SB 1183: Property taxation: exemptions: disabled veterans.
- Session Year: 2015-2016
- House: Senate
- Latest Version Date: 2016-05-10
Existing property tax law provides, pursuant to the authorization of the California Constitution, a disabled veterans property tax exemption for the principal place of residence of a veteran or a veterans spouse, including an unmarried surviving spouse, if the veteran, because of injury incurred in military service, is blind in both eyes, has lost the use of 2 or more limbs, or is totally disabled, as those terms are defined, or if the veteran has, as a result of a service-connected injury or disease, died while on active duty in military service. Existing law exempts that part of the full value of the residence that does not exceed $100,000, or $150,000, if the veterans household income does not exceed $40,000, adjusted for inflation, as specified.
This bill bill, for property tax lien dates for the 201718 fiscal year and for each fiscal year thereafter, would instead exempt that portion of the full value of the principal place of residence of a veteran or veterans spouse. spouse that does not exceed $1,000,000, adjusted annually for inflation, as specified. The bill would also define the term blind in both eyes to mean that the veteran is a blind person, as defined in a specific statute. The bill would also specify that a totally disabled veteran includes a veteran so severely disabled as to be unable to move without the aid of an assistive device. The bill would make other technical and conforming changes to the disabled veterans property tax exemption.
By changing the manner in which local tax officials administer the disabled veterans property tax exemption, this bill would impose a state-mandated local program.
Section 2229 of the Revenue and Taxation Code requires the Legislature to reimburse local agencies annually for certain property tax revenues lost as a result of any exemption or classification of property for purposes of ad valorem property taxation.
This bill would provide that, notwithstanding Section 2229 of the Revenue and Taxation Code, no appropriation is made and the state shall not reimburse local agencies for property tax revenues lost by them pursuant to the bill.
The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.
This bill would provide that, if the Commission on State Mandates determines that the bill contains costs mandated by the state, reimbursement for those costs shall be made pursuant to these statutory provisions.
This bill would take effect immediately as a tax levy.
Existing property tax law provides, pursuant to the authorization of the California Constitution, a disabled veterans property tax exemption for the principal place of residence of a veteran or a veterans spouse, including an unmarried surviving spouse, if the veteran, because of injury incurred in military service, is blind in both eyes, has lost the use of 2 or more limbs, or is totally disabled, as those terms are defined, or if the veteran has, as a result of a service-connected injury or disease, died while on active duty in military service. Existing law exempts that part of the full value of the residence that does not exceed $100,000, or $150,000, if the veterans household income does not exceed $40,000, adjusted for inflation, as specified.
This bill would instead exempt the full value of the principal place of residence of a veteran or veterans spouse. The bill would also define the term blind in both eyes to mean that the veteran is a blind person, as defined in a specific statute. The bill would also specify that a totally disabled veteran includes a veteran so severely disabled as to be unable to move without the aid of an assistive device. The bill would make other technical and conforming changes to the disabled veterans property tax exemption.
By changing the manner in which local tax officials administer the disabled veterans property tax exemption, this bill would impose a state-mandated local program.
Section 2229 of the Revenue and Taxation Code requires the Legislature to reimburse local agencies annually for certain property tax revenues lost as a result of any exemption or classification of property for purposes of ad valorem property taxation.
This bill would provide that, notwithstanding Section 2229 of the Revenue and Taxation Code, no appropriation is made and the state shall not reimburse local agencies for property tax revenues lost by them pursuant to the bill.
The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.
This bill would provide that, if the Commission on State Mandates determines that the bill contains costs mandated by the state, reimbursement for those costs shall be made pursuant to these statutory provisions.
This bill would take effect immediately as a tax levy.
Existing property tax law provides, pursuant to the authorization of the California Constitution, a disabled veterans property tax exemption for the principal place of residence of a veteran or a veterans spouse, including an unmarried surviving spouse, if the veteran, because of injury incurred in military service, is blind in both eyes, has lost the use of 2 or more limbs, or is totally disabled, as those terms are defined, or if the veteran has, as a result of a service-connected injury or disease, died while on active duty in military service. Existing law exempts that part of the full value of the residence that does not exceed $100,000, or $150,000, if the veterans household income does not exceed $40,000, adjusted for inflation, as specified.
This bill would instead exempt the full value of the principal place of residence of a veteran or veterans spouse. The bill would also define the term blind in both eyes to mean that the veteran is a blind person, as defined in a specific statute. The bill would also specify that a totally disabled veteran includes a veteran so severely disabled as to be unable to move without the aid of an assistive device. The bill would make other technical and conforming changes to the disabled veterans property tax exemption.
By changing the manner in which local tax officials administer the disabled veterans property tax exemption, this bill would impose a state-mandated local program.
Section 2229 of the Revenue and Taxation Code requires the Legislature to reimburse local agencies annually for certain property tax revenues lost as a result of any exemption or classification of property for purposes of ad valorem property taxation.
This bill would provide that, notwithstanding Section 2229 of the Revenue and Taxation Code, no appropriation is made and the state shall not reimburse local agencies for property tax revenues lost by them pursuant to the bill.
The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.
This bill would provide that, if the Commission on State Mandates determines that the bill contains costs mandated by the state, reimbursement for those costs shall be made pursuant to these statutory provisions.
This bill would take effect immediately as a tax levy.
The Personal Income Tax Law imposes taxes upon taxable income at specified rates. Proposition 30, known as the Schools and Local Public Safety Protection Act of 2012, which was approved by the voters at the November 6, 2012, statewide general election, provides the tax rates applicable to specified amounts of taxable income that is over $250,000 for taxable years beginning on or after January 1, 2012, and before January 1, 2019.
This bill would state the intent of the Legislature, for taxable years beginning on or after January 1, 2019, to modify the tax rates applicable to taxable income under the Personal Income Tax Law.
The Personal Income Tax Law imposes taxes upon taxable income at specified rates. Proposition 30, known as the Schools and Local Public Safety Protection Act of 2012, which was approved by the voters at the November 6, 2012, statewide general election, provides the tax rates applicable to specified amounts of taxable income that is over $250,000 for taxable years beginning on or after January 1, 2012, and before January 1, 2019.
