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AB-1066 Property taxation: exemption: low-value properties.(2023-2024)



Current Version: 04/27/23 - Amended Assembly

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AB1066:v96#DOCUMENT

Amended  IN  Assembly  April 27, 2023
Amended  IN  Assembly  April 24, 2023
Amended  IN  Assembly  March 23, 2023

CALIFORNIA LEGISLATURE— 2023–2024 REGULAR SESSION

Assembly Bill
No. 1066


Introduced by Assembly Member Joe Patterson

February 15, 2023


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


LEGISLATIVE COUNSEL'S DIGEST


AB 1066, as amended, Joe Patterson. 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, as adjusted annually for inflation, or personal property with a full value, not exceeding $10,000. The annual inflation adjustment applied to real property total base year value for this purpose is limited to no more than 2% per year. Existing property tax law also limits any exemption for new construction to situations where the new total base year value of the property, as adjusted for inflation, including the new construction, is $10,000 or less.
This bill would raise these maximum exemption amounts to $15,000. $15,000 for the lien dates occurring on or after January 1, 2024, and before January 1, 2029. The bill would apply the inflation adjustment factor commencing on January 1, 2025, for calculating the maximum exemption value to both the total base year value of real property and the full value of personal property. The bill would also eliminate the 2% limitation to the inflation adjustment for the purpose of calculating the exemption for a property having a full value too low to justify the costs of assessment and collection.
Existing law requires any bill authorizing a new tax expenditure to contain, among other things, specific goals, purposes, and objectives that the tax exemption will achieve, detailed performance indicators, and data collection requirements.
This bill would make specified findings detailing the goal, purpose, and objective of the above-described expansion of a tax exemption, performance indicators for determining whether the expanded exemption meets that goal, purpose, and objective, and data collection requirements.
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: NO  

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 commencing on January 1, 2025, determined as provided in subdivision (a) of Section 51, 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 or full value of more than fifteen ten thousand dollars ($15,000), ($10,000), as adjusted by an annual inflation factor commencing on January 1, 2025, determined as provided in subdivision (a) of Section 51, without regard to subparagraph (D) of paragraph (1) thereof, 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.
(iii) For lien dates occurring on or after January 1, 2024, and before January 1, 2029, the limitation is increased to fifteen thousand dollars ($15,000) in the case of property other than a possessory interest described in clause (i) or (ii), as applicable.
(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 exceed 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 commencing on January 1, 2025, determined as provided in subdivision (a) of Section 51, without regard to subparagraph (D) of paragraph (1) thereof, of the property, including this new construction, is fifteen thousand dollars ($15,000) or less. equal to or less than the applicable of the following amounts:
(1) For lien dates occurring before January 1, 2024, or on or after January 1, 2029, ten thousand dollars ($10,000).
(2) For lien dates occurring on or after January 1, 2024, and before January 1, 2029, fifteen thousand dollars ($15,000).
(f) (1) It is the intent of the Legislature to apply the requirements of Section 41 to the maximum exemption amount and inflation adjustment factor pursuant to subdivisions (a), (b), and (e).
(2) The goal, purpose, and objective of the act adding this subdivision are to provide individuals relief from the increased tax burden due to rising property values over the past 13 years.
(3) The performance indicators for the Legislature to use when measuring whether the act meets its goal, purpose, and objective shall be the amount of additional assessed value exempted and the number and type of taxpayers granted this expanded exemption.
(4) (A) To assist the Legislature in determining whether the expanded exemption allowed by the act fulfills the goal, purpose, and objective as described in paragraph (2), the State Board of Equalization shall, to the extent data is available from county assessors, annually collect and report to the Legislature, pursuant to subparagraph (B), data from county assessors to quantify the additional amount of assessed value exempted and the number and type of taxpayers granted this expanded exemption.
(B) On or before June 1, 2025, and every June 1 thereafter until June 1, 2028, the State Board of Equalization shall report this information to the Legislature.
(C) A report submitted pursuant to subparagraph (B) shall be submitted in compliance with Section 9795 of the Government Code.
(D) The requirement for submitting a report imposed under subparagraph (B) is inoperative on January 1, 2029, pursuant to Section 10231.5 of the Government Code.

SEC. 2.

 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. 3.

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