Laws, Regulations & Annotations

Property Taxes Law Guide – Revision 2010
 

Revenue and Taxation Code

Property Taxation

Part 2. Assessment

CHAPTER 1. Taxation Base

Article 2. Procedure to Claim Exemptions

Section 254.5

254.5. Welfare exemption; assessor duties. (a) Claims for the welfare exemption and the veterans' organization exemption shall be filed on or before February 15 of each year with the assessor.

The assessor may not approve a property tax exemption claim until the claimant has been issued a valid organizational clearance certificate pursuant to Section 254.6. Financial statements shall be submitted only if requested in writing by the assessor.

(b) (1) The assessor shall review all claims for the welfare exemption to ascertain whether the property on which the exemption is claimed meets the requirements of Section 214. The assessor shall also review all claims for the veterans' organization exemption to ascertain whether the property on which the exemption is claimed meets the requirements of Section 215.1. In this connection, the assessor shall consider, among other matters, whether:

(A) Any capital investment of the owner or operator for expansion of a physical plant is justified by the contemplated return thereon, and required to serve the interests of the community.

(B) The property on which the exemption is claimed is used for the actual operation of an exempt activity and does not exceed an amount of property reasonably necessary to the accomplishment of the exempt purpose.

(2) The assessor may institute an audit or verification of the operations of the owner or operator of the applicant's property to ascertain whether both the owner and operator meet the requirements of Section 214.

(c) (1) The assessor may deny a claim for the welfare exemption on a property, notwithstanding that the claimant has been granted an organizational clearance certificate by the board.

(2) If the assessor finds that the claimant's property is ineligible for the welfare exemption or the veterans' organization exemption, the assessor shall notify the claimant in writing of all of the following:

(A) That the property is ineligible for the exemption.

(B) That the claimant may seek a refund of property taxes paid by filing a refund claim with the county.

(C) That if the claimant's refund claim with the county is denied, the claimant may file a refund action in superior court.

(d) Notwithstanding subdivision (a), an applicant, granted a welfare exemption and owning any property exempted pursuant to Section 214.15 or Section 231, shall not be required to reapply for the welfare exemption in any subsequent year in which there has been no transfer of, or other change in title to, the exempted property and the property is used exclusively by a governmental entity or by a nonprofit corporation described in Section 214.15 for its interest and benefit. The applicant shall notify the assessor on or before February 15 if, on or before the preceding lien date, the applicant became ineligible for the welfare exemption or if, on or before that lien date, the property was no longer owned by the applicant or otherwise failed to meet all requirements for the welfare exemption.

Prior to the lien date, the assessor shall annually mail a notice to every applicant relieved of the requirement of filing an annual application by this subdivision.

The notice shall be in a form and contain that information that the board may prescribe, and shall set forth the circumstances under which the property may no longer be eligible for exemption, and advise the applicant of the duty to inform the assessor if the property is no longer eligible for exemption.

The notice shall include a card that is to be returned to the assessor by any applicant desiring to maintain eligibility for the welfare exemption under Section 214.15 or Section 231. The card shall be in the following form:

To all persons who have received a welfare exemption under Section 214.15 or Section 231 of the Revenue and Taxation Code for the _______________ fiscal year.

Question: Will the property to which the exemption applies in the _____________ fiscal year continue to be used exclusively by government or by an organization as described in Section 214.15 for its interest and

benefit in the fiscal year?

YES___________         NO_____________

Signature: ___________________________

Title: _______________________________

Failure to return this card does not of itself constitute a waiver of exemption as called for by the California Constitution, but may result in onsite inspection to verify exempt activity.

(e) Upon any indication that a welfare exemption or veterans' organization exemption on the property has been incorrectly granted, the assessor shall redetermine eligibility for the exemption. If the assessor determines that the property, or any portion thereof, is no longer eligible for the exemption, he or she shall immediately cancel the exemption on so much of the property as is no longer eligible for the exemption.

(f) If a welfare exemption or veterans' organization exemption on the property has been incorrectly allowed, an escape assessment as provided by Article 4 (commencing with Section 531) of Chapter 3 in the amount of the exemption, with interest as provided in Section 506, shall be made, and a penalty shall be assessed for any failure to notify the assessor as required by this section in an amount equaling 10 percent of the escape assessment, but may not exceed two hundred fifty dollars ($250).

(g) Pursuant to Section 15640 of the Government Code, the board shall review the assessor's administration of the welfare exemption and the veterans organization exemption as part of the board's survey of the county assessment roll to ensure the proper administration of the exemption.

