Bill Text: CA SB499 | 2013-2014 | Regular Session | Amended

NOTE: There are more recent revisions of this legislation. Read Latest Draft

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Bill Title: Property taxation: assessment: affordable housing.

Spectrum: Partisan Bill (Republican 1-0)

Status: (Introduced - Dead) 2014-02-03 - Returned to Secretary of Senate pursuant to Joint Rule 56. [SB499 Detail]

Download: California-2013-SB499-Amended.html

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BILL NUMBER: SB 499	AMENDED
	BILL TEXT

	AMENDED IN SENATE  APRIL 1, 2013

INTRODUCED BY   Senator Wyland

                        FEBRUARY 21, 2013

    An act to amend Section 103 of the Revenue and Taxation
Code,   relating to taxation.   A 
 n act to amend Sections 110 an   d 402.1 of the
Revenue and Taxation Code, relating to taxation, to take effect
immediately, tax levy. 


	LEGISLATIVE COUNSEL'S DIGEST


   SB 499, as amended, Wyland. Property taxation:  property:
definition.   assessment: affordable housing.  

   The California Constitution generally limits ad valorem taxes on
real property to 1% of the full cash value of that property. For
purposes of this limitation, existing property tax law defines "full
cash value" as the assessor's fair market value valuation of real
property as shown on the 1975-76 tax bill under "full cash value" or,
thereafter, the appraised value of that real property when
purchased, newly constructed, or a change in ownership has occurred.
Existing property tax law generally defines this "full cash value" of
property as the property's fair market value. Existing law
rebuttably presumes that the fair market value of real property,
other than possessory interests, is the purchase price paid in the
transaction for the property. For purposes of this presumption,
existing law defines "purchase price" as the total consideration
provided by the purchaser or on the purchasers behalf, valued in
money, whether paid in money or otherwise. Existing law requires the
county assessor to consider, when valuing real property for property
taxation purposes, the effect of any enforceable restrictions to
which the use of the land may be subjected. Under existing law these
restrictions include, but are not limited to, zoning, recorded
contracts with governmental agencies, and various other restrictions
imposed by governments.  
   This bill would exclude from the meaning of purchase price, for
purposes of the rebuttable presumption that the purchase price of
real property is the fair market value of the property, the amount
stated in a deed of trust, recorded in conjunction with an affordable
housing unit purchased by its occupant, for which that occupant is
the trustor and a nonprofit or governmental agency selling authority
is the beneficiary, both have contracted that a periodic payment of
principal and interest will not be required for at least 30 years,
and a governmental restriction requiring the property to remain an
affordable housing unit for at least 30 years has been recorded
against the affordable housing unit. This bill would also require the
county assessor to consider, when valuing real property for property
taxation purposes, restrictions on the resale price of real property
in a recorded real property deed or other recorded real property
transfer document for real property that was purchased by its
occupant through an affordable housing program operated by a city, a
county, the state, or a nonprofit organization. By changing the
manner in which county assessors assess property for property
taxation purposes, 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 these
statutory provisions.  
   Section 2229 of the Revenue and Taxation Code requires the
Legislature 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 Section 2229 of the
Revenue and Taxation Code, 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. 

   Existing property tax law defines property to include all matters
and things, real, personal, and mixed, that are capable of private
ownership.  
   This bill would make technical, nonsubstantive changes to this
provision. 
   Vote: majority. Appropriation: no. Fiscal committee:  no
  yes  . State-mandated local program:  no
  yes  .


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

   SECTION   1   .    The Legislature
finds and declares all of the following:  
   (a) It is important to provide affordable housing in this state.
 
