Laws, Regulations & Annotations

Property Taxes Law Guide – Revision 2013
 

Revenue and Taxation Code

Property Taxation

Part 0.5. Implementation of Article XIII A of the California Constitution

Chapter 2. Change in Ownership and Purchase

Chapter 2. Change in Ownership and Purchase*

* Note.Section 19 of Stats. 1979, Ch. 1161, provided that notwithstanding the provisions of Sections 110.1 and (former) 110.6, as added to the Revenue and Taxation Code by Chapter 292 of the Statutes of 1978, and amended by Chapters 332 and 576 of the Statutes of 1978, the provisions of this act shall be effective for the 1979–80 assessment year and thereafter.

It is the intent of the Legislature that the provisions of this act shall apply to the determination of base year values for the 1979–80 assessment year and thereafter, including, but not limited to, any change in ownership occurring on or after March 1, 1975. Sec. 22 thereof provided no state payments to local governments because of this act. Sec. 23 thereof provided that the provisions of this act are severable.

60. Meaning of "change in ownership." A "change in ownership" means a transfer of a present interest in real property, including the beneficial use thereof, the value of which is substantially equal to the value of the fee interest.

Construction.—This Section was intended as a guidepost in cases not covered specifically by Sections 61 through 66 and is inapplicable to cases in which specific provisions cover the transaction that occurred. Shuwa Investments Corporation v. Los Angeles County, 1 Cal.App.4th 1635. Where the owner of an apartment building conveyed title in fee simple to a buyer who planned to convert the building to cooperative housing, the buyer provided a down payment, the remainder of the purchase price was covered in an all-inclusive trust deed carried by the owner, and initial payments of interest by the buyer could be satisfied by transferring to the owner the rental income generated by the building, a change of ownership occurred. The sale documents were absolute on their face, containing no conditions, exceptions or reservations regarding transfer of full title, and buyer's sale of fractional interests to individual investors and the subsequent conveyance by one of those investors to a third party were consistent with the change of ownership at the time of the transaction between owner and buyer. Cal-American Income Property Fund II v. Los Angeles County, 208 Cal.App.3d 109. The legislative treatment of partnerships and corporations similarly and in a manner differently from joint tenancies and tenancies in common for purposes of real property transfers, which results in a 100 percent reassessment, is not irrational. Partnerships and corporations are recognized legal entities, whereas joint tenancies and tenancies in common are not, and both partners and shareholders have limited rights in the partnership or corporation's real property. Munkdale v. Giannini, 35 Cal.App.4th 1104. Majority partner's purchase of minority partners' partnership interests and partnership transfer of title to partnership real property to the sole partner constituted a change in ownership under this section. Zapara v. Orange County, 26 Cal.App.4th 464.

Under Section 61 and this section, a partnership's transfer of parcels of real property to a partner was a change in ownership requiring a 100 percent reassessment. The transfer was a transfer of a beneficial interest. Munkdale v. Giannini, 35 Cal.App.4th 1104.

The purchase by a property owner of transferable development rights allowing the owner, in developing its property, to exceed the maximum floor area ratio otherwise allowed under a city redevelopment plan, was a taxable event within the framework of Article XIII A of the Constitution, permitting reappraisal upon a change of ownership. The purchase involved a transfer of a significant present, beneficial property interest within the meaning of this section. Mitsui Fudosan (U.S.A.), Inc. v. Los Angeles County, 219 Cal.App.3d 525.

All three parts of the Section 60 test must be applied to a change in ownership analysis of a real property transfer. Auerbach v. County of Los Angeles Assessment Appeals Board No. 1, 39 Cal.4th 153.

Step transaction doctrine.—For purposes of determining whether a 100 percent change of ownership has occurred so as to support reassessment pursuant to Article XIII A, Section 2 of the Constitution and Section 60 et seq., the application of the step transaction doctrine requires an analysis of the parties' purposes and intents in carrying out the various steps in the transaction. Such matters as intent and purpose are customarily viewed as factual. Moreover, the existence of an independent business purpose for each of the various steps, while of significance, does not prevent the application of the doctrine. Even if only one or two of the relevant tests is satisfied, a step transaction finding may be made for reassessment purposes. And, even where each step may have been made according to a particular exclusion from reassessment, the series of steps may be amalgamated and viewed in their entirety if such is necessary to comply with the spirit, rather than the letter, of the change in ownership rules under Article XIII A. McMillin-BCED/Miramar Ranch North v. San Diego County, 31 Cal.App.4th 545.

Life estate.—A transfer of a life estate to a nonspouse third party constitutes a change in ownership under this section. The transferee receives a present interest in the property, the beneficial use of the property, and the primary interest under the value equivalency test. Leckie v. Orange County, 65 Cal.App.4th 334.

Sale and leaseback.—A change in ownership under this section occurred on the sale of an office building at market value with the seller simultaneously acquiring a leasehold interest in a portion of the property for 60 years and in another portion of the property for 21 months, including a renewal option. The seller transferred the entire fee to the buyer, and the buyer acquired its beneficial use during the lease and exercised its beneficial interest by exacting rent from the seller/lessee. Pacific Southwest Realty Co. v. Los Angeles County, 1 Cal.4th 155. A change in ownership under this section occurred on a corporation's sale of an office complex subject to three recently executed 50-year leases assigned to its wholly owned subsidiary. There was a transfer of a present interest, regardless of the presence of the long-term leases. The purchaser acquired beneficial use of the property, since it enjoyed the value of the property represented by the rent under the lease. And the value transferred was substantially equal to the value of the fee interest, being a transfer of the fee itself. Crow Winthrop Operating Partnership v. Orange County, 10 Cal.App.4th 1848. The sale of a building pursuant to a sale and leaseback arrangement was a change in ownership within the meaning of this section, triggering reassessment of the property. That the purchaser contracted by lease to accept the financial value of its right of possession rather than the actual, physical possession of the property did not transform its present interest in real property into a future interest. And, that the purchaser could not occupy the property during the lease period did not deprive it of its right to enjoy the value of its property represented by the rent. Industrial Indemnity Co. v. City and County of San Francisco, 218 Cal.App.3d 999.

Mineral interests.—The transfer of a mineral interest is a change of ownership of the mineral estate under this section, as is the assignment of mineral rights to another. On the other hand, a sand profit A prendre created by a sublease from the general mineral lessee to another does not undergo a change of ownership because of the transfer of the mineral interest or because of the assignment of the mineral rights where the sublessee was in continuous possession throughout the relevant period and changes in the relationships between the owner and the lessee and in the lease did not impact upon the sublease. Howard v. Amador County, 220 Cal.App.3d 962.

Distribution on dissolution.—Distribution of parcels of real property in 1982 to shareholders pursuant to an agreement after dissolution of a corporation was a change in ownership under this section, not exempted by Section 62 as it existed in 1982, triggering reassessment of the parcels. Prior to the distribution, the shareholders had equity interests in each parcel, while after the transfers, groups of shareholders owned fee interests in various different parcels. Kern v. Imperial County, 226 Cal.App.3d 391.

Leasehold interests.—Pursuant to subdivision (c) of Section 61, because the ground lease at issue was for only 20 years, the subsequent transfer of the underlying land included a change in ownership and reassessment of the improvements even though the lessee, and not the ground lessor, had constructed and owned the improvements under the terms of the lease. Additionally, all three parts of the Section 60 test must be applied to a change in ownership analysis of a real property transfer. Auerbach v. County of Los Angeles Assessment Appeals Board No. 1, 39 Cal.4th 153.

Trust beneficiaries.—A change in ownership of real property held by a testamentary trust occurred under Section 60 when an income beneficiary of the trust died and was succeeded by another income beneficiary. The beneficiary's death caused a transfer of the property's primary economic value to the successor beneficiary, who acquired a present beneficial interest in the property. Reilly v. City and County of San Francisco, 142 Cal.App.4th 480. Where commercial real property was owned by a trust, the transfer of the income beneficiary's interest to his children upon his death constituted an assessable change in ownership under Section 60. Prior to death, the deceased beneficiary had a present interest in the improvements constructed by lessee, retained the beneficial use of the property, and by virtue of his life estate, held value in the property that was substantially equivalent to the fee. Phelps v. Orange County Assessment Appeals Bd. No 1 (2010) 187 Cal.App.4th 653.

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61. "Change in ownership" includes. Except as otherwise provided in Section 62, change in ownership, as defined in Section 60, includes, but is not limited to:

(a) The creation, renewal, sublease, assignment, or other transfer of the right to produce or extract oil, gas, or other minerals regardless of the period during which the right may be exercised. The balance of the property, other than the mineral rights, shall not be reappraised pursuant to this section.

(b) The creation, renewal, extension, or assignment of a taxable possessory interest in tax exempt real property for any term. For purposes of this subdivision:

(1) "Renewal" and "extension" do not include the granting of an option to renew or extend an existing agreement pursuant to which the term of possession of the existing agreement would, upon exercise of the option, be lengthened, whether the option is granted in the original agreement or subsequent thereto.

(2) Any "renewal" or "extension" of a possessory interest during the reasonably anticipated term of possession used by the assessor to value that interest does not cause a change in ownership until the end of the reasonably anticipated term of possession used by the assessor to value that interest. At the end of the reasonably anticipated term of possession used by the assessor, a new base year value, based on a new reasonably anticipated term of possession, shall be established for the possessory interest.

(3) "Assignment" of a possessory interest means that the transfer of all rights held by a transferor in a possessory interest.

(c) (1) (A) The creation of a leasehold interest in taxable real property for a term of 35 years or more (including renewal options).

(B) The termination of a leasehold interest in taxable real property which had an original term of 35 years or more (including renewal options).

(C) Any transfer of a leasehold interest having a remaining term of 35 years or more (including renewal options).

(D) Any transfer of a lessor's interest in taxable real property subject to a lease with a remaining term (including renewal options) of less than 35 years.

(2) Only that portion of a property subject to that lease or transfer shall be considered to have undergone a change of ownership.

(3) For the purpose of this subdivision, for 1979–80 and each year thereafter, it shall be conclusively presumed that all homes eligible for the homeowners' exemption, other than manufactured homes located on rented or leased land and subject to taxation pursuant to Part 13 (commencing with Section 5800) and floating homes subject to taxation pursuant to Section 229, that are on leased land have a renewal option of at least 35 years on the lease of that land, whether or not in fact that renewal option exists in any contract or agreement.

(d) (1) (A) A sublease of a taxable possessory interest in tax-exempt real property for a term, including renewal options, that exceeds half the length of the remaining term of the leasehold, including renewable options.

(B) The termination of a sublease of a taxable possessory interest in tax-exempt property with an original term, including renewal options, that exceeds half the length of the remaining term of the leasehold, including renewal options.

(C) Any transfer of a sublessee's interest with a remaining term, including renewal options, that exceeds half of the remaining term of the leasehold.

(2) Any transfer of a possessory interest in tax-exempt real property subject to a sublease with a remaining term, including renewable options, that does not exceed half the remaining term of the leasehold, including renewal options.

(e) The creation, transfer, or termination of any joint tenancy interest, except as provided in subdivision (f) of Section 62, and in Section 63 and in Section 65.

(f) The creation, transfer, or termination of any tenancy-in-common interest, except as provided in subdivision (a) of Section 62 and in Section 63.

(g) Any vesting of the right to possession or enjoyment of a remainder or reversionary interest that occurs upon the termination of a life estate or other similar precedent property interest, except as provided in subdivision (d) of Section 62 and in Section 63.

(h) Any interests in real property that vest in persons other than the trustor (or, pursuant to Section 63, his or her spouse) when a revocable trust becomes irrevocable.

(i) The transfer of stock of a cooperative housing corporation, vested with legal title to real property that conveys to the transferee the exclusive right to occupancy and possession of that property, or a portion thereof. A "cooperative housing corporation" is a real estate development in which membership in the corporation, by stock ownership, is coupled with the exclusive right to possess a portion of the real property.

(j) The transfer of any interest in real property between a corporation, partnership, or other legal entity and a shareholder, partner, or any other person.

History.—Stats. 1979, Ch. 1161, in effect September 29, 1979, added the third paragraph of subdivision (c). Stats. 1980, Ch. 285, in effect June 30, 1980, operative July 1, 1980, added "other than mobilehomes located on rented or leased land and subject to taxation pursuant to Part 13 (commencing with Section 5800)," to the third paragraph in subdivision (c). Stats. 1980, Ch. 1081, in effect September 26, 1980, added "Section 65" to the end of subdivision (d). Stats. 1985, Ch. 186, effective January 1, 1986, substituted "regardless of the period during which the right may be exercised" for "for so long as they can be produced or extracted in paying quantities" after "minerals" in the first sentence of subdivision (a). Stats. 1986, Ch. 608, effective January 1, 1987, deleted "in" before "Section 65." in subdivision (d), added "or her" before "spouse" in subdivision (g), and deleted "as defined in Section 17265," before "vested" in the first sentence of subdivision (h) and added the second sentence thereto defining a cooperative housing corporation. Stats. 1987, Ch. 1094, in effect September 25, 1987, added the second sentence of subdivision (b). Stats. 1992, Ch. 523, in effect January 1, 1993, added "extension," after "renewal," in the first sentence of subdivision (b); and substituted "and 'extension' do" for "does" after " 'renewal' ", and added "or extend" after "renew" in the second sentence of subdivision (b). Stats. 1994, Ch. 1222, in effect January 1, 1995, substituted "that" for "such" after "subject to" in the second paragraph of paragraph (1) of subdivision (c); substituted "manufactured homes" for "mobilehomes" after "other than", substituted "that" for "which" after "Section 5800)," and substituted "that" for "such" twice in the third paragraph of paragraph (1) of subdivision (c); added "and in" after "62," in subdivision (d); and substituted "that" for "which" after "property" and "that" for "such" after "possession of" in subdivision (h). Stats. 1996, Ch. 388, in effect January 1, 1997, deleted "sublease," after "extension," in the first sentence of subdivision (b), substituted "subdivision: (1) "Renewal" for "subdivision, "renewal" ", and added paragraph (2) and (3) to subdivision (b); added subdivision (d); relettered former subdivisions (e), (f), (g), (h), and (i) as subdivisions (f), (g), (h), (i), and (j) respectively; and substituted "that" for "which" in subdivisions (g) and (h). Stats. 2006, Ch. 364 (AB 3076), in effect January 1, 2007, deleted the designation of the first paragraph of subdivision (c) as paragraph (1) and added "and floating homes subject to taxation pursuant to Section 229" after "(commencing with Section 5800)" in the first sentence of the third paragraph therein. Stats. 2010, Ch. 654 (SB 1494), in effect January 1, 2011, added paragraph and subparagraph designations to subdivision (c).

Note.—Section 22 of Stats. 1980, Ch. 285, provided no payment by state to local governments because of this act.

Note.—Section 2 of Stats. 1987, Ch. 1094, provided that the amendment made by this act does not constitute a change in, but is declaratory of, the existing law.

Construction.—The construction of Section 60 and Section 61 are governed by two precepts: the drafters intended Section 61 to provide "examples" of common applications of Section 60 rather than exceptions to it, and applications of Section 61 must be consistent with Section 60. Pacific Southwest Realty Co. v. Los Angeles County, 1 Cal.4th 155. The transfer of any interest in real property, as used in Revenue and Taxation Code Section 61, subdivision (j), means a "transfer of a present interest in real property, including the beneficial use thereof, the value of which is substantially equal to the value of the fee interest," as set forth in Revenue and Taxation Code Section 60. Fashion Valley Mall, LLC v. County of San Diego, 176 Cal.App.4th 871.

Possessory interest.—An extension of a lease term from 40 years to 66 years was not a change in ownership for purpose of this section where the extension was automatic under a provision of the original lease whereby the parties intended to create a possessory interest for the maximum term allowed by the city's charter; where at the time the lease was signed, a charter amendment increasing the permissible term was on the ballot for an election less than a month away; and where the assessor recognized and based his first valuation of the lease on the longer term. Wrather Port Properties, Ltd. v. Los Angeles County, 209 Cal.App.3d 517.

Subdivision (b) does not unconstitutionally place a heavier tax burden on lessees of government land, as compared to lessees of private land. In the case of private property, reassessment is triggered only if the leases are for 35 years or more. Since the tax-exempt status of government land gives rise to no taxes to pass on to lessees of government land, taxing those lessees every time they lease government land to the extent of their possessory interest does not inevitably impose an excess tax burden on them as compared to short-term lessees of private property, who may be subjected to the full tax burden of the private property owner and to the reassessment that occurs every time the property is sold. United Air Lines, Inc. v. San Diego County, 1 Cal.App.4th 418.

Leasehold interest.—"Change of ownership", as used in Article XIII A, section 2(a) of the Constitution (real property acquired after 1975 to be assessed according to appraised value at time of acquisition), is not so certain and clear that it requires no construction, and the definitions provided in the section, including that of subdivision (c)(1), comport with the intended meaning of the Article. Further, the term of 35 years chosen by the Legislature was neither an arbitrary nor an unreasonable term; and reappraisal of shopping center property at the time the lessee finished construction of a department store on the property and opened it for business was not prohibited either because the initial term of the lease was only for 30 years since the lease had 2 10-year renewal options and such options are included within the 35-year computation of the section, or because the lease was of the building and not the land underneath it, since the right to use and occupy the land is inherent in a lease of a structure upon the land. E. Gottschalk & Co., Inc. v. Merced County, 196 Cal.App.3d 1378. The leaseback for a term of 50 years, including renewal options, of a building pursuant to a sale and leaseback arrangement was a change in ownership within the meaning of Section 61(c)(1), triggering reassessment of the property. Industrial Indemnity Co. v. City and County of San Francisco, 218 Cal.App.3d 999. The creation of a leasehold interest in taxable real property for a term of 35 years or more may be subject to a documentary transfer tax under Revenue and Taxation Code Section 11911. Thrifty Corp. v. Los Angeles County, 210 Cal.App.3d 881. The extension of a leasehold interest in taxable real property extending the remaining term of the lease to 28 years is not subject to a documentary transfer tax under Section 11911. McDonald's Corporation v. Board of Supervisors, 63 Cal.App.4th 612. Pursuant to subdivision (c) of Section 61, because the ground lease at issue was for only 20 years, the subsequent transfer of the underlying land included a change in ownership and reassessment of the improvements even though the lessee, and not the ground lessor, had constructed and owned the improvements under the terms of the lease. Additionally, all three parts of the Section 60 test must be applied to a change in ownership analysis of a real property transfer. Auerbach v. County of Los Angeles Assessment Appeals Board No. 1, 39 Cal.4th 153.

Mineral interests.—Fixed long-term mineral interests are not governed by subdivision (c), and all such interests in real property are not subject to reassessment simply because one mineral interest is transferred. The leaseholds referred to in subdivision (c) are estates for years, not mineral profits A prendre; and subdivision (c) was intended to provide an example of a change in ownership consistent with the general definition of Section 60. However, the transfer of a mineral interest is a change of ownership of the mineral estate regardless of whether such a transaction is expressly listed in this section. The estate has been transferred and hence a "change of ownership" has occurred within the meaning of Article XIII A, Section 2(a) and (d) of the Constitution and Section 60. Howard v. Amador County, 220 Cal.App.3d 962.

Trusts.—A change in ownership occurred when a revocable trust becomes irrevocable upon the trustor's death and the full beneficial interests in the real property transferred to the residual beneficiaries of the trust. Empire Properties v. Los Angeles, 44 Cal.App.4th 781.

Partnership.—Under Section 60 and this section, a partnership's transfer of parcels of real property to a partner was a change in ownership requiring a 100 percent reassessment. The beneficial use of the partnership properties underwent a significant change upon transfer to the partner, who obtained the absolute and exclusive rights to possess, use, enjoy, and dispose of the entire fee interest in the property without limitation or condition. Munkdale v. Giannini, 35 Cal.App.4th 1104.

Limited Liability Company.—A 100 percent change in ownership occurred as a result of a corporation's (insurer's) sale of a shopping mall to a limited liability company (LLC). The corporation did not, due to its status as a member of the LLC's parent company, retain a beneficial interest in the mall. It was the parent, through the LLC, that exercised control over the mall, not the corporation. Fashion Valley Mall, LLC v. County of San Diego, 176 Cal.App.4th 871.

Step transaction doctrine.—The step transaction doctrine applied to a four-step real property transaction between a parent corporation, its subsidiary corporation, and a developer, so as to justify reassessment on the basis that a 100 percent change in ownership had occurred where the doctrine's "interdependence test" was satisfied. The interdependence test analyzes the relationship between the steps, rather than their ultimate result, and all four steps by the parties were aimed at developing the land with a developer. The developer came into the partnership, which had been formed by the two original, affiliated corporations, to assume all of the entitlement of the parent corporation, and the parent corporation withdrew. It was reasonable to infer that the developer's goals would not have been met without the transfer of title from the parent corporation to the partnership. Even if the two corporations had internal corporate reasons to take the steps they did, the steps would have been fruitless had they not found a developer to join the project. Also, it was not improper for the trial court to consider the timing of the steps in its analysis of the doctrine; timing should be considered when analyzing an entire set of circumstances. McMillin-BCED/Miramar Ranch North v. San Diego County, 31 Cal.App.4th 545.

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62. "Change in ownership" exclusions. Change in ownership shall not include:

(a) (1) Any transfer between coowners that results in a change in the method of holding title to the real property transferred without changing the proportional interests of the coowners in that real property, such as a partition of a tenancy in common.

(2) Any transfer between an individual or individuals and a legal entity or between legal entities, such as a cotenancy to a partnership, a partnership to a corporation, or a trust to a cotenancy, that results solely in a change in the method of holding title to the real property and in which proportional ownership interests of the transferors and transferees, whether represented by stock, partnership interest, or otherwise, in each and every piece of real property transferred, remain the same after the transfer. The provisions of this paragraph shall not apply to transfers also excluded from change in ownership under the provisions of subdivision (b) of Section 64.

(b) Any transfer for the purpose of perfecting title to the property.

(c) (1) The creation, assignment, termination, or reconveyance of a security interest; or (2) the substitution of a trustee under a security instrument.

(d) Any transfer by the trustor, or by the trustor's spouse or registered domestic partner, or by both, into a trust for so long as (1) the transferor is the present beneficiary of the trust, or (2) the trust is revocable; or any transfer by a trustee of such a trust described in either clause (1) or (2) back to the trustor; or, any creation or termination of a trust in which the trustor retains the reversion and in which the interest of others does not exceed 12 years duration.

(e) Any transfer by an instrument whose terms reserve to the transferor an estate for years or an estate for life. However, the termination of such an estate for years or estate for life shall constitute a change in ownership, except as provided in subdivision (d) and in Section 63.

(f) The creation or transfer of a joint tenancy interest if the transferor, after the creation or transfer, is one of the joint tenants as provided in subdivision (b) of Section 65.

(g) Any transfer of a lessor's interest in taxable real property subject to a lease with a remaining term (including renewal options) of 35 years or more. For the purpose of this subdivision, for 1979–80 and each year thereafter, it shall be conclusively presumed that all homes eligible for the homeowners' exemption, other than manufactured homes located on rented or leased land and subject to taxation pursuant to Part 13 (commencing with Section 5800) and floating homes subject to taxation pursuant to Section 229, that are on leased land have a renewal option of at least 35 years on the lease of that land, whether or not in fact that renewal option exists in any contract or agreement.

(h) Any purchase, redemption, or other transfer of the shares or units of participation of a group trust, pooled fund, common trust fund, or other collective investment fund established by a financial institution.

(i) Any transfer of stock or membership certificate in a housing cooperative that was financed under one mortgage, provided that mortgage was insured under Section 213, 221(d)(3), 221(d)(4), or 236 of the National Housing Act, as amended, or that housing cooperative was financed or assisted pursuant to Section 514, 515, or 516 of the Housing Act of 1949 or Section 202 of the Housing Act of 1959, or the housing cooperative was financed by a direct loan from the California Housing Finance Agency, and provided that the regulatory and occupancy agreements were approved by the governmental lender or insurer, and provided that the transfer is to the housing cooperative or to a person or family qualifying for purchase by reason of limited income. Any subsequent transfer from the housing cooperative to a person or family not eligible for state or federal assistance in reduction of monthly carrying charges or interest reduction assistance by reason of the income level of that person or family shall constitute a change of ownership.