This bill would state the intent of the Legislature, for taxable years beginning on or after January 1, 2019, to modify the tax rates applicable to taxable income under the Personal Income Tax Law.
(a)Property that constitutes the principal place of residence of a veteran and that is owned by the veteran, the veterans spouse, or the veteran and the veterans spouse jointly, jointly is exempted from taxation on that part of the full value of the residence that does not exceed one million dollars ($1,000,000), as adjusted for the relevant assessment year as provided in subdivision (g), if the veteran is blind in both eyes, has lost the use of two or more limbs, or if the veteran is totally disabled as a result of injury or disease incurred in military service.
(b)(1)For purposes of this section, veteran means either of the following:
(A)A veteran as specified in subdivision (o) of Section 3 of Article XIII of the California Constitution, except for the limitation on the value of property owned by the veteran or the veterans spouse.
(B)A person who would qualify as a veteran pursuant to paragraph (1) except that he or she has, as a result of a service-connected injury or disease, as determined by the United States Department of Veterans Affairs, died while on active duty in military service.
(2)For purposes of this section, property is deemed to be the principal place of residence of a veteran, disabled as described in subdivision (a), who is confined to a hospital or other care facility, if that property would be that veterans principal place of residence were it not for his or her confinement to a hospital or other care facility, provided that the residence is not rented or leased to a third party. For the purposes of this paragraph, a family member that resides at the residence is not a third party.
(c)(1)Property that is owned by, and that constitutes the principal place of residence of, the unmarried surviving spouse of a deceased veteran is exempt from taxation on that part of the full value of the residence that does not exceed one million dollars ($1,000,000), as adjusted for the relevant assessment year as provided in subdivision (g), if the deceased veteran was blind in both eyes, had lost the use of two or more limbs, or was totally disabled, provided that either of the following conditions is met:
(A)The deceased veteran during his or her lifetime qualified for the exemption pursuant to subdivision (a), or would have qualified for the exemption under the laws effective on January 1, 1977, except that the veteran died prior to January 1, 1977.
(B)The veteran died from a disease that was service-connected, as determined by the United States Department of Veterans Affairs.
(2)Property that is owned by, and that constitutes the principal place of residence of, the unmarried surviving spouse of a veteran described in subparagraph (B) of paragraph (1) of subdivision (b) is exempt from taxation. taxation on that part of the full value of the residence that does not exceed one million dollars ($1,000,000), as adjusted for the relevant assessment year as provided in subdivision (g).
(3)Property is deemed to be the principal place of residence of the unmarried surviving spouse of a deceased veteran, who is confined to a hospital or other care facility, if that property would be the unmarried surviving spouses principal place of residence were it not for his or her confinement to a hospital or other care facility, provided that the residence is not rented or leased to a third party. For purposes of this paragraph, a family member who resides at the residence is not a third party.
(d)As used in this section, property that is owned by a veteran or property that is owned by the veterans unmarried surviving spouse includes all of the following:
(1)Property owned by the veteran with the veterans spouse as a joint tenancy, tenancy in common, or as community property.
(2)Property owned by the veteran or the veterans spouse as separate property.
(3)Property owned with one or more other persons to the extent of the interest owned by the veteran, the veterans spouse, or both the veteran and the veterans spouse.
(4)Property owned by the veterans unmarried surviving spouse with one or more other persons to the extent of the interest owned by the veterans unmarried surviving spouse.
(5)That portion of the property of a corporation that constitutes the principal place of residence of a veteran or a veterans unmarried surviving spouse when the veteran, the veterans spouse, or the veterans unmarried surviving spouse is a shareholder of the corporation and the rights of shareholding entitle one to the possession of property, legal title to which is owned by the corporation. The exemption provided by this paragraph shall be shown on the local roll and shall reduce the full value of the corporate property. Notwithstanding any law or articles of incorporation or bylaws of a corporation described in this paragraph, any reduction of property taxes paid by the corporation shall reflect an equal reduction in any charges by the corporation to the person who, by reason of qualifying for the exemption, made possible the reduction for the corporation.
(e)For purposes of this section, the following definitions shall apply:
(1)Being blind in both eyes means that the veteran is a blind person, as that term is defined in Section 19153 of the Welfare and Institutions Code as that section read on January 1, 2016.
(2)Lost the use of two or more limbs means that the limb has been amputated or its use has been lost by reason of ankylosis, progressive muscular dystrophies, or paralysis.
(3)Totally disabled means any of the following:
(A)The veteran has a disability which the United States Department of Veterans Affairs or the military service from which the veteran was discharged has rated at 100 percent.
(B)The veteran has disability compensation which the United States Department of Veterans Affairs or the military service from which the veteran was discharged has rated at 100 percent by reason of the veteran being unable to secure or follow a substantially gainful occupation.
(C)The veteran is so severely disabled as to be unable to move without the aid of an assistive device.
(f)An exemption granted to a claimant pursuant to this section shall be in lieu of the veterans exemption provided by subdivisions (o), (p), (q), and (r) of Section 3 of Article XIII of the California Constitution and any other real property tax exemption to which the claimant may be entitled. No other real property tax exemption may be granted to any other person with respect to the same residence for which an exemption has been granted pursuant to this section; provided, that if two or more veterans qualified pursuant to this section coown a property in which they reside, each is entitled to the exemption to the extent of his or her interest.
(g)Commencing on January 1, 2018, and for each assessment year thereafter, the exemption amounts set forth in subdivisions (a) and (c) shall be compounded annually by an inflation factor that is the annual percentage change, measured from February to February of the two previous assessment years, rounded to the nearest one-thousandth of 1 percent, in the California Consumer Price Index for all items, as determined by the Department of Industrial Relations.
(g)
(h)The amendments made to this section by Senate Bill 1183 of the 201516 Regular Session of the Legislature shall apply for property tax lien dates for the 201718 fiscal year and for each fiscal year thereafter.
