Voter's Edge California Voter Guide
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Tuesday June 5, 2018 — California Primary Election
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State of California
Proposition 72 — Taxes for Rainwater Capture Systems Constitutional Amendment - Majority Approval Required

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Election Results


4,979,651 votes yes (84.2%)

932,263 votes no (15.8%)

100% of precincts reporting (21,487/21,487).

Permits Legislature to allow construction of rain-capture systems, completed on or after January 1, 2019, without requiring property-tax reassessment. Fiscal Impact: Probably minor reduction in annual property tax revenues to local governments.

What is this proposal?

Easy Voter Guide — Summary for new and busy voters

Information provided by The League of Women Voters of California Education Fund

The way it is now

To help deal with droughts and water shortages, some California residents install systems to collect and store rainwater that falls on the roof of a building. The cost to install a rainwater capture system can range from a few hundred dollars to several hundred thousand dollars, depending on size. Currently, adding a rainwater capture system to a building counts as a property improvement and leads to higher taxes for the property owner. In the past, voters have approved allowing some types of tax-free property improvements, such as solar panels and fire sprinklers.

What if it passes?

From the beginning of 2019 to the end of 2028, building a rainwater capture system would not be considered a property improvement. Property owners and developers would be able to install rainwater capture systems without their property taxes going up. Prop 72 would amend the State Constitution to allow this change.

Budget effect

Prop 72 would result in lower property tax payments for property owners who install rainwater capture systems. Lower tax payments would mean less money for some local governments. Statewide, the effect would probably be small.

People FOR say

  • California has experienced periods of drought and will likely face more dry years in the future.
  • Homeowners should not be penalized for installing rainwater capture systems that help our entire state. 

People AGAINST say

  • No argument against Prop 72 was submitted.

Pros & Cons — Unbiased explanation with arguments for and against

Information provided by League of Women Voter's of California Education Fund

The Question

Should the value of new construction of rain-capture systems be excluded from reassessment of property for property taxes purposes?

The Situation

California property taxes are typically charged at 1.1% of the full cash value of the property, initially assessed at the time of purchase or construction. This taxable value can be adjusted for inflation at a rate of no more than 2% per year. Normally a property’s value is not fully updated until it is sold or changes owners, but certain improvements can also trigger an updated value. In that case, only the value of the improvement (usually a major renovation or new construction) is considered, and this value is then added to the taxable base value of the property. A few types of improvements are already excluded from reassessment: solar energy systems, fire sprinkler systems, changes to increase accessibility for people with disabilities, and seismic retrofitting.

The Proposal

Prop 72 would add systems installed by property owners or developers to catch rainwater and store it for use on the property to the list of improvements excluded from reassessment for property taxes.  The exclusion is only for systems installed between January 2018 and the end of 2028. The exclusion ends when the property is sold.

Fiscal effect

Tax exemptions are generally thought to provide incentives, in this case to encourage property owners to install rain-capture systems by exempting them from property tax reassessments at the time of installation. Because these systems are usually not very expensive compared to the total cost of real estate, individual tax savings would be fairly small. The loss to local government revenue from property taxes would also be correspondingly small, though this amount would increase if the incentive succeeds in encouraging construction of more rain-capture systems. The property owner would save money on water bills by using the water captured by the system, also conserving water from public utilities for other uses, including drinking water and agricultural irrigation.

Supporters say

  • In a state prone to drought, Prop 72 provides a financial incentive for homeowners to help conserve water.
  • Savings from Prop 72 will extend to lower water bills for people with rain-capture systems.

Opponents say

  • There are no official arguments against and no opponents to this bill.

Details — Official information

YES vote means

A YES vote on this measure means: Installing a system to collect and store rainwater on a property could not result in a higher property tax bill.

NO vote means

A NO vote on this measure means: Installing a system to collect and store rainwater on a property could result in a higher property tax bill.


Attorney General of California

  • Except in certain circumstances, under the California Constitution, construction on existing property requires reassessment for tax purposes.
  • The California Constitution permits the Legislature to exempt some construction on existing property from property-tax reassessment requirements.
  • Amends the California Constitution to permit the Legislature to exempt the construction or addition of rain-capture systems from the type of construction that would require a property-tax reassessment.
  • Applicable to construction or addition of rain-capture systems completed on or after January 1, 2019.


