BILL ANALYSIS Ó
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|SENATE RULES COMMITTEE | SB 1304|
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VETO
Bill No: SB 1304
Author: Huff (R), et al.
Amended: 8/15/16
Vote: 27 - Urgency
SENATE GOVERNANCE & FIN. COMMITTEE: 7-0, 5/11/16
AYES: Hertzberg, Nguyen, Beall, Hernandez, Lara, Moorlach,
Pavley
SENATE APPROPRIATIONS COMMITTEE: Senate Rule 28.8
SENATE FLOOR: 36-0, 5/27/16
AYES: Allen, Anderson, Bates, Beall, Block, Cannella, De León,
Fuller, Gaines, Galgiani, Glazer, Hall, Hancock, Hernandez,
Hertzberg, Hill, Huff, Jackson, Leno, Leyva, Liu, McGuire,
Mendoza, Mitchell, Monning, Moorlach, Morrell, Nguyen,
Nielsen, Pan, Pavley, Roth, Stone, Vidak, Wieckowski, Wolk
NO VOTE RECORDED: Berryhill, Hueso, Lara, Runner
SENATE FLOOR: 39-0, 8/30/16
AYES: Allen, Anderson, Bates, Beall, Berryhill, Block,
Cannella, De León, Fuller, Gaines, Galgiani, Glazer, Hall,
Hancock, Hernandez, Hertzberg, Hill, Hueso, Huff, Jackson,
Lara, Leno, Leyva, Liu, McGuire, Mendoza, Mitchell, Monning,
Moorlach, Morrell, Nguyen, Nielsen, Pan, Pavley, Roth, Stone,
Vidak, Wieckowski, Wolk
ASSEMBLY FLOOR: 78-0, 8/29/16 - See last page for vote
SUBJECT: Property taxation: disaster relief: Porter Ranch
methane gas leak
SOURCE: Author
SB 1304
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DIGEST: This bill expands eligibility for disaster
reassessment, allows assessors to consider environmental
contamination when revaluing the property, and applies its
provisions retroactively to taxpayers affected by the Porter
Ranch gas leak.
ANALYSIS:
Existing law:
1)Provides that all property is taxable unless explicitly
exempted by the Constitution or federal law.
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 when
ownership changes.
3)Allows assessors to temporarily reduce value to reflect
substantial damage, destruction, or other factors causing a
decline in value.
4)Permits the Legislature to authorize local agencies to provide
for the assessment or reassessment of taxable property
physically damaged or destroyed for property tax purposes.
a) Allows a county board of supervisors to enact an
ordinance allowing any taxpayer whose property was damaged
or destroyed without his or her fault to apply for
reassessment. The ordinance can apply to large disasters,
such as earthquakes or wildfires, or site-specific
incidents, like house fires.
b) Directs assessors to revalue property that's physically
damaged by the disaster if the county enacts the ordinance.
c) Allows assessors to revalue property to reflect
restricted access to property resulting from the disaster
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only when the Governor has issued a disaster proclamation
as a result of the disaster.
d) Does not provide for any reduction in value resulting
from environmental contamination.
This bill:
1)Expands eligibility for disaster reassessment to reflect
restricted access to include a major misfortune or calamity in
an area subsequently proclaimed by the Governor to be in a
state of emergency, not only a disaster, so long as the
property was damaged or destroyed by the major misfortune or
calamity that caused the Governor to issue the proclamation.
2)Allows the assessor to consider damage from environmental
contamination when revaluing the property to its
disaster-affected value.
3)States that its provisions apply retroactively to the County
of Los Angeles with respect to property located in the Porter
Ranch neighborhood of the City of Los Angeles.
4)Allows affected taxpayers to apply for reassessment within 12
months of the date the bill is enacted.
5)Provides that if repairs do not progress by the third lien
date following the disaster, the property's assessed value
reverts to the lower of market value in its current damaged
state or Proposition 13 assessed value.
6)States legislative findings and declarations regarding the
necessity for a special law for the Porter Ranch neighborhood
of the City of Los Angeles.
7)States that its change does not alter any claims or defenses
related to diminution of property values, and that it does not
establish a presumption that property values have declined, or
that any property is in any way damaged, destroyed, or
contaminated for purposes of specified civil actions.
