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LWV CA Ed Fund LEAGUE OF WOMEN VOTERS OF CALIFORNIA EDUCATION FUND
Nonpartisan Pros & Cons of

Proposition 1

PROPERTY TAXES: CONTAMINATED PROPERTY.

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Legislative Constitutional Amendment

THE QUESTION

Should owners of environmentally contaminated property be allowed to repair or replace it without causing an increase in the assessed valuation of the property?

THE SITUATION

Under Proposition 13, property owners must pay higher property taxes if they move or rebuild, even if they are forced to do so as the result of environmental contamination that causes their home or business to be uninhabitable or unusable.

THE PROPOSAL

Proposition 1 amends the Constitution (Proposition 13) to allow property owners to transfer their current tax assessment to new or rebuilt property within their county if:

  • a home or structure is rendered "uninhabitable or unusable" as the result of health hazards caused by environmental problems
  • the property owner did not know about the contamination before purchasing or building the residence or structure; the property is designated a toxic hazard by a governmental agency
  • the environmental clean-up effort effectively destroys the home or business; and
  • the lead governmental agency determines that the owner's actions did not make the property uninhabitable or unusable.
FISCAL EFFECT

The Legislative Analyst estimates that the tax revenue loss would be less than $1 million because few properties qualify. If large environmental hazards occur or are discovered, this tax revenue loss estimate could change dramatically.

SUPPORTERS SAY

  • Proposition 1 will provide property tax relief for homeowners who are innocent victims of environmental disasters.
  • Current law provides this kind of protection to victims of natural disasters so the same degree of fairness should be extended to those whose property is destroyed by toxic or hazardous material.
OPPONENTS SAY
  • This measure would increase the unfairness of the present Proposition 13 property tax system.
  • Instead of tinkering with the system to benefit very few, the Legislature should overhaul it to lessen the wide differences in tax rates.
(Analysis prepared by the League of Women Voters of California Education Fund.)
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Last updated: September 7, 1998
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