SEC. 2.Notwithstanding Section 2229 of the Revenue and Taxation Code, no appropriation is made by this act and the state shall not reimburse any local agency for any property tax revenues lost by it pursuant to this act.
SEC. 3.If the Commission on State Mandates determines that this act contains costs mandated by the state, reimbursement to local agencies and school districts for those costs shall be made pursuant to Part 7 (commencing with Section 17500) of Division 4 of Title 2 of the Government Code.
SEC. 4.This act provides for a tax levy within the meaning of Article IV of the California Constitution and shall go into immediate effect.
(a)Property that constitutes the principal place of residence of a veteran, veteran and that is owned by the veteran, the veterans spouse, or the veteran and the veterans spouse jointly, is exempted from taxation if the veteran is blind in both eyes, has lost the use of two or more limbs, or if the veteran is totally disabled as a result of injury or disease incurred in military service.
(b)(1)For purposes of this section, veteran means either of the following:
(A)A veteran as specified in subdivision (o) of Section 3 of Article XIII of the California Constitution, except for the limitation on the value of property owned by the veteran or the veterans spouse.
(B)A person who would qualify as a veteran pursuant to paragraph (1) except that he or she has, as a result of a service-connected injury or disease, as determined by the United States Department of Veterans Affairs, died while on active duty in military service.
(2)For purposes of this section, property is deemed to be the principal place of residence of a veteran, disabled as described in subdivision (a), who is confined to a hospital or other care facility, if that property would be that veterans principal place of residence were it not for his or her confinement to a hospital or other care facility, provided that the residence is not rented or leased to a third party. For the purposes of this paragraph, a family member that resides at the residence is not a third party.
(c)(1)Property that is owned by, and that constitutes the principal place of residence of, the unmarried surviving spouse of a deceased veteran is exempt from taxation if the deceased veteran was blind in both eyes, had lost the use of two or more limbs, or was totally disabled, provided that either of the following conditions is met:
(A)The deceased veteran during his or her lifetime qualified for the exemption pursuant to subdivision (a), or would have qualified for the exemption under the laws effective on January 1, 1977, except that the veteran died prior to January 1, 1977.
(B)The veteran died from a disease that was service-connected, as determined by the United States Department of Veterans Affairs.
(2)Property that is owned by, and that constitutes the principal place of residence of, the unmarried surviving spouse of a veteran described in subparagraph (B) of paragraph (1) of subdivision (b) is exempt from taxation.
(3)Property is deemed to be the principal place of residence of the unmarried surviving spouse of a deceased veteran, who is confined to a hospital or other care facility, if that property would be the unmarried surviving spouses principal place of residence were it not for his or her confinement to a hospital or other care facility, provided that the residence is not rented or leased to a third party. For purposes of this paragraph, a family member who resides at the residence is not a third party.
(d)As used in this section, property that is owned by a veteran or property that is owned by the veterans unmarried surviving spouse includes all of the following:
(1)Property owned by the veteran with the veterans spouse as a joint tenancy, tenancy in common, or as community property.
(2)Property owned by the veteran or the veterans spouse as separate property.
(3)Property owned with one or more other persons to the extent of the interest owned by the veteran, the veterans spouse, or both the veteran and the veterans spouse.
(4)Property owned by the veterans unmarried surviving spouse with one or more other persons to the extent of the interest owned by the veterans unmarried surviving spouse.
(5)That portion of the property of a corporation that constitutes the principal place of residence of a veteran or a veterans unmarried surviving spouse when the veteran, the veterans spouse, or the veterans unmarried surviving spouse is a shareholder of the corporation and the rights of shareholding entitle one to the possession of property, legal title to which is owned by the corporation. The exemption provided by this paragraph shall be shown on the local roll and shall reduce the full value of the corporate property. Notwithstanding any law or articles of incorporation or bylaws of a corporation described in this paragraph, any reduction of property taxes paid by the corporation shall reflect an equal reduction in any charges by the corporation to the person who, by reason of qualifying for the exemption, made possible the reduction for the corporation.
(e)For purposes of this section, the following definitions shall apply:
(1)Being blind in both eyes means that the veteran is a blind person, as that term is defined in Section 19153 of the Welfare and Institutions Code as that section read on January 1, 2016.
(2)Lost the use of two or more limbs means that the limb has been amputated or its use has been lost by reason of ankylosis, progressive muscular dystrophies, or paralysis.
(3)Totally disabled means that the any of the following:
(A)The veteran has a disability which the United States Department of Veterans Affairs or the military service from which the veteran was discharged has rated at 100 percent, the veteran is so severely disabled as to be unable to move without the aid of an assistive device, or the veteran 100 percent.
(B)The veteran has rated the disability compensation which the United States Department of Veterans Affairs or the military service from which the veteran was discharged has rated at 100 percent by reason of the veteran being unable to secure or follow a substantially gainful occupation.
(C)The veteran is so severely disabled as to be unable to move without the aid of an assistive device.
(f)An exemption granted to a claimant pursuant to this section shall be in lieu of the veterans exemption provided by subdivisions (o), (p), (q), and (r) of Section 3 of Article XIII of the California Constitution and any other real property tax exemption to which the claimant may be entitled. No other real property tax exemption may be granted to any other person with respect to the same residence for which an exemption has been granted pursuant to this section; provided, that if two or more veterans qualified pursuant to this section coown a property in which they reside, each is entitled to the exemption to the extent of his or her interest.
(g)The amendments made to this section by the act adding this subdivision Senate Bill 1183 of the 201516 Regular Session of the Legislature shall apply for property tax lien dates for the 201718 fiscal year and for each fiscal year thereafter.
SEC. 2.Notwithstanding Section 2229 of the Revenue and Taxation Code, no appropriation is made by this act and the state shall not reimburse any local agency for any property tax revenues lost by it pursuant to this act.
SEC. 3.If the Commission on State Mandates determines that this act contains costs mandated by the state, reimbursement to local agencies and school districts for those costs shall be made pursuant to Part 7 (commencing with Section 17500) of Division 4 of Title 2 of the Government Code.
