Property taxation: base year value transfers.

(1) The California Constitution authorizes the Legislature to provide that a person who is either severely disabled or over 55 years of age may transfer the base year value, as defined, of property that is eligible for the homeowners' property tax exemption to a replacement dwelling that is of equal or lesser value located within the same county as the property from which the base year value is transferred, provided the replacement dwelling is purchased or newly constructed within 2 years of the sale of the original property, subject to certain conditions. This bill would provide, commencing with the 2017–18 fiscal year, that the base year value of an original property may be transferred to a replacement dwelling that is of greater value and would require the base year value of the replacement dwelling to be calculated by adding the difference between the full cash value of the original property and the full cash value of the replacement property to the base year value of the original property. The bill would prohibit a person from transferring the base year value of the original property to a replacement dwelling pursuant to these provisions if his or her household income, as defined, exceeds the area median income of the county. (2) Existing law defines "full cash value of the replacement dwelling" for purposes of this transfer of property tax base year value to mean the replacement dwelling's full cash value, determined in accordance with a specified provision, as of the date on which the replacement dwelling was purchased or new construction was completed. This bill would provide that full cash value of the replacement dwelling may also mean, in specified circumstances, the replacement dwelling's full cash value, determined in accordance with a specified provision, as of the date on which the original property is sold. (3) By changing the manner in which local assessors assess property for property taxation purposes, this bill would impose a state-mandated local program. The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement. This bill would provide that, if the Commission on State Mandates determines that the bill contains costs mandated by the state, reimbursement for those costs shall be made pursuant to these statutory provisions. (4) Section 2229 of the Revenue and Taxation Code requires the Legislature to reimburse local agencies annually for certain property tax revenues lost as a result of any exemption or classification of property for purposes of ad valorem property taxation. This bill would provide that, notwithstanding Section 2229 of the Revenue and Taxation Code, no appropriation is made and the state shall not reimburse local agencies for property tax revenues lost by them pursuant to the bill. (5) This bill would take effect immediately as a tax levy, but would become operative only if ACA 12 of the 2015–16 Regular Session is approved by the voters.