  • Probably minor reduction in annual property tax revenues to local governments.


Legislative Analyst's Office

California’s Water Supplies Can Be Limited in Some Years. California has an extensive water system to deliver water from the northern part of the state—where it is more plentiful—to farms and cities in other parts of the state. Water typically is delivered to houses and other buildings through local public water systems. The amount of water available through these water systems can vary widely from year to year. In years with less rain and snow, it can be difficult to provide enough water for all of the state’s farms, residents, and businesses. In response, the state and local governments have looked for other ways to provide water to those who want it.

Rainwater Capture Systems Collect Water for Use on Site. Rainwater capture systems are one way to create additional supplies of water. A rainwater capture system collects and stores rainwater that falls on the roof of a building. The system uses pipes to direct water from roofs and gutters to large storage tanks. Stored water can be used for things like watering plants or flushing toilets. As a result, these systems reduce somewhat the demand for water from local water systems. Rainwater capture systems installed on homes typically cost a few hundred dollars to several thousand dollars. Systems installed on business properties or apartments typically cost several thousand dollars to hundreds of thousands of dollars.

Local Governments Levy Taxes on Property Owners. California local governments—cities, counties, schools, and special districts—levy property taxes on property owners based on the value of their property. A property includes land plus any buildings or other improvements on the land. Property taxes are a major revenue source for local governments, raising over $60 billion per year statewide.

Calculating a Property Owner’s Tax Bill. Each property owner’s annual property tax bill is equal to the taxable value of their property multiplied by their property tax rate. The typical property owner’s property tax rate is 1.1 percent. In the year a property is purchased, its taxable value is its purchase price. Each year after that the property’s taxable value is adjusted for inflation (up to 2 percent). This continues until the property is sold and again is taxed at its purchase price.

Property Improvements Trigger a Higher Tax Bill. When a property owner makes an improvement to his or her property, the county assessor typically updates the property’s taxable value to reflect the improvement. The county assessor first determines the value of the improvement. The improvement’s value is based on the cost of building the improvement and how much it increases the price the property could be sold for. The county assessor then adds the value of the improvement to the property’s prior taxable value to determine the property’s new taxable value.

Certain Improvements Do Not Increase Tax Payments. Past measures approved by voters require that county assessors not count the value of certain types of property improvements toward a property’s taxable value. Such improvements include solar panels, fire sprinklers, and certain upgrades for earthquake safety.

Impartial analysis / Proposal

Legislative Analyst's Office

Rainwater Capture Systems Not Counted Toward Taxable Value. This measure, which amends the State Constitution, allows the Legislature to exclude the value of a newly constructed rainwater capture system from a property’s taxable value. Earlier this year, the Legislature passed a law to carry out this measure should it be approved by voters. Under this law, any systems installed between January 1, 2019 and December 31, 2028 would not raise property tax bills. These property tax savings would apply until the property is sold. If a developer installs a system on a new building, the first buyer of the building may claim the property tax savings for the system.

An Example. Here is an example of the property tax savings provided by this measure. Suppose a home has a taxable value of $400,000 and the homeowner’s annual tax bill is $4,400 ($400,000 multiplied by 1.1 percent). The homeowner pays $5,000 to have a rainwater capture system installed. Without this measure, the county assessor would increase the home’s taxable value to $405,000. The homeowner’s annual tax bill would increase to $4,455 ($405,000 multiplied by 1.1 percent). With the measure, the home’s taxable value and tax bill would not change. The homeowner’s annual tax bill would still be $4,400, $55 lower than if the measure were not in place.

Financial effect

Legislative Analyst's Office

Likely Minor Reduction in Property Tax RevenuesThis measure would result in lower property tax payments for property owners who install rainwater capture systems on existing buildings or who purchase new buildings that include these systems. Lower property tax payments would mean lower revenues for local governments. Statewide, these property tax revenue losses probably would be minor, not exceeding a few million dollars per year. This is because properties with new rainwater capture systems probably will pay a very small share of all property tax payments in coming years.

Published Arguments — Arguments for and against

Arguments FOR

Yes on Proposition 72 will prevent a property tax increase on homeowners who install rainwater recycling systems that benefit our entire state.

