Bill Text: CA SB1527 | 2023-2024 | Regular Session | Chaptered
Bill Title: Property taxation: exemption: low-value properties and tribal housing.
Spectrum: Committee Bill
Status: (Passed) 2024-09-22 - Chaptered by Secretary of State. Chapter 498, Statutes of 2024. [SB1527 Detail]
Download: California-2023-SB1527-Chaptered.html
Senate Bill
No. 1527
CHAPTER 498
An act to amend Sections 155.20 and 237 of the Revenue and Taxation Code, relating to taxation, to take effect immediately, tax levy.
[
Approved by
Governor
September 22, 2024.
Filed with
Secretary of State
September 22, 2024.
]
LEGISLATIVE COUNSEL'S DIGEST
SB 1527, Committee on Revenue and Taxation.
Property taxation: exemption: low-value properties and tribal housing.
(1) The California Constitution authorizes the Legislature, with the approval of 2/3 of the membership of each house, to allow a county board of supervisors to exempt from property taxation those properties having a 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.
That law, however, increases, for lien dates occurring on or after January 1, 2020, and before January 1, 2025, the $10,000 limitation to $50,000 in the case of a possessory
interest. For lien dates occurring on or after January 1, 2025, the $50,000 limitation increase applies only to possessory interests for a temporary and transitory use in specified facilities.
This bill would extend the $50,000 limitation increase applicable to possessory interests generally to lien dates occurring on or after January 1, 2020, and before January 1, 2030.
Existing law requires any bill authorizing a new tax expenditure to contain, among other things, specific goals that the tax expenditure will achieve, detailed performance indicators, and data collection requirements.
This bill would include additional information required for any bill authorizing a new tax expenditure.
(2) The California Constitution authorizes the Legislature to exempt from
taxation property that is used exclusively for religious, hospital, or charitable purposes, and is owned or held in trust by a nonprofit entity. Pursuant to this constitutional authority, existing law exempts from property taxation, subject to specified requirements, property owned and operated by a federally recognized Indian tribe or its tribally designated housing entity that is continuously available to, or occupied by, lower income households, as defined.
This bill would also authorize, for a property that has received a reservation of specified federal low-income housing tax credits, a limited partnership that includes a federally recognized Indian tribe or its tribally designated housing entity as the sole partner to claim the above-described property exemption. The bill would make conforming changes.
(3) By imposing new duties upon local tax officials, 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 the statutory provisions noted above.
(4) 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.
(5) This bill would take effect immediately as a tax levy.
Digest Key
Vote: 2/3 Appropriation: NO Fiscal Committee: YES Local Program: YESBill Text
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, 2030, 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, 2030, 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.
Section 237 of the Revenue and Taxation Code is amended to read:237.
(a) (1) Subject to the requirements set forth in paragraph (2), there is exempt from taxation under this part that portion of the assessed value of property, owned and operated by a federally recognized Indian tribe, its tribally designated housing entity, or, for a property that has received a reservation of low-income housing tax credits pursuant to Section 42 of the Internal Revenue Code of 1986, a limited partnership that includes a federally recognized Indian tribe or its tribally designated housing entity as the sole general partner, that corresponds to that portion of the property that is continuously available to, or occupied by, lower income households, as defined in Section 50079.5 of the Health and Safety Code or applicable federal, state, or local financing agreements, at rents that do not exceed those prescribed by Section 50053 of the Health and Safety Code, or rents that do not exceed those prescribed by the terms of the applicable federal, state, or local financing agreements or financial assistance agreements.(2) The exemption set forth in subdivision (a) applies only if the property and entity meet the following requirements:
(A) At least 30 percent of the property’s housing units are either continuously available to, or occupied by, lower income households, as defined in Section 50079.5 of the Health and Safety Code or applicable federal, state, or local financing agreements, at rents that do not exceed those prescribed by Section 50053 of the
Health and Safety Code, or rents that do not exceed those prescribed by the terms of the applicable federal, state, or local financing agreements or financial assistance agreements.
(B) The tribally designated housing entity, if applicable, is nonprofit.
(C) No part of the net earnings of the housing entity inure to the benefit of any private shareholder or individual, except for a limited partner in a property that has received a reservation of low-income housing tax credits pursuant to Section 42 of the Internal Revenue Code of 1986.
(b) In lieu of the tax imposed by this part, a tribe or tribally designated housing entity may agree to make payments to a county, city, city and county, or political subdivision of the
state for
services, improvements, or facilities provided by that entity for the benefit of a low-income housing project owned and operated by the tribe or tribally designated housing entity. Any payments in lieu of tax may not exceed the estimated cost to the city, county, city and county, or political subdivision of the state of the services, improvements, or facilities to be provided.
(c) A tribe or tribally designated housing entity applying for an exemption under this section shall provide the following documents to the assessor:
(1) Documents establishing that the designating tribe is federally recognized.
(2) Documents establishing that the tribally designated housing entity, if applicable, has been
designated by the tribe.
(3) Documents establishing that there is a deed restriction, agreement, or other legally binding document requiring that the property be used in compliance with subparagraph (A) of paragraph (2) of subdivision (a).
(d) This exemption shall be known as the “tribal housing exemption.”
SEC. 3.
For purposes of complying with Section 41 of the Revenue and Taxation Code, as it pertains to the amendments made to Section 155.20 of the Revenue and Taxation Code by this act, the Legislature finds and declares as follows:(a) The specific goal of expanding the low-value property tax exemption pursuant to Section 155.20 of the Revenue and Taxation Code is 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) The detailed performance indicators for the Legislature to use in determining whether the expanded low-value property tax exemption meets the goal described in subdivision (a) shall be the number of counties in this state that enact or expand that exemption.
(c) The data collection requirements for determining whether the expanded low-value property tax exemption is meeting, failing to meet, or exceeding the specific goal described in subdivision (a) are as follows:
(1) Each county assessor in a county that has adopted an ordinance pursuant to
Section 155.20 of the Revenue and Taxation Code shall report to the board whether, and by what amount, the county has increased the low-value property tax exemption for possessory interests as authorized by this section.
(2) To make the information reported pursuant to paragraph (a) widely available to the public, the board shall post that information on its internet website.
