Article 1 - General Requirements

California Revenue and Taxation Code — §§ 401-409

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Sections (31)

Amended by Stats. 1978, Ch. 1207.

Every assessor shall assess all property subject to general property taxation at its full value.

Amended by Stats. 2021, Ch. 433, Sec. 5. (SB 825) Effective January 1, 2022. Repealed as of January 1, 2027, by its own provisions.

(a)Notwithstanding any other law relating to the determination of the values upon which property taxes are based, values for each tax year from the 1984–85 tax year to the 2025–26 tax year, inclusive, for intercounty pipeline rights-of-way on publicly or privately owned property, including those rights-of-way that are the subject of a change in ownership, new construction, or any other reappraisable event during the period from March 1, 1975, to June 30, 2026, inclusive, shall be rebuttably presumed to be at full cash value for that year, if all of the following conditions are met:

(1)(A) The full cash value is determined to equal a 1975–76 base year value, annually adjusted for inflation in accordance with subdivision (b) of Section 2 of

Article XIII A of the California Constitution, and the 1975–76 base year value was determined in accordance with the following schedule:

(i)Twenty thousand dollars ($20,000) per mile for a high-density property.

(ii) Twelve thousand dollars ($12,000) per mile for a transitional-density property.

(iii) Nine thousand dollars ($9,000) per mile for a low-density property.

(B) For purposes of this section, the density classifications described in subparagraph (A) are defined as follows:

(i)“High density” means Category 1 (densely urban) as established by the State Board of Equalization.

(ii) “Transitional

density” means Category 2 (urban) as established by the State Board of Equalization.

(iii) “Low density” means Category 3 (valley-agricultural), Category 4 (grazing), and Category 5 (mountain and desert) as established by the State Board of Equalization.

(2)The full cash value is determined utilizing the same property density classifications that were assigned to the property by the State Board of Equalization for the 1984–85 tax year or, if density classifications were not so assigned to the property for the 1984–85 tax year, the density classifications that were first assigned to the property by the board for a subsequent tax year.

(3)(A) If a taxpayer owns multiple pipelines in the same right-of-way, an additional 50 percent of the value attributed to the right-of-way for the presence of

the first pipeline, as determined under paragraphs (1) and (2), shall be added for the presence of each additional pipeline up to a maximum of two additional pipelines. For any particular taxpayer, the total valuation for a multiple pipeline right-of-way shall not exceed 200 percent of the value determined for the right-of-way of the first pipeline in the right-of-way in accordance with paragraphs (1) and (2).

(B)If the State Board of Equalization has determined that an intercounty pipeline, located within a multiple pipeline right-of-way previously valued in accordance with subparagraph (A), has been abandoned as a result of physical removal or blockage, the assessed value of the right-of-way attributable to the last pipeline enrolled in accordance with subparagraph (A) shall be reduced by not less than 75 percent of that increase in assessed value that resulted from the application of subparagraph (A).

(4)If all pipelines of a taxpayer located within the same pipeline right-of-way, previously valued in accordance with this section, are determined by the State Board of Equalization to have been abandoned as the result of physical removal or blockage, the assessed value of that right-of-way to that taxpayer shall be determined to be no more than 25 percent of the assessed value otherwise determined for the right-of-way for a single pipeline of that taxpayer pursuant to paragraphs (1) and (2).

(b)If the assessor assigns values for any tax year from the 1984–85 tax year to the 2025–26 tax year, inclusive, in accordance with the methodology specified in subdivision (a), the taxpayer’s right to assert any challenge to the right to assess that property, whether in an administrative or judicial proceeding, shall be deemed to have been raised and resolved for that tax year and the values

determined in accordance with that methodology shall be rebuttably presumed to be correct. If the assessor assigns values for any tax year from the 1984–85 tax year to the 2025–26 tax year, inclusive, in accordance with the methodology specified in subdivision (a), any pending taxpayer lawsuit that challenges the right to assess the property shall be dismissed by the taxpayer with prejudice as it applies to intercounty pipeline rights-of-way.

(c)Notwithstanding any change in ownership, new construction, or decline in value occurring after March 1, 1975, if the assessor assigns values for rights-of-way for any tax year from the 1984–85 tax year to the 2025–26 tax year, inclusive, in accordance with the methodology specified in subdivision (a), the taxpayer may not challenge the right to assess that property and the values determined in accordance with that methodology shall be rebuttably presumed to be correct for that property for that tax

year.

(d)Notwithstanding any change in ownership, new construction, or decline in value occurring after March 1, 1975, if the assessor does not assign values for rights-of-way for any tax year from the 1984–85 tax year to the 2025–26 tax year, inclusive, at the 1975–76 base year values specified in subdivision (a), any assessed value that is determined on the basis of valuation standards that differ, in whole or in part, from those valuation standards set forth in subdivision (a) shall not benefit from any presumption of correctness, and the taxpayer may challenge the right to assess that property or the values for that property for that tax year. As used herein, a challenge to the right to assess shall include any assessment appeal, claim for refund, or lawsuit asserting any right, remedy, or cause of action relating to or arising from, but not limited to, the following or similar contentions:

(1)That the value of the right-of-way is included in the value of the underlying fee or railroad right-of-way.

(2)That assessment of the value of the right-of-way to the owner of the pipeline would result in double assessment.

(3)That the value of the right-of-way may not be assessed to the owner of the pipeline separately from the assessment of the value of the underlying fee.

(e)Notwithstanding any other provision of law, during a four-year period commencing on January 1, 1996, the assessor may issue an escape assessment in accordance with the specific valuation standards set forth in subdivision (a) for the following taxpayers and tax years:

(1)Any intercounty pipeline right-of-way

taxpayer who was a plaintiff in Southern Pacific Pipe Lines, Inc. v. State Board of Equalization (1993) 14 Cal.App.4th 42, for the tax years 1984–85 to 1996–97, inclusive.

