(1)The California Constitution generally limits ad valorem taxes on real property to 1% of the full cash value of that property. For purposes of this limitation, full cash value is defined as the assessors valuation of real property as shown on the 197576 tax bill under full cash value or, thereafter, the appraised value of that real property when purchased, newly constructed, or a change in ownership has occurred. Existing law defines newly constructed and new construction to mean any addition to real property since the last lien date and any alteration of land or of any improvement since the last lien date that constitutes a major rehabilitation thereof or that converts the property to a different use. Existing law, where real property has been damaged or destroyed by misfortune or calamity, excludes from the definition of newly constructed and new construction any timely reconstruction of the real property, or portion thereof, where the property after reconstruction is substantially equivalent to the property prior to damage or destruction. Existing law, pursuant to the authorization of the California Constitution, authorizes the transfer of the base year value of property that is substantially damaged or destroyed by a disaster, as declared by the Governor, to comparable replacement property within the same county that is acquired or newly constructed within 5 years after the disaster, as provided.

Existing law authorizes the owner of property substantially damaged or destroyed by a disaster, as declared by the Governor, to apply the base year value of that property to replacement property reconstructed on the same site of the damaged or destroyed property within 5 years after the disaster if the reconstructed property is comparable to the substantially damaged or destroyed property, determined as provided.

This bill would extend the 5-year time period described above by 3 years if the property was substantially damaged or destroyed by the 2025 Palisades Fire, Eaton Fire, Hurst Fire, Lidia Fire, Sunset Fire, or Woodley Fire on or after January 7, 2025, but before February 1, 2025. The bill would make these provisions applicable to the determination of base year values for the 202526 fiscal year and fiscal years thereafter. By imposing additional duties on local tax officials, the bill would create a state-mandated local program.

(2)Existing property tax law authorizes counties to adopt ordinances that allow assessees whose property was damaged or destroyed to apply for a reassessment of that property if certain conditions, including the filing of an application for reassessment, are met.

This bill would require that, in the case of property impacted by the 2025 Palisades Fire, Eaton Fire, Hurst Fire, Lidia Fire, Sunset Fire, or Woodley Fire, the fair market value of that real property on January 1, 2025, takes into account any reduction in value to that property due to damage, destruction, depreciation, obsolescence, removal of property, or other factors causing a decline in value.

(3)This bill would make legislative findings and declarations as to the public purpose served by these provisions.

(4)This bill would incorporate additional changes to Section 70.5 of the Revenue and Taxation Code proposed by SB 663 to be operative only if this bill and SB 663 are enacted and this bill is enacted last.

(5)The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that, if the Commission on State Mandates determines that the bill contains costs mandated by the state, reimbursement for those costs shall be made pursuant to the statutory provisions noted above.

(6)Existing law requires the state to reimburse local agencies annually for certain property tax revenues lost as a result of any exemption or classification of property for purposes of ad valorem property taxation.

This bill would provide that, notwithstanding those provisions, no appropriation is made and the state shall not reimburse local agencies for property tax revenues lost by them pursuant to the bill.

(7)This bill would declare that it is to take effect immediately as an urgency statute.

(1)The California Constitution generally limits ad valorem taxes on real property to 1% of the full cash value of that property. For purposes of this limitation, full cash value is defined as the assessors valuation of real property as shown on the 197576 tax bill under full cash value or, thereafter, the appraised value of that real property when purchased, newly constructed, or a change in ownership has occurred. Existing law defines newly constructed and new construction to mean any addition to real property since the last lien date and any alteration of land or of any improvement since the last lien date that constitutes a major rehabilitation thereof or that converts the property to a different use. Existing law, where real property has been damaged or destroyed by misfortune or calamity, excludes from the definition of newly constructed and new construction any timely reconstruction of the real property, or portion thereof, where the property after reconstruction is substantially equivalent to the property prior to damage or destruction. Existing law, pursuant to the authorization of the California Constitution, authorizes the transfer of the base year value of property that is substantially damaged or destroyed by a disaster, as declared by the Governor, to comparable replacement property within the same county that is acquired or newly constructed within 5 years after the disaster, as provided.

Existing law authorizes the owner of property substantially damaged or destroyed by a disaster, as declared by the Governor, to apply the base year value of that property to replacement property reconstructed on the same site of the damaged or destroyed property within 5 years after the disaster if the reconstructed property is comparable to the substantially damaged or destroyed property, determined as provided.

This bill would extend the 5-year time period described above by 3 years if the property was substantially damaged or destroyed by the 2025 Palisades Fire, Eaton Fire, Hurst Fire, Lidia Fire, Sunset Fire, or Woodley Fire on or after January 7, 2025, but before February 1, 2025. The bill would make these provisions applicable to the determination of base year values for the 202526 fiscal year and fiscal years thereafter. By imposing additional duties on local tax officials, the bill would create a state-mandated local program.

(2)Existing property tax law authorizes counties to adopt ordinances that allow assessees whose property was damaged or destroyed to apply for a reassessment of that property if certain conditions, including the filing of an application for reassessment, are met.

This bill would require that, in the case of property impacted by the 2025 Palisades Fire, Eaton Fire, Hurst Fire, Lidia Fire, Sunset Fire, or Woodley Fire, the fair market value of that real property on January 1, 2025, takes into account any reduction in value to that property due to damage, destruction, depreciation, obsolescence, removal of property, or other factors causing a decline in value.

(3)This bill would make legislative findings and declarations as to the public purpose served by these provisions.

(4)This bill would incorporate additional changes to Section 70.5 of the Revenue and Taxation Code proposed by SB 663 to be operative only if this bill and SB 663 are enacted and this bill is enacted last.

(5)The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that, if the Commission on State Mandates determines that the bill contains costs mandated by the state, reimbursement for those costs shall be made pursuant to the statutory provisions noted above.

(6)Existing law requires the state to reimburse local agencies annually for certain property tax revenues lost as a result of any exemption or classification of property for purposes of ad valorem property taxation.

This bill would provide that, notwithstanding those provisions, no appropriation is made and the state shall not reimburse local agencies for property tax revenues lost by them pursuant to the bill.

(7)This bill would declare that it is to take effect immediately as an urgency statute.

(1)The California Constitution generally limits ad valorem taxes on real property to 1% of the full cash value of that property. For purposes of this limitation, full cash value is defined as the assessors valuation of real property as shown on the 197576 tax bill under full cash value or, thereafter, the appraised value of that real property when purchased, newly constructed, or a change in ownership has occurred. Existing law defines newly constructed and new construction to mean any addition to real property since the last lien date and any alteration of land or of any improvement since the last lien date that constitutes a major rehabilitation thereof or that converts the property to a different use. Existing law, where real property has been damaged or destroyed by misfortune or calamity, excludes from the definition of newly constructed and new construction any timely reconstruction of the real property, or portion thereof, where the property after reconstruction is substantially equivalent to the property prior to damage or destruction. Existing law, pursuant to the authorization of the California Constitution, authorizes the transfer of the base year value of property that is substantially damaged or destroyed by a disaster, as declared by the Governor, to comparable replacement property within the same county that is acquired or newly constructed within 5 years after the disaster, as provided.

Existing law authorizes the owner of property substantially damaged or destroyed by a disaster, as declared by the Governor, to apply the base year value of that property to replacement property reconstructed on the same site of the damaged or destroyed property within 5 years after the disaster if the reconstructed property is comparable to the substantially damaged or destroyed property, determined as provided.

This bill would extend the 5-year time period described above by 3 years if the property was substantially damaged or destroyed by the 2025 Palisades Fire, Eaton Fire, Hurst Fire, Lidia Fire, Sunset Fire, or Woodley Fire on or after January 7, 2025, but on or before February 1, 2025. The bill would make these provisions applicable to the determination of base year values for the 202526 fiscal year and fiscal years thereafter. By imposing additional duties on local tax officials, the bill would create a state-mandated local program.

(2)Existing property tax law authorizes counties to adopt ordinances that allow assessees whose property was damaged or destroyed to apply for a reassessment of that property if certain conditions, including the filing of an application for reassessment, are met.

This bill would require that, in the case of property impacted by the 2025 Palisades Fire, Eaton Fire, Hurst Fire, Lidia Fire, Sunset Fire, or Woodley Fire, the fair market value of that real property on January 1, 2025, takes into account any reduction in value to that property due to damage, destruction, depreciation, obsolescence, removal of property, or other factors causing a decline in value.

(3)This bill would make legislative findings and declarations as to the public purpose served by these provisions.

(5)The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that, if the Commission on State Mandates determines that the bill contains costs mandated by the state, reimbursement for those costs shall be made pursuant to the statutory provisions noted above.

(6)Existing law requires the state to reimburse local agencies annually for certain property tax revenues lost as a result of any exemption or classification of property for purposes of ad valorem property taxation.

This bill would provide that, notwithstanding those provisions, no appropriation is made and the state shall not reimburse local agencies for property tax revenues lost by them pursuant to the bill.

(7)This bill would declare that it is to take effect immediately as an urgency statute.

(1)The California Constitution generally limits ad valorem taxes on real property to 1% of the full cash value of that property. For purposes of this limitation, full cash value is defined as the assessors valuation of real property as shown on the 197576 tax bill under full cash value or, thereafter, the appraised value of that real property when purchased, newly constructed, or a change in ownership has occurred. Existing law defines newly constructed and new construction to mean any addition to real property since the last lien date and any alteration of land or of any improvement since the last lien date that constitutes a major rehabilitation thereof or that converts the property to a different use. Existing law, where real property has been damaged or destroyed by misfortune or calamity, excludes from the definition of newly constructed and new construction any timely reconstruction of the real property, or portion thereof, where the property after reconstruction is substantially equivalent to the property prior to damage or destruction. Existing law, pursuant to the authorization of the California Constitution, authorizes the transfer of the base year value of property that is substantially damaged or destroyed by a disaster, as declared by the Governor, to comparable replacement property within the same county that is acquired or newly constructed within 5 years after the disaster, as provided.

Existing law authorizes the owner of property substantially damaged or destroyed by a disaster, as declared by the Governor, to apply the base year value of that property to replacement property reconstructed on the same site of the damaged or destroyed property within 5 years after the disaster if the reconstructed property is comparable to the substantially damaged or destroyed property, determined as provided.