That is urgent because California has experienced periods of drought and will likely face more dry years in the future.

More Water, Less Taxes.

Eliminating the tax penalty for Californians who install systems to store and reuse water off our roofs will preserve more water for all of us and can lower water bills for millions of Californians. It preserves precious drinking water for California residents and enables us to draw less water from our lakes, rivers and streams, helping fish and wildlife that depend on fresh water for their habitat and food.

Supported by Outdoor and Environmental Groups.

Yes on Proposition 72 is supported by environmental groups thoughout California, including Save The Bay, Planning and Conservation League and Trout Unlimited. Water conservation and environmentally sensitive water storage are important elements of our anti-drought response.

Under current law, taxes increase when property owners make home improvements— even when such improvements have statewide benefit. Proposition 72 would allow people to install rainwater capture systems without triggering higher taxes.

Australia has experienced severe drought and has embraced rainwater recycling systems as part of their solution. Currently, one-third of the Australian homes capture rainwater from their roofs.

California voters approved a similar tax reform for solar systems. Because homeowners are not required to pay higher taxes when they install rooftop solar, our electricity costs are lower. A Yes vote on Proposition 72 would allow us to follow this exact same path.

Stop The Unfair Tax on Water Conservation!

It is unfair and unwise to raise taxes on Californians who capture rainwater from their roofs in order to conserve our drinking water. That is why the California State Senate and State Assembly, on unanimous bi-partisan votes, agreed to place this measure on the ballot.

Storing and reusing rainwater benefits all of us. People should not have to pay a tax penalty for conserving water. Please vote Yes on Proposition 72.

For further info, go to

STEVE GLAZER, California State Senator

DAVID LEWIS, Executive Director
Save The Bay

HOWARD PENN, Executive Director
Planning and Conservation League

— Secretary of State Voter Info Guide

Arguments AGAINST

No argument against Prop 72 was submitted.

— Secretary of State Voter Info Guide

Read the proposed legislation

Proposed legislation

This amendment proposed by Senate Constitutional Amendment 9 of the 2017–2018 Regular Session (Resolution Chapter 1, Statutes of 2018) expressly amends the California Constitution by amending a section thereof; therefore, new provisions proposed to be added are printed in italic type to indicate that they are new.


(c) For purposes of subdivision (a), the Legislature may provide that the term “newly constructed” does not include any of the following:

(1) The construction or addition of any active solar energy system.

(2) The construction or installation of any fire sprinkler system, other fire extinguishing system, fire detection system, or fire-related egress improvement, as defined by the Legislature, that is constructed or installed after the effective date of this paragraph.

(3) The construction, installation, or modification on or after the effective date of this paragraph of any portion or structural component of a singleor multiple-family dwelling that is eligible for the homeowner’s exemption if the construction, installation, or modification is for the purpose of making the dwelling more accessible to a severely disabled person.

(4) The construction, installation, removal, or modification on or after the effective date of this paragraph of any portion or structural component of an existing building or structure if the construction, installation, removal, or modification is for the purpose of making the building more accessible to, or more usable by, a disabled person.

(5) The construction or addition, completed on or after January 1, 2019, of a rain water capture system, as defined by the Legislature.

Who gave money?


Yes on Proposition 72

Total money raised: $96,324
Bar graph showing total amount relative to total amount for this entire campaign.

No on Proposition 72

No data currently available.
Bar graph showing total amount relative to total amount for this entire campaign.

Below are the top 10 contributors that gave money to committees supporting or opposing the ballot measures.

Yes on Proposition 72

Personal Insurance Federation of California
Association of California Life & Health Insurance Companies
San Manuel Band of Mission Indians
California Building Industry Association
California Dental Association
DaVita Health Care Partners
Wine Institute
Plumbers & Pipefitters Local Union No. 447 Federal (FEC ID #C00320218)
UA Local 342

No on Proposition 72

More information about contributions

Yes on Proposition 72

By State:

California 83.59%
Missouri 6.02%
Colorado 5.71%
Louisiana 3.12%
Other 1.56%

By Size:

Large contributions (99.98%)
Small contributions (0.02%)

By Type:

From organizations (99.74%)
From individuals (0.26%)

No on Proposition 72

More information

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