Property taxation: exemption: low-value properties.

The California Constitution authorizes the Legislature, with the approval of 23 of the membership of each legislative house, to allow a county board of supervisors to exempt from property taxation those properties having a full value too low to justify the costs of assessment and collection. Existing property tax law implementing this authority generally limits any exemption granted under this constitutional provision by a county board of supervisors to real property with a total base year value, as adjusted annually for inflation, or personal property with a full value, not exceeding $10,000. The annual inflation adjustment applied to real property total base year value for this purpose is limited to no more than 2% per year. Existing property tax law also limits any exemption for new construction to situations where the new total base year value of the property, as adjusted for inflation, including the new construction, is $10,000 or less. This bill would raise these maximum exemption amounts to $15,000 for the lien dates occurring on or after January 1, 2024, and before January 1, 2029. The bill would apply the inflation adjustment factor commencing on January 1, 2025, for calculating the maximum exemption value to both the total base year value of real property and the full value of personal property. The bill would also eliminate the 2% limitation to the inflation adjustment for the purpose of calculating the exemption for a property having a full value too low to justify the costs of assessment and collection. Existing law requires any bill authorizing a new tax expenditure to contain, among other things, specific goals, purposes, and objectives that the tax exemption will achieve, detailed performance indicators, and data collection requirements. This bill would make specified findings detailing the goal, purpose, and objective of the above-described expansion of a tax exemption, performance indicators for determining whether the expanded exemption meets that goal, purpose, and objective, and data collection requirements. Existing law requires the state 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 those provisions, no appropriation is made and the state shall not reimburse local agencies for property tax revenues lost by them pursuant to the bill. This bill would take effect immediately as a tax levy.