This bill would extend the 5-year time period described above by 3 years if the property was substantially damaged or destroyed by the 2025 fire disaster in Palisades, Eaton, Hurst, Lidia, Sunset, or Woodley, Palisades Fire, Eaton Fire, Hurst Fire, Lidia Fire, Sunset Fire, or Woodley Fire on or after January 7, 2025, but on or before February 1, 2025. The bill would make these provisions applicable to the determination of base year values for the 202526 fiscal year and fiscal years thereafter. By imposing additional duties on local tax officials, the bill would create a state-mandated local program.

(2)Existing property tax law authorizes counties to adopt ordinances that allow assessees whose property was damaged or destroyed to apply for a reassessment of that property if certain conditions, including the filing of an application for reassessment, are met.

This bill would require that, in the case of property impacted by the 2025 fire disasters in Palisades, Eaton, Hurst, Lidia, Sunset, or Woodley, Palisades Fire, Eaton Fire, Hurst Fire, Lidia Fire, Sunset Fire, or Woodley Fire, the fair market value of that real property on January 1, 2025, takes into account any reduction in value to that property due to damage, destruction, depreciation, obsolescence, removal of property, or other factors causing a decline in value.

(3)This bill would make legislative findings and declarations as to the public purpose served by these provisions.

(4)The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that, if the Commission on State Mandates determines that the bill contains costs mandated by the state, reimbursement for those costs shall be made pursuant to the statutory provisions noted above.

(5)Existing law requires the state to reimburse local agencies annually for certain property tax revenues lost as a result of any exemption or classification of property for purposes of ad valorem property taxation.

This bill would provide that, notwithstanding those provisions, no appropriation is made and the state shall not reimburse local agencies for property tax revenues lost by them pursuant to the bill.

(6)This bill would declare that it is to take effect immediately as an urgency statute.

(1)The California Constitution generally limits ad valorem taxes on real property to 1% of the full cash value of that property. For purposes of this limitation, full cash value is defined as the assessors valuation of real property as shown on the 197576 tax bill under full cash value or, thereafter, the appraised value of that real property when purchased, newly constructed, or a change in ownership has occurred. Existing law defines newly constructed and new construction to mean any addition to real property since the last lien date and any alteration of land or of any improvement since the last lien date that constitutes a major rehabilitation thereof or that converts the property to a different use. Existing law, where real property has been damaged or destroyed by misfortune or calamity, excludes from the definition of newly constructed and new construction any timely reconstruction of the real property, or portion thereof, where the property after reconstruction is substantially equivalent to the property prior to damage or destruction. Existing law, pursuant to the authorization of the California Constitution, authorizes the transfer of the base year value of property that is substantially damaged or destroyed by a disaster, as declared by the Governor, to comparable replacement property within the same county that is acquired or newly constructed within 5 years after the disaster, as provided.

Existing law authorizes the owner of property substantially damaged or destroyed by a disaster, as declared by the Governor, to apply the base year value of that property to replacement property reconstructed on the same site of the damaged or destroyed property within 5 years after the disaster if the reconstructed property is comparable to the substantially damaged or destroyed property, determined as provided.

This bill would extend the 5-year time period described above by 3 years if the property was substantially damaged or destroyed by the 2025 fire disaster in Palisades, Eaton, Hurst, Lidia, Sunset, or Woodley, on or after January 7, 2025, but on or before February 1, 2025. The bill would make these provisions applicable to the determination of base year values for the 202526 fiscal year and fiscal years thereafter. By imposing additional duties on local tax officials, the bill would create a state-mandated local program.

(2)Existing property tax law authorizes counties to adopt ordinances that allow assessees whose property was damaged or destroyed to apply for a reassessment of that property if certain conditions, including the filing of an application for reassessment, are met.

This bill would require that, in the case of property impacted by the 2025 fire disasters in Palisades, Eaton, Hurst, Lidia, Sunset, or Woodley, the fair market value of that real property on January 1, 2025, takes into account any reduction in value to that property due to damage, destruction, depreciation, obsolescence, removal of property, or other factors causing a decline in value.

(3)This bill would make legislative findings and declarations as to the public purpose served by these provisions.

(4)The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that, if the Commission on State Mandates determines that the bill contains costs mandated by the state, reimbursement for those costs shall be made pursuant to the statutory provisions noted above.

(5)Existing law requires the state to reimburse local agencies annually for certain property tax revenues lost as a result of any exemption or classification of property for purposes of ad valorem property taxation.

This bill would provide that, notwithstanding those provisions, no appropriation is made and the state shall not reimburse local agencies for property tax revenues lost by them pursuant to the bill.

(1)The California Constitution generally limits ad valorem taxes on real property to 1% of the full cash value of that property. For purposes of this limitation, full cash value is defined as the assessors valuation of real property as shown on the 197576 tax bill under full cash value or, thereafter, the appraised value of that real property when purchased, newly constructed, or a change in ownership has occurred. Existing law defines newly constructed and new construction to mean any addition to real property since the last lien date and any alteration of land or of any improvement since the last lien date that constitutes a major rehabilitation thereof or that converts the property to a different use. Existing law, where real property has been damaged or destroyed by misfortune or calamity, excludes from the definition of newly constructed and new construction any timely reconstruction of the real property, or portion thereof, where the property after reconstruction is substantially equivalent to the property prior to damage or destruction. Existing law, pursuant to the authorization of the California Constitution, authorizes the transfer of the base year value of property that is substantially damaged or destroyed by a disaster, as declared by the Governor, to comparable replacement property within the same county that is acquired or newly constructed within 5 years after the disaster, as provided.

Existing law authorizes the owner of property substantially damaged or destroyed by a disaster, as declared by the Governor, to apply the base year value of that property to replacement property reconstructed on the same site of the damaged or destroyed property within 5 years after the disaster if the reconstructed property is comparable to the substantially damaged or destroyed property, determined as provided.

This bill would extend the 5-year time period described above by 3 years if the property was substantially damaged or destroyed by the 2025 fire disaster in Palisades, Eaton, Hurst, Lidia, Sunset, or Woodley, on or after January 7, 2025, but on or before February 1, 2025. The bill would make these provisions applicable to the determination of base year values for the 202526 fiscal year and fiscal years thereafter. By imposing additional duties on local tax officials, the bill would create a state-mandated local program.

(3)This bill would make legislative findings and declarations as to the public purpose served by these provisions.

(4)The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that, if the Commission on State Mandates determines that the bill contains costs mandated by the state, reimbursement for those costs shall be made pursuant to the statutory provisions noted above.

(5)Existing law requires the state to reimburse local agencies annually for certain property tax revenues lost as a result of any exemption or classification of property for purposes of ad valorem property taxation.

This bill would provide that, notwithstanding those provisions, no appropriation is made and the state shall not reimburse local agencies for property tax revenues lost by them pursuant to the bill.

The California Constitution provides that all property is taxable, and requires that it be assessed at the same percentage of fair market value, unless otherwise provided by the California Constitution or federal law.

This bill would state the intent of the Legislature to enact legislation that would provide meaningful and automatic property tax relief for disaster victims, including fire disasters, in areas of the state proclaimed to be in a state of emergency by the Governor.

CONCURRENCE IN SENATE AMENDMENTS

CSA1 Bill Id:AB 245

Author:(Gipson)

As Amended Ver:August 29, 2025

2/3 vote. Urgency

SUMMARY

Automatically extends property tax relief to victims of the 2025 Los Angeles (LA) Fires.

Senate Amendments

Add double-jointing provisions to avoid a conflict with SB 663 (Allen), and make technical modifications.

COMMENTS

1. 2025 LA Fires: In early January 2025, a series of fires began raging in LA County. Exacerbated by hurricane force gusts and drought conditions, these fires grew rapidly, expanding into outlying residential areas of the LA metropolitan area. As the month progressed, the conditions exacerbating these fires led to serious complications for first responders, and the conflagrations grew without containment. After containment of these fires, however, the true depth of destruction began to become clear. According to the UCLA Anderson Forecast, total property and capital losses could range from $76 billion to $131 billion, with a potential decline in county-level gross domestic product of $4.6 billion. This loss from fire is unprecedented in the state. By comparison, the Camp Fire that destroyed the town of Paradise and was the most destructive fire in the state is estimated to have an associated loss of around $17 billion, an order of magnitude less than the 2025 LA Fires.
2. The problem and this bill: There are two provisions in this bill. The first is a simple extension of the time to rebuild a property damaged or destroyed by a disaster on the same site, without an owner's property taxes increasing. This additional time relieves property owners who may struggle to rebuild within the given period as victims of the LA fires simultaneously seek access to the same pool of material, labor, and services.

The second is less straightforward. One might reasonably conclude that an assessor could already apply the damaged value of a LA Fire victim's property to the January 1, 2025 lien date. This area of the law, however, is not abundantly clear. The authorization for an assessor to automatically reassess a damaged or destroyed property applies in cases when a county has not adopted an ordinance pursuant to the general misfortune and calamity relief provisions. LA County has such an ordinance, and it is unclear whether the LA Assessor may automatically apply the damaged value of victims' properties to the January 1, 2025 lien date. This bill would explicitly make such an authorization.

According to the Author

The author has provided the following statement in support of this bill:

The 2025 LA Fires are the most destructive fires in our state's history. As Los Angelenos recover in the aftermath of this devastation, the extent of damage has become painfully clear. According to a report by the UCLA Anderson Forecast, LA County between $76 and $131 billion in total capital and property losses. By comparison, this is nearly an order of magnitude greater than what had been the most destructive fire in our state, the Camp Fire. AB 245 provides victims of the LA Fires additional time to rebuild their home or business without experiencing a property tax increase, and ensures property owners are not forced to pay taxes on the higher, undamaged assessed value of their home for 2025. This relief is vital, as those with less means have less ability to access the limited pool of materials, labor, and services that many victims will simultaneously demand to rebuild. Additionally, AB 245 ensures the LA County Assessor has the authority to automatically reduce the assessed value of damaged properties, providing immediate relief to victims. For these reasons, I urge your support of AB 245.

