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AB-1 Taxation: disaster relief: storms and floods.(1997-1998)

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AB1:v95#DOCUMENT

Assembly Bill No. 1
CHAPTER 3

An act to amend Sections 17207 and 24347.5 of, and to add Sections 195.77, 195.78, and 195.79 to, the Revenue and Taxation Code, relating to disaster relief, making an appropriation therefor, and declaring the urgency thereof, to take effect immediately.

[ Filed with Secretary of State  August 25, 1997. Approved by Governor  August 25, 1997. ]

LEGISLATIVE COUNSEL'S DIGEST


AB 1, Cardoza. Taxation: disaster relief: storms and floods.
Existing law authorizes a county board of supervisors to provide by ordinance for the reassessment of property that is damaged or destroyed, without fault on the part of the assessee, by a major misfortune or calamity, upon the application of the assessee or upon the action of the county assessor with the board’s approval. With respect to certain counties that have adopted reassessment ordinances and have been declared by the Governor to be in a state of disaster as a result of certain events, existing law provides for state allocations of the estimated amounts of the reductions in property tax revenues resulting in certain fiscal years from reassessments under those ordinances. Existing law also continuously appropriates, without regard to fiscal years, moneys in the Special Fund for Economic Uncertainties for purposes of funding these state allocations.
This bill would provide for similar state allocations with respect to property tax revenue reductions, resulting from a reassessment ordinance, incurred by a county that was declared by the Governor to be in a state of disaster as a result of a storm or flood occurring in California in December 1996 or January 1997. By requiring moneys continuously appropriated from the Special Fund for Economic Uncertainties to be allocated for the new purpose of reimbursing these counties for these property tax revenue reductions, this bill would make an appropriation.
The Personal Income Tax Law and Bank and Corporation Tax Law provide for the carryover to specified taxable or income years of specified losses sustained as a result of various disasters occurring in California in an area determined by the President of the United States to warrant specified federal assistance, or proclaimed by the Governor to be in a state of disaster.
This bill would extend these provisions to losses sustained as a result of storm, flood, or any other related casualty that occurred in California in December 1996 and January 1997. This bill would also authorize a taxpayer to make an election to claim a deduction for those losses on the tax return for the preceding year.
This bill would contain legislative findings and declarations as to the statewide public purpose of this bill. This bill would declare that it is to take effect immediately as an urgency statute.
Appropriation: YES  

The people of the State of California do enact as follows:


SECTION 1.

 Section 195.77 is added to the Revenue and Taxation Code, to read:

195.77.
 In the 1996–97 fiscal year, or as soon as possible thereafter, the county auditor of an eligible county, proclaimed by the Governor to be in a state of disaster as a result of storm, flooding, or any other related casualty that occurred in that county during December 1996 or January 1997, shall certify to the Director of Finance an estimate of the total amount of the reduction in property tax revenues on both the regular secured roll and the supplemental roll for the 1996–97 fiscal year resulting from the reassessment by the county assessor pursuant to paragraph (1) of subdivision (a) of Section 170 of those properties that are eligible properties as a result of that disaster, except that the amount certified shall not include any estimated property tax revenue reductions to school districts (other than basic state aid school districts) and county offices of education. For purposes of this section, “basic state aid school district” means any school district that does not receive a state apportionment pursuant to subdivision (h) of Section 42238 of the Education Code, but receives from the state only a basic apportionment pursuant to Section 6 of Article IX of the California Constitution.

SEC. 2.

 Section 195.78 is added to the Revenue and Taxation Code, to read:

195.78.
 After the county auditor of an eligible county, as described in Section 195.77, has made the applicable certification to the Director of Finance pursuant to that same section, the director shall, within 30 days after verification of the county auditor’s estimate, certify this amount to the Controller for allocation to the county. Upon receipt of certification from the Director of Finance, the Controller shall make the appropriate allocation to the county within 10 working days thereafter.

SEC. 3.

 Section 195.79 is added to the Revenue and Taxation Code, to read:

195.79.
 On or before July 1, 1998, each eligible county, as described in Section 195.77, shall compute and remit to the Controller for deposit in the General Fund an amount equal to the amount allocated to it by the Controller pursuant to Section 195.78, less the actual amount of its property tax revenue lost on the regular secured and supplemental rolls with respect to those eligible properties described in Section 195.77 as a result of the reassessment of those properties pursuant to paragraph (1) of subdivision (a) of Section 170, excluding any property tax revenue lost by school districts (other than basic state aid school districts) and county offices of education. If the actual amount of property tax revenue lost by an eligible county in the immediately preceding fiscal year, as described and limited in the preceding sentence, exceeds the amount allocated by the Controller to that county pursuant to Section 195.78, the Controller shall allocate the amount of that excess to that eligible county. For purposes of this section, “basic state aid school district” means any school district that does not receive a state apportionment pursuant to subdivision (h) of Section 42238 of the Education Code, but receives from the state only a basic apportionment pursuant to Section 6 of Article IX of the California Constitution.

