BILL ANALYSIS
AB 1766
Page 1
ASSEMBLY THIRD READING
AB 1766 (Gaines and Logue)
As Amended May 4, 2010
2/3 vote. Urgency
REVENUE & TAXATION 9-0 APPROPRIATIONS 16-0
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|Ayes:|Portantino, DeVore, |Ayes:|Fuentes, Conway, Hill, |
| |Beall, | |Bradford, Charles |
| |Charles Calderon, Coto, | |Calderon, Coto, Davis, |
| |Fuentes, Harkey, | |Hall, Harkey, Miller, |
| |Nestande, Ma | |Nielsen, Norby, Skinner, |
| | | |Solorio, Torlakson, |
| | | |Torrico |
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SUMMARY : Adds the wildfires that began in Placer County on
August 30, 2009 (49 Fire) 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.
Specifically, this bill :
1)Provides a mechanism for reimbursing Placer County for
property tax losses resulting from the reassessment of
properties damaged by the 49 Fire.
2)Provides that any dwelling that qualified for a homeowners'
property tax exemption before August 30, 2009, that was
damaged or destroyed by the 49 Fire, and that has not changed
ownership since the 49 Fire, 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.
3)Provides that any taxpayer's excess disaster loss resulting
from the 49 Fire 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.
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4)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.
5)Takes immediate effect as an urgency measure.
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.
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
AB 1766
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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.
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)The State Board of Equalization estimates that General Fund
expenditures for reimbursing Placer County for property tax
losses and extending the homeowners' exemption would be less
than $143,000 in fiscal year 2010-11 and declining amounts in
subsequent years.
2)This bill's income tax pro visions will result in minor
revenue losses of like less than $5,000 per year for the next
several years.
COMMENTS : According to the author's office, the purpose of this
bill is to provide immediate tax relief to individuals and
businesses affected by the 49 Fire.
Committee Staff Comments:
1)The 49 Fire: On August 30, 2009, a wildfire started in Placer
County. That same day, Governor Arnold Schwarzenegger
proclaimed a state of emergency, noting that the fire had
burned hundreds of acres, destroyed several homes and
commercial structures, and forced hundreds of people to be
evacuated.
2)Technical Amendment: Section 7 of this bill should be amended
to reference Section 4 and not Section 5, to appropriately
reflect the most recent set of amendments.
3)Related Bills:
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a) AB 1662 (Portantino), of the current Legislative
Session, would provide similar disaster relief in
connection with certain wildfires that occurred in Los
Angeles and Monterey Counties. AB 1662 is currently
pending in the Assembly Appropriations Committee.
b) AB 1690 (Chesbro), of the current Legislative Session,
would provide similar disaster relief in connection with
the recent earthquake that struck Humboldt County. AB 1690
is pending on the Assembly Floor.
c) AB 2136 (V. Manuel Perez), of the current Legislative
Session, would provide similar disaster relief in
connection with the earthquake that struck Imperial County
on April 4, 2010. AB 2136 is set pending on the Assembly
Floor.
d) Should these bills all continue to progress through the
Legislature, appropriate amendments should be taken to
prevent chaptering out issues.
Analysis Prepared by : M. David Ruff / REV. & TAX. / (916)
319-2098
FN: 0004403