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SB-1362 Disabled veterans’ exemption.(1999-2000)

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SB1362:v92#DOCUMENT

Senate Bill No. 1362
CHAPTER 1085

An act to amend and repeal Section 205.5 of, to add Sections 276.1, 276.2, and 276.3 to, and to repeal and add Section 276 of, the Revenue and Taxation Code, relating to taxation, to take effect immediately, tax levy.

[ Filed with Secretary of State  September 30, 2000. Approved by Governor  September 30, 2000. ]

LEGISLATIVE COUNSEL'S DIGEST


SB 1362, Poochigian. Disabled veterans’ exemption.
Existing property tax law provides, pursuant to the authorization of the California Constitution, for the exemption from property taxation of the home of a disabled veteran, or a veteran’s spouse in the case in which the veteran has, as a result of a service-connected disease or injury, died while on active duty in military service. Existing property tax law specifies an exemption amount of $40,000 and increases that amount to $100,000 in the case in which the disabled veteran is completely disabled. Existing law increases these amounts to $60,000 and $150,000, respectively, if the exemption claimant’s income does not exceed an amount stated in a specified statute. Existing law also repeals the higher exemption amounts with regard to totally disabled veterans as of January 1, 2001.
This bill would, for purposes of an income threshold, substitute an income level of $40,000 for the amount specified by a certain statute. This bill would provide for the annual adjustment of that income level for inflation for the 2002 assessment year and each assessment year thereafter. This bill would also require the exemption to be in the amount of $100,000, or in the amount of $150,000 if the claimant’s income does not exceed the adjusted income threshold.
Existing property tax law generally requires an affidavit for the disabled veterans’ exemption to be filed no later than the February 15 following the relevant lien date. It also provides for partial exemptions, each applicable as provided and contingent upon an affidavit being no later than the December 10 following the lien date, of the lesser of either certain amounts of assessed value or 80% of the full value of the real property to which the exemption is to be applied.
This bill would, subject to limitations periods, as set forth in a specified statute, revise and recast current partial exemption provisions to require the cancellation or refund of either 90% or 85% of those taxes, including any interest and penalties, levied on that portion of the property’s assessed value that would have been exempted under a timely exemption claim, depending upon whether a claim is filed either within a specified period ending with the December 10 following the lien date, or after that period. This bill would also make technical, nonsubstantive changes to provisions regarding the application of the exemption to the 2nd installment of taxes on the secured property tax roll.
This bill would, if the exemption would have been available but for the claimant not having received a disability rating from the United States Department of Veterans Affairs, require the refund or cancellation of taxes on that portion of the assessed value of the property that would have been exempt under a timely and appropriate affidavit, provided a claimant meets certain filing requirements.
This bill would, in the case in which the subject real property was only acquired after the property tax lien date, also require the cancellation or refund of those taxes levied on the full exemption amount or a prorated amount, provided an appropriate affidavit is filed on or before the next property tax lien date.
This bill would also provide for the termination of a disabled veterans’ exemption upon that subject property being transferred to a 3rd party that is not eligible for that exemption.
This bill would incorporate additional changes in Section 205.5 of the Revenue and Taxation Code, proposed by SB 2195, to be operative only if SB 2195 and this bill are both chaptered and become effective on or before January 1, 2001, and this bill is chaptered last.
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.
This bill would take effect immediately as a tax levy.

The people of the State of California do enact as follows:


SECTION 1.

 Section 205.5 of the Revenue and Taxation Code, as amended by Section 17 of Chapter 1087 of the Statutes of 1996, is amended to read:

