BILL ANALYSIS
AB 2136
Page 1
CONCURRENCE IN SENATE AMENDMENTS
AB 2136 (V. Manuel Perez and Salas)
As Amended August 20, 2010
Majority vote
-----------------------------------------------------------------
|ASSEMBLY: | |(May 24, 2010) |SENATE: |34-0 |(August 24, |
| | | | | |2010) |
-----------------------------------------------------------------
(vote not relevant)
------------------------------------------------------------------------
|COMMITTEE VOTE: |7-0 |(August 26, 2010) |RECOMMENDATION: |Concur |
| | | | | |
------------------------------------------------------------------------
Original Committee Reference: L. GOV.
SUMMARY : Adds the earthquake that struck Imperial County on April
4, 2010, (Earthquake) 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.
The Senate amendments :
1)Delete the provisions that added the Earthquake to the list of
disasters eligible for full state reimbursement of local agency
costs.
2)Specify that loans provided under the "CalHome Program Disaster
Assistance" for Imperial County that have been made to
rehabilitate, reconstruct, or replace lower income owner-occupied
manufactured homes shall be due and payable in 10 years, with 20%
of the original principal to be forgiven annually for each
additional year beyond the fifth year that the manufactured home
is owned and continuously occupied by the borrower.
3)Prevent chaptering-out issues given the large number of
disaster-related bills pending in the current legislative
session.
AS PASSED BY THE ASSEMBLY , this bill:
AB 2136
Page 2
1)Provided a mechanism for reimbursing Imperial County for property
tax losses resulting from the reassessment of properties damaged
by the Earthquake.
2)Provided that any dwelling that qualified for a homeowners'
property tax exemption before April 4, 2010, that was damaged or
destroyed by the Earthquake, and that has not changed ownership
since April 4, 2010, 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)Provided that any taxpayer's excess disaster loss resulting from
the Earthquake 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.
4)Added the Earthquake to the list of disasters eligible for the
higher state share of costs.
5)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.
6)Take immediate effect as an urgency measure.
FISCAL EFFECT :
1)The State Board of Equalization estimates General Fund costs of
$78,000 in fiscal year 2010-11 and declining amounts thereafter
for reimbursing Imperial County for its property tax losses and
extending the homeowners' exemption.
2)This bill's income tax provisions will result in minor revenue
losses of likely less than $7,000 per year for the next several
years.
3)According to the Senate Appropriations Committee, providing
CalHome loan forgiveness would accelerate up to $10 million in
revenue losses by ten years, beginning in 2015.
AB 2136
Page 3
COMMENTS :
In response to the earthquake that damaged homes in Imperial County
in April, the Department of Housing and Community Development (HCD)
issued a $10 million over-the-counter (first come/first served
until funds are depleted) Notice of Funding Availability (NOFA) for
the CalHOME Program on May 6. The funds made available through the
NOFA are to be used for rehabilitation or reconstruction of
lower-income owner-occupied conventional and manufactured homes
damaged in the April 4 earthquake in Imperial County. HCD does not
make direct assistance to homeowners under the CalHome program,
rather local jurisdictions apply to HCD and then make grants and
loans to the homeowners.
To date, HCD has awarded $1.5 million to Imperial County for 36
households and $1,320,000 to the City of Calexico for 26
households. The maximum loan amount to each homeowner is $60,000.
The NOFA specifies that financial assistance provided to an
individual household to rehabilitate, repair, or replace
manufactured housing located in a mobilehome park and not
permanently affixed to a foundation shall be in the form of a
conditional grant due and payable in 20 years, with 10% of the
original principle to be forgiven annually for each additional year
beyond the 10th year that the manufactured home is owned and
continuously occupied by the borrower.
AB 2136 alters the terms of the grant to due and payable in 10
years, with 20% of the original principal to be forgiven annually
for each additional year beyond the fifth year that the
manufactured home is owned and continuously occupied by the
borrower.
According to the HCD, "HCD has made the awards to the
jurisdictions noted above but has not executed the Standard
Agreement (contract). In recognition of the proposed amendments,
HCD would provide for terms that could be altered by later enacted
statute."
According to the author, residents would like to use CalHOME
program funds to rehabilitate their homes so that they are
inhabitable again but many are low-income seniors and young
families who may not be living in the homes for the next 20 years.
By reducing the term of the loan to 10 years and accelerating the
AB 2136
Page 4
percentage of forgiveness, residents will be more comfortable using
these loans.
CalHOME loans are forgivable under existing law provided that the
resident maintain residence in the home. AB 2136 proposes a minor
change to existing law solely for the residents of Imperial County
in response to the earthquake.
Analysis Prepared by : Lisa Engel/ H. & C.D. / (916) 319-2085
FN: 0006787