Laws, Regulations & Annotations

Property Taxes Law Guide – Revision 2013
 

California Constitutional Provisions

ARTICLE XIII Revenue and Taxation

Section 11

Sec. 11. Lands owned by local governments that are outside their boundaries. (a) Lands owned by a local government that are outside its boundaries, including rights to use or divert water from surface or underground sources and any other interests in lands, are taxable if (1) they are located in Inyo or Mono County and (a) they were assessed for taxation to the local government in Inyo County as of the 1966 lien date, or in Mono County as of the 1967 lien date, whether or not the assessment was valid when made, or (b) they were acquired by the local government subsequent to that lien date and were assessed to a prior owner as of that lien date and each lien date thereafter, or (2) they are located outside Inyo or Mono County and were taxable when acquired by the local government. Improvements owned by a local government that are outside its boundaries are taxable if they were taxable when acquired or were constructed by the local government to replace improvements which were taxable when acquired.

(b) Taxable land belonging to a local government and located in Inyo County shall be assessed in any year subsequent to 1968 at the place where it was assessed as of the 1966 lien date and in an amount derived by multiplying its 1966 assessed value by the ratio of the statewide per capita assessed value of land as of the last lien date prior to the current lien date to $766, using civilian population only. Taxable land belonging to a local government and located in Mono County shall be assessed in any year subsequent to 1968 at the place where it was assessed as of the 1967 lien date and in an amount determined by the preceding formula except that the 1967 lien date, the 1967 assessed value, and the figure $856 shall be used in the formula. Taxable land belonging to a local government and located outside of Inyo and Mono counties shall be assessed at the place where located and in an amount that does not exceed the lower of (1) its fair market value times the prevailing percentage of fair market value at which other lands are assessed and (2) a figure derived in the manner specified in this section for land located in Mono County.

If land acquired by a local government after the lien date of the base year specified in this Section was assessed in the base year as part of a larger parcel, the assessed value of the part in the base year shall be that fraction of the assessed value of the larger parcel that the area of the part is of the area of the larger parcel.

If a local government divests itself of ownership of land without water rights and this land was assessed in Inyo County as of the 1966 lien date or in Mono County as of the 1967 lien date, the divestment shall not diminish the quantity of water rights assessable and taxable at the place where assessed as of that lien date.

(c) In the event the Legislature changes the prevailing percentage of fair market value at which land is assessed for taxation, there shall be used in the computations required by Section 11(b) of this Article, for the first year for which the new percentage is applicable, in lieu of the statewide per capita assessed value of land as of the last lien date prior to the current lien date, the statewide per capita assessed value of land on the prior lien date times the ratio of the new prevailing percentage of fair market value to the previous prevailing percentage.

(d) If, after March 1954, a taxable improvement is replaced while owned by and in possession of a local government, the replacement improvement shall be assessed, as long as it is owned by a local government, as other improvements are except that the assessed value shall not exceed the product of (1) the percentage at which privately owned improvements are assessed times (2) the highest full value ever used for taxation of the improvement that has been replaced. For purposes of this calculation, the full value for any year prior to 1967 shall be conclusively presumed to be 4 times the assessed value in that year.

(e) No tax, charge, assessment, or levy of any character, other than those taxes authorized by Sections 11(a) to 11(d), inclusive, of this Article, shall be imposed upon one local government by another local government that is based or calculated upon the consumption or use of water outside the boundaries of the government imposing it.

(f) Any taxable interest of any character, other than a lease for agricultural purposes and an interest of a local government, in any land owned by a local government that is subject to taxation pursuant to Section 11(a) of this Article shall be taxed in the same manner as other taxable interests. The aggregate value of all the interests subject to taxation pursuant to Section 11(a), however, shall not exceed the value of all interests in the land less the taxable value of the interest of any local government ascertained as provided in Sections 11(a) to 11(e), inclusive, of this Article.

(g) Any assessment made pursuant to Sections 11(a) to 11(d), inclusive, of this Article shall be subject to review, equalization, and adjustment by the State Board of Equalization, but an adjustment shall conform to the provisions of these Sections.

Construction.—No conflict exists between this section and Article XIII A of the Constitution, which does not by its own terms exclude from its valuation limitation land owned by a local government and located outside its boundaries. This section only sets an upper limit on the valuation for tax purposes of property owned by local governments, and Article XIII A only sets an upper limit on the valuation and taxation of real property. San Francisco v. San Mateo County, 10 Cal.4th 554. The use to which the subject property may have been put in 1967 does not affect the Section 11 valuation, because that section specifically applies to all interests in property. Central Cal. Power Agency No. 1 v. County of Sonoma (2004) 122 Cal.App.4th 1614.

Newly constructed improvements.—Improvements which are newly constructed after acquisition and which are not constructed to substitute for or to replace taxable improvements are not subject to taxation. Sacramento Municipal Utility District v. El Dorado County, 5 Cal.App.3d 26.

Acquisition.—Although an agreement to acquire ownership interests in newly constructed improvements had been fully negotiated in 1977, it could not be executed by the parties until the Nuclear Regulatory Commission had approved the transfer of such interests and until a favorable federal income tax ruling had been received. Thus, the cities acquiring such interests did not obtain any equitable, beneficial, or taxable interests until the two contingencies had been met and until the agreement was signed in 1980, regardless of the fact that the agreement, by its own terms, stated that it had been "executed" in 1977. City of Anaheim v. San Diego County, 190 Cal.App.3d 695.

Taxable value.—Rail Transportation corridor properties owned by two cities within a county but located outside their jurisdictional boundaries were not taxable when acquired and thus, had a zero taxable value under this section. Los Angeles County v. State Board of Equalization, 105 Cal.App.4th 1.