205.5.
 (a) Property that is owned by, and that constitutes the principal place of residence of, a veteran is exempted from taxation on that part of the full value of the residence that does not exceed forty thousand dollars ($40,000), if the veteran is blind in both eyes, has lost the use of two or more limbs, or is totally disabled as a result of injury or disease incurred in military service. The exemption shall be sixty thousand dollars ($60,000) 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 fiscal year as provided in subdivision (g).
(b) For purposes of this section, “veteran” means either of the following:
(1) A veteran as specified in subdivision (o) of Section 3 of Article XIII of the Constitution without regard to any residency requirement or limitation contained therein on the value of property owned by the veteran or the veteran’s spouse.
(2) Any 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 a disease that is service related as determined by the United States Department of Veterans Affairs, died while on active duty in military service.
(c) (1) Property that is owned by, and that constitutes the principal place of residence of, the unmarried surviving spouse of a veteran is exempt from taxation on that part of the full value of the residence that does not exceed forty thousand dollars ($40,000) 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 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.
The exemption shall be sixty thousand dollars ($60,000) 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) Property that is owned by, and that constitutes the principal place of residence of, the unmarried surviving spouse of a veteran as described in paragraph (2) of subdivision (b) is exempt from taxation on that part of the full value of the residence that does not exceed forty thousand dollars ($40,000). The forty-thousand-dollar ($40,000) exemption shall be sixty thousand dollars ($60,000), 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).
(d) As used in this section, “property that is owned by a veteran” or “property that is owned by the veteran’s unmarried surviving spouse” includes all of the following:
(1) Property owned by the veteran with the veteran’s spouse as a joint tenancy, tenancy in common, or as community property.
(2) Property owned by the veteran or the veteran’s spouse as separate property.
(3) Property owned with one or more other persons to the extent of the interest owned by the veteran, the veteran’s spouse, or both the veteran and the veteran’s spouse.
(4) Property owned by the veteran’s unmarried surviving spouse with one or more other persons to the extent of the interest owned by the veteran’s unmarried surviving spouse.
(5) So much of the property of a corporation as constitutes the principal place of residence of a veteran or a veteran’s unmarried surviving spouse when the veteran, or the veteran’s spouse, or the veteran’s 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 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 the use of a limb 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 means that 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 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 this section shall be in lieu of the veteran’s exemption provided by subdivisions (o), (p), (q), and (r) of Section 3 of Article XIII of the 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 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) To determine, for taxes that attach as a lien in 2002 and in each calendar year thereafter, whether the lower or higher exemption amount governs the amount of an exemption under this section, each household income amount applied under subdivision (a) or (c) for taxes that attached a lien during the immediately preceding calendar year shall be adjusted by an inflation factor that is the percentage change, rounded to the nearest one-thousandth of 1 percent, from October of the prior fiscal year to October of the current fiscal year, in the California Consumer Price Index for all items, as determined by the California Department of Industrial Relations.
(h) This section shall become operative on January 1, 2001.

SEC. 1.5.

 Section 205.5 of the Revenue and Taxation Code, as amended by Section 16.5 of Chapter 1087 of the Statutes of 1996, is amended to read:

205.5.
 (a) Property that is owned by, and that constitutes the principal place of residence of, a veteran is exempted from taxation on that part of the full value of the residence that does not exceed one hundred thousand dollars ($100,000), 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), 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) For purposes of this section, “veteran” means either of the following:
(1) A veteran as specified in subdivision (o) of Section 3 of Article XIII of the Constitution without regard to any limitation contained therein on the value of property owned by the veteran or the veteran’s spouse.
(2) Any 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 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.
(c) (1) Property that is owned by, and that constitutes the principal place of residence of, the unmarried surviving spouse of a 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), in the case of a veteran who 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 in all respects for the exemption 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.
The one-hundred-thousand-dollar ($100,000) exemption shall be one hundred fifty thousand dollars ($150,000), 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 1994–95 fiscal year, property that is owned by, and that constitutes the principal place of residence of, the unmarried surviving spouse of a veteran as described in paragraph (2) 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). The one-hundred-thousand-dollar ($100,000) exemption shall be one hundred fifty thousand dollars ($150,000), 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).
(d) As used in this section, “property that is owned by a veteran” or “property that is owned by the veteran’s unmarried surviving spouse” includes all of the following:
(1) Property owned by the veteran with the veteran’s spouse as a joint tenancy, tenancy in common or as community property.
(2) Property owned by the veteran or the veteran’s spouse as separate property.
(3) Property owned with one or more other persons to the extent of the interest owned by the veteran, the veteran’s spouse, or both the veteran and the veteran’s spouse.
(4) Property owned by the veteran’s unmarried surviving spouse with one or more other persons to the extent of the interest owned by the veteran’s unmarried surviving spouse.
(5) So much of the property of a corporation as constitutes the principal place of residence of a veteran or a veteran’s unmarried surviving spouse when the veteran, or the veteran’s spouse, or the veteran’s 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 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 the use of a limb 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 means that 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 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 this section shall be in lieu of the veteran’s exemption provided by subdivisions (o), (p), (q), and (r) of Section 3 of Article XIII of the 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 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) To determine, for taxes that attach as a lien in 2002 and in each calendar year thereafter, whether the lower or higher exemption amount governs the amount of an exemption under this section, each household income amount applied under subdivision (a) or (c) for taxes that attached as a lien during the immediately preceding calendar year shall be adjusted by an inflation factor that is the percentage change, rounded to the nearest one-thousandth of 1 percent, from October of the prior fiscal year to October of the current fiscal year, in the California Consumer Price Index for all items, as determined by the California Department of Industrial Relations.

