BILL ANALYSIS
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|SENATE RULES COMMITTEE | AB 50|
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THIRD READING
Bill No: AB 50
Author: Nava (D), et al
Amended: 9/1/09 in Senate
Vote: 27 - Urgency
SENATE GOVERNMENTAL ORG. COMMITTEE : 10-0, 6/23/09
AYES: Wright, Harman, Benoit, Denham, Negrete McLeod,
Oropeza, Padilla, Price, Wiggins, Yee
NO VOTE RECORDED: Calderon, Florez, Wyland
SENATE REVENUE & TAXATION COMMITTEE : 8-0, 7/8/09
AYES: Wolk, Walters, Alquist, Ashburn, Florez, Padilla,
Runner, Wiggins
SENATE APPROPRIATIONS COMMITTEE : 8-5, 8/27/09
AYES: Kehoe, Corbett, Hancock, Leno, Oropeza, Price, Wolk,
Yee
NOES: Cox, Denham, Runner, Walters, Wyland
ASSEMBLY FLOOR : 78-0, 6/02/09 - See last page for vote
SUBJECT : Disaster relief
SOURCE : County of San Diego
DIGEST : This bill adds the wildfires that occurred in
southern California in 2007 to the list of disasters that
are eligible for full reimbursement of the local agency
costs under the California Disaster Assistance Act. This
bill also adds the wildfires that occurred in Santa Barbara
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County in 2008 and 2009 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.
ANALYSIS : On November 14, 2008, Governor Arnold
Schwarzenegger proclaimed a state of emergency declaring
the wildfires that occurred in Santa Barbara County to be a
state disaster. On November 18, 2008, President George W.
Bush proclaimed a federal disaster for the wildfires that
occurred in Los Angeles, Orange, Riverside, and Santa
Barbara Counties. On May 5, 2009, Governor Arnold
Schwarzenegger proclaimed a state of emergency declaring
the wildfires that occurred in Santa Barbara County to be a
state disaster. As of June 19, 2009, President Barack
Obama had not proclaimed a federal disaster for this
wildfire.
Existing law, the California Disaster Assistance Act
(CDAA), provides that the state must pay 75 percent of the
non-federal share of eligible costs for any state-declared
emergency. For some statutorily specified disasters the
state is required to pay 100 percent of the non-federal
cost.
Existing law allows the Legislature to provide for a state
share of local costs that exceeds 75 percent of total state
eligible costs if the city, county, or city and county has
adopted a local hazard mitigation plan (HMP) in accordance
with the federal Disaster Mitigation Act (DMA) of 2000.
Existing law prohibits the state share of reimbursement for
local costs due to a disaster from exceeding 75 percent of
total state eligible costs, unless the local agency is
located within a city or county that has adopted a local
HMP in accordance with the federal DMA as part of the
safety element.
Existing law requires the HMP to include all of the
following elements called for in the federal act
requirements:
1. An initial earthquake performance evaluation of public
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facilities that provide essential services, shelter, and
critical government functions.
2. An inventory of private facilities that are potentially
hazardous, including, but not limited to, multiunit,
soft story, concrete tilt-up, and concrete frame
buildings.
3. A plan to reduce the potential risk from private and
governmental facilities in the event of a disaster.
Existing federal law requires, as specified in the federal
Disaster Mitigation Act of 2000 (Public Law 106-390; 42
U.S.C. Sec.5121 et seq.) that:
1. As a condition of receipt of an increased federal share
for hazard mitigation measures, a state, local, or
tribal government shall develop and submit for approval
to the President a mitigation plan that outlines
processes for identifying the natural hazards, risks,
and vulnerabilities of the area under the jurisdiction
of the government. Each mitigation plan developed by a
local or tribal government shall:
A. Describe actions to mitigate hazards, risks, and
vulnerabilities identified under the plan.
B. Establish a strategy to implement those actions.
Existing law specifies that local jurisdictions that have
not adopted a local hazard mitigation plan shall be given
preference by the Office of Emergency Services (now the
California Emergency Management Agency) in recommending
actions to be funded from the Pre-Disaster Mitigation
Program, the Hazard Mitigation Grant Program, and the Flood
Mitigation Assistance Program to assist the local
jurisdiction in developing and adopting a local hazard
mitigation plan, subject to available funding from the
Federal Emergency Management Agency.
The California Constitution, Article XIII, Section 3(k)
exempts from property tax the first $7,000 of the assessed
value of an owner-occupied principal place of residence.
This is commonly referred to as the "homeowners'
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exemption."
Existing law provides that the $7,000 homeowners' exemption
is available to a dwelling that is occupied as the owner's
principal place of residence. Eligibility is generally
continuous once granted. However, if a property becomes
vacant or is under construction on the lien date, which is
January 1, it is not eligible for the exemption for the
upcoming tax year.
Existing law authorizes a county board of supervisors to
provide by ordinance for the reassessment of property that
is damaged or destroyed by a major disaster without the
fault of the assessed.
Existing law allows non-business taxpayers with casualty
losses that are not reimbursed by insurance and that exceed
$100 plus 10 percent of the taxpayer's adjusted gross
income (AGI) to claim these losses as itemized deductions
on their tax return. Taxpayers may carry forward 100
percent 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
percent of AGI threshold, but are subject to the same carry
forward rules that apply to individual taxpayers.
Existing law 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.
