BILL NUMBER: SB 1147 CHAPTERED 09/25/04 CHAPTER 792 FILED WITH SECRETARY OF STATE SEPTEMBER 25, 2004 APPROVED BY GOVERNOR SEPTEMBER 24, 2004 PASSED THE SENATE AUGUST 23, 2004 PASSED THE ASSEMBLY AUGUST 18, 2004 AMENDED IN ASSEMBLY JULY 8, 2004 AMENDED IN ASSEMBLY JUNE 28, 2004 AMENDED IN SENATE APRIL 21, 2004 INTRODUCED BY Senators Hollingsworth, Poochigian, and Soto (Principal coauthors: Senators Alpert, Battin, Ducheny, and Morrow) (Principal coauthors: Assembly Members Bates, Houston, Kehoe, La Suer, Mountjoy, Plescia, and Wyland) (Coauthors: Senators Ackerman, Ashburn, Cedillo, and Denham) (Coauthors: Assembly Members Benoit, Cogdill, Cox, Shirley Horton, Maddox, Maze, Pacheco, Runner, Samuelian, and Spitzer) JANUARY 26, 2004 An act to amend Section 218 of the Revenue and Taxation Code, relating to disaster relief, to take effect immediately, tax levy. LEGISLATIVE COUNSEL'S DIGEST SB 1147, Hollingsworth. Disaster relief. Existing property tax law provides, pursuant to a specified provision of the California Constitution, for a homeowners' property tax exemption in the amount of $7,000 of the full value of a "dwelling," as defined. This bill would provide that any dwelling that qualified for the exemption prior to October 15, 2003, that was damaged or destroyed by fire or earthquake in a disaster, as specified, and any dwelling that qualified for the exemption prior to June 3, 2004, that was damaged or destroyed by flood in a disaster, as specified, may not be denied the exemption solely on the basis that the dwelling was temporarily damaged or destroyed or was being reconstructed by the owner. By requiring local tax officials to implement new exemption criteria, this bill would impose a state-mandated local program. The California Constitution requires the Legislature, in each fiscal year, to reimburse local governments for the revenue losses incurred by those governments in that fiscal year as a result of the homeowners' property tax exemption. This bill would state the intent of the Legislature to make this required reimbursement in the annual Budget Act. The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement, including the creation of a State Mandates Claims Fund to pay the costs of mandates that do not exceed $1,000,000 statewide and other procedures for claims whose statewide costs exceed $1,000,000. This bill would provide that, if the Commission on State Mandates determines that the bill contains costs mandated by the state, reimbursement for those costs shall be made pursuant to these statutory provisions. This bill would take effect immediately as a tax levy. THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS: SECTION 1. Section 218 of the Revenue and Taxation Code is amended to read: 218. (a) The homeowners' property tax exemption is in the amount of the assessed value of the dwelling specified in this section, as authorized by subdivision (k) of Section 3 of Article XIII of the Constitution. That exemption shall be in the amount of seven thousand dollars ($7,000) of the full value of the dwelling. (b) The exemption does not extend to property that is rented, vacant, under construction on the lien date, or that is a vacation or secondary home of the owner or owners, nor does it apply to property on which an owner receives the veteran's exemption. (c) For purposes of this section, all of the following apply: (1) "Owner" includes a person purchasing the dwelling under a contract of sale or who holds shares or membership in a cooperative housing corporation, which holding is a requisite to the exclusive right of occupancy of a dwelling. (2) (A) "Dwelling" means a building, structure, or other shelter constituting a place of abode, whether real property or personal property, and any land on which it may be situated. A two-dwelling unit shall be considered as two separate single-family dwellings. (B) "Dwelling" includes the following: (i) A single-family dwelling occupied by an owner thereof as his or her principal place of residence on the lien date. (ii) A multiple-dwelling unit occupied by an owner thereof on the lien date as his or her principal place of residence. (iii) A condominium occupied by an owner thereof as his or her principal place of residence on the lien date. (iv) Premises occupied by the owner of shares or a membership interest in a cooperative housing corporation, as defined in subdivision (i) of Section 61, as his or her principal place of residence on the lien date. Each exemption allowed pursuant to this subdivision shall be deducted from the total assessed valuation of the cooperative housing corporation. The exemption shall be taken into account in apportioning property taxes among owners of share or membership interests in the cooperative housing corporations so as to benefit those owners who qualify for the exemption. (d) Any dwelling that qualified for an exemption under this section prior to October 20, 1991, that was damaged or destroyed by fire in a disaster, as declared by the Governor, occurring on or after October 20, 1991, and before November 1, 1991, and that has not changed ownership since October 20, 1991, shall not be disqualified as a "dwelling" or be denied an exemption under this section solely on the basis that the dwelling was temporarily damaged or destroyed or was being reconstructed by the owner. (e) Any dwelling that qualified for an exemption under this section prior to October 15, 2003, that was damaged or destroyed by fire or earthquake in a disaster, as declared by the Governor, during October, November, or December 2003, and that has not changed ownership since October 15, 2003, shall not be disqualified as a "dwelling" or be denied an exemption under this section solely on the basis that the dwelling was temporarily damaged or destroyed or was being reconstructed by the owner. (f) Any dwelling that qualified for an exemption under this section prior to June 3, 2004, that was damaged or destroyed by flood in a disaster, as declared by the Governor, during June 2004, and that has not changed ownership since June 3, 2004, shall not be disqualified as a "dwelling" or be denied an exemption under this section solely on the basis that the dwelling was temporarily damaged or destroyed or was being reconstructed by the owner. (g) The exemption provided for in subdivision (k) of Section 3 of Article XIII of the Constitution shall first be applied to the building, structure or other shelter and the excess, if any, shall be applied to any land on which it may be located. SEC. 2. It is the intent of the Legislature to provide in the annual Budget Act those additional reimbursements to local governments that, as a result of this act, are required by Section 25 of Article XIII of the California Constitution. SEC. 3. Notwithstanding Section 17610 of the Government Code, if the Commission on State Mandates determines that this act contains costs mandated by the state, reimbursement to local agencies and school districts for those costs shall be made pursuant to Part 7 (commencing with Section 17500) of Division 4 of Title 2 of the Government Code. If the statewide cost of the claim for reimbursement does not exceed one million dollars ($1,000,000), reimbursement shall be made from the State Mandates Claims Fund. SEC. 4. This act provides for a tax levy within the meaning of Article IV of the Constitution and shall go into immediate effect.