California Proposition 34, Property Tax Exemption for Historic Building Improvements (1984)
If Proposition 34 had been approved, it would have amended the "new construction" provisions of Article XIII A. It would have done this by requiring the California State Legislature to provide that the term "newly constructed" not include any addition to, or alteration or reconstruction of, a certified historic structure.
This would have meant that if the owner of a certified historic structure had improved it, the value of those improvements would have been excluded from the property's tax assessed value, until the property changed hands, at which point it would have been reappraised at its full market value, including the value of the previously un-taxed improvements.
The exemption would have applied only to "alterations involving historically accurate reconstruction of features which were once a part of the structure, or alterations which are necessary either to provide safety or handicapped access or to comply with safety codes".
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- (e) For purposes of subdivision (a), the Legislature shall provide that the term "newly constructed" shall not include any addition to, or alternation or rehabilitation of, a certified historic structure which is an historically accurate reconstruction of once extant features or necessary for safety or handicapped access or required by safety code requirements. This subdivision shall apply only to a dwelling occupied by an owner as his or her principal residence. Whenever the owner uses the property for a purpose other than as his or her principal residence, the portion of addition to, or alternation or reconstruction of the structure which was excluded pursuant to this subdivision shall be reassessed.
Proposition 34's official ballot summary said, "Under present Constitution provisions, real property is reassessed for taxation purposes when new construction occurs. Exceptions are made for reconstruction after a disaster and for certain solar energy and seismic safety construction. This measure adds additional exceptions for specified construction on certified historic structures that are dwellings occupied by an owner as a principal residence. The exclusion applies to any addition to, or alteration or rehabilitation of, a certified historic structure which is a historically accurate reconstruction of once extant features, necessary for safety or handicapped access, or required by safety codes, Summary of Legislative Analyst's estimate of net state and local government fiscal impact: Loss of property tax revenues to local governments estimated to be less than $100,000 annually. Increase in state government expenditures of about 32% of this amount to compensate local school districts for their share of property tax revenue losses."
The fiscal estimate provided by the California Legislative Analyst's Office said:
- "Because the value of certain improvements to historic property would no longer be added to the property tax rolls, this measure would reduce property tax revenues to local governments. The amount of this revenue loss would depend on the value of improvements that otherwise would have been made by the property owners. We estimate that the total loss of revenue to local agencies and school districts would be less than $100,000 annually.
- This measure also would increase state expenditures, because, under existing law, the state must provide local school districts with funding to compensate them for their share (about 32 percent) of the property tax revenue loss identified above."
Path to the ballot
The California State Legislature voted to put Proposition 34 on the ballot via Assembly Constitutional Amendment 69 (Statues of 1984, Resolution Chapter 66).