BILL ANALYSIS �
AB 711
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ASSEMBLY THIRD READING
AB 711 (Lara)
As Introduced February 17, 2011
Majority vote
REVENUE & TAXATION 6-0
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|Ayes:|Perea, Beall, Charles | | |
| |Calderon, Cedillo, | | |
| |Fuentes, Gordon | | |
|-----+--------------------------+-----+--------------------------|
| | | | |
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SUMMARY : Shifts the burden of proof from a county assessor to a
taxpayer in an assessment appeal hearing involving the
taxpayer's vacation or secondary home. Specifically, this bill :
1)Revises, for purposes of Revenue and Taxation Code (RT&C)
Section 167, the definition of an "owner-occupied single
family dwelling" to mean a single-family dwelling that
satisfies both of the following:
a) The dwelling is the owner's principal place of
residence; and,
b) The dwelling qualifies for a homeowners' property tax
exemption.
2)Shifts the burden of proof, by revising the definition of
"owner-occupied single-family dwelling," in favor of a county
assessor in any administrative hearing involving the
imposition of a property tax on, or the assessment of, a
taxpayer's or assessee's owner-occupied single-family dwelling
that is a vacation or a secondary home.
EXISTING LAW :
1)Provides for a rebuttable presumption regarding the burden of
proof in favor of a taxpayer in an assessment appeal hearing
involving the imposition of a tax on, or the assessment of, an
owner-occupied single-family dwelling. (R&TC Section 167).
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2)Specifies that the homeowner's exemption does not extend to
property that is a vacation or secondary home of the owner.
It also does not apply to a property that is vacant, rented,
or under construction on the lien date. (R&TC Section 218).
FISCAL EFFECT : According to the State Board of Equalization
staff, this bill will have no impact on General Fund revenues.
COMMENTS :
Author's Statement. The author states that, "Section 167 of the
Revenue and Taxation Code provides that the assessor has the
burden of proof in any administrative hearing on an
owner-occupied single-family dwelling. In 2010, a California
Court of Appeal overturned an interpretation by finding that an
owner of a vacation home should be given the benefit of the
presumption of correctness, and that the assessor had the burden
of proof.
"AB 711 would provide that an owner-occupied single-family
dwelling means a single-family dwelling that is the owner's
principal place of residence and that qualifies for a
homeowners' property tax exemption.
"By making this correction, no property owner is losing the
right to appeal a value. In hearings, both the assessor and the
applicant will present evidence, and the board or hearing
officer will make a determination based on evidence presented.
"AB 711 is not a new tax. "Owner-occupied" was always intended
to protect hardworking Californians who own the home in which
they live and not intended to give those owning multiple
properties protection for every dwelling they own.
"AB 711 corrects and clarifies the meaning of an
"owner-occupied" dwelling for Section 167 of the Revenue and
Taxation Code."
The Argument in Support. According to the sponsor of this bill,
this bill is needed to correct and clarify that the burden of
proof in favor of the taxpayer in an assessment appeal hearing
should be limited to principal places of residence and should
not apply to vacation homes. The sponsor believes that this
bill is consistent with the original intent of R&TC Section 167
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and states that the traditional interpretation of the term
"owner-occupied single-family dwelling" has been limited to a
taxpayer's principal residence that qualifies for a homeowner's
or disabled veterans' exemption. Finally, the sponsor argues
that this bill is intended "to correct an oversight in the
original language."
Background. A taxpayer may protest the assessments of his or
her property by appealing to a local assessment appeals board.
An assessor is generally entitled to the presumption affecting
the burden of proof that he or she has properly performed his or
her duty to assess all properties fairly and on equal basis.
�Evidence Code (EC) Section 664; Hunt-Wesson Foods, Inc. v.
County of Alameda (1974) 41 Cal.App.3d 163, 180]. In other
words, the taxpayer has the burden of proving the property was
improperly assessed. �Texaco Producing v. County of Kern (1998)
66 Cal.App.4th 1029, 1046]. Thus, in a hearing before an
assessment appeals board, the taxpayer with the burden of proof
must present his or her evidence first. �Cal. Code Regs., Title
18, Section 313(c)]. However, a county assessor has a burden of
proof in certain types of assessment appeals hearings that
involve: a) the value of owner-occupied single-family
dwellings; b) penalty assessments; c) escape
assessments; d) non-enrollment of a purchase price; and,
e) when the county assessor intends to report a higher assessed
value than the one on the assessment roll. In all of those five
types of assessment appeals hearings, the county assessor must
affirmatively establish, by a preponderance of evidence, the
correctness of his or her opinion of value or other assessment
action.
R&TC Section 167 is one of those statutory exceptions to the
normal burden of proof imposed on the taxpayer. R&TC Section
167 provides that, once the taxpayer or assessee has supplied
all information as required by law to the assessor in an
administrative hearing involving an owner-occupied,
single-family dwelling, the burden of proof shifts to the
assessor. In other words, it creates a rebuttable presumption
that the owner's valuation is correct and the burden is on the
county assessor to overcome the presumption. The application of
this section is limited to assessment appeals involving the
imposition of a tax on, or the assessment of, an owner-occupied
single-family dwelling, or the appeal of an escape assessment.
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The Recent Development: Farr v. County of Nevada. Recently,
the California Court of Appeal reiterated that, under the
presumption affecting the burden of proof in favor of the
homeowner in a hearing before an assessment appeals board
involving an owner-occupied single-family home, the homeowner's
valuation is presumed correct and the burden is on the assessor
to overcome the presumption. �Farr v. County of Nevada (2010)
187 Cal.App.4th 669]. The term "owner-occupied single-family
dwelling" is not defined in the statute but the court
interpreted that term to include an owner-occupied vacation or
second home, when it held that the Nevada County Assessment
Appeals Board failed to apply the statutory presumption
affecting the burden of proof in favor of the homeowner of a
vacation home.
Exclusion of Vacation and Secondary Homes. The new definition
of the term "owner-occupied single-family dwelling" proposed by
this bill would exclude vacation and secondary homes and would
be limited only to principal residences that qualify for the
homeowners' property tax exemption. If this bill were to become
law, then in an assessment appeal hearing involving the
assessment of a vacation or secondary home, the property owner
would have the burden of proof that the property was improperly
assessed and would have to present his or her evidence first.
Analysis Prepared by : Oksana Jaffe / REV. & TAX. / (916)
319-2098
FN: 0000169