BILL ANALYSIS �
SENATE GOVERNANCE & FINANCE COMMITTEE
Senator Lois Wolk, Chair
BILL NO: SB 947 HEARING: 5/4/11
AUTHOR: Governance & Finance CommitteeFISCAL: Yes
VERSION: 4/1/11 TAX LEVY: No
CONSULTANT: Grinnell
PROPERTY TAXATION
Revises property tax collection laws.
Background
Each year, the former Revenue and Taxation Committee
authored a measure to enact several changes to Property Tax
Law sponsored and approved unanimously by the State Board
of Equalization. Many of these measures are technical in
nature, and enacting them in separate measures isn't
warranted. Although SB 947 may not be germane under a
strict interpretation of the single-subject and germaneness
rules presented in Californians for an Open Primary v.
McPherson (2006), it implements important and necessary
changes to property tax laws without taxing legislative
resources.
Proposed Law
Revenue and Taxation Code �830 and �862 requires that state
assesses annually provide specific information to the BOE.
Failure to provide the information results in a penalty
which varies depending on the type of information that is
deficient. The law provides that that the BOE may abate
the penalty with a written application for abatement by the
applicant. Senate Bill 947 expressly allows the BOE to
partially abate the penalty. Existing law is not specific
to partial abatement.
Currently, the exclusion from reassessment for the
transfers of a property from parent to child does not apply
to a unit of cooperatively owned housing because in a
cooperative, the owner owns stock in the cooperative
housing and not any real property. However, the units are
eligible for the homeowners' exemption for these
SB 947 -- 4/1/11 -- Page 2
properties, and must be reassessed upon change of
ownership. Senate Bill 947 amends the parent-child
exclusion from reassessment to allow a parent to transfer
his or her unit or lot within a cooperative housing
corporation to a child without reassessment.
Taxpayers can transfer the base year value of a property
that was substantially damaged or destroyed by misfortune
or calamity. However, the definition of "substantially
damaged" requires a 50% loss of the fair market value of
the property. In some areas of the state, a damaged or
destroyed home cannot result in more than a 50% loss
because the surrounding land is highly valuable, therefore
denying the taxpayer the benefit. Senate Bill 947
clarifies the definition of "substantially or destroyed" to
be consistent with two other sections of the Revenue and
Taxation law (�69 and 69.3).
The current statutory definition for "seismic retrofitting"
refers to the items in a manual, the "Uniform Code for
Building Conservation of the International Conference of
Building Officials," but the manual changed its name to the
"International Existing Building Code." The same section
refers to the "Uniform Building Code," which has been
replaced by the "International Building Code." Senate Bill
947 updates the references by striking out the old
references and making the appropriate replacement.
Proposition 177 (1994) excluded from reassessment as new
construction disabled access improvements. However, the
statutory implementation refers to Proposition 177's
location in the Constitution before Proposition 13 (2010)
moved it. Senate Bill 947 changes the cross reference.
Some sections of property tax law provide exemption from
property taxes, such as disabled veterans' and non-profit
entities, and specifies that the taxpayer can take the
exemption when selling a property and acquiring a new one -
the owner has an exemption, not the property. However,
supplemental assessment law provides that the exemption
does not apply unless the transferee also qualifies, which
conflicts with the exemption statutes. Senate Bill 947
clarifies that the exemption before the transfer terminates
on the date of sale or transfer, and a new exemption is
available under the law, and deletes the formerly
conflicting supplemental assessment language.
SB 947 -- 4/1/11 -- Page 3
Eligible disabled veterans may apply for a property tax
exemption before January 1st of the calendar year for any
property acquired after the lien date. However, if a
veteran purchases property late in the year, he or she may
not have enough time to submit the claim. Senate Bill 947
extends the deadline for disabled veterans to apply to 90
days after the property is eligible.
Spouses may also claim the disabled veterans' exemption
from property tax, but the statute requires the assessor to
mail the annual notice of the exemption and its
requirements only to the disabled veterans. The bill
changes the term to "claimants," and makes conforming
changes.
Currently, four sections state the effective dates of
disabled veteran's exemptions: �75.22 (supplemental
assessments), �205.5 (general residency), �276.1 (USDVA
rating), �279 (termination events). Also, surviving
spouses of disabled veterans who subsequently remarry can
still claim the exemption. Senate Bill 947 lists all the
effective dates from the three other sections into �279,
and adds a claimant spouse remarrying to the list of
disqualifying events.
Generally, county boards of equalization or assessment
appeals boards adjudicate property tax appeals and issue
penalties for failing to file specified information.
However, penalty abatement law directs taxpayers to appeal
to the County Board of Supervisors. Senate Bill 947
substitutes county boards of equalization and assessment
appeals boards for county board of supervisors to ensure
that taxpayers file request to abate penalties with
appropriate body.
Assessors can correct the property tax roll up to four
years after a valuation if he or she makes a mistake.
However, floating homes are not expressly listed in the
code section which allows the treatment, although they are
considered real property elsewhere in property tax law.
Senate Bill 947 adds floating homes to the list of
properties eligible for the assessors' roll correction
authority.
Currently, the BOE must make available as a public record
SB 947 -- 4/1/11 -- Page 4
for ten days any refund in excess of $50,000 under all of
its tax and fee programs, except the Private Railroad Car
Tax. That limit requires publication when the refund
exceeds $15,000. Senate Bill 947 conforms the Private
Railroad Car Tax refund amount publication limit by raising
it to $50,000.
State Revenue Impact
BOE states that SB 947's effects on state revenues are
negligible.
Comments
1. Purpose of the bill . SB 947 consolidates twelve items
that make minor, technical changes to property tax law
sponsored by BOE. The bill improves the administration of
property tax laws to help both taxpayers and tax
administration agencies. Consolidating the measures into a
single bill negates the need for individual bills to enact
each change. Additionally, the measure only contains items
with universal agreement; items that are controversial or
problematic will be removed from the bill
Support and Opposition (4/28/11)
Support : State Board of Equalization (sponsor)
Opposition : Unknown.