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: 9/4/09 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
Santa Barbara 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
CONTINUED
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of excess disaster losses. The bill also 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. These
changes are necessary to ensure that state statute is
consistent with the federal requirements for hazard
mitigation plans. A majority of the counties and cities in
California, including all of the counties covered by this
proposal, have completed HMPs as per the federal
guidelines.
Senate Floor Amendments of 9/4/09 (1) insert the provisions
of AB 79 (Duvall) which add to disaster relief provisions
in the Personal Income Tax Law, Corporation Tax Law, and
Property Tax for Orange, Riverside, and San Bernardino
Counties, and taxpayers in those counties, affected by the
2009 Southern California wildfires; (2) add chaptering out
language to prevent conflicts with AB 15 (Fuentes); and (3)
delete co-authors.
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.
Income and Corporation Taxes
Existing state and federal law allows taxpayers to deduct
disaster losses in the year the loss occurs or in the
preceding year by filing an amended return. Disaster
losses result from fires, storms, floods or other natural
events proclaimed a disaster by the president or the
Governor. Disaster losses are the amounts not compensated
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for by insurance or other means.
Existing federal law, which California conforms to, only
allows loss deductions for personal income taxes that
exceed $100 per taxpayer and 10 percent of their adjusted
gross income for the year.
Current law limits disaster losses for corporate taxpayers
to the amounts set by stat law for net operating losses, 55
percent for 2000 and 2001, 60 percent for 2002 and 2003,
and 100 percent for 2004 and thereafter and the
carry-forward to five years. State law allows a limited
percentage to be carried forward up to 10 years.
Starting with the forest fires in 1985, and approximately
30 times thereafter for various disasters, the Legislature
enacted measures that allow a 100 percent carry-forward of
excess disaster losses for up to five years and a
carry-forward of the excess disaster losses under the above
percentages for up to an additional 10 years.
This bill enacts identical allowances for taxpayers with
excess disaster losses in Orange, Riverside, and San
Bernardino resulting from wildfires in those counties
occurring in November, 2008 and in wildfires that incurred
in Santa Barbara County in 2008 and 2009.
Property Taxes
Existing law allows counties to adopt ordinances allowing
taxpayers to apply for a reassessment of property destroyed
or damaged by "a major misfortune or calamity" if the
governor proclaims a disaster. Taxes that had previously
been paid are deemed "excess" as a result of a downward
reassessment and are refunded to the taxpayer. County
Assessors must defer the payment of property taxes when
they receive a timely filed application from an affected
taxpayer.
Beginning in 1990, the Legislature provided state
reimbursement of property tax revenue losses to local
governments resulting from the downward-reassessment of
damaged or destroyed properties for most disasters for one
year.
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The bill enacts identical provisions that require the state
to backfill first-year local revenue losses resulting form
the reassessment of property in Orange, Riverside, and San
Bernardino resulting from wildfires and those counties
occurring in 2008, and also for Santa Barbra Count for
wildfires in 2008 and 2009.
The bill requires that each affected county certify to the
Director of Finance an estimate of the amount of reduced
2008-09 property tax revenues resulting from reassessment
by October 30, 2009. The Director of Finance then verifies
and certifies the revenue loss estimate to the Controller,
who then sends the certified amount to the affected county.
Before June 30, 2010, each affected county must remit to
the Controller any overestimated balance. If the loss was
underestimated; the Controller must return the difference
to the affected county.
Property Taxes (Homeowners' Exemption)
Existing law provides a homeowners' exemption from property
t0061es equal to $7,000 in assessed value (at a one percent
property tax rate, the exemption reduces property taxes by
roughly $70) for owner-occupied home. Once granted,
homeowner's' exemption are generally permanent. However,
an Assessor may deny a homeowner's exemption if the
property becomes vacant or is under construction as of the
January 1st lien date.
The bill provides that Assessors may not disqualify an
otherwise qualified residence for a homeowners;' exemption
solely on the basis that the dwelling was temporarily
damage, destroyed, under reconstruction by the owner, or
temporarily uninhabited as a result of restricted access s
to the property due to the Orange, Riverside and San
Bernardino resulting from wildfires in those counties
occurring in 2008 and for Santa Barbara County wildfires in
2008-09.
This bill also resolves conflicts between AB 50 and AB 15
((Fuentes) which also amends the same sections of the
Revenue and Taxation Code by inserting provisions of AB 15
into AB 50 with contingent enactment language that prevents
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AB 50 from subsequently chaptering AB 15's provisions out.
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
Homeowner's exemption $26 annually until homes are
rebuilt General
Disaster Loss carryover $17 (FY
2008-09) General
*Special Fund For Economic Uncertainties (NOTE: this fund
is continuously appropriated, so requiring an allocation
for this purpose constitutes an appropriation)
SUPPORT : (Verified 9/8/09)
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,
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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 9/8/09 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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