BILL ANALYSIS
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THIRD READING
Bill No: AB 1662
Author: Portantino (D)
Amended: 8/20/10 in Senate
Vote: 27 - Urgency
SENATE REVENUE & TAXATION COMMITTEE : 3-0, 6/23/10
AYES: Wolk, Alquist, Padilla
NO VOTE RECORDED: Walters, Ashburn
SENATE APPROPRIATIONS COMMITTEE : 11-0, 8/12/10
AYES: Kehoe, Ashburn, Alquist, Corbett, Emmerson, Leno,
Price, Walters, Wolk, Wyland, Yee
ASSEMBLY FLOOR : 77-0, 6/1/10 - See last page for vote
SUBJECT : Disaster relief: County of Los Angeles
SOURCE : Author
DIGEST : This bill adds the wildfires that occurred in
the Counties of Los Angeles and Monterey in 2009 (2009
Wildfires) and the severe winter storms that occurred in
the Counties of Calaveras, Imperial, Los Angeles, Orange,
Riverside, San Bernardino, San Francisco, and Siskiyou in
2010 (2010 Storms) 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.
CONTINUED
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Senate Floor Amendments of 8/20/10 enact three changes in
tax law to benefit several counties and taxpayers within
those counties affected by recent disasters. The
amendments move the protections against an assessor
revoking a homeowners' exemption for disaster-affected
properties and allowance of excess disaster losses for
personal income and corporate taxpayers out of the
foundational code sections (R&T Section 218, 17207, and
24347.5, respectively) into new, nearby code sections (R&T
218.4, 17207.4, and 24347.9) to ensure that other disaster
relief bills subsequently enacted do not inadvertently
chapter-out this bill's additions. The Legislature is
currently considering five other disaster relief bills, so
more typical chaptering out, contingent enactment language
adding the provisions of each of the other bills into this
bill will result in an unwieldy bill.
ANALYSIS : On August 28, 2009, Governor Arnold
Schwarzenegger proclaimed a state of emergency declaring
the wildfires that occurred in Los Angeles and Monterey
Counties to be a state disaster. President Obama did not
declare either of these fires to be a federal disaster.
The Governor also proclaimed a state of emergency in
January 2010 declaring the severe storms, flooding,
mudslides, and mudflows that occurred in the Counties of
Calaveras, Imperial, Los Angeles, Orange, Riverside, San
Bernardino, San Francisco, and Siskiyou to be a state
disaster. In March of 2010, President Obama proclaimed a
federal disaster due to the winter storms, flooding, and
debris and mudflows that occurred in the Counties of
Calaveras, Imperial, Los Angeles, Riverside, San
Bernardino, and Siskiyou from January 17, 2010 through
February 6, 2010.
This bill:
1. Provides that, notwithstanding existing law, the state
share shall be up to 100 percent of total state eligible
costs connected with the severe winter storms, flooding,
and debris and mud flows that occurred in Northern,
Central, and Southern California from January 17, 2010,
to February 6, 2010, as specified in agreements between
this state and the United States for federal financial
assistance.
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2. Provides a mechanism for reimbursing eligible counties
for property tax losses resulting from the reassessment
of properties damaged by the 2009 Wildfires and the 2010
Storms.
3. Provides that any dwelling that qualified for a
homeowners' property tax exemption before the
commencement dates of the 2009 Wildfires, that was
damaged or destroyed by the 2009 Wildfires, and that has
not changed ownership since the commencement dates of
the 2009 Wildfires, 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 identical homeowners' property tax exemption
treatment for victims of the 2010 Storms.
5. Provides that any taxpayer's excess disaster loss
resulting from the 2009 Wildfires and/or 2010 Storms
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.
6. Specifies that, condition reimbursements to local
governments for losses from assessment reductions
resulting from fire disasters that occur after January
1, 2011 upon a county demonstrating the following:
A. Provision of adequate structural fire protection
services in state responsibility areas.
B. Compliance with existing fire prevention
requirements in very high fire hazard severity
zones.
C. The county has a fire risk reduction public
education program if it has land designated as a
very high fire hazard severity zone within its
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jurisdiction.
7. Takes immediate effect as an urgency measure.
Related Legislation
AB 1690 (Chesbro) of 2010 would provide similar disaster
assistance for losses sustained as a result of the
earthquake that struck Humboldt County on January 9, 2010.
AB 1690 is currently in the Senate Revenue and Taxation
Committee.
