BILL NUMBER: AB 1662 CHAPTERED
BILL TEXT
CHAPTER 447
FILED WITH SECRETARY OF STATE SEPTEMBER 29, 2010
APPROVED BY GOVERNOR SEPTEMBER 29, 2010
PASSED THE SENATE AUGUST 31, 2010
PASSED THE ASSEMBLY AUGUST 31, 2010
AMENDED IN SENATE AUGUST 31, 2010
AMENDED IN SENATE AUGUST 20, 2010
AMENDED IN SENATE AUGUST 17, 2010
AMENDED IN ASSEMBLY APRIL 7, 2010
AMENDED IN ASSEMBLY MARCH 10, 2010
INTRODUCED BY Assembly Members Portantino and Jeffries
(Coauthor: Assembly Member Adams)
JANUARY 19, 2010
An act to add Sections 195.167, 195.168, 195.169, 218.4, 17207.6,
and 24347.9 to the Revenue and Taxation Code, relating to disaster
relief, making an appropriation therefor, and declaring the urgency
thereof, to take effect immediately.
LEGISLATIVE COUNSEL'S DIGEST
AB 1662, Portantino. Disaster relief.
(1) Existing law authorizes a county board of supervisors to
provide by ordinance for the reassessment of property that is damaged
or destroyed, without fault on the part of the assessee, by a major
misfortune or calamity, upon the application of the assessee or upon
the action of the county assessor with the board's approval. With
respect to certain counties that have adopted reassessment ordinances
and have been declared by the Governor to be in a state of emergency
as a result of certain events, existing law provides for state
allocations of the estimated amounts of the reductions in property
tax revenues resulting in certain fiscal years from reassessments
under those ordinances. Existing law also continuously appropriates,
without regard to fiscal years, moneys in the Special Fund for
Economic Uncertainties for purposes of funding these state
allocations.
This bill would provide for similar state allocations with respect
to property tax revenue reductions resulting from a reassessment for
damages incurred within the Counties of Calaveras, Imperial, Los
Angeles, Orange, Riverside, San Bernardino, San Francisco, and
Siskiyou, which were declared by the Governor to be in a state of
emergency due to the severe winter storms that commenced in January
2010.
By requiring moneys continuously appropriated from the Special
Fund for Economic Uncertainties to be allocated for the new purpose
of reimbursing the Counties of Calaveras, Imperial, Los Angeles,
Orange, Riverside, San Bernardino, San Francisco, and Siskiyou for
these property tax revenue reductions, this bill would make an
appropriation.
(2) 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 the commencement dates of the wildfires listed in
the Governor's proclamations of August 2009, that was damaged or
destroyed by the wildfires in the Counties of Los Angeles and
Monterey, and that has not changed ownership since the commencement
dates of those disasters as listed in the proclamations, 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, or was temporarily uninhabited as a result of restricted
access to the property due to wildfires.
This bill would also provide that any dwelling that qualified for
the exemption prior to the commencement dates of the severe storms
listed in the Governor's proclamations of January 2010, that was
damaged or destroyed by the severe rainstorms, heavy snows, floods,
or mudslides that occurred in the Counties of Calaveras, Imperial,
Los Angeles, Orange, Riverside, San Bernardino, San Francisco, and
Siskiyou, and that has not changed ownership since the commencement
dates of those disasters as listed in the proclamations, 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, or was temporarily uninhabited as a result of restricted
access to the property due to floods, mudslides, rock slides, or
washed-out or damaged roads.
This bill would also provide that any dwelling that qualified for
the exemption prior to August 30, 2009, that was damaged or destroyed
by the wildfires in the County of Placer, as declared by the
Governor to be in a state of emergency in August 2009, and that has
not changed ownership since August 30, 2009, or qualified for the
exemption prior to July 26, 2010, that was damaged or destroyed by
the wildfires in the County of Kern, as declared by the Governor to
be in a state of emergency in July 2010, and that has not changed
ownership since July 26, 2010, 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, or was temporarily
uninhabited as a result of restricted access to the property due to
wildfires.
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. By requiring local
tax officials to implement new exemption criteria, this bill would
impose a state-mandated local program.
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.
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.
(3) The Personal Income Tax Law and the Corporation Tax Law
provide for the carryover to specified taxable years of specified
losses sustained as a result of certain disasters occurring in
California in an area determined by the President of the United
States to warrant specified federal assistance, or proclaimed by the
Governor to be in a state of emergency.