SEC. 4.This act provides for a tax levy within the meaning of Article IV of the California Constitution and shall go into immediate effect.
(a)Property that constitutes the principal place of residence of a veteran, that is owned by the veteran, the veterans spouse, or the veteran and the veterans spouse jointly, is exempted from taxation on that part of the full value of the residence that does not exceed one hundred thousand dollars ($100,000), as adjusted for the relevant assessment year as provided in subdivision (h), if the veteran is blind in both eyes, has lost the use of two or more limbs, or if the veteran is totally disabled as a result of injury or disease incurred in military service. The one hundred thousand dollar ($100,000) exemption shall be one hundred fifty thousand dollars ($150,000), as adjusted for the relevant assessment year as provided in subdivision (h), in the case of an eligible veteran whose household income does not exceed the amount of forty thousand dollars ($40,000), as adjusted for the relevant assessment year as provided in subdivision (g).
(b)(1)For purposes of this section, veteran means either of the following:
(A)A veteran as specified in subdivision (o) of Section 3 of Article XIII of the California Constitution without regard to any Constitution, except for the limitation contained therein on the value of property owned by the veteran or the veterans spouse.
(B)Any A person who would qualify as a veteran pursuant to paragraph (1) except that he or she has, as a result of a service-connected injury or disease, as determined by the United States Department of Veterans Affairs, died while on active duty in military service. The United States Department of Veterans Affairs shall determine whether an injury or disease is service connected.
(2)For purposes of this section, property is deemed to be the principal place of residence of a veteran, disabled as described in subdivision (a), who is confined to a hospital or other care facility, if that property would be that veterans principal place of residence were it not for his or her confinement to a hospital or other care facility, provided that the residence is not rented or leased to a third party. A For the purposes of this paragraph, a family member that resides at the residence is not considered to be a third party.
(c)(1)Property that is owned by, and that constitutes the principal place of residence of, the unmarried surviving spouse of a deceased veteran is exempt from taxation on that part of the full value of the residence that does not exceed one hundred thousand dollars ($100,000), as adjusted for the relevant assessment year as provided in subdivision (h), in the case of a if the deceased veteran who was blind in both eyes, had lost the use of two or more limbs, or was totally disabled disabled, provided that either of the following conditions is met:
(A)The deceased veteran during his or her lifetime qualified in all respects for the exemption pursuant to subdivision (a), or would have qualified for the exemption under the laws effective on January 1, 1977, except that the veteran died prior to January 1, 1977.
(B)The veteran died from a disease that was service connected service-connected, as determined by the United States Department of Veterans Affairs.
The one hundred thousand dollar ($100,000) exemption shall be one hundred fifty thousand dollars ($150,000), as adjusted for the relevant assessment year as provided in subdivision (h), in the case of an eligible unmarried surviving spouse whose household income does not exceed the amount of forty thousand dollars ($40,000), as adjusted for the relevant assessment year as provided in subdivision (g).
(2)Commencing with the 199495 fiscal year, property Property that is owned by, and that constitutes the principal place of residence of, the unmarried surviving spouse of a veteran as described in subparagraph (B) of paragraph (1) of subdivision (b) is exempt from taxation on that part of the full value of the residence that does not exceed one hundred thousand dollars ($100,000), as adjusted for the relevant assessment year as provided in subdivision (h). The one hundred thousand dollar ($100,000) exemption shall be one hundred fifty thousand dollars ($150,000), as adjusted for the relevant assessment year as provided in subdivision (h), in the case of an eligible unmarried surviving spouse whose household income does not exceed the amount of forty thousand dollars ($40,000), as adjusted for the relevant assessment year as provided in subdivision (g). taxation.
(3)Beginning with the 201213 fiscal year and for each fiscal year thereafter, property Property is deemed to be the principal place of residence of the unmarried surviving spouse of a deceased veteran, who is confined to a hospital or other care facility, if that property would be the unmarried surviving spouses principal place of residence were it not for his or her confinement to a hospital or other care facility, provided that the residence is not rented or leased to a third party. For purposes of this paragraph, a family member who resides at the residence is not considered to be a third party.
(d)As used in this section, property that is owned by a veteran or property that is owned by the veterans unmarried surviving spouse includes all of the following:
(1)Property owned by the veteran with the veterans spouse as a joint tenancy, tenancy in common, or as community property.
(2)Property owned by the veteran or the veterans spouse as separate property.
(3)Property owned with one or more other persons to the extent of the interest owned by the veteran, the veterans spouse, or both the veteran and the veterans spouse.
(4)Property owned by the veterans unmarried surviving spouse with one or more other persons to the extent of the interest owned by the veterans unmarried surviving spouse.
(5)So much of the That portion of the property of a corporation as that constitutes the principal place of residence of a veteran or a veterans unmarried surviving spouse when the veteran, or the veterans spouse, or the veterans unmarried surviving spouse is a shareholder of the corporation and the rights of shareholding entitle one to the possession of property, legal title to which is owned by the corporation. The exemption provided by this paragraph shall be shown on the local roll and shall reduce the full value of the corporate property. Notwithstanding any provision of law or articles of incorporation or bylaws of a corporation described in this paragraph, any reduction of property taxes paid by the corporation shall reflect an equal reduction in any charges by the corporation to the person who, by reason of qualifying for the exemption, made possible the reduction for the corporation.
(e)For purposes of this section, being the following definitions shall apply:
(1)Being blind in both eyes means having a visual acuity of 5/200 or less, or concentric contraction of the visual field to 5 degrees or less; losing eyes means that the veteran is a blind person, as that term is defined in Section 19153 of the Welfare and Institutions Code as that section read on January 1, 2016.
(2)Lost the use of a limb two or more limbs means that the limb has been amputated or its use has been lost by reason of ankylosis, progressive muscular dystrophies, or paralysis; and being totally disabled paralysis.