AB 1766 (Gaines) of 2010 would provide similar disaster
relief in connection with the 49 Fire that began in Placer
County in August 2009. AB 1766 is currently in the Senate
Revenue and Taxation Committee.
AB 2136 (V. Manuel Perez) of 2010 would provide similar
disaster relief in connection with the earthquake that
struck Imperial County. AB 2136 is currently in the Senate
Revenue and Taxation Committee.
Should these bills all continue to progress through the
legislative process, appropriate amendments should be taken
to prevent chaptering out issues.
FISCAL EFFECT : Appropriation: Yes Fiscal Com.: Yes
Local: Yes
According to the Senate Appropriations Committee analysis:
Fiscal Impact (in thousands)
Major Provisions 2010-11 2011-12
2012-13 Fund
Property tax reimbursement less than $500
General*
Homeowner's exemption minor costs, likely less than $10
General
annually until homes are rebuilt
Disaster loss carry forward $17 (FY 2009-10)
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General
CDAA: state assumption of up to $2,750 General
local share of disaster costs
*Special Fund for Economic Uncertainties (NOTE: existing
law continuously appropriates moneys from this fund for
disaster-related allocations, so adding an allocation for
the disasters specified in the bill constitutes an
appropriation)
SUPPORT : (Verified 8/20/10)
Los Angeles County
ARGUMENTS IN SUPPORT : The author's office has provided
the following statement in support of this bill, "On August
26, 2009, the Station Fire in Los Angeles County was
reported burning in the Angeles Forest. This mostly rural
area contains forested and chaparral vegetation and abuts
many foothill communities in Los Angeles County. Aided by
winds and hot temperatures the fire quickly spread out of
control. A report issued by the U.S. Department of
Agriculture subsequently attributed extremely dry
vegetation, extremely steep terrain and inaccessible fire
locations to the spread of the fire and the inability of
fire personnel to contain it. Ultimately the fire consumed
over 160,000 acres, destroyed 209 structures of which 89
were homes and caused the deaths of two fire fighters.
Because the Station Fire denuded the hillsides and steep
terrain of the Angeles Forest, heavy rains in February of
2010 caused mudslides and flash flooding that has destroyed
or damaged at least 86 homes. AB 1662 would allow victims
who lost homes and other property to claim disaster loss
treatment, for losses sustained as a result of the August,
2009 Station Fire in Los Angeles County. The purpose of
this bill is to provide immediate tax relief to individuals
and businesses affected by that wildfire. As an urgency
measure, this bill would be effective and operative
immediately upon enactment. AB 1662 would provide
disaster-related tax relief for losses sustained as a
result of the wildfire that occurred in Los Angeles County
in August 2009. The legislation would include state
reimbursement to backfill property tax revenue losses
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resulting from assessment reductions because of these
wildfires. These tax benefits are necessary tools for
these areas to recover from these disasters as quickly as
possible."
Proponents state, Existing law authorizes a county board of
supervisors to declare a local emergency attributable to a
natural disaster, and to provide by ordinance for the
reassessment of property that is damaged or destroyed by
the disaster. Existing law provides for the continuing
appropriation of funds to the Special Fund for Economic
Uncertainties too pay for those reimbursement costs. AB
1662 is fully consistent with prior legislative action
providing for Ste reimbursement of lost local government
property tax revenues resulting from the disaster
precipitating a Governor's State of Emergency."
ASSEMBLY FLOOR :
AYES: Adams, Ammiano, Anderson, Arambula, Bass, Beall,
Bill Berryhill, Blakeslee, Block, Blumenfield, Bradford,
Brownley, Buchanan, Caballero, Charles Calderon, Carter,
Chesbro, Conway, Cook, Coto, Davis, De La Torre, De Leon,
DeVore, Emmerson, Eng, Evans, Feuer, Fletcher, Fong,
Fuentes, Fuller, Furutani, Gaines, Galgiani, Garrick,
Gilmore, Hagman, Hall, Harkey, Hayashi, Hernandez, Hill,
Huber, Huffman, Jeffries, Jones, Knight, Lieu, Logue,
Bonnie Lowenthal, Ma, Mendoza, Miller, Monning, Nava,
Nestande, Niello, Nielsen, Norby, V. Manuel Perez,
Portantino, Ruskin, Salas, Saldana, Silva, Skinner,
Smyth, Solorio, Swanson, Torlakson, Torres, Torrico,
Tran, Villines, Yamada, John A. Perez
NO VOTE RECORDED: Tom Berryhill, Audra Strickland, Vacancy
DLW:do 8/20/10 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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