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California Proposition 19, Property Tax Transfers, Exemptions, and Revenue for Wildfire Agencies and Counties Amendment (2020)

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California Proposition 19
Flag of California.png
Election date
November 3, 2020
Topic
Taxes and Property
Status
Approveda Approved
Type
Constitutional amendment		Origin
State legislature

California Proposition 19, the Property Tax Transfers, Exemptions, and Revenue for Wildfire Agencies and Counties Amendment, was on the ballot in California as a legislatively referred constitutional amendment on November 3, 2020. Proposition 19 was approved.

A "yes" vote supported this constitutional amendment to:  

* allow eligible homeowners to transfer their tax assessments anywhere within the state and allow tax assessments to be transferred to a more expensive home with an upward adjustment;

* increase the number of times that persons over 55 years old or with severe disabilities can transfer their tax assessments from one to three;

* require that inherited homes that are not used as principal residences, such as second homes or rentals, be reassessed at market value when transferred; and

* allocate additional revenue or net savings resulting from the ballot measure to wildfire agencies and counties. 

A "no" vote opposed this constitutional amendment, therefore continuing to:

* allow eligible homeowners to transfer their tax assessments within counties and to homes of equal or lesser market value;

* keep the number of times that persons over 55 years old or with severe disabilities can transfer their tax assessments at one;

* allow the tax assessments on inherited homes, including those not used as principal residences, to be transferred from parent to child or grandparent to grandchild.

Election results

California Proposition 19

Result Votes Percentage

Approved Yes

8,545,818 51.11%
No 8,176,105 48.89%
Results are officially certified.
Source


Overview

How did the ballot measure change the rules governing tax assessment transfers?

Proposition 19 changed the rules for tax assessment transfers. In California, eligible homeowners could transfer their tax assessments to a different home of the same or lesser market value, which allows them to move without paying higher taxes. Homeowners who were eligible for tax assessment transfers are persons over 55 years old, persons with severe disabilities, and victims of natural disasters and hazardous waste contamination.[1]

The ballot measure allowed eligible homeowners to transfer their tax assessments anywhere within the state and allow tax assessments to be transferred to a more expensive home with an upward adjustment. The number of times that a tax assessment can be transferred increased from one to three for persons over 55 years old or with severe disabilities (disaster and contamination victims would continue to be allowed one transfer).[1]

How did the ballot measure affect inherited properties?

In California, parents or grandparents could transfer primary residential properties to their children or grandchildren without the property's tax assessment resetting to market value. 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.[1]

The ballot measure eliminated the parent-to-child and grandparent-to-grandchild exemption in cases where the child or grandchild does not use the inherited property as their principal residence, such as using a property as a rental house or a second home. When the inherited property is used as the recipient's principal residence but is sold for $1 million more than the property's taxable value, an upward adjustment in assessed value would occur. The ballot measure also applied these rules to certain farms. Beginning on February 16, 2023, the $1 million amount would be adjusted each year at a rate equal to the change in the California House Price Index.[1]

What did the ballot measure do with changes in revenue?

The ballot measure created the California Fire Response Fund (CFRF) and County Revenue Protection Fund (CRPF). The ballot measure required the California Director of Finance to calculate additional revenues and net savings resulting from the ballot measure. The California State Controller was required to deposit 75 percent of the calculated revenue to the Fire Response Fund and 15 percent to the County Revenue Protection Fund. The County Revenue Protection Fund was set to be used to reimburse counties for revenue losses related to the measure's property tax changes. The Fire Response Fund was set to be used to fund fire suppression staffing and full-time station-based personnel.[1]

Text of measure

Ballot title

The ballot title was as follows:[2]

“

Changes Certain Property Tax Rules. Legislative Constitutional Amendment.[3]

”

Ballot summary

The ballot summary was as follows:[2]

“
  • Permits homeowners who are over 55, severely disabled, or whose homes were destroyed by wildfire or disaster, to transfer their primary residence’s property tax base value to a replacement residence of any value, anywhere in the state.
  • Limits tax benefits for certain transfers of real property between family members.
  • Expands tax benefits for transfers of family farms.
  • Allocates most resulting state revenues and savings (if any) to fire protection services and reimbursing local governments for taxation-related changes.[3]
 ”

Fiscal impact statement

The fiscal impact statement was as follows:[2]

“
  • Local governments could gain tens of millions of dollars of property tax revenue per year. These gains could grow over time to a few hundred million dollars per year.
  • Schools could gain tens of millions of dollars of property tax revenue per year. These gains could grow over time to a few hundred million dollars per year.
  • Revenue from other taxes could increase by tens of millions of dollars per year for both the state and local governments. Most of this new state revenue would be spent on fire protection.[3]
 ”

Constitutional changes

See also: Article XIII A, California Constitution

The measure added Section 2.1, Section 2.2, and Section 2.3 to Article XIII A of the California Constitution. The following text was added:[1]

Note: Hover over the text and scroll to see the full text.

Section 2.1

(a) Limitation on Property Tax Increases on Primary Residences for Seniors, the Severely Disabled, Wildfire and Natural Disaster Victims, and Families. It is the intent of the Legislature in proposing, and the people in adopting, this section to do both of the following:

(1) Limit property tax increases on primary residences by removing unfair location restrictions on homeowners who are severely disabled, victims of wildfires or other natural disasters, or seniors over 55 years of age that need to move closer to family or medical care, downsize, find a home that better fits their needs, or replace a damaged home and limit damage from wildfires on homes through dedicated funding for fire protection and emergency response.
(2) Limit property tax increases on family homes used as a primary residence by protecting the right of parents and grandparents to pass on their family home to their children and grandchildren for continued use as a primary residence, while eliminating unfair tax loopholes used by East Coast investors, celebrities, wealthy non-California residents, and trust fund heirs to avoid paying a fair share of property taxes on vacation homes, income properties, and beachfront rentals they own in California.

