Existing law provides for the annual assessment and collection of property taxes by each county, and provides for the state administration of the property tax by the State Board of Equalization.

The California Constitution generally limits ad valorem taxes on real property to 1% of the full cash value of that property. For purposes of this limitation, full cash value is defined as the assessors valuation of real property as shown on the 197576 tax bill under full cash value or, thereafter, the appraised value of that real property when purchased, newly constructed, or a change in ownership has occurred.

Existing property tax law requires a transferee of real property or a manufactured home that is locally assessed to file a change in ownership statement with the assessor of the county in which the property or manufactured home is located, and also requires a corporation, partnership, limited liability company, or other legal entity to file a change in ownership statement with the board.

Existing property tax law also includes various property tax exemptions as authorized or established by the California Constitution.

This bill would prohibit an assessor or any person employed by the office of the county assessor from making decisions with regard to change in ownership, or with regard to property tax exemptions, except a homeowners exemption claim, unless he or she is the holder of a valid assessment analyst certificate issued by the board. The bill would require the board to provide for the examination of applicants for a certificate and would authorize the board to contract with the Department of Human Resources to give the examinations. The bill would require prescribed annual training for certification, and would also provide for advanced certification. Failure to complete training as required would be grounds for revocation. The bill would also authorize the board to issue temporary certificates and interim certificates under prescribed circumstances. This bill would specify that its provisions are not to be construed to impede assessors from managing their staff resources efficiently regarding exemption applications and change in ownership documents, provided that noncertificated staff are not responsible for making exemption or change in ownership decisions. This bill would provide that its provisions only apply in those counties and cities and counties that have passed a resolution upon the recommendation of the assessor to require certification as described above.

Existing law provides for the annual assessment and collection of property taxes by each county, and provides for the state administration of the property tax by the State Board of Equalization.

The California Constitution generally limits ad valorem taxes on real property to 1% of the full cash value of that property. For purposes of this limitation, full cash value is defined as the assessors valuation of real property as shown on the 197576 tax bill under full cash value or, thereafter, the appraised value of that real property when purchased, newly constructed, or a change in ownership has occurred.

Existing property tax law requires a transferee of real property or a manufactured home that is locally assessed to file a change in ownership statement with the assessor of the county in which the property or manufactured home is located, and also requires a corporation, partnership, limited liability company, or other legal entity to file a change in ownership statement with the board.

Existing property tax law also includes various property tax exemptions as authorized or established by the California Constitution.

This bill would prohibit an assessor or any person employed by the office of the county assessor from making decisions with regard to change in ownership, or with regard to property tax exemptions, except a homeowners exemption claim, unless he or she is the holder of a valid assessment analyst certificate issued by the board. The bill would require the board to provide for the examination of applicants for a certificate and would authorize the board to contract with the Department of Human Resources to give the examinations. The bill would require prescribed annual training for certification, and would also provide for advanced certification. Failure to complete training as required would be grounds for revocation. The bill would also authorize the board to issue temporary certificates and interim certificates under prescribed circumstances. This bill would specify that its provisions are not to be construed to impede assessors from managing their staff resources efficiently regarding exemption applications and change in ownership documents, provided that noncertificated staff are not responsible for making exemption or change in ownership decisions. This bill would provide that its provisions only apply in those counties and cities and counties that have passed a resolution upon the recommendation of the assessor to require certification as described above.

Existing law provides for the annual assessment and collection of property taxes by each county, and provides for the state administration of the property tax by the State Board of Equalization.

The California Constitution generally limits ad valorem taxes on real property to 1% of the full cash value of that property. For purposes of this limitation, full cash value is defined as the assessors valuation of real property as shown on the 197576 tax bill under full cash value or, thereafter, the appraised value of that real property when purchased, newly constructed, or a change in ownership has occurred.

Existing property tax law requires a transferee of real property or a manufactured home that is locally assessed to file a change in ownership statement with the assessor of the county in which the property or manufactured home is located, and also requires a corporation, partnership, limited liability company, or other legal entity to file a change in ownership statement with the board.

Existing property tax law also includes various property tax exemptions as authorized or established by the California Constitution.

This bill would prohibit a person an assessor or any person employed by the office of the county assessor from making decisions with regard to change in ownership, or with regard to property tax exemptions, except a homeowners exemption claim, as an employee of the state, or of a requiring county or city and county, claim, unless he or she is the holder of a valid assessment analyst certificate issued by the board. The bill would require the board to provide for the examination of applicants for a certificate and would authorize the board to contract with the Department of Human Resources to give the examinations. The bill would provide for an advanced certificate, pursuant to a course of study prescribed by, and on examination prepared by, the board. The bill would require prescribed annual training for certification, including and would also provide for advanced certification. Failure to complete training as required would be grounds for revocation. The bill would also authorize the board to issue temporary certificates and interim certificates under prescribed circumstances. This bill would specify that its provisions are not to be construed to impede assessors from managing their staff resources efficiently regarding exemption applications and change in ownership documents, provided that noncertificated staff are not responsible for making exemption or change in ownership decisions. This bill would provide that its provisions only apply in those counties and cities and counties that have passed a resolution upon the recommendation of the assessor to require certification as described above.

Existing law provides for the annual assessment and collection of property taxes by each county, and provides for the state administration of the property tax by the State Board of Equalization.