SEC. 2.

 Section 205.5 of the Revenue and Taxation Code, as amended by Section 17 of Chapter 1087 of the Statutes of 1996, is repealed.

SEC. 3.

 Section 276 of the Revenue and Taxation Code is repealed.

SEC. 4.

 Section 276 is added to the Revenue and Taxation Code, to read:

276.
 (a) Except as otherwise provided by subdivision (b), for property for which the disabled veterans’ exemption described in Section 205.5 was available, but for which a timely claim was not filed, a partial exemption shall be applied in accordance with whichever of the following is applicable:
(1) Ninety percent of any tax, including any interest or penalty thereon, levied upon that portion of the assessed value of the property that would have been exempt under a timely and appropriate claim shall be canceled or refunded, provided that an appropriate claim for exemption is filed after 5 p.m. on February 15 of the calendar year in which the fiscal year begins but on or before the following December 10.
(2) If an appropriate claim for exemption is filed after the time period specified in paragraph (1), 85 percent of that portion of any tax, including any interest or penalty thereon, that was levied upon that portion of the assessed value of the property that would have been exempt under a timely and appropriate claim, shall be canceled or refunded. Cancellations or refunds made or issued under this paragraph are subject to the limitations periods on refunds as described in Section 5096.
(b) If a late filed claim for the sixty-thousand-dollar ($60,000) exemption is filed in conjunction with a timely filed claim for the forty-thousand-dollar ($40,000) exemption, or if a late filed claim for the one-hundred-fifty-thousand dollar ($150,000) exemption is filed in conjunction with a timely filed claim for the one-hundred-thousand-dollar ($100,000) exemption, the amount of any exemption allowed under the late-filed claim under subdivision (a) shall be determined on the basis of that portion of the exemption amount, otherwise available under subdivision (a), that exceeds forty thousand dollars ($40,000) or one hundred thousand dollars ($100,000), as applicable.
(c) For those claims filed pursuant to subdivision (a) after November 15, the exemption under that subdivision may be applied to the second installment. If that exemption is so applied, the first installment is still delinquent on December 10, and is subject to delinquent penalties provided for in this division if that installment is not timely paid. A refund shall be made to the taxpayer upon a claim submitted to the auditor if the exemption is applied to the second installment and either of the following is true:
(1) Both installments are paid on or before December 10.
(2) The reduction in taxes resulting from the exemption exceeds the amount of taxes due on the second installment.

SEC. 5.

 Section 276.1 is added to the Revenue and Taxation Code, to read:

276.1.
 For property for which the disabled veterans’ exemption described in Section 205.5 would have been available but for the taxpayer’s failure to receive a timely disability rating from the United States Department of Veterans Affairs (USDVA), there shall be canceled or refunded the amount of any taxes, including any interest and penalties thereon, levied on that portion of the assessed value of the property that would have been exempt under a timely and appropriate claim, provided that the claimant meets both of the following conditions:
(a) The claimant had an application pending with the USDVA for a disability rating and subsequently received a rating that qualifies the claimant for the disabled veterans’ exemption described in Section 205.5.
(b) The claimant subsequently files an appropriate claim for the disabled veterans’ exemption described in Section 205.5 on or before the next following lien date.

SEC. 6.

 Section 276.2 is added to the Revenue and Taxation Code, to read:

276.2.
 If the disabled veterans’ exemption as described in Section 205.5 would have been available for a property, but for that property being acquired by a person eligible for the exemption only after the lien date, and an appropriate application for that exemption is filed on or before the lien date in the calendar year next following the calendar year in which the property was acquired, there shall be canceled or refunded the amount of any taxes, including any interest and penalties thereon, levied on that portion of the assessed value of the property that would have been exempt under a timely and appropriate application.

SEC. 7.

 Section 276.3 is added to the Revenue and Taxation Code, to read:

276.3.
 In the event that property receiving a disabled veterans’ exemption as described in Section 205.5 is sold or otherwise transferred to a person that is not eligible for that exemption, the exemption shall cease to apply on the date of that sale or transfer.

SEC. 8.

 Sections 1.5 and 2 of this bill incorporate amendments to Section 205.5 of the Revenue and Taxation Code proposed by both this bill and SB 2195. Sections 1.5 and 2 of this bill shall only become operative if (1) both bills are enacted and become effective on or before January 1, 2001, (2) each bill amends Section 205.5 of the Revenue and Taxation Code, and (3) this bill is enacted after SB 2195, in which case Section 1 of this bill shall not become operative.

SEC. 9.

 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. 10.

 This act provides for a tax levy within the meaning of Article IV of the Constitution and shall go into immediate effect.