(2)Any intercounty pipeline right-of-way taxpayer who was not a plaintiff in Southern Pacific Pipe Lines, Inc. v. State Board of Equalization (1993) 14 Cal.App.4th 42, for the tax years 1989–90 to 1996–97, inclusive.

(f)Any escape assessment levied under subdivision (e) shall not be subject to penalties or interest under the provisions of Section 532. If payment of any taxes due under this section is made within 45 days of demand by the tax collector for payment, the county shall not impose any late payment penalty or interest. Taxes not paid within 45 days of demand by the tax collector shall become delinquent at that time. If the tax thereon remains unpaid at the time set for declaration of default for

delinquent taxes, the tax together with any penalty and costs as may have accrued thereon while on the secured roll shall be transferred to the unsecured roll.

(g)For purposes of this section, “intercounty pipeline right-of-way” means, except as otherwise provided in this subdivision, any interest in publicly or privately owned real property through which or over which an intercounty pipeline is placed. However, “intercounty pipeline right-of-way” does not include any parcel or facility that the State Board of Equalization originally separately assessed using a valuation method other than the multiplication of pipeline length within a subject property by a unit value determined in accordance with the density category of that subject property.

(h)This section shall remain in effect only until January 1, 2027, and, as of that date is repealed.

§ 401.12

Added by Stats. 1996, Ch. 76, Sec. 4. Effective June 28, 1996.

Sections 401.10 and 401.11 do not abrogate, rescind, preclude, or otherwise affect any separate settlement agreement entered into prior to the effective date of those sections between a county and an intercounty pipeline right-of-way taxpayer concerning the subject matter of Sections 401.10 and 401.11. In the event of a conflict between any settlement agreement and the provisions of Sections 401.10 and 401.11, the settlement agreement shall control.

§ 401.13

Added by Stats. 1997, Ch. 941, Sec. 10. Effective January 1, 1998.

Notwithstanding any other provision of law, on or after January 1, 1998, the assessor shall determine the assessed value of pipelines and related rights-of-way that are located wholly within the county on the basis of a single, countywide parcel per taxpayer, and, to that end, shall combine the assessed value of each component or segment of those pipelines or rights-of-way. However, the assessor shall maintain a separate base year value for each of these components or segments.

§ 401.15

Amended by Stats. 1999, Ch. 83, Sec. 171. Effective January 1, 2000.

(a)Notwithstanding any other provision of law, for any county that makes available the credits provided for in Section 5096.3, the full cash values of certificated aircraft for fiscal years to the 1997–98 fiscal year, inclusive, are presumed to be those values enrolled by the county assessor or, in the case of timely escape assessments upon certificated aircraft issued on or after April 1, 1998, pursuant to Sections 531, 531.3, and 531.4, the values enrolled upon those escape assessments, provided that the escape assessment is made in accordance with the methodology in subdivision (b). For escape assessments for fiscal years to the 1997–98 fiscal year, inclusive, the assessor shall use the methodology and minimum and market values set by the California Assessors’ Association for the applicable fiscal year in lieu of the methodology set forth in subparagraph (C) or (D) of paragraph (1) of subdivision (b). The assessor is not required to revise or change existing enrolled assessments that are not subject to escape assessment to reflect the methodology in this section. Nothing in this section precludes audit adjustments and offsets as set forth in Section 469 or the correction of reporting errors raised by an airline. Nothing in this section affects any presumption of correctness concerning allocation of aircraft values.

(b)(1) For the 1998–99 fiscal year to the 2002–03 fiscal year, inclusive, and including escape assessments levied on or after April 1, 1998, for any fiscal year to the 2002–03 fiscal year, inclusive, except as otherwise provided in subdivision (a), certificated aircraft shall be presumed to be valued at full market value if all of the following conditions are met:

(A) Except as provided in subparagraph (D), value is derived using original cost. The original cost shall be the greater of the following:

(i)Taxpayer’s cost for that individual aircraft reported in accordance with generally accepted accounting principles, so long as that produces net acquisition cost, and to the extent not included in the taxpayer’s cost, transportation costs and capitalized interest and the cost of any capital addition or modification made before a transaction described in clause (ii).

(ii) The cost established in a sale/leaseback or assignment of purchase rights transaction for that individual aircraft that transfers the benefits and burdens of ownership to the lessor for United States federal income tax purposes.

If the original cost for leased aircraft cannot be determined from information reasonably available to the taxpayer, original cost may be determined by reference to the “average new prices” column of the Airliner Price Guide for that model, series, and year of manufacture of aircraft. If information is not available in the “average new prices” column for that model, series, and year, the original cost may be determined using the best indicator of original cost plus all conversion costs incurred for that aircraft. In the event of a merger, bankruptcy, or change in accounting methods by the reporting airline, there shall be a rebuttable presumption that the cost of the individual aircraft and the acquisition date reported by the acquired company, if available, or the cost reported prior to the change in accounting method, are the original cost and the applicable acquisition date.

(B) Original cost, plus the cost of any capital additions or modifications not otherwise included in the original cost, shall be adjusted from the date of the acquisition of the aircraft to the lien date using the producer price index for aircraft and a 16-year straight-line percent good table starting from the delivery date of the aircraft to the current owner or, in the case of a sale/leaseback or assignment of purchase rights transaction, as described in this section, the current operator with a minimum combined factor of 25 percent, unless this adjustment results in a value less than the minimum value for that aircraft computed pursuant to subparagraph (C), in which case the minimum value may be used. If original cost is determined by reference to the Airliner Price Guide “average new prices” column, the adjustments required by this paragraph shall be made by setting the acquisition date of the aircraft to be the date of the aircraft’s manufacture.

