BILL ANALYSIS
AB 79
Page 1
ASSEMBLY THIRD READING
AB 79 (Duvall)
As Amended May 21, 2009
2/3 vote. Urgency
REVENUE & TAXATION 9-0 LOCAL GOVERNMENT 7-0
-----------------------------------------------------------------
|Ayes:|Charles Calderon, DeVore, |Ayes:|Caballero, Knight, |
| |Beall, Coto, Harkey, Ma, | |Arambula, Davis, Duvall, |
| |Nielsen, Portantino, Fong | |Krekorian, Skinner |
|-----+--------------------------+-----+--------------------------|
| | | | |
-----------------------------------------------------------------
APPROPRIATIONS 17-0
-----------------------------------------------------------------
|Ayes:|De Leon, Nielsen, Ammiano, | | |
| |Charles Calderon, Davis, Duvall, | | |
| |Fuentes, Hall, Harkey, Miller, | | |
| |John A. Perez, Price, Skinner, | | |
| |Solorio, | | |
| |Audra Strickland, Torlakson, | | |
| |Krekorian | | |
-----------------------------------------------------------------
-----------------------------------------------------------------
| | | | |
-----------------------------------------------------------------
SUMMARY : Adds the wildfires that occurred in Orange, Riverside,
and San Bernardino Counties in 2008 (2008 Wildfires) to the list
of disasters eligible for full state reimbursement of local
property tax losses, beneficial homeowners' property tax
exemption treatment, and special "carry forward" treatment of
excess disaster losses. Specifically, this bill :
1)Provides a mechanism for reimbursing the counties for property
tax losses resulting from the reassessment of properties
damaged by the 2008 Wildfires.
2)Provides that any dwelling that qualified for a homeowners'
property tax exemption before the commencement dates of the
2008 Wildfires, that was damaged or destroyed by the 2008
Wildfires, and that has not changed ownership since the
commencement dates of these disasters, shall not be denied a
AB 79
Page 2
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.
3)Provides that any taxpayer's excess disaster loss resulting
from the 2008 Wildfires 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.
4)Specifies that, if the Commission on State Mandates determines
that this bill contains costs mandated by the state, local
agencies and school districts will be reimbursed for those
costs.
5)Takes effect immediately as an urgency measure.
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:
a) 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.
AB 79
Page 3
b) Provides certain disaster-related exceptions to the
general rule that a property must be owner-occupied on the
lien date to receive the homeowners' exemption. Under
these exceptions, properties that were eligible for the
homeowners' exemption immediately before the disaster, do
not change ownership after the disaster, and are vacant
solely because of damage incurred during the disaster,
continue to be eligible for the homeowners' exemption.
FISCAL EFFECT :
1)Property Tax Reassessment: The Board of Equalization (BOE)
estimates that the cost of reimbursing the counties' property
tax losses would be $635,952.
2)Homeowners' Exemption: BOE estimates that extending the
homeowners' exemption to homes that are uninhabitable on the
lien date will result in revenue losses of less than $8,000.
3)Income Tax Losses: The Franchise Tax Board estimates minimal
revenue losses resulting from the income tax provisions of
this bill.
COMMENTS : The author states, "This bill is vitally important to
our local governments to ensure that they recover the losses
suffered from this disaster."
Proponents state, "As you know, AB 79 provides disaster-related
tax relief for losses sustained as a result of wildfires that
occurred in Orange, Riverside, and San Bernardino Counties. The
legislation includes state reimbursement to backfill property
tax revenue losses resulting from assessment reductions because
of these wildfires."
Committee staff notes this bill is similar to both AB 50 (Nava)
and AB 15 (Fuentes), also introduced in the current Legislative
Session. Should all three bills continue to progress through
the Legislature, double-jointing amendments may become
necessary.
Analysis Prepared by : M. David Ruff / REV. & TAX. / (916)
319-2098
AB 79
Page 4
FN: 0001036