SEC. 4.

 Section 17207 of the Revenue and Taxation Code is amended to read:

17207.
 (a)  An excess disaster loss, as defined in subdivision (c), shall be carried to other taxable years as provided in subdivision (b), with respect to losses resulting from any of the following disasters:
(1)  Forest fire or any other related casualty occurring in 1985 in California.
(2)  Storm, flooding, or any other related casualty occurring in 1986 in California.
(3)  Any loss sustained during 1987 as a result of a forest fire or any other related casualty.
(4)  Earthquake, aftershock, or any other related casualty occurring in 1987 in California.
(5)  Earthquake, aftershock, or any other related casualty occurring in 1989 in California.
(6)  Any loss sustained during 1990 as a result of fire or any other related casualty in California.
(7)  Any loss sustained as a result of the Oakland/Berkeley Fire of 1991, or any other related casualty.
(8)  Any loss sustained as a result of storm, flooding, or any other related casualty occurring in February 1992 in California.
(9)  Earthquake, aftershock, or any other related casualty occurring in April 1992 in the County of Humboldt.
(10)  Riots, arson, or any other related casualty occurring in April or May 1992 in California.
(11)  Any loss sustained as a result of the earthquakes that occurred in the County of San Bernardino in June and July of 1992, or any other related casualty.
(12)  Any loss sustained as a result of the Fountain Fire that occurred in the County of Shasta, or as a result of either of the fires in the Counties of Calaveras and Trinity that occurred in August 1992, or any other related casualty.
(13)  Any loss sustained as a result of storm, flooding, or any other related casualty that occurred in the Counties of Alpine, Contra Costa, Fresno, Humboldt, Imperial, Lassen, Los Angeles, Madera, Mendocino, Modoc, Monterey, Napa, Orange, Plumas, Riverside, San Bernardino, San Diego, Santa Barbara, Sierra, Siskiyou, Sonoma, Tehama, Trinity, and Tulare, and the City of Fillmore in January 1993.
(14)  Any loss sustained as a result of a fire that occurred in the Counties of Los Angeles, Orange, Riverside, San Bernardino, San Diego, and Ventura, during October or November of 1993, or any other related casualty.
(15)  Any loss sustained as a result of the earthquake, aftershocks, or any other related casualty that occurred in the Counties of Los Angeles, Orange, and Ventura on or after January 17, 1994.
(16)  Any loss sustained as a result of a fire that occurred in the County of San Luis Obispo during August of 1994, or any other related casualty.
(17)  Any loss sustained as a result of the storms or flooding occurring in 1995, or any other related casualty, sustained in any county of this state subject to a disaster declaration with respect to the storms and flooding.
(18)  Any loss sustained as a result of the storms or flooding occurring in December 1996 or January 1997, or any related casualty, sustained in any county of this state subject to a disaster declaration with respect to the storms or flooding.
(b)  (1)  In the case of any loss allowed under Section 165(c) of the Internal Revenue Code, relating to limitation of losses of individuals, any excess disaster loss 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 the five-year period, then 50 percent of that excess disaster loss shall be carried forward to each of the next 10 taxable years.
(2)  The entire amount of any excess disaster loss as defined in subdivision (c) shall be carried to the earliest of the taxable years to which, by reason of subdivision (b), the loss may be carried. The portion of the loss which shall be carried to each of the other taxable years shall be the excess, if any, of the amount of excess disaster loss over the sum of the adjusted taxable income for each of the prior taxable years to which that excess disaster loss is carried.
(c)  “Excess disaster loss” means a disaster loss computed pursuant to Section 165 of the Internal Revenue Code which exceeds the adjusted taxable income of the year of loss or, if the election under Section 165(i) of the Internal Revenue Code is made, the adjusted taxable income of the year preceding the loss.
(d)  For purposes of this section, “disaster losses” are losses that either qualified for treatment under Section 165(i) of the Internal Revenue Code or were sustained in any county or city in this state which is proclaimed by the Governor to be in a state of disaster.
(e)  Losses allowable under this section may not be taken into account in computing a net operating loss deduction under Section 172 of the Internal Revenue Code.
(f)  For purposes of this section, “adjusted taxable income” shall be defined by Section 1212(b)(2)(B) of the Internal Revenue Code.
(g)  For losses described in paragraphs (15), (16), (17), and (18) of subdivision (a), the election under Section 165(i) of the Internal Revenue Code may be made on a return or amended return filed on or before the due date of the return (determined with regard to extension) for the taxable year in which the disaster occurred.

SEC. 5.

