Bill Text: CA SB558 | 2015-2016 | Regular Session | Introduced
Bill Title: Property taxation: assessment: full cash value.
Spectrum: Partisan Bill (Republican 1-0)
Status: (Failed) 2016-02-01 - Returned to Secretary of Senate pursuant to Joint Rule 56. [SB558 Detail]
Download: California-2015-SB558-Introduced.html
BILL NUMBER: SB 558 INTRODUCED
BILL TEXT
INTRODUCED BY Senator Nguyen
FEBRUARY 26, 2015
An act to amend Section 110 of the Revenue and Taxation Code,
relating to taxation.
LEGISLATIVE COUNSEL'S DIGEST
SB 558, as introduced, Nguyen. Property taxation: assessment: full
cash value.
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," and defines these
terms to mean the amount of cash or its equivalent that property
would bring if exposed for sale in the open market, as provided.
This bill would make a nonsubstantive change to that latter
definition.
Vote: majority. Appropriation: no. Fiscal committee: no.
State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. 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. 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." 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.