(3)Totally disabled means that the veteran has a disability which the United States Department of Veterans Affairs or the military service from which the veteran was discharged has rated the disability at 100 percent or percent, the veteran is so severely disabled as to be unable to move without the aid of an assistive device, or the veteran has rated the disability compensation at 100 percent by reason of being unable to secure or follow a substantially gainful occupation.
(f)An exemption granted to a claimant in accordance with the provisions of pursuant to this section shall be in lieu of the veterans exemption provided by subdivisions (o), (p), (q), and (r) of Section 3 of Article XIII of the California Constitution and any other real property tax exemption to which the claimant may be entitled. No other real property tax exemption may be granted to any other person with respect to the same residence for which an exemption has been granted under the provisions of pursuant to this section; provided, that if two or more veterans qualified pursuant to this section coown a property in which they reside, each is entitled to the exemption to the extent of his or her interest.
(g)Commencing on January 1, 2002, and for each assessment year thereafter, the household income limit shall be compounded annually by an inflation factor that is the annual percentage change, measured from February to February of the two previous assessment years, rounded to the nearest one-thousandth of 1 percent, in the California Consumer Price Index for all items, as determined by the California Department of Industrial Relations.
(h)Commencing on January 1, 2006, and for each assessment year thereafter, the exemption amounts set forth in subdivisions (a) and (c) shall be compounded annually by an inflation factor that is the annual percentage change, measured from February to February of the two previous assessment years, rounded to the nearest one-thousandth of 1 percent, in the California Consumer Price Index for all items, as determined by the California Department of Industrial Relations.
(g)The amendments made to this section by the act adding this subdivision shall apply for property tax lien dates for the 201718 fiscal year and for each fiscal year thereafter.
SEC. 2.Notwithstanding Section 2229 of the Revenue and Taxation Code, no appropriation is made by this act and the state shall not reimburse any local agency for any property tax revenues lost by it pursuant to this act.
SEC. 3.If the Commission on State Mandates determines that this act contains costs mandated by the state, reimbursement to local agencies and school districts for those costs shall be made pursuant to Part 7 (commencing with Section 17500) of Division 4 of Title 2 of the Government Code.
SEC. 4.This act provides for a tax levy within the meaning of Article IV of the Constitution and shall go into immediate effect.
SECTION 1.It is the intent of the Legislature, for taxable years beginning on or after January 1, 2019, to modify the tax rates applicable to taxable income under the Personal Income Tax Law.
It is the intent of the Legislature, for taxable years beginning on or after January 1, 2019, to modify the tax rates applicable to taxable income under the Personal Income Tax Law.
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Date
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Status
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|---|---|
| Feb 18, 2016 | Introduced. Read first time. To Com. on RLS. for assignment. To print. |
| Feb 19, 2016 | From printer. May be acted upon on or after March 20. |
| Mar 3, 2016 | Referred to Com. on RLS. |
| Mar 28, 2016 | From committee with author's amendments. Read second time and amended. Re-referred to Com. on RLS. |
| Mar 31, 2016 | Re-referred to Coms. on V.A. and GOV. & F. |
| Apr 5, 2016 | Set for hearing April 12. |
| Apr 13, 2016 | From committee: Do pass and re-refer to Com. on GOV. & F. (Ayes 5. Noes 0. Page 3524.) (April 12). Re-referred to Com. on GOV. & F. |
| Apr 13, 2016 | From committee: Do pass and re-refer to Com. on GOV. & F. (Ayes 5. Noes 0.) (April 12). Re-referred to Com. on GOV. & F. |
| May 3, 2016 | From committee: Do pass as amended and re-refer to Com. on APPR. (Ayes 7. Noes 0. Page 3698.) (April 27). |
| May 3, 2016 | From committee: Do pass as amended and re-refer to Com. on APPR. (Ayes 7. Noes 0.) (April 27). |
| May 4, 2016 | Read second time and amended. Re-referred to Com. on APPR. |
| May 6, 2016 | Set for hearing May 16. |
| May 10, 2016 | From committee with author's amendments. Read second time and amended. Re-referred to Com. on APPR. |
| May 16, 2016 | May 16 hearing: Placed on APPR. suspense file. (Ayes 7. Noes 0.) |
| May 20, 2016 | Set for hearing May 27. |
| May 27, 2016 | May 27 hearing: Held in committee and under submission. |
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Date
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Description
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Location
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Votes
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|---|---|---|---|---|
| May 16, 2016 | Placed on suspense file | Senate Standing Committee on Appropriations |
Passed |
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| Apr 27, 2016 | Do pass as amended, but first amend, and re-refer to the Committee on [Appropriations] | Senate Standing Committee on Governance and Finance |
Passed |
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| Apr 12, 2016 | Do pass, but first be re-referred to the Committee on [Governance and Finance] | Senate Standing Committee on Veterans Affairs |
Passed |
This list shows positions taken on this bill by organizations on the date displayed, which is linked to the original source.
Positions by individuals are not included.
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Organization
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Position
|
Date
|
|---|---|---|
| American G. I. Forum of California | ** Support | Apr 12, 2016 |
| American Legion- Department of California | * Support | Apr 12, 2016 |
| American Veterans | * Support | Apr 12, 2016 |
| AMVETS-Department of California | * Support | Apr 12, 2016 |
| California Association of County Veteran Service Officers | ** Support | Apr 12, 2016 |
| California State Commanders Service Council | ** Support | Apr 12, 2016 |
| California Tax Reform Association | * Against | Apr 27, 2016 |
| Committee, 2016) | ** Support | Apr 12, 2016 |
| Howard Jarvis Taxpayers Association | ** Support | Apr 12, 2016 |
| income. | ** Support | Apr 12, 2016 |
| of a disabled veteran and his | ** Support | Apr 12, 2016 |
| POSITIONS | ** Support | Apr 12, 2016 |
| PRIOR LEGISLATION | ** Support | Apr 12, 2016 |
| Related | ** Support | Apr 12, 2016 |
| See Committee Comments | ** Against | Apr 12, 2016 |
| Sponsor: Paralyzed Veterans of America, Cal-Diego Chapter. | ** Support | Apr 12, 2016 |
| Support: See Committee Comments | ** Support | Apr 12, 2016 |
| The American Legion Department California | * Support | Apr 12, 2016 |
| totally disabled veteran, as defined, or his | ** Support | Apr 12, 2016 |
| United States Army | * Support | Apr 27, 2016 |
| VFW-Department of California | ** Support | Apr 12, 2016 |
| Vietnam Veterans Of America, California State Council | ** Support | Apr 12, 2016 |
SENATE COMMITTEE ON
Senator Ricardo Lara, Chair
2015 - 2016 Regular Session
SB 1183 (Bates) - Property taxation: exemptions: disabled veterans
Version: | Policy Vote: |
Urgency: | Mandate: |
Hearing Date: | Consultant: |
This bill meets the criteria for referral to the Suspense File.
