HomeMy WebLinkAboutMINUTES - 08082000 - D2 tt,
DATE: August 8, 2000 -
COM ., ,
w - COSTA
FROM: FINANCE COMMITTEE
a' COUNTY
Mark DeSaulnier
Joe Canciamiila
To: BOARD OF SUPERVISORS
SUBJECT: Reconsideration of Implementing Proposition 90, Relative to Property Tax Base
Values.
SPECIFIC REQUEST(S)OR RECOMMENDATION($)&BACKGROUND AND JUSTIFICATION
Recommendation:
Consider the implementation of Proposition 90, which allows for the transfer of property tax
base values for those persons over 55 years of age moving from another county into Contra
Costs County.
Background;
On July 17 and on March 6, the Finance Committee reviewed the issue of whether to
implement provisions of Proposition 90, which allows for the transfer of property tax base
values for those over 55 years of age moving from another county into Contra Costa
County. The County implemented Proposition 90 in 1989 and repealed it in 1993, because
of a critical budget situation. Attachment A includes the Revenue and Taxation Code
section and background information.
The Committee took testimony from the County Administrator's staff, County Assessor and
members of the public. Reports from these parties are included as attachment B. The
County Administrator opposed implementation because of the loss of property tax revenues
and the fragile budget situation. The CAO staff suggested that this property tax relief
measure be considered when the State restores the property tax taken from. local
government in 1993, which will amount to about a $100 million loss this fiscal year. The
County Assessor opposed County implementation because of the revenue losses, because
it will be an administrative burden on his office and because it may encourage property tax
inequities. Representatives of the public supported implementation citing the fairness and
equity issues presented below:
CONTINUED ON ATTACHMENT: X YES SIGNATURE: E-4--r—
RECOMMENDATION
OF COUNTY ADMINISTRATOR RECOMMENDATION OF BOARD COMMITTEE
APPROVE OTHER
SIGNATURE(S):
ACTION OF BOARD ON Atumt 8, 2000 APPROVED AS RECOMMENDED OTWERXX
SEE THE ATTACHED ADDENDUM FOR BOARD ACTION
VOTE OF SUPERVISORS
I HEREBY CERTIFY THAT THIS IS A TRUE
UNANIMOUS(ABSENT — — — ) AND CORRECT COPY OF AN ACTION TAKEN
AYES: NOES: AND ENTERED ON MINUTES OF THE BOARD
ABSENT: ABSTAIN: OF SUPERVISORS ON THE DATE SHOWN.
Contact:
cc: Assessor
county Cousel ATTESTED AueuSt 8, 2000
PHIL BATCHELOR,CLERK OF THE BOARD OF
BY DEPUTY
1. Ten Counties have implemented Proposition 90
2. The County implemented Proposition 90 from 1989 through 1993, and therefore
helped homeowners during that period.
3. The Assessors data overstates the costs as many persons don't know about
Proposition 90.
4. Beneficiaries of Proposition 90 would be of more moderate income than during the
1989-93 period as the recently established Summerset development in Brentwood
is more moderately priced than the Rossmoore development in years past.
5. Senior Citizens should receive a tax break as their need for government services its
less than other citizens.
6. Contra Costa County taxpayers have the ability to transfer their property tax base for
another home within the County.
The Committee requested that staff provide further information for Board review. First, the
Committee requested that County Counsel review the legal implications of reinstating the
provisions of Proposition 90 and that review appears as attachment C. Second, the
Committee requested the identity of Counties currently operating under Proposition 90 and
the property tax losses. The Counties are listed below.
Alameda Orange
Kern San Diego
Los Angeles San Mateo
Modoc Santa Clara
Monterey Ventura
Of these 10 Counties, 4 Counties had data available on Proposition 90, which is
presented below:
Coun Number of ClaimsNear Revenue Loss Time Period
Alameda 84,93 1998, 1999
San Mateo 52,88 1998, 1999
Monterey 65 per year $183,000 per year 5 years
Ventura 166,261,349 $594,000 per year 1997, 1998, 1999
The Committee decided to refer the item to the full Board with no recommendation.
ADDENDUM TO ITEM D.2
August 8, 2000 Agenda
On this date, the Board of Supervisors considered the implementation of Proposition 90, relative
to Property Tax Base Values, as referred by the Finance Committee.
Proposition 90 allows for the transfer of property tax base values for those persons over 55 years
of age moving from another county into Contra Costa County.
Supervisor DeSaulnier introduced Phil Batchelor, County Administrator,who presented the
history of the issue, and the County's financial state relative to this matter. Offering comments
were Tony Enea, Senior Deputy County Administrator(Finance) and Gus Kramer, Assessor.
The Board discussed the matter, the public hearing was opened, and the following people offered
comments:
Ron Lane, 1397 Courtyard Drive, San Jose;
Anna Kelly, 1770 Kent Drive, Brentwood;
The following people did not wish to speak,but presented speaker cards with comments:
Verna Rae Lane, 1397 Courtyard Drive, San Jose;
Rosalie Kygar, 1578 Rubidoux Lane,Brentwood;
Duane Kygar, 1578 Rubidoux Lane, Brentwood;
Raymond Clarfield, 1579 Rubidoux Lane, Brentwood;
Barbara Serrao, 347 Gladstone Drive, Brentwood;
Filomena Tatao, 349 Gladstone Drive, Brentwood;
Kevin Kelly, 1770 Kent Drive, Brentwood.
No one else desiring to speak,the Board continued their discussion.
Supervisor Canciamilla requested clarification of the difference between those who can carry the
tax exemption within the County, and those that are moving from one county to another.
Gus Kramer noted the difference between Proposition 60, the "empty nesters"proposition, and
Proposition 90.
Supervisor Uilkema stated that it was her understanding that if Educational Revenue
Augmentation Funds(ERAF)money were returned from the state, this matter would be
reconsidered for implementation. Mr. Enea indicated that was the decision of the former Board
of Supervisors in 1993.
Supervisor Uilkema moved that the Board adopt that same position, which is, that after the
County receives its property tax money, this matter be agendized in the future for early action
(reconsideration).
Supervisor Canciamilla seconded the motion.
Supervisor DeSaulnier stated that he would support the motion, and requested an amendment
that they include this issue in the County's legislative package for Year 2000, including
discussion with lobbyists and the legislative delegation, to look at legislation that would address
the inequities between Propositions 60 and 90, and include advice from the Assessor.
Supervisor Uilkema accepted the amendment.
Following further discussion the Board took the following action:
ADOPTED the position that the Board will not consider implementing Proposition 90, until
the County receives Educational Revenue Augmentation Funds (ERAF) returned from the
State; and DIRECTED the County include this issue in their Year 2000 legislative package,
including discussion with lobbyists and the legislative delegation to address the inequities
between Propositions 60 and 90, and include advice from the Assessor.
2 , ATTACHMENT
TD: BOARD OF SUPERVISORS
Phil Batchelor, County Administrator ry.
FRDM:
July 23, 1992 County
DATE:
RECOMMENDED REPEAL OF THE APPLICATION OF PROPOSITION 90 AND
SUBJECT. PROPOSITION 110 IN CONTRA COSTA COUNTY
SPECIFIC REQUESTS)OR RECOMMENOATION(S)i BACKGROUND AND JUSTIFICATION
RECOMMENDATION:
Introduce, waive reading, and fix August 4, 1992, for adoption of
the attached Ordinance repealing the application of Proposition 90
and Proposition 110 in Contra Costa County, effective November 8,
1993 .
BACKGROUND:
Proposition 90 was approved by the voters in 1988. It allows a
property owner in one county to transfer the base year property
value from a residential property in one county to a newly
purchased residential property in another county, providing that
the Board of Supervisors in the second county agrees to make
Proposition 90 applicable in that county. The condition was that
the homeowner be 55 years of age or older. In 1990, the voters
approved Proposition 110, which extended these same provisions to
homeiwners who are severely and permanently disabled.
The Board of Supervisors adopted an Ordinance to make Proposition
90 applicable to Contra Costa County effective on and after
November 8, 1988. With the passage of Proposition 110 in 1990, the
Board voted to also make it applicable in Contra Costa County,
effective on and after .Tune 6, 1990.
The State Board of Equalization reported recently that only 13
counties in California have implemented Proposition 90. These 13
inc_ude Alameda, Contra Costa, Inyo, Kern, Los Angeles, Marin,
Mod:_c, Orange, Riverside, San Diego, San Mateo, Santa -Clara and
Ventura. The other 45 counties have either officially voted to
reject implementation of Proposition 90 in that county or have
simply taken no action on the subject.
