California Property Tax Transfers and Exemptions Initiative (2020)
| California Property Tax Transfers and Exemptions Initiative | |
|---|---|
 | |
| Election date November 3, 2020 | |
| Topic Taxes and Housing | |
| Status Not on the ballot | |
| Type Constitutional amendment | Origin Citizens |
The California Property Tax Transfers and Exemptions Initiative was not on the ballot in California as an initiated constitutional amendment on November 3, 2020. The ballot initiative was withdrawn after the campaign negotiated with the California State Legislature for a different measure to be placed on the ballot.
A "yes" vote would have supported this constitutional amendment to:
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A "no" vote would have opposed this constitutional amendment, therefore continuing to:
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Withdrawal
The California Association of Realtors (CAR), which was behind the Property Tax Transfers and Exemptions Initiative, negotiated with the California State Legislature for Assembly Constitution Amendment 11 (ACA 11). However, ACA 11 did not receive legislative approval before the deadline on June 25, 2020, to place measures on the general election ballot.
CAR's Alex Creel, who is listed as the initiative's proponent, asked for the ballot initiative's withdrawal to be conditioned on two legislative actions:[1]
(1) the passage of ACA 11, as written on June 23, on or before June 26, 2020
(2) the adoption of Senate Bill 300 (SB 300), as written on June 23, on or before July 1, 2020.
SB 300 was written to provide the state Legislature with additional time to place ACA 11, along with several other constitutional amendments, on the ballot for November 3, 2020. ACA 11 was approved on June 26. SB 300 was signed on June 30.
Steve Reyes, chief counsel for the office of Secretary of State Alex Padilla (D), responded to the request for a conditional withdrawal, saying that, under existing law, the ballot initiative had to be certified for the ballot because the deadline to withdraw passed on June 25. However, the office also said the withdrawal would be accepted after the deadline should ACA 11 and SB 300 both pass.[2]
House Speaker Anthony Rendon (D-63) wrote to Secretary of State Padilla, stating, "At this point, you have no legal authority to remove Initiative #1864 from the November ballot. Our house will consider its legal options for challenging any removal of Initiative #1864 from the ballot, if that should occur."[3]
On July 1, 2020, Secretary of State Padilla removed the initiative from the ballot.
Initiative design
How would the ballot initiative have changed the rules governing tax assessment transfers?
The ballot initiative would have changed the rules for tax assessment transfers. In California, eligible homeowners can transfer their tax assessments to a different home of the same or lesser market value, which allows them to move without paying higher taxes. As of 2020, homeowners who are eligible for tax assessment transfers were persons over 55 years old, persons with severe disabilities, and victims of natural disasters and hazardous waste contamination.[4] [5]
The ballot initiative would have allowed eligible homeowners to transfer their tax assessments anywhere within the state, increased the number of times a tax assessment could be transferred from one to three, and allowed tax assessments to be transferred to a more expensive home with an upward adjustment.[4]
How would the ballot initiative have affected inherited properties?
As of 2020, parents or grandparents could transfer primary residential properties to their children or grandchildren without the property's tax assessment resetting to market value in California. Other types of properties, such as vacation homes and business properties, could also be transferred from parent to child or grandparent to grandchild with the first $1 million exempt from re-assessment when transferred.[6]
The ballot initiative would have eliminated the inheritance exemption for non-primary residential properties. Therefore, the ballot initiative would have required that other types of real property be reassessed at market value when transferred from parent to child or grandparent to grandchild. Under the ballot initiative, only the first $1 million of value for an inherited primary residential property would have been exempt from reassessment. The taxable value of an inherited primary residential property would have been adjusted each year at a rate equal to the change in the California House Price Index.[4]
How would the ballot initiative have affected properties owned by legal entities?
Business properties can be owned by natural persons or legal entities, such as corporations, limited liability companies, sole proprietorships, and partnerships. As of 2020, when less than 50 percent of a legal entity's ownership changes, its property was not reassessed to market value. When any one person or entity acquires more than 50 percent of a legal entity's ownership, its property was reassessed to market value.[6]
The ballot initiative would have required that a legal entity's property be reassessed to market value if 90 percent of a legal entity's ownership changes, even if no one person or entity acquires more than 50 percent. The reassessment would have occurred if the transfer of 90 percent of the ownership occurs in a single transaction or over a 60-month period. The ballot initiative would have excluded the sale of stock in a publicly traded company as counting as a change of ownership.[4]
How did the ballot initiative compare to Proposition 5 (2018)?