Bill Summary:
SB 1183 would (1) exempt from property tax the home of any person eligible for the disabled veterans’ exemption, with a $1 million cap in assessed value that would be adjusted annually for inflation, and (2) expand eligibility for the exemption.
Fiscal Impact:
The Board of Equalization (BOE) indicates that the bill would result in annual property tax revenue losses of $66 million. Reductions in local property tax revenues, in turn, increase General Fund Proposition 98 spending by up to roughly 50 percent (the exact amount depends on the specific amount of the annual Proposition 98 guarantee, which in turns depends upon a variety of economic, demographic and budgetary factors). Additionally, the bill could result in unknown, but likely minor, costs to reimburse local governments related to changes in property tax administration.
Background:
Under the California Constitution, all property is taxable unless explicitly exempted. The Constitution limits the maximum amount of any ad valorem tax on real property at 1 percent of full cash value, plus any locally-authorized bonded indebtedness. Assessors reappraise property whenever it is purchased, newly constructed, or when ownership changes.
The Constitution permits the Legislature to partially or wholly exempt from property tax the value of a disabled veteran’s principal place of residence if the veteran has lost one or more limbs, is totally blind, or is totally disabled, as a result of a service-connected injury. This is known as the “disabled veterans’ exemption.” The Constitution provides that disabled veteran taxpayers, or unmarried surviving spouses of persons who die while on active duty, must apply for the exemption instead of, but not in combination with, other real property exemptions. BOE indicates that the number of taxpayers claiming the disabled veterans’ exemption has increased by 344 percent between 1990 and 2015. Unlike the homeowners’ property tax exemption, the State does not backfill local property tax revenue losses resulting from taxpayers applying the disabled veterans’ exemption.
State law implementing the exemption doesn’t fully exclude property value; instead, it enacts a partial exemption of $100,000 for disabled veteran taxpayers with household income of more than $40,000, or $150,000 for income lower than that amount, with each threshold adjusted for inflation (as measured by the California Consumer Price Index). The current inflation adjusted value (for 2016-17) is $127,510 for disabled veterans with income of more than $57,258, and $191,266 for those with income less than that amount.
Additionally, current law defines “blind in both eyes” to mean having a visual acuity of less than 5/200, or concentric contraction of the visual field to five degrees or less, both of which have a United States Department of Veterans’ Affairs rating of 100 percent.
Proposed Law:
This bill would broaden the disabled veterans’ exemption from property tax in three ways. Specifically, it would (1) increase the exemption amount for the home of any person qualified to receive the disabled veterans' exemption to up to $1 million adjusted annually for inflation, (2) revise the definition for “blind in both eyes” to delete the current one, and instead use the definition of “blind person” in Welfare and Institutions Code §19153, and (3) add an additional “totally disabled” condition which is “the veteran is so severely disabled as to be unable to move without the aid of an assistive device.” The bill would take effect for lien dates for the 2017-18 fiscal year.
Related Legislation:
AB 1556 (Mathis, 2016) is similar to this bill. It is currently on the suspense file in the Assembly Revenue and Taxation Committee.
Staff Comments:
To develop the revenue estimate, BOE used 2015-16 data (the most recent period for which all necessary information is available). Specifically, BOE staff estimated the number of disabled veteran-owned homes currently receiving the exemption to be 37,653: 33,196 at the basic level and 4,457 at the lower income level. Based on a survey of several counties, BOE estimates that this bill would not impact 21 percent of homes receiving the basic exemption (6,971 homes), or 24 percent of homes receiving the lower income exemption (1,070 homes). These homes are already fully exempt because they have an assessed value below the requisite levels in existing law. Thus, BOE estimates that the bill would exempt 29,612 homes: 26,225 currently receiving the basic exemption, and 3,387 homes receiving the lower income exemption.
Using the average 2015-16 assessed value of $356,370, and the basic one percent property tax rate, BOE calculates that the bill would result in an annual property tax reduction of $66 million.
The BOE estimate of annual property tax revenue loss is understated. Due to data limitations, the estimate is based on the existing property tax law requirement of either a 100 percent disability compensation rating for unemployability or a 100 percent disability rating. The BOE revenue estimate does not account for newly eligible claimants under the proposed blindness definition or mobility definition.
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SENATE COMMITTEE ON GOVERNANCE AND FINANCE
Senator Robert M. Hertzberg, Chair
2015 - 2016 Regular
Bill No: | SB 1183 | Hearing Date: | 4/27/16 |
Author: | Bates | Tax Levy: | Yes |
Version: | 3/28/16 | Fiscal: | Yes |
Consultant: | Grinnell | ||
Property taxation: exemptions: disabled veterans
Expands to a full exemption the current partial Disabled Veterans’ Property tax exemption; expands eligibility for the exemption.
Background
The California Constitution provides that all property is taxable unless explicitly exempted by the Constitution or federal law. The Constitution limits the maximum amount of any ad valorem tax on real property at 1% of full cash value, plus any locally-authorized bonded indebtedness. Assessors reappraise property whenever it is purchased, newly constructed, or when ownership changes.
