AB 652

Bill Subjects

Abstract

(1) The California Constitution generally limits the maximum amount of any ad valorem tax on real property to 1% of its full cash value and defines "full cash value" for these purposes as the county assessor's valuation of real property as shown on the 1975–76 tax bill under "full cash value" or, thereafter, the appraised value of real property when purchased, newly constructed, or a change in ownership has occurred after the 1975 assessment. Existing property tax law requires the assessor to determine a new base year value for the portion of any taxable real property which has been newly constructed and that new construction in progress on the lien date be appraised at its full value on that date, and each lien date thereafter, until construction is completed, at which time the entire portion of property which is newly constructed is reappraised at its full value. This bill would instead prohibit new construction that is in progress from acquiring a new base year value until the date of completion. (2) Existing property tax law prescribes procedures by which a taxpayer may seek a reduction in assessment from the county board of equalization or assessment appeals board or, in the case of certain publicly owned property, the State Board of Equalization, including deadlines for filing an application. Existing property tax law provides that an application for reduction in the base year value of an assessment on the current local roll may be filed during the regular filing period for that year, as provided and subject to certain limitations, including that the base year value determined in accordance with specified law is conclusively presumed to be the base year value unless the application is filed during the regular equalization period for the year in which the assessment is placed on the assessment roll or in any of the 3 succeeding years. This bill would authorize an application for reduction in the value of new construction that is in progress on the lien date on the current roll to be filed during the regular filing period for that year, as provided. The bill would authorize an application for reduction in the base year value determined upon completion of new construction to be filed during the regular equalization period for the year in which the assessment is placed on the assessment roll or in any of the 3 succeeding years. (3) Existing law requires the state 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 those provisions, no appropriation is made and the state shall not reimburse local agencies for property tax revenues lost by them pursuant to the bill. (4) By changing the manner in which assessors determine the base year value for new construction in progress, this bill would impose a state-mandated local program. The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement. This bill would provide that, if the Commission on State Mandates determines that the bill contains costs mandated by the state, reimbursement for those costs shall be made pursuant to the statutory provisions noted above. (5) This bill would take effect immediately as a tax levy.