The California Constitution generally limits ad valorem taxes on real property to 1% of the full cash value of that property. For purposes of this limitation, full cash value is defined as the assessors valuation of real property as shown on the 197576 tax bill under full cash value or, thereafter, the appraised value of that real property when purchased, newly constructed, or a change in ownership has occurred.

Existing property tax law requires a transferee of real property or a manufactured home that is locally assessed to file a change in ownership statement with the assessor of the county in which the property or manufactured home is located, and also requires a corporation, partnership, limited liability company, or other legal entity to file a change in ownership statement with the board.

Existing property tax law also includes various property tax exemptions as authorized or established by the California Constitution.

This bill would prohibit a person from making decisions with regard to change in ownership, or with regard to property tax exemptions, except a homeowners exemption claim, as an employee of the state, or of a requiring county or city and county, unless he or she is the holder of a valid assessment analyst certificate issued by the board. The bill would require the board to provide for the examination of applicants for a certificate and would authorize the board to contract with the Department of Human Resources to give the examinations. The bill would provide for an advanced certificate, pursuant to a course of study prescribed by, and on examination prepared by, the board. The bill would require prescribed annual training for certification, including advanced certification. Failure to complete training as required would be grounds for revocation. The bill would also authorize the board to issue temporary certificates and interim certificates under prescribed circumstances. This bill would specify that its provisions are not to be construed to impede assessors from managing their staff resources efficiently regarding exemption applications and change in ownership documents, provided that noncertificated staff are not responsible for making exemption or change in ownership decisions. This bill would provide that its provisions only apply in those counties and cities and counties that have passed a resolution upon the recommendation of the assessor to require certification as described above.

 THIRD READING  

Bill No: AB 1534

Author: Committee on Revenue and Taxation

Amended: 4/30/15 in Assembly

Vote: 21

SENATE GOVERNANCE & FIN. COMMITTEE: 7-0, 6/24/15

AYES: Hertzberg, Nguyen, Beall, Hernandez, Lara, Moorlach, Pavley

SENATE APPROPRIATIONS COMMITTEE: 7-0, 8/27/15

AYES: Lara, Bates, Beall, Hill, Leyva, Mendoza, Nielsen

ASSEMBLY FLOOR: 79-0, 6/2/15 - See last page for vote

SUBJECT: Assessment analyst: certification

SOURCE: Author

DIGEST: This bill bars assessors’ employees from making decisions regarding changes of ownership without holding a valid assessment analyst certificate; and specifies the certificate training program.

ANALYSIS:

Existing law:

1. Creates the Board of Equalization (BOE) to equalize property tax rates and assessment practices among counties.

2. Directs BOE to administer the property tax certification program, which imposes certification and annual training requirements on property tax appraisers and auditor-appraisers who are county employees.

This bill:

1. Bars any state or county employee from making decisions with regard to changes in ownership or property tax exemptions, except the homeowners’ exemption, unless he or she is the holder of a valid BOE assessment analyst certificate.

2. Establishes a process to certify an assessment analyst, and creates three additional certificates: temporary, interim, and advanced. To implement the program, BOE must:

1. Create an examination for applicants seeking an assessment analyst certificate, and may contract with the California Department of Human Resources to give the examinations.

2. Prepare the exam with the advice and assistance of a committee of five assessors selected by the California Assessors’ Association.

3. Issue a certificate to only to persons who attain a passing grade in the examination and demonstrate that he or she is competent to make change in ownership or exemption decisions, but allows individuals denied a certificate to ask for a review under the Administrative Procedures Act

4. Exempts individuals currently holding a valid appraiser’s or advanced appraiser’s certificate from its requirements.

3. Requires every certified assessment analyst to complete at least 24 hours of continuing education training conducted or approved by BOE each year; however, any training time in excess of the 24-hour minimum that is accumulated in any one year is carried over as credit for future training requirements, with a limit of three years in which the carryover time may be credited. Failure to complete training shall constitute grounds for revocation of a certificate, and a proceeding to revoke shall be conducted in accordance with the Administrative Procedure Act.

4. Requires BOE issue an advanced assessment analyst certificate for an applicant that has held an assessment analysts certificate for at least three years and has:

1. Completed an advanced course of study prepared by BOE with the assistance of five assessors selected by the California Assessors’ Association, and passed an advanced level examination.

2. Requires every advanced assessment analyst to complete at least 12 hours of continuing education training conducted or approved by BOE each year; however, any training time in excess of the 12-hour minimum that is accumulated in any one year is carried over as credit for future training requirements, with a limit of two years in which the carryover time may be credited. Failure to complete training shall constitute grounds for revocation of a certificate, and a proceeding to revoke shall be conducted in accordance with the Administrative Procedure Act.

5. Allows BOE to issue a temporary certificate to a person who is newly employed by the state or county to allow the person time to pass the exam, but it can’t last more than one year, unless the person has been duly elected or appointed to the office of assessor, but bars BOE from renewing a temporary certificate.

6. Allows BOE to issue an interim certificate to a person who is currently employed by the state or county who is making change in ownership or exemption decisions to allow the person time to pass the exam, but prohibits BOE from renewing, or issuing an interim certificate for a duration that exceeds four years, unless the person has been duly elected or appointed to the office of assessor.

