SB 1402

SB1402:v99#DOCUMENT

Bill Start

CALIFORNIA LEGISLATURE— 2025–2026 REGULAR SESSION

Senate Bill

No. 1402

An act to amend Sections 167, 1603, and 1604 of the Revenue and Taxation Code, relating to taxation.

LEGISLATIVE COUNSEL'S DIGEST

SB 1402, as introduced, Ochoa Bogh. Property taxation: imposition and assessment: appeals.

(1) Existing property tax law, except as provided, establishes a rebuttable presumption regarding the burden of proof in favor of a taxpayer or assessee who has supplied the required information to the assessor in an administrative hearing involving, among other things, the imposition of a tax on, or an assessment of, an owner-occupied single-family dwelling, as defined.

This bill would, instead, establish a rebuttable presumption, as described above, in an administrative hearing involving, among other things, the imposition of a tax on, or assessment of, residential real property. The bill would define residential real property to mean real property improved with one or more units used or intended for human habitation, including single-family residences, condominiums, cooperative units, duplexes, and multifamily residential property with fewer than 4 units, and any land and appurtenant improvements thereon.

(2) Existing property tax law prohibits a reduction in an assessment on the local roll from being made unless the party affected or the party’s agent makes and files with the county board a verified, written application showing the facts claimed to require the reduction and the applicant’s opinion of the full value of the property.

This bill would prohibit an assessor, tax collector, or auditor from charging or collecting a fee for that application for homes valued less than $2,500,000.

(3) Existing property tax law, subject to certain exceptions, makes the applicant’s opinion of value, as reflected on an application for reduction in assessment of property, the value upon which taxes are to be levied for the tax year or tax years covered by the application if the county board fails to hear evidence and fails to make a final determination on the application within 2 years of the timely filing of the application.

This bill would reduce that time period to hear evidence and to make a final determination to within 6 months of the timely filing of the application. The bill would also make conforming changes.

Existing property tax law prohibits a reduction in assessment reflecting the applicant’s opinion of value from being made until 2 years after the close of the filing period during which the timely application was filed. Existing property law, notwithstanding the 2-year time period to hear evidence and make a final determination described above, or any other law, retroactively extends the 2-year deadline by which a county board is required to render a final determination on a qualified application, as defined, until December 31, 2021, as provided.

This bill would remove those provisions.

(4) By increasing the duties of local officials, this bill would impose a state-mandated local program.

(5) This bill would include findings that changes proposed by this bill address a matter of statewide concern and, therefore, apply to all counties, including charter counties.

(6) 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 no reimbursement is required by this act for a specified reason.

Digest Key

Vote: MAJORITY Appropriation: NO Fiscal Committee: YES Local Program: YES

Bill Text

The people of the State of California do enact as follows:

SECTION 1.

(a) The Legislature finds and declares all of the following:

(1) The rising cost of living and increasing property values in California continue to financially burden the possibility of future and long-term home ownership.

(2) California has the second lowest rate of home ownership in the United States.

(3) Fluctuating property taxes and rising home values have created a widening gap between first-time buyers and long-time homeowners who secured their properties decades ago at far more reasonable prices.

(4) California’s property tax system is built on a foundational 1-percent base rate established by Proposition 13 and varies significantly across counties. San Francisco Bay area properties have a higher annual property tax rate of 0.95 percent compared to areas with lower property values, such as in the County of Modoc.

(5) As home values rise, older adults on fixed incomes face increasing financial hardship, including higher long-term care costs, housing instability, and even the risk of homelessness. Studies indicate that older adults prefer to remain in their homes and communities as they age.

(6) For the average homeowner and for the average senior, ensuring that improving accessibility to the property tax appeals process is essential, which helps homeowners remain in their homes and reduces the risk of displacement into rental housing or homelessness.

(7) The property tax appeals applications are generally due between July 2 and September 15, but the deadline is extended to November 30 if the county assessor fails to provide notice of the assessed value by August 1. For counties across the state, inconsistencies in the property tax filing process create an inequitable and an unbalanced property tax appeals system.

(8) Improving affordability and reducing backlogs in the property tax appeals system protect homeowners from being indebted with inaccurate assessments and the ability to avoid further financial strain.

(b) The Legislature finds and declares that Sections 2, 3, and 4 of this act amending Sections 167, 1603, and 1604, respectively, of the Revenue and Taxation Code address a matter of statewide concern. Therefore, Sections 2, 3, and 4 of this act apply to all counties, including charter counties.

SEC. 2.

Section 167 of the Revenue and Taxation Code is amended to read:

167.

(a) Notwithstanding any other provision of law to the contrary, law, and except as provided in subdivision (b), there shall be a rebuttable presumption affecting the burden of proof in favor of the taxpayer or assessee who has supplied all information as required by law to the assessor in any administrative hearing involving the imposition of a tax on an owner-occupied single-family dwelling, residential real property, the assessment of an owner-occupied single-family dwelling pursuant to this division, residential real property, or the appeal of an escape assessment.

