| 1 | 1 | | CALIFORNIA LEGISLATURE 20172018 REGULAR SESSION Senate Resolution No. 113Introduced by Senators Gaines, Anderson, Bates, Berryhill, Cannella, Fuller, Moorlach, Morrell, Nguyen, Nielsen, Stone, Vidak, and WilkJune 13, 2018 Relative to the 40th anniversary of Proposition 13. LEGISLATIVE COUNSEL'S DIGESTSR 113, as introduced, Gaines. Digest KeyBill TextWHEREAS, On June 6, 1978, Proposition 13, officially titled the Peoples Initiative to Limit Property Taxation, was overwhelmingly approved by Californias voters, establishing a 1-percent property tax cap and a two-thirds vote requirement for taxes approved by the Legislature, as well as local special taxes; andWHEREAS, Prior to the adoption of Proposition 13, Californias raging inflation had sent property tax bills in California soaring so high that some seniors on fixed incomes were forced to sell their homes, despite having paid off their mortgages, because they could no longer afford the property tax; andWHEREAS, Prior to the adoption of Proposition 13, property tax assessments showed wider divergences than assessment disparities under the current acquisition-value system; andWHEREAS, Prior to the adoption of Proposition 13, renters saw their rents increase when landlords saw their property taxes increase at a rapid rate; andWHEREAS, With the approval of Proposition 13, real property values were adjusted to a base value equal to the 1976 assessed value of real property, thereby introducing an objective standard upon which real property would be taxed and ending the previous subjective standard for assessment that led to the property tax abuses that occurred in the 1960s and 1970s; andWHEREAS, With the passage of Proposition 13, taxpayers, for the first time, were provided a measure of certainty with respect to their property taxes; andWHEREAS, According to the nonpartisan Legislative Analysts Office, property tax revenue has increased at an average annual rate of 7.3 percent since 1979, a faster rate than personal income growth, and overall property tax revenue has increased by 1000 percent over that time; andWHEREAS, In the 40 years following the passage of Proposition 13, a family who has owned their home 10 years has saved an average of $60,000 on property taxes, proving that every property owner benefits from these protections; andWHEREAS, In the landmark case Nordlinger v. Hahn, the United States Supreme Court ruled nearly unanimously to uphold Proposition 13s acquisition-based system under the equal protection clause; andWHEREAS, Proposition 13 has led to revenue stability for local governments, which have seen a nearly $40 billion increase in revenue since 1978; andWHEREAS, The concept of revenue volatility surrounding both income and sales tax revenue to the state and local governments is a major flaw in Californias tax system; however, Proposition 13 has rendered Californias property taxes a stable and predictable source of public revenue even during economic downturns and has provided a major benefit to local governments in California; andWHEREAS, To that end, in the last three-year recession, property tax was the only major revenue category to show a revenue increase, mainly because of Proposition 13s 1-percent cap; andWHEREAS, This stability is important for local government in light of Californias ongoing unfunded pension liability crisis, and the fact that property tax revenue represents 60 percent of a municipalitys average annual revenue; andWHEREAS, Proposition 13 does not create inequity between different classes of property, as the assessed valuation of commercial and business property has increased at a faster average annual rate than residential property; andWHEREAS, Since the passage of Proposition 13, various polls continue to show that a split-roll alternative which would alter the existing system so that one or more categories of nonresidential property on the local assessment roll would not be subject to the acquisition value system established by Proposition 13, is not as popular as the current system; andWHEREAS, Increased property taxes would be a disincentive for first-time homebuyers and would stand as a barrier to growth of our housing market; andWHEREAS, Proposition 13 incited a nationwide tax revolt at the state and local level; within five years of passage, nearly one-half of the 50 states imposed a similar limitation on governments ability to raise revenue, and nearly all of these tax-limitation measures remain the law of the land today; andWHEREAS, Proposition 13 has become a nationwide symbol for taxpayer revolt and for citizens exercising control and power over their governance; andWHEREAS, Proposition 13 remains just as popular with voters today as it was when it was approved, with numerous recent surveys citing over 60 percent support; andWHEREAS, Wednesday, June 6, 2018, marks the 40th year following the voters approval of Proposition 13; now, therefore, be itResolved by the Senate of the State of California, That the Senate, in recognition of the impact Proposition 13 has had on the State of California, formally commemorates Wednesday, June 6, 2018, as the 40th anniversary date of Proposition 13; and be it furtherResolved, That the Senate reaffirms its support for Proposition 13 and the benefit that it provides to individual homeowners and to the states overall economy; and be it further Resolved, That the Secretary of the Senate transmit copies of this resolution to the Governor, and to the author for appropriate distribution. |