7. Requires applicants to disclose financial interests in any legal entity at the time of initial certification, and must complete the form annually, and deems a duplicate of a filing to the Fair Political Practices Commission to meet the requirement.

8. Bars BOE from charging counties to implement the program.

9. Clarifies that the bill’s provisions do not impede an assessor from managing his or her staff resources efficiently, and in a manner that allows non-certificated staff to prepare and work with exemption applications and change in ownership documents, provided that the non-certificated staff are not responsible for making exemption or change in ownership decisions.

10. Makes legislative findings and declarations supporting its purposes, and renumbers the section of law allowing for contract employees.

Related Legislation

AB 1534 is almost identical to AB 2756 (Committee on Revenue and Taxation, 2014), which was approved by the Legislature, but subsequently vetoed by the Governor. In his veto message, Governor Brown stated that state providing training and certification should be something the assessors “can and should be doing without a state mandate.” In response, AB 1534 states that its provisions only become effective in counties or cities and counties that have enacted a resolution upon recommendation of the assessor to require the measure’s certification. While Legislative Counsel didn’t key either bill a state-mandated local program, granting counties the authority to opt-in to the measure’s requirements speaks directly to the Governor’s message.

FISCAL EFFECT: Appropriation: No Fiscal Com.: Yes Local: No

According to Senate Appropriations, AB 1534 would result in BOE incurring annual costs of up to $175,000 (General Fund) annually to implement the costs of the bill. BOE indicates that the bill would not impact property tax revenues.

SUPPORT: (Verified 8/28/15)

California Assessors Association

Organization of SMUD Employees

San Bernardino Public Employees Association

San Luis Obispo County Employees Association

OPPOSITION: (Verified 8/28/15)

None received

ARGUMENTS IN SUPPORT: According to the Author, “Since current law requires appraisers to be certified, similar certification procedures are needed for state and local government employees making decisions in regard to change in ownership and property tax exemptions. Change in ownership and exemption decisions are highly complex, requiring a thorough understanding of different legal documents, statutes, regulations, and court decisions. This bill is intended to ensure that employees making change in ownership and exemption decisions are adequately trained and educated.

ASSEMBLY FLOOR: 79-0, 6/2/15

AYES: Achadjian, Alejo, Travis Allen, Baker, Bigelow, Bloom, Bonilla, Bonta, Brough, Brown, Burke, Calderon, Campos, Chang, Chau, Chiu, Chu, Cooley, Cooper, Dababneh, Dahle, Daly, Dodd, Eggman, Frazier, Beth Gaines, Gallagher, Cristina Garcia, Eduardo Garcia, Gatto, Gipson, Gomez, Gonzalez, Gordon, Gray, Grove, Hadley, Harper, Roger Hernández, Holden, Irwin, Jones, Jones-Sawyer, Kim, Lackey, Levine, Linder, Lopez, Low, Maienschein, Mathis, Mayes, McCarty, Medina, Melendez, Mullin, Nazarian, Obernolte, O'Donnell, Olsen, Patterson, Perea, Quirk, Rendon, Ridley-Thomas, Rodriguez, Salas, Santiago, Steinorth, Mark Stone, Thurmond, Ting, Wagner, Waldron, Weber, Wilk, Williams, Wood, Atkins

NO VOTE RECORDED: Chávez

Prepared by: Colin Grinnell / GOV. & F. / (916) 651-4119

8/31/15 16:57:06

**** END ****

SENATE COMMITTEE ON APPROPRIATIONS

Senator Ricardo Lara, Chair

2015 - 2016 Regular Session

AB 1534 (Committee on Revenue and Taxation) - Assessment analyst: certification

This bill meets the criteria for referral to the Suspense File.

Bill Summary:

AB 1534 would permit local boards of supervisors to impose certification and annual training requirements on county assessor employees responsible for property tax change in ownership and exemption decisions.

Fiscal Impact:

The Board of Equalization (BOE) would incur annual costs of up to $175,000 (General Fund) annually to implement the costs of the bill. BOE indicates that the bill would not impact property tax revenues.

Background:

Under the provisions of the California Constitution, all property is taxable unless explicitly exempted by it or federal law. In 1850, the Legislature directed county assessors to tax property; however, tax rates and methods of assessment varied significantly from county to county. The California Constitution of 1879 created the Board of Equalization (BOE) to equalize property tax rates and assessment practices among counties. As part of this oversight role, BOE administers the property tax certification program, which imposes certification and annual training requirements on property tax appraisers and auditor-appraisers who are county employees.

Proposed Law:

This bill would prohibit an assessor or any person employed by the office of an assessor from making any decisions regarding "change in ownership" issues or property tax exemptions without holding valid assessment analyst certificates issued by BOE, but only if the relevant city or county has adopted a resolution to require a valid assessment analyst certificate. The bill would (1) set up a process to certify an assessment analyst, and (2) create three additional certificates, as specified.

Staff Comments:

This bill is substantially similar to AB 2756 (Assembly Revenue and Taxation Committee) of 2014, which was vetoed by the Governor. That bill required all assessor offices to obtain the training and certification of its employees, likely resulting in a state mandate. In his veto message, the Governor indicated that county assessors should be providing this training without a state mandate. As noted earlier, AB 1534 includes an opt-in provision for county assessors, requiring counties and cities to first adopt a resolution upon recommendation of the assessor before requiring its employees to obtain certifications.