(b) Notwithstanding subdivision (a), the rebuttable presumption described in that subdivision shall not apply in the case of an administrative hearing with respect to the appeal of an escape assessment resulting from a taxpayer’s failure either to file with the assessor a change in ownership statement or a business property statement, or to obtain a permit for new construction.

(c) For the purposes of this section, an owner-occupied section:

(1) “Owner-occupied single-family dwelling dwelling” means a single-family dwelling that satisfies both of the following:

(1)

(A) The dwelling is the owner’s principal place of residence.

(2)

(B) The dwelling qualifies for a homeowners’ property tax exemption.

(2) “Residential real property” means real property improved with one or more units used or intended for human habitation, including single-family residences, condominiums, cooperative units, duplexes, and multifamily residential property with fewer than four units, and any land and appurtenant improvements thereon.

SEC. 3.

Section 1603 of the Revenue and Taxation Code is amended to read:

1603.

(a) (1) A reduction in an assessment on the local roll shall not be made unless the party affected or his or her the party’s agent makes and files with the county board a verified, written application showing the facts claimed to require the reduction and the applicant’s opinion of the full value of the property. The form for the application shall be prescribed by the State Board of Equalization.

(2) An assessor, tax collector, or auditor shall not charge or collect a fee for an application, as required under paragraph (1), for homes valued at less than two million five hundred thousand dollars ($2,500,000).

(b) (1) The application shall be filed within the time period from July 2 to September 15, inclusive. An application that is mailed and postmarked September 15 or earlier within that period shall be deemed to have been filed within the time period beginning July 2 and continuing through and including September 15.

(2) Notwithstanding paragraph (1), if the taxpayer does not receive the notice of assessment described in Section 619 at least 15 calendar days prior to the deadline to file the application described in this subdivision, the party affected, or his or her the party’s agent, may file an application within 60 days of receipt of the notice of assessment or within 60 days of the mailing of the tax bill, whichever is earlier, along with an affidavit declaring under penalty of perjury that the notice was not timely received.

(3) Notwithstanding paragraph (1), the last day of the filing period shall be extended to November 30 in the case of an assessee or party affected with respect to all property located in a county where the county assessor does not provide, by August 1, a notice, as described in Section 619, to all assessees of real property on the local secured roll of the assessed value of their real property as it shall appear or does appear on the completed local roll, including the annual increases in assessed value caused solely by increases in the valuation of property that reflect the inflation rate, not to exceed 2 percent, pursuant to the authority of subdivision (b) of Section 2 of Article XIII A of the California Constitution.

(A) The county assessor shall notify the clerk of the county board of equalization and the county tax collector by April 1 of each year as to whether the notice specified in this paragraph will be provided by August 1.

(B) The clerk shall certify the last day of the filing period and shall immediately notify the State Board of Equalization as to whether the last day of the filing period for the county will be September 15 or November 30.

(C) The State Board of Equalization shall maintain a statewide listing of the time period to file an application in each county.

(D) The provisions of Section 621 may not be substituted as a means of providing the notice specified in this paragraph.

(4) If a final filing date specified in this subdivision falls on Saturday, Sunday, or a legal holiday, an application that is mailed and postmarked on the next business day shall be deemed to have been filed within the requisite time period specified in this subdivision. If on any final filing date specified in this subdivision, the county’s offices are closed for business prior to 5 p.m. or for that entire day, that day shall be considered a legal holiday for purposes of this section.

(c) The application may be filed within 12 months following the month in which the assessee is notified of the assessment, if the party affected or his or her the party’s agent and the assessor stipulate that there is an error in the assessment as the result of the exercise of the assessor’s judgment in determining the full cash value of the property and a written stipulation as to the full cash value and assessed value is filed in accordance with Section 1607.

(d) Upon the recommendation of the assessor and the clerk of the county board of equalization, the board of supervisors may adopt a resolution providing that an application may be filed within 60 days of the mailing of the notice of the assessor’s response to a request for reassessment pursuant to paragraph (2) of subdivision (a) of Section 51, if all of the following conditions are met:

(1) The request for reassessment was submitted in writing to the assessor in the form prescribed by the State Board of Equalization and includes all information that is prescribed by the State Board of Equalization.

(2) The request for reassessment was made on or before the immediately preceding March 15.

(3) The assessor’s response to the request for reassessment was mailed on or after September 1 of the calendar year in which the request for reassessment was made.

(4) The assessor did not reduce the assessment in question in the full amount as requested.

(5) The application for changed assessment is filed on or before December 31 of the year in which the request for reassessment was filed.

(6) The application for reduction in assessment is accompanied by a copy of the assessor’s response to the request for reassessment.

(e) In the form provided for making an application pursuant to this section, there shall be a notice that written findings of facts of the local equalization hearing will be available upon written request at the requester’s expense and, if not so requested, the right to those written findings is waived. The form shall provide appropriate space for the applicant to request written findings of facts as provided by Section 1611.5.

