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California Revenue And Taxation Code Section 51

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(a) For purposes of subdivision (b) of Section 2 of Article
XIIIA of the California Constitution, for each lien date after the
lien date in which the base year value is determined pursuant to
Section 110.1, the taxable value of real property shall, except as
otherwise provided in subdivision (b) or (c), be the lesser of:
   (1) Its base year value, compounded annually since the base year
by an inflation factor, which shall be determined as follows:
   (A) For any assessment year commencing prior to January 1, 1985,
the inflation factor shall be the percentage change in the cost of
living, as defined in Section 2212.
   (B) For any assessment year commencing after January 1, 1985, and
prior to January 1, 1998, the inflation factor shall be the
percentage change, rounded to the nearest one-thousandth of 1
percent, from December of the prior fiscal year to December of the
current fiscal year in the California Consumer Price Index for all
items, as determined by the California Department of Industrial
Relations.
   (C) For any assessment year commencing on or after January 1,
1998, the inflation factor shall be the percentage change, rounded to
the nearest one-thousandth of 1 percent, from October of the prior
fiscal year to October of the current fiscal year in the California
Consumer Price Index for all items, as determined by the California
Department of Industrial Relations.
   (D) In no event shall the percentage increase for any assessment
year determined pursuant to subparagraph (A), (B), or (C) exceed 2
percent of the prior year's value.
   (2) Its full cash value, as defined in Section 110, as of the lien
date, taking into account reductions in value due to damage,
destruction, depreciation, obsolescence, removal of property, or
other factors causing a decline in value.
   (b) If the real property was damaged or destroyed by disaster,
misfortune, or calamity and the board of supervisors of the county in
which the real property is located has not adopted an ordinance
pursuant to Section 170, or any portion of the real property has been
removed by voluntary action by the taxpayer, the taxable value of
the property shall be the sum of the following:
   (1) The lesser of its base year value of land determined under
paragraph (1) of subdivision (a) or full cash value of land
determined pursuant to paragraph (2) of subdivision (a).
   (2) The lesser of its base year value of improvements determined
pursuant to paragraph (1) of subdivision (a) or the full cash value
of improvements determined pursuant to paragraph (2) of subdivision
(a).
   In applying this subdivision, the base year value of the subject
real property does not include that portion of the previous base year
value of that property that was attributable to any portion of the
property that has been destroyed or removed.  The sum determined
under this subdivision shall then become the base year value of the
real property until that property is restored, repaired, or
reconstructed or other provisions of law require establishment of a
new base year value.
   (c) If the real property was damaged or destroyed by disaster,
misfortune or calamity and the board of supervisors in the county in
which the real property is located has adopted an ordinance pursuant
to Section 170, the taxable value of the real property shall be its
assessed value as computed pursuant to Section 170.
   (d) For purposes of this section, "real property" means that
appraisal unit that persons in the marketplace commonly buy and sell
as a unit, or that is normally valued separately.
   (e) Nothing in this section shall be construed to require the
assessor to make an annual reappraisal of all assessable property.
However, for each lien date after the first lien date for which the
taxable value of property is reduced pursuant to paragraph (2) of
subdivision (a), the value of that property shall be annually
reappraised at its full cash value as defined in Section 110 until
that value exceeds the value determined pursuant to paragraph (1) of
subdivision (a).  In no event shall the assessor condition the
implementation of the preceding sentence in any year upon the filing
of an assessment appeal.

Last modified: January 12, 2009