CONTINUED ON ATTACHMENT: YES SIGNATURE:
y RECOMMENDATION OF COUNTY ADMINISTRATOR _RECOMMENDATION OF BOARO COMMITTEE
.y APPROVE OTHER (�,�y
SIONATURE(S): _^E:G�G-_j .Y/j . 1i' �y L'GZ � ,r.•....,. E
ACTION OF BOARD ON.- J 1 V 2 g, 19 9 2 APPROVED AS RECOMMENOEO OTHER. .
VOTE OF SUPERVISORS
1 HEREBY CERTIFY THAT THIS IS A TRUE
-UNANIMOUS(ABSENT ) AND CORRECT COPY OF AN ACTION TAKEN
AYES: NOES: AND ENTERED ON THE MINUTES OF THE BOARD
ABSENT: ABSTAIN: OF SUPERVISORS ON THE DATE$MOWN.
cc: County Administrator ATTESTED
County Assessor PHIL BATCHELOR.CLERK OF THE BOARD OF
Auditor-Controller SUPERVISORS AND COUNTY ADMINISTRATOR
County Coursel
With the critical budget situation with which the Board of
Supervisors is currently faced, every possible source of revenue is
being examined. The Auditor-Controller reported that since the
implementation of Proposition 90, 695 qualified homebuyers have
participated. In addition, two homebuyers have qualified under the
provisions of Proposition 110. The average purchase price of the
homes which qualified for the transfer of base value has been
$228,957. The average assessed value being brought forward from
the homebuyers previous county has been $80,719. As a result,
$148,238 in assessed value that would, in the absence of
Proposition 90, be placed on Contra Costa's tax roll is lost.
Property taxes lost to all taxing jurisdictions is about $1.1
million per year. The loss to the County General Fund is about
$300,000 per year.
While the implementation of Propositions 90 and 110 in Contra Costa
County was a generous and appropriate step to take at the time, the
County's financial situation has changed substantially from 1988.
The annual loss of $300,000 in property tax revenue now represents
an amount which could maintain a number of community-based
contracts for human services, or fund several law enforcement
personnel, or maintain fire or library service in one or more areas
of the County.
The County Counsel's Office indicates that one of the requirements
of Proposition 90 was that the Ordinance implementing it in this
County had to be effective for a period of at least five years.
The Ordinance adopted by the Board of Supervisors was effective
November 8, 1988. Therefore, the County Counsel's Office points
out that while the Board of Supervisors can repeal the application
of Proposition 90 and Proposition 110 immediately, the operative
date of the repeal must be no earlier than November 8, 1993.
we are, therefore, recommending that the Board of Supervisors
introduce the attached Ordinance which repeals the application of
both Proposition 90 and Proposition 110 in Contra Costa County,
waive reading of the Ordinance, and fix August 4, 1992 for adoption
of the Ordinance, recognizing that the operative date of the
Ordinance cannot be until November 8, 1993.
s
2
ORDINANCE NO. 92- 53
(REPEAL OF PROVISIONS ALLOWING TRANSFER OF BASE YEAR VALUES FROM• ,
OUT OF COUNTY FOR REPLACEMENT RESIDENCES OF PERSONS 55 OR OVER
OR SEVERELY AND PERMANENTLY DISABLED)
The Board of Supervisors of the County of Contra Costa, California, ordains as
follows (omitting the parenthetical footnotes from the official text of the enacted or
amended provisions of the County Ordinance Code):
SECTION 1. Summary. This Ordinance repeals the provisions adopted as County
Ordinance Code Chapter 66-10 by Ordinances 91-39, 90-15, and 89-25, which concern
the transfer of base year values from out of county for replacement residences of
persons 55 or over or severely and permanently disabled.
SECTION 11. Repeal. Chapter 66-10 of the County Ordinance Code is hereby repealed
as of November 8, 1993.
SECTION ill. Effective and operative dates. Section 11 of this Ordinance shall become
operative on November 8, 1993, so as to preclude the transfer of base year values
from out of county for replacement residences of persons 55 or over or severely and
permanently disabled that are purchased in Contra Costa County after November 8,
1993. This Ordinance shall become effective 30 days after passage and, within 15
days of passage, shall be published once, with the names of the supervisors voting for
and against it, in the Contra Costa Times, a newspaper of general circulation published
in this County.
August 4, 1992
PASSED ON , BY THE FOLLOWING VOTE:
1j
AYES: Supervisors Fanden, Schroder, Torlakson, McPeak CONTRA COSTACQUNTy
ASSESSOR
NOES: None
ABSENT. Supervisor Poviers
ABSTAIN: None
ATTEST: Phil Batchelor, Clerk of
the Board of Supervisors and County Administrator
By: Deputy
Board Chair
ORDINANCE NO. 92•-53
f'
13A CHANGE IN OWNERSHIP AND PURCHASE 3 63.5
0.5
tbsti- 3 69.5. Homeowners over 55 or severely and permanently disabled; base-
vrote year value transfer to replacement dwelling; exception; condi-
i. (e)
-year tions; valuation of replacement dwelling; rescission of claim
sec-
Text of section operative Jan. 1, 1999.
a re-
iubd. (a)(1) Notwithstanding any other provision of law, pursuant to subdivision ;
for (a) of Section 2 of Article XIII A of the California Constitution, any person over
,sub- the age of 55 years, or any severely and permanently disabled person, who
by C. resides in property that is eligible for the homeowner's exemption under
1 the subdivision (k) of Section 3 of Article XIII of the California Constitution and
1180 Section 218 may transfer, subject to the conditions and limitations provided in
'this section, the base year value of that property to any replacement dwelling of k
1'1> c• equal or lesser value that is located within the same county and is purchased or
utor
CodeCodnewly constructed by that person as his or her principal residence within two I
code
years of the sale by'that person of the original property, provided that the base I
tce of year value of the original property shall not be transferred to the replacement
Para- = dwelling until the original property is sold.
o be-
sub- (2) Notwithstanding the limitation in paragraph (1) requiring that the origi-
the nal property and the replacement dwelling be located in the same county, this !�
,n for
xi, in limitation shall not apply in any county in which the county board of supervi-
sors, after consultation with local affected agencies within the boundaries of the
that county, adopts an ordinance making the provisions of paragraph (1) also
:Ymer- _; applicable to situations in which replacement dwellings are located in that �!
89county and the original properties are located in another county within this
_ 7 7 state. The authorization contained in this paragraph shall be applicable in a
county only if the ordinance adopted by the board of supervisors complies with
c. 57 all of the following requirements:
f pro- (A) It is adopted only after consultation between the board of supervisors andpany '
Code all other local affected agencies within the county's boundaries.
I
(B) It requires that all claims for transfers of base year value from original
s. (3) property located in another county be granted if the claims meet the applicable
sec of
i the a requirements of both subdivision (a) of Section 2 of Article XIII A of the
,aces. California Constitution and this section.
(C) It requires that all base Year valuations of original property located in
h had
'i
another county and determined by its assessor be accepted in connection with
,y the xhe granting of claims for transfers of base year value.
;rents (D) The ordinance provides that its provisions shall remain operative for a
tthe
o eriod of not less than five years.
try 1, 6(E) The ordinance specifies the date on and after which its provisions shall
97 c applicable. However, the date specified shall not be earlier than November 'f
d and ;+;1988. The specified applicable date may be a date earlier than the date the
scions unty adopts the ordinance. f
at the (b) In addition to meeting the requirements of subdivision (a), any person
-,mens laiming the property tax relief provided by this section shall be eligible for that
lief only if the following conditions are met:
81
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69.5 IMPLEMENTATION CONST. ART. 13A
1 Div. 1
141
(1) The claimant is an owner and a resident of the original property either at
the time of its sale or within two years of the purchase or new construction of
the replacement dwelling.
(2) The original property is eligible for the homeowner's exemption, as the
result of the claimant's ownership and occupation of the property as his or her
principal residence, either at the time of its sale or within two years of the
purchase or new construction of the replacement dwelling.
(3) At the time of the sale of the original property, the claimant or the
claimant's spouse who resides with the claimant is at least 55 years of age, or is
severely and permanently disabled.
(4) At the time of claiming the property tax relief provided by subdivision (a),
the claimant is an owner ofa replacement dwelling and occupies it as his or
her principal place of residence and, as a result thereof, the property is
currently eligible for the homeowner's exemption or would be eligible for the
exemption except that the property is already receiving the exemption because
of an exemption claim filed by the previous owner.
(5) The original property of the claimant is sold by him or her within two
years of the purchase or new construction of the replacement dwelling.' For
purposes of this paragraph, the purchase or new construction of the replace-
ment dwelling includes the purchase of that portion of land on which the
replacement building, structure, or other shelter constituting a place of abode
of the claimant will be situated and that, pursuant to paragraph (3) of subdivi-
sion (g), constitutes a part of the replacement dwelling.
1 (b) The replacement dwelling, including that portion of land on which it is
situated that is specified in paragraph (5), is located entirely within the same
county as the claimant's original property.