 Section 24347.5 of the Revenue and Taxation Code is amended to read:

24347.5.
 (a)  An excess disaster loss, as defined in subdivision (c), shall be carried to other income years as provided in subdivision (b), with respect to losses resulting from any of the following disasters:
(1)  Forest fire or any other related casualty occurring in 1985 in California.
(2)  Storm, flooding, or any other related casualty occurring in 1986 in California.
(3)  Any loss sustained during 1987 as a result of a forest fire or any other related casualty.
(4)  Earthquake, aftershock, or any other related casualty occurring in October 1987 in California.
(5)  Earthquake, aftershock, or any other related casualty occurring in October 1989 in California.
(6)  Any loss sustained during 1990 as a result of fire or any other related casualty in California.
(7)  Any loss sustained as a result of the Oakland/Berkeley Fire of 1991, or any other related casualty.
(8)  Any loss sustained as a result of storm, flooding, or any other related casualty occurring in February 1992 in California.
(9)  Earthquake, aftershock, or any other related casualty occurring in April 1992 in the County of Humboldt.
(10)  Riots, arson, or any other related casualty occurring in April or May 1992 in California.
(11)  Any loss sustained as a result of the earthquakes or any other related casualty that occurred in the County of San Bernardino in June and July of 1992.
(12)  Any loss sustained as a result of the Fountain Fire that occurred in the County of Shasta, or as a result of either of the fires in the Counties of Calaveras and Trinity that occurred in August 1992, or any other related casualty.
(13)  Any loss sustained as a result of storm, flooding, or any other related casualty that occurred in the Counties of Alpine, Contra Costa, Fresno, Humboldt, Imperial, Lassen, Los Angeles, Madera, Mendocino, Modoc, Monterey, Napa, Orange, Plumas, Riverside, San Bernardino, San Diego, Santa Barbara, Sierra, Siskiyou, Sonoma, Tehama, Trinity, and Tulare, and the City of Fillmore in January 1993.
(14)  Any loss sustained as a result of a fire that occurred in the Counties of Los Angeles, Orange, Riverside, San Bernardino, San Diego, and Ventura, during October or November of 1993, or any other related casualty.
(15)  Any loss sustained as a result of the earthquake, aftershocks, or any other related casualty that occurred in the Counties of Los Angeles, Orange, and Ventura on or after January 17, 1994.
(16)  Any loss sustained as a result of a fire that occurred in the County of San Luis Obispo during August of 1994, or any other related casualty.
(17)  Any loss sustained as a result of the storms or flooding occurring in 1995, or any other related casualty, sustained in any county of this state subject to a disaster declaration with respect to the storms and flooding.
(18)  Any loss sustained as a result of the storms or flooding occurring in December 1996 or January 1997, or any related casualty, sustained in any county of this state subject to a disaster declaration with respect to the storms or flooding.
(b)  (1)  In the case of any loss allowed under Section 165 of the Internal Revenue Code, relating to losses, any excess disaster loss shall be carried forward to each of the five income years following the income year for which the loss is claimed. However, if there is any excess disaster loss remaining after the five-year period, then 50 percent of that excess disaster loss shall be carried forward to each of the next 10 income years.
(2)  The entire amount of any excess disaster loss as defined in subdivision (c) shall be carried to the earliest of the income years to which, by reason of subdivision (b), the loss may be carried. The portion of the loss which shall be carried to each of the other income years shall be the excess, if any, of the amount of excess disaster loss over the sum of the net income for each of the prior income years to which that excess disaster loss is carried.
(c)  “Excess disaster loss” means a disaster loss computed pursuant to Section 165 of the Internal Revenue Code, which exceeds the net income of the year of loss or, if the election under Section 165(i) of the Internal Revenue Code is made, the net income of the year preceding the loss.
(d)  For purposes of this section, “disaster losses” are losses that either qualified for treatment under Section 165(i) of the Internal Revenue Code, or were sustained in any county or city in this state which is proclaimed by the Governor to be in a state of disaster.
(e)  Any corporation subject to the provisions of Section 25101 or 25101.15 that has disaster losses pursuant to this section, shall determine the excess disaster loss to be carried to other income years under the principles specified in Section 25108 relating to net operating losses.
(f)  Losses allowable under this section may not be taken into account in computing a net operating loss deduction under Section 172 of the Internal Revenue Code.
(g)  For losses described in paragraphs (15), (16), (17), and (18) of subdivision (a), the election under Section 165(i) of the Internal Revenue Code may be made on a return or amended return filed on or before the due date of the return (determined with regard to extension) for the income year in which the disaster occurred.

SEC. 6.

 The Legislature finds and declares that this act fulfills a statewide public purpose because of both of the following:
(a)  The Governor of California has officially proclaimed that the flooding that occurred in California during December 1996 and January 1997 was a disaster, thus qualifying affected persons for various forms of governmental assistance and relief.
(b)  This act is consistent with and supplements the proclaimed disaster relief by providing necessary fiscal assistance and tax relief to affected jurisdictions and persons to allow them to maintain essential basic services and repair damage to, and restore, their homes and businesses.

SEC. 7.

 This act is an urgency statute necessary for the immediate preservation of the public peace, health, or safety within the meaning of Article IV of the Constitution and shall go into immediate effect. The facts constituting the necessity are:
In order to timely provide essential relief to those persons and jurisdictions who have suffered damage or loss as a result of the floods that occurred in California during December 1996 and January 1997, it is necessary that this act take effect immediately.