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AB-608 Property taxation: exemption: low-value properties.(2019-2020)

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Date Published: 07/15/2019 09:00 PM
AB608:v95#DOCUMENT

Assembly Bill No. 608
CHAPTER 92

An act to amend Section 155.20 of the Revenue and Taxation Code, relating to taxation, to take effect immediately, tax levy.

[ Approved by Governor  July 12, 2019. Filed with Secretary of State  July 12, 2019. ]

LEGISLATIVE COUNSEL'S DIGEST


AB 608, Petrie-Norris. Property taxation: exemption: low-value properties.
The California Constitution authorizes the Legislature, with the approval of 2/3 of the membership of each legislative house, to allow a county board of supervisors to exempt from property taxation those properties having a full value too low to justify the costs of assessment and collection. Existing property tax law implementing this authority generally limits any exemption granted under this constitutional provision by a county board of supervisors to real property with a total base year value, or personal property with a full value, not exceeding $10,000. Existing property tax law increases this limit to $50,000 in the case of a possessory interest, for a temporary and transitory use, in a publicly owned fairground, fairground facility, convention facility, or cultural facility.
This bill, for lien dates occurring on or after January 1, 2020, and before January 1, 2025, would delete this requirement that the possessory interest be for a temporary and transitory use of a publicly owned fairground, fairground facility, convention facility, or cultural facility, thereby allowing the exemption from taxation under these provisions of any possessory interest valued at $50,000 or less. The bill would include findings as to the specific goals, purposes, and objectives of the bill and require county assessors to report to the State Board of Equalization on whether and by what amount the county has increased the low-value property tax exemption for possessory interests. By adding to the duties of county assessors in this regard, the bill would impose a state-mandated local program.
Existing property tax law specifies that the authority to exempt low-value properties, as described above, does not authorize an assessor to exempt or to not enroll any property of any value, unless specifically authorized by a county board of supervisors.
This bill would delete this specification. The bill would also authorize an assessor, in administering the exemption, to opt either to not enroll the property on the assessment roll or to enroll the property and apply the exemption.
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.
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.
This bill would take effect immediately as a tax levy.
Vote: 2/3   Appropriation: NO   Fiscal Committee: YES   Local Program: YES  

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


SECTION 1.

 Section 155.20 of the Revenue and Taxation Code is amended to read:

155.20.
 (a) Subject to the limitations listed in subdivisions (b), (c), (d), and (e), a county board of supervisors may exempt from property tax all real property with a base year value (as determined pursuant to Chapter 1 (commencing with Section 50) of Part 0.5) as adjusted by an annual inflation factor pursuant to subdivision (f) of Section 110.1, and personal property with a full value so low that, if not exempt, the total taxes, special assessments, and applicable subventions on the property would amount to less than the cost of assessing and collecting them.
(b) (1) (A) The board of supervisors shall have no authority to exempt property with a total base year value, as adjusted by an annual inflation factor pursuant to subdivision (f) of Section 110.1, or full value of more than ten thousand dollars ($10,000), except as otherwise provided in subparagraph (B).
(B) The limitation specified in subparagraph (A) on the amount of the exemption authorized by this section shall be increased as follows:
(i) For lien dates occurring on or after January 1, 2020, and before January 1, 2025, the limitation is increased to fifty thousand dollars ($50,000) in the case of a possessory interest.
(ii) For lien dates occurring on or after January 1, 2025, the limitation is increased to fifty thousand dollars ($50,000) in the case of a possessory interest, for a temporary and transitory use, in a publicly owned fairground, fairground facility, convention facility, or cultural facility. For purposes of this paragraph, “publicly owned convention or cultural facility” means a publicly owned convention center, civic auditorium, theater, assembly hall, museum, or other civic building that is used primarily for staging any of the following:
(I) Conventions, trade and consumer shows, or civic and community events.
(II) Live theater, dance, or musical productions.
(III) Artistic, historic, technological, or educational exhibits.
(2) In determining the level of the exemption, the board of supervisors shall determine at what level of exemption the costs of assessing the property and collecting taxes, assessments, and subventions on the property exceeds the proceeds to be collected. The board of supervisors shall establish the exemption level uniformly for different classes of property. In making this determination, the board of supervisors may consider the total taxes, special assessments, and applicable subventions for the year of assessment only or for the year of assessment and succeeding years where cumulative revenues will not exceed the cost of assessments and collections.
(3) In administering the exemption authorized by this section, the assessor may opt either to not enroll the property on the assessment roll or to enroll the property and apply the exemption.
(c) This section does not apply to those real or personal properties enumerated in Section 52.
(d) The exemption authorized by this section shall be adopted by the board of supervisors on or before the lien date for the fiscal year to which the exemption is to apply and may, at the option of the board of supervisors, continue in effect for succeeding fiscal years. Any revision or rescission of the exemption shall be adopted by the board of supervisors on or before the lien date for the fiscal year to which that revision or rescission is to apply.
(e) Nothing in this section shall authorize a county board of supervisors to exempt new construction, unless the new total base year value, as adjusted by an annual inflation factor pursuant to subdivision (f) of Section 110.1, of the property, including this new construction, is ten thousand dollars ($10,000) or less.

SEC. 2.

 The Legislature finds and declares the following with respect to the amendments made to Section 155.20 of the Revenue and Taxation Code by this act:
(a) The specific goals, purposes, and objectives of expanding the low-value property tax exemption pursuant to this act are to provide county governments with the authority to increase the amount of low-value property exemption for possessory interests allowed under their ordinances up to the level that their cost-benefit analysis indicates in order to further the goal of cost-effective property tax administration.
(b) Detailed performance indicators for the Legislature to use in determining whether the expanded low-value property tax exemption meets the goals, purposes, and objectives described in subdivision (a) shall be the number of counties in this state that expand that exemption as authorized by this act.
(c) The data collection requirements for determining whether the expanded low-value property tax exemption is meeting, failing to meet, or exceeding the specific goals, purposes, and objectives described in subdivision (a) are as follows:
(1) Each county assessor shall report to the State Board of Equalization whether and by what amount the county has increased the low-value property tax exemption for possessory interests as authorized by this act.
(2) In order to make the information reported to pursuant to paragraph (1) widely available to the public, the State Board of Equalization shall post that information on its internet website.

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.

SEC. 5.

 This act provides for a tax levy within the meaning of Article IV of the California Constitution and shall go into immediate effect.