BILL NUMBER: SB 713 CHAPTERED
BILL TEXT
CHAPTER 171
FILED WITH SECRETARY OF STATE JULY 17, 1996
APPROVED BY GOVERNOR JULY 16, 1996
PASSED THE SENATE JULY 7, 1996
PASSED THE ASSEMBLY JUNE 27, 1996
AMENDED IN ASSEMBLY JUNE 20, 1996
AMENDED IN ASSEMBLY JUNE 10, 1996
AMENDED IN ASSEMBLY APRIL 18, 1996
INTRODUCED BY Senator Maddy
FEBRUARY 22, 1995
An act to amend Sections 75.60, 107, 167, 480.6, 4837.5, and 5151
of, and to amend, repeal, and add Section 1621 of, the Revenue and
Taxation Code, relating to taxation, and declaring the urgency
thereof, to take effect immediately.
LEGISLATIVE COUNSEL'S DIGEST
SB 713, Maddy. Property taxation.
Existing property tax law with respect to supplemental tax
assessments authorizes an eligible county to recover its costs of
administering the supplemental roll. Existing law requires the State
Board of Equalization to certify a county as an eligible county only
if (1) the county's average assessment level is at 95% of the
required assessment level determined by the board's most recent
survey of that county, and (2) the sum of the differences from that
assessment level does not exceed 7.5% of the total required assessed
value of that county as determined by the same survey.
This bill would, for purposes of for the first of these criteria,
require the board survey to be the board's most recent survey
commenced on or after January 1, 1987, and would apply the 2nd of
these criteria commencing with the 1996-97 fiscal year. This bill
would also make technical, clarifying changes with respect to the
certification of a county as an eligible county.
Existing property tax law defines a possessory interest for
purposes of taxation.
This bill would make a technical, nonsubstantive change to that
definition.
Existing property tax law establishes a rebuttable presumption
affecting the burden of proof in favor of a taxpayer or assessee who
has supplied the assessor with all information as required by law in
any administrative hearing involving any of certain specified
assessment matters, including the appeal of an escape assessment.
Existing law provides that this presumption does not apply in the
case of an administrative hearing with respect to the appeal of an
escape assessment resulting from a taxpayer's failure to file a
change in ownership statement, business property statement, or permit
for new construction.
This bill would instead provide that the presumption does not
apply in the case of an administrative hearing with respect to the
appeal of an escape assessment resulting from a taxpayer's failure
either to file a change in ownership statement or business property
statement, or to obtain a permit for new construction.
Existing property tax law excuses a holder of a possessory
interest in real property owned by a state or local government entity
from filing a preliminary change in ownership report or change in
ownership statement with respect to a renewal of that interest.
Existing law requires the local governmental entity that is the fee
owner of the real property in which the possessory interest has been
created to file any report or statement as may be required with
respect to the renewal of that interest.
This bill would, as an alternative to complying with this filing
requirement, allow a local governmental entity to annually file with
the county assessor a real property usage report, containing
specified information.
Existing property tax law limits the number of assessment appeals
boards created within any county to 10.
This bill would reduce this limit from 10 to 5 commencing January
1, 2005.
Existing property tax law provides, as specified, for the payment
of escape assessments for prior fiscal years over a 4-year period.
This bill would require that interest at the rate of 0.75% per
month be added to the outstanding balance of taxes due in the case in
which the assessee was responsible in whole or in part for the error
requiring an escape assessment.
Existing property tax law generally provides for the payment of
interest on property tax refunds at the greater of 3% or the county
pool apportioned rate, as defined, but requires that interest be paid
at the rate specified by statute prior to January 1, 1993, on any
refund that became due and payable prior to March 1, 1993, and had
not been refunded as of April 6, 1995.
This bill would make technical, clarifying changes to this
requirement.
This bill would provide that amendments made by Chapter 498 of the
Statutes of 1995 to a specified statute relating to the franchise
tax on general corporations are declaratory of existing law.
This bill would incorporate additional changes in Section 5151 of
the Revenue and Taxation Code proposed by AB 1668 of the 1995-96
Regular Session of the Legislature, to be operative only if AB 1668
and this bill are both enacted and become effective, as specified,
and this bill is enacted last.