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| 3 | 3 | | CALIFORNIA LEGISLATURE 20172018 REGULAR SESSION Senate Resolution No. 113Introduced by Senators Gaines, Anderson, Bates, Berryhill, Cannella, Fuller, Moorlach, Morrell, Nguyen, Nielsen, Stone, Vidak, and WilkJune 13, 2018 Relative to the 40th anniversary of Proposition 13. LEGISLATIVE COUNSEL'S DIGESTSR 113, as introduced, Gaines. Digest Key |
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| 9 | 9 | | CALIFORNIA LEGISLATURE 20172018 REGULAR SESSION |
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| 11 | 11 | | Senate Resolution No. 113 |
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| 13 | 13 | | Introduced by Senators Gaines, Anderson, Bates, Berryhill, Cannella, Fuller, Moorlach, Morrell, Nguyen, Nielsen, Stone, Vidak, and WilkJune 13, 2018 |
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| 14 | 14 | | |
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| 15 | 15 | | Introduced by Senators Gaines, Anderson, Bates, Berryhill, Cannella, Fuller, Moorlach, Morrell, Nguyen, Nielsen, Stone, Vidak, and Wilk |
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| 16 | 16 | | June 13, 2018 |
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| 17 | 17 | | |
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| 18 | 18 | | Relative to the 40th anniversary of Proposition 13. |
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| 19 | 19 | | |
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| 20 | 20 | | LEGISLATIVE COUNSEL'S DIGEST |
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| 22 | 22 | | ## LEGISLATIVE COUNSEL'S DIGEST |
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| 23 | 23 | | |
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| 24 | 24 | | SR 113, as introduced, Gaines. |
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| 27 | 27 | | |
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| 28 | 28 | | ## Digest Key |
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| 29 | 29 | | |
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| 30 | 30 | | ## Bill Text |
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| 31 | 31 | | |
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| 32 | 32 | | WHEREAS, On June 6, 1978, Proposition 13, officially titled the Peoples Initiative to Limit Property Taxation, was overwhelmingly approved by Californias voters, establishing a 1-percent property tax cap and a two-thirds vote requirement for taxes approved by the Legislature, as well as local special taxes; and |
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| 33 | 33 | | |
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| 34 | 34 | | WHEREAS, Prior to the adoption of Proposition 13, Californias raging inflation had sent property tax bills in California soaring so high that some seniors on fixed incomes were forced to sell their homes, despite having paid off their mortgages, because they could no longer afford the property tax; and |
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| 35 | 35 | | |
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| 36 | 36 | | WHEREAS, Prior to the adoption of Proposition 13, property tax assessments showed wider divergences than assessment disparities under the current acquisition-value system; and |
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| 37 | 37 | | |
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| 38 | 38 | | WHEREAS, Prior to the adoption of Proposition 13, renters saw their rents increase when landlords saw their property taxes increase at a rapid rate; and |
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| 39 | 39 | | |
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| 40 | 40 | | WHEREAS, With the approval of Proposition 13, real property values were adjusted to a base value equal to the 1976 assessed value of real property, thereby introducing an objective standard upon which real property would be taxed and ending the previous subjective standard for assessment that led to the property tax abuses that occurred in the 1960s and 1970s; and |
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| 41 | 41 | | |
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| 42 | 42 | | WHEREAS, With the passage of Proposition 13, taxpayers, for the first time, were provided a measure of certainty with respect to their property taxes; and |
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| 43 | 43 | | |
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| 44 | 44 | | WHEREAS, According to the nonpartisan Legislative Analysts Office, property tax revenue has increased at an average annual rate of 7.3 percent since 1979, a faster rate than personal income growth, and overall property tax revenue has increased by 1000 percent over that time; and |
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| 45 | 45 | | |
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| 46 | 46 | | WHEREAS, In the 40 years following the passage of Proposition 13, a family who has owned their home 10 years has saved an average of $60,000 on property taxes, proving that every property owner benefits from these protections; and |
