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SB 1352

Property taxation: newly constructed: reconstructed property.

2025-2026 Regular Session Introduced by Ben Allen and 2 co-sponsors

SB 1352 allows applying the pre-damage base-year value to reconstructed property after a Governor-declared disaster within five years, with a temporary, formula-based framework thr

May 14 hearing: Held in committee and under submission.
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Bill Summary · SB 1352

Summary of SB 1352 (2025–2026) — California Property Taxation: Newly Constructed: Reconstructed Property

SB 1352, introduced by Senators Valladares and Allen (Coauthor: Senator Archuleta), would modify how base-year values and property tax relief apply to properties damaged or destroyed by certain disasters and subsequently reconstructed on the same site. The bill is limited in duration, operative through January 1, 2036.

1) Purpose and intent

  • To provide property tax relief to owners whose property was substantially damaged or destroyed by a Governor-declared disaster and who reconstruct on the same site.
  • Specifically, it revises when and how the base year value (the starting point for 1% ad valorem taxation under Proposition 13) may be applied to replacement property.
  • It introduces a temporary framework (through 2035–36) for determining the base year value of reconstructed property, balancing full cash value and adjusted base year values of the pre-damage property.

2) Key provisions and changes

  • Base year value application:

    • The base year value of substantially damaged or destroyed property may be applied to replacement property reconstructed on the site within five years after the disaster if the reconstructed property is comparable to the original.
    • The reconstructed property’s base year value is determined by a specified procedure that considers full cash value (FCV) and adjusted base year value (ABY) of the pre-damage property.

  • Determination of base year value (for 2026–27 through 2034–35 fiscal years):

    • The applicable base year value for the reconstructed property is the lesser of:
    • The ABY of the damaged property (applied as the base year value), or
    • If certain size conditions apply, a different calculation (see below).
    • Specifically, the bill creates two pathways:
    • Pathway A: If FCV of reconstructed property does not exceed 120% of FCV of the damaged property, apply ABY of the damaged property as the base year value (ABY approach).
    • Pathway B (size-based): If the reconstructed property does not exceed 110% of the damaged property's size, ABY still applies (with a potential lesser value between Pathway A and B as applicable). For 2026–27 to 2034–35, the lesser of the two values governs.
    • If the FCV of the reconstructed property exceeds 120% of the FCV of the damaged property, any FCV above 120% is added to the ABY to form the reconstructed property's base year value.

  • When the reconstructed property’s FCV is less than the ABY of the original property, the lower value becomes the base year value.

  • Timing and duration:

    • The above provisions apply to disasters where the Governor proclaimed a state of emergency, and the bill is operative through January 1, 2036.
    • Temporary extensions exist for certain disasters: up to three-year extensions for “qualified property” damaged in specific past fires (e.g., Woolsey, Camp Fire) or more recently, Palisades/Eaton/Hurst/Lidia/Sunset/Woodley, Mountain, or Franklin fires, for fiscal years beginning 2018–19 onward (and 2025–26 onward for newer incidents).

  • Definitions:

    • “Disaster” means a major misfortune or calamity proclaimed by the Governor as a state of disaster.
    • “Substantially damaged or destroyed” means improvements with physical damage exceeding 50% of their pre-disaster FCV.
    • “Reconstructed property” must be similar in size, utility, and function to the original property to qualify as replacement rather than new construction.

  • Eligibility and administration:

    • Only the property owner(s) of the substantially damaged or destroyed property may receive the relief under this section.
    • The Act specifies that relief under this section is inapplicable if the owner otherwise qualifies for other property tax relief under Section 69.

  • Reimbursement and fiscal impact:

    • The bill clarifies that reimbursements to local agencies for mandated costs may be subject to state mandate reimbursement rules if applicable.
    • It explicitly states that no separate appropriation is provided in this act and the state shall not reimburse local agencies for property tax revenues lost under this act (i.e., net revenue loss to local governments is not automatically funded by state).

3) Who would be affected

  • Property owners whose properties were substantially damaged or destroyed by a Governor-proclaimed disaster and subsequently reconstructed on the same site.
  • County assessors and local government agencies responsible for administering property tax assessments under the base year value rules.
  • Local agencies and school districts regarding potential revenue impacts (though the bill states no new appropriation to reimburse these losses).

4) Procedural and timeline aspects

  • Legislative timeline:
    • Introduced February 20, 2026; amendments and committee work throughout April–May 2026.
    • Proceedings show hearings and suspense file steps in May 2026 with a potential APPR (approval) outcome.
  • Operative window:
    • Core provisions are set to operate through January 1, 2036.
  • Interaction with existing law:
    • Revisions amend Section 70.5 of the Revenue and Taxation Code.
    • The bill interacts with existing base-year value rules, disaster relief provisions, and the 1% Proposition 13 cap framework.

5) Notable considerations

  • The bill seeks a targeted, temporary adjustment to property tax treatment for reconstruction after disasters, balancing the property’s FCV growth with pre-damage ABY calculations.
  • It introduces a precise timing rule (five-year replacement window) and an optional size-based alternative, but limits applicability to disaster-dited properties and periods through 2035–36.
  • Fiscal impact to local governments is acknowledged as not reimbursed by state funds under this bill.

Compiled from official sources — confirm details with the bill’s official record.

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