BILL ANALYSIS
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|SENATE RULES COMMITTEE | AB 15|
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THIRD READING
Bill No: AB 15
Author: Fuentes (D)
Amended: 9/4/09 in Senate
Vote: 27 - Urgency
SENATE REVENUE & TAXATION COMMITTEE : 8-0, 7/8/09
AYES: Wolk, Walters, Alquist, Ashburn, Florez, Padilla,
Runner, Wiggins
SENATE APPROPRIATIONS COMMITTEE : 9-3, 8/27/09
AYES: Kehoe, Corbett, Denham, Hancock, Leno, Oropeza,
Price, Wolk, Yee
NOES: Cox, Walters, Wyland
NO VOTE RECORDED: Runner
ASSEMBLY FLOOR : 79-0, 6/1/09 - See last page for vote
SUBJECT : Disaster relief: wildfires in 2008
SOURCE : Author
DIGEST : This bill 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. This
bill requires counties, as a condition of eligibility for
reimbursement of property tax losses associated with
downward reassessments of properties affected by a fire
CONTINUED
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disaster occurring after January 1, 2010, to demonstrate
that the county (1) provides adequate structural fire
protection for each state responsibility area in its
jurisdiction, (2) was in compliance with specified
requirements to take preventive measures in very high fire
hazard severity zones, and (3) has implemented a fire risk
reduction public education program. This bill is
contingent on AB 666 (Jones) and SB 505 (Kehoe) being
signed.
Senate Floor Amendments of 9/4/09 resolve conflicts between
this bill and AB 50 (Fuentes) which also amends the same
sections of the Revenue and Taxation Code by inserting
provisions of AB 50 into AB 15 with contingent enactment
language that prevents AB 15 from subsequently
chaptering-out the provisions of AB 50.
ANALYSIS :
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 . 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. Provides certain
disaster-related exceptions to the general rule that a
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property must be owner-occupied on the lien date to
receive the homeowners' exemption. Under these
exceptions, properties that were eligible for the
homeowners' 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.
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 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. Requires counties, as a condition of eligibility for
reimbursement of property tax losses associated with
downward reassessments of properties affected by a fire
disaster occurring after January 1, 2010, to demonstrate
that the county (a) provides adequate structural fire
protection for each state responsibility area in its
jurisdiction, (b) was in compliance with specified
requirements to take preventive measures in very high
fire hazard severity zones, and (c) has implemented a
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fire risk reduction public education program.
This bill incorporates additional changes in Sections 218,
17207, and 24347.5 of the Revenue and Taxation Code
proposed by AB 50 (Nava), to be operative only if AB 50 and
this bill are both enacted and become effective on or
before January 1, 2010, both bills amend those sections,
this bill is enacted after AB 50, and both AB 666 (Jones)
and SB 505 (Kehoe) are enacted.
This bill is contingent on the passage of AB 666 and SB
505.
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."
FISCAL EFFECT : Appropriation: Yes Fiscal Com.: Yes
Local: Yes
According to the Senate Appropriations Committee:
Fiscal Impact (in thousands)
Major Provisions 2009-10 2010-11 2011-12 Fund
Property tax reimbursement $264
Special*
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Homeowner's exemption $36 annually until homes are
built General
Disaster loss carryover $6 (FY 2008-09) for Los
Angeles County General
* Special Fund for Economic Uncertainties (NOTE: This
Fund is continuously appropriated, so requiring an
allocation for this purpose constitutes an appropriation)
SUPPORT : (Verified 9/4/09)
Board of Equalization
Regional Council of Rural Counties
ASSEMBLY FLOOR :
AYES: Adams, Ammiano, Anderson, Arambula, Beall, Bill
Berryhill, Tom Berryhill, Blakeslee, Blumenfield,
Brownley, Buchanan, Caballero, Charles Calderon, Carter,
Chesbro, Conway, Cook, Coto, Davis, De La Torre, De Leon,
DeVore, Duvall, Emmerson, Eng, Evans, Feuer, Fletcher,
Fong, Fuentes, Fuller, Furutani, Gaines, Galgiani,
Garrick, Gilmore, Hagman, Hall, Harkey, Hayashi,
Hernandez, Hill, Huber, Huffman, Jeffries, Jones, Knight,
Krekorian, Lieu, Logue, Bonnie Lowenthal, Ma, Mendoza,
Miller, Monning, Nava, Nestande, Niello, Nielsen, John A.
Perez, V. Manuel Perez, Portantino, Price, Ruskin, Salas,
Saldana, Silva, Skinner, Smyth, Solorio, Audra
Strickland, Swanson, Torlakson, Torres, Torrico, Tran,
Villines, Yamada, Bass
NO VOTE RECORDED: Block
DLW:mw 9/2/09 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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