(j) Any transfer during the period March 1, 1975, to March 1, 1981, between coowners in any property that was held by them as coowners for all or part of that period, and which was eligible for a homeowner's exemption during the period of the coownership, notwithstanding any other provision of this chapter. Any transferee whose interest was revalued in contravention of the provisions of this subdivision shall obtain a reversal of that revaluation with respect to the 1980–81 assessment year and thereafter, upon application to the county assessor of the county in which the property is located filed on or before March 26, 1982. No refunds shall be made under this subdivision for any assessment year prior to the 1980–81 fiscal year.

(k) Any transfer of property or an interest therein between a corporation sole, a religious corporation, a public benefit corporation, and a holding corporation as defined in Section 23701h holding title for the benefit of any of these corporations, or any combination thereof (including any transfer from one entity to the same type of entity), provided that both the transferee and transferor are regulated by laws, rules, regulations, or canons of the same religious denomination.

(l) Any transfer, that would otherwise be a transfer subject to reappraisal under this chapter, between or among the same parties for the purpose of correcting or reforming a deed to express the true intentions of the parties, provided that the original relationship between the grantor and grantee is not changed.

(m) Any intrafamily transfer of an eligible dwelling unit from a parent or parents or legal guardian or guardians to a minor child or children or between or among minor siblings as a result of a court order or judicial decree due to the death of the parent or parents. As used in this subdivision, "eligible dwelling unit" means the dwelling unit that was the principal place of residence of the minor child or children prior to the transfer and remains the principal place of residence of the minor child or children after the transfer.

(n) Any transfer of an eligible dwelling unit, whether by will, devise, or inheritance, from a parent or parents to a child or children, or from a guardian or guardians to a ward or wards, if the child, children, ward, or wards have been disabled, as provided in subdivision (e) of Section 12304 of the Welfare and Institutions Code, for at least five years preceding the transfer and if the child, children, ward, or wards have adjusted gross income that, when combined with the adjusted gross income of a spouse or spouses, parent or parents, and child or children, does not exceed twenty thousand dollars ($20,000) in the year in which the transfer occurs. As used in this subdivision, "child" or "ward" includes a minor or an adult. As used in this subdivision, "eligible dwelling unit" means the dwelling unit that was the principal place of residence of the child or children, or ward or wards for at least five years preceding the transfer and remains the principal place of residence of the child or children, or ward or wards after the transfer. Any transferee whose property was reassessed in contravention of the provisions of this subdivision for the 1984–85 assessment year shall obtain a reversal of that reassessment upon application to the county assessor of the county in which the property is located. Application by the transferee shall be made to the assessor no later than 30 days after the later of either the transferee's receipt of notice of reassessment pursuant to Section 75.31 or the end of the 1984–85 fiscal year.

(o) Any transfer of a possessory interest in tax-exempt real property subject to a sublease with a remaining term, including renewal options, that exceeds half the length of the remaining term of the leasehold, including renewal options.

(p) (1) Commencing on January 1, 2000, any transfer between registered domestic partners, as defined in Section 297 of the Family Code, including, but not limited to:

(A) Transfers to a trustee for the beneficial use of a registered domestic partner, or the surviving registered domestic partner of a deceased transferor, or by a trustee of such a trust to the registered domestic partner of the trustor.

(B) Transfers that take effect upon the death of a registered domestic partner.

(C) Transfers to a registered domestic partner or former registered domestic partner in connection with a property settlement agreement or decree of dissolution of a registered domestic partnership or legal separation.

(D) The creation, transfer, or termination, solely between registered domestic partners, of any coowner's interest.

(E) The distribution of a legal entity's property to a registered domestic partner or former registered domestic partner in exchange for the interest of the registered domestic partner in the legal entity in connection with a property settlement agreement or a decree of dissolution of a registered domestic partnership or legal separation.

(2) Any transferee whose property was reassessed in contravention of the provisions of this subdivision for a transfer occurring between January 1, 2000, and January 1, 2006, shall obtain a reversal of that reassessment upon application to the county assessor of the county in which the property is located. Application by the transferee shall be made to the assessor no later than June 30, 2009. A county may charge a fee for its costs related to the application and reassessment reversal in an amount that does not exceed the actual costs incurred. This paragraph shall be liberally construed to provide the benefits of this subdivision and Article XIII A of the California Constitution to registered domestic partners.

(A) After consultation with the California Assessors' Association, the State Board of Equalization shall prescribe the form for claiming the reassessment reversal described in paragraph (2). The claim form shall be entitled "Claim for Reassessment Reversal for Registered Domestic Partners." The claim shall state on its face that a "certificate of registered domestic partnership" is available upon request from the California Secretary of State.

(B) The information on the claim shall include a description of the property, the parties to the transfer of interest in the property, the date of the transfer of interest in the property, and a statement that the transferee registered domestic partner and the transferor registered domestic partner were, on the date of transfer, in a registered domestic partnership as defined in Section 297 of the Family Code.

(C) The claimant shall declare that the information provided on the form is true, correct, and complete to the best of his or her knowledge and belief.

(D) The claimant shall provide with the completed claim the "Certificate of Registered Domestic Partnership," or photocopy thereof, naming the transferee and transferor as registered domestic partners and reflecting the creation of the registered domestic partnership on a date prior to, or concurrent with, the date of the transfer for which a reassessment reversal is requested.

(E) Any reassessment reversal granted pursuant to a claim shall apply commencing with the lien date of the assessment year, as defined in Section 118, in which the claim is filed. No refunds shall be made under this paragraph for any prior assessment year.

(F) Under any reassessment reversal granted pursuant to that claim, the adjusted full cash value of the subject real property in the assessment year described in subparagraph (E) shall be the adjusted base year value of the subject real property in the assessment year in which the excluded purchase or transfer took place, factored to the assessment year described in subparagraph (E) for both of the following:

(i) Inflation as annually determined in accordance with paragraph (1) of subdivision (a) of Section 51.

(ii) Any subsequent new construction occurring with respect to the subject real property.

History.—Stats. 1979, Ch. 1161, in effect September 29, 1979, added the second sentence to subdivision (g); and substituted "mortgage" for "housing cooperative" after "such", added "202" after "Section", added "or such housing cooperative was financed or assisted pursuant to Section 514, 515, or 516 of the Housing Act of 1949 or Section 202 of the Housing Act of 1959, or the housing cooperative" after "amended", and substituted the balance of the first sentence after "Agency" for "and the Regulatory and Occupancy Agreements were approved by the respective insuring agency or the lender, the California Housing Finance Agency", and added the second sentence to subdivision (i). Stats. 1980, Ch. 285, in effect June 30, 1980, operative July 1, 1980, added ", other than mobilehomes located on rented or leased land and subject to taxation pursuant to Part 13 (commencing with Section 5800)," to subdivision (g). Stats. 1980, Ch. 1081, in effect September 26, 1980, added "as provided in subdivision (b) of Section 65" to the end of subdivision (f). Stats. 1980, Ch. 1349, in effect January 1, 1981, added the balance of the sentence after "tenancy in common" in subdivision (a) and added subdivision (j). Stats. 1981, Ch. 615, in effect September 22, 1981, added subdivision (k). Stats. 1981, Ch. 1141, in effect October 2, 1981, operative January 1, 1982, added "by the trustor, or by the trustor's spouse, or by both" after the first "transfer" in subdivision (d); added "during the period March 1, 1975 to March 1, 1981" after "transfer", substituted "that" for "the" before second "period", deleted "between March 1, 1975, and March 1, 1980" after second "period", added "entire" before third "period", and added "notwithstanding any other provision of this chapter" after "coownership" in the first sentence, added "provided it is" after "located" and substituted "March 26, 1982" for "February 28, 1981" after "before" in the second sentence, and added the third sentence of subdivision (j); and deleted "and a holding corporation as defined in Section 23701h holding title for the benefit of any of the aforementioned corporations," after "public benefit corporation" in subdivision (k). Stats. 1982, Ch. 1465, in effect January 1, 1983, added "(1)" after "(a)", "transferred" after "property", and "in that real property" after "coowners", and deleted "or any transfer of title" after "common" in new subdivision (a)(1); added "(2) Any transfer" before the first "between," "or individuals" after "individual", and "or" after "a corporation,", deleted "or an individual to a legal entity" after the second "cotenancy,", added "to the real property" after "title" and "ownership" after "proportional", substituted "of" for "by" after "interests", and added "in each . . . transferred" after "otherwise" in the first sentence, and added the second sentence to new subdivision (a)(2); added "and" after the second "land", and substituted "that" for "such" before the third "land" and after "fact" in the second sentence of subdivision (g); substituted "that" for "such" after the first "provided" and after "amended, or" in the first sentence, and after "level of" in the second sentence of subdivision (i); deleted "and" after "corporation,", and added "and a . . . corporations" before "or any" in subdivision (k); and added subdivision "(l)" and "(m)". Stats. 1984, Ch. 1010, in effect January 1, 1985, added subdivision (n). Stats. 1985, Ch. 186, effective January 1, 1986, deleted "of Section 62" after "subdivision (d)" in subdivision (e). Stats. 1996, Chap. 1087, in effect January 1, 1997, substituted "that" for "which" throughout text; substituted "life. However" for "life; however" after "estate for" in subdivision (e); substituted "land have" for "land and have" in subdivision (g); substituted "these corporations" for "the aforementioned corporations" after "any of" in subdivision (k); and added subdivision (o). Stats. 2002, Ch. 775 (SB 2092), in effect January 1, 2003, substituted "manufactured homes" for "mobilehomes" after "other than" in the second sentence of subdivision (g), and deleted "such" after "transfer from one" in the first sentence of subdivision (k). Stats. 2005, Ch. 416 (SB 565), in effect September 29, 2005, added subdivision (p). Stats. 2006, Ch. 364 (AB 3076), in effect January 1, 2007, added "and floating homes subject to taxation pursuant to Section 229" after "(commencing with Section 5800)" in the second sentence of subdivision (g). Stats. 2007, Ch. 555 (SB 559), in effect October 12, 2007, added "or registered domestic partner" after "the trustor's spouse" in the first sentence of subdivision (d); numbered the former first sentence of the first paragraph of subdivision (p) as paragraph (1) and substituted "on January 1, 2000," for "with the lien date for the 2006–07 fiscal year" after "Commencing" therein, designated former paragraphs (1), (2), (3), (4), and (5) as subparagraphs (A), (B), (C), (D) and (E), respectively, and added paragraph (2) thereto.

Note.—Section 22 of Stats. 1980, Ch. 285, provided no payment by state to local governments because of this act.

Note.—Section 5 of Stats. 1980, Ch. 1349, provided the amendments made to Section 62 shall be effective for the 1981–82 assessment year and years thereafter. It is the intent of the Legislature that the provisions of this act shall apply to the determination of base year values for the 1981–82 fiscal year, and shall apply to any change in ownership occurring on or after March 1, 1975. No escape assessments shall be levied and no refund shall be made for any years prior to 1981–82 for any increases or decreases in value made for the 1981–82 fiscal year or fiscal years thereafter as the result of the enactment of this act.

Note.—Section 3 of Stats. 1981, Ch. 615, provided the amendments made to Section 62 of the Revenue and Taxation Code by this act shall be effective for the 1981–82 assessment year and years thereafter. It is the intent of the Legislature that the provisions of this act shall apply to the determination of base year values for the 1981–82 fiscal year, and shall apply to any change in ownership occurring on or after March 1, 1975. No escape assessments shall be levied and no refund shall be made for any years prior to 1981–82 for any increases or decreases in value made for the 1981–82 fiscal year or fiscal years thereafter as the result of the enactment of this act.

Note.—Section 14 of Stats. 1981, Ch. 1141, provided the provisions of this act shall take immediate effect and shall apply to any change in ownership occurring on or after March 1, 1975. However, all changes in value shall be made effective commencing with the 1982–83 fiscal year. No escape assessments shall be levied and no refund shall be made for any years prior to the 1982–83 fiscal year for any increases or decreases in value made for the 1982–83 fiscal year or fiscal years thereafter as the result of the enactment of this act.

Section 16 thereof provided the Controller shall report to the Legislature on the amount of claims made by county auditors under Section 16113 of the Government Code for compensation for property tax revenues lost by reason of the classification or exemption of property by this act.

Note.—Section 2 of Stats. 1984, Ch. 1010, provided the provisions of this act shall be effective for the 1984–85 fiscal year and fiscal years thereafter. It is the intent of the Legislature that the provisions of this act shall apply to the determination of base year values for the 1984–85 fiscal year, and shall apply to any change in ownership occurring on or after March 1, 1975. No escape assessments shall be levied and no refunds shall be made for any fiscal year prior to the 1984–85 fiscal year for any increases or decreases in value made for the 1984–85 fiscal year or fiscal years thereafter as the result of the enactment of this act.

Note.—Section 1 of Stats. 2005, Ch. 416 (SB 565), provided that the Legislature finds and declares all of the following:

(a) It is the intent of the Legislature in enacting this act to guarantee equality for all Californians, regardless of gender or sexual orientation, and to further the state's interests in protecting Californians from the potentially severe economic and social consequences of abandonment, separation, the death of a partner, and other life crises.

(b) To this end, the Legislature has enacted various statutes in an attempt to move California closer to fulfilling the promises of inalienable rights, liberty, and equality contained in Sections 1 and 7 of Article I of the California Constitution.

(c) For example, in 2002, the Legislature enacted Chapter 447 of the Statutes of 2002, effective July 1, 2003, which granted registered domestic partners the same intestate succession rights with respect to separate property as spouses. A liberal reading of Chapter 447 was intended by the Legislature and this act builds upon that framework.

(d) Many lesbian, gay, and bisexual Californians continue to face economic discrimination, despite forming lasting, committed, and caring relationships with persons of the same sex according to the laws of this state. These couples build lives together, as do spouses, by purchasing property and creating and operating family businesses. Expanding the rights of registered domestic partners with respect to property ownership would further California's interests in promoting family relationships and protecting family members during life crises, and would reduce discrimination on the bases of sex and sexual orientation in a manner consistent with the California Constitution.

Note.—Section 1 of Stats. 2007, Ch. 555 (SB 559) provided that the Legislature finds and declares all of the following:

(a) It is the intent of the Legislature in enacting this act to guarantee equality for all Californians, regardless of gender or sexual orientation, and to further the state's interests in protecting Californians from the potentially severe economic consequences of abandonment, separation, the death of a partner, and other life crises.

(b) To this end, the Legislature has enacted various statutes in an attempt to move California closer to fulfilling the promises of inalienable rights, liberty, and equality contained in Sections 1 and 7 of Article I of the California Constitution.

(c) For example, in 1999, the Legislature enacted Chapter 588 of the Statutes of 1999, effective January 1, 2000, which established a state registry of domestic partnerships. In 2002, the Legislature enacted Chapter 447 of the Statutes of 2002, effective July 1, 2003, which granted registered domestic partners the same intestate succession rights with respect to separate property as spouses. In 2003, the Legislature enacted Chapter 421 of the Statutes of 2003, effective January 1, 2005, which extended to registered domestic partners nearly all of the rights and responsibilities of spouses under state law that had not been provided by prior domestic partner legislation. And, in 2005, the Legislature enacted Chapter 416 of the Statutes of 2005, which amended Section 62 of the Revenue and Taxation Code concerning valuation and taxation of real property, to exclude property transfers between registered domestic partners from the definition of "change in ownership" for purposes of property tax reassessment. The Legislature has intended a liberal reading of these laws and this act builds upon this existing framework.

(d) Although it intended to protect family members during life crises and to reduce discrimination on the bases of sex and sexual orientation in a manner consistent with the California Constitution, Chapter 417 of the Statutes of 2005 did not expressly exempt transfers from one registered domestic partner to the other registered domestic partner that resulted from the death of a partner prior to January 1, 2006.

(e) Protection against reassessment of family owned real property and resulting increases in property taxes can be a critical bulwark against financial hardship and the loss of the family home or business when a family member dies or a family relationship ends in divorce or dissolution of a domestic partnership. The same is true for domestic partners whose relationships predated California's protective legislation. Many domestic partners whose property was reassessed due to the death of one partner or the dissolution of the domestic partnership have been forced by the resulting increase in property taxes to sell the family home. Those domestic partners who have retained ownership and have been paying increased property taxes are being treated unequally in a manner inconsistent with the goal of the domestic partnership laws.

(f) Many lesbian, gay, and bisexual Californians continue to face economic discrimination, despite forming lasting, committed, and caring relationships with persons of the same sex according to the laws of this state. These couples build lives together, as do spouses, by purchasing property and creating and operating family businesses. Expanding the rights of domestic partners with respect to property ownership would further California's compelling interests in promoting family relationships and protecting family members during life crises, and would reduce discrimination on the bases of sex and sexual orientation in a manner warranted by the California Constitution.

(g) Therefore, the Legislature finds and declares that this act serves a public purpose of the state.

Section 3 thereof provided that no reimbursement is required by this act pursuant to Section 6 of Article XIII B of the California Constitution because a local agency or school district has the authority to levy service charges, fees, or assessments sufficient to pay for the program or level of service mandated by this act, within the meaning of Section 17556 of the Government Code.

Section 4 thereof 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.

Construction.—The construction of Section 60 and Section 62 are governed by two precepts: the drafters intended Section 62 to provide "examples" of common applications of Section 60 rather than exceptions to it, and application of Section 62 must be consistent with Section 60. Thus, neither subdivision (g) nor subdivision (e) was intended to apply to a sale of a freehold interest in real property and a simultaneous leaseback from the purchaser to the seller. Pacific Southwest Realty Co. v. Los Angeles County, 1 Cal.4th 155. The sale and leaseback of a building for a term of 50 years did not come within the exclusion of Section 62(e) applicable to any transfer of an interest whose term is reserved to the transferor an estate for years. The leaseback met the three-prong definition of change in ownership in Section 60. Also, Property Tax Rule No. 462(d)(2) provided that the creation of estate for years for a term of 35 years or more of real property is a change in ownership at the time of transfer unless the instrument creating the estate for years reserves such estate in the transferor, and there was no reservation of a lease in the transaction. Industrial Indemnity Co. v. City and County of San Francisco, 218 Cal.App.3d 999. Distribution of parcels of real property in 1982 to shareholders pursuant to an agreement after dissolution of a corporation did not come within the exclusion of Section 62(a), as it existed in 1982, applicable to transfers of proportional interests. Prior to the distribution, the shareholders had equity interests in each parcel, while after the transfers groups of shareholders owned fee interests in various different parcels. Although the shareholders' proportional interests remained the same after distribution, with respect to title, the proportional interests of each shareholder in each parcel changed. Kern v. Imperial County, 226 Cal.App.3d 391.

The sale of an office complex subject to three recently executed 50-year leases assigned to its wholly owned subsidiary did not come within the exclusion of Section 62(e), since that section is intended to include only reservations in which the transferor retains the beneficial use of the property. Here, the seller did not retain a beneficial use of the property since its subsidiary paid rent to the purchaser, which enjoyed the entire beneficial interest in the property. Neither did it come within the exclusion of Section 62(g), since there was no established lease in effect at the time of sale, the transfers of the fee to the purchaser and the tenancy to the subsidiary being essentially simultaneous. This exclusion protects a lessee that has made improvements and is required to pay property taxes but has no control over the lessor's sale to a third party, which was not the situation in this case. Crow Winthrop Operating Partnership v. Orange County, 10 Cal.App.4th 1848. Majority partner's purchase of minority partners' partnership interests and partnership transfer of its real property to the sole partner is not covered by subdivision (a)(2) of this section. Any variation in the proportionality of a conveyance by a legal entity to its members results in 100 percent reassessment. Zapara v. Orange County, 26 Cal.App.4th 464.

Life estate.—A transfer of real property with a retained life estate is not a change in ownership. The life tenant has the primary interest under the value equivalency test, and there is no transfer of the present interest in the property until the life tenant dies and the property vests in the remainder. Leckie v. Orange County, 65 Cal.App.4th 334.

1982 amendment.—The 1982 amendment of Section 62(a) was a clarification of existing law, providing a legislative construction of the preexisting statute. Kern v. Imperial County, 226 Cal.App.3d 391.

Leasehold interest.—Pursuant to subdivision (c) of Section 61, because the ground lease at issue was for only 20 years, the subsequent transfer of the underlying land included a change in ownership and reassessment of the improvements even though the lessee, and not the ground lessor, had constructed and owned the improvements under the terms of the lease. Additionally, all three parts of the Section 60 test must be applied to a change in ownership analysis of a real property transfer. Auerbach v. County of Los Angeles Assessment Appeals Board No. 1, 39 Cal.4th 153.

Constitutionality.—The Legislature has the constitutional authority to exempt or exclude various transfers from the definition of change in ownership even if those transfers would otherwise fit the definition of change in ownership. Strong v. State Board of Equalization, 155 Cal.App.4th 1182.

Registered Domestic Partners.—The exclusion for registered domestic partners is not palpably arbitrary and is supported by a rational basis; and, as a result, constitutes a valid exercise of the Legislature's constitutional authority to create new exclusions from the definition of change in ownership. Strong v. State Board of Equalization, 155 Cal.App.4th 1182.

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62.1. deletionMobilehome parks. (a) Change in ownership shall not include the following:

(1) Any transfer, on or after January 1, 1985, of a mobilehome park to a nonprofit corporation, stock cooperative corporation, limited equity stock cooperative, or other entity formed by the tenants of a mobilehome park, for the purpose of purchasing the mobilehome park, provided that, with respect to any transfer of a mobilehome park on or after January 1, 1989, subject to this paragraph, the individual tenants who were renting at least 51 percent of the spaces in the mobilehome park prior to the transfer participate in the transaction through the ownership of an aggregate of at least 51 percent of the voting stock of, or other ownership or membership interests in, the entity which acquires the park. If, on or after January 1, 1998, a park is acquired by an entity that did not attain an initial tenant participation level of at least 51 percent on the date of the transfer, the entity shall have up to one year after the date of the transfer to attain a tenant participation level of at least 51 percent. If an individual tenant notifies the county assessor of the intention to comply with the conditions set forth in the preceding sentence, the mobilehome park may not be reappraised by the assessor during that period. However, if a tenant participation level of at least 51 percent is not attained within the one-year period, the county assessor shall thereafter levy escape assessments for the mobilehome park transfer.

(2) Any transfer or transfers on or after January 1, 1985, of rental spaces in a mobilehome park to the individual tenants of the rental spaces, provided that (1) at least 51 percent of the rental spaces are purchased by individual tenants renting their spaces prior to purchase, and (2) the individual tenants of these spaces form, within one year after the first purchase of a rental space by an individual tenant, a resident organization as described in subdivision (l) of Section 50781 of the Health and Safety Code, to operate and maintain the park. If, on or after January 1, 1985, an individual tenant or tenants notify the county assessor of the intention to comply with the conditions set forth in the preceding sentence, any mobilehome park rental space that is purchased by an individual tenant in that mobilehome park during that period shall not be reappraised by the assessor. However, if all of the conditions set forth in the first sentence of this paragraph are not satisfied, the county assessor shall thereafter levy escape assessments for the spaces so transferred. This paragraph shall apply only to those rental mobilehome parks that have been in operation for five years or more.

(b) (1) If the transfer of a mobilehome park has been excluded from a change in ownership pursuant to paragraph (1) of subdivision (a) and the park has not been converted to condominium, stock cooperative ownership, or limited equity cooperative ownership, any transfer on or after January 1, 1989, of shares of the voting stock of, or other ownership or membership interests in, the entity that acquired the park in accordance with paragraph (1) of subdivision (a) shall be a change in ownership of a pro rata portion of the real property of the park unless the transfer is for the purpose of converting the park to condominium, stock cooperative ownership, or limited equity cooperative ownership or is excluded from change in ownership by Section 62, 63, or 63.1.

