Property taxation: change in ownership: generational transfers: special needs trusts.

In Section 63.2(e)(9), the definition of 'transfer' was cleaned up. The amended assembly version stated transfers occur through 'an inter vivos or testamentary trust, including, but not limited to, a special needs trust' and then separately stated that a special needs trust under Probate Code Section 3604 is an eligible medium of transfer. The enrolled version removes the redundant 'including, but not limited to, a special needs trust' phrase from the first sentence, leaving only the standalone sentence specifying that a special needs trust established pursuant to Section 3604 of the Probate Code shall be considered an eligible medium of transfer. The practical effect is unchanged.

The legislative counsel's digest footer line ('Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: no.') was removed, as is standard when a bill reaches enrolled form.

Standard enrolled bill elements were added: Senate and Assembly passage dates (August 27 and August 24, 2026 respectively), signature lines for the Secretary of the Senate and Chief Clerk of the Assembly, a governor receipt line, a chapter number placeholder, and an approval date line for the Governor.

All provisions related to severely and permanently disabled persons were removed, including: requiring county assessors to determine eligibility based on a letter certifying a special needs trust; authorizing preliminary eligibility determinations; requiring claimants to be liable for property tax at appraised value if the trust fails to produce the letter within 5 years; and requiring the State Department of Health Care Services to develop a method for requesting and issuing letters certifying special needs trusts.

A new sentence was added to the definition of 'transfer' specifying that a special needs trust established pursuant to Section 3604 of the Probate Code shall be considered an eligible medium of transfer, providing a clearer statutory hook for qualifying trusts.

The section number in the bill title was corrected from 'Section 69.6 63.2' to 'Section 63.2' of the Revenue and Taxation Code, fixing what appears to be a drafting error in the Senate version.

Cross-references in subdivision (f)(2) were corrected from 'paragraph (A)' to 'clause (i)' in two places within the wildfire-related filing deadline provisions, fixing internal citation errors.

The bill now amends Section 63.2 instead of Section 69.6 of the Revenue and Taxation Code, shifting from a disabled-persons taxable value transfer provision to a generational change-in-ownership exclusion.

Adds a property tax exclusion for transfers of principal residences between parents and children, or between grandparents and grandchildren (where all parents of the grandchild are deceased), so these transfers do not trigger reassessment to full cash value.

Extends the exclusion to family farms, with each legal parcel treated separately and parcels containing a family home eligible for separate residential exclusion.

Defines 'children' broadly to include stepchildren, sons-in-law/daughters-in-law, adopted children (under 18), and foster children who aged out of the system without being adopted.

Redefines 'transfer' to explicitly include transfers through inter vivos or testamentary trusts, including but not limited to special needs trusts, connecting the original bill's special needs trust focus to the new generational exclusion framework.

Adds extended filing deadlines (3 years from mailing of supplemental assessment notice) for properties damaged or destroyed by the 2025 Palisades Fire, Eaton Fire, Hurst Fire, Lidia Fire, Sunset Fire, and Woodley Fire, applicable only to claims filed before January 1, 2031.

Creates a two-step notice process where assessors can send notices of potential eligibility, with a one-time processing fee (up to $175) for late filers who fail to respond to both notices.

Removes all provisions specific to the severely and permanently disabled claimant process under Section 69.6, including the three-claim lifetime limit, equal-or-lesser-value calculations, replacement dwelling definitions, and wildfire/natural disaster victim provisions.

Requires the transferee to file for homeowners' or disabled veterans' exemption within one year of transfer, and the exclusion is removed when the transferee (or subsequent eligible transferee) is no longer eligible for either exemption.