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SB-1431 Property taxation: reassessment: disaster relief.(2019-2020)

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Date Published: 05/06/2020 09:00 PM
SB1431:v98#DOCUMENT

Amended  IN  Senate  May 06, 2020

CALIFORNIA LEGISLATURE— 2019–2020 REGULAR SESSION

Senate Bill
No. 1431

Introduced by Senator Glazer

February 21, 2020

An act to amend Section 732 of the Business and Professions Code, relating to healing arts. 170 of the Revenue and Taxation Code, relating to taxation, to take effect immediately, tax levy.


LEGISLATIVE COUNSEL'S DIGEST


SB 1431, as amended, Glazer. Physicians and surgeons and dentists: refund of overpayments by patients. Property taxation: reassessment: disaster relief.
The California Constitution authorizes the Legislature to authorize local governments to provide for the assessment or reassessment of taxable property physically damaged or destroyed after the lien date to which the assessment or reassessment relates. Existing property tax law authorizes the board of supervisors of a county, by ordinance, to provide that every assessee of any taxable property, or any person liable for the taxes thereon, whose property was damaged or destroyed without their fault, may apply for reassessment of that property, as provided. Existing property tax law requires, for property to be eligible for reassessment under these provisions, that the damage or destruction be caused by one of 3 specified occurrences, including a major misfortune or calamity in an area or region subsequently proclaimed by the Governor to be in a state of disaster if the property was damaged or destroyed by the misfortune or calamity that caused the Governor to proclaim the region to be in a state of disaster. Existing property tax law generally requires that an application for reassessment be filed within the later of the time specified in the county’s ordinance or within 12 months of the misfortune or calamity and be executed under penalty of perjury.
This bill would expand these provisions to include damage to or destruction of property due to a misfortune or calamity in an area or region subsequently proclaimed by the Governor to be in a state of emergency if the property was damaged or destroyed by the misfortune or calamity that caused the Governor to proclaim the area to be in a state of emergency. The bill, for purposes of property damaged or destroyed by a major misfortune or calamity in area declared to be in a state of disaster, as described above, would specify that “damage” includes a diminution in the value of property as a result of any law, order, rule, or regulation of the state or any city, county, or other political subdivision providing tenant protections in response to the COVID-19 pandemic, as defined. The bill would also specify that the term “majority misfortune or calamity” includes the COVID-19 pandemic. The bill would make these provisions retroactive to April 5, 2020, and authorize a person to submit an application for reassessment in connection with the COVID-19 pandemic within the later of 12 months of the bill's effective date or the time specified in the county’s ordinance.
This bill would make findings and declarations regarding the public purpose served by the bill.
By adding to the duties of local tax officials with respect to the assessment of property for taxation, and by expanding the scope of the crime of perjury, 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 with regard to certain mandates no reimbursement is required by this act for a specified reason.
With regard to any other mandates, this bill would provide that, if the Commission on State Mandates determines that the bill contains costs so mandated by the state, reimbursement for those costs shall be made pursuant to the statutory provisions noted above.
This bill would take effect immediately as a tax levy.

Existing law requires a physician and surgeon and a dentist to refund any amount paid by a patient for services rendered that constitutes a duplicate payment within 30 days after the patient’s request for a refund if the duplicate payment has been received or within 30 days after receipt of the duplicate payment if the duplicate payment has not been received. Under existing law, if the patient does not request a refund the physician and surgeon or dentist is required to notify the patient of the duplicate payment within 90 days of the date that the license knows, or should have known, of the receipt of the duplicate payment. Under existing law, the license is then required to notify the patient and refund the duplicate payment within 30 days. Existing law provides that a violation of this provision constitutes unprofessional conduct.

This bill would reduce those 30-day timeframes to 21 days.

Vote: MAJORITY   Appropriation: NO   Fiscal Committee: YES   Local Program: NOYES  

The people of the State of California do enact as follows:


SECTION 1.

 Section 170 of the Revenue and Taxation Code is amended to read:

