BILL ANALYSIS
AB 50
Page 1
ASSEMBLY THIRD READING
AB 50 (Nava)
As Amended June 1, 2009
2/3 vote. Urgency
LOCAL GOVERNMENT 7-0 REVENUE & TAXATION 9-0
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|Ayes:|Caballero, Knight, |Ayes:|Charles Calderon, DeVore, |
| |Arambula, Davis, Duvall, | |Beall, Coto, Harkey, Ma, |
| |Krekorian, Skinner | |Nielsen, Portantino, Fong |
|-----+--------------------------+-----+---------------------------|
| | | | |
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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 Santa Barbara
County in 2008 and 2009 (Santa Barbara 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 Santa Barbara County for
property tax losses resulting from the reassessment of
properties damaged by the Santa Barbara Wildfires.
2)Provides that any dwelling that qualified for a homeowners'
property tax exemption before the Santa Barbara Wildfires,
that was damaged or destroyed by the Santa Barbara Wildfires,
and that has not changed ownership since the Santa Barbara
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Wildfires, 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 Santa Barbara 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)Adds the wildfires that occurred in Southern California
starting on or about October 20, 2007, to the list of
disasters eligible for full state reimbursement of local
agency costs.
6)Deletes provisions in current law that require the inclusion
of certain elements in a local hazard mitigation plan,
including an initial earthquake performance evaluation of
public facilities that are potentially hazardous, and a plan
to reduce the potential risk from private and government
facilities in the event of a disaster.
7)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
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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; and,
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' 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.
3)Income Tax Losses:
a) Allows non-business taxpayers with casualty losses that
are not reimbursed by insurance and that exceed $100 plus
10% of the taxpayer's adjusted gross income (AGI) to claim
these losses as itemized deductions on their tax return.
Taxpayers may carry forward 100% of any remaining losses
for up to 10 years. Corporate taxpayers with casualty
losses that are not reimbursed by insurance are not subject
to the $100 plus 10% of AGI threshold, but are subject to
the same carry forward rules that apply to individual
taxpayers; and,
b) Allows both individual and corporate taxpayers who
experience losses as a result of certain named disasters to
claim these losses either in the year in which the loss
occurred or in the preceding year.
FISCAL EFFECT :
1)Property Tax Reassessment: The Board of Equalization (BOE)
estimates that the cost of reimbursing Santa Barbara County's
property tax losses would be roughly $2.8 million.
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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 roughly
$26,000.
COMMENTS : The author has introduced this bill to provide
financial relief to those affected by the Santa Barbara
Wildfires. In addition, this bill provides a property tax
revenue backfill to Santa Barbara County.
Proponents note, "The bill would reimburse Santa Barbara County
for property tax losses related to the wildfires of November
2008. The bill further provides that dwellings that qualified
for the homeowner's property tax exemption may not be denied the
exemptions solely due to it being damaged, destroyed, on
uninhabitable by those wildfires."
Committee staff notes this bill:
1)Was double-referred with the Committee on Local Government,
and passed out of that Committee by a vote of 7 to 0 on April
1, 2009.
2)Is similar to both AB 15 (Fuentes) and AB 79 (Duvall), also
introduced in the current Legislative Session. 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
FN: 0001171