This bill would declare that it is to take effect immediately as an
urgency statute.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 75.60 of the Revenue and Taxation Code is
amended to read:
75.60. (a) Notwithstanding any other provision of law, the board
of supervisors of an eligible county, upon the adoption of a method
identifying the actual administrative costs associated with the
supplemental assessment roll, may direct the county auditor to
allocate to the county, prior to the allocation of property tax
revenues pursuant to Chapter 6 (commencing with Section 95) and prior
to the allocation made pursuant to Section 75.70, an amount equal to
the actual administrative costs, but not to exceed 5 percent of the
revenues which have been collected on or after January 1, 1987, due
to the assessments under this chapter. Those revenues shall be used
solely for the purpose of administration of this chapter, regardless
of the date those costs are incurred.
(b) For purposes of this section:
(1) "Actual administrative costs" includes only those direct costs
for administration, data processing, collection, and appeal which
are incurred by county auditors, assessors, and tax collectors.
"Actual administrative costs" also includes those indirect costs for
administration, data processing, collections, and appeal which are
incurred by county auditors, assessors, and tax collectors and are
allowed by state and federal audit standards pursuant to the A-87
Cost Allocation Program.
(2) "Eligible county" means a county that has been certified by
the State Board of Equalization as an eligible county. The State
Board of Equalization shall certify a county as an eligible county
only if both of the following are determined to exist:
(A) The average assessment level in the county is at least 95
percent of the assessment level required by statute, as determined by
the board's most recent survey of that county performed pursuant to
Section 15640 of the Government Code.
(B) For any survey of a county assessment roll for the 1996-97
fiscal year and each fiscal year thereafter, the sum of the absolute
values of the differences from the statutorily required assessment
level described in subparagraph (A) does not exceed 7.5 percent of
the total amount of the county's statutorily required assessed value,
as determined pursuant to the board's survey described in
subparagraph (A).
Each certification of a county shall be valid only until the next
survey made by the board. If a county is not certified by the board,
it may request a new survey in advance of the regularly scheduled
survey, provided that it agrees to pay for the cost of the survey.
SEC. 2. Section 107 of the Revenue and Taxation Code is amended to
read:
107. "Possessory interests" means the following:
(a) Possession of, claim to, or right to the possession of land or
improvements that is independent, durable, and exclusive of rights
held by others in the property, except when coupled with ownership of
the land or improvements in the same person. For the purposes of
this subdivision:
(1) "Independent" means the ability to exercise authority and
exert control over the management or operation of the property or
improvements, separate and apart from the policies, statutes,
ordinances, rules, and regulations of the public owner of the
property or improvements. A possession or use is independent if the
possession or operation of the property is sufficiently autonomous to
constitute more than a mere agency.
(2) "Durable" means for a determinable period with a reasonable
certainty that the use, possession, or claim with respect to the
property or improvements will continue for that period.
(3) "Exclusive" means the enjoyment of a beneficial use of land or
improvements, together with the ability to exclude from occupancy by
means of legal process others who may interfere with that enjoyment.
For purposes of this paragraph, "exclusive use" includes the
following types of use in property:
(A) Sole occupancy or use of property or improvements.
(B) Use as a cotenant.
(C) Concurrent use by a person who has a primary or prevailing
right to use property or improvements at any time.
(D) Concurrent uses by persons making qualitatively different uses
of property or improvements.
(E) Concurrent use by persons engaged in similar uses that
diminish the quantity or quality of the property or improvements.
(F) Concurrent use that does not diminish the quantity or quality
of the property or improvements, if the number of those concurrent
use grants is restricted.
A use of property or improvements that does not contain one of the
elements in subparagraphs (A) to (F), inclusive, shall be rebuttably
presumed to be a nonexclusive use.
(b) Taxable improvements on tax-exempt land.
Any possessory interest may, in the discretion of the county board
of supervisors, be considered as sufficient security for the payment
of any taxes levied thereon and may be placed on the secured roll.
