BILL ANALYSIS
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|SENATE RULES COMMITTEE | SB 1064|
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UNFINISHED BUSINESS
Bill No: SB 1064
Author: Hollingsworth (R), et al
Amended: 8/14/08
Vote: 27 - Urgency
SENATE REVENUE & TAXATION COMMITTEE : 8-0, 2/13/08
AYES: Oropeza, Cogdill, Alquist, Harman, Machado, Runner,
Scott, Wiggins
SENATE APPROPRIATIONS COMMITTEE : 10-0, 3/6/08
AYES: Torlakson, Cox, Aanestad, Ashburn, Corbett, Kuehl,
Oropeza, Simitian, Steinberg, Yee
NO VOTE RECORDED: Battin, Cedillo, Dutton, Florez,
Ridley-Thomas, Runner, Wyland
SENATE FLOOR : 36-0, 4/1/08
AYES: Aanestad, Ackerman, Alquist, Ashburn, Battin,
Cedillo, Cogdill, Corbett, Correa, Cox, Denham, Ducheny,
Florez, Harman, Hollingsworth, Kehoe, Kuehl, Lowenthal,
Machado, Maldonado, Margett, McClintock, Migden, Negrete
McLeod, Oropeza, Padilla, Perata, Romero, Runner, Scott,
Simitian, Steinberg, Torlakson, Wiggins, Wyland, Yee
NO VOTE RECORDED: Calderon, Dutton, Ridley-Thomas, Vincent
ASSEMBLY FLOOR : 79-0, 8/20/08 - See last page for vote
SUBJECT : Taxation: disaster relief
SOURCE : Author
CONTINUED
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DIGEST : This bill provides additions to disaster
provisions in the Personal Income Tax Law, Corporation Tax
Law, and Property Tax for El Dorado, Los Angeles, Orange,
Riverside, San Bernardino, San Diego, Santa Barbara, and
Ventura Counties and taxpayers in those counties affected
by the 2007 Southern California wildfires, and for
Riverside County, and taxpayers in Riverside County
affected by severe wind conditions in October 2007.
Assembly Amendments added the Counties of Butte, Humboldt,
Inyo, Kern, Mariposa, Mendocino, Monterey, Plumas, Santa
Barbara, Santa Clara, Santa Cruz, Shasta, and Trinity to
the provisions of the bill which all experienced a state of
emergency event in 2008.
ANALYSIS :
Existing law:
1. Property tax reassessment . Allows each county, by
ordinance, to provide for the reassessment of properties
damaged by a calamity, disaster, or misfortune.
Taxpayers owning damaged property must apply for a
reassessment within the time period specified in the
applicable county's ordinance or within 12 months of the
misfortune or calamity, whichever is later. The
application for reassessment must show the condition and
value of the property after the damage and the dollar
value of the damage. Once the property is reassessed,
the taxpayer is entitled to a refund of any excess
property tax paid on the property. If the affected
property is subsequently repaired, its value is subject
to an upward reassessment by the county.
2. Homeowners' exemption . Exempts the first $7,000 of the
full value of a dwelling from property tax, when the
dwelling is occupied by an owner as his/her principal
residence. However, if a property is no longer
owner-occupied or is vacant on the lien date (January
1), the property is not eligible for the exemption for
the succeeding tax year.
3. Income tax losses . Allows nonbusiness taxpayers with
casualty losses that are not reimbursed by insurance and
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that exceed $100 plus 10 percent of the taxpayer's
adjusted gross income (AGI) to claim these losses as
itemized deductions on their tax return. Taxpayers may
carry forward 100 percent of any remaining losses for up
to 10 years. Corporate taxpayers with casualty losses
that are not reimbursed by insurance are not subject to
the $100 plus 10 percent of AGI threshold, but are
subject to the same carry forward rules that apply to
individual taxpayers.
This bill:
1. Provides relief in connection with the following
disasters:
A. The wildfires that began on July 6, 2007, in Inyo
County.
B. The wildfires that occurred in Los Angeles,
Orange, Riverside, San Bernardino, San Diego, Santa
Barbara, and Ventura Counties, which were the subject
of the Governor's disaster proclamations of September
15, 2007, and October 21, 2007.