(C) For certificated aircraft of a model and series that has been in revenue service for eight or more years, the minimum value shall not exceed the average of the used aircraft prices shown in columns other than the “average new prices” column for used aircraft of the oldest aircraft for that model and series in the Airliner Price Guide most recently published as of the lien date. Minimum values shall not be utilized for certificated aircraft of a model and series that has been in revenue service for less than eight years.

(D) For out-of-production aircraft that were recommended to be valued by a market approach for 1998 by the California Assessors’ Association, assessments will be based at the lower of the following:

(i)The values established by the association for the 1998 lien date.

(ii) The average of the used aircraft prices shown in the columns other than the “average new prices” column for used aircraft of the five oldest years for the aircraft model and series or that lesser time for which data is available in the Airliner Price Guide.

(2)Notwithstanding paragraph (1), in computing assessed value, the assessor may allow for extraordinary obsolescence if supported by market evidence and the taxpayer may challenge the assessment for failure to do so. To constitute market evidence of extraordinary obsolescence and to permit an assessment appeal, the evidence must show that the functional and/or economic obsolescence is in excess of 10 percent of the value for the aircraft model and series otherwise established pursuant to subparagraph (B), (C), or (D) of paragraph (1).

(3)For purposes of paragraph (1), if the Airliner Price Guide ceases to be published or the format significantly changes, a guide or adjustment agreed to by the airlines and the taxing counties shall be substituted.

(c)(1) For the 2003–04 fiscal year, certificated aircraft shall be presumed to be valued at full market value if all of the following conditions are met:

(A) Except as provided in subparagraph (D), value is derived using original cost. The original cost shall be the greater of the following:

(ii) Taxpayer’s cost as established pursuant to this subdivision plus one-half of the incremental difference between taxpayer’s cost and the cost established in a sale/leaseback or assignment of purchase rights transaction for individual aircraft that transfers the benefits and burdens of ownership to the lessor for United States federal income tax purposes.

(B) Original cost, plus the cost of any capital additions or modifications not otherwise included in original cost, shall be adjusted from the date of the acquisition of the aircraft to the lien date using the producer price index for aircraft and a 16-year straight-line percent good table starting from the delivery date of the aircraft to the current owner or, in the case of a sale/leaseback or assignment of purchase rights transaction, as described in this section, the current operator with a minimum combined factor of 25 percent, unless this adjustment results in a value less than the minimum value for that aircraft computed pursuant to subparagraph (C), in which case the minimum value may be used. If original cost is determined by reference to the Airliner Price Guide “average new prices” column, the adjustments required by this paragraph shall be made by setting the acquisition date of the aircraft to be the date of the aircraft’s manufacture.

(D) For out-of-production aircraft that were recommended to be valued by a market approach for 1998 by the California Assessors’ Association, their assessments shall be based at the lower of the following:

(i)The values established by the association for the 1998 lien date.

(2)Notwithstanding paragraph (1), in computing assessed value, the assessor may allow for extraordinary obsolescence if supported by market evidence and the taxpayer may challenge the assessment for failure to do so. To constitute market evidence of extraordinary obsolescence and to permit an assessment appeal, the evidence must show that the functional and or economic obsolescence is in excess of 10 percent of the value for the aircraft model and series otherwise established pursuant to subparagraph (B), (C), or (D) of paragraph (1).

(d)To calculate the values prescribed in subdivisions (b) and (c), the taxpayer shall, to the extent that information is reasonably available to the taxpayer, furnish the county assessor with an annual property statement that includes the aircraft original costs as defined in subparagraph (A) of paragraph (1) of subdivision (b) or (c). If an air carrier that has this information reasonably available to it fails to report original cost and additions, as required by Sections 441 and 442, an assessor may make an appropriate assessment pursuant to Section 501.

§ 401.16

Added by Stats. 2002, Ch. 299, Sec. 1. Effective January 1, 2003.

If, for purposes of property taxation, the county assessor utilizes the reproduction or replacement cost approach to value to determine the value of tangible personal property or trade fixtures, both of the following apply:

(a)(1) If the county assessor depreciates this property using percent good factors published by the State Board of Equalization that provide separate factors for property that is first acquired new and property that is first acquired used, the assessor may not average the published factors to apply these factors to both classes of new and used property.

(2)Notwithstanding paragraph (1), if information reported by a taxpayer does not indicate whether this property was first acquired by the taxpayer new or used, the assessor may average the published factors.

(b)If the county assessor depreciates this property using percent good factors that include a minimum percent good, the minimum percent good factors shall be determined in a manner that is supportable.

§ 401.17

Amended by Stats. 2015, Ch. 440, Sec. 1. (AB 1157) Effective January 1, 2016.

(a)For the 2005–06 fiscal year to the 2016–17 fiscal year, inclusive, it shall be rebuttably presumed that the preallocated fair market value of each make, model, and series of mainline jets, production freighters, and regional aircraft that has attained situs within this state is the lesser of the sum total of the amounts determined under paragraph (1) or the sum total of the amounts determined under paragraph (2). The value of an individual aircraft assessed to the original owner of that aircraft shall not exceed its original cost from the manufacturer. The preallocated fair market value of an aircraft may be rebutted by evidence including, but not limited to, appraisals, invoices, and expert testimony.