(b) Property Tax Fairness for Seniors, the Severely Disabled, and Victims of Wildfire and Natural Disasters. Notwithstanding any other provision of this Constitution or any other law, beginning on and after April 1, 2021, the following shall apply:

(1) Subject to applicable procedures and definitions as provided by statute, an owner of a primary residence who is over 55 years of age, severely disabled, or a victim of a wildfire or natural disaster may transfer the taxable value of their primary residence to a replacement primary residence located anywhere in this state, regardless of the location or value of the replacement primary residence, that is purchased or newly constructed as that person’s principal residence within two years of the sale of the original primary residence.
(2) For purposes of this subdivision:
(A) For any transfer of taxable value to a replacement primary residence of equal or lesser value than the original primary residence, the taxable value of the replacement primary residence shall be deemed to be the taxable value of the original primary residence.
(B) For any transfer of taxable value to a replacement primary residence of greater value than the original primary residence, the taxable value of the replacement primary residence shall be calculated by adding the difference between the full cash value of the original primary residence and the full cash value of the replacement primary residence to the taxable value of the original primary residence.
(3) An owner of a primary residence who is over 55 years of age or severely disabled shall not be allowed to transfer the taxable value of a primary residence more than three times pursuant to this subdivision.
(4) Any person who seeks to transfer the taxable value of their primary residence pursuant to this subdivision shall file an application with the assessor of the county in which the replacement primary residence is located. The application shall, at minimum, include information comparable to that identified in paragraph (1) of subdivision (f) of Section 69.5 of the Revenue and Taxation Code, as that section read on January 1, 2020.

(c) Property Tax Fairness for Family Homes. Notwithstanding any other provision of this Constitution or any other law, beginning on and after February 16, 2021, the following shall apply:

(1) For purposes of subdivision (a) of Section 2, the terms “purchased” and “change in ownership” do not include the purchase or transfer of a family home of the transferor in the case of a transfer between parents and their children, as defined by the Legislature, if the property continues as the family home of the transferee. This subdivision shall apply to both voluntary transfers and transfers resulting from a court order or judicial decree. The new taxable value of the family home of the transferee shall be the sum of both of the following:
(A) The taxable value of the family home, subject to adjustment as authorized by subdivision (b) of Section 2, determined as of the date immediately prior to the date of the purchase by, or transfer to, the transferee.
(B) The applicable of the following amounts:
(i) If the assessed value of the family home upon purchase by, or transfer to, the transferee is less than the sum of the taxable value described in subparagraph (A) plus one million dollars ($1,000,000), then zero dollars ($0).
(ii) If the assessed value of the family home upon purchase by, or transfer to, the transferee is equal to or more than the sum of the taxable value described in subparagraph (A) plus one million dollars ($1,000,000), an amount equal to the assessed value of the family home upon purchase by, or transfer to, the transferee, minus the sum of the taxable value described in subparagraph (A) and one million dollars ($1,000,000).
(2) Paragraph (1) shall also apply to a purchase or transfer of the family home between grandparents and their grandchildren if all of the parents of those grandchildren, who qualify as children of the grandparents, are deceased as of the date of the purchase or transfer.
(3) Paragraphs (1) and (2) shall also apply to the purchase or transfer of a family farm. For purposes of this paragraph, any reference to a “family home” in paragraph (1) or (2) shall be deemed to instead refer to a “family farm.”
(4) Beginning on February 16, 2023, and every other February 16 thereafter, the State Board of Equalization shall adjust the one million dollar ($1,000,000) amount described in paragraph (1) for inflation to reflect the percentage change in the House Price Index for California for the prior calendar year, as determined by the Federal Housing Finance Agency. The State Board of Equalization shall calculate and publish the adjustments required by this paragraph.
(5) (A) Subject to subparagraph (B), in order to receive the property tax benefit provided by this section for the purchase or transfer of a family home, the transferee shall claim the homeowner’s exemption or disabled veteran’s exemption at the time of the purchase or transfer of the family home.
(B) A transferee who fails to claim the homeowner’s exemption or disabled veteran’s exemption at the time of the purchase or transfer of the family home may receive the property tax benefit provided by this section by claiming the homeowner’s exemption or disabled veteran’s exemption within one year of the purchase or transfer of the family home and shall be entitled to a refund of taxes previously owed or paid between the date of the transfer and the date the transferee claims the homeowner's exemption or disabled veteran’s exemption.

(d) Subdivision (h) of Section 2 shall apply to any purchase or transfer that occurs on or before February 15, 2021, but shall not apply to any purchase or transfer occurring after that date. Subdivision (h) of Section 2 shall be inoperative as of February 16, 2021.

(e) For purposes of this section:

(1) “Disabled veteran’s exemption” means the exemption authorized by subdivision (a) of Section 4 of Article XIII.
(2) “Family farm” means any real property which is under cultivation or which is being used for pasture or grazing, or that is used to produce any agricultural commodity, as that term is defined in Section 51201 of the Government Code as that section read on January 1, 2020.
(3) “Family home” has the same meaning as “principal residence,” as that term is used in subdivision (k) of Section 3 of Article XIII.
(4) “Full cash value” has the same meaning as defined in subdivision (a) of Section 2.
(5) “Homeowner’s exemption” means the exemption provided by subdivision (k) of Section 3 of Article XIII.
(6) “Natural disaster” means the existence, as declared by the Governor, of conditions of disaster or extreme peril to the safety of persons or property within the affected area caused by conditions such as fire, flood, drought, storm, mudslide, earthquake, civil disorder, foreign invasion, or volcanic eruption.
(7) “Primary residence” means a residence eligible for either of the following:
(A) The homeowner’s exemption.
(B) The disabled veteran’s exemption.
(8) “Principal residence” as used in subdivision (b) has the same meaning as that term is used in subdivision (a) of Section 2.
(9) “Replacement primary residence” has the same meaning as “replacement dwelling,” as that term is defined in subdivision (a) of Section 2.
(10) “Taxable value” means the base year value determined in accordance with subdivision (a) of Section 2 plus any adjustment authorized by subdivision (b) of Section 2.
(11) “Victim of a wildfire or natural disaster” means the owner of a primary residence that has been substantially damaged as a result of a wildfire or natural disaster that amounts to more than 50 percent of the improvement value of the primary residence immediately before the wildfire or natural disaster. For purposes of this paragraph, “damage” includes a diminution in the value of the primary residence as a result of restricted access caused by the wildfire or natural disaster.
(12) “Wildfire” has the same meaning as defined in subdivision (j) of Section 51177 of the Government Code, as that section read on January 1, 2020.

Section 2.2

(a) Protection of Fire Services, Emergency Response, and County Services. It is the intent of the Legislature in proposing, and the people in adopting, this section and Section 2.3 to do both of the following:

(1) Dedicate revenue for fire protection and emergency response, address inequities in underfunded fire districts, ensure all communities are protected from wildfires, and safeguard the lives of millions of Californians.
(2) Protect county revenues and other vital local services.

(b) (1) The California Fire Response Fund is hereby created within the State Treasury.

(2) The County Revenue Protection Fund is hereby created within the State Treasury. Moneys in the County Revenue Protection Fund are continuously appropriated, without regard to fiscal year, for the purpose of reimbursing eligible local agencies that incur a negative gain, and paying the administrative costs of the California Department of Tax and Fee Administration, in accordance with Section 2.3. Moneys in the fund shall only be expended as provided in Section 2.3.

(c) For purposes of the calculations required by Section 8 of Article XVI, moneys in the California Fire Response Fund and the County Revenue Protection Fund shall be deemed to be General Fund revenues which may be appropriated pursuant to Article XIII B.

(d) The Director of Finance shall do the following, as applicable:

(1) On or before September 1, 2022, and on or before each subsequent September 1 through September 1, 2027, calculate the additional revenues and savings that accrued to the state from the implementation of Section 2.1, including, but not limited to, any increase in state income tax revenues and net savings to the state arising from any reduction in the state’s funding obligation under Section 8 of Article XVI, during the immediately preceding fiscal year ending on June 30. In making the calculation required by this paragraph, the Director of Finance shall use actual data or best available estimates where actual data is not available. The calculation shall be final and shall not be adjusted for any subsequent changes in the underlying data. The Director of Finance shall certify the results of the calculation to the Legislature and the Controller no later than September 1 of each year.
(2) On or before September 1, 2028, and each subsequent September 1 thereafter, calculate the additional revenues and savings that accrued to the state from the implementation of Section 2.1, including, but not limited to, any increase in state income tax revenues and net savings to the state arising from any reduction in the state’s funding obligation under Section 8 of Article XVI during the immediately preceding fiscal year ending on June 30 by multiplying the amount from the immediately preceding fiscal year ending on June 30 by the rate of increase in property tax revenues allocated to local agencies in that fiscal year. In making the calculation required by this paragraph, the Director of Finance shall use actual data or best available estimates where actual data is not available. The calculation shall be final and shall not be adjusted for any subsequent changes in the underlying data. The Director of Finance shall certify the results of the calculation to the Legislature and the Controller no later than September 1 of each fiscal year.

(e) No later than September 15, 2022, and each subsequent September 15 thereafter, the Controller shall do both of the following:

(1) Transfer from the General Fund to the California Fire Response Fund an amount equal to 75 percent of the amount calculated by the Director of Finance pursuant to subdivision (d) for the applicable year.
(2) Transfer from the General Fund to the County Revenue Protection Fund an amount equal to 15 percent of the amount calculated by the Director of Finance pursuant to subdivision (d) for the applicable year. Moneys transferred to the County Revenue Protection Fund pursuant to this paragraph shall be used to reimburse eligible local agencies with a negative gain, as provided in Section 2.3.

(f) Moneys in the California Fire Response Fund shall be appropriated by the Legislature in each fiscal year exclusively for the purposes of this section and, except as otherwise provided in subdivision (g), shall not be appropriated for any other purpose. Moneys in the California Fire Response Fund may be used upon appropriation without regard to fiscal year and shall be used to expand fire suppression staffing, as set forth in paragraphs (1) to (4), inclusive, and not to supplant existing state or local funds utilized for those purposes.

(1) Twenty percent of the moneys in the California Fire Response Fund shall be appropriated to the Department of Forestry and Fire Protection to fund fire suppression staffing.
(2) Eighty percent of the moneys in the California Fire Response Fund shall be deposited in the Special District Fire Response Fund, which is hereby created as a subaccount within the California Fire Response Fund, and appropriated to special districts that provide fire protection services in accordance with the following criteria:
(A) Fifty percent of the amount described in this paragraph shall be used to fund fire suppression staffing in underfunded special districts that provide fire protection services, were formed after July 1, 1978, and employ full-time or full-time-equivalent station-based personnel who are immediately available to comprise at least 50 percent of an initial full alarm assignment.
(B) Twenty-five percent of the amount described in this paragraph shall be used to fund fire suppression staffing in special districts that provide fire protection services, were formed before July 1, 1978, are underfunded due to a disproportionately low share of property tax revenue and an increase in service level demands since July 1, 1978, and employ full-time or full-time-equivalent station-based personnel who are immediately available to comprise at least 50 percent of an initial full alarm assignment.
(C) Twenty-five percent of the amount described in this paragraph shall be used to fund fire suppression staffing in underfunded special districts that provide fire protection services and employ full-time or full-time-equivalent station-based personnel who are immediately available to comprise at least 30 percent but less than 50 percent of an initial full alarm assignment.
(3) In determining whether a special district that provides fire protection services is underfunded for purposes of paragraph (2), the Legislature shall take into account the following factors, in order of priority:
(A) The degree to which the special district’s property tax revenue is insufficient to sustain adequate fire suppression, as measured against the population density, size of the service area, and number of taxpayers within the boundaries of the special district.
(B) Whether the special district, upon formation, received a property tax allocation in accordance with Chapter 282 of the Statutes of 1979.
(C) Geographic diversity.
(4) The allocation of moneys to a special district that qualifies pursuant to paragraph (2) shall be in the form of grants, with a term of not less than 10 years, in order to ensure that the special district can engage in responsible budgeting and sustain adequate fire suppression services over the long term.

