Bill Text: CA SB1164 | 2023-2024 | Regular Session | Amended

California Senate Bill 1164

Bill Title: Property taxation: new construction exclusion: accessory dwelling units.

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Engrossed) 2024-06-24 - June 24 set for first hearing canceled at the request of author. [SB1164 Detail]

Download: California-2023-SB1164-Amended.html

Amended IN Senate May 16, 2024

Amended IN Senate April 11, 2024

CALIFORNIA LEGISLATURE— 2023–2024 REGULAR SESSION

Senate Bill

No. 1164

Introduced by Senator Newman

February 14, 2024

An act to add and repeal Section 74.9 of the Revenue and Taxation Code, relating to taxation, to take effect immediately, tax levy.

LEGISLATIVE COUNSEL'S DIGEST

SB 1164, as amended, Newman. Property taxation: new construction exclusion: accessory dwelling units.

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, “full cash value” is defined as the assessor’s 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.

This bill would exclude from classification as “newly constructed” and “new construction” the construction of an accessory dwelling unit, as defined, if construction on the unit is completed on or after January 1, 2025, and before January 1, 2030, until one of specified events occurs. The bill would require the property owner to, among other things, notify the assessor that the property owner intends to claim the exclusion for an accessory dwelling unit and submit an affidavit stating that the owner shall make a good faith effort to ensure the unit will be used as residential housing for the duration the owner receives the exclusion. The bill would require the State Board of Equalization to prescribe the manner and form for claiming the exclusion. Because this bill would require an affidavit by a property owner and a higher level of service from county assessors, it 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.

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

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

SECTION 1.

Section 74.9 is added to the Revenue and Taxation Code, to read:

74.9.

(a) Notwithstanding Section 70 and subject to the requirements of this section, for purposes of Section 2 of Article XIII A of the California Constitution, “new construction” and “newly constructed” does not include the construction or addition of an accessory dwelling unit, if construction on the unit is completed on or after January 1, 2025, and before January 1, 2030.

(b) (1) Subject to paragraph (2), the exclusion described in subdivision (a) shall remain in effect only until any of the following occurs:

(A) ~~Fifteen~~ Ten years have passed from the first lien date following completion of construction on the accessory dwelling unit.

(B) There is a subsequent change in ownership of the accessory dwelling unit.

(2) Notwithstanding any law, upon the occurrence of one of the events described in paragraph (1), the new base year value of the unit shall be established as of the occurrence of the event, be adjusted annually in accordance with paragraph (1) of subdivision (a) of Section 51, and be enrolled.

(c) (1) For purposes of this section, “accessory dwelling unit” means an attached or detached residential dwelling unit that provides complete, independent living facilities for one or more persons and that is located on a lot with a preexisting, single-family or multifamily residential dwelling on the lot. An “accessory dwelling unit” shall include permanent provisions for living, sleeping, eating, cooking, and sanitation on the same parcel that the single-family or multifamily residential dwelling is located.

(2) An “accessory dwelling unit” includes, but is not limited to, either of the following:

(A) An efficiency unit, as defined in Section 17958.1 of the Health and Safety Code.

(B) A manufactured home, as defined in Section 18007 of the Health and Safety Code.

(d) (1) In order to receive the exclusion, the property owner shall do all of the following:

(A) Notify the assessor prior to, or within 30 days of, completion of the project that the property owner intends to claim the exclusion for an accessory dwelling unit.

(B) Submit, at the same time notification is given pursuant to subparagraph (A), an affidavit stating that the owner shall make a good faith effort to ensure the unit will be used as residential housing for the duration the owner receives the exclusion under this section.

(D) Provide any additional documentation that the assessor requests. All additional documents necessary to support the exclusion shall be filed by the property owner with the assessor not later than six months after the completion of the project.

(2) The property owner shall inform the county assessor within 30 days of the conversion of the unit to any use other than for residential housing.

(3) The State Board of Equalization shall prescribe the manner and form for claiming the exclusion.

(e) This section shall remain in effect only until January 1, ~~2046,~~ 2041, and as of that date is repealed.

SEC. 2.

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. 3.

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.