(1)(A) The original cost for the aircraft, which shall be determined as follows and adjusted, as applicable, under subparagraphs (B), (C), and (D):

(i)For owned and leased aircraft, the taxpayer’s or lessor’s acquisition cost for that individual aircraft reported in accordance with generally accepted accounting principles, and to the extent not included in the acquisition cost, transportation costs and capitalized interest and the cost of improvements made before a transaction described in clause (ii). If the original cost for leased aircraft cannot be determined from information reasonably available to the taxpayer, original cost may be determined by reference to the “average new prices” column of the Airliner Price Guide for that model, series, and year of manufacture of aircraft. If information is not available in the “average new prices” column for that model, series, and year, the original cost may be determined using the best

indicator of original cost plus all conversion costs and improvement costs incurred for that aircraft.

(ii) For sale/leaseback or assignment of purchase rights transaction aircraft, the average of the taxpayer’s cost established pursuant to clause (i) and the cost established in a sale/leaseback or assignment of purchase rights transaction for individual aircraft that transfers the benefits and burdens of ownership to the lessor for United States federal income tax purposes. In no event shall the original cost for sale/leaseback aircraft be less than the taxpayer’s acquisition cost.

(iii) In the event of a merger, bankruptcy, or change in accounting methods by the reporting airline, there shall be a rebuttable presumption that the cost of the individual aircraft and the acquisition date reported by the acquired company, if available, or the cost reported prior to the change in

accounting method, are the original cost and the applicable acquisition date.

(B) (i) For mainline jets and production freighters, the original cost described in subparagraph (A), plus the cost of any improvements not otherwise included in the original cost, shall be adjusted from the date of the acquisition of the aircraft to the lien date using the monthly United States Department of Labor Producer Price Index for aircraft and a 20-year straight-line percent-good table starting from the delivery date of the aircraft to the current owner or, in the case of a sale/leaseback or assignment of purchase rights transaction, as described in this section, the current operator with a minimum combined factor of 25 percent.

(ii) For regional aircraft, the original cost described in subparagraph (A), plus the cost of any improvements not otherwise included in the

original cost, shall be adjusted from the date of the acquisition of the aircraft to the lien date using the monthly United States Department of Labor Producer Price Index for aircraft and a 16-year straight-line percent-good table starting from the delivery date of the aircraft to the current owner or, in the case of a sale/leaseback or assignment of purchase rights transaction, as described in this section, the current operator with a minimum combined factor of 25 percent.

(iii) If original cost is determined by reference to the Airliner Price Guide “average new prices” column, the adjustments required by this paragraph shall be made by setting the acquisition date of the aircraft to be the date of the aircraft’s manufacture.

(C) (i) For mainline jets and regional aircraft, the assessor shall analyze the adjusted original cost derived pursuant to

subparagraph (B), for application of an economic obsolescence allowance which shall be determined as follows:

(I) For the applicable year, the assessor shall calculate the average annual net revenue per available seat mile, the net load factor, and the yield utilizing the Airline Quarterly Financial Review published by the United States Department of Transportation, and referring to the section descriptive of the passenger airline industry, entitled “System Operations, System Pax. Majors” for the calendar year ending December 31 immediately preceding the applicable assessment date.

(II) For a 10-year benchmark, the assessor shall calculate as of December 31 for each of the 10 calendar years preceding the applicable year, the average annual net revenue per available seat mile, the net load factor, and the yield utilizing the Airline Quarterly Financial Review published by the

United States Department of Transportation, and referring to the section descriptive of the passenger airline industry, entitled “System Operations, System Pax. Majors” for the calendar year ending December 31 immediately preceding the applicable assessment date.

(ii) (I) The assessor shall compare each factor calculated under subclause (I) of clause (i) with the corresponding factor calculated under subclause (II) of clause (i) to derive the percentage that each of the factors calculated under subclause (I) of clause (i) deviated from the 10-year benchmark calculated under subclause (II) of clause (i). The assessor shall then calculate a weighted average of the indicated percentage adjustments, weighted as follows:

(aa) Net revenue per available seat mile shall be weighted 35 percent.

(ab) Net

load factor shall be weighted 35 percent.

(ac) Yield shall be weighted 30 percent.

(II) The assessor shall reduce the adjusted original costs derived under subparagraph (B) by the percentage adjustment calculated in subclause (I), but only if the final economic obsolescence determined under that subclause exceeds 10 percent, otherwise no economic obsolescence allowance shall be provided.

(D) (i) For production freighters, the assessor shall analyze the adjusted original cost derived under subparagraph (B), for application of an economic obsolescence allowance, as follows:

(I) For the applicable year, the assessor shall calculate the industry average of net revenue per available ton mile and the ton load factor based upon the

Airline Quarterly Financial Review published by the United States Department of Transportation, and referring to the section descriptive of the cargo airline industry, entitled “System Operations, System Cargo Majors” for the calendar year ending December 31 preceding the relevant assessment date.

(II) For a 10-year benchmark, the assessor shall calculate as of December 31 for each of the 10 calendar years preceding the applicable year, the net revenue per available ton mile and the ton load factor utilizing the Airline Quarterly Financial Review published by the United States Department of Transportation and referring to the section descriptive of the cargo airline industry, entitled “System Operations, System Cargo Majors” as of December 31 for each of the 10 calendar years preceding the calendar year utilized for the subject year, for the calendar year ending December 31 immediately preceding the applicable assessment date.

(2)(A) Except as otherwise provided in subparagraph (B), for each individual mainline jet, production freighter, or regional aircraft, the assessor shall identify the value referenced in the “Used Price of Avg. Acft. Wholesale” column of the Winter edition of the Airliner Price Guide by make, model, series, and year of manufacture, and deduct 10 percent from that value for a fleet discount.

