BILL ANALYSIS Ó
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|SENATE RULES COMMITTEE | AB 1378|
|Office of Senate Floor Analyses | |
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THIRD READING
Bill No: AB 1378
Author: Holden (D)
Introduced:2/27/15
Vote: 21
SENATE GOVERNANCE & FIN. COMMITTEE: 7-0, 7/8/15
AYES: Hertzberg, Nguyen, Beall, Hernandez, Lara, Moorlach,
Pavley
SENATE APPROPRIATIONS COMMITTEE: 7-0, 8/27/15
AYES: Lara, Bates, Beall, Hill, Leyva, Mendoza, Nielsen
ASSEMBLY FLOOR: 80-0, 6/1/15 - See last page for vote
SUBJECT: Property tax: base year value transfersProperty tax:
base year value transfers.
SOURCE: Author
DIGEST: This bill provides that a claimants spouse shall not be
deemed as a claimant for purposes of base year value transfers.
ANALYSIS:
Existing law:
1)Provides that all property is taxable unless explicitly
exempted by the Constitution or federal law.
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2)Limits the maximum amount of any ad valorem tax on real
property at 1% of full cash value, and directs assessors to
only reappraise property when newly constructed, or ownership
changes.
3)Allows homeowners over the age of 55 and disabled persons
(regardless of age) to transfer their home's base year values
to a replacement home of equal or lesser value within the same
county (Proposition 60, 1988, and Proposition 110, 1990), or
to homes in counties that adopt ordinances allowing the
transfer (Proposition 90, 1990).
4)Defines "claimant" as any eligible person claiming the base
year transfer.
5)Limits claimants to one base-year value transfer.
This bill:
1)Provides that a claimant's spouse shall not be deemed as a
claimant for purposes of base year value transfers by deleting
references to the spouse from the relevant section of the
Revenue and Taxation Code, thereby allowing a spouse to
subsequently claim another base year value transfer.
2)Applies the change solely to claims filed on or after January
1, 2016, by individuals who have not previously been granted a
transfer.
Background
Because the Constitution doesn't specify eligibility
requirements, state law details them for base year value
transfers. Instead of allowing infinite transfers, state law
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limits taxpayers to one transfer, as a "claimant" is eligible
only when an assessor has not previously granted a base year
transfer. Currently, the law only allows individuals to claim a
second base year value transfer after becoming 55 years of age,
then another should they subsequently become disabled, or vice
versa. If the claimant has a spouse who is also an owner of
record of the home, then the spouse is considered a claimant,
and therefore precluded from claiming a base year transfer in
the future.
Comments
Currently, whenever a taxpayer transfers a base year value to a
replacement property, his or her spouse is permanently precluded
for subsequently claiming a base year value transfer if their
name is on the title, as they are considered a "claimant." AB
1378 deletes spouses from that term's definition. However,
under current law, taxpayers can also avoid this "marriage
penalty" by simply keeping the spouse's name off of the title of
either the original home, or failing that, keep the original
claimant's name off the replacement home when they buy it.
Additionally, currently law allows the spouses of individuals
who own property separately, and are not themselves over 55 or
disabled, but reside on a property with a person who is but not
on title, to claim the base year value transfer on their behalf.
By deleting cohabitating spouses from the definition of
"claimant," AB 1378 allows for second transfers, but at the cost
of always requiring the eligible person to claim the transfer,
and be a recorded owner of both properties.
The Board of Equalization (BOE) collects data from counties to
ensure that one taxpayer is not filing multiple claims for
benefits when the taxpayer is not eligible. In this case, state
law requires BOE to maintain a database of base year value
transfer claimants, so the name of both the claimant and the
spouse is entered into the database. If a claimant's spouse
subsequently applies, the BOE database would match the name, and
the transfer could not be granted. AB 1378's change ensures
that the spouse's name didn't go in the database, so that he or
she can maintain eligibility for a future transfer. However,
because this bill is prospective, names currently in the
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database would remain ineligible.
FISCAL EFFECT: Appropriation: No Fiscal
Com.:YesLocal: No
According to the Senate Appropriations Committee, AB 1378
results in a $350,000 annual property tax revenue loss,
increasing annually thereafter.
SUPPORT: (Verified8/28/15)
California Assessors Association
California Association of Realtors
California Taxpayers Association
Howard Jarvis Taxpayers Association
OPPOSITION: (Verified8/28/15)
None received
ARGUMENTS IN SUPPORT: According to the author, "Assembly Bill
1378 recognizes the evolving nature of marriage relations and
living patterns of Californians and expands eligibility for a
Proposition 60/90 transfer to include one transfer per person in
a recognized long-term relationship. Assembly Bill 1378 ensures
California law recognizes all types of marriages, cohabitations
and housing situations."
ASSEMBLY FLOOR: 80-0, 6/1/15
AYES: Achadjian, Alejo, Travis Allen, Baker, Bigelow, Bloom,
Bonilla, Bonta, Brough, Brown, Burke, Calderon, Campos, Chang,
Chau, Chávez, Chiu, Chu, Cooley, Cooper, Dababneh, Dahle,
Daly, Dodd, Eggman, Frazier, Beth Gaines, Gallagher, Cristina
Garcia, Eduardo Garcia, Gatto, Gipson, Gomez, Gonzalez,
Gordon, Gray, Grove, Hadley, Harper, Roger Hernández, Holden,
Irwin, Jones, Jones-Sawyer, Kim, Lackey, Levine, Linder,
Lopez, Low, Maienschein, Mathis, Mayes, McCarty, Medina,
Melendez, Mullin, Nazarian, Obernolte, O'Donnell, Olsen,
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Patterson, Perea, Quirk, Rendon, Ridley-Thomas, Rodriguez,
Salas, Santiago, Steinorth, Mark Stone, Thurmond, Ting,
Wagner, Waldron, Weber, Wilk, Williams, Wood, Atkins
Prepared by:Colin Grinnell / GOV. & F. / (916) 651-4119
8/31/15 9:05:48
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