- See also: Background
Both this ballot initiative and Proposition 5 (2018) were proposed by the California Association of Realtors (CAR), which is a 501(c)(6) trade association for real estate agents. Some of the ballot initiative’s provisions were similar to CAR’s 2018 ballot initiative, Proposition 5, which was defeated. Like Proposition 5, the ballot initiative would have increased ways for eligible homeowners to transfer their property’s tax assessment to a new home. Unlike Proposition 5, the ballot initiative would have addressed reassessments for inherited properties and changes in ownership of business properties.
In 2018, the state legislative analyst's office estimated that Proposition 5 would decrease revenue for local governments and school districts by $2 billion or more per year in the long-term. CAR’s 2020 ballot initiative would have had a net positive increase on local and school revenue, according to the analyst's office. While the expansion of opportunities for eligible homeowners to transfer their property’s tax assessment to a new home would have caused a decrease in revenue, the ballot initiative’s changes to inherited properties and ownership transfers would have caused an increase.[6]
Text of measure
Ballot title
The official ballot title was as follows:[7]
| “ |
Changes Requirements For Transferring Property Tax Base To Replacement Property. Expands Business Property Reassessment. Initiative Constitutional Amendment.[8] |
” |
Petition summary
The summary provided for inclusion on signature petition sheets was as follows:[7]
| “ |
Removes the following requirements to transfer property tax base to replacement residence for homeowners over 55 or severely disabled: that replacement property be of equal or lesser value; that replacement property be in eligible county; and that transfer occur only once. Allows three such transfers. Removes location and replacement-value requirements for transfers of contaminated or disaster-destroyed property. Adjusts replacement property’s tax base, based on market value. Limits tax benefits for certain transfers between family members. Expands circumstances requiring business property reassessment.[8] |
” |
Fiscal impact
The fiscal impact statement was as follows:[7]
| “ |
Local governments could gain tens of millions of dollars of property tax revenue per year, likely growing over time to a few hundred million dollars per year. Schools could receive similar property tax revenue gains. Other local and state revenues each could increase by tens of millions of dollars per year. County property tax administration costs likely would increase by tens of millions of dollars per year.[8] |
” |
Full text
The full text of the ballot initiative is below:[4]
Sponsors
Homeownership for Families and Tax Savings for Seniors led the campaign in support of the ballot initiative. The California Association of Realtors (CAR) developed the ballot initiative and was also behind Proposition 5 (2018).
Campaign finance
Through June 30, 2020, the Homeownership for Families and Tax Savings for Seniors PAC, a committee associated with the California Association of Realtors, was registered to support the ballot initiative. The committee had raised $19.08 million, with the California Association of Realtors Issues Mobilization PAC providing $15.70 million since 2019. The committee had spent $10.54 million.[9]
| Cash Contributions | In-Kind Contributions | Total Contributions | Cash Expenditures | Total Expenditures | |
|---|---|---|---|---|---|
| Support | $19,076,476.40 | $70,000.00 | $19,146,476.40 | $10,471,499.84 | $10,541,499.84 |
| Oppose | $0.00 | $0.00 | $0.00 | $0.00 | $0.00 |
| Total | $19,076,476.40 | $70,000.00 | $19,146,476.40 | $10,471,499.84 | $10,541,499.84 |
Support
The following table includes contribution and expenditure totals for the committee in support of the ballot initiative through June 30, 2020.[9]
| Committees in support of California Property Tax Transfers and Exemptions Initiative (2020) | |||||
|---|---|---|---|---|---|
| Committee | Cash Contributions | In-Kind Contributions | Total Contributions | Cash Expenditures | Total Expenditures |
| Homeownership for Families and Tax Savings for Seniors | $19,076,476.40 | $70,000.00 | $19,146,476.40 | $10,471,499.84 | $10,541,499.84 |
| Total | $19,076,476.40 | $70,000.00 | $19,146,476.40 | $10,471,499.84 | $10,541,499.84 |
Donors
The following were the top donors to the support committee.[9]
| Donor | Cash Contributions | In-Kind Contributions | Total Contributions |
|---|---|---|---|
| California Association of Realtors Issues Mobilization PAC | $15,700,000.00 | $0.00 | $15,700,000.00 |