Arguments in Support

The California Assessors' Association, writing in support of this bill, states, in part:

AB 245 will extend the 5-year rebuild deadline […] AB 245 also establishes that, for purposes of determining the full cash value of affected properties, the fair market value on January 1, 2025, will be based on the property's value at the time it was damaged or destroyed. This value will take into account reductions due to damage, destruction, depreciation, obsolescence, removal of property, or any other factors that contribute to a decline-in-value. [This] bill defines "qualified real property" as

Arguments in Opposition

None on file

FISCAL COMMENTS

The Senate Appropriations Committee notes the following fiscal impact in its analysis of this bill:

1. The [State] Board of Equalization (BOE) indicates that any property tax revenue loss resulting from this bill would be dependent upon individual reduction calculations resulting from retroactive property tax reassessment. The magnitude is unknown. Reductions in local property tax revenues, in turn, can increase General Fund Proposition 98 spending by up to roughly 50% (the exact amount depends on the specific amount of the annual Proposition 98 guarantee, which in turns depends upon a variety of economic, demographic and budgetary factors). [The] BOE would incur minor administrative costs to implement the provisions of the bill.
2. By imposing specified duties on Los Angeles County tax officials, this bill creates a state-mandated local program. To the extent the Commission on State Mandates determines that the provisions of this bill create a new program or impose a higher level of service on local agencies, local agencies could claim reimbursement of those costs. The magnitude is unknown, but potentially in excess of $50,000 annually (General Fund).

VOTES:

ASM REVENUE AND TAXATION: 7-0-0

YES: Gipson, Ta, Bains, DeMaio, Garcia, McKinnor, Quirk-Silva

ASM APPROPRIATIONS: 14-0-1

YES: Wicks, Arambula, Calderon, Caloza, Dixon, Elhawary, Fong, Mark González, Hart, Pacheco, Pellerin, Solache, Ta, Tangipa

ABS, ABST OR NV: Sanchez

ASSEMBLY FLOOR: 79-0-0

YES: Addis, Aguiar-Curry, Ahrens, Alanis, Alvarez, Arambula, Ávila Farías, Bains, Bauer-Kahan, Bennett, Berman, Boerner, Bonta, Bryan, Calderon, Caloza, Carrillo, Castillo, Chen, Connolly, Davies, DeMaio, Dixon, Elhawary, Ellis, Flora, Fong, Gabriel, Gallagher, Garcia, Gipson, Jeff Gonzalez, Mark González, Hadwick, Haney, Harabedian, Hart, Hoover, Irwin, Jackson, Kalra, Krell, Lackey, Lee, Lowenthal, Macedo, McKinnor, Muratsuchi, Nguyen, Ortega, Pacheco, Papan, Patel, Patterson, Pellerin, Petrie-Norris, Quirk-Silva, Ramos, Ransom, Celeste Rodriguez, Michelle Rodriguez, Rogers, Blanca Rubio, Sanchez, Schiavo, Schultz, Sharp-Collins, Solache, Soria, Stefani, Ta, Tangipa, Valencia, Wallis, Ward, Wicks, Wilson, Zbur, Rivas

UPDATED

VERSION: August 29, 2025

CONSULTANT: Harrison Bowlby / REV. & TAX. / (916) 319-2098 FN: 0002065

 THIRD READING  

Bill No: AB 245

Author: Gipson (D)

Amended: 8/29/25 in Senate

Vote: 27 - Urgency

SENATE REVENUE AND TAXATION COMMITTEE: 5-0, 7/9/25

AYES: McNerney, Valladares, Ashby, Grayson, Umberg

SENATE APPROPRIATIONS COMMITTEE: 7-0, 8/29/25

AYES: Caballero, Seyarto, Cabaldon, Dahle, Grayson, Richardson, Wahab

ASSEMBLY FLOOR: 79-0, 6/3/25 - See last page for vote

SUBJECT: Property taxation: application of base year value: disaster relief

SOURCE: Author

DIGEST:

This bill enacts two property tax relief provisions to assist taxpayers affected by the 2025 Los Angeles County Fires.

ANALYSIS:

Existing law:

1. Provides that all property is taxable unless explicitly exempted by the Constitution or federal law (California Constitution, Article XIII, Section One.)
2. Limits the maximum amount of any ad valorem tax on real property at 1% of full cash value, plus any locally-authorized bonded indebtedness, and caps a property’s annual inflationary increase in taxable value to 2%. Provides that assessors reappraise property whenever it is purchased, newly constructed, or when ownership changes (California Constitution, Article XIIIA, as added by Proposition 13, 1978).
3. Allow temporary reductions in assessed value in cases where real property suffers a decline in value (California Constitution, Article XIIIA, as amended by Proposition 8, 1978).
4. Implements Proposition 8 to direct the assessor to evaluate the change in a property’s value from one lien date (January 1 of each year) to the next, and enrolls a new value if the property’s current market value falls below its previous assessed value. If the market value subsequently increases, the assessor can revalue the property upward, but not higher than its Prop. 13 value.
5. Permits the Legislature to authorize local agencies to provide for the assessment or reassessment of taxable property “physically damaged or destroyed” for property tax purposes (California Constitution, Article XIII, Section 15).
6. Allows a county board of supervisors to enact an ordinance allowing any taxpayer whose property was damaged or destroyed in a major misfortune or calamity, and not by the fault of the taxpayer, to apply for reassessment.
7. Requires taxpayers to file a claim with the county assessor within the time specified in its ordinance, or 12 months from the date of damage or destruction, whichever is later.
8. Directs the assessor to revalue the property to its disaster-affected value upon the taxpayer filing a claim.
9. Sets, generally, a property’s value as its sales price when purchased or, when there is no sales price, at its fair market value when ownership changes (base year value).
10. Requires an annual inflation adjustment to that value that cannot exceed 2% (factored base year value).
11. Allows for base year value transfers in specified circumstances, which allow a taxpayer to continue paying property taxes at the factored base year value of their previous home (or other property types where the law allows) and not on the value of their newly purchased or constructed home.
12. Permits a taxpayer to transfer their base year value when their property is damaged by a major misfortune or calamity and located in an area the Governor declared or proclaimed to be in a state of disaster (Proposition 50, 1986).
13. Provides that any timely reconstruction of property damaged or destroyed by a misfortune or calamity was not reassessed, so long as the reconstruction is “substantially equivalent” to the property prior to damage or destruction. Assessors then value any newly constructed property that was not “substantially equivalent” at fair market value.
14. Directs assessors to not revalue a reconstructed structure that is larger in size if its value is within 120% of the value of the damaged or destroyed structure. Assessors only assess, to fair market value, that portion of value that exceeds 120% of its pre-disaster value (AB 2013, Irwin, Chapter 124, Statutes of 2020).
15. Requires taxpayers to complete reconstruction within five years to apply AB 2013’s protections, with specified exceptions.

This bill:

1. States that the fair market value of real property affected by the 2025 Los Angeles Fires on the January 1, 2025 lien date shall be its full cash value as of the date the property was damaged or destroyed, taking into account reductions in value due to damage, destruction, depreciation, obsolescence, removal of property, or other factors causing a decline in value. This provision applies notwithstanding the general law determining property value as of the lien date, and only to property:
   1. Impacted by the 2025 fire disasters in Palisades, Eaton, Hurst, Lidia, Sunset, or Woodley, as proclaimed by the Governor.
   2. The sum of the full cash values of the land, improvements, and personalty before the damage or destruction exceeds the sum of the values after the damage by ten thousand dollars or more.
   3. The property is not eligible for disaster reassessment.
2. Lengthens the five-year deadline in AB 2013 by three years if the qualified property was substantially damaged or destroyed on or after January 1, 2025, but before February 1, 2025, and is applicable for the determination of base year values for the 2025–26 fiscal year and thereafter.
3. Contains legislative findings and declarations to state that its retroactive treatment does not constitute a gift of public funds for purposes of Section 6 of Article XVI of the California Constitution.
4. Provides that its provisions take effect immediately as an urgency statute.
5. Contains provisions to resolve conflicts with SB 663 (Allen, 2025).

Background

Los Angeles County Fires. The National Weather Service held a conference call with Southern California fire and emergency management officials on Jan. 3, warning that a “truly historic event” was due in four days, with the possibility of fires that would spread with extraordinary speed. On January 7, 2025, a series of fires exploded in Los Angeles County, for which the Governor declared a state of emergency to exist in Los Angeles and Ventura counties. According to the California Department of Forestry and Fire Protection, the Palisades Fire burned 23,448 acres, destroyed 6,833 structures, and killed 12. The Eaton Fire burned 14,021 acres, destroyed 9,418 structures, and killed 18. The Kenneth Fire started two days later, and the Hughes Fire started on January 22nd; neither destroyed structures or resulted in loss of life. The UCLA Anderson School of Management estimates total property and capital losses could range between $76 billion and $131 billion, with insured losses estimated up to $45 billion. The causes of all four fires remain under investigation.

Disaster reassessment. When a property has a loss of more than $10,000 in market value due to physical damage or destruction due to a major misfortune or calamity, including a wildfire in an area declared a state of emergency by the Governor, the assessor revalues the property as of the date of disaster, which reduces valuations for tax purposes in the future until reconstructed, and can result in a refund of previously paid taxes. For properties completely damaged or destroyed by the disaster, determining the necessary threshold of $10,000 in damage when comparing a property’s pre-disaster and post-disaster value is straightforward; the assessor can quickly decide the threshold is met. However, for properties where damage or destruction was significant, but not complete, assessors must gather a great deal of information to qualify homeowners for disaster relief. They compare separate values of land, improvements, and personalty before and after the disaster damage to determine whether the $10,000 threshold is met, and if so, the specific percentage reduction to apply. Properties with significant but partial destruction will likely eventually qualify for Prop. 8 decline in value reassessment, but will have to wait until January 1, 2026 to request a reduction (almost one year after the fires), and their current 2025-26 taxes will reflect their property’s pre-disaster value. This bill allows the assessor to revalue properties for 2025-26 that were damaged or destroyed by the 2025 Los Angeles Fires, so long as they determine market value loss of $10,000 or more, instead of the more administratively cumbersome process of comparing pre- and post-disaster values for each of the land, personalty, and improvements. The assessor expects this bill to apply to around 2,000 properties, many of which have suffered smoke and other indirect damage. To qualify under AB 245, the property must be impacted by the 2025 fire disasters in Palisades, Eaton, Hurst, Lidia, Sunset, or Woodley, as proclaimed by the Governor, with a decline in value of $10,000 or more.

