BILL ANALYSIS Ó
AB 2314
Page A
Date of Hearing: April 18, 2016
ASSEMBLY COMMITTEE ON REVENUE AND TAXATION
Sebastian Ridley-Thomas, Chair
AB 2314
(Bigelow) - As Introduced February 18, 2016
2/3 vote. Urgency. Fiscal committee.
SUBJECT: Disaster relief: County of Calaveras: wildfires
SUMMARY: Provides a mechanism for reimbursing Calaveras County
for property tax losses resulting from the reassessment of
properties damaged by the wildfires of September 2015 (2015
wildfires). Specifically, this bill:
1)Requires, by an unspecified date, the Calaveras County auditor
to certify to the Director of Finance an estimate of the
reduction in property tax revenues for the 2015-16 fiscal year
(FY) resulting from the county assessor's reassessment of
eligible properties damaged by the 2015 wildfires, as
specified.
2)Provides that, after the Calaveras County auditor has provided
the Director of Finance with the applicable certification, the
director shall, within 30 days of verifying the county
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auditor's estimate, certify this amount to the State
Controller for allocation to the county.
3)Requires, again by an unspecified date, Calaveras County to
compute and remit to the State Controller for deposit in the
General Fund an amount equal to its original allocation less
the actual property tax losses. If, however, the actual
amount of property tax revenue lost in the 2015-16 FY exceeds
the amount of the original allocation, the State Controller
shall allocate the difference to the county.
4)Contains legislative declarations that a special law is
necessary because of the unique fiscal pressures experienced
by Calaveras County due to the 2015 wildfires.
5)Takes immediate effect as an urgency statute.
EXISTING LAW:
1)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.
2)Authorizes the Governor to proclaim a state of emergency under
specified circumstances. (Government Code Section 8625).
Specifically, the Governor is empowered to proclaim a state of
emergency upon the existence of conditions of disaster or of
extreme peril to the safety of persons and property within the
state, as specified. (Government Code Section 8558(b).)
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FISCAL EFFECT: According to the State Board of Equalization
(BOE), the estimated state allocation resulting from the
reassessment of property damaged by the 2015 wildfires in
Calaveras County is $538,000.
COMMENTS:
1)The author has provided the following statement in support of
this bill:
The Butte Fire destroyed over 70,000 acres, 921 structures
(including 549 homes, 368 outbuildings and 4 commercial
properties), and killed 2 civilians. Many people in
Calaveras County are still misplaced and have yet to begin
picking up the pieces. It is imperative the State offer
financial assistance as the victims of the Butte Fire begin
to rebuild their lives. AB 2314 does just that, by
providing state funding to backfill property tax revenue
loss incurred by Calaveras County due to the Butte Fire.
2)This bill is supported by the Rural County Representatives of
California, which notes the following:
Rural counties rely heavily on property tax as a primary
source of revenue. According to the County Auditor, an
estimated $53.8 million was lost in property value as a
result of the Butte Fire, which equates to a loss of
$540,607 in property tax revenue. AB 2314 would
appropriate sufficient state funds to cover the complete
loss in property tax revenue.
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3)The BOE notes the following in its staff analysis of this
bill:
a) Local governments : "This bill provides state
reimbursement to local governments in Calaveras County for
property tax revenue losses due to the disaster tax relief
given to property owners in the county."
b) Related legislation : "SB 825, the Budget Act of 2016,
Item 9210-102-000 at page 599 to 600 provides Calaveras
County and the special districts located therein with funds
not to exceed $596,000 for property tax, sales and use tax,
and transient occupancy tax losses incurred in the 2015-16
fiscal year related to the 2015 wildfires."
4)Committee Staff Comments:
a) General background : Existing law allows counties to
provide property tax relief to property owners following a
disaster, misfortune, or calamity. The BOE notes that this
relief is available for both Governor-declared disasters
(such as the 2015 wildfires) and site-specific disasters
(such as a single-home fire). This law allows the county
assessor to reassess the damaged property to recognize the
property's loss in value following the disaster.
Of course, disasters also negatively impact local
governments as a result of unexpected reductions in
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property tax revenues. Prior to the last few years<1>, the
state historically would reimburse local governments for
the property tax revenue loss associated with reassessments
triggered by a Governor-declared disaster. Such
reimbursements were typically limited to losses incurred in
the fiscal year in which the disaster occurred.
b) The Butte and Valley Fires : On September 9, 2015, the
Butte Fire started in Amador County and spread into
Calaveras County, burning thousands of acres and destroying
multiple structures. As a result, Governor Brown
proclaimed a state of emergency on September 11, 2015 for
both Amador and Calaveras Counties.
The following day, on September 12, 2015, the Valley Fire
began in Lake County and spread into Napa County. The fire
burned thousands of acres of land; destroyed multiple
structures, including homes; and necessitated the
evacuation of residents. The fire also damaged critical
infrastructure, and forced the closure of major highways
and local roads. Thus, on September 13, 2015, Governor
Brown proclaimed a state of emergency in both Lake and Napa
Counties.
On September 21, 2015, Governor Brown sent letters to
President Obama requesting Presidential major disaster
declarations for the state following the Butte Fire and
Valley Fire. The Governor noted that the fires had
scorched more than 145,000 acres, taken lives, and
destroyed thousands of homes and structures. Specifically,
the Governor noted that the Butte Fire had burned over
-------------------------
<1> The BOE notes that, "backfill has not been provided for any
wildfires occurring after July 2008." The BOE also notes that
the most recent backfill that the state provided in connection
with a Governor-declared disaster was for the San Bruno gas
explosion in 2009.
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70,760 acres, and destroyed at least 475 homes and 343
nonresidential properties. The Governor also noted that
the Butte fire had, as of that date, taken two lives. The
Valley Fire, in turn, had burned over 75,111 acres,
destroyed 1,238 homes, and taken three lives.
c) This bill : This bill provides statutory language
necessary to backfill property tax revenue losses incurred
by Calaveras County following the Butte Fire.
Specifically, the county will estimate its property tax
losses, the Director of Finance will verify this estimate,
and the State Controller will allocate the verified amount
to the county. In addition, this bill contains a "true-up"
provision. Specifically, this bill requires a subsequent
corrective adjustment based on actual property tax revenue
losses in the county.
d) When and where to provide relief : Historically, the
state would backfill county property tax losses following a
Governor-declared disaster as a matter of course. This has
not been the case in recent years, however. In fact, the
BOE points to numerous disasters in the past few years
(such as the May 2014 fires in San Diego County) for which
no property tax backfill was provided. Thus, this bill
would mark a departure from recent legislative practice.
In addition, it should be noted that this bill's disaster
relief is confined to Calaveras County. No provisions are
included for Amador, Lake, or Napa Counties, which were
also negatively impacted by the wildfires of 2015.
REGISTERED SUPPORT / OPPOSITION:
Support
AB 2314
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California State Association of Counties
Rural County Representatives of California
Opposition
None on file
Analysis Prepared by:M. David Ruff / REV. & TAX. / (916)
319-2098