This proposition allows the Assessor to temporarily lower assessments when the market value on January 1 is lower than the factored base year value for that year.

• Upon written application by the property owner to the Assessor's Office the property value will be reviewed as of the preceding January 1st lien date. The last day to file an application for the preceding January 1st lien date is December 31st.
  
  
• If the market value of the property is less than its factored base year value, market value will be enrolled for that specific assessment year.
  
  
• Whenever such relief is provided, the Assessor is obligated to annually review and enroll the lesser of either market value or the factored base year value, but never higher than the factored base year (Proposition 13) value.
  
  

If it is determined that the market value of the property exceeds the factored base year value the factored base year value will be fully or partially restored for that assessment year. When fully restored, the property will be no longer be annually reviewed and will be subject to assessment under Prop 13 provisions. Under no circumstances will the restored factored base value exceed the original base year value had the property not been lowered under the decline in market value provisions.

Example:

• Initial base year value: In year 1, the subject property was purchased (transferred) for $100,000 and the Assessor enrolled that amount as the base year value.
  
  
• Year 2: The market value of the property has grown to $115,000. The maximum amount the property could be assessed under proposition 13 is $102,000 ($100,000 + 2%).
  
  
• Years 3-5: The market value of the property has decreased below the factored base year value (prop 13) limit. The assessment, upon request of the property owner, would be reduced to the actual market value.
  
  
• Year 6: The market value of the property value is now $120,000 which exceeds the prop 13 limit. The assessed value is restored to the prop 13 limit of $110,408 ($100,000 + 2% consumer price index for each successive year).
  
  
• Year 7: The market value has continued to rise and the assessed value is restricted to a maximum increase of 2% ($110,408 + 2%= $112,616).