Property taxation: change in ownership: family homes and farms.

Removed a broader provision (former first subparagraph (D) of Section 63.2(a)(1)) that would have started the one-year clock at 'the effective date of a court's determination of the final ownership of the property.' Only the narrower version remains, which starts the clock at 'the effective date of the order entered pursuant to the Probate Code.' This limits the provision to transfers formalized through a specific probate court order rather than any court finding of ownership.

The state-mandated local program designation was changed from 'yes' to 'no' in the fiscal analysis, and the operative State Mandates reimbursement section (former SEC. 2) was removed from the bill. This means the state will not reimburse local agencies for costs associated with administering this exclusion.

Remaining sections were renumbered: the no-appropriation provision moved from SEC. 3 to SEC. 2, and the tax levy effective date provision moved from SEC. 4 to SEC. 3.

Subsection (D) of Section 63.2(a)(1) was changed from a provision that automatically restarts the one-year occupancy and exemption-filing clock at the effective date of a probate court order, to one that requires the eligible transferee to file three specific documents with the assessor (eligibility form, copy of court order indicating probate prevented timely residence establishment, and a Section 480(b) statement) before the extended deadline applies. The timing language also changed from the period 'commencing' at the order date to the period 'ending' one year after the order date.

Section numbering was renumbered: former SEC. 2 (state mandates reimbursement) became SEC. 3, and former SEC. 3 (no appropriation for lost property tax revenues) became SEC. 4, with a new SEC. 2 appearing to be a placeholder or formatting artifact.

The bill now amends Section 63.2 of the Revenue and Taxation Code (family home/farm transfer exclusion) in addition to adding Section 3777 (tax-defaulted property sales). The scope expanded from a single topic to two distinct property tax issues.

The state-mandated local program designation changed from 'no' to 'yes,' acknowledging that the bill expands duties of local tax officials (assessors) and triggers potential state mandate reimbursement for those costs.

When an eligible transferor dies, the one-year period for the transferee to establish principal residence or file for homeowners' exemption now begins on the effective date of a court's determination of final ownership, rather than the date of death. This gives heirs more time during probate to comply with requirements.

A transferee must notify the county assessor within one year of the transferor's death of their intention to claim the exclusion, using forms prescribed by the State Board of Equalization.

A late-filing mechanism allows claims to be considered even after normal deadlines if the property has not been transferred to a third party. However, the exclusion then applies only from the lien date of the year the claim is filed, and the taxable value is factored forward for inflation and new construction.

For properties damaged or destroyed by the 2025 Palisades, Eaton, Hurst, Lidia, Sunset, or Woodley Fires where a previously unrecorded change in ownership triggered reassessment, the filing deadline is extended to three years after mailing of the supplemental assessment notice. This fire-specific provision applies only to claims filed before January 1, 2031.

If a transferee fails to file a certified claim within 45 days of a first notice of potential eligibility and 60 days of a second notice, the assessor may impose a one-time processing fee (capped at $175 or actual reassessment costs, whichever is less) when the claim is eventually filed and approved.

The bill now explicitly states that no state appropriation is made and the state will not reimburse local agencies for property tax revenues lost due to this act, overriding the general reimbursement requirement in Section 2229 of the Revenue and Taxation Code.

The bill now takes effect immediately as a tax levy under Article IV of the California Constitution, rather than following the standard July 1 effective date.

The entire provision adding Section 3777 to the Revenue and Taxation Code was deleted. That section would have restricted when tax-defaulted property could be offered for sale (requiring prior public offering, assessed value of $10,000 or less, licensed appraisal, factored value test, or owner consent). Its removal means the bill no longer addresses tax-defaulted property sales to public agencies.

The bill title was simplified from 'An act to add amend Section 3777 to 63.2 of the Revenue and Taxation Code' to 'An act to amend Section 63.2 of the Revenue and Taxation Code,' reflecting the removal of the tax-defaulted property sales component.

The death-of-transferor rule in Section 63.2(a)(1)(D) was narrowed. Previously, the one-year period for establishing principal residence and filing for homeowners exemption would start on the effective date of any court's determination of final ownership. Now it only applies when the transfer is made by an order entered pursuant to the Probate Code, and the language changed from the transfer being 'deemed to occur' to the one-year period being 'deemed to commence.' This limits the provision to probate court orders specifically.

The state-mandated local program designation changed from 'no' to 'yes,' indicating the bill now imposes costs on local agencies that trigger state reimbursement obligations under the Commission on State Mandates.