The Constitution allows the Legislature to partially or wholly exempt from property tax the value of a disabled veteran’s principal place of residence if the veteran has lost one or more limbs, is totally blind, or is totally disabled, as a result of a service-connected injury. This is known as the “disabled veterans’ exemption.” The Constitution provides that disabled veteran taxpayers, or unmarried surviving spouses of persons who die while on active duty, must apply the exemption instead of, but not in combination with, other real property exemptions.
Unlike the homeowners’ exemption, the state does not backfill property tax revenue losses resulting from taxpayers applying the exemption. According to the Board of Equalization (BOE), the number of taxpayers claiming the exemption has increased from 8,483 to 37,653 between 1990 and 2015, an increase of 344%. San Diego (5,391), San Bernardino (3,732), and Sacramento (2,422) are the counties with the most taxpayers claiming the exemption.
State law implementing the Constitutional exemption doesn’t fully exclude the property value, instead enacting a partial exemption of $100,000 for disabled veteran taxpayers with household income of more than $40,000, or $150,000 for income lower than that amount, with each threshold adjusted for inflation by the Department of Industrial Relations using the California Consumer Price Index for all items. The current inflation adjusted value is $127,410 for disabled veterans with income of more than $57,258, and $191,266 for those with less than that amount.
Additionally, statute defines “blind in both eyes” to mean having a visual acuity of less than 5/200, or concentric contraction of the visual field to five degrees or less, both of which have a United States Department of Veterans’ Affairs rating of 100%. The author wants to expand the current partial exemption measured by income to a full exemption without regard to income, and expand the definition for blind in both eyes to allow the exemption for other forms of blindness.
Proposed Law
Senate Bill 1183 broadens the disabled veterans’ exemption from property tax in three ways. The bill:
- Enacts a full exemption from property tax for the principal place of residence qualifying disabled veterans,
- Revises the definition for “blind in both eyes” to delete the current one, and instead use the definition of “blind person” in Welfare and Institutions Code §19153,
- Qualifies as “totally disabled,” a veteran who “is so severely disabled as to be unable to move without the aid of an assistive device.”
The measure makes technical and conforming changes, and would take effect for lien dates for the 2017-18 fiscal year.
State Revenue Impact
According to BOE, SB 1183 results in potential annual property tax revenue losses of $65.9 million.
Comments
1. Purpose of the bill. According to the author, “Existing property tax exemptions for disabled veterans are well below California’s median home value of $458,500. In veteran-rich counties, such as Orange, for example, this gap grows even wider, with the median home cost at $647,000. Often, existing law only exempts a small portion of veterans’ home value, putting disabled veterans in jeopardy of losing their homes. California must expand statute to assist those veterans who have given so much to our state and country. 100% disabled veterans deserve to be protected from losing their homes because of the disabilities they have suffered protecting us. Additionally, military spouses should not be left with a tax burden that they cannot afford, upon their spouses’ deaths.”
2. No Income test. Generally, property tax exemptions don’t depend on the taxpayer’s income; however, the different disabled veterans exemption amounts were first enacted by the Legislature when it allowed a greater exemption ($15,000 at the time), for disabled veterans with income that qualified him or her for the Property Tax Postponement program (AB 955, Mangers, 1978). The Legislature maintained the distinction when it fixed the current exemption amounts (SB 320, Royce, 1989), and applied the inflation adjustment (SB 1362, Poochigian, 2000). SB 1183 would end this distinction by granting a full exemption for all taxpayers regardless of income. Increasing the disabled veterans’ exemption provides reduces taxes for those who have sacrificed greatly for the country, and would be easier for assessors to administer, as they would no longer have to verify the taxpayer’s income. However, SB 1183 would grant a full exemption to all qualifying taxpayers, thereby providing a potential benefit for individuals who have income sufficient to meet current tax obligations. The Committee may wish to consider whether the disabled veterans’ exemptions should be full or partial, and whether it should depend on the taxpayer’s income.
3. Expanded definitions. The Constitution allows the Legislature to implement the disabled veterans’ exemption to any veteran who has lost one or more limbs, is totally blind, or is totally disabled, as a result of a service-connected injury, or their surviving, unmarried spouse. SB 1183 incorporates a broader definition of blindness, and expands eligibility to include disabled veterans who are unable to move without the aid of an assistance device. The change in the blindness definition applies to conditions currently rated by USDVA at 70% disability, whereas current law applies to conditions rated at 100%. Additionally, because current law already qualifies disabled veterans who are 100% disabled according to USDVA, it’s unclear who would qualify under the measure’s expansion of eligibility to veterans who are unable to move without the aid of an assistive device.
4. Related legislation. SB 1183 is identical to AB 1556 (Mathis), which was recently heard by the Assembly Revenue and Taxation Committee, but referred to its suspense file. SB 1183’s change from a partial exemption conditioned on income to a full exemption is also in SB 1104 (Stone), which is currently set for the Committee’s May 11th hearing.
5. Mandate. The California Constitution requires the state to reimburse local governments for the costs of new or expanded state mandated local programs. Because SB 1183 changes how assessors apply the disabled veterans’ exemption, Legislative Counsel says that it imposes a new state mandate. The measure provides that the state shall not reimburse local agencies for property tax revenue losses, instead stating that should the Commission on State Mandates determine that the bill imposes a reimbursable mandate, reimbursement must be made pursuant to existing statutory provisions.
6. Technicals. BOE and Committee Staff recommend the following technical amendment to reflect the USDVA’s responsibility to rate disabilities:
- On page 6, line 4, strike out “the veteran is so severely;” strike out line 5; on line 6, replace, “device, or the or the veteran has” with “or;” and at the end of line 8, strike the period and insert “, or the veteran is so severely disabled as to be unable to move without the aid of an assistive device.”
7. Incoming! On April 12th, the Committee on Veteran’s Affairs approved SB 1183 by a vote of 5 to 0. The Committee on Governance and Finance is hearing the measure as the committee of second referral.