(7) The claimant has not previously been granted, as a claimant, the property
tax relief provided by this section, except that this paragraph shall not apply to
any person who becomes severely and permanently disabled subsequent to
being granted, as a claimant, the property tax relief provided by this section for
any person over the age of 55 years. In order to prevent duplication of claims
under this section within this state, county assessors shall report quarterly to
f the State Board of Equalization that information from claims filed in accor-
dance with subdivision (f) and from county records as is specified by the board
necessary to identify fully all claims under this section allowed by assessors and
all claimants who have thereby received relief. The board may specify that the
information include all or a part of the names and social security numbers of
} claimants and their spouses and the identity and location of the replacement
dwelling to which the claim applies. The information may be required in the
form of data processing media or other media and in a format that is
compatible with the recordkeeping processes of the counties and the auditing
procedures of the state.
(c) The property tax relief provided by this section shall be available if the
original property or the replacement dwelling, or both, of the claimant, in-
cludes, but is not limited to, either of the following:
82
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13A CHANGE IN OWNERSHIP AND PURCHASE 3 69.5
IV. 1 Pt. 0.5
x at (1) A unit or lot within a cooperative housing corporation, a community
n of apartment project, a condominium project, or a planned unit development. If J
the unit or lot constitutes the original property of the claimant, the assessor
the shall transfer to the claimant's replacement dwelling only the base year value of
her t the claimant's unit or lot and his or her share in any common area reserved as
th
e an appurtenance of that unit or lot. If the unit or lot constitutes the replace- r ' 1
ment dwelling of the claimant, the assessor shall transfer the base year value of ¢'
the the claimant's original property only to the unit or lot of the claimant and any
share of the claimant in any common area reserved as an appurtenance of that
or is unit or lot.
(a), (2) A mobilehome or a mobilehome and any land owned by the claimant on
which the mobilehome is situated. If the mobilehome or the mobilehome and
is or the land on which it is situated constitutes the claimant's original property, the
r' is assessor shall transfer to the claimant's replacement dwelling either the base
r the year value of the mobilehome or the base year value of the mobilehome and the
,ease land on which it is situated, as appropriate. No transfer of base year value
shall be made by the assessor of that portion of land that does not constitute a
two part of the original property, as provided in paragraph (4) of subdivision(g). If
For the mobilehome or the mobilehome and the land on which it is situated
dace- constitutes the claimant's replacement dwelling, the assessor shall transfer the
h the base year value of the claimant's original property either to the mobilehome or
ibode the mobilehome and the land on which it is situated, as appropriate. No.
bdivi- transfer of base year value shall be made by the assessor to that portion of land
that does not constitute a part of the replacement dwelling, as provided in
3 it is paragraph(3)of subdivision(g). l
same This subdivision shall be subject to the limitations specified in subdivision(d). ,
(d) The property tax relief provided by this section shall be available to a
)pew, claimant who is the coowner of original property, as a joint tenant, a tenant in
ply to common, or a community property owner, subject to the following limitations:
int to (1) If a single replacement dwelling is purchased or newly constructed by all E
on for of the coowners and each coowner retains an interest in the replacement
,Maims dwelling, the claimant shall be eligible under this section whether or not any or
wrly to all of the remaining coowners would otherwise be eligible claimants.
accor- (2) If two or more replacement dwellings are separately purchased or newly
board constructed by two or more coowners and more than one coowner would
rs and otherwise be an eligible claimant, only one coowner shall be eligible under this
iat the section. These coowners shall determine by mutual agreement which one of
vers of ahem shall be deemed eligible.
:ement (3) If two or more replacement dwellings are separately purchased or newly
in the constructed by two coowners who held the original property as community 1i
-hat is property, only the coowner who has attained the age of 55 years, or is severely I
editing and permanently disabled, shall be eligible under this section. If both spouses
are over 55y ears of age, they shall determine by mutual agreement which one
if the of them is eligible.
int, in-
In the case of coowners whose original property is a multiunit dwelling, the
limitations imposed by paragraphs (2) and (3) shall only apply to coowners who
83
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f,
§ 69.5 IMPLEMENTATION CONST. ART. 13A CHAR
Div. 1 Pt. 0.5
occupied the same dwelling unit within the original property at the time (4)
specified in paragraph (2)of subdivision(b). claimz
Y (e) Upon the sale of original property, the assessor shall determine a new
base year value for that property in accordance with subdivision (a) of Section dwelli-
2 of Article XIII A of the California Constitution and Section 110.1, whether or or her
not a replacement dwelling is subsequently purchased or newly constructed by The
the former owner or owners of the original property. Any
This section shall not apply unless the transfer of the original property is a replac
change in ownership that either (1) subjects that property to reappraisal at its meat c
current fair market value in accordance with Section 110.1 or 5803 or (2) (g) 1
results in a base year value determined in accordance with this section, Section (1) ,
69, or Section 69.3 because the property qualifies under this section, Section
69, or Section 69.3 as a replacement dwelling or property. persor
(f) A claimant shall not be eligible for the property tax relief provided by this origin,
de(2)
2) ,
section unless the claimant provides to the assessor, on a form that the assessor
3 shall make available upon request, the following information: detern
sub
(1) The name and social security number of each claimant and of any spouse and sL
of the claimant who was a record owner of the original property at the time of prior t.
its sale or is a record owner of the replacement dwelling. If tl
(2) Proof that the claimant or the claimant's spouse who resided on the transfe
original property with the claimant was, at the time of its sale, at least 55 years include
of age, or severely and permanently disabled. Proof of severe and permanent 110.1 1
disability shall be considered a certification, signed by a licensed physician and year o1
surgeon of appropriate specialty, attesting to the claimant's severely and shall b
permanently disabled condition. In the absence of available proof that a year vz
person is over 55 years of age, the claimant shall certify under penalty of (3)
ut' perjury that the age requirement is met. In the case of a severely and
permanently disabled claimant either of the following shall be submitted: tsoownf
4
(A) A certification, signed by a licensed physician or surgeon of appropriate and an
specialty that identifies specific reasons why the disability necessitates a move shelter
#'
" to the replacement dwelling and the disability-related requirements, including replace
any locational requirements, of a replacement dwelling. The claimant shall site for
substantiate that the replacement dwelling meets disability-related require- the cla
meats so identified and that the primary reason for the move to the replace- Sectior
meat dwelling is to satisfy those requirements. If the claimant, or the claim- be con
ant's spouse or guardian, so declares under penalty of perjury, it shall be graph,
rebuttably presumed that the primary purpose of the move to the replacement all lane
r. dwelling is to satisfy identified disability-related requirements. of the I
1 i (B) The claimant's substantiation that the primary purpose of the move to the (4)
replacement dwelling is to alleviate financial burdens caused by the disability. tuting .
If the claimant, or the claimant's spouse or guardian, so declares under penalty owned
of perjury, it shall be rebuttably presumed that the primary purpose of the move and an,
is to alleviate the financial burdens caused by the disability. shelter
(3) The address and, if known, the assessor's parcel number of the original origins.
property.
for a re
84
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,= x
CHANGE IN OWNERSHIP AND PURCHASE § 69.5
Pt. 0.5
(4) The date of the claimant's sale of the original property and the date of the
claimant's purchase or new construction of a replacement dwelling. i
(5) A statement by the claimant that he or she occupied the replacement
dwelling as his or her principal place of residence on the date of the filing of his
or her claim.
The State Board of Equalization shall design the form for claiming eligibility. r
Any claim under this section shall be filed within three years of the date the
replacement dwelling was purchased or the new construction of the replace-
ment dwelling was completed. 1
(g) For purposes of this section:
(1) ".Person over the age of 55 years" means any person or the spouse of any
person who has attained the age of 55 years or older at the time of the sale of j
original property.
(2) "Base year value of the original property„ means its base year value, as !
determined in accordance with Section 110.1, with the adjustments permitted
by subdivision (b) of Section 2 of Article .XIII A of the California Constitution
and subdivision (f) of Section 110.1, determined as of the date immediately
prior to the date that the original property is sold by the claimant.
If the replacement dwelling is purchased or newly constructed after the
transfer of the original property, "base year value of the original property," also
includes any inflation factor adjustments permitted by subdivision (f) of Section
110.1 for the period subsequent to the sale of the original property. The base
year or years used to compute the "base year value of the original property,"
shall be deemed to be the base year or years of any property to which that base
year value is transferred pursuant to this section. ; !