(2) For the purposes of this subdivision, "pro rata portion of the real property" means the total real property of the mobilehome park multiplied by a fraction consisting of the number of shares of voting stock, or other ownership or membership interests, transferred divided by the total number of outstanding issued or unissued shares of voting stock of, or other ownership or membership interests in, the entity that acquired the park in accordance with paragraph (1) of subdivision (a).

(3) Any pro rata portion or portions of real property that changed ownership pursuant to this subdivision may be separately assessed as provided in Section 2188.10.

(4) (A) Notwithstanding any other provision of law, after an exclusion under subdivision (a), the assessor may not levy any escape or supplemental assessment with respect to any change in ownership of a pro rata portion of the real property of the mobilehome park that occurred between January 1, 1989, and January 1, 2002, and for which the assessor did not, prior to January 1, 2000, levy any assessments. However, commencing with the January 1, 2002, lien date, the assessor shall correct the base year value of the pro rata portion of the real property of the park to properly reflect these changes in ownership. A mobilehome park shall provide information requested by the assessor that is necessary to correct the base year value of the property for purposes of this paragraph.

(B) When an assessor corrects the base year value of the real property of the park pursuant to subparagraph (A), the assessor shall notify parks that residents may be eligible for property tax assistance programs offered by either the Controller or the Franchise Tax Board for senior citizens, or blind or disabled persons.

(C) Any outstanding taxes that were levied between January 1, 2000, and January 1, 2002, as a result of a pro rata change in ownership as described in subparagraph (A) shall be canceled. However, there shall be no refund of taxes, as so levied, that were paid prior to January 1, 2002.

(5) A mobilehome park that does not utilize recorded deeds to transfer ownership interest in the spaces or lots shall file, by February 1 of each year, a report with the county assessor's office containing all of the following information:

(A) The full name and mailing address of each owner, stockholder, or holder of an ownership interest in the mobilehome park.

(B) The situs address, including space number, of each unit.

(C) The date that the ownership interest was acquired.

(D) If the unit is a manufactured home, the Department of Housing and Community Development decal number or serial number, or both, and whether the manufactured home is subject to the vehicle license fee or the local property tax.

(6) Within 30 days of a change in ownership, the new resident owner or other purchaser or transferee of a manufactured home within a mobilehome park that does not utilize recorded deeds to transfer ownership interest in the spaces or lots shall file a change in ownership statement described in either Section 480 or 480.2.

(7) Failure to comply with the reporting requirement described in paragraph (5) shall result in a penalty pursuant to Section 482.

(c) It is the intent of the Legislature that, in order to facilitate affordable conversions of mobilehome parks to tenant ownership, paragraph (1) of subdivision (a) apply to all bona fide transfers of rental mobilehome parks to tenant ownership, including, but not limited to, those parks converted to tenant ownership as a nonprofit corporation made on or after January 1, 1985.

History.—Added and repealed by Stats. 1984, Ch. 1692, in effect January 1, 1985. Stats. 1986, Ch. 447, effective July 22, 1986, reorganized this section, added the subdivision letters, added subdivision (b), and substituted the second paragraph for the former second paragraph which contained the same January 1, 1989, termination date for the former section, now subdivision (a). Stats. 1987, Ch. 1344, in effect September 29, 1987, deleted ", as described in Section 50561 of the Health and Safety Code," after "entity" in subdivision (a); lettered the former second paragraph of subdivision (b) as (c), and substituted "1994" for "1989" after "January 1," therein; and added subdivision (d). Stats. 1988, Ch. 1076, in effect January 1, 1989, added "limited equity stock cooperative," after "corporation," and added ", provided that, with respect to any transfer of a mobilehome park on or after January 1, 1989, subject to this subdivision, the individual tenants who were renting at least 51 percent of the spaces in the mobilehome park prior to the transfer participate in the transaction through the ownership of an aggregate of at least 51 percent of the voting stock of, or other ownership or membership interests in, the entity which acquires the park" after "park" in subdivision (a); added subdivision (c); and relettered former subdivisions (c) and (d) as (d) and (e) respectively. Stats. 1991, Ch. 442, in effect September 26, 1991, substituted "1994" for "1987" after "January 1,", substituted "resident organization" for "nonprofit corporation, stock cooperative, or other entity," after "tenant, a", added "subdivision (k) of" after "in", and substituted "50781" for "50561" after "Section" in the first sentence of subdivision (b); substituted "1994" for "1987" after "January 1," in the second sentence of subdivision (b); substituted "or" for "of" after "five years" in the fourth sentence of subdivision (b); substituted "Subdivisions" for "Subdivision" after "(d)", added "and (b)" after "(a)", and substituted "operative" for "in effect" after "remain" in the first sentence of subdivision (d); and deleted the former second sentence of subdivision (d) which provided that subdivision (b) would remain in effect only until January 1, 1987. Stats. 1993, Ch. 1200, in effect October 11, 1993, substituted "2000" for "1994" after "January 1" in the first and second sentences of subdivision (b); deleted "the provisions of" after "ownership by" in the first sentence of subdivision (c)(1); and substituted "2000" for "1994" after "January 1" in the first sentence of subdivision (d). Stats. 1998, Ch. 139 (AB 2384), in effect January 1, 1999, added a comma before "for the purpose of" in the first sentence and added the second, third, and fourth sentences of subdivision (a); deleted "and before January 1, 2000,"after "January 1, 1985," in the first and second sentences of subdivision (b); deleted former subdivision (d) which provided that subdivisions (a) and (b) would remain in effect only until January 1, 2000; and relettered former subdivision (e) as (d) and deleted ", and before the termination date of subdivision (a)" after "January 1, 1985" in the first sentence therein. Stats. 2001, Ch. 772 (AB 1457), in effect January 1, 2002, created subdivision (a) with the former first sentence of the first paragraph and deleted "either of" after "include" therein, renumbered former subdivision (a) as new paragraph (1) and substituted "paragraph" for "subdivision" after "to this" in the first sentence therein, renumbered former subdivision (b) as paragraph (2) and substituted "subdivision (l)" for "subdivision (k)" after "described in" in the first sentence, substituted "that" for "which" after "space" in the second sentence, substituted "paragraph" for "subdivision" after "this" in the third sentence, substituted "paragraph" for "subdivision" after "This" and substituted "that" for "which" after "parks" in the fourth sentence therein; relettered former subdivision (c) as (b), substituted "paragraph (1) of subdivision (a)" for "subdivision (a)" twice, after "pursuant to" and after "accordance with", substituted "that" for "which" after "entity" in the first sentence of paragraph (1), substituted "that" for "which" after "entity" and substituted "paragraph (1) of subdivision (a)" for "subdivision (a)" after "accordance with" in the first sentence of paragraph (2), substituted "that" for "which" after "property" in the first sentence of paragraph (3), and added paragraphs (4), (5), (6) and (7) therein; and relettered former subdivision (d) as (c) and substituted "paragraph (1) of subdivision (a)" for "subdivision (a)" after "ownership," in the first sentence therein. Stats. 2002, Ch. 775 (SB 2092), in effect January 1, 2003, substituted "subparagraph" for "subparagaph" after "as described in" in the first sentence of subparagraph (C) of paragraph (4) and substituted "manufactured home" for "mobilehome" after "transferee of a" in the first sentence of paragraph (6) of subdivision (b).

Note.—Section 2 of Stats. 1986, Ch. 447, provided that no reimbursement shall be made from the State Mandates Claim Fund for costs mandated by the state pursuant to this act.

Note.—Section 1 of Stats. 2001, Ch. 772 (AB 1457) provided that in 1988, the Legislature changed, for purposes of property taxation, the method for determining changes in ownership of resident-owned mobilehome parks, but failed to specify a notice process for those changes in ownership. The Legislature finds and declares, as a result, that there exists a situation in which the failure to timely assess changes in ownership in resident-owned mobilehome parks has or will result in the issuance of escape and supplemental assessments in an unfair and inequitable manner. Residents of those parks have been or will be faced with unforeseen tax bills in significant amounts that have imposed or will impose an unfair and unreasonable burden on the residents of the parks, many of whom are persons of limited means or fixed incomes. The Legislature further finds and declares that it is in the public interest to avoid the unfair and unreasonable burden on the park residents that results from escape and supplement assessments in this situation. It is the intent of the Legislature, in adding paragraph (4) to subdivision (b) of Section 62.1 of the Revenue and Taxation Code to avoid the unfair and unreasonable burden on the park residents of escape and supplemental assessments, and to permit the changes in ownership to be applied prospectively only, commencing with the lien date in 2002. It is the intent of the Legislature, in adding paragraphs (5), (6), and (7) to subdivision (b) of Section 62.1 of the Revenue and Taxation Code, to ensure adequate notice of ownership changes and prevent future unanticipated assessments.

Sec. 3 thereof provided 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.

Sec. 4 thereof provided that notwithstanding Section 17610 of the Government Code, if the Commission on State Mandates determines that this act contains costs mandated by the state, reimbursement to local agencies and school districts for those costs shall be made pursuant to Part 7 (commencing with Section 17500) of Division 4 of Title 2 of the Government Code. If the statewide cost of the claim for reimbursement does not exceed one million dollars ($1,000,000), reimbursement shall be made from the State Mandates Claims Fund.

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62.2. deletionMobilehome parks. (a) (1) Subject to paragraph (2), change in ownership shall not include any transfer on or after January 1, 1989, of a mobilehome park to a nonprofit corporation, stock cooperative corporation, tenant-in-common ownership group, or any other entity, including a governmental entity, if, within 18 months after the transfer, the mobilehome park is transferred by that corporation or other entity, including a governmental entity, to a nonprofit corporation, stock cooperative corporation, or other entity formed by the tenants of the mobilehome park in a transaction that is excluded from change in ownership by paragraph (1) of subdivision (a) of Section 62.1, or at least 51 percent of the mobilehome park rental spaces are transferred to the individual tenants of those spacesin a transaction excluded from change in ownership by paragraph (2) subdivision (a) of Section 62.1.

(2) (A) Any mobilehome park that was initially transferred on or after January 1, 1993, to a nonprofit corporation, stock cooperative corporation, tenant-in-common ownership group, or any other entity, including a governmental entity, that is subsequently transferred within 36 months of that initial transfer as provided in paragraph (1), shall qualify for the exclusion from change in ownership pursuant to this subdivision. In applying the 36-month limit specified in the preceding sentence to the subsequent transfer to an individual tenant, as provided in paragraph (1), of a rental space in a mobilehome park that was initially transferred on or after January 1, 1995, to a nonprofit corporation, stock cooperative corporation, tenant-in-common ownership group, or any other entity, the execution of a purchase contract and the opening of a bona fide purchase escrow with a licensed escrow agent shall be deemed to transfer the rental space in compliance with that 36-month limit, provided that both of the following conditions are met:

(i) The escrow is opened prior to the expiration of the 36-month time period.

(ii) The escrow closes on a date no later than six months after the end of the 36-month time period.

(B) A mobilehome park located within a disaster area that was initially transferred on or after October 1, 1991, and before October 31, 1991, to a nonprofit corporation, stock cooperative corporation, or other entity, that is subsequently transferred within 76 months of that initial transfer as provided in paragraph (1), shall qualify for the exclusion from change in ownership pursuant to this subdivision. For purposes of the preceding sentence, "mobilehome park located within a disaster area" means a mobilehome park that is located in the County of Los Angeles in an area for which both of the following apply:

(i) The Governor, as a result of the January 17, 1994, Northridge earthquake, has declared the area to be in a state of disaster and certified the area's need for assistance.

(ii) The President of the United States has, pursuant to federal law, determined the area to be in a state of major disaster.

The exclusion from change in ownership pursuant to this subdivision of a mobilehome park located within a disaster area shall be effective commencing with the 1995–96 fiscal year, and shall not require any affected county to refund any amount of property tax levied with respect to a mobilehome park for the period from October 1, 1991, to June 30, 1995, inclusive.

(b) With respect to any transfer of any mobilehome park on or after January 1, 1989, subject to this section, the individual tenants who are renting at least a majority of the spaces in the mobilehome park prior to the transfer to the entity formed by the tenants for the acquisition of the park shall participate in the transaction through the ownership of an aggregate of at least a majority of voting stock of, or other ownership or membership interest in, that entity.

(c) This section shall not apply if any fees charged the mobilehome park tenants in connection with either the first or second transfer exceed 15 percent of the total consideration paid for the mobilehome park in the first transfer, plus any accrued interest and taxes.

(d) If the assessor is notified in writing at the time the transferee files the change in ownership statement that the transferee intends to qualify the transfer under this section, the mobilehome park shall not be reappraised pending satisfaction of the relevant conditions set forth in this section for exclusion from change in ownership. If the transferee fails to satisfy those conditions, the assessor shall reappraise the mobilehome park and levy escape assessments or supplemental assessments, as appropriate. For escape or supplemental assessments levied pursuant to the preceding sentence with respect to a mobilehome park located within a disaster area, both of the following conditions shall apply:

(1) The limitations period shall be that period specified in either subdivision (b) of Section 532 or subdivision (d) of Section 75.11, as applicable.

(2) For purposes of applying the limitations periods specified in paragraph (1), the expiration date of the 76-month period specified in subdivision (a) shall be deemed to be the date upon which the initial transfer of the mobilehome park was reported to the assessor.

History.—Added by Stats. 1988, Ch. 1625, in effect January 1, 1989. Stats. 1991, Ch. 442, in effect September 26, 1991, added "including a governmental entity," after "other entity," twice, substituted "one year" for "270 days" after "if, within", and added ", or at least . . . of Section 62.1" after "Section 62.1" in the first sentence. Stats. 1992, Ch. 1080, in effect September 29, 1992, substituted "eighteen months" for "one year" after "within" in the first sentence. Stats. 1995, Ch. 687, in effect October 10, 1995, added subdivision letter designation (a) before "Change in ownership" and substituted "that" for "which" in the first sentence; added the second, third, and fourth sentences, and added paragraphs (1) and (2) in subdivision (a); added subdivision letter designations (b), (c), and (d); substituted "relevant" for "above" after "satisfaction of the", and added "set forth . . . ownership" after "conditions" in the first sentence of subdivision (d); and added the third sentence and paragraphs (1) and (2) in subdivision (d). Stats. 1999, Ch. 603 (SB 42), in effect October 10, 1999, created new paragraph (1) with the former first sentence, added "Subject to paragraph (2)," before "change in ownership shall", added "tenant-in-common ownership group," after "stock cooperative corporation", added "any" before "other entity", and substituted "18" for "eighteen" after "if, within" therein; created new paragraph (2)(A) with the former second sentence, added "tenant-in-common ownership group," after "stock cooperative corporation", added "any" before "other entity", substituted "in paragraph (1)" for "under this subdivision" after "as provided", added the second sentence and added clauses (i) and (ii) therein; created new subparagraph (B) with the former third sentence and substituted "in paragraph (1)" for "under this subdivision" after "as provided" therein, renumbered former paragraph (1) as clause (i), and, renumbered former paragraph (2) as clause (ii), and substituted "subdivision" for "section" after "pursuant to this" in the first sentence of the second paragraph therein, of subdivision (a). Stats. 2002, Ch. 775 (SB 2092), in effect January 1, 2003, substituted "paragraph (1) of subdivision (a)" for "subdivision (a)" after the first "in ownership by" and substituted "paragraph (2) subdivision (a)" for "subdivision (b)" after the second "in ownership by" in the first sentence of paragraph (1) of subdivision (a).

Note.—Section 2 of Stats. 1999, Ch. 603 (SB 42), 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.

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62.3. Cotenancy interests; principal residences. (a) Notwithstanding any other provision in this chapter, a change in ownership shall not include a transfer of a cotenancy interest in real property from one cotenant to the other that takes effect upon the death of the transferor cotenant if all of the following conditions apply:

(1) The transfer is solely by and between two individuals who together own 100 percent of the real property in joint tenancy or as tenants in common.

(2) As a result of the death of the transferor cotenant, the deceased cotenant's tenancy in common or joint tenancy interest in the real property is transferred to the surviving cotenant, which results in the surviving cotenant holding a 100-percent ownership interest in the real property immediately after the transfer, thereby terminating the cotenancy.

(3) For the one-year period immediately preceding the transfer, the real property was coowned by the transferor and the transferee, and both cotenants have been the owners of record of that real property.

(4) The real property constituted the principal residence of both cotenants immediately preceding the transferor cotenant's death.

(5) The transferor and the transferee continuously resided at that residence for the one-year period immediately preceding the transfer.

(6) The transferee has signed, under penalty of perjury, an affidavit affirming that he or she continuously resided with the transferor at the residence for the one-year period immediately preceding the transfer.

(b) A transfer of cotenancy interest in real property from one cotenant to the other shall take effect upon the death of the transferor cotenant under any of the following circumstances:

(1) Pursuant to the transferor cotenants will or trust, upon the death of the transferor cotenant.

(2) Through intestate succession from the transferor cotenant.

(3) By operation of law, upon the death of the transferor cotenant.

(c) The exclusion provided by this section shall not apply to any transfer of real property interests for which a separate exclusion in this chapter applies.

(d) For purposes of this section, both of the following apply:

(1) "Cotenancy interest" means an interest in real property held only as tenants in common or joint tenants.

(2) "Principal residence" means a dwelling eligible for either the homeowners' exemption or the disabled veterans' exemption.

(e) This section shall only apply to transfers that occur on or after January 1, 2013.

History.—Added by Stats. 2012, Ch. 781 (AB 1700) in effect September 29, 2012.

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62.5. Floating home marinas. (a) Notwithstanding any provision of this chapter, a change in ownership shall not include a transfer of a floating home marina to a nonprofit corporation, stock cooperative corporation, limited equity stock cooperative, or other entity formed by the tenants of a floating home marina for the purpose of purchasing the floating home marina, provided that the individual tenants who were renting at least 51 percent of the berths in the floating home marina prior to the transfer participate in the transaction through the ownership of an aggregate of at least 51 percent of the voting stock of, or other ownership or membership interests in, the entity that acquires the floating home marina.

(b) (1) If the transfer of a floating home marina has been excluded from a change in ownership pursuant to subdivision (a) and the floating home marina has not been converted to condominium, stock cooperative ownership, or limited equity cooperative ownership, any transfer of shares of the voting stock of, or other ownership or membership interests in, the entity that acquired the floating home marina in accordance with subdivision (a) shall be a change in ownership of a pro rata portion of the real property of the floating home marina, unless the transfer is for the purpose of converting the floating home marina to condominium, stock cooperative ownership, or limited equity cooperative ownership, or is excluded from change in ownership by Section 62, 63, or 63.1.

(2) A floating home marina that does not utilize recorded deeds to transfer ownership interest in the berths shall file, by February 1 of each year, a report with the county assessor's office containing all of the following information:

(A) The full name and mailing address of each owner, stock holder, or holder of an ownership interest in the floating home marina.

(B) The situs address, including berth number and dock, of each unit.

(C) The date the ownership interest was acquired.

(D) The Department of Housing and Community Development decal number or serial number, or both.

(3) Within 30 days of a change in ownership, the new resident owner or other purchaser or transferee of a floating home within a floating home marina that does not utilize recorded deeds to transfer ownership interest in the berths, shall file a change in ownership statement described in either Section 480 or 480.2.

(c) For purposes of this section, both of the following shall apply:

(1) "Floating home marina" has the same meaning as defined in Section 800.4 of the Civil Code.

(2) "Pro rata portion of the real property" means the total real property of the floating home marina multiplied by a fraction consisting of the number of shares of voting stock, or other ownership or membership interests, transferred divided by the total number of outstanding issued or unissued shares of voting stock of, or other ownership or membership interests in, the entity that acquired the floating home marina in accordance with subdivision (a).

History.—Added by Stats. 2012, Ch. 817 (AB 2046), in effect September 30, 2012.

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62.11. Certificates of sale; right of redemption period. Change in ownership does not include the recordation of a certificate of sale pursuant to subdivision (a) of Section 729.040 of the Code of Civil Procedure, relating to property sold subject to the right of redemption, for the period in which the right of redemption exists.

History.—Added by Stats. 2007, Ch. 277 (AB 1020), in effect January 1, 2008.

63. Interspousal transfers. Notwithstanding any other provision in this chapter, a change of ownership shall not include any interspousal transfer, including, but not limited to:

(a) Transfers to a trustee for the beneficial use of a spouse, or the surviving spouse of a deceased transferor, or by a trustee of such a trust to the spouse of the trustor.

(b) Transfers which take effect upon the death of a spouse.

(c) Transfers to a spouse or former spouse in connection with a property settlement agreement or decree of dissolution of a marriage or legal separation, or

(d) The creation, transfer, or termination, solely between spouses, of any coowner's interest.

(e) The distribution of a legal entity's property to a spouse or former spouse in exchange for the interest of such spouse in the legal entity in connection with a property settlement agreement or a decree of dissolution of a marriage or legal separation.

History.—Stats. 1981, Ch. 1141, in effect October 2, 1981, operative January 1, 1982, substituted "any other provision in this chapter" for "Sections 60, 61, 62, and 65" after "Notwithstanding" in the first sentence and added subdivision (e).

Note.—Section 14 of Stats. 1981, Ch. 1141, provided the provisions of this act shall take immediate effect and shall apply to any change in ownership occurring on or after March 1, 1975. However, all changes in value shall be made effective commencing with the 1982–83 fiscal year. No escape assessments shall be levied and no refund shall be made for any years prior to the 1982–83 fiscal year for any increases or decreases in value made for the 1982–83 fiscal year or fiscal years thereafter as the result of the enactment of this act. Section 16 thereof provided the Controller shall report to the Legislature on the amount of claims made by county auditors under Section 16113 of the Government Code for compensation for property tax revenues lost by reason of the classification or exemption of property by this act.

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63.1. Transfers between parents and their children. (a) Notwithstanding any other provision of this chapter, a change in ownership shall not include the following purchases or transfers for which a claim is filed pursuant to this section:

(1) (A) The purchase or transfer of real property which is the principal residence of an eligible transferor in the case of a purchase or transfer between parents and their children.

(B) A purchase or transfer of a principal residence from a foster child to the child's biological parent shall not be excluded under subparagraph (A) if the transferor child received that principal residence, or interest therein, from a foster parent through a purchase or transfer that was excluded under subparagraph (A).

(2) The purchase or transfer of the first one million dollars ($1,000,000) of full cash value of all other real property of an eligible transferor in the case of a purchase or transfer between parents and their children.

(3) (A) Subject to subparagraph (B), the purchase or transfer of real property described in paragraphs (1) and (2) of subdivision (a) occurring on or after March 27, 1996, between grandparents and their grandchild or grandchildren, if all of the parents of that grandchild or those grandchildren, who qualify as the children of the grandparents, are deceased as of the date of purchase or transfer. Notwithstanding any other provision of law, for the lien date for the 2006–07 fiscal year and each fiscal year thereafter, in determining whether "all of the parents of that grandchild or those grandchildren, who qualify as the children of the grandparents, are deceased as of the date of purchase or transfer," a son-in-law or daughter-in-law of the grandparent that is a stepparent to the grandchild need not be deceased on the date of the transfer.

(B) A purchase or transfer of a principal residence shall not be excluded pursuant to subparagraph (A) if the transferee grandchild or grandchildren also received a principal residence, or interest therein, through another purchase or transfer that was excludable pursuant to paragraph (1) of subdivision (a). The full cash value of any real property, other than a principal residence, that was transferred to the grandchild or grandchildren pursuant to a purchase or transfer that was excludable pursuant to paragraph (2) of subdivision (a) and the full cash value of a principal residence that fails to qualify for exclusion as a result of the preceding sentence shall be included in applying, for purposes of paragraph (2) of subdivision (a), the one million dollar ($1,000,000) full cash value limit specified in paragraph (2) of subdivision (a).