(f) The form provided for making an application pursuant to this section shall contain the following language in the signature block:

I certify (or declare) under penalty of perjury under the laws of the State of California that the foregoing and all information hereon, including any accompanying statements or documents, is true, correct, and complete to the best of my knowledge and belief and that I am (1) the owner of the property or the person affected (i.e., (i.e.), a person having a direct economic interest in the payment of the taxes on that property—“The Applicant,” (2) an agent authorized by the applicant under Item 2 of this application, or (3) an attorney licensed to practice law in the State of California, State Bar No. ____, who has been retained by the applicant and has been authorized by that person to file this application.

(g) The clerk of a county board of equalization may accept an electronically filed application for changed assessment containing an electronic signature if all of the following criteria are met:

(1) The application complies with all other requirements for filing the application.

(2) The electronic signature is accompanied by the certification described in subdivision (f).

(3) The electronic signature is authenticated in a manner that is approved by the county board of supervisors, which manner may include, but is not limited to, the use of personal identification numbers the clerk has assigned to applicants.

SEC. 4.

Section 1604 of the Revenue and Taxation Code is amended to read:

1604.

(a) (1) In counties of the first class, annually, on the fourth Monday in September, the county board shall meet to equalize the assessment of property on the local roll. It shall continue to meet for that purpose, from time to time, until the business of equalization is disposed of.

(2) In all other counties, annually, on the third Monday in July, the county board shall meet to equalize the assessment of property on the local roll. It shall continue to meet for that purpose, from time to time, until the business of equalization is disposed of.

(b) (1) An application for a reduction in an assessment filed pursuant to Section 1603 shall also constitute a sufficient claim for refund, if the applicant states in the application that the application is also intended to constitute a claim for refund pursuant to the provisions of Section 5097.

(2) The county board shall have no power to receive or hear any application for a reduction in an escaped assessment made pursuant to Section 531.1 nor a penal assessment levied in respect thereto, nor to reduce those assessments.

(c) (1) If the county board fails to hear evidence and fails to make a final determination on the application for reduction in assessment of property within two years six months of the timely filing of the application, the applicant’s opinion of value as reflected on the application for reduction in assessment shall be the value upon which taxes are to be levied for the tax year or tax years covered by the application, unless either of the following occurs:

(1)

(A) The applicant and the county board mutually agree in writing, or on the record, to an extension of time for the hearing.

(2)

(B) The application for reduction is consolidated for hearing with another application by the same applicant with respect to which an extension of time for the hearing has been granted pursuant to paragraph (1). subparagraph (A). In no case shall the application be consolidated without the applicant’s written agreement after the two-year six-month time period has passed or after an extension of the two-year six-month time period previously agreed to by the applicant has expired.

The reduction in assessment reflecting the applicant’s opinion of value shall not be made, however, until two years after the close of the filing period during which the timely application was filed. Further, this

(2) This subdivision shall not apply to applications for reductions in assessments of property where the applicant has failed to provide full and complete information as required by law or where litigation is pending directly relating to the issues involved in the application.

(d) (1) When the applicant’s opinion of value, as stated on the application, has been placed on the assessment roll pursuant to subdivision (c), and the application requested a reduction in the base year value of an assessment, the applicant’s opinion of value shall remain on the roll until the county board makes a final determination on the application. The value so determined by the county board, plus appropriate adjustments for the inflation factor, shall be entered on the assessment roll for the fiscal year in which the value is determined. No increased or escape taxes other than those required by a purchase, change in ownership, or new construction, or resulting from application of the inflation factor to the applicant’s opinion of value shall be levied for the tax years during which the county board failed to act.

(2) When the applicant’s opinion of value has been placed on the assessment roll pursuant to subdivision (c) for any application other than an application requesting a reduction in base year value, the applicant’s opinion of value shall be enrolled on the assessment roll for the tax year or tax years covered by that application.

(e) The county board shall notify the applicant in writing of any decision by that board not to hold a hearing on the applicant’s application for reduction in assessment within the two-year six-month period specified in subdivision (c) or, if applicable, within the period as modified by subdivision (f). This notice shall also inform the applicant that the applicant’s opinion of value as reflected on the application for reduction in assessment shall, as a result of the county board’s failure to hold a hearing within the prescribed time period, be the value upon which taxes are to be levied in the absence of the application of either paragraph (1) or (2) subparagraph (A) or (B) os paragraph (1) of subdivision (c).

(f)(1)Notwithstanding subdivision (c) or any other law, the two-year deadline by which a county board is required under subdivision (c) to render a final determination on a qualified application shall be extended until December 31, 2021. This extension of the two-year deadline shall apply retroactively to all qualified applications that have a two-year deadline under subdivision (c) occurring during the period beginning on March 4, 2020, through December 31, 2021, inclusive.

(2)For purposes of this subdivision, “qualified application” means a pending application for reduction in assessment of property as described in subdivision (c) that is timely filed with the county board and has a two-year deadline under subdivision (c) occurring during the period beginning on March 4, 2020, through December 31, 2021, inclusive.

SEC. 5.

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.