Leasehold estates for the production of gas, petroleum and other
hydrocarbon substances from beneath the surface of the earth, and
other rights relating to these substances which constitute
incorporeal hereditaments or profits a prendre, are sufficient
security for the payment of taxes levied thereon. These estates and
rights shall not be classified as possessory interests, but shall be
placed on the secured roll.
If the tax on any possessory interest or leasehold estate for the
production of gas, petroleum and other hydrocarbon substances is
unpaid when any installment of secured taxes become delinquent, the
tax collector may use those collection procedures which are available
for the collection of assessments on the unsecured roll.
If the tax on any possessory interest or leasehold estate for the
production of gas, petroleum and other hydrocarbon substances remains
unpaid at the time set for the declaration of default for taxes
carried on the secured roll, the possessory interest tax together
with any penalty and costs which may be accrued thereon while on the
secured roll shall be transferred to the unsecured roll.
SEC. 3. Section 167 of the Revenue and Taxation Code is amended to
read:
167. (a) Notwithstanding any other provision of law to the
contrary, and except as provided in subdivision (b), there shall be a
rebuttable presumption affecting the burden of proof in favor of the
taxpayer or assessee who has supplied all information as required by
law to the assessor in any administrative hearing involving the
imposition of a tax on an owner-occupied single-family dwelling, the
assessment of an owner-occupied single-family dwelling pursuant to
this division, or the appeal of an escape assessment.
(b) Notwithstanding subdivision (a), the rebuttable presumption
described in that subdivision shall not apply in the case of an
administrative hearing with respect to the appeal of an escape
assessment resulting from a taxpayer's failure either to file with
the assessor a change in ownership statement or a business property
statement, or to obtain a permit for new construction.
SEC. 4. Section 480.6 of the Revenue and Taxation Code is amended
to read:
480.6. (a) Notwithstanding any other provision of law, a holder
of a possessory interest in real property that is owned by a state or
local governmental entity is not required to file a preliminary
change in ownership report or change in ownership statement with
respect to any renewal of that possessory interest. Instead, every
state or local governmental entity that is the fee owner of real
property in which one or more taxable possessory interests have been
created shall either file any preliminary change in ownership report
or change in ownership statement otherwise required to be filed with
respect to any renewal of a possessory interest, or annually file
with the county assessor, no later than the 15th day of the first
month following the month in which the lien date occurs, a real
property usage report. The report shall include all of the following
information:
(1) The name and address of the fee owner of the real property.
(2) The name and address of each holder of a possessory interest
in the real property.
(3) The types of transactions in which the holders of the
possessory interests acquired those interests, whether creations,
renewals, subleases, or assignments.
(4) The description of the subject real property.
(5) The date of each transaction in which a holder of a possessory
interest in the real property acquired that interest.
(6) The terms of each transaction described in paragraph (5),
including all the following:
(A) The consideration given for the possessory interest, whether
paid in money or otherwise.
(B) The terms of the possessory interest, including any renewal or
extension option.
(C) For any subleases, the original term and remaining term of the
sublease, and the consideration paid for the master lease.
(D) For any assignments, the original term and remaining term of
the assignment, and the consideration paid for the underlying lease.
(b) The failure of a state or local governmental entity to comply
with this filing requirement shall not give rise to any interest or
penalties assessed against the holder of the possessory interest.
SEC. 5. Section 1621 of the Revenue and Taxation Code is amended
to read:
1621. (a) No more than 10 assessment appeals boards may be
created within any county. Assessment appeals boards shall be
designated by number in the ordinance providing for their creation.
(b) This section shall remain in effect only until January 1,
2005, and as of that date is repealed, unless a later enacted
statute, that is enacted before January 1, 2005, deletes or extends
that date.
SEC. 6. Section 1621 is added to the Revenue and Taxation Code, to
read:
1621. (a) Not more than five assessment appeals boards may be
created within any county. Assessment appeals boards shall be
designated by number in the ordinance providing for their creation.
(b) This section shall become operative on January 1, 2005.