| National Association of Realtors | $2,800,000.00 | $0.00 | $2,800,000.00 |
Background
California Proposition 13 (1978)
California Proposition 13, the Tax Limitations Initiative, was on the ballot for the election on June 6, 1978. Voters approved Proposition 13, with 64.79 percent voting for passage.[10][11] Howard Jarvis, who founded the Howard Jarvis Taxpayers Association, developed Proposition 13. He worked with Paul Gann on writing the ballot initiative.[12][13]
Proposition 13 required that properties be taxed at no more than 1 percent of their full cash value shown on the 1975-1976 assessment rolls and limited annual increases of assessed (taxable) value to the inflation rate or 2 percent, whichever was less. When a property is sold or transferred to new owners, however, the property is reassessed at 1 percent of its full cash value and the limit on increases to assessed value resets.[10]
Amendments to Proposition 13
The following ballot measures amended Proposition 13 to change who can transfer their home's taxable value and how the transfers work:
- Proposition 58 (1986): Voters approved Proposition 58, which allowed the transfer of a principal residence between spouses or between parents and children without a reset on the home's taxable value. Proposition 58 also exempted the first $1 million of other real properties that are transferred from parent to child from tax reassessments.[14]
- Proposition 60 (1986): Voters approved Proposition 60, which permitted homeowners over the age of 55 to transfer the taxable value of their present home to a replacement home, assuming the replacement home was of equal or lesser value, located within the same county, and purchased within two years of selling the original home.[14]
- Proposition 90 (1988): The voter-approved Proposition 60 allowed qualified homeowners age 55 or older to transfer the current taxable value of their original home to a replacement home in another county, but only if the county in which the replacement home is located agrees to participate in the program.[15]
- Proposition 193 (1996): Proposition 193, which was approved, allowed the transfer of a principal residence from a grandparent to a grandchild when the parent is deceased without a tax reassessment. Proposition 193 also exempted the first $1 million of other real properties that are transferred from grandparent to grandchild from tax reassessments.[16]
California Proposition 5 (2018)
The California Association of Realtors (CAR) sponsored a ballot initiative, titled Proposition 5, in 2018. The ballot initiative was defeated, with 59.8 percent of electors voting against the proposal.
Proposition 5 would have allowed homebuyers who are persons over 55 years old, persons with severe disabilities, and victims of natural disasters and hazardous waste contamination to transfer the tax-assessed value from their prior home to their new home. Proposition 5 would have allowed eligible homeowners to transfer their tax assessments anywhere within the state, an unlimited number of times, and to a more expensive home with an upward adjustment. The Legislative Analyst and Director of Finance estimated that Proposition 5 would have reduced tax revenue by $2.0 billion.[17]
The campaign Homeownership for Families and Tax Savings for Seniors raised $13.22, including $10.20 million from the California Association of Realtors Issues Mobilization PAC, to support Proposition 5. The campaign opposed to Proposition 5 raised $3.32 million, including $1.00 million from the SEIU California State Council Political Committee.
Path to the ballot
Process in California
In California, the number of signatures required for an initiated constitutional amendment is equal to 8 percent of the votes cast in the preceding gubernatorial election. Petitions are allowed to circulate for 180 days from the date the attorney general prepares the petition language. Signatures need to be certified at least 131 days before the general election. As the verification process can take multiple months, the secretary of state provides suggested deadlines for ballot initiatives.
The requirements to get initiated constitutional amendments certified for the 2020 ballot:
- Signatures: 997,139 valid signatures were required.
- Deadline: The deadline for signature verification was June 25, 2020. However, the process of verifying signatures can take multiple months. The recommended deadlines were March 3, 2020, for an initiative requiring a full check of signatures and April 21, 2020, for an initiative requring a random sample of signatures.