(g) Notwithstanding subdivision (f), if in any fiscal year after the first fiscal year for which moneys are transferred from the General Fund to the California Fire Response Fund pursuant to this section the amount transferred exceeds the amount transferred in the previous fiscal year by more than 10 percent, the Controller shall not transfer the amount in excess of that 10 percent, which shall be available for appropriation from the General Fund for any purpose.

Section 2.3

(a) Each county shall annually, no later than the date specified by the California Department of Tax and Fee Administration by regulations adopted pursuant to this section, determine the gain for the county and for each local agency in the county resulting from implementation of Section 2.1 by adding the following amounts:

(1) The revenue increase resulting from the sale and reassessment of original primary residences for outbound intercounty transfers pursuant to subdivision (b) of Section 2.1.
(2) The revenue decrease, which shall be expressed as a negative number, resulting from the transfer of taxable values of original primary residences located in other counties to replacement primary residences located within the county for inbound intercounty transfers pursuant to subdivision (b) of Section 2.1.
(3) The revenue increase resulting from subdivision (c) of Section 2.1.

(b) A county or any local agency in the county that has a positive gain determined pursuant to subdivision (a) shall not be eligible to receive reimbursement from the County Revenue Protection Fund. A county or any local agency in the county that has a negative gain determined pursuant to subdivision (a) shall be deemed to be an eligible local agency entitled to a reimbursement from the County Revenue Protection Fund.

(c) The California Department of Tax and Fee Administration shall determine each eligible local agency’s aggregate gain every three years, based on the amounts determined pursuant to subdivision (a) for each of those three years, and provide reimbursement to each eligible local agency with a negative gain from the moneys in the County Revenue Protection Fund equal to that amount. If there are insufficient moneys in that fund to cover the total amount of reimbursements under this section, the California Department of Tax and Fee Administration shall allocate a pro rata share of the moneys in the fund to each eligible local agency based on the amount of the eligible local agency’s reimbursement relative to the total amount of reimbursements under this section.

(d) At the end of each three-year period described in subdivision (c), after the California Department of Tax and Fee Administration has reimbursed each eligible local agency that has experienced a negative gain during that three-year period, the Controller shall transfer the remaining balance, if any, in the County Revenue Protection Fund to the General Fund, to be available for appropriation for any purpose.

(e) The California Department of Tax and Fee Administration shall promulgate regulations to implement this section pursuant to the rulemaking provisions of the Administrative Procedure Act (Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code), as may be amended from time to time by the Legislature, or any successor to those provisions.

(f) For purposes of this section and Section 2.2, an “eligible local agency” is a county, a city, a city and county, a special district, or a school district as determined pursuant to subdivision (o) of Section 42238.02 of the Education Code as it read on January 8, 2020, that has a negative gain as determined pursuant to this section.[3]

Readability score

See also: Ballot measure readability scores, 2020
Using the Flesch-Kincaid Grade Level (FKGL and Flesch Reading Ease (FRE) formulas, Ballotpedia scored the readability of the ballot title and summary for this measure. Readability scores are designed to indicate the reading difficulty of text. The Flesch-Kincaid formulas account for the number of words, syllables, and sentences in a text; they do not account for the difficulty of the ideas in the text. The attorney general wrote the ballot language for this measure.


The FKGL for the ballot title is grade level 17, and the FRE is -19. The word count for the ballot title is 8, and the estimated reading time is 2 seconds. The FKGL for the ballot summary is grade level 14, and the FRE is 28. The word count for the ballot summary is 76, and the estimated reading time is 20 seconds.


Support

Supporters

Officials

Political Parties

Unions

  • AFSCME California
  • California Conference Board of the Amalgamated Transit Unions
  • California Labor Federation
  • California Nurses Association
  • California Professional Firefighters
  • California and Nevada State Association of Electrical Workers
  • United Food and Commercial Workers Western States Council

Organizations

  • CalAsian Chamber of Commerce
  • California Association of Realtors
  • California Black Chamber of Commerce
  • California Business Roundtable
  • California Forestry Association
  • California Hispanic Chambers of Commerce
  • California NAACP State Conference
  • California Senior Advocates League
  • California Statewide Law Enforcement Association
  • Congress of California Seniors
  • Disability Rights California


Arguments

Official arguments

The following is the argument in support of Proposition 19 found in the Official Voter Information Guide:[4]