(B)For each individual mainline jet, production freighter, or regional aircraft that is less than two years old and for which the Airliner Price Guide does not list used wholesale values, the original cost determined under paragraph (1) of subparagraph (A) shall be decreased by the lesser of 5 percent or one-half of the percentage decrease between original cost and 90 percent of the value listed in the “Used Price of Avg. Acft. Wholesale” column of the Winter edition of the

Airliner Price Guide for a two-year-old aircraft of that same make, model, and series.

(b)For the 2005–06 fiscal year to the 2016–17 fiscal year, inclusive, it shall be rebuttably presumed that the preallocated fair market value for each make, model, and series of converted freighters that has attained situs within this state is the amount that is determined as follows:

(1)(A) The assessor shall begin his or her appraisal of a converted freighter as of the relevant lien date by identifying the aircraft’s original cost as a passenger aircraft prior to conversion. The aircraft’s original cost as a converted freighter shall be the lesser of:

(i)Its trended original cost as a passenger aircraft prior to conversion, less a downward adjustment of 10 percent to reflect tear-outs.

(ii) Its value described in the Winter edition of the Airliner Price Guide in the “Used Price of Avg. Acft. Wholesale” column in passenger configuration, less a downward adjustment of 10 percent to reflect tear-outs.

(B) The amount determined under subparagraph (A) shall be adjusted according to the following:

(i)If, on the relevant lien date, the frame of the aircraft is 15 years old or more, 50 percent of the cost to convert the aircraft to a freighter shall be added to the value determined under subparagraph (A).

(ii) If, on the relevant lien date, the frame of the aircraft is less than 15 years old, 75 percent of the cost to convert the aircraft to a freighter shall be added to the value determined under subparagraph (A).

(iii) In addition, all other improvements, including capitalized interest, to the aircraft that are not otherwise included in the aircraft’s original and conversion costs shall be added at full value.

(2)The amount determined under paragraph (1) shall be adjusted from the date of the conversion of the aircraft to the lien date using the monthly United States Department of Labor Producer Price Index for aircraft and a 16-year straight-line percent-good table, however, the percent-good applied to the aircraft shall in no event be less than 15 percent.

(3)If the Airliner Price Guide “Used Price of Avg. Acft. Wholesale” is utilized under paragraph (1), only the improvements and adjusted conversion costs pertaining to the converted freighter shall be adjusted from the date of the conversion of the aircraft to the relevant

lien date using the monthly United States Department of Labor Producer Price Index for aircraft and a 16-year straight-line percent-good table. In no event, however, shall the percent-good applied to the improvements and adjusted conversion costs be less than 15 percent.

(4)(A) Except as otherwise provided in subparagraph (B), the assessor shall reduce the adjusted original cost, plus improvements, and adjusted conversion costs, derived under paragraphs (1) to (3), inclusive, by the obsolescence percentage adjustment calculated for production freighters under subparagraph (D) of paragraph (1) of subdivision (a).

(B)If the Airliner Price Guide “Used Price of Avg. Acft. Wholesale” is utilized under paragraph (1), only the improvements and adjusted conversion costs pertaining to the converted freighter shall be reduced by the obsolescence percentage adjustment

described in subparagraph (A).

(c)For purposes of this section, if the Airliner Price Guide ceases to be published or the format significantly changes, a guide or adjustment agreed to by commercial air carriers and the counties in which certificated aircraft have situs shall be substituted. If these parties do not agree on a guide or adjustment, the State Board of Equalization shall determine the guide or adjustment.

(d)The taxpayer shall, to the extent that information is reasonably available to the taxpayer, furnish the county assessor with an annual property statement that includes the aircraft original costs as defined in subparagraph (A) of paragraph (1) of subdivision (a). If an air carrier that has this information reasonably available to it fails to report original cost and improvements, as required by Sections 441 and 442, an assessor may in that case make an

appropriate assessment pursuant to Section 501.

(e)For purposes of this section, all of the following apply:

(1)“Converted freighter” means a certificated aircraft, as defined in Section 1150, that, following its original manufacture, was used for passenger transportation, but was later converted to be used primarily for cargo transportation purposes.

(2)“Mainline jet” means a certificated aircraft, as defined in Section 1150, that is either of the following:

(A)Manufactured by Boeing, Airbus, or McDonnell Douglas.

(B)Capable of being configured with approximately 100 seats or more.

(3)“Production Freighter” means a

certificated aircraft, as defined in Section 1150, that immediately following its manufacture is deployed primarily for cargo transportation purposes.

(4)“Regional aircraft” means a certificated aircraft, as defined in Section 1150, that is either of the following:

(A)Manufactured by ATR (Avions De Transport Regional), Beech, British Aerospace Jetstream, Canadair Regional Jet, Cessna, DeHaviland, Embraer, Fairchild, or Saab.

(B)Generally configured with fewer than 100 seats.

(5)“Improvements” means the cost of any modifications or capital additions that materially add to the value of or substantially prolong the useful life of the aircraft, or make it adaptable to a different use. “Improvements” include modification costs incurred during a heavy

maintenance visit to the extent that they materially add to the value of or substantially prolong the useful life of the aircraft. “Improvements” do not include repair and maintenance costs incurred for the purpose of keeping the aircraft in an ordinarily efficient operating condition.

(6)“Net revenue per available seat mile” means operating revenue per available seat mile less cost per available seat mile as determined by the United States Department of Transportation.

(7)“Net load factor” means actual passenger load factor less break-even passenger load factor, as determined by the United States Department of Transportation.

(8)“Net revenue per available ton mile” means operating revenue per ton mile less cost per available ton mile as determined by the United States Department of Transportation.

(9)“Yield” means average revenue per revenue passenger mile as determined by the United States Department of Transportation.