Since the adoption of Proposition 13 in 1978, real property has generally been taxed on its value at the time of its acquisition, with increases for inflation limited to 2 percent per year. The property is reassessed to its market value when the ownership of property is changed. While the requirement to reassess property upon a change in ownership is contained in the California Constitution, the phrase "change in ownership" is not defined. Change in ownership and exemption decisions are highly complex, requiring a thorough understanding of different legal documents, statutes, regulations, and court decisions.

Since current law requires appraisers to be certified, similar certification procedures are needed for state and local government employees making decisions in regard to change in ownership and property tax exemptions. This bill is intended to ensure that employees making change in ownership and exemption decisions are adequately trained and educated.

-- END --

SENATE COMMITTEE ON GOVERNANCE AND FINANCE

Senator Robert M.Hertzberg, Chair

2015 - 2016 Regular

ASSESSMENT ANALYSIS: CERTIFICATION

Bars assessors’ employees from making decisions regarding changes of ownership without holding a certificate; specifies training program.

Background and Existing Law

Section One of Article XIII of the California Constitution provides that all property is taxable unless explicitly exempted by the Constitution or federal law. In 1850, the Legislature first directed county assessors to tax property; however, assessors at the time often applied tax rates and methods of assessment that varied significantly from county to county. The California Constitution of 1879 created the Board of Equalization (BOE) to equalize property tax rates and assessment practices among counties. As part of this oversight role, BOE administers the property tax certification program, which imposes certification and annual training requirements on property tax appraisers and auditor-appraisers who are county employees. The California Assessors’ Associations wants BOE to create a certification program to help train employees to make determinations regarding changes in ownership and welfare exemptions.

Proposed Law

Assembly Bill 1534 bars any state or county employee from making decisions with regard to changes in ownership or property tax exemptions, except the homeowners’ exemption, unless he or she is the holder of a valid BOE assessment analyst certificate. The measure sets up a process to certify an assessment analyst, and creates three additional certificates: temporary, interim, and advanced.

BOE must create an examination for applicants seeking an assessment analyst certificate, and may contract with the California Department of Human Resources to give the examinations. BOE must prepare the exam with the advice and assistance of a committee of five assessors selected by the California Assessors’ Association. BOE cannot issue a certificate to any person who has not attained a passing grade in the examination and demonstrated to the board that he or she is competent to make change in ownership or exemption decisions. However, any applicant denied a certificate can ask for a review under the Administrative Procedure Act. Individuals holding a valid appraiser’s or advanced appraiser’s certificate from BOE aren’t subject to the bill’s requirements, and BOE can’t charge counties for the bill’s costs.

The bill requires every certified assessment analyst to complete at least 24 hours of continuing education training conducted or approved by BOE each year. Any training time in excess of the 24-hour minimum that is accumulated in any one year must be carried over as credit for future training requirements, with a limit of three years in which the carryover time may be credited. Failure to complete training shall constitute grounds for revocation of a certificate, and a proceeding to revoke shall be conducted in accordance with the Administrative Procedure Act.

BOE must issue an advanced assessment analyst certificate for an applicant that has held an assessment analysts certificate for at least three years and has:

• Completed an advanced course of study prepared by BOE and assistance of five assessors selected by the California Assessors’ Association, and

• Passed an advanced level examination,

To retain a valid advanced assessment analyst certificate, every holder must complete at least 12 hours of training in each one-year period, but any training time for the advanced assessment analyst certificate in excess of the 12-hour minimum accumulated in any one year must be carried over as credit for future training requirements, with a limit of two years in which the carryover time may be credited. Failure to complete training shall constitute grounds for revocation of a certificate, and BOE can conduct a proceeding to revoke under the Administrative Procedure Act.

BOE can issue a temporary certificate to a person who is newly employed by the state or county to allow the person time to pass the exam, but it can’t last more than one year, unless the person has been duly elected or appointed to the office of assessor. BOE cannot renew a temporary certificate.

BOE can also issue an interim certificate to a person who is currently employed by the state or county who is making change in ownership or exemption decisions to allow the person time to pass the exam. BOE cannot issue an interim certificate for a duration that exceeds four years, unless the person has been duly elected or appointed to the office of assessor. BOE cannot renew an interim certificate.

Applicants must disclose his or her financial interest in any legal entity at the time of initial certification, and must complete the form annually. The bill deems a duplicate of a filing to the Fair Political Practices Commission to meet the requirement.

The measure clarifies that it can’t be construed to impede an assessor from managing his or her staff resources efficiently, and in a manner that allows non-certificated staff to prepare and work with exemption applications and change in ownership documents, provided that the non-certificated staff are not responsible for making exemption or change in ownership decisions.

The measure makes legislative findings and declarations supporting its purposes, and renumbers the section of law allowing for contract employees.

State Revenue Impact

BOE states that AB 1534 doesn’t have a revenue impact.

Comment

1. Purpose of the bill. Since current law requires appraisers to be certified, similar certification procedures are needed for state and local government employees making decisions in regard to change in ownership and property tax exemptions. Change in ownership and exemption decisions are highly complex, requiring a thorough understanding of different legal documents, statutes, regulations, and court decisions. This bill is intended to ensure that employees making change in ownership and exemption decisions are adequately trained and educated.