  • Official Voter Information Guide: YES on 19. Tax Savings and Housing Relief for SENIORS, WILDFIRE VICTIMS, and PEOPLE WITH DISABILITIES. Proposition 19 protects vulnerable Californians, closes unfair tax loopholes, and generates needed revenue for fire protection and emergency medical response. 1) LIMITS PROPERTY TAXES FOR SENIORS, WILDFIRE VICTIMS, AND DISABLED HOMEOWNERS. PROP. 19: • Removes unfair, ever-changing location restrictions in current law so homeowners who are seniors, disabled, or victims of wildfire can transfer their home's Prop. 13 tax savings to a replacement home anywhere in California. • Provides housing relief for millions of seniors, many feeling trapped in homes they can't maintain, with too many stairs, located too far from family or medical care—made worse by coronavirus health risks. • Creates record home ownership opportunities for renters and new homeowners statewide as tens of thousands of homes will become available for the first time in decades. • "After two wildfires destroyed 15,155 homes, victims faced massive tax hikes simply for relocating a few miles away. Prop. 19 removes unfair location restrictions to eliminate sudden tax increases so wildfire victims can move to a replacement home anywhere in California." —Kristy Militello, Tubbs Wildfire Survivor 2) CLOSES UNFAIR TAX LOOPHOLES USED BY EAST COAST INVESTORS, CELEBRITIES, AND WEALTHY TRUST FUND HEIRS ON VACATION HOMES AND RENTALS: • News reports and property records have revealed rules meant to limit taxes on family primary residences are exploited by out-of-state professionals, celebrities, and wealthy heirs to avoid paying their fair share of taxes on vacation homes and rentals. [Los Angeles Times, 8/17/18] • Exploiting loopholes resulted in billions in lost revenue for schools and counties, forcing California homeowners to pay tax bills 10 times higher than rental homes in the same neighborhood owned by heirs, many living as far as Florida or New York. PROP. 19 PROTECTS FAMILY HOMES—and low tax rates—for children inheriting and living in primary residences as intended under law; ELIMINATES TAX LOOPHOLES on homes converted into rentals . . . since rental income would easily cover any bump in property taxes. 3) INCREASES FIRE PROTECTION, EMERGENCY RESPONSE & SCHOOL FUNDING BY: • Establishing Fire Protection and Emergency Medical Response Funding: dedicated revenue for fire districts in rural and urban communities to fix inequities that threaten life-saving response times to wildfires and medical emergencies. • Providing an economic boost for schools and counties struggling to balance budgets due to coronavirus, with long-term revenue for emergency response, affordable housing, homeless programs, healthcare, and other local services. • Generating hundreds of millions in revenue for schools and local governments resulting from senior home sales and closing loopholes on inherited properties not used as a primary residence. 4) DEMOCRATS AND REPUBLICANS SUPPORT PROP. 19: "Prop. 19 protects tax savings and benefits for vulnerable Californians, including seniors, disabled homeowners, and wildfire victims."—Jim Brulte, CA Republican Party Former Chair "Vote with state and local Democrats to close unfair loopholes and provide needed housing relief for seniors and working families."—Alexandra Rooker, CA Democratic Party Former Chair PLEASE JOIN FIREFIGHTERS, EMERGENCY RESPONDERS, SENIORS AND DISABILITY RIGHTS GROUPS, CALIFORNIA BLACK CHAMBER OF COMMERCE, CALASIAN CHAMBER, HISPANIC CHAMBER, LOCAL DEMOCRATS & REPUBLICANS. YESon19.vote BRIAN RICE, President California Professional Firefighters KATHLEEN BARAJAS, President Californians for Disability Rights GEORGE MOZINGO, Boardmember California Senior Advocates League

Opposition

Opponents

Organizations


Arguments

Official arguments

The following is the argument in opposition to Proposition 19 found in the Official Voter Information Guide:[5]

  • Official Voter Information Guide: VOTE NO ON PROPOSITION 19. "Proposition 19 is an attempt by Sacramento politicians to raise property taxes by removing two voter-approved taxpayer protections from the State Constitution. This measure would require reassessment to market value of property transferred from parents to children, and from grandparents to grandchildren."—Jon Coupal, President, Howard Jarvis Taxpayers Association Proposition 19 TAKES AWAY PROPOSITION 13-related protections that California families have under the State Constitution and replaces them with a tax increase. VOTE NO on Proposition 19. Under current law, transfers of certain property between parents and children are excluded from reassessment, meaning the property tax bill stays the same after the property is transferred. The same is true for certain transfers between grandparents and grandchildren. Voters added these overwhelmingly popular provisions to the State Constitution with Proposition 58 in 1986 and Proposition 193 in 1996. Under Prop. 58, parents may transfer a home of any value and up to $1 million of assessed value of other property to their children without an increase in property taxes. IF WE LOSE PROPOSITION 58, children could be forced by higher taxes to sell their family's property, such as a small business that has provided the family with financial security, and their longtime family home if they can't move into it fast enough. PROPOSITION 19 TAKES AWAY PROPOSITION 58, EVEN THOUGH IT WAS APPROVED BY 75.7% OF VOTERS! Proposition 19 was put on the ballot through a last-minute backroom deal in the Legislature, despite opposition from both Democrats and Republicans. Proposition 19 would force the reassessment to market value of property transferred within families unless used as the new owner’s principal residence. PROPOSITION 19 IS A MASSIVE, BILLION-DOLLAR TAX INCREASE ON CALIFORNIA FAMILIES. The non-partisan Legislative Analyst's Office projects that Proposition 19 could eventually cost California families about two billion dollars annually in higher property taxes. THE TRANSFER PROVISIONS IN PROPOSITION 19 WERE ALREADY REJECTED BY VOTERS. Current law (Propositions 60 and 90) allows homeowners age 55 and older to move to a replacement home and transfer their base-year property tax assessment from their previous home to the new property. Current law allows this transfer one time, within the same county or to a county that accepts the transfers, and only if the replacement property is of equal or lesser value. In 2018, voters were presented with Proposition 5, which would have allowed more transfer opportunities, but voters decided the current system was fair and they overwhelmingly rejected Proposition 5. Now Sacramento politicians are offering this proposal again, but this time they've added a massive tax increase on inherited property. It's a bad deal for California families. California voters have said clearly that they do not want property reassessed to market value when transferred between parents and children, or, if the children's parents are deceased, between grandparents and grandchildren. Now Sacramento politicians are trying to take these protections away from California families so they can raise taxes again. Don’t let it happen. VOTE NO ON PROPOSITION 19. JON COUPAL, President Howard Jarvis Taxpayers Association SENATOR PATRICIA BATES, District 36 ASSEMBLYMAN KEN COOLEY, District 8