(3) "Replacement dwelling„ means a building, structure, or other shelter '
constituting a place of abode, whether real property or personal property, that
is owned and occupied by a claimant as his or her principal place of residence, }j
and any land owned by the claimant on which the building, structure, or other
shelter is situated. For purposes of this paragraph, land constituting a part of a
replacement dwelling includes only that area of reasonable size that is used as a
site for a residence, and "land owned by the claimant" includes land for which
the claimant either holds a leasehold interest described in subdivision (e) of +
Section 61 or a land purchase contract. Each unit of a multiunit dwelling shall 1 '
be considered a separate replacement dwelling. For purposes of this para-
;l�aph, "area of reasonable size that is used as a site for a residence" includes '
all land if any nonresidential uses of the property are only incidental to the use '`f
Of the property as a residential site. E
i'
(4) "Original property„ means a building, structure, or other shelter consti-
tuting a place of abode, whether real property or personal property, that is
awned and occupied by a claimant as his or her principal place of residence, j
and any land owned by the claimant on which the building, structure, or other
shelter is situated. For purposes of this paragraph, land constituting a part of
Original property includes only that area of reasonable size that is used as a site
for a residence, and "land owned by the claimant" includes land for which the
85
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1;
§ 69.5 IMPLEMENTATION CONST. ART. 13A C1
.Div. 1 Pt
claimant either holds a leasehold interest described in subdivision(c)of Section
61 or a land purchase contract. Each unit of a multiunit dwelling shall be sh
considered a separate original property. For purposes of this paragraph, "area ar
of reasonable size that is used as a site for a residence" includes all land if any
nonresidential uses of the property are only incidental to the use of the property su
as a residential site.
(5) "Equal or lesser value" means that the amount of the full cash value of a ye
replacement dwelling does not exceed one of the following: ac
(A) One hundred percent of the amount of the full cash value of the original
property if the replacement dwelling is purchased or newly constructed prior to
the date of the sale of the original property.
(B) One hundred and five percent of the amount of the full cash value of the
original property if the replacement dwelling is purchased or newly constructed of
4i within the first year following the date of the sale of the original
property. ar
k' (C) One hundred and ten percent of the amount of the full cash value of the th
. il original property if the replacement dwelling is purchased or newly constructed w
within the second year following the date of the sale of the original property.
g.,
For the purposes of this paragraph, except as otherwise provided in para- 7-`
graph (4) of subdivision (h), if the replacement dwelling is, in part, purchased ac
and, in part, newly constructed, the date the "replacement dwelling is pur- to
IT chased or newly constructed" is the date of purchase or the date of completion
of construction, whichever is later. gr
(6) "Full cash value of the replacement dwelling" means its full cash value, st
determined in accordance with Section 110.1, as of the date on which it was
th
th
purchased or new construction was completed, and after the purchase or the of
completion of new construction.
(7) "Full cash value of the original property" means its new base year value, sa
determined in accordance with subdivision (e), without the application of sa
r' cc
subdivision (h) of Section 2 of Article XIII A of the California Constitution, plus
+ the adjustments permitted by subdivision (b) of Section 2 of Article XIII A and 1
subdivision p
(f) of Section 110.1 for the period from the date of its sale by the
' claimant to the date on which the replacement property was purchased or new is
construction was completed.
Pt
g dT
(8) "Sale" means any change in ownership of the original property for
consideration.
th
(9) "Claimant" means any person claiming the property tax relief provided of
by this section. If a spouse of that person is a record owner of the replacement to
dwelling, the spouse is also a claimant for purposes of determining whether in fo
any future claim filed by the spouse under this section the condition of
eligibility specified in paragraph (7) of subdivision (b) has been met.
(10) "Property that is eligible for the homeowner's exemption" includes ec
property that is the principal place of residence of its owner and is entitled to cF
exemption pursuant to Section 205.5. re
86
i
RT. 13A CHANGE IN OWNERSHIP AND PURCHASE § 69.5
Div. 1 Pt. 0.5
Section (1I) "Person" means any individual, but does not include any firm, partner-
shall be ship, association, corporation, company, or other legal entity or organization of
,h, "area any kind.
id if any (12) "Severely and permanently disabled" means any person described in
property subdivision (b) of Section 74.3.
(h)(1) Upon the timely filing of a claim, the assessor shall adjust the new base
aiue of a year value of the replacement dwelling in conformity with this section. This
adjustment shall be made as of the latest of the following dates:
original (A) The date the original property is sold.
I prior to (B) The date the replacement dwelling is purchased.
(C) The date the new construction of the replacement dwelling is completed.
ue of the (2) Any taxes that were levied on the replacement dwelling prior to the filing
nstructed of the claim on the basis of the replacement dwelling's new base year value,
property. and any allowable annual adjustments thereto, shall be canceled or refunded to IV
lue of the the claimant to the extent that the taxes exceed the amount that would be due
nstructed when determined on the basis of the adjusted new base year value.
property. (3) Notwithstanding Section 75.10, Chapter 3.5 (commencing with Section
75) shall be utilized for purposes of implementing this subdivision, including
in para-
purchased adjustments of the new base year value of replacement dwellings acquired prior '
'
ig is pur- to the sale of the original property.
impletion (4) In the case where a claim under this section has been timely filed and
granted, and new construction is performed upon the replacement dwelling
ash value, subsequent to the transfer of base year value, the property tax relief provided by
ich it was this section also shall apply to the replacement dwelling, as improved, and thus
there shall be no reassessment upon completion of the new construction if both
ase or the of the following conditions are met:
ear value, (A) The new construction is completed within two years of the date of the
sale of the original property and the owner notifies the assessor in writing
ication of ng of
lus completion of the new construction within 30 days after completion.
KIII A and (B) The fair market value of the new construction on the date of completion,
ale b the plus the full cash value of the replacement dwelling on the date of acquisition,
y is not more than the full cash value of the original property as determined
:ed or new pursuant to paragraph 7 of subdivision
g p ( ) (g) for purposes of granting the
original claim.
operty for (i) An claimant may rescind a claim for the property Any y p p rty tax relief provided by
this section and shall not be considered to have received that relief for purposes
f provided of paragraph (7) of subdivision (b), if a written notice of rescission is delivered
placement to the office of the assessor in which the original claim was filed and all of the
whether in following have occurred:
)ndition of (1) The notice is signed by the original filing claimant or claimants.
(2) The notice is delivered to the office of the assessor before the date that the
includes county first issues, as a result of relief granted under this section, a refund
entitled to check for property taxes imposed upon the replacement dwelling. If granting
relief will not result in a refund of property taxes, then the notice shall be
87
I
,i
I
§ 69.5 IMPLEMENTATION CONST. ART. 13A C:
Div. I P1
delivered before payment is first made of any property taxes, or any portion
thereof, imposed upon the replacement dwelling consistent with relief granted
under this section. If payment of the taxes is not made, then notice shall be
delivered before the first date that those property taxes, or any portion thereof, at'
U
imposed upon the replacement dwelling, consistent with relief granted under Ta
of
this section, are delinquent. bit
(3) The notice is accompanied by the payment of a fee as the assessor may di,
require, provided that the fee shall not exceed an amount reasonably related to P
the estimated cost of processing a rescission claim, including both direct costs an
and developmental and indirect costs, such as costs for overhead, personnel, dv
supplies, materials, office space, and computers. co
Ch
0)(1) With respect to the transfer of base year value of original properties to be
replacement dwellings located in the same county, this section, except as pr
provided in paragraph (3)or(4), shall apply to any replacement dwelling that is pr
.
purchased or newly constructed on or after November 6, 1986. ch
(2) With respect to the transfer of base year value of original propertiesto i
replacement dwellings located in different counties, except as provided in co
paragraph (4), this section shall apply to any replacement dwelling that is an
1 purchased or newly constructed on or after the date specified in accordance Su
with subparagraph (E) of paragraph (2) of subdivision (a) in the ordinance of cls
the county in which the replacement dwelling is located, but shall not apply to `1i
ed
any replacement dwelling which was purchased or newly constructed before Se
November 9, 1988. ha
(3) With respect to the transfer of base year value by a severely and perma- {
(, nently disabled person, this section shall apply only to replacement dwellings di.
