BILL ANALYSIS
AB 2362
Page 1
Date of Hearing: May 28, 2010
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Felipe Fuentes, Chair
AB 2362 (Skinner) - As Amended: May 18, 2010
Policy Committee: Revenue and
Taxation Vote: 9-0
Urgency: No State Mandated Local Program:
No Reimbursable:
SUMMARY
This bill places in law a separate a new-construction exclusion
from property reassessments for seismic safety improvements made
to pre-1978 wood frame multi-unit residential buildings
so-called "soft-story buildings." This specific exclusion is
identical to a more general exclusion currently provided to
soft-story buildings and most other structures under current
law.
FISCAL EFFECT
No fiscal impact, since soft story buildings are already
eligible for the seismic exclusion.
COMMENTS
1)Rationale . The bill is intended to provide an incentive to
owners of soft-story buildings to seismically retrofit their
buildings to protect their residents. As noted below, however,
these structures are already provided the seismic exclusion
under current law.
2)Background . Under Proposition 13, property is subject to
taxation at a general rate of 1% of the acquisition price of
the property, and may be reassessed when newly constructed
improvements are made, or when change in ownership occurs.
Otherwise, real property assessment growth each year is
limited to 2% or the annual rate of inflation, whichever is
less.
Two constitutional amendments passed subsequent to Proposition
AB 2362
Page 2
13 provide property tax exemptions for certain improvements
made for seismic safety purposes. Proposition 23, passed in
1984, provides a 15-year exemption for seismic safety
equipment installed in reinforced masonry buildings in order
to comply with a local ordinance. Proposition 127, passed in
1990, authorizes the Legislature to provide a similar
exemption for qualifying seismic-related construction on all
property not already covered by Proposition 23 (including the
soft-story buildings covered by this bill). The exemption
provided by Proposition 127 does not have a time limit, nor
does it require that the qualifying construction be mandated
by a local government.
3)Proposition 13 on the June 2010 ballot provides the exemption
for all seismic improvements for all properties - irrespective
of local ordinances - until the property has a change of
ownership; in effect providing the same exclusion for
unreinforced masonry buildings as currently exists for all
other structures.
Analysis Prepared by : Brad Williams / APPR. / (916)
319-2081