BILL ANALYSIS
AB 15
Page 1
ASSEMBLY THIRD READING
AB 15 (Fuentes)
As Amended May 21, 2009
2/3 vote. Urgency
REVENUE & TAXATION 9-0 LOCAL GOVERNMENT 7-0
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|Ayes:|Charles Calderon, DeVore, |Ayes:|Caballero, Knight, |
| |Beall, Coto, Harkey, Ma, | |Arambula, Davis, Duvall, |
| |Nielsen, Portantino, Fong | |Krekorian, Skinner |
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APPROPRIATIONS 17-0
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|Ayes:|De Leon, Nielsen, Ammiano, | | |
| |Charles Calderon, Davis, Duvall, | | |
| |Fuentes, Hall, Harkey, Miller, | | |
| |John A. Perez, Price, Skinner, | | |
| |Solorio, Audra Strickland, | | |
| |Torlakson, Krekorian | | |
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SUMMARY : Adds the wildfires that occurred in Los Angeles and
Ventura Counties in 2008 (2008 Wildfires) 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.
Specifically, this bill :
1)Provides a mechanism for reimbursing the counties for property
tax losses resulting from the reassessment of properties damaged
by the 2008 Wildfires.
2)Provides that any dwelling that qualified for a homeowners'
property tax exemption before the commencement dates of the 2008
Wildfires, that was damaged or destroyed by the 2008 Wildfires,
and that has not changed ownership since the commencement dates
of these disasters, 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
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temporarily uninhabited as a result of restricted access.
3)Provides that any taxpayer's excess disaster loss resulting from
the 2008 Wildfires 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.
4)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.
5)Takes effect immediately as an urgency measure.
EXISTING LAW :
1)Property Tax Reassessment: Allows each county, by ordinance, to
provide for the reassessment of properties damaged by a
calamity, disaster, or misfortune. Taxpayers owning damaged
property must apply for a reassessment within the time period
specified in the applicable county's ordinance or within 12
months of the misfortune or calamity, whichever is later. The
application for reassessment must show the condition and value
of the property after the damage and the dollar value of the
damage. Once the property is reassessed, the taxpayer is
entitled to a refund of any excess property tax paid on the
property. If the affected property is subsequently repaired,
its value is subject to an upward reassessment by the county.
2)Homeowners' Exemption:
a) Exempts the first $7,000 of the full value of a dwelling
from property tax, when the dwelling is occupied by an owner
as his/her principal residence. However, if a property is no
longer owner-occupied or is vacant on the lien date (January
1), the property is not eligible for the exemption for the
succeeding tax year.
b) Provides certain disaster-related exceptions to the
general rule that a property must be owner-occupied on the
lien date to receive the homeowners' exemption. Under these
exceptions, properties that were eligible for the homeowners'
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exemption immediately before the disaster, do not change
ownership after the disaster, and are vacant solely because
of damage incurred during the disaster, continue to be
eligible for the homeowners' exemption.
FISCAL EFFECT :
1)Property Tax Reassessment: The Board of Equalization (BOE)
estimates that the cost of reimbursing the counties' property
tax losses would be $263,552.
2)Homeowners' Exemption: BOE estimates that extending the
homeowners' exemption to homes that are uninhabitable on the
lien date will result in revenue losses of less than $36,000.
3)Income Tax Losses: The Franchise Tax Board estimates minimal
revenue losses resulting from the carry forward provisions of
this bill.
COMMENTS : The author states, "AB 15 would allow special tax
treatment, called disaster loss treatment, for losses sustained as
a result of the October and November 2008 Los Angeles County
wildfires. The purpose of this bill is to provide immediate tax
relief to individuals and businesses affected by the wildfires.
As an urgency measure, this bill would be effective and operative
immediately upon enactment."
Proponents state, "AB 15 would provide disaster-related tax relief
for losses sustained as a result of wildfires that occurred in Los
Angeles and Ventura Counties. The legislation would include state
reimbursement to backfill property tax revenue losses 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."
Committee staff notes this bill is similar to both AB 50 (Nava)
and AB 79 (Duvall), of 2009. Should all three bills continue to
progress through the Legislature, double-jointing amendments may
become necessary.
Analysis Prepared by : M. David Ruff / REV. & TAX. / (916)
319-2098
AB 15
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FN: 0001034