Article 5 - Cancellation of Taxes on Exempt Property

California Revenue and Taxation Code — §§ 5081-5091

Sections (14)

Added by Stats. 1979, Ch. 31.

As used in this article, “exempt property” means:

(a)Property acquired by the United States that becomes exempt from taxation under the laws of the United States.

(b)Property acquired by the state or by a county, city, school district, or other public entity, that becomes exempt from taxation under the laws of the state.

§ 5082

Added by Stats. 1979, Ch. 31.

For purposes of this article, the “date of apportionment” is the earliest of the following times:

(a)The date the conveyance to the acquiring entity or the final order of condemnation is recorded.

(b)The date of actual possession by the acquiring entity.

(c)The date upon or after which the acquiring entity may take possession as authorized by an order for possession or by a declaration of taking.

§ 5082.1

Added by Stats. 1985, Ch. 650, Sec. 2.

Every public entity shall do all of the following:

(a)Provide the local assessor and auditor a copy of the instrument evidencing the acquisition of property by the entity.

(b)Indicate on the instrument referred to in subdivision (a) the date of apportionment.

(c)Request the auditor to cancel taxes for the remaining portion of the fiscal year after the date of apportionment.

(d)Provide a map of the acquired property.

§ 5083

Added by Stats. 1979, Ch. 31.

If exempt property is acquired either by negotiated purchase or eminent domain any lien on the property for ad valorem taxes is extinguished as a matter of law upon the acquisition of the property, and the lien immediately transfers and attaches to the proceeds constituting the purchase price or award.

§ 5084

Added by Stats. 1979, Ch. 31.

(a)No cancellation shall be made of all or any portion of any unpaid taxes or any penalties or costs levied for prior tax years that constitute a lien at the time of acquisition of exempt property.

(b)Such unpaid taxes, penalties, and costs shall be paid through escrow at the close of escrow or from the award in eminent domain, or if unpaid for any reason, shall be transferred to the unsecured roll pursuant to Section 5090 and are collectible from either the person from whom the property was acquired or the public entity that acquired the property.

§ 5085

Added by Stats. 1979, Ch. 31.

If exempt property is acquired by negotiated purchase, gift, devise, or eminent domain after the lien date but prior to the commencement of the fiscal year for which taxes are a lien on the property, the amount of the taxes for that fiscal year shall be canceled and are not collectible from either the person from whom the property was acquired or the public entity that acquired the property.

§ 5086

Amended by Stats. 1988, Ch. 830, Sec. 27. Applicable July 1, 1989, by Sec. 31 of Ch. 830.

If exempt property is acquired by negotiated purchase, gift, devise, or eminent domain after commencement of the fiscal year for which the current taxes are a lien on the property:

(a)The portion of the current taxes and any penalties and costs that are allocable to the part of the fiscal year that ends on the day before the date of apportionment shall be paid through escrow at the close of escrow or from the award in eminent domain.

(b)The portion of the current taxes and any penalties and costs that are allocable to the part of the fiscal year that begins on the date of apportionment shall be canceled and are not collectible either from the person from whom the property was acquired or from the public entity that acquired the property.

(c)If the amount of taxes or special assessment liens is unknown, the portion of the current taxes attributable to the period of the fiscal year that ends on the day before the date of apportionment shall be ascertained by the auditor on a pro rata basis of the previous year’s taxes, and shall be paid to the tax collector. The auditor shall adjust the assessment roll and the tax charge accordingly.

§ 5086.1

Added by Stats. 1985, Ch. 650, Sec. 3.

The auditor shall cancel taxes on the date of apportionment provided in the notice required by Section 5082.1.

§ 5086.2

Added by Stats. 2024, Ch. 922, Sec. 1. (AB 3134) Effective January 1, 2025.

If the cancellation of taxes under this article will result in a refund, the auditor shall either process the refund to the payer of the tax or notify the payer in writing of the requirements for obtaining a refund pursuant to Section 5097. The notice shall state that the payer of the tax is entitled to a refund and that a claim for a refund shall be filed, pursuant to Section 5097, within 60 days of the date of the notice.

Notwithstanding Section 5097, a claim for a refund shall be deemed timely filed if it is filed within 60 days of the date of the notice.

§ 5087

Added by Stats. 1979, Ch. 31.

The board of supervisors of a county may provide that all unpaid taxes, penalties, and costs and the allocable portion of current taxes, penalties, and costs computed in accordance with this article shall not be paid through escrow at the close of escrow or from the award in eminent domain, but shall be transferred to the unsecured roll pursuant to Section 5090 and are collectible from the person from whom the property was acquired.

§ 5088

Amended by Stats. 1985, Ch. 316, Sec. 91.

Notwithstanding any other provision of this article, unpaid taxes, penalties, or costs shall not be transferred to the unsecured roll with respect to property that has become subject to a power of sale pursuant to Section 3691.

§ 5089

Amended by Stats. 1991, Ch. 532, Sec. 46.

The board of supervisors of a county may prescribe that, where the amount of unpaid taxes, penalties, and costs to be transferred to the unsecured roll pursuant to this article is less than twenty dollars ($20) with respect to a given fiscal year, the unpaid taxes, penalties, and costs shall be canceled rather than transferred to the unsecured roll.

§ 5090

Amended by Stats. 1985, Ch. 316, Sec. 92.

(a)If taxes, penalties, and costs that are not subject to cancellation pursuant to this article are unpaid at the time set for the declaration of default of property on the secured roll, they shall be transferred to the unsecured roll pursuant to Section 2921.5, and collected as provided therein.

(b)The statute of limitations on any suit brought to collect taxes, penalties, and costs transferred to the unsecured roll commences to run on the date of transfer, which date shall be entered on the unsecured roll by the auditor opposite the name of the assessee at the time the transfer is made.

(c)The amount of taxes, penalties, and costs collectible on the unsecured roll from a public entity pursuant to this article shall not exceed the amount paid for the property or awarded in the proceeding.

(d)The person from whom the property was acquired is liable to the public entity that acquired the property for any taxes, penalties, and costs collected on the unsecured roll from the public entity.

§ 5091

Amended by Stats. 2016, Ch. 300, Sec. 2. (AB 2450) Effective January 1, 2017.

(a)If a public entity proposes to acquire property for a public use that will make the property exempt from taxation, the public entity shall give notice to the county assessor, the county tax collector, and to any public entities whose taxes are not collected by the county tax collector but who at the time exercise the right of assessment and taxation.

(b)The notice shall be given within a reasonable time following

the initial budgeting of funds for the proposed acquisition, and shall state all of the following:

(1)The approximate extent of the proposed project.

(2)The estimated time of completion of all acquisitions necessary for the proposed project.

(c)This section creates no rights or liabilities and does not affect the validity of any property acquisitions by negotiated purchase or eminent domain.