C. The extremely strong winds that began on October
20, 2007, in Riverside County.
D. The wildfires that began on May 22, 2008, in
Humboldt County.
E. The wildfires that occurred in May and June 2008,
in Butte, Kern, Mariposa, Mendocino, Monterey,
Plumas, Santa Clara, Santa Cruz, Shasta, and Trinity
Counties.
F. The wildfires that began on July 1, 2008, in Santa
Barbara County.
G. The severe rainstorms that began on July 12, 2008,
in Inyo County.
2. Provides a mechanism for reimbursing the affected
counties for property tax losses resulting from the
reassessment of properties damaged by these disasters.
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3. Provides that any dwelling that qualified for a
homeowners' property tax exemption before the
commencement dates of these disasters, that was damaged
or destroyed by these disasters, and that has not
changed ownership since the commencement dates of these
disasters, shall not be denied a homeowners' exemption
solely because that dwelling was temporarily damaged or
destroyed, or was being reconstructed by the owner, or
was temporarily uninhabited as a result of restricted
access.
4. Provides that any taxpayer's excess disaster loss
resulting from these disasters shall be carried forward
to each of the five taxable years following the taxable
year for which the loss is claimed. However, if there
is any excess disaster loss remaining after this
five-year period, then the applicable percentage of that
excess disaster loss shall be carried forward to each of
the next 10 taxable years.
5. Provides a mechanism for reimbursing El Dorado County
for property tax losses incurred during the 2007-08
fiscal year as a result of the reassessment of
properties damaged by the wildfires that began there on
June 24, 2007.
FISCAL EFFECT : Appropriation: Yes Fiscal Com.: Yes
Local: Yes
According to the Assembly Revenue and Taxation Committee:
1. One-time General Fund (GF) costs of $4.5 million to
reimburse the affected counties for downward assessments
of property taxes in 2007-08.
2. One-time GF costs of $185,000 to reimburse local
governments for their losses due to homeowner's
exemption. The annual impact would decrease over time
as homes are rebuilt.
3. GF revenue reductions of less than $200,000 in 2007-08,
partly offset by minor revenue gains in subsequent
years, due to the changes in the carry-forward
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allowances of fire-related casualty losses allowed under
the bill.
SUPPORT : (Verified 8/19/08)
Board of Equalization
California State Association of Counties
City of Poway
Counties of Riverside and San Diego
El Dorado County Board of Supervisors
Lakeside Chamber of Commerce
League of California Cities
Lemon Grove Chamber of Commerce
Regional Council of Rural Counties
San Diego East County Chamber of Commerce
School Innovations and Advocacy
Ventura County Board of Supervisors
ARGUMENTS IN SUPPORT : The author states, "SB 1064 is an
urgency bill similar to previous disaster relief measures
adopted by the Legislature. Specifically, it would allow
homeowners and businesses to carry forward losses resulting
from the ? disasters into future taxable years and ensure
that standard property tax deductions continue for those
displaced from their homes. SB 1064 would also compensate
affected local governments that experienced losses in
property tax revenue."
ASSEMBLY FLOOR :
AYES: Adams, Aghazarian, Anderson, Arambula, Beall,
Benoit, Berg, Berryhill, Blakeslee, Brownley, Caballero,
Charles Calderon, Carter, Cook, Coto, Davis, De La Torre,
De Leon, DeSaulnier, DeVore, Duvall, Dymally, Emmerson,
Eng, Evans, Feuer, Fuentes, Fuller, Furutani, Gaines,
Galgiani, Garcia, Garrick, Hancock, Hayashi, Hernandez,
Horton, Houston, Huff, Huffman, Jeffries, Jones,
Karnette, Keene, Krekorian, La Malfa, Laird, Leno,
Levine, Lieber, Lieu, Ma, Maze, Mendoza, Mullin,
Nakanishi, Nava, Niello, Nunez, Parra, Plescia,
Portantino, Price, Sharon Runner, Ruskin, Salas, Saldana,
Silva, Smyth, Solorio, Spitzer, Strickland, Swanson,
Torrico, Tran, Villines, Walters, Wolk, Bass
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NO VOTE RECORDED: Soto
DLW:mw 8/21/08 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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