BILL ANALYSIS �
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|SENATE RULES COMMITTEE | SB 947|
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CONSENT
Bill No: SB 947
Author: Senate Governance and Finance Committee
Amended: As introduced
Vote: 21
SENATE GOVERNANCE & FINANCE COMMITTEE : 9-0, 5/4/11
AYES: Wolk, Huff, DeSaulnier, Fuller, Hancock, Hernandez,
Kehoe, La Malfa, Liu
SENATE APPROPRIATIONS COMMITTEE : Senate Rule 28.8
SUBJECT : Property taxation
SOURCE : State Board of Equalization
DIGEST : This bill consolidates twelve items that make
minor, technical changes to property tax law.
ANALYSIS : Revenue and Taxation Code Section 830 and
Section 862 requires that state assesses annually provide
specific information to the Board of Equalization (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.
This bill expressly allows the BOE to partially abate the
penalty. Existing law is not specific to partial
abatement.
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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
properties, and must be reassessed upon change of
ownership.
This bill 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 percent 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
percent loss because the surrounding land is highly
valuable, therefore denying the taxpayer the benefit.
This bill clarifies the definition of "substantially or
destroyed" to be consistent with two other sections of the
Revenue and Taxation law (Section 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."
This bill 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.
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This bill 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.
This bill 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.
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/she may not
have enough time to submit the claim.
This bill 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: Section75.22 (supplemental
assessments), Section205.5 (general residency),
Section276.1 (USDVA rating), Section 279 (termination
events). Also, surviving spouses of disabled veterans who
subsequently remarry can still claim the exemption.
This bill lists all the effective dates from the three
other sections into Section279, and adds a claimant spouse
remarrying to the list of disqualifying events.
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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. This bill 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/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.
This bill 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
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.
This bill conforms the Private Railroad Car Tax refund
amount publication limit by raising it to $50,000.
Comments
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 BOE. Many of
these measures are technical in nature, and enacting them
in separate measures isn't warranted. Although this bill
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.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: Yes
BOE states this bill effects on state revenues are
negligible.
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SUPPORT : (Verified 5/17/11)
State Board of Equalization
AGB:do 5/17/11 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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