BILL ANALYSIS
AB 1662
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Date of Hearing: April 14, 2010
ASSEMBLY COMMITTEE ON LOCAL GOVERNMENT
Cameron Smyth, Chair
AB 1662 (Portantino) - As Amended: April 7, 2010
SUBJECT : Disaster relief: County of Los Angeles.
SUMMARY : Allows special tax treatment for losses sustained from
winter storms in January
of 2010, and fires in Monterey County and Los Angeles County in
August of 2009, and increases from 75% to 100% the amount of the
state share of eligible state costs related to the severe winter
storms that occurred in Northern, Central, and Southern
California during January 2010. Specifically, this bill :
1)Provides that the state share shall be up to 100% of the total
state eligible costs connected with the severe winter storms,
flooding, and debris and mud flows that occurred in Northern,
Central, and Southern California during the period from
January 17, 2010, to February 6, 2010, as specified in
agreements between the state and the United States for federal
financial assistance.
2)Requires, by October 30, 2010, the auditors of Los Angeles and
Monterey Counties, which were the subject of the Governor's
proclamation of a state of emergency for the wildfires that
commenced on August 26-27, 2009, to certify to the Director of
Finance an estimate for the total amount of the reduction in
property tax revenues resulting from the reassessment of
properties impacted by the fires.
3)Requires, by October 30, 2010, the auditors of the Counties of
Calaveras, Imperial, Los Angeles, Orange, Riverside, San
Bernardino, San Francisco, and Siskiyou, which were the
subject of the Governor's proclamations of a state of
emergency for the severe winter storms that commenced in
January 2010, to certify to the Director of Finance an
estimate for the total amount of the reduction in property tax
revenues resulting from the reassessment of the properties
impacted by the severe winter storms.
4)Requires the Director of Finance, within 30 days after
verification of the county auditor's property tax estimate, to
certify the amount to the State Controller for allocation to
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the County for reimbursement in property tax loss.
5)Provides that any dwelling that qualified for a homeowners'
property tax exemption before either disaster event, that was
damaged or destroyed by either disaster, and that has not
changed ownership since the date of the disaster, 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.
6)Provides that any taxpayer's excess disaster loss shall be
carried forward to future years for any loss sustained in
either disaster.
7)States the intent of the Legislature to provide in the annual
Budget Act those additional reimbursements to local
governments for the property tax revenue reductions due to
disasters.
8)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.
9)Makes findings and declarations that this act fulfills a
statewide public purpose because
of the Governor's declarations of a state of emergency for both
disaster events, which constituted conditions of extreme peril
to public health and safety to persons and property, thus
qualifying affected persons for various forms of governmental
assistance and relief.
10)Contains an urgency clause.
EXISTING LAW :
1)Provides that for any eligible project, the state share shall
amount to no more than 75%
of total state eligible costs [Government Code 8686 (a)].
2)Specifies a list of disasters for which the state share shall
be up to 100% of total state eligible costs [Government Code
8686 (b)].
3)Provides, for any federally-declared disaster subsequent to
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January 1, 1995, that the Legislature has designated in
Government Code 8686 (b), that the state shall assume the
increased share in those cases where the Federal Emergency
Management Agency (FEMA) or another applicable federal agency
has approved the federal share of costs.
4)Provides, under the California Disaster Assistance Act, a list
of disasters eligible for full state reimbursement of local
agency costs.
5)Provides for state reimbursement to backfill property tax
revenue loss resulting from assessment reductions in areas
that the Governor has declared to be in a state of emergency.
6)Provides for a standard homeowners' property tax exemption of
$7,000, and allows dwellings damaged in disasters declared by
the Governor to continue eligibility for the exemption.
7)Allows losses sustained because of a Governor-declared
disaster to be carried forward to each of the five taxable
years following the loss, or if the loss remains after the
five years, extends the loss for the next ten years.
8)Requires that the state share of reimbursement for local costs
due to a disaster not exceed 75% of total state eligible costs
unless the local agency is located within a city or county
that has adopted a local Hazard Mitigation Plan in accordance
with the federal Disaster Mitigation Act as part of the safety
element.
FISCAL EFFECT : Unknown
COMMENTS :
1)On August 28, 2009, Governor Schwarzenegger declared a state
of emergency as a result
of the wildfires in both Los Angeles County and Monterey County.
On January 21, 2010, Acting Governor Brown proclaimed a state
of emergency for the Counties of Los Angeles, Orange,
Riverside, San Francisco and Siskiyou due to a series of
winter storms that brought high winds and significant amounts
of precipitation statewide. On March 8, 2010, after a request
by Governor Schwarzenegger was submitted to FEMA in February,
President Obama declared a major disaster for California for
the severe winter storms, flooding, and debris and mud flows
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during the period of January 17 to February 6, 2010, in the
Counties of Calaveras, Imperial, Los Angeles, Riverside, San
Bernardino, and Siskiyou.
A previous version of this bill dealt only with disaster loss
provisions for Los Angeles County. Amendments taken on April
7, 2010, add the other affected counties of both the August
2009 fire and the winter storms in January of 2010. Also,
because the winter storms in January 2010 received a
presidential major disaster declaration under the Stafford
Act, the amendments added the winter storms to Government Code
8686(b), which provides for a higher percentage (up to 100%)
of the state share of eligible state costs. Staff notes that
there are 13 disasters currently listed in Government Code
8686(b), ranging from 2006 back to 1989, and each of those
disasters received a presidential major disaster declaration.
2)Support Arguments . AB 1662 specifically provides that all the
counties involved in the two disasters are eligible for
reimbursement due to the loss of property tax resulting from
the lower reassessed property value caused by the disaster.
Additionally, this bill will allow homeowners to carry forward
losses resulting from the two disasters in August of 2009 and
January of 2010 into future taxable years and ensure that
standard property tax deductions continue for those displaced
from their homes by the fires.
3)Opposition Arguments . None at this time.
4)Staff notes that AB 1662 is similar to other disaster relief
bills including AB 1690 (Chesbro) and AB 1766 (Gaines), which
are currently pending in the Committee, and several other
disaster relief measures that passed out of the Committee last
year. As these disaster relief bills move forward, each will
need to be amended to avoid chaptering out issues.
5)This bill is an urgency measure and will take effect
immediately upon the Governor's signature.
6)This bill is double-referred to the Committee on Revenue and
Taxation.
REGISTERED SUPPORT / OPPOSITION :
AB 1662
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Support
CA State Association of Counties
CA Professional Firefighters
Regional Council of Rural Counties
Opposition
None on file
Analysis Prepared by : Debbie Michel / L. GOV. / (916)
319-3958