(b) (1) For purposes of paragraph (1) of subdivision (a), "principal residence" means a dwelling that is eligible for a homeowners' exemption or a disabled veterans' exemption as a result of the transferor's ownership and occupation of the dwelling. "Principal residence" includes only that portion of the land underlying the residence that consists of an area of reasonable size that is used as a site for the residence.

(2) For purposes of paragraph (2) of subdivision (a), the one-million-dollar ($1,000,000) exclusion shall apply separately to each eligible transferor with respect to all purchases by and transfers to eligible transferees on and after November 6, 1986, of real property, other than the principal residence, of that eligible transferor. The exclusion shall not apply to any property in which the eligible transferor's interest was received through a transfer, or transfers, excluded from change in ownership by the provisions of either subdivision (f) of Section 62 or subdivision (b) of Section 65, unless the transferor qualifies as an original transferor under subdivision (b) of Section 65. In the case of any purchase or transfer subject to this paragraph involving two or more eligible transferors, the transferors may elect to combine their separate one-million-dollar ($1,000,000) exclusions and, upon making that election, the combined amount of their separate exclusions shall apply to any property jointly sold or transferred by the electing transferors, provided that in no case shall the amount of full cash value of real property of any one eligible transferor excluded under this election exceed the amount of the transferor's separate unused exclusion on the date of the joint sale or transfer.

(c) As used in this section:

(1) "Purchase or transfer between parents and their children" means either a transfer from a parent or parents to a child or children of the parent or parents or a transfer from a child or children to a parent or parents of the child or children. For purposes of this section, the date of any transfer between parents and their children under a will or intestate succession shall be the date of the decedent's death, if the decedent died on or after November 6, 1986.

(2) "Purchase or transfer of real property between grandparents and their grandchild or grandchildren" means a purchase or transfer on or after March 27, 1996, from a grandparent or grandparents to a grandchild or grandchildren if all of the parents of that grandchild or those grandchildren who qualify as the children of the grandparents are deceased as of the date of the transfer. For purposes of this section, the date of any transfer between grandparents and their grandchildren under a will or by intestate succession shall be the date of the decedent's death. Notwithstanding any other provision of law, for the lien date for the 2006–07 fiscal year and each fiscal year thereafter, in determining whether "all of the parents of that grandchild or those grandchildren, who qualify as the children of the grandparents, are deceased as of the date of purchase or transfer," a son-in-law or daughter-in-law of the grandparent that is a stepparent to the grandchild need not be deceased on the date of the transfer.

(3) "Children" means any of the following:

(A) Any child born of the parent or parents, except a child, as defined in subparagraph (D), who has been adopted by another person or persons.

(B) Any stepchild of the parent or parents and the spouse of that stepchild while the relationship of stepparent and stepchild exists. For purposes of this paragraph, the relationship of stepparent and stepchild shall be deemed to exist until the marriage on which the relationship is based is terminated by divorce, or, if the relationship is terminated by death, until the remarriage of the surviving stepparent.

(C) Any son-in-law or daughter-in-law of the parent or parents. For the purposes of this paragraph, the relationship of parent and son-in-law or daughter-in-law shall be deemed to exist until the marriage on which the relationship is based is terminated by divorce, or, if the relationship is terminated by death, until the remarriage of the surviving son-in-law or daughter-in-law.

(D) Any child adopted by the parent or parents pursuant to statute, other than an individual adopted after reaching the age of 18 years.

(E) Any foster child of a state-licensed foster parent, if that child was not, because of a legal barrier, adopted by the foster parent or foster parents before the child aged out of the foster care system. For purposes of this paragraph, the relationship between a foster child and foster parent shall be deemed to exist until terminated by death. However, for purposes of a transfer that occurs on the date of death, the relationship shall be deemed to exist on the date of death.

(4) "Grandchild" or "grandchildren" means any child or children of the child or children of the grandparent or grandparents.

(5) "Full cash value" means full cash value, as defined in Section 2 of Article XIII A of the California Constitution and Section 110.1, with any adjustments authorized by those sections, and the full value of any new construction in progress, determined as of the date immediately prior to the date of a purchase by or transfer to an eligible transferee of real property subject to this section.

(6) "Eligible transferor" means a grandparent, parent, or child of an eligible transferee.

(7) "Eligible transferee" means a parent, child, or grandchild of an eligible transferor.

(8) "Real property" means real property as defined in Section 104. Real property does not include any interest in a legal entity. For purposes of this section, real property includes an interest in a unit or lot within a cooperative housing corporation, as defined in subdivision (i) of Section 61.

(9) "Transfer" includes, and is not limited to, any transfer of the present beneficial ownership of property from an eligible transferor to an eligible transferee through the medium of an inter vivos or testamentary trust.

(10) "Social security number" also includes a taxpayer identification number issued by the Internal Revenue Service in the case in which the taxpayer is a foreign national who cannot obtain a social security number.

(d) (1) The exclusions provided for in subdivision (a) shall not be allowed unless the eligible transferee, the transferee's legal representative, the trustee of the transferee's trust, or the executor or administrator of the transferee's estate files a claim with the assessor for the exclusion sought and furnishes to the assessor each of the following:

(A) A written certification by the transferee, the transferee's legal representative, the trustee of the transferee's trust, or the executor or administrator of the transferee's estate, signed and made under penalty of perjury that the transferee is a parent, child, or grandchild of the transferor and that the transferor is his or her parent, child, or grandparent. In the case of a grandparent-grandchild transfer, the written certification shall also include a certification that all the parents of the grandchild or grandchildren who qualify as children of the grandparents were deceased as of the date of the purchase or transfer and that the grandchild or grandchildren did or did not receive a principal residence excludable under paragraph (1) of subdivision (a) from the deceased parents, and that the grandchild or grandchildren did or did not receive real property other than a principal residence excludable under paragraph (2) of subdivision (a) from the deceased parents. The claimant shall provide legal substantiation of any matter certified pursuant to this subparagraph at the request of the county assessor.

(B) A written certification by the transferor, the transferor's legal representative, the trustee of the transferor's trust, or the executor or administrator of the transferor's estate, signed and made under penalty of perjury that the transferor is a grandparent, parent, or child of the transferee and that the transferor is seeking the exclusion under this section and will not file a claim to transfer the base year value of the property under Section 69.5.

(C) A written certification shall also include either or both of the following:

(i) If the purchase or transfer of real property includes the purchase or transfer of residential real property, a certification that the residential real property is or is not the transferor's principal residence.

(ii) If the purchase or transfer of real property includes the purchase or transfer of real property other than the transferor's principal residence, a certification that other real property of the transferor that is subject to this section has or has not been previously sold or transferred to an eligible transferee, the total amount of full cash value, as defined in subdivision (c), of any real property subject to this section that has been previously sold or transferred by that transferor to eligible transferees, the location of that real property, the social security number of each eligible transferor, and the names of the eligible transferees of that property.

(D) If there are multiple transferees, the certification and signature may be made by any one of the transferees, if both of the following conditions are met:

(i) The transferee has actual knowledge that, and the certification signed by the transferee states that, all of the transferees are eligible transferees within the meaning of this section.

(ii) The certification is signed by the transferee as a true statement made under penalty of perjury.

(E) In the case of a transfer between a foster parent and foster child, the claim filed with the assessor shall include a certified copy of the court decision regarding the foster child status of the individual and a certified statement from the appropriate county agency stating that the foster child was not, because of a legal barrier, adopted by the foster parent or foster parents. Upon a request by the county assessor, the claimant also shall provide to the assessor legal substantiation of any matter certified under this subparagraph.

(2) If the full cash value of the real property purchased by or transferred to the transferee exceeds the permissible exclusion of the transferor or the combined permissible exclusion of the transferors, in the case of a purchase or transfer from two or more joint transferors, taking into account any previous purchases by or transfers to an eligible transferee from the same transferor or transferors, the transferee shall specify in his or her claim the amount and the allocation of the exclusion he or she is seeking. Within any appraisal unit, as determined in accordance with subdivision (d) of Section 51 by the assessor of the county in which the real property is located, the exclusion shall be applied only on a pro rata basis, however, and shall not be applied to a selected portion or portions of the appraisal unit.

(e) (1) The State Board of Equalization shall design the form for claiming eligibility. Except as provided in paragraph (2), any claim under this section shall be filed:

(A) For transfers of real property between parents and their children occurring prior to September 30, 1990, within three years after the date of the purchase or transfer of real property for which the claim is filed.

(B) For transfers of real property between parents and their children occurring on or after September 30, 1990, and for the purchase or transfer of real property between grandparents and their grandchildren occurring on or after March 27, 1996, within three years after the date of the purchase or transfer of real property for which the claim is filed, or prior to transfer of the real property to a third party, whichever is earlier.

(C) Notwithstanding subparagraphs (A) and (B), a claim shall be deemed to be timely filed if it is filed within six months after the date of mailing of a notice of supplemental or escape assessment, issued as a result of the purchase or transfer of real property for which the claim is filed.

(2) In the case in which the real property subject to purchase or transfer has not been transferred to a third party, a claim for exclusion under this section that is filed subsequent to the expiration of the filing periods set forth in paragraph (1) shall be considered by the assessor, subject to all of the following conditions:

(A) Any exclusion granted pursuant to that claim shall apply commencing with the lien date of the assessment year in which the claim is filed.

(B) Under any exclusion granted pursuant to that claim, the adjusted full cash value of the subject real property in the assessment year described in subparagraph (A) shall be the adjusted base year value of the subject real property in the assessment year in which the excluded purchase or transfer took place, factored to the assessment year described in subparagraph (A) for both of the following:

(i) Inflation as annually determined in accordance with paragraph (1) of subdivision (a) of Section 51.

(ii) Any subsequent new construction occurring with respect to the subject real property.

(3) (A) Unless otherwise expressly provided, the provisions of this subdivision shall apply to any purchase or transfer of real property that occurred on or after November 6, 1986.

(B) Paragraph (2) shall apply to purchases or transfers between parents and their children that occurred on or after November 6, 1986, and to purchases or transfers between grandparents and their grandchildren that occurred on or after March 27, 1996.

(4) For purposes of this subdivision, a transfer of real property to a parent or child of the transferor shall not be considered a transfer to a third party.

(f) The assessor may report quarterly to the State Board of Equalization all purchases or transfers, other than purchases or transfers involving a principal residence, for which a claim for exclusion is made pursuant to subdivision (d). Each report shall contain the assessor's parcel number for each parcel for which the exclusion is claimed, the amount of each exclusion claimed, the social security number of each eligible transferor, and any other information the board may require in order to monitor the one million dollar ($1,000,000) limitation in paragraph (2) of subdivision (a). In recognition of the state and local interests served by the action made optional in this subdivision, the Legislature encourages the assessor to continue taking the action formerly mandated by this subdivision.

(g) This section shall apply to both voluntary transfers and transfers resulting from a court order or judicial decree. Nothing in this subdivision shall be construed as conflicting with paragraph (1) of subdivision (c) or the general principle that transfers by reason of death occur at the time of death.

(h) (1) Except as provided in paragraph (2), this section shall apply to purchases and transfers of real property completed on or after November 6, 1986, and shall not be effective for any change in ownership, including a change in ownership arising on the date of a decedent's death, that occurred prior to that date.

(2) This section shall apply to purchases or transfers of real property between grandparents and their grandchildren occurring on or after March 27, 1996, and, with respect to purchases or transfers of real property between grandparents and their grandchildren, shall not be effective for any change in ownership, including a change in ownership arising on the date of a decedent's death, that occurred prior to that date.

(i) A claim filed under this section is not a public document and is not subject to public inspection, except that a claim shall be available for inspection by the transferee and the transferor or their respective spouse, the transferee's legal representative, the transferor's legal representative, the trustee of the transferee's trust, the trustee of the transferor's trust, and the executor or administrator of the transferee's or transferor's estate.

(j) (1) If the assessor notifies the transferee in writing of potential eligibility for exclusion from change in ownership under this section, a certified claim for exclusion shall be filed with the assessor within 45 days of the date of the notice of potential eligibility. If a certified claim for exclusion is not filed within 45 days, the assessor may send a second notice of potential eligibility for exclusion, notifying the transferee that a certified claim for exclusion has not been received and that reassessment of the property will commence unless a certified claim for exclusion is filed within 60 days of the date of the second notice of potential eligibility. The second notice of potential eligibility shall indicate whether a certified claim for exclusion that is not filed within 60 days will be subject to a processing fee as provided in paragraph (2).

(2) If a certified claim for exclusion is not filed within 60 days of the date of the second notice of potential eligibility and an eligible transferee subsequently files a claim and qualifies for the exclusion, the assessor may, upon authorization by a county board of supervisors, require an eligible transferee to pay a one-time processing fee, collected at the time the claim is submitted, and reimbursed by the assessor if the claim is ineligible. The fee shall be subject to the provisions of Chapter 12.5 (commencing with Section 54985) of Part 1 of Division 2 of Title 5 of the Government Code and shall not exceed the amount of the actual and reasonable costs incurred by the assessor for reassessment work done due to failure to file the claim for exclusion or one hundred seventy-five dollars ($175), whichever is less.

(3) The failure to file a certified claim for exclusion within the filing periods specified by this subdivision shall not be construed to limit any exclusion from being granted pursuant to a claim filed within the filing periods specified by subdivision (e).

History.—Added by Stats. 1987, Ch. 48, in effect June 17, 1987. Stats. 1988, Ch. 769, in effect January 1, 1989, added the second sentence, and substituted the balance of the third sentence for "may jointly sell or transfer property with a full cash value of not more than the combined amount of their separate exclusions" after "election," in paragraph (2) of subdivision (b); added the second sentence to subparagraph (B) of paragraph (2) of subdivision (c); deleted the period after "parents" and added the balance of the first sentence and the second sentence to subparagraph (C) of paragraph (2) of subdivision (C); added "and the full value of any new construction in progress," after "sections," in paragraph (3) of subdivision (c); added paragraph (7) to subdivision (c); added the second sentence to the first paragraph and added a new second paragraph to subparagraph (C) of paragraph (2) of subdivision (d); and deleted the period after "1986" and added ", and shall not be effective for any change in ownership, including a change in ownership arising on the date of a decedent's death, which occurred prior to that date." in subdivision (f). Stats. 1990, Ch. 126, in effect June 11, 1990, deleted "while the relationship of parent and son-in-law or daughter-in-law exists" after "parents" in subparagraph (C) of paragraph (2) of subdivision (c); added "the Social Security number of each eligible transferor," after "that real property" in subparagraph (B) of paragraph (2) of subdivision (d); and substituted "Social Security" for "tax identification" after "claimed, the" in the second sentence of the third paragraph of subdivision (d). Stats. 1990, Ch. 1494, in effect September 30, 1990, added ", or prior to . . . whichever is earlier" after "claim is filed" in the second sentence of the second paragraph of subdivision (d). Stats. 1992, Ch. 1180, in effect January 1, 1993, added "For purposes . . . November 6, 1986" after "or children" as the second sentence in paragraph (1) of subdivision (c); added paragraph number (1) after subdivision letter (d); changed former paragraph numbers (1) and (2) of subdivision (d) to subparagraphs (A) and (B), respectively, of paragraph (1) of subdivision (d); relettered subparagraphs (A) and (B) of former paragraph (2) of subdivision (d) as subsections (i) and (ii), respectively, of subparagraph (B) of paragraph (1) of subdivision (d); changed former subparagraph (C) of former paragraph (2) of subdivision (d) to paragraph (2) of subdivision (d); created new subdivision (e) with the former second paragraph of the former subparagraph (C) of former paragraph (2) of subdivision (d); added a colon after "shall be filed" in the newly created subdivision (e); created paragraph (1) in the newly created subdivision (e) and added "For transfers . . . September 30, 1990" after "(1)"; added a period after "claim is filed" in the newly created paragraph (1) of subdivision (e) and created new paragraph (2) of subdivision (e) by adding "For transfers . . . is filed," before "or prior to"; created new subdivision (f) with the former third paragraph of the former subparagraph (C) of former paragraph (2) of subdivision (d); deleted "this" after "pursuant to", and added "(d)" after "subdivision" in the first sentence of the newly created subdivision (f); and relettered former subdivisions (e) and (f) as subdivisions (g) and (h), respectively. Stats. 1993, Ch. 709, in effect January 1, 1994, added ", the transferee's . . . estate" after "transferee" in paragraph (1) and in subparagraph (A) of paragraph (1), substituted "that" for "which" in subdivision (ii), and substituted "from" for "of" in paragraph (2) of subdivision (d); added paragraphs (3) and (4) to subdivision (e); deleted "as" after "information" in the second sentence of paragraph (f); added the second sentence to paragraph (g); and substituted "that" for "which" after "death," in paragraph (h). Stats. 1994, Ch. 1222, in effect January 1, 1995, added paragraph (8) to subdivision (c). Stats. 1996, Ch. 1087, in effect January 1, 1997, deleted "either of" after "shall not include" in the first sentence, and added paragraph (3) of subdivision (a); substituted "homeowners'" for "homeowner's" and "veterans' " for "veteran's" in paragraph (1) of subdivision (b); added subparagraphs (2) and (4), and renumbered former subparagraphs (2), (3), (4), (5), (6), (7) and (8) as (3), (5), (6), (7), (8), (9) and (10), respectively, of subdivision (c), added "grandparent," to renumbered subparagraph (6), deleted "or" before "child" and added ",or grandchild" after "child" to renumbered subparagraph (7); substituted "grandparent, parent, child, or grandchild" for "parent or child" in the first sentence of subparagraph (A), and added the second and third sentences to subparagraph (A) in paragraph (1) of subdivision (d), added "grandparent," after "the transferor is a" in subparagraph (B); added "and for the purchase or transfer of real property between grandparents and their grandchildren occurring on or after March 27, 1996," after "September 30, 1990," to subparagraph (2) of subdivision (e); substituted "social security" for "Social Security" after "the" in the second sentence of subdivision (f); and substituted "(1) Except as provided by paragraph (2), this section" for "This section", and added paragraph (2) of subdivision (h). Stats. 1997, Ch. 941 (SB 542), in effect January 1, 1998, substituted "subdivision (d)" for "subdivision (e)" after "accordance with" in the second sentence of paragraph (2) of subdivision (d); added paragraph number (1) after subdivision letter (e) and added "Except as provided in paragraph (2)," before "any claim" in the second sentence of newly created paragraph (1), changed former paragraph numbers (1), (2) and (3) to subparagraphs (A), (B) and (C), respectively, substituted "subparagraphs (A) and (B)" for "paragraphs (1) and (2)" after "notwithstanding" in subparagraph (C), added paragraph (2), renumbered former paragraph (4) to paragraph (3), added "(A)" before "Unless otherwise" and added subparagraph (B) to former paragraph (4) in subdivision (e). Stats. 1999, Ch. 941 (SB 1231), in effect January 1, 2000, added paragraph (4) to subdivision (e). Stats. 2001, Ch. 613 (SB 1184), in effect January 1, 2002, added ", signed and" after "estate" and added "and that the transferor is his or her parent, child, or grandparent" after "transferor" in the first sentence of subparagraph (A), deleted the former first sentence of subparagraph (B) which provided that "A copy of a written certification by the transferor, the transferor's legal representative, or the executor or administrator of the transferor's estate made under penalty of perjury that the transferor is a grandparent, parent, or child of the transferee." and substituted "A written" for "The written" before "certification" in the former second sentence therein, and added subparagraph (C) to paragraph (1) of subdivision (d). Stats. 2002, Ch. 775 (SB 2092), in effect January 1, 2003, added a comma after "terminated by divorce" in the second sentence of subparagraph (C) of paragraph (3) of subdivision (c), and added new subparagraph (B) to paragraph (1) of subdivision (d) and relettered former subparagraphs (B) and (C) as subparagraphs (C) and (D), respectively, therein. Stats. 2004, Ch. 227 (SB 1102), in effect August 16, 2004, and Stats. 2004, Ch. 889 (AB 2853), in effect September 29, 2004, substituted "may" for "shall" after "The assessor" in the first sentence, substituted "may" for "shall" after "the board" in the second sentence, and added the third sentence in subdivision (f). Stats. 2005, Ch. 264 (SB 555), in effect January 1, 2006, added the second sentence to subparagraph (A) of paragraph (3) of subdivision (a), added the third sentence to paragraph (2) of subdivision (c), and added subdivision (i). Stats. 2006, Ch. 224 (SB 1607), in effect January 1, 2007, amended the uncodified legislative intent language of Section 2 of the Stats. 1987, Ch. 48 to create new subdivision (a) with the former first sentence of the first paragraph and added "both of the following:" after "the intent of" therein, created new paragraph (1) with the balance of the former first sentence commencing with "Proposition 58" and added paragraph (2) thereto; created new subdivision (b) with the former second and third sentences; and created new subdivision (c) with the former fourth sentence, deleted "nothing in" after "provided herein," and added "not" after "this section shall" therein. Stats. 2007, Ch. 450 (AB 402), in effect January 1, 2008, designated former paragraph (1) of subdivision (a) as subparagraph (A) and added subparagraph (B) thereto; substituted "that is eligible for a homeowners' exemption or a disabled veterans' exemption as a result of the transferor's ownership and occupation of the eligible dwelling" for "for which a homeowners' exemption or a disabled veterans' residence exemption has been granted in the name of the transferor's ownership" after "means a dwelling" and deleted "eligible" after "occupation of the" in the first sentence and deleted "principal" after "'and underlying the" in the second sentence of paragraph (1) and substituted "one-million-dollar" for "one million dollar" twice in the first and third sentences of paragraph (2) of subdivision (b); added subparagraph (E) to paragraph (3) of subdivision (c); and deleted "grandparent," after "transferee is a" in the first sentence of subparagraph (A) of paragraph (1) of subdivision (d) and added subparagraph (E) thereto. Stats. 2008, Ch. 349 (SB 1233), in effect January 1, 2009, added subdivision (j). Stats. 2010, Ch. 654 (SB 1494), in effect January 1, 2011, added "the trustee of the transferee's trust," after "legal representative," three times in the first sentences of paragraph (1), subparagraph (A), and subparagraph (B) of subdivision (d) and added "the trustee of the transferee's trust, the trustee of the transferor's trust," after "legal representative," in the first sentence of subdivision (i). Stats. 2011, Ch. 351 (SB 947), in effect January 1, 2012, added the second sentence to paragraph (8) of subdivision (c) commencing with "For purposes of" and substituted "transferor's" for "transferee's" after "trustee of the" in the first sentence of subparagraph (B) of paragraph (1) of subdivision (d).

Note.—Section 2 of Stats. 1987, Ch. 48 (AB 47), as amended by Section 6 of Stats. 2006, Ch. 224 (SB 1607), provided that:

(a) It is the intent of the Legislature that the provisions of Section 63.1 of the Revenue and Taxation Code shall be liberally construed in order to carry out the intent of both of the following:

(1) Proposition 58 on the November 4, 1986, general election ballot to exclude from change in ownership purchases or transfers between parents and their children described therein.

(2) Proposition 193 on the March 26, 1996, primary election ballot to exclude from change in ownership purchases or transfers between grandparents and their grandchildren described therein.

(b) Specifically, transfers of real property from a corporation, partnership, trust, or other legal entity to an eligible transferor or transferors, where the latter are the sole owner or owners of the entity or are the sole beneficial owner or owners of the property, shall be fully recognized and shall not be ignored or given less than full recognition under a substance-over-form or step-transaction doctrine, where the sole purpose of the transfer is to permit an immediate retransfer from an eligible transferor or transferors to an eligible transferee or transferees which qualifies for the exclusion from change in ownership provided by Section 63.1. Further, transfers of real property between eligible transferors and eligible transferees shall also be fully recognized when the transfers are immediately followed by a transfer from the eligible transferee or eligible transferees to a corporation, partnership, trust, or other legal entity where the transferee or transferees are the sole owner or owners of the entity or are the sole beneficial owner or owners of the property, if the transfer between eligible transferors and eligible transferees satisfies the requirements of Section 63.1.

