date of completion and the taxable
37value on the current roll.

38(2) On the lien date following completion of the repair,
39restoration, or reconstruction, the assessor shall enroll the new
40taxable value of the property as of that lien date.

P7    1(3) For purposes of this subdivision, “new taxable value” shall
2mean the lesser of the property’s (A) full cash value, or (B) factored
3base year value or its factored base year value as adjusted pursuant
4to subdivision (c) of Section 70.

5(i) The assessor may apply Chapter 3.5 (commencing with
6Section 75) of Part 0.5 in implementing this section, to the extent
7that chapter is consistent with this section.

8(j) This section applies to all counties, whether operating under
9a charter or under the general laws of this state.

10(k) Any ordinance in effect pursuant to former Section 155.1,
11155.13, or 155.14 shall remain in effect according to its terms as
12if that ordinance was adopted pursuant to this section, subject to
13the limitations of subdivision (b).

14(l) When the assessor does not have the general authority
15pursuant to subdivision (a) to initiate reassessments, if no
16application is made and the assessor determines that within the
17preceding 12 months a property has suffered damage caused by
18misfortune or calamity, that may qualify the property owner for
19relief under an ordinance adopted under this section, the assessor,
20with the approval of the board of supervisors, may reassess the
21particular property for which approval was granted as provided in
22subdivision (b) and notify the last known owner of the property
23of the reassessment.

24(m) The amendments made to this section by the act adding this
25subdivision shall apply retroactively to the County of Los Angeles
26with respect to property located in the Porter Ranch neighborhood
27in the City of Los Angeles that was affected by the methane gas
28leak in that area in 2015 and 2016. Notwithstanding any other law,
29in the case of these properties, the application for reassessment
30may be filed within 12 months of the enactment of this subdivision
31or within the time specified in the ordinance, whichever is later.
32
begin insert This subdivision does not alter any existing law regarding claims
33or defenses related to diminution of property values. The enactment
34of this subdivision does not in itself establish a presumption that
35property values have declined or that any property is in any way
36“damaged or destroyed” or otherwise “contaminated” for
37purposes of a civil action related to the methane gas leak that
38occurred in the Porter Ranch neighborhood of the City of Los
39Angeles in 2015 and 2016.end insert

P8    1

SEC. 2.  

The Legislature finds and declares that a special law
2is necessary and that a general law cannot be made applicable
3within the meaning of Section 16 of Article IV of the California
4Constitution because of the unique circumstances related to the
5methane gas leak that occurred in the Porter Ranch neighborhood
6of the City of Los Angeles in 2015 and 2016.

7

SEC. 3.  

This act is an urgency statute necessary for the
8immediate preservation of the public peace, health, or safety within
9the meaning of Article IV of the Constitution and shall go into
10immediate effect. The facts constituting the necessity are:

11In order to as soon as possible provide necessary relief to the
12residents of the Porter Ranch neighborhood in the City of Los
13Angeles that were affected by the methane gas leak that occurred
14there in 2015 and 2016, it is necessary that this act take effect
15immediately.



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