Campaign finance

See also: Campaign finance requirements for California ballot measures

Two Yes on 19 PACs were organized to support Proposition 19. Together, the committees had raised $47.57 million. The California Association of Realtors Issues Mobilization PAC was the largest donor, contributing $40.40 million.[6] Before Proposition 19, Yes on 19 was called Homeownership for Families and Tax Savings for Seniors and supported the California Property Tax Transfers and Exemptions Initiative.

Cash Contributions In-Kind Contributions Total Contributions Cash Expenditures Total Expenditures
Support $45,923,543.84 $1,645,098.30 $47,568,642.14 $55,431,674.43 $57,076,772.73
Oppose $238,471.02 $50.00 $238,521.02 $68,958.32 $69,008.32
Total $46,162,014.86 $1,645,148.30 $47,807,163.16 $55,500,632.75 $57,145,781.05

Support

The following table includes contribution and expenditure totals for the committee in support of the measure.[6]

Committees in support of Proposition 19
Committee Cash Contributions In-Kind Contributions Total Contributions Cash Expenditures Total Expenditures
Yes on 19 $23,607,226.44 $1,522,800.64 $25,130,027.08 $23,607,226.44 $25,130,027.08
Yes on 19: Tax Savings and Housing Relief for Seniors, Severely Disabled, And Wildfire Victims $22,266,817.40 $122,297.66 $22,389,115.06 $31,774,947.99 $31,897,245.65
Committee for an Equitable Los Angeles, Yes on 16 & 19, Councilwoman Monica Rodriguez Ballot Measure Committee $49,500.00 $0.00 $49,500.00 $49,500.00 $49,500.00
Total $45,923,543.84 $1,645,098.30 $47,568,642.14 $55,431,674.43 $57,076,772.73

Donors

The following were the top five donors who contributed to the support committee.[6]

Donor Cash Contributions In-Kind Contributions Total Contributions
California Association of Realtors Issues Mobilization PAC $40,400,341.00 $0.00 $40,400,341.00
National Association of Realtors $4,800,000.00 $23,500.00 $4,823,500.00
California Democratic Party $0.00 $1,516,144.30 $1,516,144.30
California Professional Firefighters Ballot Issues Committee $100,000.00 $454.00 $100,454.00
Operating Engineers Local Union No. 3 Issues Advocacy/Ballot Initiative PAC $10,000.00 $0.00 $10,000.00

Opposition

The following table includes contribution and expenditure totals for the committee in support of the measure.[6]

Committees in opposition to Proposition 19
Committee Cash Contributions In-Kind Contributions Total Contributions Cash Expenditures Total Expenditures
Stop the Tax Hikes, No on 15 and 19 $238,471.02 $50.00 $238,521.02 $68,958.32 $69,008.32
Total $238,471.02 $50.00 $238,521.02 $68,958.32 $69,008.32

Donors

The following was the top donor who contributed to the opposition committee.[6]

Donor Cash Contributions In-Kind Contributions Total Contributions
Protect Prop. 13, No on 15, a Project of the Howard Jarvis Taxpayers Association $45,000.00 $50.00 $45,050.00

Media editorials

Support

The following media editorial boards published an editorial supporting the ballot measure:

  • San Mateo Daily Journal Editorial Board: "This would enable people in high cost areas to move more easily, opening up room for new residents to the area."
  • The San Diego Union-Tribune Editorial Board: "While critics see this as a gift to the wealthy elderly, the great majority of older homeowners are middle-income, not rich. Allowing them (as well as disabled homeowners and wildfire or disaster victims) to downsize without suffering a huge property tax hit is a humane policy that helps people retire with much less financial stress. It would also promote fluidity in home sales, increasing the availability of larger homes for families with children and easing the phenomenon of Proposition 13 depressing the real estate free market by trapping empty nesters in homes bigger than they need. So vote yes on Proposition 19. It’s not perfect, but it is good."


Opposition

The following media editorial boards published an editorial opposing the ballot measure:

  • The Orange County Register Editorial Board: "But Prop. 19 is best understood for what it is: an attempt by real estate interests to accomplish what they couldn’t accomplish two years ago by pandering to the state’s firefighters union. This is a special-interest measure that seeks to raise hundreds of millions of new tax revenues to appease yet another special interest. Prop. 19 has one good feature — portability. Counties ought to enable it forthwith, as a few already have done. But Prop. 19 is a cash grab, not tax reform; it’s not fair to property heirs, and it buys off a union so it has a better chance of passing. Vote it down."
  • Mercury News & East Bay Times Editorial Boards: "Prop. 19 merely plugs one hole in the state’s porous property tax laws while creating another. It’s time for holistic reform that simplifies the system and makes it more equitable. This isn’t it. [...] The longer a person had owned their current home, and already benefited from inordinately low tax bills due to Prop. 13, the greater the tax break on the new property. And those who downsize would often be competing with first-time buyers for more-affordable smaller homes. The real reform would be to abolish the tax-transfer program, not expand it. Vote no on Prop. 19."
  • The Bakersfield Californian Editorial Board: "Proposition 19 is another do-over on the ballot. Two years ago, the real estate industry spent $13 million on a similar initiative campaign to expand the program statewide and enhance the benefit for eligible homeowners. Sixty percent of voters rejected the initiative. They should do the same this year."
  • Los Angeles Times Editorial Board: "But Proposition 19 would just expand the inequities in California’s property tax system. It would grossly benefit those who were lucky enough to buy a home years ago and hold onto it as values skyrocketed. It would give them a huge tax break and greater buying power in an already expensive real estate market. It would skew tax breaks further away from people who don’t own a home or who may be struggling to buy one."
  • San Francisco Chronicle Editorial Board: "But it’s still a flawed package, designed to rev up home sales that benefit real estate agents who could reap more in commissions. It favors one narrow segment of the tax-paying public but does nothing for the rest of the state’s home buyers. The measure shows the convoluted extremes that California’s tangled property tax system produces."
  • The Desert Sun Editorial Board: "What seems clear is that the main backers of this measure — Realtors and the firefighters union — stand to gain greatly in the forms of expected increased home sales and related sales commissions and the measure’s dedication of some of the state’s ultimate new tax proceeds specifically to firefighting efforts. Firefighting must be a priority of state and local governments. Budgeting for anything so vital by this type of special interest ballot measure is the worst way to do so. Lawmakers should be making such key spending decisions in their regular budget work."
  • The Press Democrat Editorial Board: "Proposition 19 would allow people to buy more expensive homes anywhere in the state, while capping their property taxes. Moreover, they could repeat the maneuver three times. That might provide lots of business for real estate agents, but it would undercut school districts and local governments, the beneficiaries of property taxes. [...] California’s tax system is overdue for an overhaul, but these measures make piecemeal changes that are as likely to create new problems as solve old ones. The Press Democrat recommends no votes on Propositions 15 and 19."


Polls

See also: 2020 ballot measure polls
California Proposition 19, Property Tax Transfers, Exemptions, and Revenue for Wildfire Agencies and Counties Amendment (2020)
Poll Support OpposeUndecidedMargin of errorSample size
SurveyUSA (likely voters)
9/26/2020 - 9/28/2020		 56.0%10.0%24.0%+/-5.4588
Note: The polls above may not reflect all polls that have been conducted in this race. Those displayed are a random sampling chosen by Ballotpedia staff. If you would like to nominate another poll for inclusion in the table, send an email to editor@ballotpedia.org.

Background

Withdrawal of Initiative 19-0003

See also: California Property Tax Transfers and Exemptions Initiative (2020)

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:[7]

(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.[8]

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."[9]

California Proposition 13 (1978)

See also: California Proposition 13, Tax Limitations Initiative (June 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]

Proposition 90 tax transfers between counties

In 1988, voters approved Proposition 90, which 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]

As of 2020, 10 counties in California had adopted ordinances to accept the tax transfers of qualified homeowners age 55 or older from the other counties allowing tax transfers between counties. For example, a person age 55 or older who sold a house in Los Angeles County would be allowed to transfer their original home's taxable value to their new home in San Diego County, assuming the new home was of equal or lesser value than the original home.

The following map illustrates which counties allow for tax transfers between each other, as of 2018:[17]

Tax policies on the ballot in 2020

See also: Taxes on the ballot

In 2020, voters in 14 states voted on 21 ballot measures addressing tax-related policies. Ten of the measures addressed taxes on properties, three were related to income tax rates, two addressed tobacco taxes, one addressed business-related taxes, one addressed sales tax rates, one addressed fees and surcharges, and one was related to tax-increment financing (TIF).

Click Show to read details about the tax-related measures on statewide ballots in 2020.

Path to the ballot

See also: Amending the California Constitution

In California, a two-thirds vote is needed in each chamber of the California State Legislature to refer a constitutional amendment to the ballot for voter consideration.

In 2019, the constitutional amendment was introduced as Assembly Concurrent Resolution 11 (ACA 11). The original version of ACA 11 was designed to add the Legislative Analyst to the California Constitution. The California State Assembly passed the original version on May 6, 2019. The Senate Elections and Constitutional Amendments Committee adopted a rewritten version of ACA 11, which addressed property tax transfers and exemptions, on June 23, 2020. The California State Senate voted 29 to 5 to pass the rewritten version of ACA 11 on June 25, 2020. The California State Assembly voted 56 to 5 to pass ACA 11 on June 26, 2020. As one seat was vacant in the Assembly, 53 votes were needed to pass ACA 11.[1]

Vote in the California State Senate
June 25, 2020
Requirement: Two-thirds (66.67 percent) vote of all members in each chamber
Number of yes votes required: 27  Approveda
YesNoNot voting
Total2956
Total percent72.50%12.50%15.00%
Democrat2702
Republican254
Vote in the California State Assembly
June 26, 2020
Requirement: Two-thirds (66.67 percent) vote of all members in each chamber
Number of yes votes required: 53  Approveda
YesNoNot voting
Total56518
Total percent70.89%6.33%22.78%
Democrat46213
Republican935
Independent100

Senate Bill 300

Based on California Elections Code 9040 (CEC 9040), the deadline for the California State Legislature to place legislative referrals, including constitutional amendments, on the ballot for the general election on November 3, 2020, was June 25, 2020. Since CEC 9040 is a statute, the state Legislature can waive or adjust the referral deadline with a bill.[37]

With Senate Bill 300 (SB 300), the state Legislature is seeking to allow more time to place three constitutional amendments—ACA 4, ACA 11, and ACA 25—on the ballot for November 3. SB 300 would give the state Legislature until July 1, 2020, to pass the constitutional amendments.[38]

On June 26, the Assembly voted 47 to 16 to pass SB 300. On June 29, the Senate voted 29 to 8 to pass SB 300.[38]

Gov. Gavin Newsom (D) signed SB 300 into law on June 30, 2020.[39]

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.