   (b) Affordable housing programs provide families with an
opportunity to better their lives and the lives of their children by
making available the American dream of home ownership.  
   (c) Section 402.1 of the Revenue and Taxation Code already
requires county assessors to consider the effect of enforceable
restrictions on land when assessors value that land for property
taxation purposes.  
   (d) This act would extend this existing practice of considering
the effect of enforceable restrictions placed on land pursuant to an
affordable housing program that assists families in purchasing their
own homes and silent second mortgages that may affect the fair market
value of that property.  
   (e) Therefore, it is the intent of the Legislature in enacting
this act to further a state public policy of encouraging and
maintaining effective land use planning by ensuring that homes
purchased under an affordable housing program are valued for property
taxation purposes in a manner that reflects the restrictions on the
property.  
   (f) It is also the intent of the Legislature, in enacting this
act, to make the necessary statutory changes to provide that, if a
homeowner is participating in an affordable housing program, the
purchase price for an affordable housing unit shall not include, for
purposes of taxation under the ad valorem property tax, the amount
secured by a deed of trust recorded in conjunction with the purchase
of an affordable housing unit. 
   SEC   . 2.    Section 110 of the  
Revenue and Taxation Code   is amended to read: 
   110.  (a) Except as is otherwise provided in Section 110.1, "full
cash value" or "fair market value" means the amount of cash or its
equivalent that property would bring if exposed for sale in the open
market under conditions in which neither buyer nor seller could take
advantage of the exigencies of the other, and both the buyer and the
seller have knowledge of all of the uses and purposes to which the
property is adapted and for which it is capable of being used, and of
the enforceable restrictions upon those uses and purposes.
   (b) For purposes of determining the "full cash value" or "fair
market value" of real property, other than possessory interests,
being appraised upon a purchase, "full cash value" or "fair market
value" is the purchase price paid in the transaction unless it is
established by a preponderance of the evidence that the real property
would not have transferred for that purchase price in an open market
transaction. The purchase price shall, however, be rebuttably
presumed to be the "full cash value" or "fair market value" if the
terms of the transaction were negotiated at arms length between a
knowledgeable transferor and transferee neither of which could take
advantage of the exigencies of the other. "Purchase price," as used
in this section, means the total consideration provided by the
purchaser or on the purchaser's behalf, valued in money, whether paid
in money or otherwise  , but, beginning with the lien date for
the 2014-15 fiscal year and for each fiscal year thereafter, does not
include the amount secured by a deed of trust, recorded in
conjunction with the purchase of an affordable housing unit by its
occupant, for which   that occupant is the trustor and a
nonprofit organization or governmental agency selling authority is
the beneficiary, both have contracted that a periodic payment of
principal and interest will not be required for at least 30 years,
and a governmental restriction requiring the property to remain an
affordable housing unit for at least 30 years has been recorded
against the affordable housing unit.  . There is a rebuttable
presumption that the value of improvements financed by the proceeds
of an assessment resulting in a lien imposed on the property by a
public entity is reflected in the total consideration, exclusive of
that lien amount, involved in the transaction. This presumption may
be overcome if the assessor establishes by a preponderance of the
evidence that all or a portion of the value of those improvements is
not reflected in that consideration. If a single transaction results
in a change in ownership of more than one parcel of real property,
the purchase price shall be allocated among those parcels and other
assets, if any, transferred based on the relative fair market value
of each.
   (c) For real property, other than possessory interests, the change
of ownership statement required pursuant to Section 480, 480.1, or
480.2, or the preliminary change of ownership statement required
pursuant to Section 480.4, shall give any information as the board
shall prescribe relative to whether the terms of the transaction were
negotiated at  "arms length."   "arm's length.
  "  In the event that the transaction includes
property other than real property, the change in ownership statement
shall give information as the board shall prescribe disclosing the
portion of the purchase price that is allocable to all elements of
the transaction. If the taxpayer fails to provide the prescribed
information, the rebuttable presumption provided by subdivision (b)
shall not apply.
   (d) Except as provided in subdivision (e), for purposes of
determining the "full cash value" or "fair market value" of any
taxable property, all of the following shall apply:
   (1) The value of intangible assets and rights relating to the
going concern value of a business using taxable property shall not
enhance or be reflected in the value of the taxable property.
   (2) If the principle of unit valuation is used to value properties
that are operated as a unit and the unit includes intangible assets
and rights, then the fair market value of the taxable property
contained within the unit shall be determined by removing from the
value of the unit the fair market value of the intangible assets and
rights contained within the unit.
   (3) The exclusive nature of a concession, franchise, or similar
agreement, whether de jure or de facto, is an intangible asset that
shall not enhance the value of taxable property, including real
property.
   (e) Taxable property may be assessed and valued by assuming the
presence of intangible assets or rights necessary to put the taxable
property to beneficial or productive use.
