BILL ANALYSIS
SENATE REVENUE & TAXATION COMMITTEE
Senator Lois Wolk, Chair
AB 157 - Anderson
Amended: June 22, 2010
Hearing: July 1, 2010 Tax Levy Fiscal: Yes
SUMMARY: Allows Counties to Extend Period for Taxpayers to
Transfer Base Year Values for Disaster-Affected
Property.
EXISTING LAW (California Constitution) required the
Legislature to allow taxpayers to transfer the base-year
value of property that is substantially damaged or
destroyed by a disaster, as declared by the Governor, to
comparable property within the same county that is acquired
or newly constructed as a replacement for the substantially
damaged or destroyed property (Proposition 50, 1986).
EXISTING LAW implements this constitutional
requirement, but limits the transfer of base-year value to
replacement property acquired or newly constructed within
the same county to five years after the disaster (to the
extent that the replacement property does not exceed 120%
of the fair market value of the old property immediately
prior to the disaster). In 2006, the Legislature extended
the deadline from three to five years for disasters
occurring on or after July 1, 2003 (AB 1890, Mountjoy).
The deadline applies only when the taxpayer acquires a new
property or rebuilds in a different location than the site
of the disaster; taxpayers may retain the base-year
transfer an unlimited amount of time to retaining the
base-year value when rebuilding on the site of the disaster
because the Constitution exempts real property that is
reconstructed after a disaster from the definition of "new
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construction" requiring reassessment
EXISTING LAW (California Constitution) allows similar
treatment for taxpayers seeking to transfer their base-year
value to a replacement property acquired or newly
constructed in a different county for three years.
THIS BILL allows the Board of Supervisors of any
county to enact an ordinance to extend the five year period
by two years to transfer the base year value from property
that is substantially damaged or destroyed by the Cedar
Fire that commenced in October, 2003 to a replacement
property in the same county.
FISCAL EFFECT:
According to the Board of Equalization (BOE), AB 157
results in annual property tax revenue losses of
approximately $10,000.
COMMENTS:
A. Purpose of the Bill
"Assembly Bill 157 is a disaster relief bill that
would extend the timeframe for survivors of the devastating
2003 Cedar Fire to replace their fire-destroyed properties.
Nothing will ever be the same again for survivors of these
catastrophic fire events, but we can help. The time it
takes to rebuild homes and lives cannot be underestimated,
and for many, restoration is an ongoing challenge. Even
now, property owners struggle to resolve the
necessary but time-consuming issues surrounding the
replacement of their [homes]. I introduced Assembly Bill
157 as a simple way to ensure a realistic timetable for
addressing the losses that survivors have suffered."
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B. It's Your Call
As introduced, AB 157 amended state law to extend the
period of time for a taxpayer to transfer their base year
value from a disaster-affected property to a replacement
property within the same county from five to seven years.
At the time, the Committee was concerned that the measure
changes state law for all taxpayers due to the adverse
circumstances suffered by a few taxpayers as a result of
the Cedar Fire in San Diego County in 2003. As amended, AB
157 allows any County Board of Supervisors to extend the
timeline, shifting the determination from the state to
local agencies, who are closer to the taxpayers and
experienced the disaster first hand. Additionally,
Counties would face a tradeoff between helping taxpayers
affected by disaster and the fiscal consequence of foregone
revenue resulting from the longer window of time. While
delegating these responsibilities to county boards of
supervisors is unique, AB 157 no longer changes the law for
all taxpayers, instead granting counties the power to act
if they see fit.
C. Amendments Needed
On Page 6, restore the strikeouts on lines 26 and
27 to ensure that a change specifically made to
Section 69 in SB 824 (Committee on Revenue and
Taxation, 2009) last year to treat land and
improvements separately for purposes of passing the
50% damage test.
On Page 8, Lines 7 through 16, change subdivision
(f) to ensure statewide applicability whilst ensuring
that victims of the Cedar Fire are eligible for the
longer timeline.
(f) Notwithstanding any other law, the board of
supervisors of any county may by ordinance extend the
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time period specified in subdivision (a) to transfer
the base year value of property that is substantially
damaged or destroyed a disaster by the Cedar Fire that
commenced in October 2003 , as declared by the
Governor, to comparable property within the same
county that is acquired or newly constructed as a
replacement for the substantially damaged or destroyed
property by two years. This subdivision shall apply
to eligible property damaged or destroyed by the Cedar
Fire that commenced in October 2003 if an ordinance is
enacted. This subdivision shall apply to the
determination of base year values for the 2003-04
fiscal year and fiscal years thereafter
Support and Opposition
Support:Board of Equalization, United Policyholders,
Lakeside Chamber of Commerce, Neptune Society, Telophase
Cremation Society, Cedar Fire Rebuilding Resource Group, RB
United, San Diego Association of Realtors, Ramona Fire
Recovery Center, San Miguel Consolidated Fire Protection
District, La Mesa Chamber of Commerce, San Diego East
County Chamber of Commerce, California Association of
Realtors, San Diego County Board of Supervisors, (106)
individuals.
Oppose:None received.
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Consultant: Colin Grinnell
AB 157 - Anderson
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