SEC. 7. Section 4837.5 of the Revenue and Taxation Code is amended
to read:
4837.5. (a) Notwithstanding any other provision of law, taxes
due, whether secured or unsecured, on escape assessments for prior
fiscal years may be paid over a four-year period at the option of the
assessee if: (1) the additional tax is over five hundred dollars
($500), and (2) a written request for installment payment is filed by
the assessee with the tax collector prior to the time the second
installment of taxes on the secured roll becomes delinquent, or by
the last day of the month following the month in which the tax bill
is mailed, whichever is later. The tax collector shall include with
the property tax bill a notice of the payment provisions of this
section. For unsecured taxes, the written request for installment
payment shall be filed with the tax collector prior to the date on
which those taxes become delinquent.
(b) If payment by installments is requested, 20 percent or more of
the tax shall be paid no later than the deadline for filing the
written request. The current taxes and prior year taxes with
penalties and costs thereon shall be paid with or prior to the
initial installment payment. In each succeeding fiscal year, the
assessee shall pay, before the delinquency date of the second
installment of current taxes on the secured roll, all current year
taxes, and a sum at least sufficient to reduce the outstanding
balance of the tax by 20 percent of the original amount. In the case
of unsecured taxes, the required annual installment shall be paid on
or before August 31.
(c) Interest at the rate of three-fourths of 1 percent per month,
calculated from the date of the deadline for filing the written
request to the date that payment is due, shall be added to the
outstanding balance, if the tax collector determines that the escape
or underassessment was due, in whole or in part, to the error,
omission, or fault of the assessee.
(d) No additional penalties shall be charged as long as
installment payments are made timely; and, in the case of secured
taxes, as long as all payments are made timely, an affidavit
regarding the property shall not be published pursuant to Section
3371.
(e) If any installment is not paid timely, or if the property on
the secured roll becomes tax defaulted, or if the property changes
ownership, or if taxes for the property on the unsecured roll are not
paid before becoming delinquent, the balance of the tax remaining to
be paid shall immediately become due and payable, and no further
installment payments for that escape assessment or correction shall
be authorized. The tax collector shall inform the auditor of the
defaulted, off-roll installment plan and of the delinquent amount
remaining unpaid.
(f) The auditor shall add the unpaid balance, plus all penalties
and costs thereon, to the current roll, adjust the tax collector's
charge accordingly, and the remaining balance of the tax shall become
subject to all of the provisions of this division applicable to
delinquent taxes.
(g) The tax collector shall maintain records listing the current
status of all the installment accounts authorized under this section.
The status of each installment account shall be entered on the
current roll and the tax collector may file for record with the
county recorder a certificate pursuant to Section 2191.3.
(h) When the installment account is paid in full before 5 p.m. on
June 30 of the year in which the account has become defaulted and the
tax collector has filed for record a certificate of lien, the tax
collector shall also file for record a release of that lien. Where
the account is not paid in full until after June 30 of the year in
which the account became defaulted, the filings of the certificates
of lien and release of lien shall be subject to recording fees
charged to the taxpayer.
SEC. 8. Section 5151 of the Revenue and Taxation Code is amended
to read:
5151. (a) Interest at the greater of 3 percent per annum or the
county pool apportioned rate shall be paid, when that interest is ten
dollars ($10) or more, on any amount refunded under Section 5096.7,
or refunded to a taxpayer for any reason whatsoever. However, no
interest shall be paid under the provisions of this section if the
taxpayer has been given the notice required by Section 2635 and has
failed to apply for the refund within 30 days after the mailing of
that notice. For purposes of this section, "county pool apportioned
rate" means the annualized rate of interest earned on the total
amount of pooled idle funds from all accounts held by the county
treasurer, in excess of the county treasurer's administrative costs
with respect to that amount, as of June 30 of the preceding fiscal
year for which the refund is calculated.
(b) The interest rate provided for in subdivision (a) does not
apply to interest on refunds of those amounts of tax that became due
and payable before March 1, 1993. Interest on refunds of amounts of
a qualified tax shall be paid at that rate provided for by this
section as it read prior to January 1, 1993. As used in this
section, a "qualified tax" means a tax that became due and payable
before March 1, 1993, and had not been refunded as of April 6, 1995.
This subdivision shall not be construed to affect the interest paid
on refunds of those amounts of tax that became due and payable before
March 1, 1993, and have been refunded as of April 6, 1995.