This bill:
1. Makes the following changes to the Government Code:
A. 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.
B. 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
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are potentially hazardous, and a plan to reduce the
potential risk from private and government
facilities in the event of a disaster.
2. Makes the following changes to the Revenue and Taxation
Code:
A. Provides a mechanism for reimbursing Santa
Barbara County for property tax losses resulting
from the reassessment of properties damaged by the
Santa Barbara Wildfires.
B. 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
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.
C. Provides that for any fire disaster occurring
after January 1, 2010, the Department of Finance
shall not certify a county auditor's estimate of
the total amount of the reduction in property tax
revenues resulting from the reassessment by the
county assessor of those properties that are
eligible properties as a result of those disasters,
unless the county demonstrates compliance with all
of the following requirements at the time the fire
disaster occurred:
(1) The county had at least one of the
following for each state responsibility area
within its jurisdiction:
(a) Its own structural fire protection
services.
(b) A contract providing structural fire
protection services by the Department of
Forestry and Fire Protection that requires
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all state costs to provide structural fire
protection be included in the contract,
including, but not limited to, salaries, and
wages benefits, retirement, distributed
administrative costs, workers' compensation,
equipment, and costs associated with entering
into the contract.
(c) Structural fire protection services
from another county, city, special district,
or political subdivision of the state or
another entity organized solely to provide
fire protection services that is monitored
and funded by a county or other public
entity.
(2) The county was in compliance with Chapter 6.8
(commencing with Section 51175) of Part 1 of
Division 1 of Title 5 of the government Code.
(3) If a county had land designated as a very high
fire hazard severity zone of state responsibility
area within its jurisdiction, the county had a fire
risk reduction public education program that
included, but was not limited to, recommendations
for ignition-resistant landscaping, creating and
maintaining defensible space around homes and other
structures, and ignition-resistant construction
principles.
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.
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5. Provides that this bill is contingent upon enactment of
AB 666 (Jones) and SB 505 (Kehoe).
NOTE: Please refer to the Senate Governmental
Organization Committee analysis for detailed
background information.
Related legislation
SB 1537 (Kehoe) Chapter 355, Statutes of 2008 , provides for
up to 100 percent state reimbursement to local governments
for the costs associated with the Wildfires that devastated
Southern California in October, 2007. Becomes operative
only if SB 1764 of the 2007-2008 Regular Session is
enacted, however, SB 1764 was vetoed by the Governor.
SB 1764 (Kehoe), 2007-2008 Legislative Session , would have
required a local agency, on or after on January 1, 2010, to
obtain an annual certification by the State Fire Marshal to
be eligible to receive a percentage for a state share for
an eligible project in excess of 75 percent in his vetoed
message the Governor stated:
I am returning Senate Bill 1764 without my signature.
This bill prohibits a city or county, in the event of a
wildfire, from receiving full reimbursement from the
state for disaster-related costs, unless that city or
county has obtained certification from the Department
of Forestry and Fire Protection (CALFIRE) for specified
fire protection requirements.
When a fire disaster occurs, it is vital that all
levels of government commit resources to protect public
health and safety. Local governments should have
incentives to increase prevention, but they should also
have incentives to respond to a disaster whenever one
might occur.
Current law correctly requires local governments to
have adopted an overarching Local Hazard Mitigation
Plan and submitted it to the state to receive 100
percent of their California Disaster Assistance Act
funding. This type of broad based planning is
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appropriate and serves a dual purpose because federal
grant distribution is also based on those plans. By
preventing a local government from receiving
reimbursement from the state unless they meet the
specifications of this bill, it provides a perverse
incentive for areas that might not have met the bill's
requirements, even for technical reasons.
A more appropriate fiscal incentive program would not
focus on holding hostage funds already expended in an
emergency, but would provide both local and state
funding to reward disaster preparation and prevention.
The Emergency Response Initiative I proposed in this
year's budget would have done so. As I proposed, this
initiative would have provided $139 million each year
to initially increase our disaster response
capabilities. This could have been expanded to provide
financial incentives, through grants to local
governments, for increasing disaster prevention
activities as well. Unfortunately, the Legislature
rejected this proposal.
Nonetheless, I look forward to working with the
Legislature in the next session to continue to look for
new ways to fund both disaster prevention and response
activities.
For these reasons, I am returning this bill without my
signature.
FISCAL EFFECT : Appropriation: Yes Fiscal Com.: Yes
Local: Yes
According to the Senate Appropriations Committee analysis:
Fiscal Impact (in thousands)
Major Provisions 2009-10
2010-11 2011-12 Fund
Property tax $2,811
Special*
reimbursement
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Homeowner's exemption $26 annually until homes are
rebuilt General
Disaster Loss carryover $17 (FY
2008-09) General
CDAA: state assumption $5,500 payable over several FYs
General
of local share of disaster
costs
*Special Fund For Economic Uncertainties (NOTE: this fund
is continuously appropriated, so requiring an allocation
for this purpose constitutes an appropriation)
SUPPORT : (Verified 9/1/09)
County of San Diego (source)
American Federation of State, County and Municipal
Employees
California Special Districts Association
California State Association of Counties
County of Santa Barbara
ASSEMBLY FLOOR :
AYES: Adams, Ammiano, Anderson, Arambula, Beall, 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: Bill Berryhill, Block
TSM:do 9/1/09 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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