that are purchased or newly constructed on or after June 6, 1990. Ca
(4) The amendments made to subdivision (e) by the act adding this para- civ
graph shall apply only to replacement dwellings under Section 69 that are ha
acquired or newly constructed on or after October 20, 1991, and shall apply
tv
.i commencing with the 1991-92 fiscal year. ,`
(k) The amendments to this section made by the act adding this subdivision, in
and by the act amending this section during the 1997-98 Regular Session of the id`
(b)
Legislature, shall become operative on January 1, 1999. qu
aft
(Added by Stats.1987, c. 186, § 1, eff. July 23, 1987. Amended by Stats.1988, c. 160,
§ 165; Stats.1988, c. 1271, § 2, eff. Sept. 26, 1988, operative Jan. 1, 1999; Stats.1990, t}
C c. 902 (A.13.3723), § 1; Stats.1990, c. 1487 (A.B.2835), § 2; Stats.1990, c. 1494 (A.B. tai
3843), § 3.7, eff. Sept. 30, 1990, operative Jan. 1, 1999; Stats.1992, c. 1180 (S.B.1639), cy,
§ 3.5, operative Jan. 1, 1999; Stats.1994, c. 1010 (S.B.2053), § 223.5, operative Jan. 1, pa,
1999; Stats.1994, c. 1222 (S.B.1431), § 7, operative Jan. 1, 1999; Stats.1996, c. 897 pa
(S.B.1692), § 2, eff. Sept. 25, 1996, operative Jan. 1, 1999; Stats.1997, c. 227 (A.B.240),
§ 1, operative Jan. 1, 1999; Stats.1997, c. 940 (&B,1105), § 6, operative Jan. 1, 1999; WY
Stats.1997, c. 941 (S.B.542),§ 2,operative Jan. 1, 1999.) a
3 pr(
For text of,section operative until .fan. 1, 1999, see Revenue and het
Taxation Code§ 69.5, ante. in
, GC(
i
Sul
88
i
13A CHANGE IN OWNERSHIP AND PURCHASE § 69.5
"iv. 1 Pt. 0.5
-tion Historical and Statutory Notes
nted Section 3 of Stats.1987,c. 186,provides: subd.(g)(3), added the last phrase of the second
it be "The Legislature finds and declares that valu- sentence following "residence", and added the 1
ations of replacement dwellings by assessors for third sentence; in subd. (g)(4), added the last
hof' purposes of Section 69.5 of the Revenue and phrase of the second sentence following "resi-
nder Taxation Code necessarily involve the exercise dence", and added the third sentence. The
of judgment, and that to the extent that intangi- amendment also, in subd. (g)(5)(C), added the
ble factors may be involved in those judgments, second paragraph; in subd. (h)(3) added the
may differences may occur in the valuation of com- third paragraph; added subd. 0); and made
.d to parable replacement dwellings which result in nonsubstantive changes throughout the section,
the qualification of some replacement dwellings Operation of amendments by Stats.1988, c.
'oS and the disqualification of other replacement 1271, §§ 2, 2.5, was contingent on approval of
lnel, dwellings within a particular county or between A.C.A. No. I of the 1987-88 regular session,
counties. The Legislature further finds and de- approved as Proposition 90 of the Nov. 8, 1988,
clares that a replacement dwelling which may election.
2S to be of equal or lesser value than the original Section 9 of Stats.1988,c. 1271,provides:
,t as property at the time of the sale of the original
property may no longer meet that eligibility "Unless specifically provided otherwise in I
at is criterion when the replacement dwelling is pur- that section, the amendments to Section 69.5 of i{
chased or newly constructed one or two years the Revenue and Taxation Code made by this
after the sale of the original property. In order act shall apply to purchases and transfers of
:S t0 to provide the maximum property tax relief real property which occur on or after November
d in 4` contemplated by Section 69.5 of the Revenue 5, 1986."
at is and Taxation Code, consistent with the terms of Subordination of legislation by Stats.1988, c.
subdivision (a) of Section 2 of Article XIII A of 160, to other legislation enacted during the
ince the California Constitution, the Legislature con- 1988 calendar year, whether enacted before or
,e of eludes that the 5 percent annual adjustment in after c. 160, see Historical Note under Business j
ly to the valuation of a replacement dwelling provid- and Professions Code§ 6033.
,fore ed for in paragraph (5) of subdivision (g) of The 1990 amendment, by c. 1494 (A.B.3843),
Section 69.5 properly ameliorates the potential § 3.7, extended the provisions regarding trans-
hardships to property owners referred to in this fers of base-year value to include severely and
section and is a valid implementation of the permanently disabled persons; in the second
rma" authority conferred upon the Legislature by sub- sentence of subd (b)(7), added "and all claim-
lings division (a)of Section 2 of Article XIII A of the ants who have thereby received relief"; rewrote
California Constitution." subd.(f)(2),which read:
The 1988 amendment,by c. 1271,§ 2, opera- "Proof that the claimant or the claimant's
Sara- tive Jan. 1, 1999, rewrote subd. (b)(1), which spouse who resided on the original property
are had read: with the claimant was, at the time of its sale, at
pply "At the time of the sale of the original proper- least 55 years of age. In the absence of avail- ;
ty, the claimant is an owner and a resident of able proof, the claimant shall certify under pen-
that property."; alty of perjury that the age requirement is met."
cion, in subd. (b)(2),added the phrase following "res- The 1990 amendment, by c. 1494 (A.B.3843),
f the idence" at the end of the sentence; in subd. § 3.7, also, in the second paragraph of subd.
(b)(7), in the second sentence, inserted "report (g)(5)(C), inserted "except as otherwise provid-
quarterly to the State Board of Equalization"' ed in paragraph(4)of subdivision(h)'"; inserted
160, after "shall", and deleted "'the written request subds. (g)(11) and (g)(12); redesignated former
of"after "specified by"; in subd. (d)(1),deleted cls. (1) to (3) of the first paragraph of subd. (h)
1990' "the same proportional interest" after "re- as subds. (h)(1)(A) to (h)(1)(C); designated the
(A•B• tains", and substituted "dwelling" for "proper- former second and third paragraphs of subd.(h)
639), ty" after "replacement"; added the second as subds.(h)(2)and(h)(3); inserted subds.(h)(4)
an. 1, paragraph of subd. (d)(3); rewrote the second and (i); redesignated as subds. 0) and (k) and
897 paragraph of subd. (e),which had read: rewrote former subds. (i) and 0), which had
240), "This section shall not apply in any case in read:
1999; which the transfer of the original property is not "(i) This section shall apply to any replace-
a change in ownership which subjects that ment dwelling which is purchased or newly
property to reappraisal at its current fair mar- constructed on or after November 6, 1986.
j ket value in accordance with Section 110.1 or "o) The amendments to this section made by
5803."; the act adding this subdivision shall become
in subd. (f)(5), substituted "occupied" for "will operative on the effective date of this act unless
occupy" and "on" for "within one year of"; in Assembly Constitutional Amendment No. I of
subd. (g)(2), added the second paragraph; in the 1987-88 Regular Session is approved by the '!
89
Iii
§ 69.5 IMPLEMENTATION CONST. ART. 13A NJ
Div. 1 Pt.
voters. In that event,the amendments shall not 1992 amendment of this section by c. 1180 Ste
become operative until January 1, 1999." (S.B.1639),§ 3.5. Ca
The 1990 amendment of this section by c. Subordination of legislation by Stats.1994, c.
1494,§ 3.7 explicitly amended the 1988 amend- 1010 (S.B.2053), see Historical and Statutory
ment of this section by c. 1271,§ 2. Notes under Business and Professions Code `
Section 9 of Stats.1990, c. 1494 (A.B.3843), § 128• No
provides: The 1996 amendment, in the first sentence of
r "The amendments made by Sections 2.3, 2.7, subd. (b)(7), inserted ", except that this para-
3.3, and 3.7 of this act to Section 69.5 of the graph shall not apply to any person who be.
!c Revenue and Taxation Code with respect to newcomes severely and permanently disabled sub- l
i construction performed upon a replacement sequent to being granted, as a claimant, the 24
dwelling subsequent to the transfer of base-year property tax relief provided by this section for
value to that dwelling shall only apply with any person over the age of 55 years"; and, in
respect to a replacement dwelling which is pur- subd. (g), pars. (3) and (4), added the last two
chased or newly constructed on or after January sentences defining "area of reasonable size that
1, 1991." is used as a site for a residence"and "commer- t
Under the provisions of§ 8 of Stats.1990, c. cial purposes". t
1494 (A.B.3843), the 1990 amendments of this The 1996 amendment of this section by Stats.
section by c. 902, c. 14$7 and c. 1494 were 1996, c. 897 (S.B.1692) explicitly amended the
given effect and incorporated in the form set section as amended by Stats.1994, c. 1222, § 7.