AB 2013. AB 2013’s reassessment protections only apply when taxpayers complete reconstruction within five years of the disaster, a deadline which can be difficult to meet. This bill extends this period an additional three years, following a precedent set by the Legislature in the 2018 Camp Fire and Woolsey Fire disasters (AB 1500, Irwin, Chapter 583, Statutes of 2023).

Related/Prior Legislation

SB 663 (Allen, 2025) also enacts property tax relief provisions for taxpayers affected by the 2025 Los Angeles County Fires, including lengthening AB 2013’s five year deadline; SB 663 also extends this deadline for taxpayers affected by fires in Ventura County in 2024. The bill is currently pending on the Assembly Floor.

FISCAL EFFECT: Appropriation: No Fiscal Com.: Yes Local: Yes

According to the Senate Appropriations Committee:

• The Board of Equalization (BOE) estimates that this bill would result in annual property tax revenue losses of $184 million. Reductions in local property tax revenues, in turn, can increase General Fund Proposition 98 spending by up to roughly 50 percent (the exact amount depends on the specific amount of the annual Proposition 98 guarantee, which in turns depends upon a variety of economic, demographic and budgetary factors). BOE would incur minor administrative costs to implement the provisions of the bill.
• By imposing specified duties on local tax officials, this bill creates a state-mandated local program. To the extent the Commission on State Mandates determines that the provisions of this bill create a new program or impose a higher level of service on local agencies, local agencies could claim reimbursement of those costs. The magnitude is unknown, but potentially in excess of $50,000 annually (General Fund).

SUPPORT: (Verified 8/29/25)

State Board of Equalization
California Apartment Association
California Assessors’ Association
California Association of Realtors
California Charter Schools Association
California Federation of Teachers
California Taxpayers Association
Howard Jarvis Taxpayers Association 
Independent Insurance Agents & Brokers of California, Inc.

OPPOSITION: (Verified 8/29/25)

None received

ARGUMENTS IN SUPPORT: According to the author, “the 2025 LA Fires are the most destructive fires in our state's history. As Los Angelenos recover in the aftermath of this devastation, the extent of damage has become painfully clear. According to a report by the UCLA Anderson Forecast, LA County suffered between $76 and $131 billion in total capital and property losses. By comparison, this is nearly an order of magnitude greater than what had been the most destructive fire in our state, the Camp Fire. AB 245 provides victims of the LA Fires additional time to rebuild their home or business without experiencing a property tax increase, and ensures property owners are not forced to pay taxes on the higher, undamaged assessed value of their home for 2025. This relief is vital, as those with less means have less ability to access the limited pool of materials, labor, and services that many victims will simultaneously demand to rebuild. Additionally, AB 245 ensures the LA County Assessor has the authority to automatically reduce the assessed value of damaged properties, providing immediate relief to victims.”

ASSEMBLY FLOOR: 79-0, 6/3/25

AYES: Addis, Aguiar-Curry, Ahrens, Alanis, Alvarez, Arambula, Ávila Farías, Bains, Bauer-Kahan, Bennett, Berman, Boerner, Bonta, Bryan, Calderon, Caloza, Carrillo, Castillo, Chen, Connolly, Davies, DeMaio, Dixon, Elhawary, Ellis, Flora, Fong, Gabriel, Gallagher, Garcia, Gipson, Jeff Gonzalez, Mark González, Hadwick, Haney, Harabedian, Hart, Hoover, Irwin, Jackson, Kalra, Krell, Lackey, Lee, Lowenthal, Macedo, McKinnor, Muratsuchi, Nguyen, Ortega, Pacheco, Papan, Patel, Patterson, Pellerin, Petrie-Norris, Quirk-Silva, Ramos, Ransom, Celeste Rodriguez, Michelle Rodriguez, Rogers, Blanca Rubio, Sanchez, Schiavo, Schultz, Sharp-Collins, Solache, Soria, Stefani, Ta, Tangipa, Valencia, Wallis, Ward, Wicks, Wilson, Zbur, Rivas

Prepared by: Colin Grinnell / REV. & TAX. / (916) 651-4117

9/2/25 17:53:04

**** END ****

SENATE COMMITTEE ON

Senator Anna Caballero, Chair

2025 - 2026 Regular Session

AB 245 (Gipson) - Property taxation: application of base year value: disaster relief

Bill Summary:

AB 245 would (1) extend the five-year deadline to eight years to reconstruct without reassessment, and (2) allow the county assessor to reduce valuations for properties partially damaged more quickly, as a result of the Los Angeles Fires in January 2025.

*********** ANALYSIS ADDENDUM – SUSPENSE FILE ***********

The following information is revised to reflect amendments

adopted by the committee on August 29, 2025

Fiscal Impact:

• The Board of Equalization (BOE) estimates that this bill would result in annual property tax revenue losses of $184 million. Reductions in local property tax revenues, in turn, can increase General Fund Proposition 98 spending by up to roughly 50 percent (the exact amount depends on the specific amount of the annual Proposition 98 guarantee, which in turns depends upon a variety of economic, demographic and budgetary factors). BOE would incur minor administrative costs to implement the provisions of the bill.
• By imposing specified duties on local tax officials, this bill creates a state-mandated local program. To the extent the Commission on State Mandates determines that the provisions of this bill create a new program or impose a higher level of service on local agencies, local agencies could claim reimbursement of those costs. The magnitude is unknown, but potentially in excess of $50,000 annually (General Fund).

Author Amendments:

Address chaptering issues with SB 663 (Allen).

-- END --

SENATE COMMITTEE ON

Senator Anna Caballero, Chair

2025 - 2026 Regular Session

AB 245 (Gipson) - Property taxation: application of base year value: disaster relief

Bill Summary:

AB 245 would (1) extend the five-year deadline to eight years to reconstruct without reassessment, and (2) allow the county assessor to reduce valuations for properties partially damaged more quickly, as a result of the Los Angeles Fires in January 2025.

Fiscal Impact:

• The Board of Equalization (BOE) estimates that this bill would result in annual property tax revenue losses of $184 million. Reductions in local property tax revenues, in turn, can increase General Fund Proposition 98 spending by up to roughly 50 percent (the exact amount depends on the specific amount of the annual Proposition 98 guarantee, which in turns depends upon a variety of economic, demographic and budgetary factors). BOE would incur minor administrative costs to implement the provisions of the bill.
• By imposing specified duties on local tax officials, this bill creates a state-mandated local program. To the extent the Commission on State Mandates determines that the provisions of this bill create a new program or impose a higher level of service on local agencies, local agencies could claim reimbursement of those costs. The magnitude is unknown, but potentially in excess of $50,000 annually (General Fund).

Background:

Under the California Constitution, all property is taxable unless explicitly exempted by itself or federal law. The Constitution limits the maximum amount of any ad valorem tax on real property at one percent of full cash value, plus any locally-authorized bonded indebtedness. Assessors reappraise property whenever it is purchased, newly constructed, or when ownership changes (as defined by both statute and the Constitution). Current law generally sets a property’s value as its sales price when purchased or, when there is no sales price, at its fair market value when ownership changes (base year value). Thereafter, existing law requires an annual inflation adjustment to that value that cannot exceed 2 percent (factored base year value).

Under current law, a county board of supervisors can enact an ordinance allowing any taxpayer whose property was damaged or destroyed in a major misfortune or calamity, as specified, to apply for reassessment. These provisions apply to large disasters, such as earthquakes or wildfires, or site-specific incidents, like house fires. All 58 counties have enacted such an ordinance. Taxpayers must file a claim with the county assessor within the time specified in its ordinance, or 12 months from the date of damage or destruction, whichever is later. After the taxpayer files a claim with the assessor, the assessor revalues the property to its (generally lower) disaster-affected value and sends the taxpayer a Notice of Proposed New Assessment. The county will then issue a separate supplemental, prorated refund for taxes paid in the current year based on the amount of reduction, if applicable. The property retains its disaster-affected value until fully restored, reconstructed, or rebuilt. Additionally, taxpayers can defer payment of their next property tax installment if the property was damaged or destroyed by a disaster for which the Governor issued a state of emergency.

Base year value transfers allow a taxpayer to continue paying property taxes at the factored base year value of their previous home (or other property types where permitted by law) and not on the value of their newly purchased or constructed home, often resulting in tax savings. For example, a taxpayer who purchased a residence for $100,000 in 1975 now has a base year value under Proposition 13 that cannot exceed $269,158 under the 2 percent cap in annual inflationary growth, regardless of its market value. A base year value transfer allows a taxpayer to transfer the $269,158 value to a newly purchased or constructed property subject to specified requirements; without a base year value transfer, the new property would be assessed at (higher) fair market value.

In June 1986, voters enacted Proposition 50 to allow a taxpayer to transfer their base year value when their property is damaged by a major misfortune or calamity and located in an area the Governor declared or proclaimed to be in a state of disaster. State law implements Proposition 50 to allow the transfer when:

• The damaged property sustains physical damages amounting to more than 50 percent of its current market value immediately prior to the disaster.
• The replacement property is located in the same county as the damaged property and is acquired or newly constructed within five years after the disaster.
• The replacement property is comparable to the damaged property in size, utility, and function. For example, a residential property can be a replacement property for a damaged residence, but not for a commercial, agricultural, or industrial property.
• The market value of the replacement property does not exceed 120 percent of the fair market value of the replaced property in its pre-damaged condition. Property owners can still receive the disaster relief in cases where the value of the replacement property exceeds the 120 percent limitation, but any amount over this threshold is assessed at full market value and added to the transferred base year value.
• The buyer of the replacement property was the owner of the damaged property at the time of damage.