   (f) For purposes of determining the "full cash value" or "fair
market value" of real property, intangible attributes of real
property shall be reflected in the value of the real property. These
intangible attributes of real property include zoning, location, and
other attributes that relate directly to the real property involved.
   SEC. 3.    Section 402.1 of the   Revenue
and Taxation Code   is amended to read: 
   402.1.  (a) In the assessment of land, the assessor shall consider
the effect upon value of any enforceable restrictions to which the
use of the land may be subjected. These restrictions shall include,
but are not limited to, all of the following:
   (1) Zoning.
   (2) Recorded contracts with governmental agencies other than those
provided in Sections 422 and 422.5.
   (3) Permit authority of, and permits issued by, governmental
agencies exercising land use powers concurrently with local
governments, including the California Coastal Commission and regional
coastal commissions, the San Francisco Bay Conservation and
Development Commission, and the Tahoe Regional Planning Agency.
   (4) Development controls of a local government in accordance with
any local coastal program certified pursuant to Division 20
(commencing with Section 30000) of the Public Resources Code.
   (5) Development controls of a local government in accordance with
a local protection program, or any component thereof, certified
pursuant to Division 19 (commencing with Section 29000) of the Public
Resources Code.
   (6) Environmental constraints applied to the use of land pursuant
to provisions of statutes.
   (7) Hazardous waste land use restriction pursuant to Section 25240
of the Health and Safety Code.
   (8) A recorded conservation, trail, or scenic easement, as
described in Section 815.1 of the Civil Code, that is granted in
favor of a public agency, or in favor of a nonprofit corporation
organized pursuant to Section 501(c)(3) of the Internal Revenue Code
that has as its primary purpose the preservation, protection, or
enhancement of land in its natural, scenic, historical, agricultural,
forested, or open-space condition or use.
   (9) A solar-use easement pursuant to Chapter 6.9 (commencing with
Section 51190) of Part 1 of Division 1 of Title 5 of the Government
Code. 
   (10) Beginning with the lien date for the 2014-15 fiscal year and
for each fiscal year thereafter, restrictions on the resale price of
real property in a recorded real property deed or other recorded real
property transfer document for real property that was purchased by
its occupant through an affordable housing program operated by a
city, a county, a city and county, the state, or a nonprofit
organization. 
   (b) There is a rebuttable presumption that restrictions will not
be removed or substantially modified in the predictable future and
that they will substantially equate the value of the land to the
value attributable to the legally permissible use or uses.
   (c) Grounds for rebutting the presumption may include, but are not
necessarily limited to, the past history of like use restrictions in
the jurisdiction in question and the similarity of sales prices for
restricted and unrestricted land. The possible expiration of a
restriction at a time certain shall not be conclusive evidence of the
future removal or modification of the restriction unless there is no
opportunity or likelihood of the continuation or renewal of the
restriction, or unless a necessary party to the restriction has
indicated an intent to permit its expiration at that time.
   (d) In assessing land with respect to which the presumption is
unrebutted, the assessor shall not consider sales of otherwise
comparable land not similarly restricted as to use as indicative of
value of land under restriction, unless the restrictions have a
demonstrably minimal effect upon value.
   (e) In assessing land under an enforceable use restriction wherein
the presumption of no predictable removal or substantial
modification of the restriction has been rebutted, but where the
restriction nevertheless retains some future life and has some effect
on present value, the assessor may consider, in addition to all
other legally permissible information, representative sales of
comparable lands that are not under restriction but upon which
natural limitations have substantially the same effect as
restrictions.
   (f) For the purposes of this section the following definitions
apply:
   (1) "Comparable lands" are lands that are similar to the land
being valued in respect to legally permissible uses and physical
attributes.
   (2) "Representative sales information" is information from sales
of a sufficient number of comparable lands to give an accurate
indication of the full cash value of the land being valued.
   (g) It is hereby declared that the purpose and intent of the
Legislature in enacting this section is to provide for a method of
determining whether a sufficient amount of representative sales
information is available for land under use restriction in order to
ensure the accurate assessment of that land. It is also hereby
declared that the further purpose and intent of the Legislature in
enacting this section and Section 1630 is to avoid an assessment
policy which, in the absence of special circumstances, considers uses
for land that legally are not available to the owner and not
contemplated by government, and that these sections are necessary to
implement the public policy of encouraging and maintaining effective
land use planning. Nothing in this statute shall be construed as
requiring the assessment of any land at a value less than as required
by Section 401 or as prohibiting the use of representative
comparable sales information on land under similar restrictions when
this information is available.
   SEC. 4.    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. 5.    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. 6.    This act provides for a tax levy within
the meaning of Article IV of the Constitution and shall go into
immediate effect.  
  SECTION 1.    Section 103 of the Revenue and
Taxation Code is amended to read:
   103.  "Property" includes all those matters and things, real,
personal, and mixed, that are capable of private ownership.