(c) Interest allowed under this section shall be computed using
whichever of the following periods provides the longest period:
(1) The date of the recording of the deed to the public agency
acquiring the property in eminent domain to the date of the filing of
the claim for refund.
(2) The date of the payment of the tax on property subject to an
application for equalization of the assessed value thereof to the
date of the determination of the equalized value of the property.
(3) The date of the payment of the tax on property subject to a
refund as a result of an assessor error in assessing the property to
a date 15 days after the date of approval of the correction to the
tax roll that was not the result of court action or an assessment
appeal decision.
(4) Forty-five days following the filing of a claim for refund
until the refund is paid.
The interest charged shall be apportioned to the appropriate
funds, as determined by the county auditor.
SEC. 9. Section 5151 of the Revenue and Taxation Code is amended
to read:
5151. (a) Interest at the greater of 3 percent per annum or the
county pool apportioned rate shall be paid, when that interest is ten
dollars ($10) or more, on any amount refunded under Section 5096.7,
or refunded to a taxpayer for any reason whatsoever. However, no
interest shall be paid under the provisions of this section if the
taxpayer has been given the notice required by Section 2635 and has
failed to apply for the refund within 30 days after the mailing of
that notice. For purposes of this section, "county pool apportioned
rate" means the annualized rate of interest earned on the total
amount of pooled idle funds from all accounts held by the county
treasurer, in excess of the county treasurer's administrative costs
with respect to that amount, as of June 30 of the preceding fiscal
year for which the refund is calculated. For each fiscal year, the
county treasurer shall advise the Controller of the county pool
apportioned rate, and of computations made in deriving that rate, no
later than 60 days after the end of that fiscal year.
(b) The interest rate provided for in subdivision (a) does not
apply to interest on refunds of those amounts of tax that became due
and payable before March 1, 1993. Interest on refunds of amounts of
a qualified tax shall be paid at that rate provided for by this
section as it read prior to January 1, 1993. As used in this
section, a "qualified tax" means a tax that became due and payable
before March 1, 1993, and had not been refunded as of April 6, 1995.
This subdivision shall not be construed to affect the interest paid
on refunds of those amounts of tax that became due and payable before
March 1, 1993, and have been refunded as of April 6, 1995.
(c) (1) The interest computation period shall commence with the
date of payment of the tax when any of the following apply:
(A) A timely application for reduction in an assessment was filed,
without regard to whether the refund ultimately results from a
judgment or order of a court, an order of a board of equalization or
assessment appeals board, or an assessor's correction to the
assessment roll.
(B) The refund is pursuant to a roll correction resulting from the
determination or adjustment by the assessor or a local assessment
appeals board of a base year value.
(C) The refund results from a correction to the assessment roll
pursuant to Section 4831 or 4876.
(2) Interest on refunds of taxes on property acquired by a public
agency in eminent domain shall accrue from the date of recordation of
the deed.
(3) In all other cases the interest computation period shall
commence on the date of filing a claim for refund or payment of the
tax, whichever is later.
(d) The computation of interest shall terminate as of a date
within 30 days of the date of mailing or personal delivery of the
refund payment.
(e) The interest charged shall be apportioned to the appropriate
funds, as determined by the county auditor.
(f) The amendments made to this section by the act adding this
subdivision shall apply to all refunds made after January 1, 1997.
SEC. 10. The amendments to Section 23154 of the Revenue and
Taxation Code made by Section 17 of Chapter 498 of the Statutes of
1995 do not constitute a change in, but are declaratory of, existing
law.
SEC. 11. Section 9 of this bill incorporates amendments to Section
5151 of the Revenue and Taxation Code proposed by both this bill and
Assembly Bill 1668. It shall only become operative if (1) both
bills are enacted and become effective, (2) each bill amends Section
5151 of the Revenue and Taxation Code, and (3) this bill is enacted
after Assembly Bill 1668, in which case Section 8 of this bill shall
not become operative.
SEC. 12. 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 provide as soon as possible essential clarifications
and corrections with respect to the property tax law, it is necessary
that this act take effect immediately.