2. Have we met before? AB 1534 is almost identical to AB 2756 (Committee on Revenue and Taxation, 2014), which the Committee approved unanimously last year, but was subsequently vetoed by the Governor. In his veto message, Governor Brown stated that state providing training and certification should be something the assessors “can and should be doing without a state mandate.” In response, AB 1534 states that its provisions only become effective in counties or cities and counties that have enacted a resolution upon recommendation of the assessor to require the measure’s certification. While Legislative Counsel didn’t key either bill a state-mandated local program, granting counties the authority to opt-in to the measure’s requirements speaks directly to the Governor’s message.

Assembly Actions

Assembly Floor 79-0
Assembly Appropriations 17-0
Assembly Revenue and Taxation 9-0

Support and Opposition

(6/16/15)

Support: California Assessors’ Association

Opposition: None received.

-- END --

ASSEMBLY THIRD READING

ATR Bill Id:AB 1534

Author:(Committee on Revenue and Taxation)

As Amended Ver:April 30, 2015

Majority vote

SUMMARY: Prohibits any state, county, or municipal employee from making any decision regarding a "change in ownership" (CIO) issue or a property tax exemption without holding a valid assessment analyst certificate issued by the State Board of Equalization (BOE). Specifically, this bill:

1. Prohibits an assessor or any person employed by the office of the county assessor from making decisions regarding a CIO or a property tax exemption, other than a homeowner's exemption, unless he/she is the holder of a valid assessment analyst certificate issued by the BOE.

2. Requires the BOE to provide for the examination of applicants for an assessment analyst certificate and authorizes the BOE to contract with the Department of Human Resources to give the examinations.

3. Provides that the examinations must be prepared by the BOE, with the advice and assistance of a committee of five assessors selected by the California Assessors' Association for this purpose.

4. Prohibits the issuance of a certificate to an assessor or person employed by the office of the county assessor who has not attained a passing grade in the examination or demonstrated that he/she is competent to make the CIO and exemption decisions, as specified.

5. Grants any applicant who is denied a certificate the right to a review of that denial in accordance with the Administrative Procedure Act [Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code (GC)] ("APA").

6. Provides that these requirements do not apply to an assessor or any person employed by the office of the county assessor holding a valid appraiser's or advanced appraiser's certificate issued by the BOE.

7. Prohibits the BOE from imposing any charge upon a county or city and county or an applicant for an examination or certification required by this bill or training conducted by the BOE.

8. Requires the BOE to do both of the following:

   1. Issue an advanced assessment analyst certificate for an applicant that has held a valid assessment analyst certificate for at least three years and has either successfully completed an advanced study course or passed an advanced level examination; and,

   2. Prescribe an advanced course of study and prepare the advanced level examination, with the advice and assistance of five assessors selected by the California Assessors' Association.

9. Requires a certified assessment analyst, in order to retain a valid certificate, to complete at least 24 hours of training conducted or approved by the BOE in each one-year period. Allows any training time in excess of the 24-hour minimum that is accumulated in any one year to be carried over as credit for future training requirements, with a limit of three years in which the carryover time may be credited.

10. Requires an advanced assessment analyst to complete at least 12 hours of training in each one-year period in order to retain a valid certificate and allows any training time that is in excess of the 12-hour minimum accumulated in any one year to be carried over as a credit for future training requirements, with a limit of two years in which the carryover time may be credited.

11. Requires training for both regular and advanced assessment analyst certificates to include new developments in applicable case law, statutory law, and administrative rules.

12. Specifies that failure to complete additional training, as provided, shall constitute grounds for revocation of a certificate. A proceeding to revoke shall be conducted in accordance with the APA.

13. Requires each applicant to disclose, at the time of certification, on forms provided by the BOE, his or her financial interest in any legal entity.

14. Provides that, if an applicant is required to annually file with the Fair Political Practices Commission pursuant to Article 3 (commencing with Section 87300) of Chapter 7 of Title of the GC), a duplicate of that filing must meet the requirements of this bill.

15. Allows the BOE to do both of the following:

    1. Issue a temporary certificate to an assessor who is newly elected or appointed or to any person newly employed by the office of the county assessor in order to afford the person the opportunity to apply for, and take, an examination; and,

    2. Issue an interim certificate to a current assessor or to any person who is currently employed by the office of the county assessor, and who is making CIO or exemption decisions, in order to afford that person the opportunity to apply for and take an exemption for a certificate.

16. Prohibits the BOE from issuing a temporary or interim certificate if its duration exceeds one year or four years, respectively, unless the person has been duly elected or appointed to the office of assessor.

17. Prohibits the BOE from renewing either a temporary or an interim certificate.

18. Provides that this bill only applies to counties and cities that adopt a resolution upon the recommendation of the assessor to require a valid assessment analyst certification.

19. Adds finding and declarations.

FISCAL EFFECT: According to the Assembly Appropriations Committee, estimated General Fund costs of approximately $175,000 in the first year and $150,000 each year thereafter to the BOE to establish and administer the certificate program.