Signatures are first filed with local election officials, who determine the total number of signatures submitted. If the total number is equal to at least 100 percent of the required signatures, then local election officials perform a random check of signatures submitted in their counties. If the random sample estimates that more than 110 percent of the required number of signatures are valid, the initiative is eligible for the ballot. If the random sample estimates that between 95 and 110 percent of the required number of signatures are valid, a full check of signatures is done to determine the total number of valid signatures. If less than 95 percent are estimated to be valid, the initiative does not make the ballot.
Stages of this initiative
Alexander Creel filed the ballot initiative on July 3, 2019.[4] On September 6, 2019, Scretary of State Alex Padilla (D) published petition language for the ballot initiative, allowing proponents to begin collecting signatures. The deadline to file signatures was March 4, 2020.
On November 27, 2019, proponents announced that the number of collected signatures surpassed the 25-percent threshold (249,285 signatures) to require legislative hearings on the ballot initiative.[18] In 2014, Senate Bill 1253 was enacted into law, which required the legislature to assign ballot initiatives that meet the 25-percent threshold to committees to hold joint public hearings on the initiatives not later than 131 days before the election.
The campaign filed 1,492,219 signatures for the ballot initiative before the deadline. At least 997,139 (66.82 percent) of the submitted signatures needed to be valid for the initiative to be certified. On April 23, 2020, the secretary of state's office announced that a random sample of signatures projected that 76.55 percent of the submitted signatures were valid. On July 1, 2020, the initiative was withdrawn from the ballot.[19]
How to cast a vote
- See also: Voting in California
Click "Show" to learn more about voter registration, identification requirements, and poll times in California.
| How to cast a vote in California | |||||
|---|---|---|---|---|---|
Poll timesAll polls in California are open from 7:00 a.m. to 8:00 p.m. Pacific Time. An individual who is in line at the time polls close must be allowed to vote.[20] Registration
To vote in California, an individual must be a U.S. citizen and California resident. A voter must be at least 18 years of age on Election Day. Pre-registration is available at 16 years of age. Pre-registered voters are automatically registered to vote when they turn 18.[21] Automatic registrationCalifornia automatically registers eligible individuals to vote when they complete a driver's license, identification (ID) card, or change of address transaction through the Department of Motor Vehicles. Learn more by visiting this website. Online registration
California has implemented an online voter registration system. Residents can register to vote by visiting this website. Same-day registrationCalifornia allows same-day voter registration. Californians must be registered to vote at least 15 days before Election Day. If the registration deadline has passed for an upcoming election, voters may visit a location designated by their county elections official during the 14 days prior to, and including Election Day to conditionally register to vote and vote a provisional ballot, which are counted once county election officials have completed the voter registration verification process. The state refers to this process as Same Day Voter Registration.[22][23] Residency requirementsTo register to vote in California, you must be a resident of the state. State law does not specify a length of time for which you must have been a resident to be eligible. Verification of citizenshipCalifornia's constitution requires that voters be U.S. citizens. When registering to vote, proof of citizenship is not required. Individuals who become U.S. citizens less than 15 days before an election must bring proof of citizenship to their county elections office to register to vote in that election. An individual applying to register to vote must attest that they are a U.S. citizen under penalty of perjury.[22] As of November 2024, two jurisdictions in California had authorized noncitizen residents to vote for local board of education positions through local ballot measures. Only one of those jurisdictions, San Francisco, had implemented that law. Noncitizens voting for board of education positions must register to vote using a separate application from the state voter registration application.[24] All 49 states with voter registration systems require applicants to declare that they are U.S. citizens in order to register to vote in state and federal elections, under penalty of perjury or other punishment.[25] As of January 2025, six states — Alabama, Arizona, Georgia, Kansas, Louisiana, and New Hampshire — had passed laws requiring verification of citizenship at the time of voter registration. However, only two of those states' laws were in effect, in Arizona and New Hampshire. In three states — California, Maryland, and Vermont — at least one local jurisdiction allowed noncitizens to vote in some local elections as of November 2024. Noncitizens registering to vote in those elections must complete a voter registration application provided by the local jurisdiction and are not eligible to register as state or federal voters. Verifying your registrationThe secretary of state's My Voter Status website allows residents to check their voter registration status online. Voter ID requirementsCalifornia does not require voters to present identification before casting a ballot in most cases. However, some voters may be asked to show a form of identification when voting if they are voting for the first time after registering to vote by mail and did not provide a driver license number, California identification number, or the last four digits of their social security number.[26][27] On September 29, 2024, Gov. Gavin Newsom (D) signed SB 1174 into law prohibiting any jurisdiction in the state from adopting a local law that requires voters to present ID before voting.[28] The following list of accepted ID was current as of October 2024. Click here for the California Secretary of State page to ensure you have the most current information.
