BILL ANALYSIS
AB 321
Page 1
Date of Hearing: April 29, 2009
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Kevin De Leon, Chair
AB 321 (Niello) - As Amended: April 15, 2009
Policy Committee: Revenue and
Taxation Vote: 8-0
Urgency: No State Mandated Local Program:
No Reimbursable:
SUMMARY
This bill allows each spouse in a marriage to be eligible for
the one-time base-year value transfer that is available for
homeowners over the age of 55 in certain counties. Specifically,
this bill:
1)Eliminates the requirement that both spouses be considered a
single claimant for purposes of the base year property tax
relief, so that the spouse of a taxpayer claiming the value
transfer remains eligible to make the one-time claim on a
future date.
2)Repeals the requirement that a property owner who has been
granted the base year value transfer notify an assessor within
30 days of completing otherwise assessable new construction on
the replacement property.
3)Provides that its provisions will apply only to persons who
file a claim on or after January 1, 2010.
4)Provides that if the Commission on State Mandates determines
that the bill contains costs mandated by the state,
reimbursement of these costs will be made.
FISCAL EFFECT
BOE estimates that, since the bill would only apply to claims
filed beginning in 2010, the annual property tax losses will
start small but grow over time. Specifically, the BOE estimates
that the bill will result in annual revenues losses of $38,000
in FY 2011-12, climbing by a like amount each year. By 2021-22,
AB 321
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the annual loss would be $380,000.
COMMENTS
1)Background . Existing law, as provided for by Proposition 60 in
1988 and Proposition 90 in 1990, allows property owners over
55 years of age, or disabled persons, a once-in-a-lifetime
opportunity to transfer the base-year value of their principle
residences to a replacement home of equal or lesser value
within the same county, or to a replacement home in counties
that adopt ordinances allowing the transfer. Base-year
transfers allow taxpayers to keep their old, normally lower,
property tax assessment and avoid the upward assessment that
would otherwise occur when a home is purchased.
Existing law defines any person claiming the base year
transfer property tax relief as a "claimant" and specifies
that spouses are deemed to be a single claimant. However,
other co-owners of principal residences - such as domestic
partners or unmarried couples - are considered to be separate
claimants for purposes of the base-year transfer program. In
these other cases, the non-claimant retains the opportunity to
claim a base-year transfer of property value in the future.
Existing law also allows a homeowner who has been granted a
base year value transfer to perform new construction on the
replacement property subsequent to the transfer, and have the
new construction exempted from assessment, provided that
certain requirements are met. Homeowners are required to
notify the assessor in writing of the completion of new
construction within 30 days in order for the new construction
to be eligible for the property tax relief.
2)Rationale . According to the sponsor of this bill (The
California Assessors' Association), the purpose of the bill is
to close a loophole that unfairly penalizes married senior
citizen couples and to simplify the administration of
Proposition 60 and Proposition 90. The sponsor cites a
specific example where a married couple uses the one-time
base-year transfer and subsequently divorces. If one spouse
then marries a spouse that has not yet filed for a base year
transfer, the new couple would be precluded from doing so in
the future, because the previously married spouse had already
used the transfer.
AB 321
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The sponsor also notes that the construction reporting
requirement of current law is redundant, since the county
already receives the required information when the
applications for building permits are received.
Analysis Prepared by : Brad Williams / APPR. / (916) 319-2081