BILL ANALYSIS
SCA 9
Page 1
Date of Hearing: August 6, 2002
ASSEMBLY COMMITTEE ON ELECTIONS, REAPPORTIONMENT AND
CONSTITUTIONAL AMENDMENTS
John Longville, Chair
SCA 9 (Speier) - As Amended: June 26, 2002
SENATE VOTE : 28-5
SUBJECT : Property taxation: changes in ownership: exclusion:
coowners.
SUMMARY : Permits a county board of supervisors to enact an
ordinance allowing co-owners and co-habitants to transfer a
principal place of residence without triggering a property tax
reassessment. Specifically, this bill provides that the terms
"purchased" and "change of ownership" for the purposes of
property tax assessments do not include the purchase or transfer
of an ownership interest in the principal residence of the
transferor or a transferee if the county board of supervisors
enacts an ordinance to provide for this and all of the following
conditions are met:
1)The residence was co-owned by the transferor and transferee
for the three-year period immediately preceding the transfer;
2)The transferor and the transferee continuously resided at the
residence for the three-year period immediately preceding the
transfer; and
3)The transfer occurs on or after January 1, 2005, by reason of
the death of the transferor.
EXISTING LAW :
1)Limits ad valorem taxes on real property to 1% of the full
cash value of that property.
2)Defines "full cash value," for the purposes of property tax
assessments, as the county assessor's valuation of real
property as shown on the 1975-6 tax bill under "full cash
value" or, thereafter, the appraised value of real property
when purchased, newly constructed, or when a change in
ownership has occurred after the 1975 assessment. Provides
that the full cash value base may be adjusted by no more than
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2% annually to reflect inflation.
3)Provides, for the purposes of determining the "full cash
value" of a property, that the terms "purchased" and "change
in ownership" do not include:
a) The purchase or transfer of real property between
spouses; and
b) The purchase or transfer of the principal residence and
the purchase or transfer of the first $1 million of the
full cash value of all other real property between the
following individuals:
i) Parents and their children; or
ii) Grandparents and their grandchildren, provided that
all the parents of the grandchild or grandchildren are
deceased.
FISCAL EFFECT : Unknown
COMMENTS :
1)Purpose of the Bill : According to the author, "[a]
fundamental argument for Proposition 13 was that a person
should not be 'taxed' out of their home because of increasing
property taxes. Exemptions have been granted to spouses,
children, and grandchildren when their parents predecease
them. With the dramatic increases in property values in
California over the past two decades, many people have faced
significant hardship when a family member who is a titled
owner of a property dies. . . SCA 9 will allow counties to
expand the exemption to include many non-traditional
households and was drafted to be as inclusive as possible . .
. SCA 9 will apply to seniors, veterans, or others who choose
not to marry because of the loss of various benefits; persons
who choose not to marry or may be unable to marry legally;
same sex relationships; domestic partnerships; persons with
familial relationships, such a siblings; friends or
companions; care providers and care recipients; or persons who
live together to share the cost of housing."
2)Arguments in Opposition : Opponents of this measure argue that
it awards "marriage-equivalent" rights to unmarried
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individuals living together in the same household, and thus
the measure undermines marriage. They argue that this measure
is inconsistent with the will of the voters expressed in the
approval of Proposition 22 on March 7, 2000. Proposition 22
read, in its entirety, "Only marriage between a man and a
woman is valid or recognized in California." In addition, the
California Taxpayers' Association expresses concern that this
measure "would be enormously expensive to administer and would
divert valuable assessor-office resources from the primary
responsibility: the administration of the property tax system
in California."
3)Proposition 13 : In 1978, California voters passed Proposition
13, that limited property taxation to 1 percent of assessed
valuation and provided that property valuations may be
reassessed only upon change of ownership, except that property
valuations may be adjusted by up to 2 percent per year to
reflect inflation. Proposition 13 did not define the term
"change of ownership," however, subsequent legislation defined
"change of ownership" to exclude interspousal transfers of
property, and later to exclude certain transfers between
parents and their minor children upon death of the parent.
Those exceptions were later amended into the Constitution with
the approval of Proposition 58 in 1986. In 1996, voters
approved Proposition 193, a constitutional amendment to
exclude certain transfers between grandparents and their
grandchildren from the definition of "change of ownership"
when both of a grandchild's parents are deceased.
4)Related Legislation : ACA 19 (Nation), which was held on the
Assembly Appropriations suspense file, permits a grandparent
to transfer to a grandchild the grandparent's principal place
of residence without triggering a property tax reassessment.
ACA 19 was approved by this committee by a vote of 6-0. ACA
18 (Wiggins), which was held on the Assembly Revenue and
Taxation suspense file, provides for a property tax exemption
similar to that in ACA 19, except that the exemption would
only apply to grandparents who are transferring property to
developmentally disabled grandchildren.
5)Double Referral : On June 24, 2002, the Assembly Revenue and
Taxation Committee approved this measure by a vote of 4-1.
6)Approval by Voters : As a constitutional amendment, this
measure requires the approval of the voters to take effect.
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Because the deadline to qualify measures for the November 2002
ballot has passed, this measure would appear on the ballot at
the March 2004 statewide election if it is approved by the
legislature.
REGISTERED SUPPORT / OPPOSITION :
Support
Board of Equalization
California Alliance for Pride and Equality
Congress of California Seniors
Gray Panthers
West Hollywood City Council
Opposition
American Family Association
American Family Defense Coalition
Americans for Voluntary School Prayer
Brotherhood Organization of a New Destiny
California Taxpayers' Association
Campaign for California Families
Center for Reclaiming America
Christian Coalition of San Diego County
Concerned Women for America
Desert Stream Ministries
Eagle Forum of California
Exodus International, North America
Pro-Family Law Center
United States Justice Foundation
Analysis Prepared by : Ethan Jones / E., R. & C. A. / (916)
319-2094