This bill would extend these provisions to losses sustained in the
Counties of Los Angeles, Monterey, and Placer as a result of the
wildfires that commenced in August 2009, losses sustained in the
County of Kern as a result of the wildfires that commenced in July
2010, and losses sustained in the Counties of Calaveras, Imperial,
Los Angeles, Orange, Riverside, San Bernardino, San Francisco, and
Siskiyou as a result of the severe winter storms that commenced in
January 2010. This bill would authorize a taxpayer to make an
election to claim a deduction for those losses on the tax return for
the preceding year.
(4) This bill would declare that it is to take effect immediately
as an urgency statute.
Appropriation: yes.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 195.167 is added to the Revenue and Taxation
Code, to read:
195.167. (a) By October 30, 2010, the auditors of the Counties of
Calaveras, Imperial, Los Angeles, Orange, Riverside, San Bernardino,
San Francisco, and Siskiyou, which were the subject of the Governor'
s proclamations of a state of emergency for the severe winter storms
that commenced in January 2010 that caused damage by the severe
rainstorms, heavy snows, floods, or mudslides, shall certify to the
Director of Finance an estimate of the total amount of the reduction
in property tax revenues on both the regular secured roll and the
supplemental roll for the 2009-10 fiscal year resulting from the
reassessment by the county assessor pursuant to paragraph (1) of
subdivision (a) of Section 170 of those properties that are eligible
properties as a result of those disasters, except that the amount
certified shall not include any estimated property tax revenue
reductions to school districts, other than basic state aid school
districts, and county offices of education.
(b) For purposes of this section, "basic state aid school district"
means any school district that does not receive a state
apportionment pursuant to subdivision (h) of Section 42238 of the
Education Code, but receives from the state only a basic
apportionment pursuant to Section 6 of Article IX of the California
Constitution.
SEC. 2. Section 195.168 is added to the Revenue and Taxation Code,
to read:
195.168. After the county auditor of the eligible county, as
described in Section 195.167, has made the applicable certification
to the Director of Finance pursuant to that section, the director
shall, within 30 days after verification of the county auditor's
estimate, certify this amount to the Controller for allocation to the
county. Upon receipt of certification from the Director of Finance,
the Controller shall make the appropriate allocation to the county
within 10 working days.
SEC. 3. Section 195.169 is added to the Revenue and Taxation Code,
to read:
195.169. (a) On or before June 30, 2011, an eligible county, as
described in Section 195.167, shall compute and remit to the
Controller for deposit in the General Fund an amount equal to the
amount allocated to it by the Controller pursuant to Section 195.168,
less the actual amount of its property tax revenue lost on the
regular secured and supplemental rolls with respect to those eligible
properties described in Section 195.167 as a result of the
reassessment of those properties pursuant to paragraph (1) of
subdivision (a) of Section 170, excluding any property tax revenue
lost by school districts, other than basic state aid school
districts, and county offices of education. If the actual amount of
property tax revenue lost by an eligible county in the immediately
preceding fiscal year, as described and limited in the preceding
sentence, exceeds the amount allocated by the Controller to that
county pursuant to Section 195.168, the Controller shall allocate the
amount of that excess to that eligible county.
(b) For purposes of this section, "basic state aid school district"
means any school district that does not receive a state
apportionment pursuant to subdivision (h) of Section 42238 of the
Education Code, but receives from the state only a basic
apportionment pursuant to Section 6 of Article IX of the California
Constitution.
SEC. 4. Section 218.4 is added to the Revenue and Taxation Code,
to read:
218.4. (a) 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.
(b) Any dwelling that qualified for an exemption under Section 218
prior to the commencement dates of the wildfires listed in the
Governor's disaster proclamation of August 2009, that was damaged or
destroyed by the wildfires and any other related casualty that
occurred as a result of this disaster in the Counties of Los Angeles
and Monterey, as declared by the Governor in August 2009, and that
has not changed ownership since the commencement dates of these
disasters as listed in the proclamations, shall not be disqualified
as a "dwelling" or be denied an exemption under Section 218 solely on
the basis that the dwelling was temporarily damaged or destroyed or
was being reconstructed by the owner, or was temporarily uninhabited
as a result of restricted access to the property due to the
wildfires.
