BILL ANALYSIS �
AB 1428
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Date of Hearing: May 27, 2011
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Felipe Fuentes, Chair
AB 1428 (Chesbro) - As Amended: May 24, 2011
Policy Committee: Revenue and
Taxation Vote: 8-0
Urgency: Yes State Mandated Local Program:
No Reimbursable:
SUMMARY
This bill allows special tax treatment, known as "disaster loss
treatment," for losses sustained in the County of Mendocino as a
result of the tsunami that occurred in March 2011.
Specifically, this bill:
1)Allows any excess disaster losses to 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 (currently 100%) of that excess disaster
loss shall be carried forward to each of the next 10 taxable
years.
2)Allows affected taxpayers to file an amended return to deduct
disaster losses in the taxable year prior to the loss to
receive an expedited refund.
3)Takes immediate effect as an urgency measure.
FISCAL EFFECT
The Franchise Tax Board estimates revenue losses will be minor
and absorbable.
COMMENTS
1)Purpose . According to the author, AB 1428 provides relief for
all the individuals and companies that were negatively
affected by the Tsunami that occurred March 10th as a result
of the 9.0 earthquake. This measure would help relieve some
AB 1428
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of the pressure and allow those who were affected to carry
over losses beyond what they could deduct in a given year.
2)Background : On March 11, 2011, a roughly 8.9 magnitude
earthquake struck Honshu, Japan. The resulting tsunami
inundated California beaches, ports, and harbors, destroying
public and private property and threatening numerous
structures. The tsunami also caused the evacuation of
residents and the opening of emergency shelters. As a result,
Governor Brown proclaimed a state of emergency, the very same
day, covering the Counties of Del Norte, Humboldt, San Mateo,
and Santa Cruz. Five days later, on March 16, 2011, Governor
Brown issued an additional emergency proclamation for
Mendocino and San Luis Obispo Counties.
3)Disaster relief legislation : The Legislature has routinely
passed standard tax relief legislation following
Governor-declared states of emergency. These bills have
typically included excess disaster loss provisions like those
contained in this bill, as well as provisions compensating
counties for property tax losses resulting from assessment
reductions. AB 1428 contains only the standard excess
disaster loss provisions, and applies only to losses sustained
in the Counties of Del Norte and Mendocino.
4)Presidential declaration. Following this bill's introduction,
President Obama declared a state of emergency, which covered
only Del Norte and Santa Cruz Counties. Existing state law
automatically extends the special tax treatment of losses
under presidentially declared disasters." As such, this bill
was amended to apply only to Mendocino County.
There is no registered opposition to this bill.
Analysis Prepared by : Roger Dunstan / APPR. / (916) 319-2081