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<br />45 <br /> <br />Appeals of Assessed Values; Proposition 8 <br /> <br />Pursuant to California law, property owners may apply for a reduction of their property <br />tax assessment by filing a written application, in form prescribed by the State Board of <br />Equalization, with the appropriate county board of equalization or assessment appeals board. <br /> <br />After the applicant and the assessor have presented their arguments, the Appeals Board <br />makes a final decision on the proper assessed value. The Appeals Board may rule in the <br />assessor’s favor, in the applicant’s favor, or the Board may set their own opinion of the proper <br />assessed value, which may be more or less than either the assessor’s opinion or the applicant’s <br />opinion. <br /> <br />Any reduction in the assessment ultimately granted applies to the year for which the <br />application is made and may also affect the values in subsequent years. Refunds for taxpayer <br />overpayment of property taxes may include refunds for overpayment of taxes in years after that <br />which was appealed. Current year values may also be adjusted as a result of a successful <br />appeal of prior year values. Any taxpayer payment of property taxes that is based on a value <br />that is subsequently adjusted downward will require a refund for overpayment. <br /> <br />Appeals for reduction in the “base year” value of an assessment, if successful, reduce <br />the assessment for the year in which the appeal is made and prospectively thereafter. The <br />base year is determined by the completion date of new construction or the date of change of <br />ownership. Any base year appeal must be made within four years of the change of ownership <br />or new construction date. <br /> <br />Appeals may also be filed under Section 51 of the Revenue and Taxation Code, which <br />requires that for each lien date the value of real property shall be the lesser of its base year <br />value annually adjusted by the inflation factor pursuant to Article XIIIA of the State Constitution <br />or its full cash value, taking into account reductions in value due to damage, destruction, <br />depreciation, obsolescence, removal of property or other factors causing a decline in value. <br />Significant reductions have taken place in some counties due to declining real estate values. <br />Reductions made under this code section may be initiated by the County Assessor or requested <br />by a property owner. After a roll reduction is granted under this section, the property is <br />reviewed on an annual basis to determine its full cash value and the valuation is adjusted <br />accordingly. This may result in further reductions or in value increases. Such increases must <br />be in accordance with the full cash value of the property and it may exceed the maximum <br />annual inflationary growth rate allowed on other properties under Article XIIIA of the State <br />Constitution. Once the property has regained its prior value, adjusted for inflation, it once again <br />is subject to the annual inflationary factor growth rate allowed under Article XIIIA. See <br />“PROPERTY TAXATION IN CALIFORNIA” above. <br /> <br />The Fiscal Consultant reviewed assessment appeals data from the County for the past <br />seven fiscal years, 2006-07 through 2013-14, to determine the potential impact that pending <br />appeals may have on the projected tax increment available to pay debt service on the 2014 <br />Bonds. According to the Fiscal Consultant, since fiscal year 2006-07, owners of land within the <br />Project Areas have filed a total of 321 appeals. Of the 321 appeals, 255 resulted in reductions <br />in assessed value totaling approximately $88 million; representing a 7% reduction in assessed <br />value or a 93% assessed value retention rate. <br />