Prior to 2020, any timely reconstruction of property damaged or destroyed by a misfortune or calamity was not reassessed, so long as the reconstruction is “substantially equivalent” to the property prior to damage or destruction. Assessors then value any newly constructed property that was not “substantially equivalent” at fair market value. Consequently, taxpayers who have endured disasters and subsequently reconstructed property can often have some portions of their properties with different base year values, depending on whether the property was destroyed, the damaged property incurred a loss in value, and the degree of any reconstruction. Taxpayers can even have different base year values for the same building, because the assessor will only assess to fair market value the portion of the building that is not substantially equivalent. For example, a taxpayer owns a 1,200 square foot home that is destroyed in a wildfire. If they replace the home with a 3,500 square foot home, the assessor values the additional square footage to fair market value, and adds that value to the factored base year value for the 1,200 square foot home.

In 2020, the Legislature enacted AB 2013 (Irwin) to ensure consistency between the standards that apply to owners who rebuild onsite using the new construction exclusion, who currently must meet the “substantial equivalence” requirement, and the more specific and flexible requirements that apply to owners who transfer their base year values to a newly purchased or constructed offsite property under Proposition 50. Under AB 2013, assessors would not revalue a structure that is larger in size if its value is within 120 percent of the value of the damaged or destroyed structure. Additionally, the assessor will only assess to fair market value that portion of value that exceeds 120 percent of its pre-disaster value. This treatment applied only when taxpayers complete reconstruction within five years of the disaster.

The five-year window can be difficult to meet. Disaster-affected property owners become their own property developers, and have to navigate insurance, permitting, and construction contracting. Consequently, the Legislature has extended AB 2013’s five-year deadline in AB 1500 by three years for both the 2018 Camp Fire and Woolsey Fire disasters (AB 1500, Irwin, 2023).

The Constitution allows the Legislature to exempt property used exclusively for charitable purposes, so long as it is owned by non-profit entities organized and operated for charitable purposes, such as universities, hospitals, and libraries. To receive a welfare exemption, the Board of Equalization must verify that the organization is charitable, and then the assessor must determine that the use of the property qualifies for an exemption. After a disaster, such as when a wildfire destroys an exempt property, it is hard for a property to qualify as exempt in many cases. For example, a church must be used for religious worship to qualify for the exemption; however, if the church is destroyed or damaged so badly it cannot be used for services, the property no longer meets the requirement of being used for charitable purposes. In such a case, the assessor must generally revoke the property welfare exemption.

In January 2025, a series of fires erupted in Los Angeles County, for which the Governor declared a state of emergency in Los Angeles and Ventura counties. According to the California Department of Forestry and Fire Protection (CalFIRE), the Palisades Fire burned 23,448 acres, and destroyed 6,833 structures. The Eaton Fire burned 14,021 acres, and destroyed 9,413 structures. The Kenneth Fire and Hughes Fires started a few days later, neither of which destroyed structures. The UCLA Anderson School of Management estimates total property and capital losses could range between $76 billion and $131 billion, with insured losses estimated up to $45 billion.

Proposed Law:

This bill would, among other things, make the following two changes to property tax law resulting from the 2025 Los Angeles Fires:

• Lengthen the five-year deadline in AB 2013 by three years if the qualified property as substantially damaged or destroyed on or after January 1, 2025, but before February 1, 2025, and is applicable for the determination of base-year values for 2025–26 and thereafter.
• State that the fair market value of real property affected by the 2025 Los Angeles Fires on the January 1, 2025 lien date shall be its full cash value as of the date the property was damaged or destroyed, taking into account reductions in value due to damage, destruction, depreciation, obsolescence, removal of property, or other factors causing a decline in value. This provision applies notwithstanding the general law determining property value as of the lien date, and only to property:
  • Impacted by specified 2025 fire disasters as proclaimed by the Governor.
  • The sum of the full cash values of the land, improvements, and personalty before the damage or destruction exceeds the sum of the values after the damage by ten thousand dollars or more.
  • The property is not eligible for disaster reassessment.

Related Legislation:

• SB 293 (Pérez) would extend the current six-month deadline to three years from the date of notice for supplemental assessment under Propositions 58 and 19, applicable for taxpayers that have been reassessed due to a disaster and had an unrecorded change in ownership. The bill is currently pending in the Assembly Appropriations Committee.
• SB 663 (Allen), like AB 245, would extend the five-year deadline in AB 2013 by three years if the qualified property was substantially damaged or destroyed on or after January 1, 2025, but before February 1, 2025. SB 663 also would apply these provisions to the County of Ventura, and would extend the deadline from 12 to 24 months for taxpayers to file a claim for disaster reassessment for property that was damaged or destroyed by the 2025 Los Angeles County Fires, and directs the assessor to deem that a property that received a welfare exemption in 2025 continues to be used exclusively for its welfare exempt purposes if the property is no longer being used for its exempt purpose due to damage to the property by the Los Angeles fires. The bill is currently pending in the Assembly Appropriations Committee.

Staff Comments:

As noted previously, according to CalFIRE, 6,833 structures (homes, barns, garages, sheds and commercial properties) were destroyed in the Palisades fire, and 9,413 structures in the Eaton fire. The majority of the structures lost were single-family homes (SFRs): 5,058 in the Palisades Fire, and 6,003 in the Eaton Fire.

BOE data indicate that the average assessed value of a SFR destroyed in Palisades was $1.6 million; BOE estimates the corresponding market value to be approximately $4 million. Therefore, when a transfer is granted, using BOE estimates, the average difference between an SFR’s market value and assessed value is $2.4 million; the corresponding property tax revenue loss (at the basic one percent rate) is $24,000. Applying this figure to the total number of SFRs lost in the Palisades Fire, and assuming that homeowners would need additional time to reconstruct the property, BOE estimates the total annual revenue loss associated with SFRs in the Palisades Fire to be $122 million.

BOE further estimates that the average assessed value of SFRs destroyed in the non-Palisades areas is $532,568, and the market value is $1.4 million. Therefore, when the transfer is granted, using BOE estimates, the average difference between these SFRs’ market value and assessed value is $867,000; the corresponding revenue loss is $8,674. Applying this figure to the total number of SFRs lost in the non-Palisades areas, and assuming that homeowners would need additional time to reconstruct the property, BOE estimates the total annual revenue loss associated with SFRs in the non-Palisades areas to be $52 million. Thus, BOE estimates the bill’s revenue loss from all affected SFRs to be $174 million. BOE estimates the revenue loss associated with commercial property to be $10 million annually.

The Board notes that its estimates can be considered an upper-bound, as its figures assume that all affected land owners would seek the additional three years. Additionally, BOE’s figures assume that every fire victim who had a home damaged or destroyed elects to rebuild on their property instead of purchasing replacement property.

-- END --

ASSEMBLY THIRD READING

ATR Bill Id:AB 245

Author:(Gipson)

As Amended Ver:April 30, 2025

2/3 vote. Urgency

SUMMARY

Automatically extends property tax relief to victims of the 2025 Los Angeles (LA) Fires.

Major Provisions

1. Extends by three years the existing five-year deadline to rebuild "qualified property" damaged or destroyed on or after January 7, 2025, but on or before February 1, 2025, while still retaining the base year value of the property prior to the damage or destruction.
2. Defines "qualified property" as property that was substantially damaged or destroyed, as defined, by the 2025 fire disasters in Palisades, Eaton, Hurst, Lidia, Sunset, or Woodley, as proclaimed by the Governor.
3. Provides that, notwithstanding existing law governing the valuation of real property, the fair market value of "qualified real property" on January 1, 2025 is the full cash value as of the date the property was damaged or destroyed, taking into account factors causing a decline in value.
4. Defines "qualified real property" as property impacted by the 2025 fire disasters in Palisades, Eaton, Hurst, Lidia, Sunset, or Woodley, as proclaimed by the Governor, if the sum of the full cash values of the land, improvements, and personality before the damage or destruction exceeds the sum of the values after the damage by $10,000 or more, and if the property is not eligible for relief under Revenue and Taxation Code (R&TC) Section 170.

COMMENTS

1. 2025 LA Fires: Beginning in early January 2025, a series of fires began raging in LA County. Exacerbated by hurricane force gusts and drought conditions, these fires rapidly grew, expanding into outlying residential areas of the LA metropolitan area. As the month progressed, the conditions exacerbating these fires led to serious complications for first responders, and the conflagrations grew without containment. After containment of these fires, however, the true depth of destruction began to become clear. According to the UCLA Anderson Forecast, total property and capital losses could range from $76 billion to $131 billion, with a potential decline in county-level gross domestic product of $4.6 billion. This loss from fire is unprecedented in the state. By comparison, the Camp Fire that destroyed the town of Paradise and was the most destructive fire in the state is estimated to have an associated loss of around $17 billion, an order of magnitude less than the 2025 LA Fires.

The problem and this bill: There are two provisions in this bill. The first is a simple extension of the time to rebuild a property damaged or destroyed by a disaster on the same site, without an owner's property taxes increasing. This additional time relieves property owners who may struggle to rebuild within the given period as victims of the LA fires simultaneously seek access to the same pool of material, labor, and services.

The second is less straightforward. One might reasonably conclude that an assessor could already apply the damaged value of a LA Fire victim's property to the January 1, 2025 lien date. This area of the law, however, is not abundantly clear. The authorization for an assessor to automatically reassess a damaged or destroyed property applies in cases where when a county has not adopted an ordinance pursuant to the general misfortune and calamity relief provisions. LA County has such an ordinance, and it is unclear whether the LA Assessor may automatically apply the damaged value of victims' properties to the January 1, 2025 lien date. This bill would explicitly make such an authorization.

According to the Author

The author has provided the following statement in support of this bill:

The 2025 LA Fires are the most destructive fires in our state's history. As Los Angelenos recover in the aftermath of this devastation, the extent of damage has become painfully clear. According to a report by the UCLA Anderson Forecast, LA County between $76 and $131 billion in total capital and property losses. By comparison, this is nearly an order of magnitude greater than what had been the most destructive fire in our state, the Camp Fire. AB 245 provides victims of the LA Fires additional time to rebuild their home or business without experiencing a property tax increase, and ensures property owners are not forced to pay taxes on the higher, undamaged assessed value of their home for 2025. This relief is vital, as those with less means have less ability to access the limited pool of materials, labor, and services that many victims will simultaneously demand to rebuild. Additionally, AB 245 ensures the LA County Assessor has the authority to automatically reduce the assessed value of damaged properties, providing immediate relief to victims. For these reasons, I urge your support of AB 245.