COMMENTS:

1. The Purpose of this Bill. Current law does not require any certification or training for employees who make change in ownership or exemption decisions. Yet, their decisions can potentially add or eliminate millions of dollars each year from tax rolls statewide. Both CIO and exemption decisions have become highly complex, requiring a deep understanding of many different legal documents and a variety of statutes, regulations, court decisions. This bill ensures that state and local employees making CIO and property tax exemption decisions are adequately trained and educated.

2. Arguments in Support. Supporters of this bill state that "[c]urrent law does not require any certification or training for employees who make change in ownership or exemption decisions. Yet, their decision can potentially add or eliminate millions of dollars each year from tax rolls statewide. Both change in ownership (CIO) and exemption decisions have become highly complex, requiring a deep understanding of many different legal documents and a variety of statutes, regulations, and court decisions. This bill ensures that state and local employees making CIO and property tax exemption decisions are adequately trained and educated.”

3. Arguments in Opposition: None submitted.

4. Background: Proposition 13 and "Change in Ownership". The property tax applies to all classes of property and is one of the major general revenue sources for local governments in California. The property tax is imposed on the property owners and is based on the value of the property. Much of the law pertaining to taxation of property is prescribed by the California Constitution Article XIII and Article XIII A. Since the adoption of Proposition 13 in 1978, real property has generally been taxed based on its value at the time of its acquisition, with increases for inflation limited to 2% per year. The property is reassessed to its market value when the ownership of property is changed. While the requirement to reassess property upon a change in ownership is contained in the California Constitution, the phrase "change in ownership" is not defined. There have been hundreds of court cases relating to interpretation of "change in ownership" and exemption issues, and attorneys with years of training still scrutinize statutory language and argue as to its meaning and intended interpretation.

5. What Does this Bill Do? This bill proposes to create a training program required for any state, county, or municipal employee who is involved in making decisions regarding a "change in ownership" or property tax exemption, except for homeowners' exemption claims. The annual training program will be administered by the BOE, which will provide for the training and examination of applicants. Once certified, an employee will also have to complete additional training, in order to retain a valid certificate. Each year, a certified employee will have to complete either 24 hours or 12 hours of training, depending on whether he/she is an assessment analyst or an advanced assessment analyst.

6. Addressing the Governor's Veto Message: This bill is substantially similar to AB 2756 (Revenue and Taxation Committee) of 2014. AB 2756 was vetoed. The Governor provided the following in his veto message:

This measure requires employees in county Assessor offices who decide change in ownership issues affecting the real property tax to receive state provided training and certification.

This is something the Assessors can and should be doing without a state mandate.

In order to address the concerns of the Governor, this bill creates an opt-in provision requiring the counties and cities to first adopt a resolution upon the recommendation of the assessor before any of the valid assessment analyst certification requirements go into effect. By requiring counties and cities to opt in, this bill does not create a state mandate.

Analysis Prepared by: Carlos Anguiano / REV. & TAX. / (916) 319-2098 FN: 0000664

Date of Hearing: May 13, 2015

ASSEMBLY COMMITTEE ON APPROPRIATIONS

Jimmy Gomez, Chair

ABPCA Bill Id:AB 1534

Author:(Committee on Revenue and Taxation) – As Amended Ver:April 30, 2015

Urgency: No State Mandated Local Program: No Reimbursable: No

SUMMARY:

This bill prohibits an assessor or any person employed by the office of an assessor from making any decisions regarding "change in ownership" issues or property tax exemptions without holding valid assessment analyst certificates issued by the Board of Equalization (BOE), but only if the relevant city or county has adopted a resolution upon recommendation of the assessor to require a valid assessment analyst certificate. Specifically, this bill:

1) Requires the BOE to prepare an examination with the assistance and advice of the California Assessors' Association and provide it for applicants.

2) Requires a certified assessment analyst to complete at least 24 hours of training conducted or approved by the BOE in each one-year period; requires an advanced assessment analyst to complete at least 12 hours of training in each one-year period.

3) Exempts persons holding a valid appraiser's or advanced appraiser's certificate issued by the BOE from having to also receive an assessment analyst certificate.

4) Requires the BOE to prescribe an advanced course of study and prepare an advanced level examination with the assistance and advice of the California Assessors' Association, and requires the BOE to issue an advanced assessment analyst certificate for an applicant who has held a valid assessment analyst certificate for at least three years and has either successfully completed an advanced study course or passed an advanced level examination.

5) Allows the BOE to issue temporary and/or interim certificates in limited circumstances.

6) Prohibits the BOE from imposing any charge upon a county, city or an applicant for an assessment analyst examination or certification or training conducted by the BOE.

FISCAL EFFECT:

Estimated GF costs of approximately $175,000 in the first year and $150,000 each year thereafter to the BOE to establish and administer the certificate program.

COMMENTS:

1) Purpose. According to the authors, state law does not require any certification or training for employees of county assessors who make change in ownership or exemption decisions, yet their decisions can potentially impact the tax roll by adding or removing millions of dollars each year. The authors and supporters, including the California Assessors' Association, believe change in ownership and exemption decisions are highly complex and require a thorough understanding of legal documents as well as a variety of statutes, regulations, and court decisions. Current law already requires appraisers to be certified, and this bill will create similar certification procedures for employees of assessors making those decisions, ensuring they are educated and trained.