Support and Opposition
(4/21/16)
Support: Disabled Veterans of America, Cal-Diego Chapter (Sponsor); American G.I. Forum of California; Paralyzed Veterans of America, Cal-Diego Chapter; The American Legion – Department of California; The AMVETS – Department of California; The California Association of County Veterans Service Officers; The California State Commanders Veterans Council; The Military Officers Association of America, California Council of Chapters; The VFW – Department of California; The Vietnam Veterans of America – California State Council
Opposition: California Tax Reform Association (unless amended).
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SENATE COMMITTEE ON
Senator Jim Nielsen, Chair
2015 - 2016 Regular
Bill No: Hearing Date: 4/12/16
Author: | Bates | ||
Version: |
| ||
Urgency: | Fiscal: | ||
Consultant: | |||
Subject:
DESCRIPTION
Summary:
Exempts completely from property taxation the home of any person eligible for the “disabled veterans property tax exemption.”
Existing law:
- Authorizes the Legislature to exempt partially or fully from property tax, the home of a disabled veteran – or the veteran’s spouse, including an unmarried surviving spouse – if the veteran’s disabling injury incurred in military service; and the veteran is blind in both eyes; lost the use of two or more limbs; or is totally disabled.
[California Constitution, Article XIII, Section 4(a)]
- Applies also to the veteran’s spouse, including an unmarried surviving spouse, if the veteran has, as a result of a service-connected injury or disease, died while on active duty in military service.
- Does not apply if the home is receiving another real property exemption.
- Provides a partial exemption for eligible disabled veterans. (RTC Section 205.5)
- Defines a veteran for its purposes as a person who, among other things, is serving in or has served in and has been discharged under honorable conditions from service in the United States Army, Navy, Air Force, Marine Corps, or Coast Guard. (RTC Section 205.5)
This bill:
Provides a full exemption for the home of any person qualified to receive the disabled veterans' property tax exemption.
BACKGROUND
Disabled Veterans Property Tax Exemption
California provides qualified disabled veterans and their unmarried surviving spouses with a property tax exemption that applies to their home’s assessed value. Eligibility provisions require that the claimant demonstrate award of disability rating from the United States Department of Veterans Affairs (USDVA) that:
- Rates the veteran’s disability at 100%; or
- Rates the veteran’s disability compensation at 100% because the veteran is unable to secure and maintain gainful employment.
The law also allows surviving spouses to receive the exemption if the spouse's death was service-connected. To be eligible for the exemption, surviving spouses must receive a USDVA determination that the spouse’s death was service-connected. A USDVA determination is necessary for (1) active duty personnel deaths (i.e., the service person was not a “veteran”) and (2) veterans without a 100% rating when alive, but whose cause of death is deemed service-connected. Surviving spouses of veterans with a 100% disability rating during their lifetime continue to receive the exemption after the veteran’s death so long as they do not remarry.
The exemption amount depends upon the claimant’s income. According to the State Board of Equalization, Fiscal year 2016-17, the basic exemption adjusted for inflation will be $127,510. If the claimant’s income is less than $57,258, the exemption amount will be $191,266. In 1990, 8,483 disabled veterans' exemptions were provided to eligible homeowners. For 2015, there were 37,653 eligible homeowners. In the last 25 years, this is a 344% increase.
Qualification | Basic Exemption Amount | Lower Income Exemption Amount $40,000 adjusted for inflation $57,258 |
Disabled Veteran
Spouse of Military Personnel
| $100,000 adjusted for inflation $127,510 | $150,000 adjusted for inflation $191,266 |
Claims Granted: 37,653 | 33,196 | 4,457 |
Source: California State Board of Equalization, Legislative and Research Division, 2016 | ||
COMMENT
Committee Comments:
SB 1183 is virtually identical to AB 1556, introduced into the Assembly earlier this year. Due to the late amendment (3/28/2016) of SB 1183 into its current form, the measure’s likely supporters have not yet adopted positions on this measure; however, the list of support and opposition for AB 1556, according to the Assembly Revenue and Taxation Committee analysis (as of 3/31/2016) is as follows:
Support:
American G. I. Forum of California
AMVETS-Department of California
American Legion- Department of California
California Association of County Veteran Service Officers
California State Commanders Service Council
Howard Jarvis Taxpayers Association
VFW-Department of California
Vietnam Veterans of America, California State Council
Opposition: None on file
Related/Prior Legislation:
AB 1556 (Mathis/Weber, pending Assembly Revenue and Taxation Committee, 2016) exempts fully from property tax the home of a totally disabled veteran, as defined, or his/her unmarried surviving spouse, by repealing the limitations imposed on the assessed value of the disabled veteran's principal residence eligible for the exemption and the amount of his/her household income.
AB 2568 (Houston, held, Senate Revenue and Taxation Committee, 2008) Exempts fully from property tax the personal residence of a disabled veteran and his/her spouse.
SB 1485 (Jeffries, held Senate Appropriations Committee, 2007) Increases the property tax exemption currently provided to disabled veterans and their surviving spouses beginning in 2008-09. Specifically, 1) increases the exemptions for households with income of up to $48,825, from $161,420 to $250,000; 2) increases the exemption for households with incomes over $48,825, from $107,613 to $200,000; 3) provides that future exemption amounts will continue to be indexed for inflation.
SB 1005 (Florez, held Senate Revenue and Taxation Committee, 2005) fully exempts from property taxation the principal residence of the unmarried surviving spouse of a veteran who died as a result of a service-connected disease or injury. Also, fully exempts from property taxation the principal residence of the unmarried surviving spouse of a qualified public safety officer who died in the line of duty.
SB 764 (Morrow, Chapter 544, Statutes of 2004), for assessment years beginning on and after January 1, 2006, increases these exemption amounts by a specified inflation factor. Also imposes a state-mandated local program by requiring local tax officials to annually adjust these increased exemption amounts in accordance with a specified inflation factor.
POSITIONS
Sponsor: Paralyzed Veterans of America, Cal-Diego Chapter.
Support: See Committee Comments
Oppose: See Committee Comments
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Discussed in Hearing
12MIN
Senate Standing Committee on Governance and Finance
Senate Standing Committee on Veterans Affairs
Bill Author