(c) Any dwelling that qualified for an exemption under Section 218
prior to August 30, 2009, that was damaged or destroyed by the
wildfires and any other related casualty that occurred as a result of
this disaster in the County of Placer, as declared by the Governor
in August 2009, and that has not changed ownership since August 30,
2009, shall not be disqualified as a "dwelling" or be denied an
exemption under Section 218 solely on the basis that the dwelling was
temporarily damaged or destroyed or was being reconstructed by the
owner, or was temporarily uninhabited as a result of restricted
access to the property due to the wildfires.
(d) Any dwelling that qualified for an exemption under Section 218
prior to the commencement dates of the severe winter storms listed
in the Governor's disaster proclamations of January 2010, that was
damaged or destroyed by the severe rainstorms, heavy snows, floods,
or mudslides that occurred as a result of these disasters in the
Counties of Calaveras, Imperial, Los Angeles, Orange, Riverside, San
Bernardino, San Francisco, and Siskiyou, as declared by the Governor
in January 2010, and that has not changed ownership since the
commencement dates of these disasters as listed in the proclamations,
shall not be disqualified as a "dwelling" or be denied an exemption
under Section 218 solely on the basis that the dwelling was
temporarily damaged or destroyed or was being reconstructed by the
owner, or was temporarily uninhabited as a result of restricted
access to the property due to floods, mudslides, rockslides, or
washed-out or damaged roads.
(e) Any dwelling that qualified for an exemption under Section 218
prior to July 26, 2010, that was damaged or destroyed by the
wildfires and any other related casualty that occurred as a result of
the disaster in the County of Kern, as declared by the Governor in
July 2010, and that has not changed ownership since July 26, 2010,
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, or was temporarily uninhabited as a result of restricted
access to the property due to the wildfires.
(f) The exemption provided for in subdivision (k) of Section 3 of
Article XIII of the California 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. 5. Section 17207.6 is added to the Revenue and Taxation Code,
to read:
17207.6. (a) An excess disaster loss, as defined in subdivision
(c), shall be carried to other taxable years as provided in
subdivision (b), with respect to losses resulting from any of the
following disasters:
(1) Any loss sustained in the Counties of Los Angeles and Monterey
as a result of wildfires that commenced in August 2009.
(2) Any loss sustained in the County of Placer as a result of
wildfires that commenced in August 2009.
(3) Any loss sustained in the Counties of Calaveras, Imperial, Los
Angeles, Orange, Riverside, San Bernardino, San Francisco, and
Siskiyou as a result of winter storms that commenced in January 2010.
(4) Any loss sustained in the County of Kern as a result of the
wildfires that commenced in July 2010.
(b) (1) In the case of any loss allowed under Section 165(c) of
the Internal Revenue Code, relating to limitation of losses of
individuals, any excess disaster loss 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 the five-year period, then the applicable percentage,
as set forth in paragraph (1) of subdivision (b) of Section 17276,
of that excess disaster loss shall be carried forward to each of the
next 10 taxable years.
(2) The entire amount of any excess disaster loss as defined in
subdivision (c) shall be carried to the earliest of the taxable years
to which, by reason of subdivision (b), the loss may be carried. The
portion of the loss which shall be carried to each of the other
taxable years shall be the excess, if any, of the amount of excess
disaster loss over the sum of the adjusted taxable income for each of
the prior taxable years to which that excess disaster loss is
carried.
(c) "Excess disaster loss" means a disaster loss computed pursuant
to Section 165 of the Internal Revenue Code which exceeds the
adjusted taxable income of the year of loss or, if the election under
Section 165(i) of the Internal Revenue Code is made, the adjusted
taxable income of the year preceding the loss.
(d) The provisions of this section and Section 165(i) of the
Internal Revenue Code shall be applicable to any of the losses listed
in subdivision (a) sustained in any county or city in this state
which was proclaimed by the Governor to be in a state of disaster.
(e) Losses allowable under this section may not be taken into
account in computing a net operating loss deduction under Section 172
of the Internal Revenue Code.
(f) For purposes of this section, "adjusted taxable income" shall
be defined by Section 1212(b)(2)(B) of the Internal Revenue Code.
(g) For losses described in subdivision (a), the election under
Section 165(i) of the Internal Revenue Code may be made on a return
or amended return filed on or before the due date of the return
(determined with regard to extension) for the taxable year in which
the disaster occurred.