Arguments in Support

The State Board of Equalization (BOE), writing in support of this bill, states, in part:

Since the wildfires in Los Angeles and Ventura Counties began in January 2025, the [BOE] has been proactive in having active conversations with the Legislature, the Administration, and the Los Angeles County Assessor's Office in providing insight into ways to provide quicker property tax relief to those affected. As you know, the [BOE] held an Informational Hearing on the 2025 Wildfire Disaster Relief and Recovery in February 2025. This bill achieves the aims of providing additional property tax disaster relief, including extending the current five-year period by an additional three years, the ability to rebuild substantially damaged or destroyed real property in a Governor-proclaimed disaster area, and allowing the County Assessor to adjust the value of properties that may not have been significantly damaged or destroyed but still impacted directly or indirectly by the wildfires. These measures will provide additional relief to those who were affected by the wildfires earlier this year.

Arguments in Opposition

None on file

FISCAL COMMENTS

1. Annual property tax revenue loss of approximately $184 million by allowing additional base-year value transfers beyond the existing five-year time period. Although this bill specifies that the state is prohibited from reimbursing any local agency for lost property tax revenues and property tax is a local government revenue source, reductions in property tax revenues increase Proposition 98 General Fund (GF) spending by up to roughly 50% (the exact amount depends on the specific amount of the annual Proposition 98 guarantee).
2. Costs of approximately $12,000 to the BOE to update informational materials and guidance to impacted county assessors (GF).
3. Costs of an unknown, but likely absorbable, amount to the Los Angeles and Ventura county assessors to process additional base year value transfers and follow specified assessment practices. If the Commission on State Mandates determines the provisions of this bill create a new program or impose a higher level of service for which the state must reimburse local costs, the two counties could claim reimbursement from the state (GF).

VOTES

ASM REVENUE AND TAXATION: 7-0-0

YES: Gipson, Ta, Bains, DeMaio, Garcia, McKinnor, Quirk-Silva

ASM APPROPRIATIONS: 14-0-1

YES: Wicks, Arambula, Calderon, Caloza, Dixon, Elhawary, Fong, Mark González, Hart, Pacheco, Pellerin, Solache, Ta, Tangipa

ABS, ABST OR NV: Sanchez

UPDATED

VERSION: April 30, 2025

CONSULTANT: Harrison Bowlby / REV. & TAX. / (916) 319-2098 FN: 0000817

Date of Hearing: May 21, 2025

ASSEMBLY COMMITTEE ON APPROPRIATIONS

Buffy Wicks, Chair

ABPCA Bill Id:AB 245

Author:(Gipson) – As Amended Ver:April 30, 2025

Urgency: Yes State Mandated Local Program: Yes Reimbursable: Yes

SUMMARY:

This bill extends, by three years, the existing five-year deadline to rebuild qualified property damaged or destroyed by the January 2025 Los Angeles-area wildfire disaster while retaining the original property’s base-year value.

This bill also provides, for purposes of the January 1, 2025, lien date, that the fair market value of qualified property impacted by the wildfire disaster must take into account related factors causing a decline in value.

FISCAL EFFECT:

1. Annual property tax revenue loss of approximately $184 million by allowing additional base-year value transfers beyond the existing five-year time period. Although this bill specifies that the state is prohibited from reimbursing any local agency for lost property tax revenues and property tax is a local government revenue source, reductions in property tax revenues increase Proposition 98 General Fund (GF) spending by up to roughly 50% (the exact amount depends on the specific amount of the annual Proposition 98 guarantee).
2. Costs of approximately $12,000 to the State Board of Equalization (BOE) to update informational materials and guidance to impacted county assessors (GF).
3. Costs of an unknown, but likely absorbable, amount to the Los Angeles and Ventura county assessors to process additional base year value transfers and follow specified assessment practices. If the Commission on State Mandates determines the provisions of this bill create a new program or impose a higher level of service for which the state must reimburse local costs, the two counties could claim reimbursement from the state (GF).

COMMENTS:

1. Purpose. According to the author:

AB 245 provides victims of the LA Fires additional time to rebuild their home or business without experiencing a property tax increase, and ensures property owners are not forced to pay taxes on the higher, undamaged assessed value of their home for 2025. This relief is vital, as those with less means have less ability to access the limited pool of materials, labor, and services that many victims will simultaneously demand to rebuild.

This bill is supported by the BOE, California Assessors’ Association, taxpayer associations, and other groups.

1. Background. Base-year Value Transfer. Existing law provides several exceptions to the required reassessment of real property from its base-year value to its current market value when a change in ownership or new construction occurs. For example, the base-year value of a property substantially damaged or destroyed by a Governor-proclaimed disaster may be transferred to a comparable replacement property in the same county or to a reconstructed property on the same site within five years. All property types (residential, commercial, agricultural, or industrial) are eligible for such base-year value transfers. Since Proposition 13 capped the annual growth of a property’s assessed value and set the tax rate at 1% of assessed value, this exception allows the taxpayer to maintain lower property tax bills.

This bill grants a property owner three more years to apply the base-year value of qualified property substantially damaged or destroyed by the January 2025 Los Angeles-area wildfire disaster to a replacement property reconstructed on the site of the damaged or destroyed property. This bill does not provide a similar extension to base-year value transfers for a property owner electing to purchase a replacement property.

Lien Date. Generally, property tax assessments are imposed as of the January 1 lien date. The January 2025 Los Angeles-area wildfire disaster began on January 7, 2025. Existing law authorizes a property owner to apply for reassessment of property damaged or destroyed by a misfortune or calamity if the county has an implementing ordinance. Existing law also authorizes an assessor to automatically reassess a damaged or destroyed property, without application by the owner, when a county has not adopted an implementing ordinance. Such reassessments often lead to a downward adjustment in the assessed value of the property, thereby ensuring a property owner does not pay property tax on damaged or destroyed property.

Since Los Angeles County has adopted an implementing ordinance, it is unclear whether the county assessor may automatically provide property tax relief. This bill provides, for purposes of the January 1, 2025, lien date, that the fair market value of property impacted by the wildfire disaster account for related factors causing a decline in value, thus authorizing the assessor to automatically reassess property without an application process.

1. Related Legislation. SB 603 (Niello) extends, by three years, the five-year deadline to transfer the base-year value of a damaged or destroyed property to a comparable replacement property in the same county, if the county board of supervisors adopts an authorizing ordinance. SB 603 is pending on the Senate Appropriations Committee’s suspense file.

SB 663 (Allen) extends the deadline for rebuilding property damaged or destroyed by the January 2025 Los Angeles-area wildfire disaster, similar to this bill, and also makes other related changes to assessment practices. SB 663 is pending on the Senate Appropriations Committee’s suspense file.

1. Prior Legislation. AB 1500 (Irwin), Chapter 583, Statutes of 2023, extended, by three years, the five-year deadline to rebuild property damaged or destroyed by the 2018 Camp Fire or 2018 Woolsey Fire while retaining the original property’s base-year value.

Analysis Prepared by: Irene Ho / APPR. / (916) 319-2081

Date of Hearing: April 28, 2025

ASSEMBLY COMMITTEE ON REVENUE AND TAXATION

Mike Gipson, Chair

ABPCA Bill Id:AB 245 (

Author:Gipson) – As Amended Ver:March 10, 2025

SUSPENSE

Majority vote. Fiscal committee.

SUBJECT: Property taxation: application of base year value: disaster relief

SUMMARY: Provides automatic property tax relief to the victims of the 2025 Los Angeles (LA) Fires. Specifically, this bill:

1. Extends by three years the existing five-year deadline to rebuild "qualified property" damaged or destroyed on or after January 7, 2025, but on or before February 1, 2025, while still retaining the base year value of the property prior to the damage or destruction.
2. Defines "qualified property" as property that was substantially damaged or destroyed, as defined, by the 2025 fire disasters in Palisades, Eaton, Hurst, Lidia, Sunset, or Woodley, as proclaimed by the Governor.
3. Provides that, notwithstanding existing law governing the valuation of real property, the fair market value of "qualified real property" on January 1, 2025 is the full cash value as of the date the property was damaged or destroyed, taking into account factors causing a decline in value.
4. Defines "qualified real property" as property impacted by the 2025 fire disasters in Palisades, Eaton, Hurst, Lidia, Sunset, or Woodley, as proclaimed by the Governor, if the sum of the full cash values of the land, improvements, and personality before the damage or destruction exceeds the sum of the values after the damage by $10,000 or more, and if the property is not eligible for relief under Revenue and Taxation Code (R&TC) Section 170.
5. Finds and declares that the substantive provisions of this bill do not constitute a gift of public funds within the meaning of Section 6 of Article XVI of the California Constitution, and serve the purpose of ensuring that owners of real property that has been substantially damaged or destroyed in the 2025 fire disasters in Palisades, Eaton, Hurst, Lidia, Sunset, or Woodley, as proclaimed by the Governor, are provided the full and fair opportunity to reconstruct on the site of the damaged or destroyed real property and to retain the property tax base year value of the property. Additionally, to prevent the undue hardship for owners of real property that has suffered significant reduction in value due to damage, destruction, depreciation, obsolescence, removal of property, or other factors causing a decline in value, these factors should be taken into account in determining property valuations for the 2025 calendar year, as provided in this bill.
6. Requires the state to reimburse local agencies and school districts if the Commission on State Mandates determines that this bill contains costs mandated by the state.
7. Provides that no appropriation is made by this bill, and that the state shall not reimburse any local agency for any property tax revenues lost by it pursuant to this act.