2) Change in Ownership. Since the adoption of Proposition 13 in 1978, real property has generally been taxed on its value at the time of its acquisition, with increases for inflation limited to 2% per year. The property is reassessed to its market value when the ownership of property is changed. While the requirement to reassess property upon a change in ownership is contained in the California Constitution, the phrase "change in ownership" is not defined. There have been hundreds of court cases relating to interpretation of "change in ownership" and exemption issues, leading to considerable legal debate as to its meaning and intended interpretation.

3) Mandatory Certification, If You Want It. This bill is substantially similar to AB 2756 (Revenue and Taxation Committee) of 2014, which was vetoed by the Governor. That bill required all assessor offices to obtain the training and certification of its employees, resulting in a state mandate. In his veto message, the Governor made clear that county assessors should be providing this training without a state mandate. This bill includes an opt-in provision for county assessors, requiring counties and cities to first adopt a resolution upon recommendation of the assessor before requiring its employees to obtain certifications. As a result, this bill does not create a state mandate.

Analysis Prepared by: Joel Tashjian / APPR. / (916) 319-2081

Date of Hearing: April 27, 2015

ASSEMBLY COMMITTEE ON REVENUE AND TAXATION

Philip Ting, Chair

ABPCA Bill Id:AB 1534

Author:(Committee on Revenue and Taxation) – As Introduced Ver:March 25, 2015

Majority vote. Fiscal committee.

SUBJECT: Assessment analyst: certification

SUMMARY: Prohibits any state, county, or municipal employee from making any decision regarding a "change in ownership" issue or a property tax exemption without holding a valid assessment analyst certificate issued by the State Board of Equalization (BOE) Specifically, this bill:

1. Includes the legislative findings and declarations stating legislative intent to do all of the following:
   
   

   1. Protect the interests of taxpayers by ensuring that decisions regarding eligibility of a property for exemption or whether a transaction constitutes a "change in ownership" (COI) be made by staff who is certified;
      
      

   2. Ensure that education and certification requirements be implemented in the most efficient and economical manner, utilizing existing resources of California county assessors with advice and counsel of the Board of Equalization;
      
      

   3. Not impede assessors in managing their staff resources in an efficient manner and in a way that allows non-certificated staff to prepare and work with exemption applications and COI documents, provided that the staff is not making COI or exemption decisions; and,
      
      

   4. Clarify that this act shall be construed as an act necessary for the implementation of Article XIII A of the California Constitution and, as such, is not a program or higher level of service mandated by the state.
      
      

2. Prohibits a person, who is an employee of the state, a county, or a city and county, from making decisions regarding changes in ownership or a property tax exemption, other than a homeowner's exemption, unless he/she is the holder of a valid assessment analyst certificate issued by the BOE.
   
   

3. Requires the BOE to provide for the examination of applicants for an assessment analyst certificate and authorizes the BOE to contract with the Department of Human Resources to give the examinations.
   
   

4. Provides that the examinations must be prepared by the BOE, with the advice and assistance of a committee of five assessors selected by the California Assessors' Association for this purpose.
   
   

5. Prohibits the issuance of a certificate to a person who has not attained a passing grade in the examination or demonstrated that he/she is competent to make the change in ownership (CIO) and exemption decisions, as specified.
   
   

6. Grants any applicant who is denied a certificate the right to a review of that denial in accordance with the Administrative Procedure Act [Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code (GC)] ("APA").
   
   

7. Does not apply to a person holding a valid appraiser's or advanced appraiser's certificate issued by the BOE.
   
   

8. Prohibits the BOE from imposing any charge upon a county or city and county or an applicant for an examination or certification required by this bill or training conducted by the BOE.
   
   

9. Requires the BOE to do both of the following:
   
   

   1. Issue an advanced assessment analyst certificate for an applicant that has held a valid assessment analyst certificate for at least three years and has either successfully completed an advanced study course or passed an advanced level examination; and,
      
      

   2. Prescribe an advanced course of study and prepare the advanced level examination, with the advice and assistance of five assessors selected by the California Assessors' Association.
      
      

10. Requires a certified assessment analyst, in order to retain a valid certificate, to complete at least 24 hours of training conducted or approved by the BOE in each one-year period. Allows any training time in excess of the 24-hour minimum that is accumulated in any one year to be carried over as credit for future training requirements, with a limit of three years in which the carryover time may be credited.
    
    

11. Requires an advanced assessment analyst to complete at least 12 hours of training in each one-year period in order to retain a valid certificate and allows any training time that is in excess of the 12-hour minimum accumulated in any one year to be carried over as a credit for future training requirements, with a limit of two years in which the carryover time may be credited.
    
    

12. Requires training for both regular and advanced assessment analyst certificates to include new developments in applicable case law, statutory law, and administrative rules.
    
    

13. Specifies that failure to complete additional training, as provided, shall constitute grounds for revocation of a certificate. A proceeding to revoke shall be conducted in accordance with the APA.

14. Requires each applicant to disclose, at the time of certification, on forms provided by the BOE, his or her financial interest in any legal entity.
    
    

15. Provides that, if an applicant is required to annually file with the Fair Political Practices Commission pursuant to Article 3 (commencing with Section 87300) of Chapter 7 of Title of the GC), a duplicate of that filing must meet the requirements of this bill.
    
    

16. Allows the BOE to do both of the following:
    
    

    1. Issue a temporary certificate to a person who is newly employed by the state, a county, or a city and county in order to afford the person the opportunity to apply for, and take, an examination.
       