See also

External links

Footnotes

  1. ↑ 1.0 1.1 1.2 1.3 1.4 1.5 1.6 California State Legislature, "Assembly Concurrent Resolution 11," accessed May 8, 2019
  2. ↑ 2.0 2.1 2.2 California Secretary of State, "Ballot Title and Summary," accessed July 28, 2020
  3. ↑ 3.0 3.1 3.2 3.3 3.4 Note: This text is quoted verbatim from the original source. Any inconsistencies are attributable to the original source. Cite error: Invalid <ref> tag; name "quotedisclaimer" defined multiple times with different content Cite error: Invalid <ref> tag; name "quotedisclaimer" defined multiple times with different content
  4. ↑ California Secretary of State, "Official Voter Information Guide," accessed September 28, 2020
  5. ↑ California Secretary of State, "Official Voter Information Guide," accessed September 28, 2020
  6. ↑ 6.0 6.1 6.2 6.3 6.4 Cal-Access, "Homepage," accessed June 24, 2020
  7. ↑ California Secretary of State, "Letter for (Conditional) Withdrawal," June 25, 2020
  8. ↑ California Secretary of State, "Letter from Steve Reyes," June 25, 2020
  9. ↑ Los Angeles Times, "Will California voters see two ballot measures doing the same thing?" June 29, 2020
  10. ↑ 10.0 10.1 UC-Hastings, "Voter Information Guide for 1978, Primary," accessed December 21, 2017
  11. ↑ California Tax Data, "What is Proposition 13?" accessed December 21, 2017
  12. ↑ Time, "How California's Fiscal Woes Began: A Crisis 30 Years in the Making," July 1, 2009
  13. ↑ New York Times, "The California Ballot Measure That Inspired a Tax Revolt," October 16, 2018
  14. ↑ 14.0 14.1 UC-Hastings, "Voter Information Guide for 1986, General," accessed March 26, 2018
  15. ↑ 15.0 15.1 UC-Hastings, "Voter Information Guide for 1988, General," accessed March 26, 2018
  16. ↑ UC-Hastings, "Proposition 193 (1996)," accessed March 11, 2020
  17. ↑ California State Board of Equalizers, "Transfer of Base Year Value for Persons Age 55 and Over – Propositions 60/90," accessed July 21, 2020
  18. ↑ Arizona Secretary of State, "Initiative 31-2020," February 14, 2020
  19. ↑ Colorado Secretary of State, "2019-2020 Initiative Filings, Agendas & Results," accessed April 17, 2020
  20. ↑ Illinois State Legislature, "Senate Joint Resolution Constitutional Amendment 1," accessed May 2, 2019
  21. ↑ Illinois State Board of Elections,"Committee Search," accessed May 28, 2019
  22. ↑ Alaska Division of Elections, "Alaska's Fair Share Act," accessed January 13, 2020
  23. ↑ Anchorage Daily News, "Group says it has enough signatures to put Alaska oil tax initiative on ballot," January 14, 2020
  24. ↑ APOC, "Online Reports," accessed January 7, 2020
  25. ↑ Nebraska Secretary of State, "Initiative Petition text," accessed August 22, 2019
  26. ↑ California Attorney General, "Initiative 19-0008," September 17, 2019
  27. ↑ California the Legislative Analyst's Office, "A.G. File No. 2019-0008," February 5, 2018
  28. ↑ California State Legislature, "Assembly Concurrent Resolution 11," accessed May 8, 2019
  29. ↑ Colorado General Assembly, "SCR 20-001," accessed June 10, 2020
  30. ↑ Arkansas State Legislature, "House Joint Resolution 1018," accessed March 7, 2019
  31. ↑ UA Little Rock Public Radio, "Arkansas Governor Signs $95 Million Highway Funding Bill Into Law," accessed March 25, 2019
  32. ↑ Arkansas Ethics Commission, "Filings," accessed August 18, 2020
  33. ↑ Colorado State Legislature, "House Bill 20-1427," accessed June 15, 2020
  34. ↑ Oregon State Legislature, "HB 2270," accessed June 25, 2019
  35. ↑ Colorado Secretary of State, "2019-2020 Initiative Filings, Agendas & Results," accessed February 10, 2020
  36. ↑ Nebraska State Legislature, "LR14CA," accessed April 5, 2019
  37. ↑ California State Legislature, "Elections Code 9040," accessed June 26, 2020
  38. ↑ 38.0 38.1 California State Legislature, "Senate Bill 300," accessed June 26, 2020
  39. ↑ California Governor, "Governor Newsom Signs SB 350, Giving the State Protection that PG&E will be Transformed into a Safer Utility," June 30, 2020
  40. ↑ California Secretary of State, "Section 3: Polling Place Hours," accessed August 12, 2024
  41. ↑ California Secretary of State, "Voter Registration," accessed August 13, 2024
  42. ↑ 42.0 42.1 California Secretary of State, "Registering to Vote," accessed August 13, 2024
  43. ↑ California Secretary of State, "Same Day Voter Registration (Conditional Voter Registration)," accessed August 13, 2024
  44. ↑ SF.gov, "Non-citizen voting rights in local Board of Education elections," accessed November 14, 2024
  45. ↑ 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."
  46. ↑ California Secretary of State, "What to Bring to Your Polling Place," accessed August 12, 2024
  47. ↑ BARCLAYS OFFICIAL CALIFORNIA CODE OF REGULATIONS, "Section 20107," accessed August 12, 2024
  48. ↑ Democracy Docket, "California Governor Signs Law to Ban Local Voter ID Requirements," September 30, 2024
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