BILL ANALYSIS                                                                                                                                                                                                    



                                                                  AB 157
                                                                  Page  1

          Date of Hearing:   May 28, 2009

                        ASSEMBLY COMMITTEE ON APPROPRIATIONS
                                Kevin De Leon, Chair

                    AB 157 (Anderson) - As Amended:  May 20, 2009 

          Policy Committee:                              Revenue and  
          Taxation     Vote:                            9-0

          Urgency:     No                   State Mandated Local Program:  
          No     Reimbursable:              

           SUMMARY  

          This bill increases, from five years to seven years, the  
          timeframe a property owner has to acquire or construct a  
          property to replace one damaged or destroyed in certain  
          governor-declared disasters and remain eligible to receive a  
          base-year value transfer. It applies to property damaged in  
          disasters occurring after September 30, 2007 and the Cedar Fires  
          in San Diego County of 2003.
           
          FISCAL EFFECT  

          The Board of Equalization (BOE) estimates property tax losses of  
          less than $10,000 annually.
           
           COMMENTS  

           1)Background  . Under Proposition 13, real property is valued at  
            its acquisition price, as increased by 2% per year, until a  
            change-of-ownership or new construction occurs. At that point,  
            the value is reassessed to the property's new market value.  
            Current law also provides for various situations where the  
            base year value of a property is either retained  
            (notwithstanding new construction or a change of ownership),  
            or transferred to another property.  One of these exemptions  
            is for property substantially damaged or destroyed in a  
            state-declared disaster. The owners may transfer the base year  
            value to property acquired or constructed as a replacement  
            within five years of the disaster.  

           2)Rationale  .  The bill is intended to address the lengthy time  
            periods involved in resolving compensation issues and  








                                                                  AB 157
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            rebuilding following the Cedar Fire in 2003. Supporters note  
            that delays are normally prevalent following major disasters,  
            and there are currently added reasons for delays, such as  
            difficulties in obtaining financing.

           Analysis Prepared by  :    Brad Williams / APPR. / (916) 319-2081