EXISTING LAW:

1. Provides that all property is taxable unless otherwise provided by the California Constitution or the laws of the United States. (California Constitution, Article XIII, Section 1.)
2. Limits the maximum amount of ad valorem property taxation to 1% of the full cash value of the property. Generally, the Constitution restricts the full cash value of a property to the assessed value upon a change of ownership in, or new construction on, the property. This is referred to as the base year value, which may be adjusted upwards for inflation at no more than 2% annually. (California Constitution, Article XIIIA, Sections 1 and 2.)
3. Excludes from the definition of "newly constructed" real property that is reconstructed after a disaster declared by the Governor, where the fair market value of the reconstructed real property is comparable to its fair market value prior to the disaster. (California Constitution, Article XIIIA, Section 2.) Property owners have a five-year period during which they may reconstruct a damaged or destroyed property on the same site and retain the base year value of their property, subject to valuation limitations. A property is considered damaged or destroyed if the physical damage to improvements on the property is more than 50% of the full cash value of those improvements immediately prior to the disaster. The five-year limitation is extended by three years for victims of certain wildfires. (R&TC Section 70.5.)
4. Authorizes a county board of supervisors to, by ordinance, allow property owners to apply for a reassessment of a property if the assessor determines that the property was damaged or destroyed within the past 12 months by a misfortune or calamity, as defined. A property must have suffered at least $10,000 in damages to qualify, and the reduction in assessed value cannot exceed the loss. An assessor may also notify a property owner that the property may be eligible for a reassessment due to damage or destruction within the last 12 months, and the owner must respond to that notice with an application for reassessment, as specified. Additionally, an assessor in a county without an implementing ordinance may make a reassessment to a property otherwise qualifying for relief after misfortune or calamity, and notify that property's owner of the reassessment. Finally, the valuation of the reassessment is prorated based on the number of months that the property was damaged in that taxable year, and, for properties damaged after the January 1 lien date, but before the beginning of the next fiscal year, the reassessed value is used to determine the tax liability for the next fiscal year. (R&TC Section 170.)

FISCAL EFFECT: The BOE estimates an annual property tax revenue loss of $184 million.

COMMENTS:

1. The author has submitted the following statement in support of this bill:

The 2025 LA Fires are the most destructive fires in our state's history. As Los Angelenos recover in the aftermath of this devastation, the extent of damage has become painfully clear. According to a report by the UCLA Anderson Forecast, LA County between $76 and $131 billion in total capital and property losses. By comparison, this is nearly an order of magnitude greater than what had been the most destructive fire in our state, the Camp Fire. AB 245 provides victims of the LA Fires additional time to rebuild their home or business without experiencing a property tax increase, and ensures property owners are not forced to pay taxes on the higher, undamaged assessed value of their home for 2025. This relief is vital, as those with less means have less ability to access the limited pool of materials, labor, and services that many victims will simultaneously demand to rebuild. Additionally, AB 245 ensures the LA County Assessor has the authority to automatically reduce the assessed value of damaged properties, providing immediate relief to victims. For these reasons, I urge your support of AB 245.

1. The State Board of Equalization, writing in support of this bill, states, in part:

Since the wildfires in Los Angeles and Ventura Counties began in January 2025, the Board has been proactive in having active conversations with the Legislature, the Administration, and the Los Angeles County Assessor's Office in providing insight into ways to provide quicker property tax relief to those affected. As you know, the Board held an Informational Hearing on the 2025 Wildfire Disaster Relief and Recovery in February 2025. This bill achieves the aims of providing additional property tax disaster relief, including extending the current five-year period by an additional three years, the ability to rebuild substantially damaged or destroyed real property in a Governor-proclaimed disaster area, and allowing the County Assessor to adjust the value of properties that may not have been significantly damaged or destroyed but still impacted directly or indirectly by the wildfires. These measures will provide additional relief to those who were affected by the wildfires earlier this year.

1. Committee Staff Comments:
   1. 2025 LA Fires: Beginning in early January 2025, a series of fires began raging in LA County. Exacerbated by hurricane force gusts and drought conditions, these fires rapidly grew, expanding into outlying residential areas of the LA metropolitan area. As the month progressed, the conditions exacerbating these fires led to serious complications for first responders, and the conflagrations grew without containment. After containment of these fires, however, the true depth of destruction began to become clear. According to the UCLA Anderson Forecast, total property and capital losses could range from $76 billion to $131 billion, with a potential decline in county-level gross domestic product of $4.6 billion. This loss from fire is unprecedented in the state. By comparison, the Camp Fire that destroyed the town of Paradise and was the most destructive fire in the state is estimated to have an associated loss of around $17 billion, an order of magnitude less than the 2025 LA Fires.
   2. Operation of property tax relief after disaster in existing law: California property tax law provides property owners general protections against significant increases in property tax liability by establishing the taxable value of a property as its base year value, generally the full cash value of the property upon its purchase or transfer. This base year value may be upwardly adjusted for inflation at no more than 2% annually.

A base year value must also be reassessed when new construction occurs on the property. Often times, the current value of a reconstructed property is significantly higher than the value for which the property was acquired. Currently, when an owner's property is damaged or destroyed by a Governor-proclaimed disaster, that owner may rebuild their property on the same site within five years of the disaster, while still retaining the base year value of the property prior to the disaster. A property owner would receive a significant property tax increase absent the new construction exclusion for rebuilt property after a disaster.

Upon damage to a property by misfortune or calamity, an owner may apply for a reassessment of that damaged property within 12 months of the misfortune or calamity if the county has an implementing ordinance. Such reassessments very often lead to a downward adjustment in the assessed value of the property, thereby ensuring that owners do not pay property taxes on portions of their property that are damaged or destroyed. A disaster is a qualifying type of misfortune or calamity, and victims of the 2025 LA Fires would be eligible to apply for reassessment. Similarly, under that provision of law, an assessor may proactively notify owners of damage or destruction to their property that entitles the property to a downward adjustment, but the owner must apply after the assessor's notice to receive the reassessment. Finally, if a county has not adopted an implementing ordinance, a county assessor may reassess a property suffering damage or destruction due to misfortune or calamity without application by the owner.

A reassessment due to misfortune or calamity is prorated based on the number of months in a year that the property was in its damaged state. Generally, property taxes are imposed as of the January 1 lien date, and provide revenue for the upcoming fiscal year. Thus, property taxes levied on the January 1, 2025 lien date correspond to revenues for the 2025-26 fiscal year, despite the lien date occurring in the 2024-25 fiscal year. In turn, existing law authorizes the application of a property's damaged value to the next fiscal year if the damage occurs after the January 1 lien date of that year, but before the next fiscal year. Relevant to this bill, the 2025 LA Fires occurred after January 1, 2025, but before the start of the 2025-26 fiscal year on July 1, 2025. Thus, property owners generally qualifying for misfortune and calamity relief under a county ordinance could retroactively use the damaged value of the property for taxation purposes in that taxable year despite the qualifying event occurring after the lien date for that taxable year, but only if a property owner applies or responds to an assessor's notice.

• 1. The problem and this bill: As noted above, there are two provisions in this bill. The first is a simple extension of the time to rebuild a property damaged or destroyed by a disaster on the same site, without an owner's property taxes increasing. This additional time relieves property owners who may struggle to rebuild within the given period as victims of the LA fires simultaneously seek access to the same pool of material, labor, and services.

The second is less straightforward. Based on the description above, one might reasonably conclude that an assessor could already apply the damaged value of a LA Fire victim's property to the January 1, 2025 lien date. This area of the law, however, is not abundantly clear. The authorization for an assessor to automatically reassess a damaged or destroyed property applies in cases where when a county has not adopted an ordinance pursuant to the general misfortune and calamity relief provisions. LA County has such an ordinance, and it is unclear whether the LA Assessor may automatically apply the damaged value of victims' properties to the January 1, 2025 lien date. This bill would explicitly make such an authorization.

• 1. Related legislation:
     1. SB 603 (Niello) would extend by three years the existing five-year period to rebuild a damaged or destroyed property in the same county, and retain the base year value of the property prior to its damage or destruction for any county affected by a disaster declared by the Governor on or after January 1, 2025. SB 603 is set for a hearing by the Senate Committee on Revenue and Taxation on May 14.
     2. SB 663 (Allen) would extend by three years the time to rebuild a property damaged or destroyed by a disaster, as defined, while retaining that property's base year value prior to the disaster, and would authorize an assessor to determine the appropriate date of damage for purposes of reassessment after property is damaged or destroyed by misfortune or calamity, among other changes. SB 663 is set for a hearing by the Senate Committee on Revenue and Taxation on April 9.
  2. Previous legislation: AB 1500 (Irwin), Chapter 583, Statutes of 2023, extended by three years the period to rebuild a property damaged or destroyed by the Camp or Woolsey Fires while still retaining the base year value of the property prior to damage.

REGISTERED SUPPORT / OPPOSITION:

Support

California Assessors Association

California Apartment Association

California Association of Realtors

California Charter Schools Association

California Federation of Teachers

California Taxpayers Association

Howard Jarvis Taxpayers Association

Independent Insurance Agents and Brokers of California, Inc.

State Board of Equalization

Opposition

None on file

Analysis Prepared by: Harrison Bowlby / REV. & TAX. / (916) 319-2098

Date of Hearing: April 7, 2025

ASSEMBLY COMMITTEE ON REVENUE AND TAXATION

Mike Gipson, Chair

ABPCA Bill Id:AB 245 (

Author:Gipson) – As Amended Ver:March 10, 2025

Majority vote. Fiscal committee.

SUBJECT: Property taxation: application of base year value: disaster relief

SUMMARY: Provides automatic property tax relief to the victims of the 2025 Los Angeles (LA) Fires. Specifically, this bill:

1. Extends by three years the existing five-year deadline to rebuild "qualified property" damaged or destroyed on or after January 7, 2025, but on or before February 1, 2025, while still retaining the base year value of the property prior to the damage or destruction.
2. Defines "qualified property" as property that was substantially damaged or destroyed, as defined, by the 2025 fire disasters in Palisades, Eaton, Hurst, Lidia, Sunset, or Woodley, as proclaimed by the Governor.
3. Provides that, notwithstanding existing law governing the valuation of real property, the fair market value of "qualified real property" on January 1, 2025 is the full cash value as of the date the property was damaged or destroyed, taking into account factors causing a decline in value.
4. Defines "qualified real property" as property impacted by the 2025 fire disasters in Palisades, Eaton, Hurst, Lidia, Sunset, or Woodley, as proclaimed by the Governor, if the sum of the full cash values of the land, improvements, and personality before the damage or destruction exceeds the sum of the values after the damage by $10,000 or more, and if the property is not eligible for relief under Revenue and Taxation Code (R&TC) Section 170.
5. Finds and declares that the substantive provisions of this bill do not constitute a gift of public funds within the meaning of Section 6 of Article XVI of the California Constitution, and serve the purpose of ensuring that owners of real property that has been substantially damaged or destroyed in the 2025 fire disasters in Palisades, Eaton, Hurst, Lidia, Sunset, or Woodley, as proclaimed by the Governor, are provided the full and fair opportunity to reconstruct on the site of the damaged or destroyed real property and to retain the property tax base year value of the property. Additionally, to prevent the undue hardship for owners of real property that has suffered significant reduction in value due to damage, destruction, depreciation, obsolescence, removal of property, or other factors causing a decline in value, these factors should be taken into account in determining property valuations for the 2025 calendar year, as provided in this bill.
6. Requires the state to reimburse local agencies and school districts if the Commission on State Mandates determines that this bill contains costs mandated by the state.
7. Provides that no appropriation is made by this bill, and that the state shall not reimburse any local agency for any property tax revenues lost by it pursuant to this act.

