BILL ANALYSIS
AB 1662
Page 1
CONCURRENCE IN SENATE AMENDMENTS
AB 1662 (Portantino and Jeffries)
As Amended August 31, 2010
2/3 vote. Urgency
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|ASSEMBLY: |77-0 |(June 1, 2010) |SENATE: |28-0 |(August 31, |
| | | | | |2010) |
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Original Committee Reference: REV. & TAX.
SUMMARY : Adds the severe winter storms that occurred in the
Counties of Calaveras, Imperial, Los Angeles, Orange, Riverside,
San Bernardino, San Francisco, and Siskiyou in 2010 (2010
Storms) 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 of excess disaster losses. Adds the
wildfires that occurred in the Counties of Los Angeles and
Monterey in 2009 (2009 Wildfires), the wildfires that occurred
in the County of Placer in 2009 (Placer Wildfires), and the
wildfires that occurred in the County of Kern in 2010 (Kern
Wildfires) to the list of disasters eligible for beneficial
homeowners' property tax exemption treatment, and special "carry
forward" treatment of excess disaster losses.
The Senate amendments :
1)Delete the provisions that added the severe winter storms that
occurred in Northern, Central, and Southern California in
early 2010 to the list of disasters eligible for full state
reimbursement of local agency costs.
2)Delete the provisions that added the 2009 Wildfires to the
list of disasters eligible for full state reimbursement of
local property tax losses.
3)Add the Placer Wildfires and the Kern Wildfires to the list of
disasters eligible for beneficial homeowners' property tax
exemption treatment, and special "carry forward" treatment of
excess disaster losses.
4)Prevent chaptering-out issues given the large number of
disaster-related bills pending in the current legislative
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session.
AS PASSED BY THE ASSEMBLY , this bill:
1)Provided that, notwithstanding existing law, the state share
shall be up to 100% of total state eligible costs connected
with the severe winter storms, flooding, and debris and mud
flows that occurred in Northern, Central, and Southern
California from January 17, 2010, to February 6, 2010, as
specified in agreements between this state and the United
States for federal financial assistance.
2)Provided a mechanism for reimbursing eligible counties for
property tax losses resulting from the reassessment of
properties damaged by the 2009 Wildfires and the 2010 Storms.
3)Provided that any dwelling that qualified for a homeowners'
property tax exemption before the commencement dates of the
2009 Wildfires, that was damaged or destroyed by the 2009
Wildfires, and that has not changed ownership since the
commencement dates of the 2009 Wildfires, 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.
4)Provided identical homeowners' property tax exemption
treatment for victims of the 2010 Storms.
5)Provided that any taxpayer's excess disaster loss resulting
from the 2009 Wildfires and/or 2010 Storms shall be carried
forward to each of the five taxable years following the
taxable year for which the loss is claimed. However, if there
is any excess disaster loss remaining after this five-year
period, then the applicable percentage of that excess disaster
loss shall be carried forward to each of the next 10 taxable
years.
6)Specified 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.
7)Takes immediate effect as an urgency measure.
AB 1662
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EXISTING LAW :
1)Property tax reassessment: Allows each county, by ordinance,
to provide for the reassessment of properties damaged by a
calamity, disaster, or misfortune. Taxpayers owning damaged
property must apply for a reassessment within the time period
specified in the applicable county's ordinance or within 12
months of the misfortune or calamity, whichever is later. The
application for reassessment must show the condition and value
of the property after the damage and the dollar value of the
damage. Once the property is reassessed, the taxpayer is
entitled to a refund of any excess property tax paid on the
property. If the affected property is subsequently repaired,
its value is subject to an upward reassessment by the county.
2)Homeowners' exemption:
a) Exempts the first $7,000 of the full value of a dwelling
from property tax, when the dwelling is occupied by an
owner as his/her principal residence. However, if a
property is no longer owner-occupied or is vacant on the
lien date (January 1), the property is not eligible for the
exemption for the succeeding tax year; and,
b) Provides certain disaster-related exceptions to the
general rule that a property must be owner-occupied on the
lien date to receive the homeowners' exemption. Under
these exceptions, properties that were eligible for the
homeowners' exemption immediately before the disaster, do
not change ownership after the disaster, and are vacant
solely because of damage incurred during the disaster,
continue to be eligible for the homeowners' exemption.
3)Income tax losses:
a) Allows non-business taxpayers with casualty losses that
are not reimbursed by insurance and that exceed $100 plus
10% of the taxpayer's adjusted gross income (AGI) to claim
these losses as itemized deductions on their tax return.
Taxpayers may carry forward 100% of any remaining losses
for up to 10 years. Corporate taxpayers with casualty
losses that are not reimbursed by insurance are not subject
to the $100 plus 10% of AGI threshold, but are subject to
the same carry forward rules that apply to individual
taxpayers; and,
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b) Allows both individual and corporate taxpayers who
experience losses as a result of certain named disasters to
claim these losses either in the year in which the loss
occurred or in the preceding year.
FISCAL EFFECT :
1)Property tax reassessment and homeowners' exemption: The
Board of Equalization estimates that the cost of reimbursing
the counties' property tax losses and of extending the
homeowners' exemption would be $106,930.
2)Income tax losses: Unknown, but likely minimal.
COMMENTS : The author has provided the following statement in
support of this bill:
On August 26, 2009, the Station Fire in Los Angeles County
was reported burning in the Angeles Forest. This mostly
rural area contains forested and chaparral vegetation and
abuts many foothill communities in Los Angeles County.
Aided by winds and hot temperatures the fire quickly spread
out of control. A report issued by the U.S. Department of
Agriculture subsequently attributed extremely dry
vegetation, extremely steep terrain and inaccessible fire
locations to the spread of the fire and the inability of
fire personnel to contain it.
Ultimately the fire consumed over 160,000 acres, destroyed
209 structures of which 89 were homes and caused the deaths
of two fire fighters. Because the Station Fire denuded the
hillsides and steep terrain of the Angeles Forest, heavy
rains in February of 2010 . . . caused mudslides and flash
flooding that has destroyed or damaged at least 86 homes.
AB 1662 would allow victims who lost homes and other
property to claim disaster loss treatment, for losses
sustained as a result of the August, 2009 Station Fire in
Los Angeles County. The purpose of this bill is to provide
immediate tax relief to individuals and businesses affected
by that wildfire. As an urgency measure, this bill would
be effective and operative immediately upon enactment.
Committee Staff Comments: As noted above, the Senate amendments
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to this bill delete the provisions that added the severe winter
storms of early 2010 to the list of disasters eligible for full
state reimbursement of local agency costs. The Senate
amendments also add the Placer Wildfires and the Kern Wildfires
to the list of disasters eligible for beneficial homeowners'
property tax exemption treatment, and special "carry forward"
treatment of excess disaster losses.
Analysis Prepared by : M. David Ruff / REV. & TAX. / (916)
319-2098
FN:
0006902