(c) Except as provided herein, this section shall not be construed as an expression of intent on the part of the Legislature disapproving in principle the appropriate application of the substance-over-form or step-transaction doctrine.

Sec. 3 thereof provided that the Legislature finds that Section 1 of this act mandates a new program or higher level of service on local government by requiring periodic reports to the State Board of Equalization by county assessors with regard to all purchases or transfers of real property specified in subdivision (d) of Section 63.1 of the Revenue and Taxation Code, as added by Section 1 of this act. As required by Section 6 of Article XIII B of the California Constitution, reimbursement to local agencies and school districts for costs mandated by the state, pursuant to this act shall be made pursuant to Part 7 (commencing with Section 17500) of Division 4 of Title 2 of the Government Code and, if the statewide cost of the claim for reimbursement does not exceed five hundred thousand dollars ($500,000), shall be made from the State Mandates Claims Fund.

Note.—Section 4 of Stats. 1988, Ch. 769, provided that except for the addition of paragraph (7) to subdivision (c), the amendments to this section shall apply to purchases and transfers of real property which occur on or after November 6, 1986.

Note.—Section 8 of Stats. 1992, Ch. 1180 provided that the Legislature finds and declares that the amendments made by Section 2 of this act in paragraph (1) of subdivision (e) of this section do not constitute changes in, but are declaratory of, existing law.

Note.—Section 41 of Stats. 1999, Ch. 941 (SB 1231) provided that notwithstanding Section 17610 of the Government Code, if the Commission on State Mandates determines that this act contains costs mandated by the state, reimbursement to local agencies and school districts for those costs shall be made pursuant to Part 7 (commencing with Section 17500) of Division 4 of Title 2 of the Government Code. If the statewide cost of the claim for reimbursement does not exceed one million dollars ($1,000,000), reimbursement shall be made from the State Mandates Claims Fund.

Note.—Section 5 of Stats. 2001, Ch. 613 (SB 1184) 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. Sec. 6 therein provided that notwithstanding Section 17610 of the Government Code, if the Commission on State Mandates determines that this act contains costs mandated by the state, reimbursement to local agencies and school districts for those costs shall be made pursuant to Part 7 (commencing with Section 17500) of Division 4 of Title 2 of the Government Code. If the statewide cost of the claim for reimbursement does not exceed one million dollars ($1,000,000), reimbursement shall be made from the State Mandates Claims Fund.

Note.—Section 18 of Stats. 2005, Ch. 264 (SB 555), provided that the Legislature finds and declares that the amendments made by this act to Sections 63.1 and 69.5 of the Revenue and Taxation Code impose limitations on the public's right of access to the meetings of public bodies or the writings of public officials and agencies within the meaning of Section 3 of Article I of the California Constitution. Pursuant to that constitutional provision, the Legislature makes the following findings to demonstrate the interest protected by this limitation and the need for protecting that interest:

(a) Claims filed under Section 63.1 or Section 69.5 contain taxpayer sensitive personal information, including social security numbers, dates of birth, home addresses, home telephone numbers, marital status, adoption status, financial matters, and medical information. Notwithstanding Section 3 of Article I of the California Constitution, county assessors have a responsibility and an obligation to safeguard from public access a taxpayer's personal information with which it has been entrusted.

(b) The right to privacy is a personal and fundamental right protected by Section 1 of Article I of the California Constitution and by the United States Constitution. All individuals have a right of privacy in information pertaining to them.

(c) This state has previously recognized, in Section 408.2 of the Revenue and Taxation Code, the importance of protecting the confidentiality and privacy of an individual's personal and financial information contained in homeowners' exemption claims, property statements, and change of ownership statements filed with county assessors for property tax purposes.

(d) In addition to the right of privacy, there is a need to protect from public disclosure personal information due to the growing prevalence and debilitating nature of identity theft.

(e) It is not the intent of this act to make confidential that a particular property has received a property tax benefit pursuant to Section 63.1 or Section 69.5 of the Revenue and Taxation Code, or the amount of the benefit, but only to protect the personal information contained in the claim form. In addition, the Legislature further finds that in determining the fiscal impact resulting from either of these provisions, county assessors may provide aggregated data on property in their counties that have been extended these property tax benefits.

Construction.—A devisee who inherited real property under his mother's will was not required to submit written certification of the relationship in accordance with Section 63.1(d) in order to qualify for exemption under Article XIII A, Section 2(h) of the Constitution where Section 63.1 did not exist at the time the property passed to him by the probate court's order of distribution and where the devisee did what he was required to do at the time to ripen his claim. Larson v. Duca, 213 Cal.App.3d 324.

Under this section, certain transfers of real property between parents and children are excluded from change in ownership. The exclusion is not applicable to a transfer of real property from a parent to a limited partnership wholly owned by the parent and her adult children, however. The section limits the scope of the exclusion by restricting the definition of "children" to natural persons. Penner v. Santa Barbara County, 37 Cal.App.4th 1672.

Step transaction doctrine.—A reassessment of real property transferred by a parent to a limited partnership wholly owned by herself and her adult children did not violate the step transaction doctrine, even though the exclusion would have been applicable had the owner first transferred the property to herself and her children and then to the partnership. The doctrine treats a series of nominally separate transactional steps as a single transaction if the steps are, in substance, interdependent and focused toward a particular result. However, the doctrine allows certain steps actually taken to be ignored; it does not allow a taxpayer to invent steps that never existed. Having chosen to transfer the real property directly to the limited partnership, the owner was required to accept the tax consequences of that choice. Penner v. Santa Barbara County, 37 Cal.App.4th 1672. Subdivision (e)(4) of this section does not violate the constitutional prohibition against making a gift of public funds pursuant to Article XVI, Section 6 of the Constitution, which generally bars the Legislature from providing relief for taxes which have become fixed and vested, because the tax relief provided falls within the well recognized exception for funds expended for a public purpose. By enlarging the time period for filing claims for exclusion, the subdivision implements the provisions of Article XIII A, Section 2, Subdivision (h)(1) of the Constitution and, thereby, fulfills a valid public purpose of relieving hardship on taxpayers, even though such public purpose was not expressly articulated by the Legislature. Scott v. State Board of Equalization, 50 Cal.App.4th 1597.

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64. Corporation and partnership interests. (a) Except as provided in subdivision (i) of Section 61 and subdivisions (c) and (d) of this section, the purchase or transfer of ownership interests in legal entities, such as corporate stock or partnership or limited liability company interests, shall not be deemed to constitute a transfer of the real property of the legal entity. This subdivision is applicable to the purchase or transfer of ownership interests in a partnership without regard to whether it is a continuing or a dissolved partnership.

(b) Any corporate reorganization, where all of the corporations involved are members of an affiliated group, and that qualifies as a reorganization under Section 368 of the United States Internal Revenue Code and that is accepted as a nontaxable event by similar California statutes, or any transfer of real property among members of an affiliated group, or any reorganization of farm credit institutions pursuant to the federal Farm Credit Act of 1971 (Public Law 92-181), as amended, shall not be a change of ownership. The taxpayer shall furnish proof, under penalty of perjury, to the assessor that the transfer meets the requirements of this subdivision.

For purposes of this subdivision "affiliated group" means one or more chains of corporations connected through stock ownership with a common parent corporation if both of the following conditions are met:

(1) One hundred percent of the voting stock, exclusive of any share owned by directors, of each of the corporations, except the parent corporation, is owned by one or more of the other corporations.

(2) The common parent corporation owns, directly, 100 percent of the voting stock, exclusive of any shares owned by directors, of at least one of the other corporations.

(c) (1) When a corporation, partnership, limited liability company, other legal entity, or any other person obtains control through direct or indirect ownership or control of more than 50 percent of the voting stock of any corporation, or obtains a majority ownership interest in any partnership, limited liability company, or other legal entity through the purchase or transfer of corporate stock, partnership, or limited liability company interest, or ownership interests in other legal entities, including any purchase or transfer of 50 percent or less of the ownership interest through which control or a majority ownership interest is obtained, the purchase or transfer of that stock or other interest shall be a change of ownership of the real property owned by the corporation, partnership, limited liability company, or other legal entity in which the controlling interest is obtained.

(2) On or after January 1, 1996, when an owner of a majority ownership interest in any partnership obtains all of the remaining ownership interests in that partnership or otherwise becomes the sole partner, the purchase or transfer of the minority interests, subject to the appropriate application of the step-transaction doctrine, shall not be a change in ownership of the real property owned by the partnership.

(d) If property is transferred on or after March 1, 1975, to a legal entity in a transaction excluded from change in ownership by paragraph (2) of subdivision (a) of Section 62, then the persons holding ownership interests in that legal entity immediately after the transfer shall be considered the "original coowners." Whenever shares or other ownership interests representing cumulatively more than 50 percent of the total interests in the entity are transferred by any of the original coowners in one or more transactions, a change in ownership of that real property owned by the legal entity shall have occurred, and the property that was previously excluded from change in ownership under the provisions of paragraph (2) of subdivision (a) of Section 62 shall be reappraised.

The date of reappraisal shall be the date of the transfer of the ownership interest representing individually or cumulatively more than 50 percent of the interests in the entity.

A transfer of shares or other ownership interests that results in a change in control of a corporation, partnership, limited liability company, or any other legal entity is subject to reappraisal as provided in subdivision (c) rather than this subdivision.

(e) To assist in the determination of whether a change of ownership has occurred under subdivisions (c) and (d), the Franchise Tax Board shall include a question in substantially the following form on returns for partnerships, banks, and corporations (except tax-exempt organizations):

If the corporation (or partnership or limited liability company) owns real property in California, has cumulatively more than 50 percent of the voting stock (or more than 50 percent of total interest in both partnership or limited liability company capital and partnership or limited liability company profits) (1) been transferred by the corporation (or partnership or limited liability company) since March 1, 1975, or (2) been acquired by another legal entity or person during the year–? (See instructions.)

If the entity answers "yes" to (1) or (2) in the above question, then the Franchise Tax Board shall furnish the names and addresses of that entity and of the stock or partnership or limited liability company ownership interest transferees to the State Board of Equalization.

History.—Stats. 1979, Ch. 1161, in effect September 29, 1979, substituted "A corporation, partnership, other legal entity or any other person" for "one corporation", and substituted "any" for "another" after "in" in the first sentence of subdivision (c). Stats. 1980, Ch. 1349, in effect January 1, 1981, added "and (d)" after "subdivision (c)" in subdivision (a); added "or obtains a majority ownership interest in any partnership or other legal entity" before "through the purchase", substituted "partnership interest, or ownership interests in other legal entities" for "exclusive of any shares owned by directors" after "corporate stock", added "or other interest" before "shall be" and "partnership, or other legal entity" before "in which" in subdivision (c); and added subdivisions (d) and (e). Stats. 1982, Ch. 1465, in effect January 1, 1983, deleted "by merger or consolidation," after "reorganization," in the first sentence of subdivision (b); substituted "If" for "Whenever" before "property," added "on or after March 1, 1975," after "transferred", "paragraph (2) of" before "subdivision (a)", and "then" after "Section 62," in the first sentence, and substituted "that" for "the " before "real property", added "which . . . Section 62" before "shall be", and deleted "by the assessor pursuant to Section 65" after "reappraised" in the second sentence of the first paragraph of subdivision (d), and added the fourth paragraph thereof; and substituted "subdivision (c) and (d)" for "subdivision (c)" after "under" in the first paragraph of subdivision (e), substituted "has cumulatively . . . person" for "was control of the corporation (partnership) transferred or sold" after "California," in the second paragraph thereof, and substituted "the" for "an" after "If", added "(1) or (2) in "after 'cyes' to", substituted "shall" for "will" after "Board", substituted "names and addresses of that" for "name and address of such" after "furnish the", and added "and of . . . transferees" after "entity" in the third paragraph thereof. Stats. 1984, Ch. 678, in effect January 1, 1985, deleted the former third paragraph of subdivision (d) which stated that "The persons holding ownership interests in the legal entity immediately following the reappraisal shall be considered the new original co-owners." Stats. 1988, Ch. 560, in effect January 1, 1989, added ", or any reorganization of farm credit institutions pursuant to the Federal Farm Credit Act of 1971 (Public Law 92-181), as amended," before "shall" in the first sentence of subdivision (b). Stats. 1994, Chs. 1200 and 1243, in effect September 30, 1994, added references to limited liability company throughout text; added "(as enacted . . . 1955)" after "25105" and substituted "the" for "such" and substituted "that" for "such" in subdivision (c). Stats. 1995, Ch. 497, in effect January 1, 1996, added the second sentence in subdivision (a); substituted "that" for "which" twice in the first paragraph in subdivision (b); added "both of . . . are met" after "corporation if" in the second paragraph of subdivision (b); substituted a period for "; and" after "corporations" in paragraph (1) of subdivision (b); added paragraph number designation (1) before first paragraph of subdivision (c), substituted "through direct . . . stock of" for ", as defined in Section 25105 (as enacted by Chapter 938 of the Statutes of 1955), in", after "obtains control", added "including any . . . is obtained," after "legal entities,", and added "the real" after "ownership of" therein; added paragraph (2) to subdivision (c); and substituted "that" for "which" twice in the first paragraph and in the third paragraph of subdivision (d). Stats. 1998, Ch. 591 (SB 2237), in effect January 1, 1999, substituted "subdivision (i)" for "subdivision (h)" after "as provided in" in the first sentence of subdivision (a). Stats. 1999, Ch. 83 (SB 966), in effect January 1, 2000, added a comma after "this subdivision" in the first sentence of the second paragraph of subdivision (b), and deleted "In order" before "To assist" in the first sentence of the first paragraph of subdivision (e).

Note.—Section 40 of Stats. 1995, Ch. 497, providing the following:

The Legislature finds and declared that the amendments of subdivision (a) and paragraph (1) of subdivision (c) of Section 64 of the Revenue and Taxation Code made by this act do not constitute a change in, but are declaratory of, existing law.

The Legislature further finds and declares that the amendment adding paragraph (2) to subdivision (c) of Section 64 of the Revenue and Taxation Code that is made by this act is necessary to correctly state the change in ownership results intended by the Legislature when a majority partner acquires the minority partners' ownership interests. It is the Legislature's intent that, absent the appropriate application of the step-transaction doctrine or one of the express exceptions listed in subdivision (a) of Section 64 of the Revenue and Taxation Code, the transfer of minority interests in a partnership to the majority owner shall not constitute a change in ownership of the partnership real property, on or after January 1, 1996.

Note.—Section 5 of Stats. 1980, Ch. 1349, provided the amendments made to Section 64 shall be effective for the 1981–82 assessment year and years thereafter. It is the intent of the Legislature that the provisions of this act shall apply to the determination of base year values for the 1981–82 fiscal year, and shall apply to any change in ownership occurring on or after March 1, 1975. No escape assessments shall be levied and no refund shall be made for any years prior to 1981–82 for any increases or decreases in value made for the 1981–82 fiscal year or fiscal years thereafter as the result of the enactment of this act. Section 6 thereof provided the provisions of subdivision (d) of Section 64 as added by this act shall be operative with respect to returns for years beginning in 1981 and thereafter.

Note.—Section 11 of Stats. 1988, Ch. 560, provided that the amendment made to Section 64 shall be applicable to the 1985–86 fiscal year and fiscal years thereafter. The Legislature finds and declares that farm credit banks are instrumentalities of the federal government, and that the recent reorganization of these farm credit institutions was effected pursuant to federal law and regulations. The Legislature further finds and declares that the reorganization of these institutions was of a type which would have avoided a change in ownership reappraisal under Section 64 of the Revenue and Taxation Code if the institutions had been members of a privately owned "affiliated group" connected through stock ownership with a common parent, rather than a federal instrumentality.

Construction.—This section applies to true changes in ownership, rather than "paper" ones. Where a corporation is involved, the term exempts a mere change in the form of ownership or corporate organization, but it encompasses outright sale of either land or the company to a stranger, whether for cash or for shares of stock. Thus, reassessment may not be avoided by selling all or a majority of the stock in real estate holding companies, and all realty held by a holding company and its former parent corporation was subject to reassessment upon a surviving corporation's acquisition of control of the holding company by merger with the former parent corporation. The change of ownership of the realty occurred within the meaning of section 64(c) when the shareholders of the former parent corporation became proportionate, but minority, shareholders in the surviving corporation, thereby losing control, and conversely, the surviving corporation obtained control of the holding company by acquiring a majority of its voting shares. Section 64(b) was not applicable since the merger was not between members of an affiliated group where none of the corporations owned 100 percent of the voting stock of the other at the time the merger tender offer was accepted. Sav-on Drugs, Inc. v. Orange County, 190 Cal.App.3d 1611.

A corporation, which obtained direct control of an intermediary corporation by conversion of its wholly owned subsidiary's common stock into the common stock of the intermediary, obtained indirect control of a separate subsidiary corporation that was wholly owned by the intermediary. Thus, notwithstanding the fact that the acquiring corporation did not directly purchase the stock of the intermediary's subsidiary, a change in ownership of that subsidiary's real property holdings occurred within the meaning of Section 64(c). The determinative factor as to whether a change in ownership of corporate property has occurred is control of the corporation that owns the property, not the right to occupy the property or to take possession of it. Title Ins. & Trust Co. v. Riverside County, 48 Cal.3d 84.

A corporate reorganization effecting a change in the majority controlling ownership of the corporate entities results in a change of ownership of the real property under Section 64(c), even though the reorganization itself was exempt from state and federal income taxation. The reorganization involved affiliated entities that were not affiliated after the transaction, and for Section 64(b) to be applicable, "members of an affiliated group" must have been affiliated from beginning to end, under the same ownership and control before a transfer and after. Pueblos Del Rio South v. City of San Diego, 209 Cal.App.3d 893.

A change in ownership of corporate real property triggering reassessment of the property occurred within the meaning of Section 64(c) where the taxpayer and another corporation formed a new corporation which set up two wholly owned subsidiary corporations which were then merged into the taxpayer and the other corporation, but which left the taxpayer's shareholders with a majority interest in the stock of the new corporation. Kraft, Inc. v. Orange County, 219 Cal.App.3d 1104. The acquisition of a film corporation by another corporation, specially created for that purpose, constituted a change in ownership within the meaning of Section 64(c) so as to allow reassessment of real property owned by the film corporation, even though none of the investors in the acquiring corporation owned more than 50 percent of its stock. The ultimate control theory, reflected in that section and which looks through the titleholder to the entity ultimately responsible, did not require that the acquiring corporation be ignored in order to focus instead on the individual investors. Twentieth Century Fox Film Corp. v. Los Angeles County, 223 Cal.App.3d 1158. The statutory definition of "control", in a partnership, a majority ownership interest, prevails over the concept that a choice in action represents indirect, constructive or effective control. Shuwa Investments Corporation v. Los Angeles County, 1 Cal.App.4th 1635. While acquisition of a minority partnership interest does not constitute a change of ownership under this section, this exemption applies only to transfers involving continuing entities. Thus, where the majority partner purchased the minority partners' partnership interests, in this case the partnership dissolved, this was a change in ownership, and the partnership's subsequent transfer of title to its real property to the sole partner was a mere formality. Zapara v. Orange County, 26 Cal.App.4th 464.

Section 64(e) is designed to assist the appropriate authorities in determining whether a change of ownership has occurred by alerting them to stock purchases that might lead to reassessment of real property, not to state the circumstances under which a property value tax reassessment should occur. Title Ins. & Trust Co. v. Riverside County, 48 Cal.3d 84.

Legislative intent.—The intent of the Legislature is the end and aim of all statutory construction. The Legislature's failure to adopt a proposed amendment to Section 64(c) which would have expressly extended application of the subdivision to corporate subsidiaries is not conclusive evidence of its intent that the subdivision not apply to subsidiaries. The Legislature may have objected to other portions of the bill, which contained numerous other provisions, or it may have determined that further clarification of the status of subsidiaries was unnecessary. Title Ins. & Trust Co. v. Riverside County, 48 Cal.3d 84.

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65. Termination of joint tenancy or tenancy in common. [Repealed by Stats. 1980, Ch. 1081, in effect September 26, 1980.]

65. Joint tenancy interests. (a) The creation, transfer, or termination of any joint tenancy is a change in ownership except as provided in this section, Section 62, and Section 63. Upon a change in ownership of a joint tenancy interest only the interest or portion which is thereby transferred from one owner to another owner shall be reappraised.

(b) There shall be no change in ownership upon the creation or transfer of a joint tenancy interest if the transferor or transferors, after such creation or transfer, are among the joint tenants. Upon the creation of a joint tenancy interest described in this subdivision, the transferor or transferors shall be the "original transferor or transferors" for purposes of determining the property to be reappraised on subsequent transfers. The spouses of original transferors shall also be considered original transferors within the meaning of this section.

(c) Upon the termination of an interest in any joint tenancy described in subdivision (b), the entire portion of the property held by the original transferor or transferors prior to the creation of the joint tenancy shall be reappraised unless it vests, in whole or in part, in any remaining original transferor, in which case there shall be no reappraisal. Upon the termination of the interest of the last surviving original transferor, there shall be a reappraisal of the interest then transferred and all other interests in the properties held by all original transferors which were previously excluded from reappraisal pursuant to this section.

(d) Upon the termination of an interest held by other than the original transferor in any joint tenancy described in subdivision (b), there shall be no reappraisal if the entire interest is transferred either to an original transferor or to all remaining joint tenants, provided that one of the remaining joint tenants is an original transferor.

(e) For purposes of this section, for joint tenancies created on or before March 1, 1975, it shall be rebuttably presumed that each joint tenant holding an interest in property as of March 1, 1975, shall be an "original transferor." This presumption is not applicable to joint tenancies created after March 1, 1975.

History.—Added by Stats. 1980, Ch. 1081, in effect September 26, 1980. Stats. 1981, Ch. 1141, in effect October 2, 1981, operative January 1, 1982, added subdivision (e). Stats. 1988, Ch. 1271, in effect September 26, 1988, substituted "transferor" for "transfer" after "the original", and deleted the period and added ", provided that one of the remaining joint tenants is an original transferor." after "tenants" in subdivision (d).

Note.—Section 14 of Stats. 1981, Ch. 1141, provided the provisions of this act shall take immediate effect and shall apply to any change in ownership occurring on or after March 1, 1975. However, all changes in value shall be made effective commencing with the 1982–83 fiscal year. No escape assessments shall be levied and no refund shall be made for any years prior to the 1982–83 fiscal year for any increases or decreases in value made for the 1982–83 fiscal year or fiscal years thereafter as the result of the enactment of this act.

Note.—Section 16 of Stats. 1981, Ch. 1141, provided the Controller shall report to the Legislature on the amount of claims made by county auditors under Section 16113 of the Government Code for compensation for property tax revenues lost by reasons of the classification or exemption of property by this act.

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65.1. Percentage interests; units or lots in a complex with common areas or facilities. (a) Except for a joint tenancy interest described in subdivision (f) of Section 62, when an interest in a portion of real property is purchased or changes ownership, only the interest or portion transferred shall be reappraised. A purchase or change in ownership of an interest with a market value of less than 5 percent of the value of the total property shall not be reappraised if the market value of the interest transferred is less than ten thousand dollars ($10,000) provided, however, that transfers during any one assessment year shall be cumulated for the purpose of determining the percentage interests and value transferred.

(b) If a unit or lot within a cooperative housing corporation, community apartment project, condominium, planned unit development, shopping center, industrial park, or other residential, commercial, or industrial land subdivision complex with common areas or facilities is purchased or changes ownership, then only the unit or lot transferred and the share in the common area reserved as an appurtenance of such unit or lot shall be reappraised.

Notwithstanding any other provision of law, the increase in property taxes resulting from such reappraisal shall be applied by the owner of such property to the tenant-shareholder, lessee, or occupant of such individual unit or lot only, and shall not be prorated among all other units or lots of such property.