EXISTING LAW:

1. Provides that all property is taxable unless otherwise provided by the California Constitution or the laws of the United States. (California Constitution, Article XIII, Section 1.)
2. Limits the maximum amount of ad valorem property taxation to 1% of the full cash value of the property. Generally, the Constitution restricts the full cash value of a property to the assessed value upon a change of ownership in, or new construction on, the property. This is referred to as the base year value, which may be adjusted upwards for inflation at no more than 2% annually. (California Constitution, Article XIIIA, Sections 1 and 2.)
3. Excludes from the definition of "newly constructed" real property that is reconstructed after a disaster declared by the Governor, where the fair market value of the reconstructed real property is comparable to its fair market value prior to the disaster. (California Constitution, Article XIIIA, Section 2.) Property owners have a five-year period during which they may reconstruct a damaged or destroyed property on the same site and retain the base year value of their property, subject to valuation limitations. A property is considered damaged or destroyed if the physical damage to improvements on the property is more than 50% of the full cash value of those improvements immediately prior to the disaster. The five-year limitation is extended by three years for victims of certain wildfires. (R&TC Section 70.5.)
4. Authorizes a county board of supervisors to, by ordinance, allow property owners to apply for a reassessment of a property if the assessor determines that the property was damaged or destroyed within the past 12 months by a misfortune or calamity, as defined. A property must have suffered at least $10,000 in damages to qualify, and the reduction in assessed value cannot exceed the loss. An assessor may also notify a property owner that the property may be eligible for a reassessment due to damage or destruction within the last 12 months, and the owner must respond to that notice with an application for reassessment, as specified. Additionally, an assessor in a county without an implementing ordinance may make a reassessment to a property otherwise qualifying for relief after misfortune or calamity, and notify that property's owner of the reassessment. Finally, the valuation of the reassessment is prorated based on the number of months that the property was damaged in that taxable year, and, for properties damaged after the January 1 lien date, but before the beginning of the next fiscal year, the reassessed value is used to determine the tax liability for the next fiscal year. (R&TC Section 170.)

FISCAL EFFECT: Pending from the State Board of Equalization. Committee staff notes that a similar bill previously heard by this Committee, AB 1500 (Irwin), Chapter 583, Statutes of 2023, qualified for this Committee's Suspense File, despite being narrower in scope than this bill. Thus, this bill likely qualifies for this Committee's Suspense File.

COMMENTS:

1. The author has submitted the following statement in support of this bill:

The 2025 LA Fires are the most destructive fires in our state's history. As Los Angelenos recover in the aftermath of this devastation, the extent of damage has become painfully clear. According to a report by the UCLA Anderson Forecast, LA County between $76 and $131 billion in total capital and property losses. By comparison, this is nearly an order of magnitude greater than what had been the most destructive fire in our state, the Camp Fire. AB 245 provides victims of the LA Fires additional time to rebuild their home or business without experiencing a property tax increase, and ensures property owners are not forced to pay taxes on the higher, undamaged assessed value of their home for 2025. This relief is vital, as those with less means have less ability to access the limited pool of materials, labor, and services that many victims will simultaneously demand to rebuild. Additionally, AB 245 ensures the LA County Assessor has the authority to automatically reduce the assessed value of damaged properties, providing immediate relief to victims. For these reasons, I urge your support of AB 245.

1. The State Board of Equalization, writing in support of this bill, states, in part:

Since the wildfires in Los Angeles and Ventura Counties began in January 2025, the Board has been proactive in having active conversations with the Legislature, the Administration, and the Los Angeles County Assessor's Office in providing insight into ways to provide quicker property tax relief to those affected. As you know, the Board held an Informational Hearing on the 2025 Wildfire Disaster Relief and Recovery in February 2025. This bill achieves the aims of providing additional property tax disaster relief, including extending the current five-year period by an additional three years, the ability to rebuild substantially damaged or destroyed real property in a Governor-proclaimed disaster area, and allowing the County Assessor to adjust the value of properties that may not have been significantly damaged or destroyed but still impacted directly or indirectly by the wildfires. These measures will provide additional relief to those who were affected by the wildfires earlier this year.

1. Committee Staff Comments:
   1. 2025 LA Fires: Beginning in early January 2025, a series of fires began raging in LA County. Exacerbated by hurricane force gusts and drought conditions, these fires rapidly grew, expanding into outlying residential areas of the LA metropolitan area. As the month progressed, the conditions exacerbating these fires led to serious complications for first responders, and the conflagrations grew without containment. After containment of these fires, however, the true depth of destruction began to become clear. According to the UCLA Anderson Forecast, total property and capital losses could range from $76 billion to $131 billion, with a potential decline in county-level gross domestic product of $4.6 billion. This loss from fire is unprecedented in the state. By comparison, the Camp Fire that destroyed the town of Paradise and was the most destructive fire in the state is estimated to have an associated loss of around $17 billion, an order of magnitude less than the 2025 LA Fires.
   2. Operation of property tax relief after disaster in existing law: California property tax law provides property owners general protections against significant increases in property tax liability by establishing the taxable value of a property as its base year value, generally the full cash value of the property upon its purchase or transfer. This base year value may be upwardly adjusted for inflation at no more than 2% annually.

A base year value must also be reassessed when new construction occurs on the property. Often times, the current value of a reconstructed property is significantly higher than the value for which the property was acquired. Currently, when an owner's property is damaged or destroyed by a Governor-proclaimed disaster, that owner may rebuild their property on the same site within five years of the disaster, while still retaining the base year value of the property prior to the disaster. A property owner would receive a significant property tax increase absent the new construction exclusion for rebuilt property after a disaster.

Upon damage to a property by misfortune or calamity, an owner may apply for a reassessment of that damaged property within 12 months of the misfortune or calamity if the county has an implementing ordinance. Such reassessments very often lead to a downward adjustment in the assessed value of the property, thereby ensuring that owners do not pay property taxes on portions of their property that are damaged or destroyed. A disaster is a qualifying type of misfortune or calamity, and victims of the 2025 LA Fires would be eligible to apply for reassessment. Similarly, under that provision of law, an assessor may proactively notify owners of damage or destruction to their property that entitles the property to a downward adjustment, but the owner must apply after the assessor's notice to receive the reassessment. Finally, if a county has not adopted an implementing ordinance, a county assessor may reassess a property suffering damage or destruction due to misfortune or calamity without application by the owner.

A reassessment due to misfortune or calamity is prorated based on the number of months in a year that the property was in its damaged state. Generally, property taxes are imposed as of the January 1 lien date, and provide revenue for the upcoming fiscal year. Thus, property taxes levied on the January 1, 2025 lien date correspond to revenues for the 2025-26 fiscal year, despite the lien date occurring in the 2024-25 fiscal year. In turn, existing law authorizes the application of a property's damaged value to the next fiscal year if the damage occurs after the January 1 lien date of that year, but before the next fiscal year. Relevant to this bill, the 2025 LA Fires occurred after January 1, 2025, but before the start of the 2025-26 fiscal year on July 1, 2025. Thus, property owners generally qualifying for misfortune and calamity relief under a county ordinance could retroactively use the damaged value of the property for taxation purposes in that taxable year despite the qualifying event occurring after the lien date for that taxable year, but only if a property owner applies or responds to an assessor's notice.

• 1. The problem and this bill: As noted above, there are two provisions in this bill. The first is a simple extension of the time to rebuild a property damaged or destroyed by a disaster on the same site, without an owner's property taxes increasing. This additional time relieves property owners who may struggle to rebuild within the given period as victims of the LA fires simultaneously seek access to the same pool of material, labor, and services.

The second is less straightforward. Based on the description above, one might reasonably conclude that an assessor could already apply the damaged value of a LA Fire victim's property to the January 1, 2025 lien date. This area of the law, however, is not abundantly clear. The authorization for an assessor to automatically reassess a damaged or destroyed property applies in cases where when a county has not adopted an ordinance pursuant to the general misfortune and calamity relief provisions. LA County has such an ordinance, and it is unclear whether the LA Assessor may automatically apply the damaged value of victims' properties to the January 1, 2025 lien date. This bill would explicitly make such an authorization.

• 1. Related legislation:
     1. SB 603 (Niello) would extend by three years the existing five-year period to rebuild a damaged or destroyed property in the same county, and retain the base year value of the property prior to its damage or destruction for any county affected by a disaster declared by the Governor on or after January 1, 2025. SB 603 is set for a hearing by the Senate Committee on Revenue and Taxation on May 14.
     2. SB 663 (Allen) would extend by three years the time to rebuild a property damaged or destroyed by a disaster, as defined, while retaining that property's base year value prior to the disaster, and would authorize an assessor to determine the appropriate date of damage for purposes of reassessment after property is damaged or destroyed by misfortune or calamity, among other changes. SB 663 is set for a hearing by the Senate Committee on Revenue and Taxation on April 9.
  2. Previous legislation: AB 1500 (Irwin), Chapter 583, Statutes of 2023, extended by three years the period to rebuild a property damaged or destroyed by the Camp or Woolsey Fires while still retaining the base year value of the property prior to damage.

REGISTERED SUPPORT / OPPOSITION:

Support

California Assessors Association

California Apartment Association

California Association of Realtors

California Federation of Teachers

Independent Insurance Agents and Brokers of California, Inc.

State Board of Equalization

Opposition

None on file

Analysis Prepared by: Harrison Bowlby / REV. & TAX. / (916) 319-2098