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HomeMy WebLinkAboutMINUTES - 01301990 - FC.2 Fc. TO: BOARD OF SUPERVISORS Finance Committee a. Contra FROM: / Costa DATE: January 30 , 1990 c�`'A cooK -�T�'� Count y SUBJECT: IMPLEMENTATION OF AB152 " SPECIFIC REQUEST(S)OR RECOMMENDATION(S)&BACKGROUND AND JUSTIFICATION RECOMMENDATION: 1. Accept report recommending the implementation of AB152 retroactive to November 9, 1988. 2. -Fix February 27 , 1990 at 11 : 00 a.m. for hearing on the implementation and first reading of ordinance. 3. Direct County Counsel to prepare an amendment to Ordinance 89-25 implementing AB152 for adoption on March 6, 1990 . 4. Authorize the Assessor to change the fee schedule to reflect actual costs of processing. i 5. Remove this item as a referral to our Committee. FINANCIAL IMPACT: The County' s preliminary budget forecast for 1990-91 indicates a significant deficit. Enactment of AB152 would result in a loss estimated to be a minimum of $7,000 plus administrative costs. BACKGROUND: Proposition 90 was approved by voters on November 8, 1988 . It extends existing provisions of law contained in Proposition 60 , which allows any person over the age of 55 years old who resides in a property which is eligible for the homeowner' s exemption, to transfer the base year value of that residence to a replacement dwelling of equal or lesser value located in the same county. Proposition 90 modified that exemption to include transfers to CONTINUED ON ATTACHMENT: YES SIGNATURE: rpQ, T.x'l :n RECOMMENDATION OF COUNTY ADMINISTRATOR RECOMMENDATION OF BOARD COMMITTEE APPROVE OTHER SIGNATURE(S): ACTION OF BOARD ON -- January 30 . 1990 APPROVED AS RECOMMENDED OTHER VOTE OF SUPERVISORS I HEREBY CERTIFY THAT THIS IS A TRUE X 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 SHOWN. CC: County Administrator ATTESTED ad /991J County Counsel PHI BATCHELOR, ERK OF THE BOARD OF Assessor SUPERVISORS AND COUNTY ADMINISTRATOR M38210/88 BY OW9,-� e,We DEPUTY ( ) 61 -2- another county. This legislation gave Board of Supervisors the option to implement. At that time, there was no provision for retroactivity. It was approved by the Board and became in Contra Costa County effective May 18, 1989. ,Assembly Bill 152 is a provision of law which allows Boards of Supervisors to implement the terms of Proposition 90 retroactively to anytime after November 8 , 1988 . Survey of other Counties Since the passage of Proposition 90 in November 1988, ten counties have implemented the legislation. The County Administrator' s Office surveyed. those counties who adopted Proposition 90 to determine whether they have implemented AB152 . Of the nine counties contacted, three counties have implemented AB152 , one is in the process of implementing, three have no plans to implement and in two counties the issue has not been raised. Public Response in favor of AB152 The County Administrator' s office received several letters in favor of implementing AB 152 . The Assessor ' s office indicates that many taxpayers have complained that they are ineligible for Proposition 90 benefits because the effective .date of our ordinance was May 18 , 1989 and they purchased property in our County prior to that date but after November 8, 1988. The Assessor' s office has received 85 applications for the Proposition 90 exemption. Of the 85 applications, six were denied due to the fact that the purchase of property occurred during the ineligible "window period" between November 9, 1988 and May 18, 1989. During the Committee meeting, the testimony from impacted homeowners was that failure to implement AB152 results in discrimination against those persons who purchased during the window period. Status of Implementation of Prop 90 The first six months of the implementation of Proposition 90 was less severe than the Assessor had anticipated; 85 applications were received, 120 were estimated. However, an average of the 27 exemptions that have been granted shows that the assessment roll loses approximately $125,000 per exemption which is 25% greater than. originally estimated. The Assessor anticipates that the 52 pending applications will be valid. At a projection of 160 Proposition 90 exemption's per year with an average loss of $125 , 000 per exemption, the total loss to the secured roll would be $20;000,000 annually, or $200,000 in property taxes. The actual time and cost in processing Proposition 90 applications is much greater than had been estimated. The current cost of processing an application is approximately :a $195 , a significantly higher cost than the original estimate of $65 . The main reason for the higher cost is the time spent in evaluating and re-evaluating records once information from other counties is received. Since a majority of counties have not enacted Proposition 90, a uniform procedure for exchanging information has not been developed. This causes processing delays and explains why the Assessor currently has 57 applications in pending status. Although the implementation of AB 152 will add to the time and cost to process, the overall cost would be minimal because a system is already in place to handle the change in the effective date. During the Committee meeting, the Committee and homeowners concurred that. the Assessor should recover full cost of Processing exemptions. The Committee views the AB152 bill as a clean-up measure -to Proposition 90 and recommends the implementation of this legislation.