forth in§§ 2.7 and 3.7 of c. 1494. Amendments Legislative declaration of Stats.1996, c. 57
of this section by§§ 2, 2.3, 2.5, 3, 3.3, and 3.5, (S.B.141),§ 30, relating to the rendition of pro-
of Stats.1990, c. 1494 (A.B.3843), failed to be- fessional services by a limited liability company,
Come operative under the provisions of § 8 of see Historical and Statutory Notes under Code
that Act. of Civil Procedure§ 699.720. Se
Amendment of this section b §§ 1.3, 1.5, 1.7, g 70
t Y Stats.1997,997,c. 941,added subd. (a)(2),relating 70
2.3, 2.5, 2.7 of Stats.1990, c. 1487, failed to to ordinances making the provisions of para- 71
become operative under the provisions of§ 4 of graph (1) applicable to situations in which re-
that Act. placement dwellings are located in that county 72
i Amendment of this section by§§ 1.3, 1.5, 1.7, and the original properties are located in anoth-
2.3, 2.5, 2.7 of Stats.1990, c. 902, failed to er county; in subds. (g)(4) and (g)(5), in the 73
become operative under the provisions of§ 3 of fourth sentences substituted "any nonresidential 73
that Act. uses of the property are only incidental"for"no 73
Section affected by two or more acts at the portion of the property is used for commercial 74
same session of the legislature,see Government purposes. 'Commercial purposes' does not in'
Code§ 9605 clude activities that are"; in subd. 0)(1), insert-
74
The 1992 amendment inserted references to ed "'With respect to the transfer of base year
§ 69 in subd. (e); inserted the reference to value of original properties to replacement 74
dwellings located in the same county,", and
paragraph(.3)in subd.(j)(1); and inserted subd. substituted "paragraph (3) or (4)" for "para-
0)(3)relating to application of the amendments graph (2) or(3)"; inserted subd. 0)(2), relating 74
made to subd.(e).
to the application of the section to any replace-
The 1992 amendment of this section by c. ment dwelling that is purchased or newly con-
1180,§ 3.5 explicitly amended the 1990 amend- structed on or after a date specified; in subd.
ment of this section by c. 1494,§ 3.7. (k), inserted ", and by the act amending this
The 1994 amendment by c. 1222, § 7, in the section during the 1997-98 Regular Session of
second paragraph of subd. (d)(3) substituted the Legislature,"; and made nonsubstantive
"coowners whose original property" for changes.
"coowners who original property"; rewrote Section 130 of Stats.1997, c. 17, provided for PIE
item 2 of the second paragraph of subd. (e), amendment and repeal on Jan. 1, 1999, of
which previously read, "results in a base-year § 69.5, as amended by Stats.1996, c. 897, § I. §
value determined in accordance with this sec- Section 131 of Stats.1997, c. 17, provided for
tion or Section 69 because the property quali- repeal of § 69.5, as amended by Stats.1996, c.
fies under this section or Section 69 as a re- 897, § 2. Section 132 of Stats.1997, c. 17,
placement dwelling"; in the second sentence of provided for the addition of§ 69.5, to become
subd. (f)(2)(B) substituted "penalty of perjury" operative Jan. 1, 1999. Stats.1997, e. 227, § i fix
for"penalty or perjury'; and made nonsubstan- and Stats.1997, c. 941, § 2, amended§ 69.5, as
tive changes throughout the section. amended by Stats.1996, c.897,§ 2. th
The 1994 amendment of this section by c. Subordination of legislation by Stats.1997, c.
1222 (S.B.1431), § 7 explicitly amended the 17, to other 1997 legislation, see Historical and cc
90
13A NEW CONSTRUCTION § 70
IV. 1 y Pt. 0.5
1180s Statutory.Motes under Business and Professions Section affected by two or more acts at the
Code§ 30. same session of the legislature, see Government
94, c. Code§ 9605.
utory
Code Cross References
Notice of tax relief available under this section to be included in change in ownership statement,
ice of see Revenue and Taxation Code§ 480.
para- Law Review and Journal Commentaries
o be-
1 sub- Review of selected 1992 California legislation.
t, the * 24 Pac.L.J. 1043(1993).
)n for
rid, in Library References
it two Taxation e-362.5. Guide's Table of Statutes for chapter para- "
e that WESTLAW Topic No.371. graph number references to paragraphs dis-
nmer- C.J.S.Taxation§§ 419,509.
cussing this section.
California Practice Guide: Real Property
Stats. Transactions, Greenwald & Asimow, see
ed the q
2, § 7.
c. 57 Chapter 3
A pro- j
apany, NEW CONSTRUCTION
Code f
Section
elating 70. Newlyconstructed; new construction. (�
para- 71. Determination of new base year value by assessor; construction in progress. {
ich re- Building 72. un permit; certificates of occupancy; plans; filing; transmittal to county
county g P P Yr P g;
anoth- assessor.
in the 73. Repealed.
dential 73.1, Inoperative.
for"no 73:5.
t
nercial 74. Exclusions from definitions of "newly constructed" or "new construction" of f�
not in- certain fire protection devices and improvements. 1
insert- 74.3. Exclusions from definition of "newly constructed" of certain construction to
;e year existing dwellings eligible for homeowner's exemption.
cement 74.5. Exclusions from definitions of "newly constructed" and "new construction";
and
para seismic retrofitting; earthquake hazard mitigation technologies.
relating 74.6. Construction for purpose of making building accessible to disabled person; !
vplace- exclusion from definition of "newly constructed" and "new construction".
,ly con-
n subd. Chapter 3 was added by Stats.1979, c. 242, p. 506, § 4, off. July 10,
.ng this 1979.
ssion of
stantive
Cross References
ided for Planned development assessments,see Revenue and Taxation Code§ 2188.5. 7:
999, of
97, § L
ided for 3 70. Newly constructed; new construction y
1996, c. 't
c. 17, (a) "Newly constructed" and "new construction" means:
become (1) Any addition to real property, whether land or improvements (including
227, § 1 fixtures), since the last lien date; and
•'i
69.5, as
(2) Any alteration of land or of any improvement (including fixtures) since
1997, c. the last lien date which constitutes a major rehabilitation thereof or which
�ical and converts the property to a different use.
91
i'
i
+i
OFFICE OF THE COUNTY ADMINISTRATOR
CONTRA COSTA COUNTY
Administration Building ATTACHMENT
Pine Street, 10th Floor
Martinez, CA 94553 B
DATE: July 13, 2000
TO: Finance Committee
Mark DeSaulnier
Joe Canciamilla
FROM: Tony Enea, Senior Deputy County Administrator
SUBJECT: FINANCIAL IMPACT OF IMPLEMENTING PROPOSITION 90
Recommendation:
Oppose the implementation of Proposition 90, which allows for the transfer of property tax base values
for those persons over 55 years of age moving from another county into Contra Costa County.
Bac ar und•
On March 6, the Finance Committee discussed a report from the Assessor which estimated an annual
1,000,000 property tax revenue loss if Proposition 90 were to be reinstituted (see attachment).
Administrative costs of about$90,000 per year would also be required. The Committee deferred action
on this matter until more was known about the County Budget.
The County Budget will be discussed by the Board of Supervisors starting on July 19. The Board is
faced with a $14,300,000 deficit from the Health Services and Probation Departments. Property tax relief
from the State Government's $12,300,000,000 surplus will amount to $2,700,000 — about half the
estimated incremental loss of property tax revenue to the state in fiscal year in 2001. The County
Administrator has written in the fiscal year 2000 — 2001 budget message that "if the State does not act
to restore (property tax) or increase other forms of general purpose revenue, we must begin to plan for
major restructuring of the budget in future years".
It is the recommendation of the County Administrator and the County Assessor that Proposition 90
should not be implemented. Further erosion of property tax revenues will require budget cuts not
currently included in the budget. The Proposition will also burden the Assessor with additional
administrative costs. Most counties have not implemented Proposition 90 because of the negative
budget implications. Finally, the Proposition may encourage property tax in inequities as cited in the
Assessor's report.
Attachment
cc: Gus Kramer, County Assessor
Contra Costa County Assessor's Office 834 Court Street,Martinez,CA 94553
DATE: February 24, 2000
TO: Tony Enea, Senior Deputy County Adminis
FROM: Gus S. Kramer, County Assessor
SUBJECT: Budgetary Impact of Re-Adopting Proposition 90
At the January 11, 2000 Board of Supervisors' meeting, Supervisor Joe Canciamilla
requested that the Board reconsider adopting an ordinance allowing for the
implementation of Proposition 90 relative to property tax transfers. This issue was
referred to the Finance Committee and the following staff report summarizes the
budgetary impact of re-adopting this ordinance in Contra Costa County.
Back
graunr
In March of 1989, the Board of Supervisors adopted Ordinance 89-25 allowing for the
implementation of Proposition 90, implementing provisions of a state ballot measure
which allowed the transfer of base property tax values for those over 55 years of age
moving from another county into Contra Costa County and amended Chapter 66-10,
Taxation of Replacement Residences. The Board subsequently repealed Chapter 66-10 in
1993 due to the severe budget crisis the County faced and because of the substantial
losses of property tax revenue resulting from the implementation of Proposition 90.
Erosion of Tax Base/Lass of,Revenue
Per a report from Phil Batchelor to the Board of Supervisors dated June 15, 1992, the
fiscal impact of Proposition 90 during the period of November 1988 through June 1992
resulted in a property tax loss of approximately $1.1 million per year. During this period,
the Assessor's Office processed approximately 700 Proposition 90 exemptions. At that
time, the average purchase price of homes in the County was $228,957. The average
assessed value transferred from the homebuyers' previous county was $80,719, which
represents 35% of the assessed market value of the property. Due to the reduction in
assessed market value, the average assessed value loss to the secured assessment roll was
$148,238, which equates to 65% of the market value of the property. Property taxes lost
to all jurisdictions amounted to approximately $4.4 million.
