BILL NUMBER: AB 1694 CHAPTERED 07/28/99 CHAPTER 200 FILED WITH SECRETARY OF STATE JULY 28, 1999 APPROVED BY GOVERNOR JULY 27, 1999 PASSED THE SENATE JULY 15, 1999 PASSED THE ASSEMBLY JUNE 1, 1999 AMENDED IN ASSEMBLY MAY 24, 1999 AMENDED IN ASSEMBLY APRIL 29, 1999 INTRODUCED BY Committee on Revenue and Taxation (Knox (Chair), Ducheny, Honda, and Romero) MARCH 25, 1999 An act to amend Section 74 of the Revenue and Taxation Code, relating to taxation, to take effect immediately, tax levy. LEGISLATIVE COUNSEL'S DIGEST AB 1694, Committee on Revenue and Taxation. Ad valorem taxation: fire detection systems. 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. The California Constitution authorizes the Legislature to exclude from classification as "new construction" the construction or installation on or after November 7, 1984, of fire safety improvements that include a fire detection system. Existing statutory law implementing this exclusion defines a "fire detection system" to include any system or appliance intended to, among other things, activate an alarm or signal. It also specifies that a fire detection system includes any system that serves additional functions, but limits the exemption to that portion that is for fire detection purposes. This bill would expand this exclusion to specify that a fire detection system includes, as provided, all equipment used to transmit fire alarm activations and related signals to a remote location. 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. This bill would take effect immediately as a tax levy. THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS: SECTION 1. Section 74 of the Revenue and Taxation Code is amended to read: 74. (a) For purposes of subdivision (a) of Section 2 of Article XIII A of the Constitution, "newly constructed" does not include the construction or installation of any fire sprinkler system, other fire extinguishing system, fire detection system, or fire-related egress improvement that is constructed or installed on or after November 7, 1984. (b) Notwithstanding any other provision of this chapter or Chapter 3.5 (commencing with Section 75), neither "newly constructed" nor "new construction" includes the construction or installation of any fire sprinkler system, other fire extinguishing system, fire detection system, or fire-related egress improvement that is constructed or installed on or after November 7, 1984. (c) For purposes of this section: (1) "Fire sprinkler system" means any system intended to discharge water for the purpose of suppressing or extinguishing a fire, and includes a fire sprinkler system that derives its water from the domestic water supply of the building or structure of which it is a part. (2) "Other fire extinguishing system" means any system intended to suppress or to extinguish a fire other than by discharging water upon the fire. An "other fire extinguishing system" includes, but is not limited to, a component or application that, solely or primarily for the purposes of fire suppression or extinguishment, is made part of the heating, ventilating, or air-conditioning system of a building or structure, a wet chemical system, or a dry chemical system. (3) "Fire detection system" means any system or appliance intended to detect combustion, or the products thereof, and to activate an alarm or signal, whether audio, visual, or otherwise, including all equipment used to transmit fire alarm activations and related signals to a remote location. A fire detection system includes any system that serves additional functions, but this section shall only apply with respect to that portion of a system that is for fire detection purposes. No portion of a fire detection system as described in this paragraph shall be deemed to be personal property, or shall be deemed to be excluded from that fire detection system, by reason of being owned or controlled by a person other than the owner of property upon which the fire detection system was constructed or installed. (4) "Fire-related egress improvement" means any improvement intended to do either of the following: (A) Provide any new, or improve any existing, means of egress for individuals from a structure, or any portion thereof, in which a fire is in progress, as to which there is an imminent threat that a fire may soon be in progress, or as to which individuals therein might be subjected to health hazards or the risk of physical injury due to a fire elsewhere. (B) With respect to individuals who for any reason cannot evacuate a structure in which a fire is in progress, provide a means of safeguarding, or increasing the safety of, those individuals until the time that the rescue of those individuals can be effected. (5) "Existing building" means any building or structure already erected at the time that a fire sprinkler system, other fire extinguishing system, fire detection system, or fire-related egress improvement is constructed or installed in that building or structure. (d) Any system or improvement referred to in this section shall be deemed to have been constructed or installed on or after November 7, 1984, if the actual construction or installation thereof is completed on or after November 7, 1984, regardless of when the actual construction or installation thereof was commenced or any building permit pertaining thereto was issued. (e) This section applies only to fire sprinkler systems, other fire extinguishing systems, fire detection systems, and fire-related egress improvements, as defined in this section, that are constructed or installed in an existing building. SEC. 2. Notwithstanding Section 2229 of the Revenue and Taxation Code, no appropriation is made by this act and the state shall not reimburse any local agency for any property tax revenues lost by it pursuant to this act. SEC. 3. This act provides for a tax levy within the meaning of Article IV of the Constitution and shall go into immediate effect.