Construction.—This section applies to conveyances of interests in portions of real properties. A conveyance by a partnership of its entire real property to its sole partner is not covered by this section. Zapara v. Orange County, 26 Cal.App.4th 464.

History.—Added by Stats. 1980, Ch. 1081, in effect September 26, 1980. Stats. 1981, Ch. 1141, in effect October 2, 1981, operative January 1, 1982, substituted, "for a . . . Section 62," for "as provided in Section 65," after "Except" and deleted "undivided" before the second "interest" in the first sentence, and deleted "undivided" before the first "interest" and added "percentage interests and" before "value transferred" in the second sentence of subdivision (a).

66. Vesting of employee benefit plan. Change in ownership does not include any of the following:

(a) The creation, vesting, transfer, distribution or termination of a participant's or beneficiary's interest in an employee benefit plan.

(b) Any contribution of real property to an employee benefit plan.

(c) Any acquisition by an employee benefit plan of the stock of the employer corporation pursuant to which the employee benefit plan obtains direct or indirect ownership or control of more than 50 percent of the voting stock of the employer corporation.

As used in this section, the terms "employer," "employee benefit plan," "participant," and "beneficiary" shall be defined as they are defined in the Employee Retirement Income Security Act of 1974.

History.—Stats. 1986, Ch. 497, effective January 1, 1987, added "any of the following" after "include" in the first sentence, substituted "." for "; or" after "plan" in subdivision (a), added subdivision (c), and added "employer," after "terms" in the first sentence of the second paragraph. Stats. 1999, Ch. 941 (SB 1231), in effect January 1, 2000, substituted "does" for "shall" after "Change in ownership" in the first sentence of the first paragraph, and substituted "ownership or control of more than 50 percent of the voting stock of" for "control, as defined in Section 25105, in" after "direct or indirect" in the first sentence of subdivision (c).

Note.—Section 2 of Stats. 1986, Ch. 497, provided that the amendments to Section 66 of the Revenue and Taxation Code made by this act shall be effective for the 1979–80 fiscal year and fiscal years thereafter. It is the intent of the Legislature that these amendments shall apply to the determination of new base year values for the 1979–80 fiscal year and fiscal years thereafter with respect to any transfer occurring on or after March 1, 1975. However, no refunds shall be made for any fiscal year preceding the applicable period provided in Section 5097 of the Revenue and Taxation Code. Sec. 3 thereof declared that Section 1 of this act does not constitute a change in, but is declaratory of, the existing law. Sec. 4 thereof provided that reimbursement to local agencies and school districts for costs mandated by the state pursuant to this act shall be made.

Tax injunction act.—ERISA's grant of exclusive jurisdiction was not intended as an exception to the Tax Injunction Act. Thus, where an ERISA plan trustee failed to show that it could not raise the issue of ERISA preemption of state tax in a state court, as required to invoke "lack of plain, speedy and efficient state remedy" exception to the Act's prohibition on enjoining, suspending, or restraining assessment of a state tax, the Act barred a federal court action. Chase Manhattan Bank, N.A. v. San Francisco, 121 F.3d 557.

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67. "Purchase." "Purchased" or "purchase" means a change in ownership for consideration.

68. "Change in ownership" exclusion; replacement property. For purposes of Section 2 of Article XIII A of the Constitution, the term "change in ownership" shall not include the acquisition of real property as a replacement for comparable property if the person acquiring the real property has been displaced from property in this state by eminent domain proceedings, by acquisition by a public entity, or by governmental action which has resulted in a judgment of inverse condemnation. The adjusted base year value of the property acquired shall be the lower of the fair market value of the property acquired or the value which is the sum of the following:

(a) The adjusted base year value of the property from which the person was displaced.

(b) The amount, if any, by which the full cash value of the property acquired exceeds 120 percent of the amount received by the person for the property from which the person was displaced.

The provisions of this section shall apply to eminent domain proceedings, acquisitions, or judgments of inverse condemnation after March 1, 1975, and shall affect only those assessments of that property which occur after June 8, 1982.

Persons acquiring replacement property between March 1, 1975, and January 1, 1983, shall request assessment under this section with the assessor on or before January 1, 1987. Persons acquiring replacement property on and after January 1, 1983, shall request assessment within four years of the date the property was acquired by eminent domain or purchase or the date the judgment of inverse condemnation becomes final.

Any change in the adjusted base year value of the replacement property acquired, resulting from the application of the provisions of this section, shall be deemed to be effective on the first day of the month following the month in which the property is acquired. The change in value shall be treated as a change in ownership for the purpose of placing supplemental assessments on the supplemental roll pursuant to Chapter 3.5 (commencing with Section 75). The assessor shall, however, appraise the replacement property acquired in accordance with the provisions of this section rather than the provisions of Section 75.10. The provisions of Chapter 3.5 shall be liberally construed in order to provide the benefits of this section and Section 2 of Article XIII A of the California Constitution to affected property owners at the earliest possible date.

History.—Added by Stats. 1982, Ch. 1465, in effect January 1, 1983. Stats. 1983, Ch. 662, in effect September 7, 1983, substituted "value which is the sum of the following" for "adjusted base year value of the property from which the person was displaced" after "or the" in the second paragraph, and added subsections (a) and (b) thereto. Stats. 1985, Ch. 186, effective January 1, 1986, added the fifth paragraph.

Note.—Section 1 of Stats. 1983, Ch. 662, provided that the Legislature finds and declares that it is the intent of the people in enacting subdivision (d) of Section 2 of Article XIII A of the California Constitution to permit taxpayers to use the base year value of the property from which the taxpayer was displaced as the base year value of the property acquired, in cases where the full cash value of the property acquired is no more than 20 percent greater than the value received by the taxpayer for the property from which the taxpayer was displaced.

In cases where the full cash value of the property acquired is more than 20 percent greater than the value received by the taxpayer for the property from which the taxpayer was displaced, the Legislature finds and declares that the intent of the provisions of subdivision (d) of Section 2 of Article XIII A is to permit taxpayers (1) to carry forward the base year value from the property displaced for the portion of the value of the acquired property which is not more than 20 percent greater than the sum received for the property from which the taxpayer was displaced, and (2) to add to the base year value the full cash value of the acquired property in excess of this amount. The Legislature finds this incremental value is appropriately added because this portion of the property is of greater utility than the property from which the taxpayer was displaced. Sec. 3 thereof provided that no appropriation is made by this act for the purpose of making reimbursement pursuant to these sections. Sec. 4 thereof provided that the provisions of this act shall remain in effect unless and until they are amended or repealed by a later enacted act.

Construction.—Taxpayer's sale of property to a private party did not qualify as replacement property for purposes of the eminent domain exclusion from change in ownership. Duea v. County of San Diego (2012) 204 Cal.App.4th 691.

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69. Disaster relief. (a) Notwithstanding any other law, pursuant to Section 2 of Article XIII A of the Constitution, the base year value of property that is substantially damaged or destroyed by a disaster, as declared by the Governor, may be transferred to comparable property within the same county, which is acquired or newly constructed within five years after the disaster, including in the case of the Northridge earthquake, as a replacement for the substantially damaged or destroyed property. At the time the base year value of the substantially damaged or destroyed property is transferred to the replacement property, the substantially damaged or destroyed property shall be reassessed at its full cash value; however, the substantially damaged or destroyed property shall retain its base year value notwithstanding the transfer authorized by this section. If the owner or owners of substantially damaged or destroyed property receive property tax relief under this section, that property shall not be eligible for property tax relief under subdivision (c) of Section 70 in the event of its reconstruction.

(b) The replacement base year value of the replacement property acquired shall be determined in accordance with this section.

The assessor shall use the following procedure in determining the appropriate replacement base year value of comparable replacement property:

(1) If the full cash value of the comparable replacement property does not exceed 120 percent of the full cash value of the property substantially damaged or destroyed, then the adjusted base year value of the property substantially damaged or destroyed shall be transferred to the comparable replacement property as its replacement base year value.

(2) If the full cash value of the replacement property exceeds 120 percent of the full cash value of the property substantially damaged or destroyed, then the amount of the full cash value over 120 percent of the full cash value of the property substantially damaged or destroyed shall be added to the adjusted base year value of the property substantially damaged or destroyed. The sum of these amounts shall become the replacement property's replacement base year value.

(3) If the full cash value of the comparable replacement property is less than the adjusted base year value of the property substantially damaged or destroyed, then that lower value shall become the replacement property's base year value.

(4) The full cash value of the property substantially damaged or destroyed shall be the amount of its full cash value immediately prior to its substantial damage or destruction, as determined by the county assessor of the county in which the property is located.

(c) For purposes of this section:

(1) Property is substantially damaged or destroyed if either the land or the improvements sustain physical damage amounting to more than 50 percent of either the land's or the improvement's full cash value immediately prior to the disaster. Damage includes a diminution in the value of property as a result of restricted access to the property where the restricted access was caused by the disaster and is permanent in nature.

(2) Replacement property is comparable to the property substantially damaged or destroyed if it is similar in size, utility, and function to the property which it replaces.

(A) Property is similar in function if the replacement property is subject to similar governmental restrictions, such as zoning.

(B) Both the size and utility of property are interrelated and associated with value. Property is similar in size and utility only to the extent that the replacement property is, or is intended to be, used in the same manner as the property substantially damaged or destroyed and its full cash value does not exceed 120 percent of the full cash value of the property substantially damaged or destroyed.

(i) A replacement property or any portion thereof used or intended to be used for a purpose substantially different than the use made of the property substantially damaged or destroyed shall to the extent of the dissimilar use be considered not similar in utility.

(ii) A replacement property or portion thereof that satisfies the use requirement but has a full cash value that exceeds 120 percent of the full cash value of the property substantially damaged or destroyed shall be considered, to the extent of the excess, not similar in utility and size.

(C) To the extent that replacement property, or any portion thereof, is not similar in function, size, and utility, the property, or portion thereof, shall be considered to have undergone a change in ownership when the replacement property is acquired or newly constructed.

(3) "Disaster" means a major misfortune or calamity in an area subsequently proclaimed by the Governor to be in a state of disaster as a result of the misfortune or calamity.

(d) (1) This section applies to any comparable replacement property acquired or newly constructed on or after July 1, 1985.

(2) The amendments made by Chapter 1053 of the Statutes of 1993 apply to any comparable replacement property that is acquired or newly constructed as a replacement for property substantially damaged or destroyed by a disaster occurring on or after October 20, 1991, and to the determination of base year values for the 1991–92 fiscal year and fiscal years thereafter.

(3) The amendments made by Chapter 317 of the Statutes of 2006 apply to any comparable replacement property that is acquired or newly constructed as a replacement for property substantially damaged or destroyed by a disaster occurring on or after July 1, 2003, and to the determination of base year values for the 2003–04 fiscal year and fiscal years thereafter.

(e) Only the owner or owners of the property substantially damaged or destroyed, whether one or more individuals, partnerships, corporations, other legal entities, or a combination thereof, shall receive property tax relief under this section. Relief under this section shall be granted to an owner or owners of substantially damaged or destroyed property obtaining title to replacement property. The acquisition of an ownership interest in a legal entity, which directly or indirectly owns real property is not an acquisition of comparable property.

(f) Notwithstanding any other law, the board of supervisors of the County of San Diego may by ordinance extend the time period specified in subdivision (a) to transfer the base year value of property that is substantially damaged or destroyed by the Cedar Fire that commenced in October 2003, as declared by the Governor, to comparable property within the same county that is acquired or newly constructed as a replacement for the substantially damaged or destroyed property by two years. This subdivision shall apply to the determination of base year values for the 2003–04 fiscal year and fiscal years thereafter.

(g) The amendments made to this section by the act adding this subdivision shall apply commencing with the lien date for the 2012-13 fiscal year.

History.—Added by Stats. 1986, Ch. 855, effective September 17, 1986, operative July 1, 1985. Stats. 1987, Ch. 219, in effect July 23, 1987, substituted "; however, the substantially damaged or destroyed property shall retain its base-year value notwithstanding the transfer authorized by this section." for "," after "full cash value" in the second sentence of subdivision (a). Stats. 1993, Ch. 1053, in effect October 11, 1993, substituted "three" for "two" after "constructed within" in the first sentence of subdivision (a); and added "(1)" after "(d)" and added paragraph (2) to subdivision (d). Stats. 1997, Ch. 353 (SB 594), in effect August 26, 1997, added ",or five years in the case of the Northridge earthquake," after "after the disaster" in the first sentence of subdivision (a). Stats. 2006, Ch. 317 (AB 1890), in effect September 18, 2006, substituted "five" for "three" after "newly constructed within" in the first sentence of subdivision (a); substituted "The assessor shall use the following procedure" for "The following procedure shall be used by the assessor" before "in determining the" in the second paragraph of subdivision (b); substituted "that" for "which" twice in clause (ii) of subparagraph (B) of paragraph (2) of subdivision (c); and substituted "applies" for "shall apply" after "This section" in the first sentence of subparagraph (1), substituted "Chapter 1053 of the Statutes of 1993" for "the act adding this paragraph shall" after "amendments made by" in the first sentence of paragraph (2), and added paragraph (3) to subdivision (d). Stats. 2009, Ch. 67 (SB 824), in effect January 1, 2010, deleted "provision of" after "any other", substituted "that" for "which" after "of property", and substituted "that" for "which" after "same county" in the first sentence of subdivision (a); substituted "the land or the improvements sustain" for "it sustains" after "or destroyed" in the first sentence of paragraph (1) and substituted "that" for "which" after "the property" in the first sentence of paragraph (2) of subdivision (c); and substituted "that" for "which" after "legal entity" in the third sentence of subdivision (e). Stats. 2010, Ch. 341 (AB 157), in effect September 27, 2010, substituted ", which" for "that" after "same county" and substituted "including" for "or five years" after "the disaster," in the first sentence of subdivision (a); substituted "which" for "that" after the second "the property" in the first sentence of paragraph (2) of subdivision (c); substituted "Chapter 317 of the Statutes of 2006" for "the act adding this paragraph" after "made by" in the first sentence of paragraph (3) of subdivision (d); substituted ", which directly or indirectly owns real property," for "that, directly or indirectly, owns real property" after "legal entity" in the third sentence of subdivision (e); and added subdivision (f). Stats. 2011, Ch. 351 (SB 947), in effect January 1, 2012, added "either" after "destroyed if" and substituted "either the land's or the improvement's" for "its" after "50 percent of" in the first sentence of paragraph (1) of subdivision (c) and added subdivision (g).

Note.—Section 2 of Stats. 1986, Ch. 855, provided no reimbursement is required by this act. Sec. 3 thereof provided that this act shall not become operative unless Senate Constitutional Amendment No. 28 of the 1985–86 Regular Session is adopted by the voters. In that event, this act shall become operative on the effective date of Senate Constitutional Amendment No. 28. SCA 28 was adopted by the voters on June 3, 1986, and its effective date is June 4, 1986.

Note.—Section 2 of Stats. 1987, Ch. 219 provided that the amendment made by this act shall apply to substantially damaged or destroyed property for which comparable replacement property was acquired or newly constructed on or after July 1, 1985.

Note.—Section 2 of Stats 1997, Ch. 353 provided that the Legislature finds and declares that a special law is necessary and that a general law cannot be made applicable within the meaning of Section 16 of Article IV of the California Constitution as a result of the unique difficulties being suffered by homeowners affected by the Northridge earthquake.

Note.—Section 2 of Stats. 2010, Ch. 341 (AB 157), provided that the Legislature finds and declares that a special law is necessary and that a general law cannot be made applicable within the meaning of Section 16 of Article IV of the California Constitution as a result of the unique difficulties being suffered by homeowners affected by the Cedar Fires of 2003.

Section 3 thereof provided that the Legislature finds and declares that this act fulfills a statewide public purpose because of all of the following:

(a) Former Governor Gray Davis had officially proclaimed a state of emergency declaring that the wildfires that occurred within the County of San Diego, commencing in October 2003, constitute conditions of extreme peril to public health and safety to persons and property within that county, thus qualifying affected persons for various forms of governmental assistance and relief.

(b) This act is consistent with the proclaimed disaster assistance and relief by extending necessary tax relief to affected homeowners, many of whom are still struggling to replace their homes lost in those wildfires or have encountered delays, not of their making, in this process of transferring their base year values of damaged or destroyed property to their replacement property.

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69.3. Transfer of base year value to replacement dwelling; disasters. (a) (1) Notwithstanding any other law, pursuant to the authority of paragraph (3) of subdivision (e) of Section 2 of Article XIII A of the California Constitution, a county board of supervisors, after consultation with affected local agencies located within the boundaries of the county, may adopt an ordinance that authorizes the transfer, subject to the conditions and limitations of this section, of the base year value of real property that is located within another county in this state and has been substantially damaged or destroyed by a disaster to comparable replacement property, including land, of equal or lesser value that is located within the adopting county and has been acquired or newly constructed as a replacement for the damaged or destroyed property within three years after the damage or destruction of the original property.

(2) The base year value of the original property shall be the base year value of the original property as determined in accordance with Section 110.1, with the inflation factor adjustments permitted by subdivision (f) of Section 110.1, determined as of the date immediately prior to the date that the original property was substantially damaged or destroyed. The base year value of the original property shall also include any inflation factor adjustments permitted by subdivision (f) of Section 110.1 for the period subsequent to the date of the substantial damage to, or destruction of, the original property and up to the date the replacement property is acquired or newly constructed, regardless of whether the claimant continued to own the original property during this entire period. The base year or years used to compute the base year value of the original property shall be deemed to be the base year or years of any property to which that base year value is transferred pursuant to this section.

(b) For purposes of this section:

(1) "Affected local agency" means any city, special district, school district, or community college district that receives an annual allocation of ad valorem property tax revenues.

(2) "Claimant" means an owner or owners of real property claiming the property tax relief provided by this section.

(3) "Comparable replacement property" means a replacement property that has a full cash value of equal or lesser value as defined in paragraph (6).

(4) "Consultation" means a noticed hearing that is conducted by a county board of supervisors concerning the adoption of an ordinance described in subdivision (a) and with respect to which all affected local agencies within the boundaries of the county are provided with reasonable notice of the time and the place of the hearing and a reasonable opportunity to appear and participate.

(5) "Disaster" means a major misfortune or calamity in an area subsequently proclaimed by the Governor to be in a state of disaster as a result of the misfortune or calamity.

(6) "Equal or lesser value" means that the amount of the full cash value of the replacement property does not exceed one of the following:

(A) One hundred five percent of the amount of the full cash value of the original property if the replacement property is purchased or newly constructed within the first year following the date of the damage or destruction of the original property.

(B) One hundred ten percent of the amount of the full cash value of the original property if the replacement property is purchased or newly constructed within the second year following the date of the damage or destruction of the original property.

(C) One hundred fifteen percent of the amount of the full cash value of the original property if the replacement property is purchased or newly constructed within the third year following the date of the damage or destruction of the original property.

For purposes of this paragraph, if the replacement property is, in part, purchased and, in part, newly constructed, the date the "replacement property is purchased or newly constructed" is the date of the purchase or the date of completion of new construction, whichever is later.

(7) "Full cash value of the original property" means its full cash value, as determined in accordance with Section 110, immediately prior to its substantial damage or destruction, as determined by the county assessor of the county in which the property is located.

(8) "Full cash value of the replacement property" means its full cash value, as determined in accordance with Section 110.1 as of the date upon which it was purchased or new construction was completed, that is applicable on and after that date.

(9) "Original property" means a building, structure, or other shelter constituting a place of abode, whether real property or personal property, that is owned and occupied by a claimant as his or her principal place of residence, and any land owned by the claimant on which the building, structure, or other shelter is situated, that has been substantially damaged or destroyed by a disaster. For purposes of this paragraph, land constituting a part of original property includes only that area of reasonable size that is used as a site for a residence, and "land owned by the claimant" includes land for which the claimant either holds a leasehold interest described in subdivision (c) of Section 61 or a land purchase contract. For purposes of this paragraph, each unit of a multiunit dwelling shall be considered a separate original property.

(10) "Owner or owners" means an individual or individuals, but does not include any firm, partnership, association, corporation, company, or other legal entity or organization of any kind.

(11) "Replacement property" means a building, structure, or other shelter constituting a place of abode, whether real property or personal property, that is owned and occupied by a claimant as his or her principal place of residence, and any land owned by the claimant on which the building, structure, or other shelter is situated. For purposes of this paragraph, land constituting a part of the replacement property includes only that area of reasonable size that is used as the site for a residence, and "land owned by the claimant" includes land for which the claimant either holds a leasehold interest described in subdivision (c) of Section 61 or a land purchase contract. For purposes of this paragraph, each unit of a multiunit dwelling shall be considered a separate replacement property. "Replacement property" does not include any property, including land or improvements, if the claimant owned any portion of that property prior to the date of the disaster that damaged or destroyed the original property.

(12) "Substantially damaged or destroyed" means property where either the land or the improvements sustain physical damage amounting to more than 50 percent of either the land's or the improvement's full cash value immediately prior to the disaster. Damage includes a diminution in the value of property as a result of restricted access to the property where the restricted access was caused by the disaster and is permanent in nature.

(c) At the time the base year value of the substantially damaged or destroyed property is transferred to the replacement property pursuant to an ordinance adopted under this section, the substantially damaged or destroyed property shall be reassessed at its full cash value. However, the substantially damaged or destroyed property shall retain its base year value notwithstanding that transfer. If the owner or owners of substantially damaged or destroyed property receive property tax relief under this section, that property shall not be eligible for property tax relief under subdivision (c) of Section 70 in the event of its reconstruction.

(d) Only the owner or owners of the property that has been substantially damaged or destroyed may receive property tax relief under an ordinance adopted pursuant to this section. Relief under an ordinance adopted pursuant to this section shall be granted to an owner or owners of a substantially damaged or destroyed property obtaining comparable replacement property. The acquisition of an ownership interest in a legal entity that, directly or indirectly, owns real property is not an acquisition of comparable replacement property for purposes of this section.

(e) A timely claim for relief under an ordinance adopted pursuant to this section, in that form as shall be prescribed by the board, shall be filed by the owner with the assessor of the county in which the replacement property is located. No relief under an ordinance adopted pursuant to this section shall be granted unless the claim is filed no later than January 1, 1996, or within three years after the replacement property is acquired or newly constructed, whichever is later.

(f) Any taxes that were levied on the replacement property prior to the filing of a claim on the basis of the replacement property's new base year value, and any allowable annual adjustments thereto, shall be canceled or refunded to the claimant to the extent that taxes exceed the amount that would be due when determined on the basis of the adjusted new base year value.

(g) This section shall apply to any comparable replacement property of equal or lesser value that is acquired or newly constructed as a replacement for property that has been substantially damaged or destroyed by a disaster occurring on or after October 20, 1991, and to the determination of base year values for the 1991–92 fiscal year and each fiscal year thereafter.

(h) The amendments made to this section by the act adding this subdivision shall apply commencing with the lien date for the 2012-13 fiscal year.