The Assessor's Office recently surveyed counties who currently have an ordinance
implementing Proposition 90 to gather statistics relative to participation level and
financial impact of implementing Proposition 90. Pour counties (Alameda, Monterey,
San Mateo and Ventura) responded and the survey results indicate that, although the total
value loss and number of Proposition 90 claims differ from county to county, the
"average value transferred" percentage remains at approximately 35% of market value
and the "average value loss" percentage remains at 65% of market value.
Today, the average sales price of homes in Contra Costa County is $356,166. Using the
above percentages, if Proposition 90 were re-instated, the average assessed value being
transferred from the homebuyers' previous county would be $124,658 and the average
assessed value loss per claim would be $231,508. Considering that the cost of a home in
Contra Costa County is significantly less than in neighboring counties, and there is a high
demand for affordable housing in the bay area, it is projected that the number of
Proposition 90 claims processed will be twice the amount processed between 1988 and
1993.
If approximately 300 Proposition 90 exemptions are processed annually, the average
value loss to the secured assessment roll will total $69,452,400 and the property tax loss
is estimated to be $868,155 for the first year. The following is an analysis of tax revenue
losses based on the above assumptions:
Tax Rev Lost Tax Revenue Tax Rev Lost
Year from Secured Cumulative from Supp. Total Loss Admin.
Roll Loss* Loss. Roll Loss* Costs**
1 $ 868,155 $ 868,155 $ 434,078 $ 1,302,233 $ 89,200
2 $ 937,607 $ 1,805,762 $ 468,804 $ 2,274,566 $ 93,660
3 $ 1,012,616 $ 2,818,378 $ 506,308 $ 3,324,686 $ 98,343
4 $ 1,093,625 $ 3,912,004 $ 546,813 $ 4,458,816 $ 103,260
5 Is 1,181,115 1 $ 5,093,119 $ 590,558 $ 5,683,677 $ 108,423
* Assume 8% annual inflation factor
** Assume 5% annual inflation factor
Administrative Costs
Based on past experience, it is anticipated that administrative support required for the
implementation of the Proposition 90 program will include the addition of one full time
clerk and one half time appraiser for a total annual cost of $89,200 in salaries and
benefits. This cost is based on the number of hours to process exemption claims which
2
require extensive research and follow up to determine homebuyer eligibility, and time
spent evaluating and reevaluating records once the delinquent information is received.
Since the majority of counties do not participate in the Proposition 90 program, the
exchange of information between counties is cumbersome and often causes processing
delays. Also, in the past, the burden of securing the necessary documents to validate
Proposition 90 applications has been placed with the applicant, which has also caused
paper delays in approving exemption claims.
Beneficiaries of Proposition 90
Based on a historical review of homebuyers who were granted exemptions, the majority
of Proposition 90.beneficiaries have come from Alameda County, San Mateo County and
San Francisco County. During the 5-year period that Proposition 90 was in effect in
Contra Costa County, the average fair market value of the residences sold by Proposition
90 beneficiaries was $350,000. This data supports the idea that Proposition 90 tends to
benefit a small percentage of homebuyers. It was also reported that the majority of
Proposition 90 beneficiaries settled in Rossmoor and do not appear to be low income
senior citizens who are trying to preserve a modest retirement home for themselves.
With the trend in the workforce towards a high-tech job market, Contra Costa County is
in high demand with respect to affordable housing relative to Alameda County, San
Mateo County and Santa Clara County because of open space and quality suburban living
conditions. If Proposition 90 is implemented, we are at high risk of unjustly enriching a
small but affluent population of homebuyers who will benefit from the tax exemption
program, and we will ultimately -ontribute to the loss of property tax revenue at the
expense of the working class that already resides in Contra Costa County.
cc: Mark DeSaulnier, Chair, Finance Committee
Joe Canciamilla, Member, Finance Committee
3
FEB-02-2000 12:58 P.02i02
Contra
TO: BOARD OF SUPERVISORS ;,f Costa
FROM: Supervisor Joe Canciamilla County
DATE: January 11, 2000 0
SUBJECT: REQUEST THAT THE BOARD RECONSIDER ADOPTING AN ORDINANCE
ALLOWING FOR THE IMPLEMENTATION OF PROPOSITION 90 RELATIVE TO
PROPERTY TAX TRANSFERS
SPECIFIC REQUEST(S)OR RECOMMENDATION(S)AND JUSTIFICATION
RECOMMENDED ACTION: Request that the Board of Supervisors reconsider adoption of an
ordinance allowing for the implementation of Proposition 90 relative to property tax transfers. Refer
this issue to the Finance Committee and, request that staff prepare a preliminary report evaluating
the budgetary impact of re-adopting this ordinance for the Finance Committee's next agenda.
BACKGROUND INFORMATION: In March 1989 the Board of Supervisors adopted Ordinance 89-26
allowing for the implementation of Proposition 90, implementing provisions of a statement ballot
measure which allowed the transfer of base property tax values for those over 55 moving from
another county into Contra Costa County and amended Chapter 68-10,Taxation of Replacement
Residences. The Board subsequently repealed Chapter 66.10, by the Board in 1993.
There have been a number of"over 55"developments constructed in Contra Costa County,
and my office has received several Inquiries from incoming residents who were either not aware that
this ordinance had been repealed in our County, and are simply inquiring why it is not in effect.
I believe it is appropriate to revisit this issue.
CONTINUED ON ATTACHMENT: —YES SIGNATURE:
RECOMMENDATION OF COUNTY ADMINISTRATOR RECOMMEKATION OF BOARD COMMITTEE
APPROVE OTHER
SIGNATURE(S)
ACTION OF BOARD ON APPROVED AS RECOMMENDED: OTHER:
VOTE OF SUPERVISORS:
UNANIMOUS(ABSENT )
AYES: NOES:
1 HEREBY CERTIFY THAT THIS IS A TRUE AND CORRECT COPY
OF AN ACTION TAKEN AND ENTERED ON THE MINUTES OF THE
ABSENT: ABSTAIN: BOARD OF SUPERVISORS ON THE DATE SHOWN.
ATTESTED
PHIL BATCHELOR,CLERK OF THE BOARD OF
SUPERVISORS AND COUNTY ADMINISTRATOR
a: County Adminlspator's Office
Gus Kramer-Courtly Assadear
BY
DEPUTY
T'rlTdi 4� C'�
July 1, 2000
Finance Committee
Contra Costa County
Martinez, CA
Subject: Adoption of an ordinance to implement Proposition 90
for out-of-county residents
Gentlemen:
Thank you for making time during the meeting of,July 17th to discuss the
possible adoption of Proposition 90 for residents over 55 from other counties
in the State of California.for the Finance Committee
In order to facilitate the adoption of this ordinance relative to the property tax
transfer, the residents of Summerset II in Brentwood (an over 55 development)
would like to present the following for your consideration at this meeting.
We realize that this privilege was taken away in 1992 due to financial needs of
the County after the State took a large portion of property tax money from you.
At the present time, the State is returning some of this revenue to you based on
their large surplus. Because of this, we feel you should readopt Proposition 90
for transfers from all counties. The elimination of this benefit places an
extreme financial burden on many residents here at Summerset and the County
who are on fixed incomes. For those of us transferring in from other counties,
the property tax burden has tripled or quadrupled.
At the time this benefit was removed, the only over 5 S facility in the County was
Rossmoor where the residents are generally of a higher income than some of
the Summerset residents. It may not have created a financial burden on these
individuals; however, many of the residents of Summerset are on fined incomes
and/or disabled. This tremendous tax burden may in the near future force
some to sell their homes and move elsewhere, as they will be unable to maintain
the financial strain brought on by this excessive tax burden. Not only will this
be a financial burden, but an emotional and physical hardship as well.
Finance Committee Page Z
As mature adults, we require minimal, if any, draw on the County's finances:
i.e. Children in school; our roads are maintained privately within the
development, most of us do not commute, therefore, do not contribute to the
gridlock on the highways, which increases the need for new and improved
roads. Further, as adults with time for volunteer work, we assist in many
community activities, such as the annual Brentwood Corn Fest, an annual golf
tournament to raise money for 'VESTIA and other County programs, as well as
volunteer work at County libraries, community centers, and the Byron Boys
ranch. These activities help in saving substantial money for the County. In one
of the most recent charity events, we were able to provide a large sum of
money needed to buy uniforms for the Liberty High School band. We bought
the band uniforms with our fund-raising. We are willing and ready to help the
County as much as possible.