SEC. 6. Section 24347.9 is added to the Revenue and Taxation Code,
to read:
24347.9. (a) An excess disaster loss, as defined in subdivision
(c), shall be carried to other taxable years as provided in
subdivision (b), with respect to losses resulting from any of the
following disasters:
(1) Any loss sustained in the Counties of Los Angeles and Monterey
as a result of wildfires that commenced in August 2009.
(2) Any loss sustained in the County of Placer as a result of
wildfires that commenced in August 2009.
(3) Any loss sustained in the Counties of Calaveras, Imperial, Los
Angeles, Orange, Riverside, San Bernardino, San Francisco, and
Siskiyou as a result of winter storms that commenced in January 2010.
(4) Any loss sustained in the County of Kern as a result of the
wildfires that commenced in July 2010.
(b) (1) In the case of any loss allowed under Section 165 of the
Internal Revenue Code, relating to losses, any excess disaster loss
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 the five-year period, then
the applicable percentage, as set forth in paragraph (1) of
subdivision (b) of Section 24416, of that excess disaster loss shall
be carried forward to each of the next 10 taxable years.
(2) The entire amount of any excess disaster loss as defined in
subdivision (c) shall be carried to the earliest of the taxable years
to which, by reason of subdivision (b), the loss may be carried. The
portion of the loss which shall be carried to each of the other
taxable years shall be the excess, if any, of the amount of excess
disaster loss over the sum of the net income for each of the prior
taxable years to which that excess disaster loss is carried.
(c) "Excess disaster loss" means a disaster loss computed pursuant
to Section 165 of the Internal Revenue Code, which exceeds the net
income of the year of loss or, if the election under Section 165(i)
of the Internal Revenue Code is made, the net income of the year
preceding the loss.
(d) The provisions of this section and Section 165(i) of the
Internal Revenue Code shall be applicable to any of the losses listed
in subdivision (a) sustained in any county or city in this state
which was proclaimed by the Governor to be in a state of disaster.
(e) Any corporation subject to the provisions of Section 25101 or
25101.15 that has disaster losses pursuant to this section, shall
determine the excess disaster loss to be carried to other taxable
years under the principles specified in Section 25108 relating to net
operating losses.
(f) Losses allowable under this section may not be taken into
account in computing a net operating loss deduction under Section 172
of the Internal Revenue Code.
(g) For losses described in subdivision (a), the election under
Section 165(i) of the Internal Revenue Code may be made on a return
or amended return filed on or before the due date of the return
(determined with regard to extension) for the taxable year in which
the disaster occurred.
SEC. 7. 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 Section 4 of this act, are required
by Section 25 of Article XIII of the California Constitution.
SEC. 8. The Legislature finds and declares that this act fulfills
a statewide public purpose because of all of the following:
(a) The Governor of California has officially proclaimed a state
of emergency declaring that the wildfires that occurred within the
Counties of Los Angeles, Monterey, and Placer, commencing in August
2009, and within the County of Kern, commencing in July 2010,
constitute conditions of extreme peril to public health and safety to
persons and property within that county, thus qualifying affected
persons for various forms of governmental assistance and relief.
(b) The Governor of California has officially proclaimed a state
of emergency declaring that the winter storms that occurred within
the Counties of Calaveras, Imperial, Los Angeles, Orange, Riverside,
San Bernardino, San Francisco, and Siskiyou, commencing in January
2010, constitute conditions of extreme peril to public health and
safety to persons and property within that county, thus qualifying
affected persons for various forms of governmental assistance and
relief.
(c) This act is consistent with, and supplements, the proclaimed
disaster assistance and relief by providing necessary fiscal
assistance and tax relief to affected jurisdictions and persons to
allow them to maintain essential basic services and repair damage to,
and restore, their homes and businesses.
SEC. 9. 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.
SEC. 10. This act is an urgency statute necessary for the
immediate preservation of the public peace, health, or safety within
the meaning of Article IV of the Constitution and shall go into
immediate effect. The facts constituting the necessity are:
In order to timely provide essential relief to those persons and
jurisdictions that have suffered damage or loss as a result of the
wildfires that occurred within the Counties of Los Angeles, Monterey,
and Placer, commencing in August 2009, and within the County of
Kern, commencing in July 2010, or as a result of the severe winter
storms that occurred in the Counties of Calaveras, Imperial, Los
Angeles, Orange, Riverside, San Bernardino, San Francisco, and
Siskiyou, commencing in January 2010, that were the subject of the
Governor's proclamations of a state of emergency, it is necessary
that this act take effect immediately.