170.
 (a) Notwithstanding any other law, the board of supervisors, by ordinance, may provide that every assessee of any taxable property, or any person liable for the taxes thereon, whose property was damaged or destroyed without his or her the person’s fault, may apply for reassessment of that property as provided in this section. The ordinance may also specify that the assessor may initiate the reassessment where if the assessor determines that within the preceding 12 months taxable property located in the county was damaged or destroyed.
To be eligible for reassessment the damage or destruction to the property shall have been caused by any of the following:
(1) A major misfortune or calamity, in an area or region subsequently proclaimed by the Governor to be in a state of emergency or state of disaster, if that property was damaged or destroyed by the major misfortune or calamity that caused the Governor to proclaim the area or region to be in a state of emergency or state of disaster. As used in this paragraph, “damage” paragraph:
(A) “Damage” includes a diminution in the value of property as a result of restricted either of the following:
(i) Restricted access to the property where that restricted access was caused by the major misfortune or calamity.
(ii) Any law, order, rule, or regulation of the state or any city, county, or other political subdivision providing tenant protections in response to the COVID-19 pandemic, including, but not limited to, eviction controls imposed under Executive Order No. N-33-20, issued on March 19, 2020, and Executive Order No. N-37-20, issued on March 27, 2020.
(B) “Major misfortune or calamity” includes the COVID-19 pandemic.
(C) “COVID-19 pandemic” means the conditions described in the Governor’s proclamation of a state of emergency issued on March 4, 2020.
(2) A misfortune or calamity.
(3) A misfortune or calamity that, with respect to a possessory interest in land owned by the state or federal government, has caused the permit or other right to enter upon the land to be suspended or restricted. As used in this paragraph, “misfortune or calamity” includes a drought condition such as existed in this state in 1976 and 1977.
The application for reassessment may be filed within the time specified in the ordinance or within 12 months of the misfortune or calamity, whichever is later, by delivering to the assessor a written application requesting reassessment showing the condition and value, if any, of the property immediately after the damage or destruction, and the dollar amount of the damage. The application shall be executed under penalty of perjury, or if executed outside the State of California, verified by affidavit.
An ordinance may be made applicable to a major misfortune or calamity specified in paragraph (1) or to any misfortune or calamity specified in paragraph (2), or to both, as the board of supervisors determines. An ordinance shall not be made applicable to a misfortune or calamity specified in paragraph (3), unless an ordinance making paragraph (2) applicable is operative in the county. The ordinance may specify a period of time within which the ordinance shall be effective, and, if no period of time is specified, it shall remain in effect until repealed.
(b) Upon receiving a proper application, the assessor shall appraise the property and determine separately the full cash value of land, improvements and personalty immediately before and after the damage or destruction. If the sum of the full cash values of the land, improvements and personalty before the damage or destruction exceeds the sum of the values after the damage by ten thousand dollars ($10,000) or more, the assessor shall also separately determine the percentage reductions in value of land, improvements and personalty due to the damage or destruction. The assessor shall reduce the values appearing on the assessment roll by the percentages of damage or destruction computed pursuant to this subdivision, and the taxes due on the property shall be adjusted as provided in subdivision (e). However, the amount of the reduction shall not exceed the actual loss.
(c) (1) As used in this subdivision, “board” means either the county board of supervisors acting as the county board of equalization, or an assessment appeals board established by the county board of supervisors in accordance with Section 1620, as applicable.
(2) The assessor shall notify the applicant in writing of the amount of the proposed reassessment. The notice shall state that the applicant may appeal the proposed reassessment to the board within six months of the date of mailing the notice. If an appeal is requested within the six-month period, the board shall hear and decide the matter as if the proposed reassessment had been entered on the roll as an assessment made outside the regular assessment period. The decision of the board regarding the damaged value of the property shall be final, provided that a decision of the board regarding any reassessment made pursuant to this section shall create no presumption as regards the value of the affected property subsequent to the date of the damage.
(3) Those reassessed values resulting from reductions in full cash value of amounts, as determined above, shall be forwarded to the auditor by the assessor or the clerk of the board, as the case may be. The auditor shall enter the reassessed values on the roll. After being entered on the roll, those reassessed values shall not be subject to review, except by a court of competent jurisdiction.
(d) (1) If no application is made and the assessor determines that within the preceding 12 months a property has suffered damage caused by misfortune or calamity that may qualify the property owner for relief under an ordinance adopted under this section, the assessor shall provide the last known owner of the property with an application for reassessment. The property owner shall file the completed application within 12 months after the occurrence of that damage. Upon receipt of a properly completed, timely filed application, the property shall be reassessed in the same manner as required in subdivision (b).
(2) This subdivision does not apply where the assessor initiated reassessment as provided in subdivision (a) or (l).
(e) The tax rate fixed for property on the roll on which the property so reassessed appeared at the time of the misfortune or calamity, shall be applied to the amount of the reassessment as determined in accordance with this section and the assessee shall be liable for: (1) a prorated portion of the taxes that would have been due on the property for the current fiscal year had the misfortune or calamity not occurred, to be determined on the basis of the number of months in the current fiscal year prior to the misfortune or calamity; plus, (2) a proration of the tax due on the property as reassessed in its damaged or destroyed condition, to be determined on the basis of the number of months in the fiscal year after the damage or destruction, including the month in which the damage was incurred. For purposes of applying the preceding calculation in prorating supplemental taxes, the term “fiscal year” means that portion of the tax year used to determine the adjusted amount of taxes due pursuant to subdivision (b) of Section 75.41. If the damage or destruction occurred after January 1 and before the beginning of the next fiscal year, the reassessment shall be utilized to determine the tax liability for the next fiscal year. However, if the property is fully restored during the next fiscal year, taxes due for that year shall be prorated based on the number of months in the year before and after the completion of restoration.
(f) Any tax paid in excess of the total tax due shall be refunded to the taxpayer pursuant to Chapter 5 (commencing with Section 5096) of Part 9, as an erroneously collected tax or by order of the board of supervisors without the necessity of a claim being filed pursuant to Chapter 5.
(g) The assessed value of the property in its damaged condition, as determined pursuant to subdivision (b) compounded annually by the inflation factor specified in subdivision (a) of Section 51, shall be the taxable value of the property until it is restored, repaired, reconstructed or other provisions of the law require the establishment of a new base year value.
If partial reconstruction, restoration, or repair has occurred on any subsequent lien date, the taxable value shall be increased by an amount determined by multiplying the difference between its factored base year value immediately before the calamity and its assessed value in its damaged condition by the percentage of the repair, reconstruction, or restoration completed on that lien date.
(h) (1) When the property is fully repaired, restored, or reconstructed, the assessor shall make an additional assessment or assessments in accordance with subparagraph (A) or (B) upon completion of the repair, restoration, or reconstruction:
(A) If the completion of the repair, restoration, or reconstruction occurs on or after January 1, but on or before May 31, then there shall be two additional assessments. The first additional assessment shall be the difference between the new taxable value as of the date of completion and the taxable value on the current roll. The second additional assessment shall be the difference between the new taxable value as of the date of completion and the taxable value to be enrolled on the roll being prepared.
(B) If the completion of the repair, restoration, or reconstruction occurs on or after June 1, but before the succeeding January 1, then the additional assessment shall be the difference between the new taxable value as of the date of completion and the taxable value on the current roll.
(2) On the lien date following completion of the repair, restoration, or reconstruction, the assessor shall enroll the new taxable value of the property as of that lien date.
(3) For purposes of this subdivision, “new taxable value” shall mean the lesser of the property’s (A) full cash value, or (B) factored base year value or its factored base year value as adjusted pursuant to subdivision (c) of Section 70.
(i) The assessor may apply Chapter 3.5 (commencing with Section 75) of Part 0.5 in implementing this section, to the extent that chapter is consistent with this section.
(j) This section applies to all counties, whether operating under a charter or under the general laws of this state.
(k) Any ordinance in effect pursuant to former Section 155.1, 155.13, or 155.14 shall remain in effect according to its terms as if that ordinance was adopted pursuant to this section, subject to the limitations of subdivision (b).
(l) When If the assessor does not have the general authority pursuant to subdivision (a) to initiate reassessments, if no application is made made, and the assessor determines that within the preceding 12 months a property has suffered damage caused by misfortune or calamity, calamity that may qualify the property owner for relief under an ordinance adopted under this section, the assessor, with the approval of the board of supervisors, may reassess the particular property for which approval was granted as provided in subdivision (b) and notify the last known owner of the property of the reassessment.
(m) (1) The amendments to this section by the act adding this subdivision shall apply beginning on and after April 5, 2020. Notwithstanding any other provision of this section, a person who owns property eligible for property tax relief as a result of the amendments made by the act adding this subdivision may submit an application within 12 months of the effective date of this subdivision or within the time specified in the county’s ordinance adopted pursuant to subdivision (a), whichever is later.
(2) The amendments to this section by the act adding this subdivision shall not be construed to affect any previously existing law regarding claims or defenses related to a diminution of property values, nor to establish a presumption that property values have declined or that any property is in any way “damaged or destroyed” or otherwise contaminated for purposes of any civil action.