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See also
External links
Footnotes
- ↑ California Secretary of State, "Letter for (Conditional) Withdrawal," June 25, 2020
- ↑ California Secretary of State, "Letter from Steve Reyes," June 25, 2020
- ↑ Los Angeles Times, "Will California voters see two ballot measures doing the same thing?" June 29, 2020
- ↑ 4.0 4.1 4.2 4.3 4.4 4.5 California Attorney General, "Initiative 19-0003," July 3, 2019
- ↑ California Legislative Analyst," "Initiative #19-0003," August 22, 2019
- ↑ 6.0 6.1 6.2 Cite error: Invalid
<ref>tag; no text was provided for refs namedanalysis - ↑ 7.0 7.1 7.2 California Secretary of State, "Initiatives and Referenda Cleared for Circulation," accessed June 25, 2019
- ↑ 8.0 8.1 8.2 8.3 Note: This text is quoted verbatim from the original source. Any inconsistencies are attributable to the original source.
- ↑ 9.0 9.1 9.2 Cal-Access, "Campaign Finance," accessed March 11, 2020
- ↑ 10.0 10.1 UC-Hastings, "Voter Information Guide for 1978, Primary," accessed December 21, 2017
- ↑ California Tax Data, "What is Proposition 13?" accessed December 21, 2017
- ↑ Time, "How California's Fiscal Woes Began: A Crisis 30 Years in the Making," July 1, 2009
- ↑ New York Times, "The California Ballot Measure That Inspired a Tax Revolt," October 16, 2018
- ↑ 14.0 14.1 UC-Hastings, "Voter Information Guide for 1986, General," accessed March 26, 2018
- ↑ UC-Hastings, "Voter Information Guide for 1988, General," accessed March 26, 2018
- ↑ UC-Hastings, "Proposition 193 (1996)," accessed March 11, 2020
- ↑ California Attorney General, "Initiative #17-0013," accessed July 24, 2017
- ↑ California Secretary of State, "Proponent Letter of 25% of Signatures Reached," November 27, 2019
- ↑ California Secretary of State, "Random Sample," April 23, 2020
- ↑ California Secretary of State, "Section 3: Polling Place Hours," accessed August 12, 2024
- ↑ California Secretary of State, "Voter Registration," accessed August 13, 2024
- ↑ 22.0 22.1 California Secretary of State, "Registering to Vote," accessed August 13, 2024
- ↑ California Secretary of State, "Same Day Voter Registration (Conditional Voter Registration)," accessed August 13, 2024
- ↑ SF.gov, "Non-citizen voting rights in local Board of Education elections," accessed November 14, 2024
- ↑ Under federal law, the national mail voter registration application (a version of which is in use in all states with voter registration systems) requires applicants to indicate that they are U.S. citizens in order to complete an application to vote in state or federal elections, but does not require voters to provide documentary proof of citizenship. According to the U.S. Department of Justice, the application "may require only the minimum amount of information necessary to prevent duplicate voter registrations and permit State officials both to determine the eligibility of the applicant to vote and to administer the voting process."
- ↑ California Secretary of State, "What to Bring to Your Polling Place," accessed August 12, 2024
- ↑ BARCLAYS OFFICIAL CALIFORNIA CODE OF REGULATIONS, "Section 20107," accessed August 12, 2024
- ↑ Democracy Docket, "California Governor Signs Law to Ban Local Voter ID Requirements," September 30, 2024
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