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SB-1393 Property taxation: disabled veterans’ exemption.(1999-2000)

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SB1393:v97#DOCUMENT

Amended  IN  Senate  March 15, 2000
Amended  IN  Senate  March 27, 2000

CALIFORNIA LEGISLATURE— 1999–2000 REGULAR SESSION

Senate Bill
No. 1393

Introduced  by  Senator Leslie
 (Coauthor(s): Senator Johannessen, Monteith, Morrow)
 (Coauthor(s): Assembly Member Ashburn, Bates, Bock, Campbell, Cox, Cunneen, Dickerson, Frusetta, House, Leach, Maldonado, Oller, Robert Pacheco, Pescetti, Runner, Zettel)

January 25, 2000

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.


LEGISLATIVE COUNSEL'S DIGEST


SB 1393, as amended, Leslie. Property taxation: 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 eliminate this repeal and 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.
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, 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, allow an exemption in the amount that would have been allowed had a proper affidavit for that exemption been filed on the effective date of that disability rating. This bill would condition this exemption upon the subsequent filing of an affidavit.
This bill would also 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 application, depending upon whether an affidavit is filed either before, or on or after, the December 10 following the lien date.
This bill would, in the case in which the subject real property was only acquired after the lien date, also require the cancellation or refund of those taxes levied on either the full exemption amount or a prorated amount, depending upon whether an affidavit is filed either prior to the fiscal year beginning in the same year as the lien date, or after the beginning of that fiscal year.
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.
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.
Vote: MAJORITY   Appropriation: NO   Fiscal Committee: YES   Local Program: YES  

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 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 forty thousand dollars ($40,000), if the veteran is blind in both eyes or has lost the use of two or more limbs as a result of injury or disease incurred in military service or that does not exceed one hundred thousand dollars ($100,000), if the veteran is totally disabled as a result of injury or disease incurred in military service. The forty thousand dollar ($40,000) exemption shall be sixty thousand dollars ($60,000), and 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 current 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 forty thousand dollars ($40,000), in the case of a veteran who was blind in both eyes or had lost the use of two or more limbs, or one hundred thousand dollars ($100,000), in the case of a veteran who 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 forty thousand dollar ($40,000) exemption shall be sixty thousand dollars ($60,000), and 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 current 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 current 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; 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, or the lower or higher pair of exemption amounts, 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.
Section 276 of the Revenue and Taxation Code is repealed.
276.(a)A claimant for the disabled veterans’ property tax exemption may qualify for a partial exemption if the claimant fails to file the required affidavit with the assessor by 5 p.m. on February 15 of the calendar year in which the fiscal year begins, but files the claim on or before the following December 10. Late-filed claims for the forty thousand dollar ($40,000) exemption provided in Section 205.5 shall receive the lesser of thirty-two thousand dollars ($32,000) or 80 percent of the full value of the dwelling. Late-filed claims for the sixty thousand dollar ($60,000) exemption provided in Section 205.5, when filed in conjunction with late-filed claims for the forty thousand dollar ($40,000) exemption, shall receive the lesser of forty-eight thousand dollars ($48,000) or 80 percent of the full value of the dwelling. Late-filed claims for the sixty thousand dollar ($60,000) exemption, when filed in conjunction with timely filed claims for the forty thousand dollar ($40,000) exemption, shall receive the lesser of fifty-six thousand dollars ($56,000) or forty thousand dollars ($40,000) plus 80 percent of the full value of the dwelling over forty thousand dollars ($40,000). Late-filed claims for the one hundred thousand dollar ($100,000) exemption provided in Section 205.5 shall receive the lesser of eighty thousand dollars ($80,000) or 80 percent of the full value of the dwelling. Late-filed claims for the one hundred fifty thousand dollar ($150,000) exemption provided in Section 205.5, when filed in conjunction with late-filed claims for the one hundred thousand dollar ($100,000) exemption, shall receive the lesser of one hundred twenty thousand dollars ($120,000) or 80 percent of the full value of the dwelling. Commencing with the 1990–91 assessment year, late-filed claims for the one hundred fifty thousand dollar ($150,000) exemption, when filed in conjunction with timely filed claims for the one hundred thousand dollar ($100,000) exemption, shall receive the lesser of one hundred forty thousand dollars ($140,000) or one hundred thousand dollars ($100,000) plus 80 percent of the full value of the dwelling over one hundred thousand dollars ($100,000).

(b)On those claims filed pursuant to subdivision (a) after November 15, this exemption may be applied to the second installment, and if applied to the second installment, the first installment will still become delinquent on December 10, and the delinquent penalty provided for in this division will attach if the tax amount due is not paid.

If this exemption is applied to the second installment and if both installments are paid on or before December 10, or if the reduction in taxes from this exemption exceeds the amount of taxes due on the second installment, a refund shall be made to the taxpayer upon a claim submitted by the taxpayer to the auditor.

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 application 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 application shall be canceled or refunded, provided that an appropriate application for exemption is filed prior to December 10 of the calendar year in which a timely application was not filed.
(2) If an appropriate application for exemption is filed on or after the date specified in paragraph (1), 85 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 application shall be canceled or refunded. A cancellation or refund may be granted under this paragraph only with respect to those taxes that attached as a lien on the lien date in 1999 or a later calendar year.
(b) If a late-filed claim for the sixty thousand dollar ($60,000) exemption or the one hundred fifty thousand dollar ($150,000) exemption is filed in conjunction with a timely filed claim for the forty thousand dollar ($40,000) or 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.

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 disability rating from the United States Department of Veterans Affairs (USDVA), an exemption shall apply in that amount that would have been allowed if the claimant had filed an appropriate application for the exemption on the effective date of his or her disability rating from the USDVA, provided that the claimant subsequently files an appropriate application.

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 that 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, an exemption shall be allowed in accordance with whichever of the following is applicable:
(a) If the property was acquired after the lien date, but prior to the fiscal year commencing in that same calendar year, there shall be cancelled 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.
(b) If the property was acquired during a calendar year after the beginning of the fiscal year commencing in that same calendar year, there shall be cancelled or refunded an amount that is equal to the product of both of the following:
(1) The amount of any taxes, plus 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.
(2) A ratio, the numerator of which is the number of days during the fiscal year in which the property was acquired that the claimant owns the property, and the denominator of which is 365.

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.

 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. 4.

SEC. 9.

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