8)Contains an urgency clause stating that the measure takes
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effect immediately.
Background
On October 23rd, 2015, a massive natural gas leak from a natural
gas storage facility was detected in Southern California, known
today as the Aliso Canyon or Porter Ranch gas leak. The leak
sickened and displaced residents, and may be one of the most
harmful environmental events in the country's history, according
to news reports. The Governor issued a proclamation declaring
the situation a state of emergency on January 6, 2016. However,
the gas leak didn't cause physical damage to property, and
neither the Governor's proclamation nor any subsequent
legislative bill declared the situation a disaster, so the Los
Angeles County Board of Supervisors cannot enact an ordinance
directing the assessor to revalue properties to reflect the gas
leak's impact on property values.
State law sets forth a very specific process for taxpayers to
obtain disaster relief reassessments. First, a county must
adopt an ordinance, which all counties except Fresno have done.
Taxpayers must then file a written request with the assessor
before the date specified in the ordinance, or within 12 months
of the major misfortune or calamity, whichever is later. In the
application, the taxpayer must show the condition and value of
property immediately after the damage or destruction, and the
dollar amount of the damage. Upon receipt of a complete
application, the assessor must then appraise the property, and
determine separately the full cash value of the land and
improvements before and after the disaster. If the value of the
damage exceeds $10,000, the assessor reduces the value and the
taxes due to reflect the disaster's impact, and sends a notice
to the taxpayer. The county must refund any previously overpaid
taxes resulting from the lower value, which remains in place
until the taxpayer repairs, restores, or reconstructs the
property. Taxpayers can also file a claim to postpone the next
installment of property taxes that occurs immediately after the
disaster, which postpones that payment without penalty or
interest until the county assessor has reassessed the property.
After the reassessment, the tax collector issues a corrected tax
bill. Once repaired or restored, the assessor again revalues
the property; however, the post-disaster value cannot exceed the
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previous base year value, unless any new square footage was
added, which the assessor would then appraise at full market
value.
FISCAL EFFECT: Appropriation: No Fiscal
Com.:NoLocal: No
According to the Assembly Appropriations Committee, SB 1304's
fiscal impact is insignificant.
SUPPORT: (Verified8/15/16)
Los Angeles County Assessor Jeffrey Prang
BOE Member George Runner
California Apartment Association
California Assessors Association
OPPOSITION: (Verified8/15/16)
None received
ARGUMENTS IN SUPPORT: According to the author, "Residents of
the Porter Ranch in the City of Los Angles had been driven from
their homes and neighborhood due to harmful gas that was
released into the air from neighboring natural gas wells in
Aliso Canyon in October of 2015. After being displaced for
months, residents have struggled to manage the lasting impacts
of the damage to both their health and property. This bill is
an important step of financial assistance to residents of Porter
Ranch during this time of healing and repairing."
GOVERNOR'S VETO MESSAGE:
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I am returning Senate Bill 1304 without my signature.
This bill allows for retroactive property tax assessments
for those affected by the Porter Ranch gas leak and expands
the basis for future tax relief in similar circumstances.
Under existing law, the county assessor can already reduce
the assessed value of homes to reflect changed market
conditions. I think that should be sufficient.
ASSEMBLY FLOOR: 78-0, 8/29/16
AYES: Achadjian, Alejo, Travis Allen, Arambula, Atkins, Baker,
Bigelow, Bloom, Bonilla, Bonta, Brough, Brown, Burke, Campos,
Chang, Chau, Chávez, Chiu, Chu, Cooley, Cooper, Dababneh,
Dahle, Daly, Dodd, Eggman, Frazier, Beth Gaines, Gallagher,
Cristina Garcia, Eduardo Garcia, Gatto, 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,
Patterson, Quirk, Ridley-Thomas, Rodriguez, Salas, Santiago,
Steinorth, Mark Stone, Thurmond, Ting, Wagner, Waldron, Weber,
Wilk, Williams, Wood, Rendon
NO VOTE RECORDED: Calderon, Gipson
Prepared by:Colin Grinnell / GOV. & F. / (916) 651-4119
10/25/16 14:29:21
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