History.—Added by Stats. 1994, Ch. 72, in effect May 20, 1994. Stats. 1994, Ch. 1222, in effect January 1, 1995, deleted "of equal or lesser value" after "property" and added "of equal or lesser value" after "land," in paragraphs (1), added "inflation factor" after "with the", deleted "(b) of Section 2 of Article XIII A of the California Constitution and subdivision" after "subdivision", and added "regardless . . . entire period." after "constructed" in paragraph (2) of subdivision (a); added paragraph (2) to subdivision (b), renumbered former paragraphs (2), (3), (4), and (5) as (3), (4), (5), and (6), respectively, and substituted "(6)" for "(5)" after "paragraph" in paragraph (2), added paragraphs (7) and (8) in subdivision (b), renumbered former paragraphs (7), (8), and (9) as (10), (11), and (12), respectively, substituted "constituting . . . personal property" for "or other personal property," in the first sentence of paragraph (8), deleted "land" after "part of the", and substituted "property" for "dwelling" after "replacement" in the second sentence of paragraph (8), substituted "property" for ''dwelling" after "replacement" in the third sentence of paragraph (8), and added the fourth sentence therein, substituted "to more" for "more to 1" after "amounting" in the first sentence of paragraph (12), and deleted "of value" after "diminution" in the second sentence of paragraph (12) of subdivision (b); added "to the replacement property" after "transferred" in the first sentence of subdivision (c); and deleted "title to" after "obtaining" in the second sentence of subdivision (d). In subdivision (e), added "timely" before "claim," added "in that form . . . by the board" after "to this section," added "by the owner" after "shall be filed," deleted "in accordance . . . Section 69.5." Added "No relief . . . whichever is later," to subdivision (f), deleted former subdivision (h), which provided that the Legislature's intent in enacting this section is that the scope and the amount of tax relief provided under an ordinance adopted pursuant to this section not exceed the scope and amount of tax relief provided under Section 69.5 as that section read on November 2, 1993. Stats. 2009, Ch. 67 (SB 824), in effect January 1, 2010, deleted "provision of" after "Notwithstanding any other" in the first sentence of paragraph (1) and substituted "this" for "the" after "property during" in the second sentence of paragraph (2) of subdivision (a); added a comma after "board of supervisors" in the first sentence of paragraph (4), deleted "the" after "For" in the first sentence of the second paragraph of subparagraph (C) of paragraph (6) and deleted the former second sentence therein, which provided: "For purposes of this paragraph, "full cash value of the original property" shall be the amount of its full cash value immediately prior to its substantial damage or destruction, as determined by the county assessor of the county in which the property is located.", added a comma after the second "cash value" in the first sentence of paragraph (7), deleted a comma after "other shelter" in the first sentence of paragraph (11), and substituted "where either the land or the improvements sustain" for "that sustains" after "means property" in the first sentence of paragraph (12) of subdivision (b). Stats. 2010, Ch. 328 (SB 1330), in effect January 1, 2011, deleted a comma twice after "a hearing" and after "of supervisors" in the first sentence of paragraph (4) and added "or" after "company," in the first sentence of paragraph (10) of subdivision (b). Stats. 2011, Ch. 351 (SB 947), in effect January 1, 2012, substituted "either the land's or the improvement's" for "its" after "percent of" in the first sentence of paragraph (12) of subdivision (b) and added subdivision (h).

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69.4. Transfer of base year value; environmentally contaminated property. (a) (1) Notwithstanding any other provision of law, pursuant to the authority of subdivision (i) of Section 2 of Article XIII A of the California Constitution, the base year value of qualified contaminated property may be transferred, subject to the conditions and limitations of that subdivision and this section, to a comparable replacement property of equal or lesser value that is located in the same county and is acquired or newly constructed as a replacement for the contaminated property, pursuant to subparagraph (A) of paragraph (1) of that subdivision.

(2) The limitation in paragraph (1) requiring that the qualified contaminated property and the replacement property be located in the same county does not apply in a county in which the county board of supervisors adopts a resolution making the provisions of this section applicable to replacement properties acquired to replace qualified contaminated properties located in another county within this state. The resolution shall specify the date on and after which its provisions are applicable. The specified date may be a date earlier than the date on which the county adopts the ordinance, but no earlier than November 3, 1998.

(b) The replacement property shall be acquired or newly constructed within five years after the original property is sold or otherwise transferred.

(c) (1) Upon the sale or transfer of the original property, the assessor shall determine a new base year value for that property in accordance with subdivision (a) of Section 2 of Article XIII A of the California Constitution and Section 110.1.

(2) This section does not apply unless the sale or transfer of the original property is a change in ownership that does either of the following:

(A) Subjects the original property to reappraisal at its current fair market value in accordance with Section 110.1 or 5803.

(B) Results in a base year value determined in accordance with this section, Section 69, Section 69.3, or Section 69.5 because the property qualifies under this section, Section 69, Section 69.3, or Section 69.5 as a replacement dwelling or property.

(d) Property tax relief under this section is not available for a replacement property if the owner or owners of the original property do either of the following:

(1) Receive property tax relief under Section 74.7.

(2) Sign a claim under Section 63.1 allowing the base year value to stay with the original property.

(e) For purposes of this section:

(1) The "original property" means the qualified contaminated property.

(2) "Equal or lesser value" means the amount of the full cash value of a replacement property that does not exceed one of the following:

(A) One hundred five percent of the amount of the full cash value of the original property, if the replacement property is purchased or newly constructed within the first year following the date of the sale of the original property.

(B) One hundred ten percent of the amount of the full cash value of the original property, if the replacement property is purchased or newly constructed within the second year following the date of the sale of the original property.

(C) One hundred fifteen percent of the amount of the full cash value of the original property, if the replacement property is purchased or newly constructed within the third year following the date of the sale of the original property.

(D) One hundred twenty percent of the amount of the full cash value of the original property, if the replacement property is purchased or newly constructed within the fourth year following the date of the sale of the original property.

(E) One hundred twenty-five percent of the amount of the full cash value of the original property, if the replacement property is purchased or newly constructed within the fifth year following the date of the sale of the original property. For purposes of this paragraph, if the replacement property is, in part, purchased and, in part, newly constructed, the date the replacement property is "acquired or newly constructed" is the date of acquisition or the date of completion of construction, whichever is later.

(3) The base year value of the original property shall be the base year value of the original property as determined in accordance with Section 110.1, with the inflation factor adjustments permitted by subdivision (f) of Section 110.1. The base year value of the original property shall also include any inflation factor adjustments permitted by subdivision (f) of Section 110.1 up to the date the replacement property is acquired or newly constructed, regardless of whether the claimant continued to own the original property during this entire period. The base year or years used to compute the base year value of the original property shall be deemed to be the base year or years of any property to which that base year value is transferred pursuant to this section.

(4) "Fair market value of the replacement property" means the full cash value of the replacement property determined in accordance with Section 110.1 as of the date on which that property was acquired or new construction was completed. If the replacement property is, in part, acquired and, in part, newly constructed, "fair market value of the replacement property" means the fair market value of the land and the improvements as of the date of completion.

(5) "Fair market value of the qualified contaminated property" means the full cash value of the qualified contaminated property, as if that property was not contaminated, determined in accordance with Section 110.1, as of the date of its sale or transfer by the claimant.

(6) "Claimant" means any owner of qualified contaminated property claiming the property tax relief provided by this section.

(7) "Comparable replacement property" means a property that is similar in utility and function to the property that it replaces. Property is similar in function and utility if it is, or is intended to be, used in the same manner as the qualified contaminated property.

(f) (1) A claimant is not eligible for the property tax relief provided by this section unless a claim is filed within three years of the date the replacement property was purchased or the new construction of the replacement property was completed.

(2) The claimant shall provide to the assessor the following information:

(A) Proof that the claimant did not participate or acquiesce in any act or omission that rendered the real property uninhabitable or unusable, as applicable, or is related to any individual or entity that committed that act or omission.

(B) Proof that the qualified contaminated property has been designated as a toxic or environmental hazard or as an environmental cleanup site by an agency of the State of California or the federal government.

(3) The State Board of Equalization shall design the form for claiming eligibility.

(g) (1) Upon the timely filing of a claim, the assessor shall adjust the new base year value as of the date the replacement property is acquired or the date the new construction of the replacement property is completed, whichever is later.

(2) Any taxes that were levied on the replacement property prior to the filing of the claim on the basis of the replacement property's new base year value, and any allowable annual adjustments thereto, shall be canceled or refunded to the claimant to the extent that the taxes exceed the amount that would be due when determined on the basis of the adjusted new base year value.

(3) Notwithstanding Section 75.10, Chapter 3.5 (commencing with Section 75) of Part 0.5 of Division 1 shall be utilized for purposes of implementing this subdivision, including adjustments of the new base year value of replacement properties acquired prior to the sale or transfer of the qualified contaminated property.

(h) This section applies only to replacement property that is acquired or newly constructed on or after January 1, 1995.

History.—Added by Stats. 1999, Ch. 941 (SB 1231), in effect January 1, 2000. Stats. 2003, Ch. 471 (SB 1062), in effect January 1, 2004, substituted "paragraph (1)" for "paragraph 1" after "subparagraph (A)" and deleted ", or if the remediation of the contamination requires the repair or replacement of contaminated property, that repair or replacement shall not be considered "new construction," pursuant to subparagraph (B) of that subdivision" after "paragraph (1)" in the first sentence of subdivision (a). Stats. 2004, Ch. 354 (AB 3073), in effect August 30, 2004, designated the former subdivision (a) as paragraph (1) of subdivision (a) and substituted "transferred , subject to the conditions and limitations of that subdivision and this section, to a comparable replacement property of equal or lesser value that is located in the same county and" for "transferred to a replacement property that" after "may be" in the first sentence and added paragraph (2) therein; added subdivisions (b), (c), and (d); added subdivision (e) and created new paragraph (3) with the former first paragraph of former subdivision (b) therein; and added subdivisions (f), (g), and (h). Stats. 2005, Ch. 22 (SB 1108), in effect January 1, 2006, substituted "Article XIII" for "Article XII" after "Section 2 of" in the first sentence of paragraph (1) of subdivision (c).

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69.5. Transfer of base year value to replacement dwelling. (a) (1) Notwithstanding any other provision of law, pursuant to subdivision (a) of Section 2 of Article XIII A of the California Constitution, any person over the age of 55 years, or any severely and permanently disabled person, who resides in property that is eligible for the homeowners' exemption under subdivision (k) of Section 3 of Article XIII of the California Constitution and Section 218 may transfer, subject to the conditions and limitations provided in this section, the base year value of that property to any replacement dwelling of equal or lesser value that is located within the same county and is purchased or newly constructed by that person as his or her principal residence within two years of the sale by that person of the original property, provided that the base year value of the original property shall not be transferred to the replacement dwelling until the original property is sold.

(2) Notwithstanding the limitation in paragraph (1) requiring that the original property and the replacement dwelling be located in the same county, this limitation shall not apply in any county in which the county board of supervisors, after consultation with local affected agencies within the boundaries of the county, adopts an ordinance making the provisions of paragraph (1) also applicable to situations in which replacement dwellings are located in that county and the original properties are located in another county within this state. The authorization contained in this paragraph shall be applicable in a county only if the ordinance adopted by the board of supervisors complies with all of the following requirements:

(A) It is adopted only after consultation between the board of supervisors and all other local affected agencies within the county's boundaries.

(B) It requires that all claims for transfers of base year value from original property located in another county be granted if the claims meet the applicable requirements of both subdivision (a) of Section 2 of Article XIII A of the California Constitution and this section.

(C) It requires that all base year valuations of original property located in another county and determined by its assessor be accepted in connection with the granting of claims for transfers of base year value.

(D) It provides that its provisions are operative for a period of not less than five years.

(E) The ordinance specifies the date on and after which its provisions shall be applicable. However, the date specified shall not be earlier than November 9, 1988. The specified applicable date may be a date earlier than the date the county adopts the ordinance.

(b) In addition to meeting the requirements of subdivision (a), any person claiming the property tax relief provided by this section shall be eligible for that relief only if the following conditions are met:

(1) The claimant is an owner and a resident of the original property either at the time of its sale, or at the time when the original property was substantially damaged or destroyed by misfortune or calamity, or within two years of the purchase or new construction of the replacement dwelling.

(2) The original property is eligible for the homeowners' exemption, as the result of the claimant's ownership and occupation of the property as his or her principal residence, either at the time of its sale, or at the time when the original property was substantially damaged or destroyed by misfortune or calamity, or within two years of the purchase or new construction of the replacement dwelling.

(3) At the time of the sale of the original property, the claimant or the claimant's spouse who resides with the claimant is at least 55 years of age, or is severely and permanently disabled.

(4) At the time of claiming the property tax relief provided by subdivision (a), the claimant is an owner of a replacement dwelling and occupies it as his or her principal place of residence and, as a result thereof, the property is currently eligible for the homeowners' exemption or would be eligible for the exemption except that the property is already receiving the exemption because of an exemption claim filed by the previous owner.

(5) The original property of the claimant is sold by him or her within two years of the purchase or new construction of the replacement dwelling. For purposes of this paragraph, the purchase or new construction of the replacement dwelling includes the purchase of that portion of land on which the replacement building, structure, or other shelter constituting a place of abode of the claimant will be situated and that, pursuant to paragraph (3) of subdivision (g), constitutes a part of the replacement dwelling.

(6) Except as otherwise provided in paragraph (2) of subdivision (a), the replacement dwelling, including that portion of land on which it is situated that is specified in paragraph (5), is located entirely within the same county as the claimant's original property.

(7) The claimant has not previously been granted, as a claimant, the property tax relief provided by this section, except that this paragraph shall not apply to any person who becomes severely and permanently disabled subsequent to being granted, as a claimant, the property tax relief provided by this section for any person over the age of 55 years. In order to prevent duplication of claims under this section within this state, county assessors shall report quarterly to the State Board of Equalization that information from claims filed in accordance with subdivision (f) and from county records as is specified by the board necessary to identify fully all claims under this section allowed by assessors and all claimants who have thereby received relief. The board may specify that the information include all or a part of the names and social security numbers of claimants and their spouses and the identity and location of the replacement dwelling to which the claim applies. The information may be required in the form of data processing media or other media and in a format that is compatible with the recordkeeping processes of the counties and the auditing procedures of the state.

(c) The property tax relief provided by this section shall be available if the original property or the replacement dwelling, or both, of the claimant includes, but is not limited to, either of the following:

(1) A unit or lot within a cooperative housing corporation, a community apartment project, a condominium project, or a planned unit development. If the unit or lot constitutes the original property of the claimant, the assessor shall transfer to the claimant's replacement dwelling only the base year value of the claimant's unit or lot and his or her share in any common area reserved as an appurtenance of that unit or lot. If the unit or lot constitutes the replacement dwelling of the claimant, the assessor shall transfer the base year value of the claimant's original property only to the unit or lot of the claimant and any share of the claimant in any common area reserved as an appurtenance of that unit or lot.

(2) A manufactured home or a manufactured home and any land owned by the claimant on which the manufactured home is situated. For purposes of this paragraph, "land owned by the claimant" includes a pro rata interest in a resident-owned mobilehome park that is assessed pursuant to subdivision (b) of Section 62.1.

(A) If the manufactured home or the manufactured home and the land on which it is situated constitutes the claimant's original property, the assessor shall transfer to the claimant's replacement dwelling either the base year value of the manufactured home or the base year value of the manufactured home and the land on which it is situated, as appropriate. If the manufactured home dwelling that constitutes the original property of the claimant includes an interest in a resident-owned mobilehome park, the assessor shall transfer to the claimant's replacement dwelling the base year value of the claimant's manufactured home and his or her pro rata portion of the real property of the park. No transfer of base year value shall be made by the assessor of that portion of land that does not constitute a part of the original property, as provided in paragraph (4) of subdivision (g).

(B) If the manufactured home or the manufactured home and the land on which it is situated constitutes the claimant's replacement dwelling, the assessor shall transfer the base year value of the claimant's original property either to the manufactured home or the manufactured home and the land on which it is situated, as appropriate. If the manufactured home dwelling that constitutes the replacement dwelling of the claimant includes an interest in a resident-owned mobilehome park, the assessor shall transfer the base year value of the claimant's original property to the manufactured home of the claimant and his or her pro rata portion of the park. No transfer of base year value shall be made by the assessor to that portion of land that does not constitute a part of the replacement dwelling, as provided in paragraph (3) of subdivision (g).

This subdivision shall be subject to the limitations specified in subdivision (d).

(d) The property tax relief provided by this section shall be available to a claimant who is the coowner of the original property, as a joint tenant, a tenant in common, a community property owner, or a present beneficiary of a trust subject to the following limitations:

(1) If a single replacement dwelling is purchased or newly constructed by all of the coowners and each coowner retains an interest in the replacement dwelling, the claimant shall be eligible under this section whether or not any or all of the remaining coowners would otherwise be eligible claimants.

(2) If two or more replacement dwellings are separately purchased or newly constructed by two or more coowners and more than one coowner would otherwise be an eligible claimant, only one coowner shall be eligible under this section. These coowners shall determine by mutual agreement which one of them shall be deemed eligible.

(3) If two or more replacement dwellings are separately purchased or newly constructed by two coowners who held the original property as community property, only the coowner who has attained the age of 55 years, or is severely and permanently disabled, shall be eligible under this section. If both spouses are over 55 years of age, they shall determine by mutual agreement which one of them is eligible.

In the case of coowners whose original property is a multiunit dwelling, the limitations imposed by paragraphs (2) and (3) shall only apply to coowners who occupied the same dwelling unit within the original property at the time specified in paragraph (2) of subdivision (b).

(e) Upon the sale of original property, the assessor shall determine a new base year value for that property in accordance with subdivision (a) of Section 2 of Article XIII A of the California Constitution and Section 110.1, whether or not a replacement dwelling is subsequently purchased or newly constructed by the former owner or owners of the original property.

This section shall not apply unless the transfer of the original property is a change in ownership that either (1) subjects that property to reappraisal at its current fair market value in accordance with Section 110.1 or 5803 or (2) results in a base year value determined in accordance with this section, Section 69, or Section 69.3 because the property qualifies under this section, Section 69, or Section 69.3 as a replacement dwelling or property.

(f) (1) A claimant shall not be eligible for the property tax relief provided by this section unless the claimant provides to the assessor, on a form that shall be designed by the State Board of Equalization and that the assessor shall make available upon request, the following information:

(A) The name and social security number of each claimant and of any spouse of the claimant who is a record owner of the replacement dwelling.

(B) Proof that the claimant or the claimant's spouse who resided on the original property with the claimant was, at the time of its sale, at least 55 years of age, or severely and permanently disabled. Proof of severe and permanent disability shall be considered a certification, signed by a licensed physician and surgeon of appropriate specialty, attesting to the claimant's severely and permanently disabled condition. In the absence of available proof that a person is over 55 years of age, the claimant shall certify under penalty of perjury that the age requirement is met. In the case of a severely and permanently disabled claimant either of the following shall be submitted:

(i) A certification, signed by a licensed physician or surgeon of appropriate specialty that identifies specific reasons why the disability necessitates a move to the replacement dwelling and the disability-related requirements, including any locational requirements, of a replacement dwelling. The claimant shall substantiate that the replacement dwelling meets disability-related requirements so identified and that the primary reason for the move to the replacement dwelling is to satisfy those requirements. If the claimant, or the claimant's spouse or guardian, so declares under penalty of perjury, it shall be rebuttably presumed that the primary purpose of the move to the replacement dwelling is to satisfy identified disability-related requirements.

(ii) The claimant's substantiation that the primary purpose of the move to the replacement dwelling is to alleviate financial burdens caused by the disability. If the claimant, or the claimant's spouse or guardian, so declares under penalty of perjury, it shall be rebuttably presumed that the primary purpose of the move is to alleviate the financial burdens caused by the disability.

(C) The address and, if known, the assessor's parcel number of the original property.

(D) The date of the claimant's sale of the original property and the date of the claimant's purchase or new construction of a replacement dwelling.

(E) A statement by the claimant that he or she occupied the replacement dwelling as his or her principal place of residence on the date of the filing of his or her claim.

(F) Any claim under this section shall be filed within three years of the date the replacement dwelling was purchased or the new construction of the replacement dwelling was completed subject to subdivision (k) or (m).

(2) A claim for transfer of base year value under this section that is filed after the expiration of the filing period set forth in subparagraph (F) of paragraph (1) shall be considered by the assessor, subject to all of the following conditions:

(A) Any base year value transfer granted pursuant to that claim shall apply commencing with the lien date of the assessment year in which the claim is filed.

(B) The full cash value of the replacement property in the assessment year described in subparagraph (A) shall be the base year value of the real property in the assessment year in which the base year value was transferred, factored to the assessment year described in subparagraph (A) for both of the following:

(i) Inflation as annually determined in accordance with paragraph (1) of subdivision (a) of Section 51.

(ii) Any subsequent new construction occurring with respect to the subject real property that does not qualify for property tax relief pursuant to the criteria set forth in subparagraphs (A) and (B) of paragraph (4) of subdivision (h).

(g) For purposes of this section:

(1) "Person over the age of 55 years" means any person or the spouse of any person who has attained the age of 55 years or older at the time of the sale of the original property.

(2) "Base year value of the original property" means its base year value, as determined in accordance with Section 110.1, with the adjustments permitted by subdivision (b) of Section 2 of Article XIII A of the California Constitution and subdivision (f) of Section 110.1, determined as of the date immediately prior to the date that the original property is sold by the claimant, or in the case where the original property has been substantially damaged or destroyed by misfortune or calamity and the owner does not rebuild on the original property, determined as of the date immediately prior to the misfortune or calamity.

If the replacement dwelling is purchased or newly constructed after the transfer of the original property, "base year value of the original property" also includes any inflation factor adjustments permitted by subdivision (f) of Section 110.1 for the period subsequent to the sale of the original property. The base year or years used to compute the "base year value of the original property" shall be deemed to be the base year or years of any property to which that base year value is transferred pursuant to this section.

(3) "Replacement dwelling" means a building, structure, or other shelter constituting a place of abode, whether real property or personal property, that is owned and occupied by a claimant as his or her principal place of residence, and any land owned by the claimant on which the building, structure, or other shelter is situated. For purposes of this paragraph, land constituting a part of a replacement dwelling includes only that area of reasonable size that is used as a site for a residence, and "land owned by the claimant" includes land for which the claimant either holds a leasehold interest described in subdivision (c) of Section 61 or a land purchase contract. Each unit of a multiunit dwelling shall be considered a separate replacement dwelling. For purposes of this paragraph, "area of reasonable size that is used as a site for a residence" includes all land if any nonresidential uses of the property are only incidental to the use of the property as a residential site. For purposes of this paragraph, "land owned by the claimant" includes an ownership interest in a resident-owned mobilehome park that is assessed pursuant to subdivision (b) of Section 62.1.

(4) "Original property" means a building, structure, or other shelter constituting a place of abode, whether real property or personal property, that is owned and occupied by a claimant as his or her principal place of residence, and any land owned by the claimant on which the building, structure, or other shelter is situated. For purposes of this paragraph, land constituting a part of the original property includes only that area of reasonable size that is used as a site for a residence, and "land owned by the claimant" includes land for which the claimant either holds a leasehold interest described in subdivision (c) of Section 61 or a land purchase contract. Each unit of a multiunit dwelling shall be considered a separate original property. For purposes of this paragraph, "area of reasonable size that is used as a site for a residence" includes all land if any nonresidential uses of the property are only incidental to the use of the property as a residential site. For purposes of this paragraph, "land owned by the claimant" includes an ownership interest in a resident-owned mobilehome park that is assessed pursuant to subdivision (b) of Section 62.1.

(5) "Equal or lesser value" means that the amount of the full cash value of a replacement dwelling does not exceed one of the following:

(A) One hundred percent of the amount of the full cash value of the original property if the replacement dwelling is purchased or newly constructed prior to the date of the sale of the original property.

(B) One hundred and five percent of the amount of the full cash value of the original property if the replacement dwelling is purchased or newly constructed within the first year following the date of the sale of the original property.

(C) One hundred and ten percent of the amount of the full cash value of the original property if the replacement dwelling is purchased or newly constructed within the second year following the date of the sale of the original property.

For the purposes of this paragraph, except as otherwise provided in paragraph (4) of subdivision (h), if the replacement dwelling is, in part, purchased and, in part, newly constructed, the date the "replacement dwelling is purchased or newly constructed" is the date of purchase or the date of completion of construction, whichever is later.

(6) "Full cash value of the replacement dwelling" means its full cash value, determined in accordance with Section 110.1, as of the date on which it was purchased or new construction was completed, and after the purchase or the completion of new construction.

(7) "Full cash value of the original property" means, either:

(A) Its new base year value, determined in accordance with subdivision (e), without the application of subdivision (h) of Section 2 of Article XIII A of the California Constitution, plus the adjustments permitted by subdivision (b) of Section 2 of Article XIII A and subdivision (f) of Section 110.1 for the period from the date of its sale by the claimant to the date on which the replacement property was purchased or new construction was completed.

