In November, Voters Will Consider Proposition 15 Which Would Create a “Split Roll” for Real Property Taxes


This November, the voters of the State of California will consider Proposition 15, an initiative measure that seeks to change the way commercial and industrial real property is assessed for purposes of the levy of ad valorem property taxes in California. Specifically, Proposition 15 would amend Article XIII A of the California Constitution, which was added when the voters adopted Proposition 13 in 1978.

Proposition 13 currently applies to taxable residential, commercial and industrial real property. By adding Article XIII A, Proposition 13 limited the “maximum amount of any ad valorem tax on real property” to one percent (1%) “of the full cash value of such property.” (Emphasis added) Under Article XIII A, a property’s assessed value was redefined as (1) either (a) the value of the property reflected on its “1975-[19]76 tax bill” or (b) the “appraised value of [the] real property” at the time of certain triggering events, plus (2) an “inflationary rate not to exceed 2 percent for any given year or reduction as shown in the consumer price index or comparable data.” The triggering events are when the real property is purchased, newly constructed or when a change in ownership occurs.

Under proposed Proposition 15, commercial and industrial property will be assessed differently than residential, creating a “split roll”. Proposition 15 would, in part, add Section 2.5 to Article XIII A. Pursuant to Section 2.5(a), “for the lien date [January 1] for the 2022-23 fiscal year and each lien date thereafter, the ‘full cash value’ of commercial and industrial real property that is not otherwise exempt under the Constitution is the fair market value of such real property as of that date as determined by the county assessor of the county in which such real property is located.” (Emphasis added)

Proposition 15’s ballot title and summary, prepared by the California Attorney General, focuses on the additional revenues for local government and schools. According to the ballot summary, Proposition 15 “[i]ncreases funding for K-12 public schools, community colleges, and local governments by requiring that commercial and industrial real property be taxed based on current market value.” It has been reported that the additional revenue will be split between local governments and special districts (60%) and school districts and community colleges (40%).

According to, the main support page for Proposition 15, the initiative measure “is a fair and balanced reform” that:

1. Closes property tax loopholes benefiting wealthy corporations.
2. Cuts small business taxes.
3. Reclaims billions every year to invest in our schools and local communities.
4. Exempts homeowners, renters, small businesses and agricultural land so they continue to be protected by Prop 13.
5. Prioritizes transparency and accountability by requiring public disclosure of all new revenues and how they are spent.

On the other hand, Proposition 15’s main opposition website ( opines that Proposition 15 has “too many flaws and will increase the cost of living for all Californians.” The website lists the following Proposition 15 “flaws”:

1) Hurts farmers.
2) Hurts California’s renewable energy goals.
3) Hurts California’s small businesses.
4) Hurts local government budgets.
5) Lacks accountability and transparency.
6) Hurts renters & makes California’s housing crisis worse.

Proposition 15 will pass if approved by a majority of the voters statewide.

This AALRR publication is intended for informational purposes only and should not be relied upon in reaching a conclusion in a particular area of law. Applicability of the legal principles discussed may differ substantially in individual situations. Receipt of this or any other AALRR publication does not create an attorney-client relationship. The Firm is not responsible for inadvertent errors that may occur in the publishing process.
© 2020 Atkinson, Andelson, Loya, Ruud & Romo



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