The State Legislature passed this amendment of the California Constitution with unanimous votes in both the State Senate and the State Assembly. This proposition is on the ballot, because constitutional amendments require majority approval by voters.

Proposition 13 of 1978

In the late 1970’s, property tax bills were rising very sharply as a result of rapidly increasing real estate values. In response, California voters approved Proposition 13 in June 1978, an initiative constitutional amendment. Prop 13 reduced value-based property taxes in several ways:

• It reduced the assessed value of property (for tax purposes) to 1975 levels.
• It introduced limits on changes in the assessed value.
• It set the property tax rate at 1% of assessed value. 

Prior to passage of Proposition 13, property could be reassessed to the current market price every year. Since its passage, the assessed value of a property can be reset to market value only when there is a change in ownership. While a property has the same owner, only limited changes in its assessed value are allowed:

• Assessed value may be increased by up to two percent per year.
• When new construction to a property occurs, the value of the improvements
  may be added to assessed value. 

The provision for reassessment after property improvements has been the target of many amendments to the original Proposition 13, beginning with the very next election. Proposition 8 of November 1978 provided that new construction would not trigger reassessment when rebuilding was necessitated by fire, flood or other disasters. Some new construction is excluded when reassessment might discourage certain discretionary improvements, such as solar energy installations or access for severely disabled persons. Reassessment is also excluded when qualified fire safety and earthquake safety improvements are made.

Property Reassessment Exclusions for Earthquake Safety Improvements

In current law, there are two exclusions from property reassessment after earthquake safety improvements. The first one was a legislative constitutional amendment, Proposition 23, approved in June 1984. It provided that when a building is modified to comply with a local earthquake safety ordinance, the reconstructed portion is not considered "new construction" for property tax purposes. It applied only to buildings with unreinforced masonry bearing walls, including walls built with bricks, cement blocks, or other types of masonry material without steel reinforcing bars. It also specified that the exclusion would expire fifteen years after the reconstruction occurred.

The second exclusion for earthquake safety was another legislative constitutional amendment, Proposition 127, approved in November 1990. It authorized the legislature to exclude from property tax assessments earthquake safety upgrades to any existing building, but did not change the earlier exclusion from 1984. It authorized the legislature to define further the safety improvements that would qualify, referred broadly to existing buildings, and had no time limit.