Laws, Regulations & Annotations
Property Taxes Law Guide – Revision 2013
Property Tax Annotations
620.0000 OPEN-SPACE LANDS
620.0020 Valuation During Non-Renewal Period. Revenue and Taxation Code section 426 directs assessors to determine the value of the land by capitalization of income as provided in section 423. Section 423 states in part that unless a party to an instrument which creates an enforceable restriction expressly prohibits such a valuation, the valuation resulting from the capitalization of income method described in this section shall not exceed the valuation that would have resulted by calculations under section 110.1, as though such property was not subject to an enforceable restriction in the base year. Therefore, if neither party to the contract objects and the factored unrestricted base year value is less than the currently computed restricted value, the factored base year value will be enrolled. The comparison of restricted and unrestricted value indicators must be made annually, for the relationship between them may change during the 9 year nonrenewal period.
On the other hand, if either party to the contract objects to the comparison, the valuation procedure contained in section 426 will apply and the current restricted value will be revised annually by the present worth of the difference between the current restricted value and the factored base year value discounted for the remainder of the nonrenewal period.
A special circumstance exists when the city or county has implemented the provisions of section 423.3, under which the assessor is required to compare the current restricted value to a percentage of the factored base year value and enroll the lower. As section 423.3 is not specifically referred to in section 426, it is the Board's position that the value determined under section 423.3 does not enter into the nonrenewal valuation process. Even if section 423.3 is in effect, the value to enroll during the nonrenewal period is the factored base year value when such figure is less than the current restricted value as calculated via the income approach. LTA 7/14/1981 (No. 81/78).