       

    2. Issue an interim certificate to a current employee of the state, county, or a city and county, who is making CIO or exemption decisions, in order to afford that person the opportunity to apply for and take an exemption for a certificate.
       
       

17. Prohibits the BOE from issuing a temporary or interim certificate if its duration exceeds one year or four years, respectively, unless the person has been duly elected or appointed to the office of assessor.

18. Prohibits the BOE from renewing either a temporary or an interim certificate.

19. Provides that this bill only applies to counties and cities that adopt a resolution upon the recommendation of the assessor to require a valid assessment analyst certification.

EXISTING LAW:

1. Provides that all property is taxable, unless otherwise provided by the California Constitution or federal laws. [Section 1(a), Article XIII, California Constitution.] Limits ad valorem taxes on real property to 1% of the full cash value of that property (Proposition 13).
   
   

2. Requires real property to be reassessed to its current fair market value whenever a "change in ownership" occurs. [California Constitution, Article XIII A, Section 2; Revenue and Taxation Code (R&TC) Sections 60 – 69.5.]
   
   

3. Provides that "change in ownership" includes a transfer of any interest in real property between a corporation, partnership, or other legal entity and a shareholder, partner or any other person. [R&TC Section 61(j).]
   
   

4. Specifies in RT&C Sections 60 through 69.5 what constitutes "a change in ownership."
   
   

5. States that, generally, when real property is owned by a homeowner, the purchase or transfer or ownership interests in that entity triggers a change in ownership of the property. However, specific exemptions from reassessment are provided for intra-family transfers, replacement residences of senior citizens and disabled persons, and specific types of home improvements.
   
   

6. Provides a homeowners' exemption from property taxes equal to $7,000 in assessed value (at a one percent property tax rate, the exemption reduces property taxes by roughly $70) for owner-occupied homes. Once granted, homeowners' exemptions are generally permanent. However, an assessor may deny a homeowner's exemption if the property becomes vacant or is under construction as of the January 1^st lien date

FISCAL EFFECT: According to the BOE, "[t]his bill has no impact on property tax revenues."

COMMENTS:

1. The Purpose of this Bill. Current law does not require any certification or training for employees who make change in ownership or exemption decisions. Yet, their decisions can potentially add or eliminate millions of dollars each year from tax rolls statewide. Both CIO and exemption decisions have become highly complex, requiring a deep understanding of many different legal documents and a variety of statutes, regulations, court decisions. This bill ensures that state and local employees making CIO and property tax exemption decisions are adequately trained and educated.
   
   

2. Arguments in Support. The California Assessor's Association states, "Despite the extreme complexity of determining whether a property has changed ownership, or is eligible for exemption, and the millions of dollars in property tax value impact such decisions have, no training is required for [employees making those decisions]." The California Assessor's Association emphasizes that it is time to "recognize the need for these [employees] to be certified," especially in light of new legal and regulatory changes. Current law already requires appraisers to be certified. This bill is needed to create similar certification procedures for state and local government employees making decisions with regard to property tax exemptions and CIO transactions.
   
   

3. Background: Proposition 13 and "Change in Ownership". The property tax applies to all classes of property and is one of the major general revenue sources for local governments in California. The property tax is imposed on the property owners and is based on the value of the property. Much of the law pertaining to taxation of property is prescribed by the California Constitution, Article XIII and Article XIII A. Since the adoption of Proposition 13 in 1978, real property has generally been taxed based on its value at the time of its acquisition, with increases for inflation limited to 2% per year. The property is reassessed to its market value when the ownership of property is changed. While the requirement to reassess property upon a change in ownership is contained in the California Constitution, the phrase "change in ownership" is not defined. There have been hundreds of court cases relating to interpretation of "change in ownership" and exemption issues, and attorneys with years of training still scrutinize statutory language and argue as to its meaning and intended interpretation.
   
   

4. What Does this Bill Do? This bill proposes to create a training program required for any state, county, or municipal employee who is involved in making decisions regarding a "change in ownership" or property tax exemption, except for homeowners' exemption claims. The annual training program will be administered by the BOE, which will provide for the training and examination of applicants. Once certified, an employee will also have to complete additional training, in order to retain a valid certificate. Each year, a certified employee will have to complete either 24 hours or 12 hours of training, depending on whether he/she is an assessment analyst or an advanced assessment analyst.

5. Addressing the Governor's Veto Message: This bill is substantially similar to AB 2756 (Revenue and Taxation Committee), of the 2013-14 Legislative Session. AB 2756 was vetoed. The Governor provided the following in his veto message:

This measure requires employees in county Assessor offices who decide change in ownership issues affecting the real property tax to receive state provided training and certification.

This is something the Assessors can and should be doing without a state mandate.

In order to address the concerns of the Governor, this bill creates an opt-in provision requiring the counties and cities to first adopt a resolution upon the recommendation of the assessor before any of the valid assessment analyst certification requirements go into effect. By requiring counties and cities to opt in, this bill does not create a state mandate.

REGISTERED SUPPORT / OPPOSITION:

Support

California Assessor's Association

Opposition

None on file

Analysis Prepared by: Carlos Anguiano / REV. & TAX. / (916) 319-2098