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| 47 | 47 | | |
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| 48 | 48 | | WHEREAS, In the landmark case Nordlinger v. Hahn, the United States Supreme Court ruled nearly unanimously to uphold Proposition 13s acquisition-based system under the equal protection clause; and |
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| 49 | 49 | | |
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| 50 | 50 | | WHEREAS, Proposition 13 has led to revenue stability for local governments, which have seen a nearly $40 billion increase in revenue since 1978; and |
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| 51 | 51 | | |
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| 52 | 52 | | WHEREAS, The concept of revenue volatility surrounding both income and sales tax revenue to the state and local governments is a major flaw in Californias tax system; however, Proposition 13 has rendered Californias property taxes a stable and predictable source of public revenue even during economic downturns and has provided a major benefit to local governments in California; and |
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| 53 | 53 | | |
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| 54 | 54 | | WHEREAS, To that end, in the last three-year recession, property tax was the only major revenue category to show a revenue increase, mainly because of Proposition 13s 1-percent cap; and |
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| 55 | 55 | | |
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| 56 | 56 | | WHEREAS, This stability is important for local government in light of Californias ongoing unfunded pension liability crisis, and the fact that property tax revenue represents 60 percent of a municipalitys average annual revenue; and |
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| 57 | 57 | | |
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| 58 | 58 | | WHEREAS, Proposition 13 does not create inequity between different classes of property, as the assessed valuation of commercial and business property has increased at a faster average annual rate than residential property; and |
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| 59 | 59 | | |
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| 60 | 60 | | WHEREAS, Since the passage of Proposition 13, various polls continue to show that a split-roll alternative which would alter the existing system so that one or more categories of nonresidential property on the local assessment roll would not be subject to the acquisition value system established by Proposition 13, is not as popular as the current system; and |
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| 61 | 61 | | |
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| 62 | 62 | | WHEREAS, Increased property taxes would be a disincentive for first-time homebuyers and would stand as a barrier to growth of our housing market; and |
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| 63 | 63 | | |
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| 64 | 64 | | WHEREAS, Proposition 13 incited a nationwide tax revolt at the state and local level; within five years of passage, nearly one-half of the 50 states imposed a similar limitation on governments ability to raise revenue, and nearly all of these tax-limitation measures remain the law of the land today; and |
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| 65 | 65 | | |
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| 66 | 66 | | WHEREAS, Proposition 13 has become a nationwide symbol for taxpayer revolt and for citizens exercising control and power over their governance; and |
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| 67 | 67 | | |
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| 68 | 68 | | WHEREAS, Proposition 13 remains just as popular with voters today as it was when it was approved, with numerous recent surveys citing over 60 percent support; and |
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| 69 | 69 | | |
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| 70 | 70 | | WHEREAS, Wednesday, June 6, 2018, marks the 40th year following the voters approval of Proposition 13; now, therefore, be it |
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| 71 | 71 | | |
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| 72 | 72 | | Resolved by the Senate of the State of California, That the Senate, in recognition of the impact Proposition 13 has had on the State of California, formally commemorates Wednesday, June 6, 2018, as the 40th anniversary date of Proposition 13; and be it further |
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| 73 | 73 | | |
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| 74 | 74 | | Resolved, That the Senate reaffirms its support for Proposition 13 and the benefit that it provides to individual homeowners and to the states overall economy; and be it further |
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| 75 | 75 | | |
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| 76 | 76 | | Resolved, That the Secretary of the Senate transmit copies of this resolution to the Governor, and to the author for appropriate distribution. |
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