(10)“Ton Load Factor” means that percentage of effective use of cargo capacity as determined by the United States Department of Transportation.

(f)The amendments made by the act adding this subdivision shall apply with respect to lien dates occurring on and after January 1, 2011.

§ 401.20

Added by Stats. 2006, Ch. 417, Sec. 2. Effective January 1, 2007.

(a)(1) The State Board of Equalization shall, in consultation with the California Assessors’ Association and representatives of the computer, semiconductor, and biopharmaceutical industries, conduct a study to obtain and analyze data in order to update the information used to develop the valuation factors annually published by the State Board of Equalization that are applied to nonproduction computers, semiconductor manufacturing equipment, and biopharmaceutical industry equipment and fixtures.

(2)The State Board of Equalization shall conduct the study described in paragraph (1) only if funds are appropriated by the Legislature to the board for that purpose during the 2005-06 Regular Session.

(3)To the extent the State Board of Equalization periodically conducts these studies, the board shall publish revised valuation factors based on the updated information. If the board reviews the data and determines that an update is not warranted, the existing factors shall remain in effect.

(b)(1) Notwithstanding any other provision of law relating to the determination of the values for property tax assessment, values determined by using valuation factors resulting from the study described in subdivision (a), as instructed by the State Board of Equalization for nonproduction computers, semiconductor manufacturing equipment, and biopharmaceutical industry equipment and fixtures, shall be rebuttably presumed to be the full cash value.

(2)The assessor or the taxpayer shall have the right to present evidence supporting values different from those based on the published factors in order to attempt to overcome the presumption.

(c)The presumption in subdivision (b) shall not apply to any particular tax year if the information upon which the valuation factors for that category of property are based was last reviewed by the State Board of Equalization more than six years before the lien date for that tax year.

§ 401.3

Amended by Stats. 1986, Ch. 608, Sec. 9.

The assessor shall assess all property subject to general property taxation on the lien date as provided in Articles XIII and XIII A of the Constitution and any legislative authorization thereunder.

§ 401.4

Amended by Stats. 1973, Ch. 208.

When valuing an owner-occupied single-family dwelling and the land on which it is situated that may be required for the convenient occupation and use of such dwelling, if such dwelling is on land which is zoned exclusively for single-family home use or which is zoned for agricultural use where single-family homes are permitted, the assessor shall not value the land at any value greater than that which would reflect the use of the land as a site for a single-family dwelling.

As used in this section, owner-occupied single-family dwelling means any single-family dwelling occupied by an owner thereof as his principal place of residence on the lien date.

§ 401.5

Amended by Stats. 1996, Ch. 1087, Sec. 18. Effective January 1, 1997.

The board shall issue to assessors data relating to costs of property, or, with respect to commercial and industrial property, shall, after a public hearing, review and approve commercially available data, and shall issue to assessors other information as in the judgment of the board will promote uniformity in appraisal practices and in assessed values throughout the state. An assessor shall adapt data received pursuant to this section to local conditions and may consider that data together with other factors as required by law in the assessment of property for tax purposes.

§ 401.6

Added by Stats. 1995, Ch. 399, Sec. 1. Effective January 1, 1996.

(a)In any case in which the cost approach method is used to value special use property for purposes of taxation, the assessor shall not add a component for entrepreneurial profit unless he or she has market-derived evidence that entrepreneurial profit exists and has not been fully offset by physical deterioration or economic obsolescence.

(b)For purposes of this section:

(1)“Entrepreneurial profit” means either of the following:

(A)The amount a developer would expect to recover with respect to a property in excess of the amount of the developer’s costs incurred with respect to that property.

(B)The difference between the fair market value of a property and the total costs incurred with respect to that property.

(2)“Total costs” means both direct costs of construction, including, but not limited to, the costs of land, building materials, and labor, and indirect costs of construction, including, but not limited to, the costs of construction capital and permit fees.

(3)“Special use property” means a limited market property with a unique physical design, special construction materials, or a layout that restricts its utility to the use for which it was built.

§ 401.8

Amended by Stats. 1996, Ch. 801, Sec. 2. Effective September 24, 1996.

(a)Notwithstanding any other provision of law, commencing with the 1995–96 fiscal year, the county assessor shall determine the property tax assessed value in the county attributable to assessable intercounty pipeline rights-of-way on the basis of a single, countywide parcel per taxpayer by combining the assessed values of each separate right-of-way interest, or segment thereof, of the taxpayer in the county. However, the assessor shall maintain a separate base year value as determined pursuant to Section 110.1 for each separate right-of-way interest, or segment thereof.

(b)Any assessment appeal that is authorized to be filed in Sections 401.10 to 401.12, inclusive, with respect to an intercounty pipeline right-of-way interest, or segment thereof, for which the assessor did not assign a value in the manner specified in subdivision (a) of Section 401.10, shall be filed by the taxpayer upon one or more specified intercounty pipeline right-of-way interests, or segments thereof, as described in subdivision (a), and in no event shall be filed with respect to a taxpayer’s entire, undivided intercounty pipeline right-of-way. The assessor shall maintain for five calendar years those records for each assessment year that identify each intercounty pipeline right-of-way interest, or segment thereof, located within his or her county, and shall provide the information in those records with respect to a given intercounty pipeline right-of-way interest, or segment thereof, to the taxpayer upon request.

§ 402

Enacted by Stats. 1939, Ch. 154.

Cultivated and uncultivated land of the same quality and similarly situated shall be assessed at the same value.

§ 402.1

Amended by Stats. 2024, Ch. 580, Sec. 7.5. (AB 2897) Effective January 1, 2025.

