BILL ANALYSIS                                                                                                                                                                                                    



                                                                  AB 1690
                                                                  Page  1

          Date of Hearing:  April 14, 2010

                       ASSEMBLY COMMITTEE ON LOCAL GOVERNMENT
                                Cameron Smyth, Chair
                 AB 1690 (Chesbro) - As Introduced:  January 27, 2010
           
          SUBJECT  :  Disaster relief: County of Humboldt earthquake.

           SUMMARY  :  Allows special tax treatment for losses sustained as a  
          result of the earthquake that occurred on January 9, 2010, in  
          Humboldt County.  Specifically,  this bill  :  

          1)Provides reimbursement for property tax losses resulting from  
            the reassessment of properties damaged by the January 2010  
            earthquake in Humboldt County.

          2)Requires, by October 30, 2010, the auditor of Humboldt County  
            to certify to the Director 
          of Finance an estimate for the total amount of the reduction in  
            property tax revenues resulting from the reassessment of  
            properties impacted by the January 2010 earthquake.

          3)Requires the Director of Finance, within 30 days after  
            verification of the county auditor's property tax estimate, to  
            certify the amount to the State Controller for allocation to  
            the County for reimbursement in property tax loss.

          4)Provides that any dwelling that qualified for a homeowners'  
            property tax exemption before the January 2010 earthquake in  
            Humboldt County, that was damaged or destroyed by that  
            earthquake, and that has not changed ownership since the date  
            of the disaster, 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.

          5)Provides that a taxpayer's excess disaster loss shall be  
            carried forward to future years for any loss sustained in  
            Humboldt County as a result of the January 2010 earthquake.

          6)States the intent of the Legislature to provide in the annual  
            Budget Act those additional reimbursements to local  
            governments for the property tax revenue reductions due to the  
            January 2010 earthquake in Humboldt County.









                                                                  AB 1690
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          7)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.

          8)Makes findings and declarations that this act fulfills a  
            statewide public purpose because 
          of the Governor's declarations of a state of emergency, which  
            constituted conditions of extreme peril to public health and  
            safety to persons and property within Humboldt County, thus  
            qualifying affected persons for various forms of governmental  
            assistance and relief.

          9)Contains an urgency clause.

           


          EXISTING LAW  :

          1)Provides, under the California Disaster Assistance Act, a list  
            of disasters eligible for full state reimbursement of local  
            agency costs.

          2)Provides for state reimbursement to backfill property tax  
            revenue loss resulting from assessment reductions in areas  
            that the Governor has declared to be in a state of emergency.

          3)Provides for a standard homeowners' property tax exemption of  
            $7,000, and allows dwellings damaged in disasters declared by  
            the Governor to continue eligibility for the exemption.

          4)Allows losses sustained because of a Governor-declared  
            disaster to be carried forward to each of the five taxable  
            years following the loss, or if the loss remains after the  
            five years, extends the loss for the next ten years.

          5)Requires that the state share of reimbursement for local costs  
            due to a disaster not exceed 75% of total state eligible costs  
            unless the local agency is located within a city or county  
            that has adopted a local Hazard Mitigation Plan in accordance  
            with the federal Disaster Mitigation Act as part of the safety  
            element.

           FISCAL EFFECT  :  Unknown








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           COMMENTS  :   

          1)On January 12, 2010, Governor Schwarzenegger declared a state  
            of emergency as a result 
          of the earthquake that occurred in Humboldt County on January 9,  
            2010.  Traditionally, when a disaster has occurred in  
            California that receives a declaration of a state of emergency  
            by the Governor, the state has enacted legislation to keep  
            counties whole with respect to any loss 
          of property tax revenue the local government experienced from  
            reduced property values from the disaster.  This bill follows  
            a longstanding state policy of backfilling county losses  
            resulting from reduced property values.

           2)Support Arguments  .  AB 1690, sponsored by Humboldt County,  
            specifically provides that Humboldt County is eligible for  
            reimbursement due to the loss of property tax resulting from  
            the lower reassessed property value caused by the disaster.   
            Additionally, this bill will allow homeowners to carry forward  
            losses resulting from the earthquake into future taxable years  
            and ensures that standard property tax deductions continue for  
            those displaced from their homes by the earthquake. 

            The California State Association of Counties (CSAC), in  
            support, writes that "this type of disaster assistance is  
            critical to the recovery of the area because it allows owners  
            of homes and business damaged by natural disasters to be  
            eligible to apply for property tax relief."

           3)Opposition Arguments  .  None at this time.

          4)AB 1690 is similar to AB 1662 (Portantino), and AB 1766  
            (Gaines), which are currently pending in the Committee, and  
            other disaster bills that passed out of the Committee last  
            year.  As these disaster relief bills move forward, each will  
            need to be amended to avoid chaptering out issues.
          5)This bill is an urgency measure and will take effect  
            immediately upon the Governor's signature.

          6)This bill is double-referred to the Committee on Revenue and  
            Taxation.
           
          REGISTERED SUPPORT / OPPOSITION  :   









                                                                  AB 1690
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           Support 
           
          County of Humboldt [SPONSOR]
          CA Professional Firefighters
          CA State Association of Counties

           Opposition 
           
          None on file
           
          Analysis Prepared by  :    Debbie Michel / L. GOV. / (916)  
          319-3958