SEC. 2.

 The Legislature finds and declares that the amendments to Section 170 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 who own multifamily residential buildings that have suffered material rent loss as the result of efforts to preserve housing availability during the COVID-19 pandemic.

SEC. 3.

 No reimbursement is required by this act pursuant to Section 6 of Article XIII B of the California Constitution for certain costs that may be incurred by a local agency or school district because, in that regard, this act creates a new crime or infraction, eliminates a crime or infraction, or changes the penalty for a crime or infraction, within the meaning of Section 17556 of the Government Code, or changes the definition of a crime within the meaning of Section 6 of Article XIII B of the California Constitution.
However, if the Commission on State Mandates determines that this act contains other 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.

 This act provides for a tax levy within the meaning of Article IV of the California Constitution and shall go into immediate effect.
SECTION 1.Section 732 of the Business and Professions Code is amended to read:
732.

(a)A physician and surgeon and a dentist shall refund any amount that a patient has paid for services rendered that has subsequently been paid to the physician and surgeon or dentist by a third-party payor and that constitutes a duplicate payment. The refund shall be made as follows:

(1)If the patient requests a refund, within 21 days following the request from that patient for a refund if the duplicate payment has been received, or within 21 days of receipt of the duplicate payment if the duplicate payment has not been received.

(2)If the patient does not request a refund, within 90 days of the date the physician and surgeon or dentist knows, or should have known, of the receipt of the duplicate payment, the physician and surgeon or dentist shall notify the patient of the duplicate payment, and the duplicate payment shall be refunded within 21 days of the notification unless the patient requests that a credit balance be retained.

(b)Violation of this section shall constitute unprofessional conduct. Disciplinary proceedings shall be conducted in accordance with the Medical Practice Act (Chapter 5 (commencing with Section 2000)) or the Dental Practice Act (Chapter 4 (commencing with Section 1600)), as applicable.