(a)In the assessment of land, the assessor shall consider the effect upon value of any enforceable restrictions to which the use of the land may be subjected. These restrictions shall include, but are not limited to, all of the following:

(1)Zoning.

(2)Recorded contracts with governmental agencies other than those provided in Sections 422, 422.5, and 422.7.

(3)Permit authority of, and permits issued by, governmental agencies exercising land use powers concurrently with local governments, including the California Coastal Commission and regional coastal commissions, the San Francisco Bay Conservation and Development Commission, and

the California Tahoe Regional Planning Agency.

(4)Development controls of a local government in accordance with any local coastal program certified pursuant to Division 20 (commencing with Section 30000) of the Public Resources Code.

(5)Development controls of a local government in accordance with a local protection program, or any component thereof, certified pursuant to Division 19 (commencing with Section 29000) of the Public Resources Code.

(6)Environmental constraints applied to the use of land pursuant to provisions of statutes.

(7)Hazardous waste land use restriction pursuant to Section 25226 of the Health and Safety Code.

(8)(A) A recorded conservation, trail, or scenic easement, as described in Section 815.1 of the Civil Code, that is granted in favor of a public agency, or in favor of a nonprofit corporation organized pursuant to Section 501(c)(3) of the Internal Revenue Code that has as its primary purpose the preservation, protection, or enhancement of land in its natural, scenic, historical, agricultural, forested, or open-space condition or use.

(B)A recorded greenway easement, as described in Section 816.52 of the Civil Code, that is granted in favor of a public agency, or in favor of a nonprofit corporation organized pursuant to Section 501(c)(3) of the Internal Revenue Code that has as its primary purpose the developing and preserving of greenways.

(9)A solar-use easement pursuant to Chapter 6.9

(commencing with Section 51190) of Part 1 of Division 1 of Title 5 of the Government Code.

(10)(A) A contract where the following apply:

(i)The contract is with a nonprofit corporation organized pursuant to Section 501(c)(3) of the Internal Revenue Code that has received a welfare exemption under Section 214.15 for properties intended to be sold to low-income families who participate in a special no-interest loan program.

(ii) The contract restricts the use of the land for at least 30 years to owner-occupied housing available at affordable housing cost in accordance with Section 50052.5 of the Health and Safety Code.

(iii) The contract includes a deed of trust on the property in favor of the nonprofit corporation to ensure compliance with the terms of the program, which has no value unless the owner fails to comply with the covenants and restrictions of the terms of the home sale.

(iv) The local housing authority or an equivalent agency, or, if none exists, the city attorney or county counsel, has made a finding that the long-term deed restrictions in the contract serve a public purpose.

(v)The contract is recorded and provided to the assessor.

(B) For real property subject to a contract that satisfies all the requirements of

subparagraph (A), there shall be a rebuttable presumption that, at the time of purchase, an assessor shall not include the value of the deed of trust referenced in clause (iii) of subparagraph (A) of this paragraph.

(11)(A) A contract where the following apply:

(i)The contract is a renewable 99-year ground lease between a community land trust, or a wholly owned subsidiary of a community land trust that is solely directed and managed by the community land trust, and the qualified owner of an owner-occupied single-family dwelling or an owner-occupied unit in a multifamily dwelling.

(ii) The contract subjects a single-family dwelling or unit in a multifamily dwelling, and the land on which the dwelling or unit is situated that is leased to the qualified owner by a community land trust for the convenient occupation and use of that dwelling or unit, to affordability restrictions.

(iii) One of the following public agencies or officials has made a finding that the affordability restrictions in the contract serve the public interest to create and preserve the affordability of residential housing for persons and families of low or moderate income:

(I) The director of the local housing authority or equivalent agency.

(II) The county counsel.

(III) The director of a county housing department.

(IV) The city attorney.

(V) The director of a city housing department.

(iv) The contract is recorded and is provided to the assessor.

(B) (i) For purposes of this paragraph, the sale or resale price of the dwelling or unit is rebuttably presumed to include both the dwelling or unit and the leased land on which the dwelling or unit is situated. This presumption may be overcome if the assessor establishes by a preponderance of the evidence that all or a portion of the value of the leased land is not reflected in the sale or resale price of the dwelling or unit.

(ii) Notwithstanding any other law, corrections of base year values and declines in value owing to the

restrictions on properties assessed under this subparagraph shall apply to all lien dates occurring after September 27, 2016.

(i)“Affordability restrictions” mean that all of the following conditions are met:

(I) The dwelling or unit can only be sold or resold to a qualified owner to be occupied as a principal place of residence.

(II) The sale or resale price of the dwelling or unit is determined by a formula that ensures the dwelling or unit has a purchase price that is affordable to qualified owners.

(III) There is a purchase option for the dwelling or unit in favor of a community land trust intended to

preserve the dwelling or unit as affordable to qualified owners.

(IV) The dwelling or unit is to remain affordable to qualified owners by a renewable 99-year ground lease.

(ii) “Community land trust” means a nonprofit corporation exempt from federal income tax pursuant to Section 501(c)(3) of the Internal Revenue Code that satisfies all of the following:

(I) Has as its primary purposes the creation and maintenance of permanently affordable single-family or multifamily residences.

(II) (ia) All dwellings and units located on the land owned by the nonprofit corporation or its wholly owned subsidiary are

either sold to a qualified owner to be occupied as the qualified owner’s primary residence or rented to persons and families of low or moderate income.