History.—Added by Stats. 1945, p. 2602, in effect September 15, 1945. Stats. 1966, p. 657 (First Extra Session), in effect October 6, 1966, first operative for the 1967–68 assessment year, substituted "March 15" for "April 1st", added the provision requiring that affidavits be forwarded to the board by April 1 with the assessor's recommendations, added the provision requiring that the board make and forward its finding to the assessor by June 1, deleted a provision that the assessor consider the board's finding, and added the last sentence. Stats. 1968, p. 1329, in effect November 13, 1968, added subdivision (d) and "and the applicant's property" to the first sentence of the second paragraph. Stats. 1969, p. 199, in effect May 13, 1969, added the second sentence of the second paragraph extending to June 15, in some cases, the date on which the board must make its finding. Stats. 1970, p. 461, in effect November 23, 1970, changed "of indirectly" to "or indirectly" in subdivision (b). Stats. 1971, p. 3516, in effect March 4, 1972, deleted "and 215" immediately after "Sections 214" in the second sentence of the first paragraph. Stats. 1972, p. 195, in effect March 7, 1973, operative on the lien date in 1973, added "veterans' organization" to the first paragraph. Stats. 1990, Ch. 718, in effect January 1, 1991, added "(a)" before "Affidavits"; deleted "concerned" after "assessor" in the first sentence and added "or her" after "his" in the second sentence in subdivision (a); substituted "(1)", "(2)", "(3)", and "(4)" for "(a)", "(b)", "(c)", and "(d)" and "on" for "in" after "The property" in subdivision (a); added "(b)" before "The board"; and added subdivisions (c), (d), and (e). Stats. 1993, Ch. 1187, in effect January 1, 1994, added a period after "assessor", deleted "and" after "assessor", added "Affidavits . . . first time" which created a new second sentence with the balance of the former first sentence, and added the third sentence to subdivision (a); and deleted "not later than June 1" after "concerned" in the first sentence, deleted "the time for making" after "property," and substituted "shall be forwarded" for "and forwarding it" after "finding" in the second sentence, and substituted "within 30 days . . . following the hearing" for "is extended to no later than June 15." after "concerned" in the third sentence of subdivision (b). Stats. 1994, Ch. 146, in effect January 1, 1995, substituted "the" for "such" after "review all" in the fourth sentence of subdivision (a), substituted "that" for "which" twice in subdivision (c), and reformatted notice in subdivision (c) by placing "Title:" underneath "Signature:". Stats. 1998, Ch. 695 (SB 2235), in effect January 1, 1999, substituted "February" for "March" after "on or before" in the first sentence of subdivision (a). Stats. 1999, Ch. 927 (AB 1559), in effect October 10, 1999, operative January 1, 2000, added "Section 214.15 or" before "Section 231", and added "or by a nonprofit corporation described in Section 214.15" after "governmental entity" in the first sentence of the first paragraph, and added "Section 214.15 or" before "Section 231" in the first and third sentences, added "or by an organization as described in Section 214.15" after "by government" in the fourth sentence of the fourth paragraph of subdivision (c); Stats. 2002, Ch. 214 (SB 2086), in effect January 1, 2003, added an "a" after "for expansion of" in the first sentence of paragraph (3) and added "the" after "property on which" in the first sentence of paragraph (4) of subdivision (a); substituted "If" for "In a case where" before "the board conducts" in the second sentence and added "that" after "of an applicant" in the third sentence of subdivision (b); substituted "February 15" for "March 15" after "on or before" in the second sentence of the first paragraph and added a comma after the first "eligible for exemption" in the first sentence of the third paragraph of subdivision (c); and substituted "may not exceed" for "in no event exceeding" after "escape assessment, but" in the first sentence of subdivision (e). Stats. 2003, Ch. 471 (SB 1062), in effect January 1, 2004, substituted "Claims" for "Affidavits" before "for the welfare", deleted "in duplicate" after "shall be filed" in the first sentence, and deleted the former second, third, fourth and fifth sentences and former paragraphs (1) and (3) of the fifth sentence which provided that "Affidavits of organizations filing for the first time shall be accompanied by duplicate certified copies of the financial statements of the owner and operator. Thereafter, financial statements shall be submitted only if requested in writing by either the assessor or the board. Copies of the affidavits and financial statements shall be forwarded not later than April 1 by the assessor with his or her recommendations for approval or denial to the board which shall review all the affidavits and statements and may institute an independent audit or verification of the operations of the owner and operator to ascertain whether both the owner and operator meet the requirements of Section 214 of the Revenue and Taxation Code. In this connection the board shall consider, among other matters, whether: (1) The services and expenses of the owner or operator (including salaries) are excessive, based upon like services and salaries in comparable public institutions. (2) The operations of the owner or operator, either directly or indirectly, materially enhance the private gain of any individual or individuals."; added the second paragraph to subdivision (a); added subdivision (b) and created subparagraphs (A) and (B) of paragraph (1) therein with former paragraphs (3) and (4) of the fifth sentence of subdivision (a); added subdivision (c); relettered former subdivision (c) as subdivision (d); relettered former subdivisions (d) and (e) as subdivisions (e) and (f), respectively, and added "on the property" after "a welfare exemption" in the first sentences therein; and added subdivision (g). Stats. 2006, Ch. 224 (SB 1607), in effect January 1, 2007, added the second sentence commencing with "The assessor shall also", to paragraph (1) of subdivision (b); added "or the veterans' organization exemption" after "welfare exemption" in the first sentence of paragraph (2) and deleted "welfare" after "ineligible for the" in the first sentence of subparagraph (A) therein in subdivision (c); added "or veterans' organization exemption" after "a welfare exemption" in the first sentences of subdivisions (e) and (f); and added "and the veterans' organization exemption" after "the welfare exemption" in the first sentence of subdivision (g).

Revision after April 1.—A claimant may file a revision of claim withdrawing some of the property from the scope of its claim after April 1. St. Francis Memorial Hospital v. San Francisco, 137 Cal.App.2d 321.

Note.—See Sections 214 and 214.01.

Note.—Section 5 of Stats. 1999, Ch. 927 (AB 1559), provided that 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.