Today's Law As Amended

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AB-885 Property taxation: new construction: definition.(2019-2020)



SECTION 1.

 Section 70 of the Revenue and Taxation Code is amended to read:

70.
 (a) “Newly constructed” and “new construction” means:
(1) Any addition to real property, whether land or improvements, including fixtures, since the last lien date; and
(2) Any alteration of land or of any improvement, including fixtures, since the last lien date that constitutes a major rehabilitation thereof or that converts the property to a different use.
(b) Any rehabilitation, renovation, or modernization that converts an improvement or fixture to the substantial equivalent of a new improvement or fixture is a major rehabilitation of that improvement or fixture.
(c) (1)  Notwithstanding subdivisions (a) and (b), where real property has been damaged or destroyed by misfortune or calamity, “newly constructed” and “new construction” does not mean any timely reconstruction of the real property, or portion thereof, where the property after reconstruction is substantially equivalent to the property prior to damage or destruction. Any reconstruction of real property, or portion thereof, that is not substantially equivalent to the damaged or destroyed property, shall be deemed to be new construction and only that portion that exceeds substantially equivalent reconstruction shall have a new base year value determined pursuant to Section 110.1.
(2) For purposes of this subdivision, “substantially equivalent” means either of the following:
(A) The size of the improvement after reconstruction does not exceed 120 percent of the size of the improvement before damage or destruction.
(B) The full cash value of the improvement after reconstruction does not exceed 120 percent of the full cash value of the improvement before damage or destruction.
(d) (1) Notwithstanding subdivisions (a) and (b), where a tank must be improved, upgraded, or replaced to comply with federal, state, and local regulations on underground storage tanks, “newly constructed” and “new construction” does not mean the improvement, upgrade, or replacement of a tank to meet compliance standards, and the improvement, upgrade, or replacement shall be considered to have been performed for the purpose of normal maintenance and repair.
(2) Notwithstanding subdivisions (a) and (b), where a structure, or any portion thereof, was reconstructed, as a consequence of completing work on an underground storage tank to comply with federal, state, and local regulations on these tanks, timely reconstruction of the structure shall be considered to have been performed for the purpose of normal maintenance and repair where the structure, or portion thereof, after reconstruction is substantially equivalent to the prior structure in size, utility, and function.
(e) The amendments made to subdivision (c) by the act adding this subdivision shall apply to real property damaged or destroyed by misfortune or calamity on or after January 1, 2017.
SEC. 2.
 The Legislature find and declares that the amendments to Section 70 of the Revenue and Taxation Code by this act serve a public purpose and do not constitute a gift of public funds within the meaning of Section 6 of Article XVI of the California Constitution by providing necessary property tax relief to taxpayers whose property was damaged or destroyed by a destructive California wildfire.
SEC. 3.
 If the Commission on State Mandates determines that this act contains costs mandated by the state, reimbursement to local agencies and school districts for those costs shall be made pursuant to Part 7 (commencing with Section 17500) of Division 4 of Title 2 of the Government Code.
SEC. 4.
 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.