(ib) In the case of dwellings or units sold to qualified owners, if the community land trust, directly or through its wholly owned subsidiary, owns the land underneath the dwellings or units,

then the land underneath the dwellings or units shall be leased to the qualified owner of a dwelling or unit on the land for the convenient occupation and use of that dwelling or unit for a renewable term of 99 years. In the case of dwellings or units that are part of a condominium, cooperative, or other common interest development under which the land is owned by a homeowners’ association or person other than the community land trust, then the condominium unit or interest owned by the community land trust shall be sold to qualified owners for the convenient occupation and use of that dwelling or unit subject to affordability restrictions as that term is defined in this subdivision, except that in lieu of a ground lease there shall be an affordability covenant, of a duration of at least 99 years, recorded against the unit or interest.

(iii) “Limited equity housing cooperative” has the same meaning as that term is

defined in Section 817 of the Civil Code.

(iv) “Persons and families of low or moderate income” has the same meaning as that term is defined in Section 50093 of the Health and Safety Code.

(v)“Qualified owner” means persons and families of low or moderate income, including persons and families of low or moderate income that own a dwelling or unit collectively as member occupants or resident shareholders of a limited equity housing cooperative.

(b)There is a rebuttable presumption that restrictions will not be removed or substantially modified in the predictable future and that they will substantially equate the value of the land to the value attributable to the legally permissible use or uses.

(c)Grounds for rebutting the presumption may include, but

are not necessarily limited to, the past history of like use restrictions in the jurisdiction in question and the similarity of sales prices for restricted and unrestricted land. The possible expiration of a restriction at a time certain shall not be conclusive evidence of the future removal or modification of the restriction unless there is no opportunity or likelihood of the continuation or renewal of the restriction, or unless a necessary party to the restriction has indicated an intent to permit its expiration at that time.

(d)In assessing land with respect to which the presumption is unrebutted, the assessor shall not consider sales of otherwise comparable land not similarly restricted as to use as indicative of value of land under restriction, unless the restrictions have a demonstrably minimal effect upon value.

(e)In assessing land under an enforceable use restriction

wherein the presumption of no predictable removal or substantial modification of the restriction has been rebutted, but where the restriction nevertheless retains some future life and has some effect on present value, the assessor may consider, in addition to all other legally permissible information, representative sales of comparable lands that are not under restriction but upon which natural limitations have substantially the same effect as restrictions.

(f)For the purposes of this section the following definitions apply:

(1)“Comparable lands” are lands that are similar to the land being valued in respect to legally permissible uses and physical attributes.

(2)“Representative sales information” is information from sales of a sufficient number of comparable lands to give an accurate indication of the full cash

value of the land being valued.

(g)It is hereby declared that the purpose and intent of the Legislature in enacting this section is to provide for a method of determining whether a sufficient amount of representative sales information is available for land under use restriction to ensure the accurate assessment of that land. It is also hereby declared that the further purpose and intent of the Legislature in enacting this section and Section 1630 is to avoid an assessment policy which, in the absence of special circumstances, considers uses for land that legally are not available to the owner and not contemplated by government, and that these sections are necessary to implement the public policy of encouraging and maintaining effective land use planning. This statute shall not be construed as requiring the assessment of any land at a value less than as required by Section 401 or as prohibiting the use of representative comparable sales

information on land under similar restrictions when this information is available.

§ 402.2

Added by Stats. 2016, Ch. 300, Sec. 1. (AB 2450) Effective January 1, 2017.

Contracts with government agencies restricting the use of property for owner-occupied housing available at affordable cost shall be recorded. Nothing in this section shall be construed to prevent the assessor from considering a contract that restricts the use of the property to owner-occupied housing available at affordable housing cost, including under any locally adopted inclusionary housing program, for purposes of applying Section 402.1 or subdivision (a) of Section 110.

§ 402.3

Amended by Stats. 2022, Ch. 258, Sec. 122. (AB 2327) Effective January 1, 2023. Operative January 1, 2024, pursuant to Sec. 130 of Stats. 2022, Ch. 258.

An assessor shall consider any restrictive covenant, easement, restriction, or servitude adopted pursuant to Section 25202.5, 25222.1, or 79055 of the Health and Safety Code or any restriction, easement, covenant, or servitude imposed pursuant to Section 25230 of the Health and Safety Code as an enforceable restriction, easement, covenant, or servitude subject to Section 402.1 and shall appropriately reassess any land, the use of which has been so restricted, at the lien date following the adoption or imposition of the covenant, easement, servitude, or restriction.

§ 402.5

Amended by Stats. 2014, Ch. 325, Sec. 1. (AB 1143) Effective September 15, 2014.

When valuing property by comparison with sales of other properties, in order to be considered comparable, the sales shall be sufficiently near in time to the valuation date, and the properties sold shall be located sufficiently near the property being valued, and shall be sufficiently alike in respect to character, size, situation, usability, zoning, or other legal restriction as to use unless rebutted pursuant to Section 402.1, to make it clear that the properties sold and the properties being valued are comparable in value and that the cash equivalent price realized for the properties sold may fairly be considered as shedding light on the value of the property being valued. “Near in time to the

valuation date” does not include any sale more than 90 days after the valuation date.

§ 402.9

Amended by Stats. 1999, Ch. 941, Sec. 10. Effective January 1, 2000.

In valuing property for persons of low and moderate income that is financed under Section 236 or Section 515 of the federal National Housing Act, since federal restrictions accompanying these programs substantially affect actual income and expenses of the property owner, the assessor shall not consider as income any interest subsidy payments made to a lender on that property by the federal government.

§ 402.95

Added by Stats. 2004, Ch. 786, Sec. 1. Effective January 1, 2005.

In valuing property under the income method of appraisal, the assessor shall exclude from income the benefit from federal and state low-income housing tax credits allocated by the California Tax Credit Allocation Committee pursuant to Section 42 of the Internal Revenue Code and Sections 12206, 17058, and 23610.5.

§ 403