It is a known fact that the property tax base in Contra Costa County has
increased substantially over the past (5) years due to the increase in market
value of real estate, including commercial property and new developments
In East Contra Costa County. These new developments are continuing at a fast
pace, with Brentwood being one of the top growth cities in the State of
California. The finances in the County coffers should greatly increaser!
As previously noted, you are allowing some Summerset residents to bring their
property tax base (former Contra Costa County residents) with them.. The rest
of us are being discriminated against by not having the same benefit. Is this
unlawful discrimination??? If you readopt this ordinance, is the loss .of
revenue from these residents any different than the loss of revenue from us?
The number moving here from within the county are about equal to those of us
from other counties. We are not talking about thousands of residents, but only
a few hundred residents in our particular development. Unfortunately, many
residents have already lost the privilege of Proposition 90 because of the two
(2) year limitation set by the State of California and can do nothing about it
because it is a State law. Please do not make more of us suffer the same
consequences. Please give this issue your prompt attention with a favorable
decision in readopting Proposition 90 for out-of-county transfers.
Many of us will be in attendance at the July 17th meeting. Hopefully, we will be
allowed to speak and express our concerns for this financial hardship.
Concerned Summerset II Brentwood residents.
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t 7
SUMMERSEr
AT BRENTWOOD
A Pulte Active Adult Community
To whom it concerns:
As the sales manager for a large Active Adult Community in Brentwood
selling approximately 250-300 homes a year to persons 55+, it is my opinion
that we would capture an additional 12 15% of buyers if they were allowed
to transfer their tax base from outside Contra Costa County. The additional
tax liability by not having this option available to them, particularly
considering the majority is on a fixed income, very often causes them to
simply remain in their existing home. Some of the benefits lost in.addition to
the tax revenue is the considerable amount of disposable income the `adult'
buyer brings and the high level of volunteerism and sharing of time and
knowledge imparted, particularly on the youth of a community.
Very Tru'
R dy ul
190 Summerset Drive 0 1lrentuvod,CA 94513 0 (925)516-7500 •1 (888)786-7738 •Fax 9251516-7624
Summerset buyers by county
Purchased within last 18 months
Contra Costa — 121
Santa Clara v 67
Alameda— 61
San Mateo — 20
San Joaquin - 3
SECTION F 1 SATURDAY 1 JULY 1, 20030 1 SAN JOSE MERCURY NEWS
---REA [ EST-AT [ -
C . City demand excessive
easement for water Connective?
BY ROBERT J.BRUSS its original, unreasonable demand mands, so she
. Grace asked the city to connect violated the Equal Protection is not entitled
her home to the public water sup- Clause of the 14th Amendment of to any dam-
ply. The city conditioned granting the U.S. Constitution. She argued ages.
the water connection upon Grace the city's demand was motivated by if you were
giving the city a 33-foot easement. her previous filing of an unrelated, the judge
She objected,claiming the city only successful lawsuit against the city. would you rule Ii,f
required a 16-foot easement from Grace emphasized she is a"class Grace is enti-
other nearby property owners. of one"who is entitled to equal pro- tled to damages
After a three-month delay, the tection of the law, meaning equal for the city's violation of the U.S.
city agreed to a 16-foot easement. treatment. The city responded it Constitution's Equal Protection
Grace then sued the city, claiming eventually agreed to .Grace's de- Clause since she was treated differ-
ently than herAbighbors?
The judge said yes.
The 14th Amendment of the U.S.
Constitution, the judge said, is in-
tended to protect individuals
against intentional and arbitrary
discrimination, whether by statute
or by improper execution of laws b;;
duly constituted government offi-
cials.
Grace stated a claim for relief,he
said, bused on unequal treatment
compared to her neighbors. This
case may involve "vindictive ac-
tion"or"ill will"toward Grace,the
judge said,but this ruling only gives
rise to a cause of action for dam-
ages due to the city's original, un-
reasonable demand for an exces-
sive easement,the judge concluded.
Based on the$000 U.S.Supreme
Court decision in Village of
Willowbrook vs.OW14120 SCf.1073,
Robert J.Bross is a Bay Area lawWer
and real estate broker.
Office of the County Counsel Contra Costa County
651 Pine Street, 6th Floor Phone: (925) 335-1833
Martinez, CA 94553 ATTAC N M E N T Pax: (925) 646-1228
CONFIDENTIAL C
Date: August 1, 2000
To: Phil Batchelor, County Administrator
Attn: Tony Enea, Senior Deputy Administrator
From: Victor J. Westman, County Counsel
By: Dennis Graves, Senior Financial Co
Re: County Ordinance Code Chapter 66-10, regarding limitation of base year values for
people over 55 or severely and permanently disabled
This responds to your memo of July 25, 2000, in which you state that the Finance
Committee would like our opinion on several questions regarding the tax relief of
transfer of base year values previously afforded by Chapter 66-10 of the County
Ordinance Code.
Background:
Ordinance Number 89-25 was adopted to implement Revenue and Taxation Code
Section 69.5, which in turn implemented Proposition 90 (amending Section 2(a) of
Article XIIIA [Proposition 13]) of the November 1988 election. Proposition 90 and its
implementing Legislation allowed transfer of a base year value for a homeowner over
age 55 who sold his home in one county and bought a home of lesser value in another
county. Ordinance Number 89-25 added Chapter 66-10 to the Contra Costa County
Ordinance Code, operative to provide tax relief for those over 55 for dwellings
purchased in this County after May 18, 1989. In accordance with Revenue and
Taxation Code Section 69.5(a)(2)(D), as operative until January 1, 1999, the Ordinance
provided that the provisions must operate for at least five years.
The Board of Supervisors thereafter enacted Ordinance Number 90-15 to extend the
base year value tax benefits for those over 55 who purchased a home in this county
after November 8, 1988. Thus, Ordinance Number 90-15 changed the operative date
of Chapter 66-10 from May 18, 1989 to November 8, 1988.1
In 1991, the Board of Supervisors enacted Ordinance Number 91-39, to extend the
base year value transfer benefits of Chapter 66-10 to persons who were severely and
1 If we recall correctly,the impetus for this was to provide the benefits of Chapter 66-10 to the significant number of
people who bought property in Contra Costa County after the Oakland Hills fire. Changing the operative date to
November 8, 1988 was intended to assist individuals who lost their property in the fire and moved from the fire area to
Contra Costa.
permanently disabled and purchased property in this County after June 6, 1990.
On August 4, 1992, the Board of Supervisors enacted Ordinance Number 92-53, which
repealed Chapter 66-10, effective November 8, 1993. To comply with the aforenoted
Legislation, this date was exactly five years after the November 8, 1988 operative date
enacted by Ordinance Number 90-15.
Questions:
1. Did the Board of Supervisors legally rescind Chapter 66-10 in 1992?
2. Can Chapter 66-10 be reenacted at this time?
3. If Chapter 66-10 can be reenacted at this time, can it be made retroactive to the
November 8, 1993 date of rescission?
Answers:
1. Yes.
2. Yes.
3. Yes.
Discussion:
1. The benefits of Chapter 66-10 were effective November 8, 1988 and rescinded
effective November 8, 1993, which meets the 5 year operative requirement of original
Revenue and Taxation Code Section 69.5(a)(2)(D).
2. If a new ordinance is enacted, it must meet the requirements of current Revenue
and Taxation Code Section 69.5. The primary requirement may be that of Section
69.5(a)(2)(D) which states that the ordinance must be operative for 5 years. If the
ordinance were made retroactive to the November 8, 1993 date of rescission of the
prior ordinances, the five year requirement would be met as the relief would operate
from the starting date of November 8, 1988. If not retroactive to the rescission date of
November 8, 1993, there would be an argument that the ordinance must be operative
for five years from its date of enactment.
3. Current Revenue and Taxation Code Section 69.5(a)(2)(E) expressly provides that
the ordinance can be made retroactive to November 8, 1988. The Constitutional
language of Proposition 90 appears intended to authorize the Legislature to allow
counties to make such ordinances retroactive. (See Art. XIIIA, Sec. 2(a).)
Comment:
If the Board is considering re-enacting Chapter 66-10, it may wish to first have the
Assessor and Administrator do a study to determine the fiscal impact of 1) making the
Chapter retroactive to the November 8, 1993 date of rescission of the prior ordinances
and 2) making the Chapter effective from adoption in the fall of 2000 to at least the fall
of 2005. As we recall, the reason for rescinding Chapter 66-10 was that the Board at
that time responded to a study of the Assessor and/or Administrator that indicated the
County could ill-afford the revenue loss of continuing to provide the base year value
relief of Chapter 66-10.
Cc.Gus Kramer, Assessor
Attn: Steve Dawkins, Asst. Assessor
C:prop90re.doc