California Revenue And Taxation Code Section 68

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For purposes of Section 2 of Article XIIIA of the Constitution,
the term "change in ownership" shall not include the acquisition of
real property as a replacement for comparable property if the person
acquiring the real property has been displaced from property in this
state by eminent domain proceedings, by acquisition by a public
entity, or by governmental action which has resulted in a judgment of
inverse condemnation.
   The adjusted base year value of the property acquired shall be the
lower of the fair market value of the property acquired or the
value which is the sum of the following:
   (a) The adjusted base year value of the property from which the
person was displaced.
   (b) The amount, if any, by which the full cash value of the
property acquired  exceeds 120 percent of the amount received by the
person for the property from which the person was displaced.
   The provisions of this section shall apply to eminent domain
proceedings, acquisitions, or judgments of inverse condemnation after
March 1, 1975, and shall affect only those assessments of that
property which occur after June 8, 1982.
   Persons acquiring replacement property between March 1, 1975, and
January 1, 1983, shall request assessment under this section with the
assessor on or before January 1, 1987.  Persons acquiring
replacement property on and after January 1, 1983, shall request
assessment within four years of the date the property was acquired by
eminent domain or purchase or the date the judgment of inverse
condemnation becomes final.
   Any change in the adjusted base year value of the replacement
property acquired, resulting from the application of the provisions
of this section, shall be deemed to be effective on the first day of
the month following the month in which the property is acquired.  The
change in value shall be treated as a change in  ownership for the
purpose of placing supplemental assessments on the supplemental roll
pursuant to Chapter 3.5 (commencing with Section 75). The assessor
shall, however, appraise the replacement property acquired in
accordance with the provisions of this section rather than the
provisions of Section 75.10.  The provisions of Chapter 3.5 shall be
liberally construed in order to provide the benefits of this section
and Section 2 of Article XIII A of the California Constitution to
affected property owners at the earliest possible date.

Last modified: July 31, 2008