(B) In the case where the original property has been substantially damaged or destroyed by misfortune or calamity and the owner does not rebuild on the original property, its full cash value, as determined in accordance with Section 110, immediately prior to its substantial damage or destruction by misfortune or calamity, as determined by the county assessor of the county in which the property is located, without the application of subdivision (h) of Section 2 of Article XIII A of the California Constitution, plus the adjustments permitted by subdivision (b) of Section 2 of Article XIII A of the California Constitution and subdivision (f) of Section 110.1, for the period from the date of its sale by the claimant to the date on which the replacement property was purchased or new construction was completed.

(8) "Sale" means any change in ownership of the original property for consideration.

(9) "Claimant" means any person claiming the property tax relief provided by this section. If a spouse of that person is a record owner of the replacement dwelling, the spouse is also a claimant for purposes of determining whether in any future claim filed by the spouse under this section the condition of eligibility specified in paragraph (7) of subdivision (b) has been met.

(10) "Property that is eligible for the homeowners' exemption" includes property that is the principal place of residence of its owner and is entitled to exemption pursuant to Section 205.5.

(11) "Person" means any individual, but does not include any firm, partnership, association, corporation, company, or other legal entity or organization of any kind. "Person" includes an individual who is the present beneficiary of a trust.

(12) "Severely and permanently disabled" means any person described in subdivision (b) of Section 74.3.

(13) For the purposes of this section property is "substantially damaged or destroyed by misfortune or calamity" if either the land or the improvements sustain physical damage amounting to more than 50 percent of either the land's or the improvement's full cash value immediately prior to the misfortune or calamity. Damage includes a diminution in the value of property as a result of restricted access to the property where the restricted access was caused by the misfortune or calamity and is permanent in nature.

(h) (1) Upon the timely filing of a claim described in subparagraph (F) of paragraph (1) of subdivision (f), the assessor shall adjust the new base year value of the replacement dwelling in conformity with this section. This adjustment shall be made as of the latest of the following dates:

(A) The date the original property is sold.

(B) The date the replacement dwelling is purchased.

(C) The date the new construction of the replacement dwelling is completed.

(2) Any taxes that were levied on the replacement dwelling prior to the filing of the claim on the basis of the replacement dwelling's new base year value, and any allowable annual adjustments thereto, shall be canceled or refunded to the claimant to the extent that the taxes exceed the amount that would be due when determined on the basis of the adjusted new base year value.

(3) Notwithstanding Section 75.10, Chapter 3.5 (commencing with Section 75) shall be utilized for purposes of implementing this subdivision, including adjustments of the new base year value of replacement dwellings acquired prior to the sale of the original property.

(4) In the case where a claim under this section has been timely filed and granted, and new construction is performed upon the replacement dwelling subsequent to the transfer of base year value, the property tax relief provided by this section also shall apply to the replacement dwelling, as improved, and thus there shall be no reassessment upon completion of the new construction if both of the following conditions are met:

(A) The new construction is completed within two years of the date of the sale of the original property and the owner notifies the assessor in writing of completion of the new construction within six months after completion.

(B) The fair market value of the new construction on the date of completion, plus the full cash value of the replacement dwelling on the date of acquisition, is not more than the full cash value of the original property as determined pursuant to paragraph (7) of subdivision (g) for purposes of granting the original claim.

(i) Any claimant may rescind a claim for the property tax relief provided by this section and shall not be considered to have received that relief for purposes of paragraph (7) of subdivision (b), and the assessor shall grant the rescission, if a written notice of rescission is delivered to the office of the assessor as follows:

(1) A written notice of rescission signed by the original filing claimant or claimants is delivered to the office of the assessor in which the original claim was filed.

(2) (A) Except as otherwise provided in this paragraph, the notice of rescission is delivered to the office of the assessor before the date that the county first issues, as a result of relief granted under this section, a refund check for property taxes imposed upon the replacement dwelling. If granting relief will not result in a refund of property taxes, then the notice shall be delivered before payment is first made of any property taxes, or any portion thereof, imposed upon the replacement dwelling consistent with relief granted under this section. If payment of the taxes is not made, then notice shall be delivered before the first date that those property taxes, or any portion thereof, imposed upon the replacement dwelling, consistent with relief granted under this section, are delinquent.

(B) Notwithstanding any other provision in this division, any time the notice of rescission is delivered to the office of the assessor within six years after relief was granted, provided that the replacement property has been vacated as the claimant's principal place of residence within 90 days after the original claim was filed, regardless of whether the property continues to receive the homeowners' exemption. If the rescission increases the base year value of a property, or the homeowners' exemption has been incorrectly allowed, appropriate escape assessments or supplemental assessments, including interest as provided in Section 506, shall be imposed. The limitations periods for any escape assessments or supplemental assessments shall not commence until July 1 of the assessment year in which the notice of rescission is delivered to the office of the assessor.

(3) The notice is accompanied by the payment of a fee as the assessor may require, provided that the fee shall not exceed an amount reasonably related to the estimated cost of processing a rescission claim, including both direct costs and developmental and indirect costs, such as costs for overhead, personnel, supplies, materials, office space, and computers.

(j) (1) With respect to the transfer of base year value of original properties to replacement dwellings located in the same county, this section, except as provided in paragraph (3) or (4), shall apply to any replacement dwelling that is purchased or newly constructed on or after November 6, 1986.

(2) With respect to the transfer of base year value of original properties to replacement dwellings located in different counties, except as provided in paragraph (4), this section shall apply to any replacement dwelling that is purchased or newly constructed on or after the date specified in accordance with subparagraph (E) of paragraph (2) of subdivision (a) in the ordinance of the county in which the replacement dwelling is located, but shall not apply to any replacement dwelling which was purchased or newly constructed before November 9, 1988.

(3) With respect to the transfer of base year value by a severely and permanently disabled person, this section shall apply only to replacement dwellings that are purchased or newly constructed on or after June 6, 1990.

(4) The amendments made to subdivision (e) by the act adding this paragraph shall apply only to replacement dwellings under Section 69 that are acquired or newly constructed on or after October 20, 1991, and shall apply commencing with the 1991–92 fiscal year.

(k) (1) In the case in which a county adopts an ordinance pursuant to paragraph (2) of subdivision (a) that establishes an applicable date which is more than three years prior to the date of adoption of the ordinance, those potential claimants who purchased or constructed replacement dwellings more than three years prior to the date of adoption of the ordinance and who would, therefore, be precluded from filing a timely claim, shall be deemed to have timely filed a claim if the claim is filed within three years after the date that the ordinance is adopted. This paragraph may not be construed as a waiver of any other requirement of this section.

(2) In the case in which a county assessor corrects a base year value to reflect a pro rata change in ownership of a resident-owned mobilehome park that occurred between January 1, 1989, and January 1, 2002, pursuant to paragraph (4) of subdivision (b) of Section 62.1, those claimants who purchased or constructed replacement dwellings more than three years prior to the correction and who would, therefore, be precluded from filing a timely claim, shall be deemed to have timely filed a claim if the claim is filed within three years of the date of notice of the correction of the base year value to reflect the pro rata change in ownership. This paragraph may not be construed as a waiver of any other requirement of this section.

(3) This subdivision does not apply to a claimant who has transferred his or her replacement dwelling prior to filing a claim.

(4) The property tax relief provided by this section, but filed under this subdivision, shall apply prospectively only, commencing with the lien date of the assessment year in which the claim is filed. There shall be no refund or cancellation of taxes prior to the date that the claim is filed.

(l) No escape assessment may be levied if a transfer of base year value under this section has been erroneously granted by the assessor pursuant to an expired ordinance authorizing intercounty transfers of base year value.

(m) (1) The amendments made to subdivisions (b) and (g) of this section by Chapter 613 of the Statutes of 2001 shall apply:

(A) With respect to the transfer of base year value of original properties to replacement dwellings located in the same county, to any replacement dwelling that is purchased or newly constructed on or after November 6, 1986.

(B) With respect to the transfer of base year value of original properties to replacement dwellings located in different counties, to any replacement dwelling that is purchased or newly constructed on or after the date specified in accordance with subparagraph (E) of paragraph (2) of subdivision (a) in the ordinance of the county in which the replacement dwelling is located, but not to any replacement dwelling that was purchased or newly constructed before November 9, 1988.

(C) With respect to the transfer of base year value by a severely and permanently disabled person, to replacement dwellings that are purchased or newly constructed on or after June 6, 1990.

(2) The property tax relief provided by this section in accordance with this subdivision shall apply prospectively only commencing with the lien date of the assessment year in which the claim is filed. There shall be no refund or cancellation of taxes prior to the date that the claim is filed.

(n) A claim filed under this section is not a public document and is not subject to public inspection, except that a claim shall be available for inspection by the claimant or the claimant's spouse, the claimant's or the claimant's spouse's legal representative, the trustee of a trust in which the claimant or the claimant's spouse is a present beneficiary, and the executor or administrator of the claimant's or the claimant's spouse's estate.

(o) The amendments made to this section by the act adding this subdivision shall apply commencing with the lien date for the 2012-13 fiscal year.

History.—Added by Stats. 1987, Ch. 186, in effect July 23, 1987. Stats. 1988, Ch. 1271, in effect September 26, 1988, operative January 1, 1999, substituted the new paragraphs (1) and (2) for the former paragraphs that provided "(1) at the time of sale of the original property, the claimant is an owner and a resident of that property. (2) At the time of sale of the original property, the property is eligible for the homeowner's exemption as a result of the claimant's ownership and occupation of the property as his or her principal place of residence." in subdivision (b); substituted "report quarterly to the State Board of Equalization" for "supply" and deleted "the written request of" after "specified by" in subdivision (b)(7); substituted "an" for "the same proportional" and substituted "dwelling" for "property as he or she held in the original property" in subdivision (d)(1); substituted "is" for "shall be deemed" in the second sentence, and added the second paragraph of subdivision (d)(3); substituted "unless" for "in any case in which", deleted "not" after "original property is", added "either (1)" after "which", and added the remainder of the sentence after "5803" in the second paragraph of subdivision (e); substituted "occupied" for "will occupy", and substituted "on" for "within one year of" in subdivision (f)(5); added the second paragraph to subdivision (g)(2); added the last part of the second sentence after "residence" and the third sentence in subdivision (g)(3); added the last part of the second sentence after "residence" and the third sentence in subdivision (g)(4); added the second paragraph to subdivision (g)(5)(C); substituted "is" for "shall" and deleted "be deemed" in the second sentence of subdivision (g)(9); added the third paragraph to subdivision (h); and added subdivision (j). Stats. 1990, Ch. 1494, in effect September 30, 1990, added ", or any severely and permanently disabled person," after "55 years" in subdivision (a); substituted "base-year" for "base year" intermittently throughout the section; added ", or is severely and permanently disabled" after "55 years of age" in subdivisions (b)(3) and (d)(3); added ", as a claimant," after "previously been granted", and added "and all claimants . . . received relief" after "allowed by assessors" in the first sentence of subdivision (b)(7); substituted "each" for "the" in subdivision (f)(1); added ", or severely and permanently disabled" after "age" in the first sentence, added the second sentence, added "that a person . . . of age" after "available proof" in the third sentence, and added the fourth sentence, including subparagraphs (A) and (B), to subdivision (f)(2); added "except as . . . subdivision (h)," after "paragraph" in the second paragraph of subdivision (g)(5)(C); deleted "original party or the" after "owner of the", deleted "whether or not that spouse joined in the claim," after "replacement dwelling,", deleted "or has not" after "subdivision (b) has", and deleted "by the spouse" after "been met" in subdivision (g)(9); added paragraphs (11) and (12) to subdivision (g); added "(1)" before "Upon the timely", substituted "(A)", "(B)" and "(C)" for "(1)", "(2)" and "(3)", respectively, added "(2)" before "Any taxes", added "(3)" before "Notwithstanding Section 75.10", and added paragraph (4) to subdivision (h); added subdivision (i); relettered former subdivision (i) as (j); added "(1)" before "This section", added "except as provided in paragraph (2)," after "this section", and added paragraph (2) to subdivision (j); relettered former subdivision (j) as (k); and deleted "the effective date of this act unless Assembly Constitutional Amendment No. 1 of the 1987–88 Regular Session is approved by the voters. In that event, the amendments shall not become operative until" after "shall become operative on" in subdivision (k). Stats. 1992, Ch. 1180, in effect January 1, 1993, added "or Section 69" after "section", and "under this section or Section 69" after "qualifies" in the second paragraph of subdivision (e); added "or (3)" after "(2)" in paragraph (1) of subdivision (j); and added paragraph (3) to subdivision (j). Stats. 1994, Ch. 1222, in effect January 1, 1995, substituted "that" for "which" throughout text; deleted hyphen in "base year" throughout text; added ", or Section 69.3" after "Section 69" twice and added "or property" after "dwelling" in the second paragraph of subdivision (e). Stats. 1996, Ch. 897, in effect September 25, 1996, added the balance of the first sentence after "by this section" in subdivision (b)(7); added the fourth and fifth sentences of subdivision (g)(3), and added the fourth and fifth sentences of subdivision (g)(4). Stats. 1997, Ch. 941 (SB 542), in effect January 1, 1998, added "1" before "Notwithstanding" in the first sentence of subdivision (a), and added paragraph 2 and (A), (B), (C), (D), and (E) thereof to subdivision (a); substituted "any nonresidential uses of property are only" for "no portion of the property is used for commercial purposes. "Commercial purposes" does not include activities that are" in the fourth and former fifth sentences of paragraphs (3) and (4) of subdivision (g); substituted "With respect to . . . in the same county, this" for "This" in subdivision (g)(1) and substituted "(3) or (4)" for "(2) or (3)" after "paragraph" therein, added subdivision (g)(2), and renumbered former paragraphs (2) and (3) as (3) and (4) respectively; and added ", and by the act amending this section during the 1997–98 Regular Session of the Legislature," after "subdivision" in subdivision (k). Stats. 1998, Ch. 485 (AB 2803), in effect January 1, 1999, substituted "This section" for "The amendments to this section made by the act adding this subdivision, and by the act amending this section during the 1997–98 Regular Session of the Legislature," before "shall become operative" in subdivision (k). Stats. 2000, Ch. 693 (SB 383), in effect September 27, 2000, deleted former subdivision (k) which provided that "This section shall be become operative on January 1, 1999.", and added new subdivision (k). Stats. 2000, Ch. 693 (SB 383), in effect September 27, 2000, operative January 1, 2001, substituted "It" for "The ordinance" before "provides that" and substituted "are" for "shall remain" after "its provisions" in the first sentence of subparagraph (D) of paragraph (2) of subdivision (a); added "subject to subdivision (k)" after "was completed" in the third paragraph of subdivision (f); added "and the assessor shall grant the rescission," after "subdivision (b)," and substituted "as follows:" for "in which the original claim was filed and all of the following have occurred:" after "office of the assessor" in the first sentence of subdivision (i), substituted "A written notice of rescission" for "The notice is" before "signed by", and added "is delivered to the office of the assessor in which the original claim was filed" after "claimants" in the first sentence of paragraph (1) therein, added subparagraph designation (A) to the first paragraph of paragraph (2) therein and substituted "Except as otherwise provided in this paragraph, the notice of rescission" for "The notice" in the first sentence, and added subparagraph (B) therein; added subdivision (k); and relettered former subdivision (k) as subdivision (l). Stats. 2001, Ch. 613 (SB 1184), in effect January 1, 2002, added ", or at the time when the original property was substantially damaged or destroyed by misfortune or calamity," after "sale" in the first sentences of paragraphs (1) and (2) of subdivision (b); added ", or in the case where the original property has been substantially damaged or destroyed by misfortune or calamity and the owner does not rebuild on the original property, determined as of the date immediately prior to the misfortune or calamity" after "claimant" in the first sentence of the first paragraph of paragraph (2), substituted "means, either:" for "means" after "property" in the first sentence of paragraph (7) and created subparagraph (A) with the balance of the former first sentence after "means" and added subparagraph (B) therein, and added paragraph (13) to subdivision (g); and deleted "is" after "rescission" in the first sentence of paragraph (1) of subdivision (i); and added subdivision (m). Stats. 2002, Ch. 775 (SB 2092), in effect January 1, 2003, substituted "manufactured home" for "mobilehome" throughout the text; added the second sentence to paragraph (2) of subdivision (c), created new subparagraph (A) with the former second and third sentences of paragraph (2) of subdivision (c), and added the second sentence therein, and created new subparagraph (B) with the former fourth and fifth sentences of paragraph (2) and added the second sentence therein; added "or (m)" after "subdivision (k)" in the third paragraph of subdivision (f); and added the fifth sentence to paragraph (3), added the fifth sentence to paragraph (4), and substituted "its" for "is" after "50 percent of" in paragraph (13) of subdivision (g); added paragraph (2) and renumbered former paragraphs (2) and (3) as paragraphs (3) and (4), respectively, to subdivision (k); and substituted subdivision (m) for former subdivision (m) which provided that "The amendments made to subdivisions (b) and (g) of this section by the act adding this subdivision apply only to replacement dwellings that are acquired or newly constructed on or after March 24, 1999, and shall apply commencing with the 1998–99 fiscal year. The property tax relief provided by this section, but filed under this subdivision, shall apply prospectively only, commencing with the lien date of the assessment year in which the claim is filed. There shall be no refund or cancellation of taxes prior to the date that the claim is filed." Stats. 2005, Ch. 264 (SB 555), in effect January 1, 2006, substituted "homeowners' exemption" for "homeowner's exemption" throughout text, deleted a comma after "of the claimant" in the first sentence of the first paragraph of subdivision (c), added "the" after "the coowner of" in the first sentence of the first paragraph of subdivision (d), deleted "was a record owner of the original property at the time of its sale or" after "the claimant who" in the first sentence of paragraph (1) of subdivision (f), added "the" after "the sale of" in the first sentence of paragraph (1) and added "the" after "a part of" in the second sentence of paragraph (4) of subdivision (g), and added subdivision (n). Stats. 2006, Ch. 364 (AB 3076), in effect January 1, 2007, designated the former first sentence of subdivision (f) as paragraph (1) thereof and added "shall be designed by the State Board of Equalization and that" after "a form that" therein, designated former paragraphs (1), (2), (3), (4), and (5) as new subparagraphs (A), (B), (C), (D), and (E), respectively, deleted the former second paragraph which provided that "The State Board of Equalization shall design the form for claiming eligibility."; created new subparagraph (F) with the former third paragraph, and added paragraph (2) thereto; added "described in subparagraph (F) of paragraph (1) of subdivision (f)" after "of a claim" in the first sentence of subdivision (h); and deleted the former third sentence of paragraph (2) of subdivision (m) which provided that "Notwithstanding subdivision (f), a claim shall be deemed to be timely file if it is filed within four years after the operative date of the act adding this paragraph." Stats. 2007, Ch. 449 (SB 1045), in effect January 1, 2008, substituted "the claimant or the claimant's spouse, the claimant's or the claimant's spouse's legal representative, the trustee of a trust in which the claimant or the claimant's spouse is a present beneficiary, and the executor or administrator of the claimant's or the claimant's spouse's estate" for "transferee and the transferor or their respective spouse, the transferee's legal representative, the transferor's legal representative, and the executor or administrator of the transferee's or transferor's estate" after "inspection by the" in the first sentence of subdivision (n). Stats. 2010, Ch. 654 (SB 1494), in effect January 1, 2011, deleted "or" after "in common," and added "or a present beneficiary of a trust" after "property owner," in the first sentence of subdivision (d) and added the second sentence of paragraph (11) to subdivision (g). Stats. 2011, Ch. 351 (SB 947), in effect January 1, 2012, added "Except as otherwise provided in paragraph (2) of subdivision (a), the" before "replacement" in the first sentence of paragraph (6) of subdivision (b); added "of the California Constitution" after "Article XIII A" in the first sentence of subparagraph (B) of paragraph (7) and added a comma after "this section", substituted "either the land or the improvements sustain" for "it sustains" after "calamity", if", and substituted "either the land's or the improvement's" for "its" after "50 percent of" in the first sentence of paragraph (13) of subdivision (g); substituted "six months" for "30 days" after "construction within" in the first sentence of subparagraph (A) of paragraph (4) of subdivision (h); and added subdivision (o).

Note.—Section 9 of Stats. 1988, Ch. 1271 provided that unless specifically provided otherwise in that section, the amendments to Section 69.5 of the Revenue and Taxation Code made by this act shall apply to purchases and transfers of real property which occur on or after November 5, 1986.

Note.—Section 9 of Stats. 1990, Ch. 1494, provided that the amendments made by Section 3.7 of this act to Section 69.5 of the Revenue and Taxation Code with respect to new construction performed upon a replacement dwelling subsequent to the transfer of base-year value to that dwelling shall only apply with respect to a replacement dwelling which is purchased or newly constructed on or after January 1, 1991.

Note.—Section 5 of Stats. 2001, Ch. 613 (SB 1184) 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. Sec. 6 therein provided that notwithstanding Section 17610 of the Government Code, if the Commission on State Mandates determines that this act contains costs mandated by the state, reimbursement to local agencies and school districts for those costs shall be made pursuant to Part 7 (commencing with Section 17500) of Division 4 of Title 2 of the Government Code. If the statewide cost of the claim for reimbursement does not exceed one million dollars ($1,000,000), reimbursement shall be made from the State Mandates Claims Fund.

Note.—Section 18 of Stats. 2005, Ch. 264 (SB 555), provided that the Legislature finds and declares that the amendments made by this act to Sections 63.1 and 69.5 of the Revenue and Taxation Code impose limitations on the public's right of access to the meetings of public bodies or the writings of public officials and agencies within the meaning of Section 3 of Article I of the California Constitution. Pursuant to that constitutional provision, the Legislature makes the following findings to demonstrate the interest protected by this limitation and the need for protecting that interest:

(a) Claims filed under Section 63.1 or Section 69.5 contain taxpayer sensitive personal information, including social security numbers, dates of birth, home addresses, home telephone numbers, marital status, adoption status, financial matters, and medical information. Notwithstanding Section 3 of Article I of the California Constitution, county assessors have a responsibility and an obligation to safeguard from public access a taxpayer's personal information with which it has been entrusted.

(b) The right to privacy is a personal and fundamental right protected by Section 1 of Article I of the California Constitution and by the United States Constitution. All individuals have a right of privacy in information pertaining to them.

(c) This state has previously recognized, in Section 408.2 of the Revenue and Taxation Code, the importance of protecting the confidentiality and privacy of an individual's personal and financial information contained in homeowners' exemption claims, property statements, and change of ownership statements filed with county assessors for property tax purposes.

(d) In addition to the right of privacy, there is a need to protect from public disclosure personal information due to the growing prevalence and debilitating nature of identity theft.

(e) It is not the intent of this act to make confidential that a particular property has received a property tax benefit pursuant to Section 63.1 or Section 69.5 of the Revenue and Taxation Code, or the amount of the benefit, but only to protect the personal information contained in the claim form. In addition, the Legislature further finds that in determining the fiscal impact resulting from either of these provisions, county assessors may provide aggregated data on property in their counties that have been extended these property tax benefits.

Construction.—Under Revenue and Taxation Code Sections 218 and 69.5, in order to transfer the base year value of an original property to a replacement property, the original property must be the principal residence of a person over the age of 55 years who was the owner of record at the time of the sale of original property. When an individual transferred the original property to his wholly owned corporation before it was sold, he did not qualify for either the homeowner's exemption or a base year value transfer. The individual had to accept the tax consequences of this choice to transfer to a corporation whether or not such consequences were contemplated. Grotenhuis v. County of Santa Barbara (2010) 182 Cal.App.4th 1158.

Application.—When an applicant for Proposition 60 tax relief builds a new residence on land purchased years earlier, the value of that replacement dwelling must be determined when construction is complete. Wunderlich v. County of Santa Cruz, 178 Cal.App.4th 680.

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