Bill Text: CA AB476 | 2015-2016 | Regular Session | Amended
Bill Title: Taxation: homeowners' exemption and renters' credit.
Spectrum: Partisan Bill (Republican 22-1)
Status: (Failed) 2016-02-01 - From committee: Filed with the Chief Clerk pursuant to Joint Rule 56. [AB476 Detail]
Download: California-2015-AB476-Amended.html
BILL NUMBER: AB 476 AMENDED
BILL TEXT
AMENDED IN ASSEMBLY MARCH 25, 2015
AMENDED IN ASSEMBLY MARCH 19, 2015
INTRODUCED BY Assembly Member Chang
(Principal coauthor: Assembly Member Harper)
(Principal coauthor: Senator Vidak)
(Coauthors: Assembly Members Achadjian, Travis Allen, Brough,
Chávez, Gallagher, Grove, Jones, Kim, Lackey, Linder, Mayes,
Melendez, Olsen, Patterson, Steinorth, Waldron, and Wilk)
(Coauthors: Senators Morrell, Nguyen, and Nielsen)
FEBRUARY 23, 2015
An act to amend Sections 218 and 17053.5 of the Revenue and
Taxation Code, relating to taxation, to take effect immediately, tax
levy.
LEGISLATIVE COUNSEL'S DIGEST
AB 476, as amended, Chang. Taxation: homeowners' exemption and
renters' credit.
Existing property tax law provides, pursuant to the authority of a
specified provision of the California Constitution, for a homeowners'
exemption in the amount of $7,000 of the full value of a "dwelling,"
as defined, and authorizes the Legislature to increase this
exemption.
This bill, beginning with the lien date for the 2016-17 fiscal
year, would increase the homeowners' exemption from $7,000 to $25,000
of the full value of a dwelling. This bill would also require, for
the 2017-18 fiscal year and for each fiscal year thereafter, the
county assessor to adjust the amount of the homeowners' exemption by
the percentage change in the House Price Index for California for the
first 3 quarters of the prior calendar year, as specified.
The California Constitution requires the Legislature, whenever it
increases the homeowners' property tax exemption, to provide a
comparable increase in benefits to qualified renters. The Personal
Income Tax Law authorizes various credits against the taxes imposed
by that law, including a credit for qualified renters in the amount
of $120 for married couples filing joint returns, heads of household,
and surviving spouses if adjusted gross income is $50,000 or less,
and in the amount of $60 for other individuals if adjusted gross
income is $25,000 or less. Existing law requires the Franchise Tax
Board to annually adjust for inflation these adjusted gross income
amounts.
This bill would, for taxable years beginning on and after January
1, 2016, increase this credit for a qualified renter to $428 for
married couples filing joint returns, heads of household, and
surviving spouses if adjusted gross income is $50,000 or less, as
adjusted for inflation, and to an amount equal to $214 for other
individuals if adjusted gross income is $25,000 or less, as adjusted
for inflation. The bill would also require, for taxable years
beginning on or after January 1, 2017, the Franchise Tax Board to
annually adjust for inflation, based upon the California Consumer
Price Index, the amount of these credits. The bill would also make
technical, nonsubstantive changes to the renters' credit.
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.
The California Constitution requires the Legislature, in each
fiscal year, to reimburse local governments for the revenue losses
incurred by those governments in that fiscal year as a result of the
homeowners' property tax exemption.
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.
Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 218 of the Revenue and Taxation Code is amended
to read:
218. (a) The homeowners' property tax exemption is in the amount
of the assessed value of the dwelling specified in this section, as
authorized pursuant to subdivision (k) of Section 3 of Article XIII
of the Constitution. That exemption is in the following amounts:
(1) Seven thousand dollars ($7,000) of the full value of the
dwelling through the 2015-16 fiscal year.
(2) (A) Beginning with the lien date for the 2016-17 fiscal year,
twenty-five thousand dollars ($25,000) of the full value of the
dwelling.
(B) Beginning with the lien date for the 2017-18 fiscal year and
for each fiscal year thereafter, the assessor shall adjust the
exemption amount of the prior fiscal year by the percentage change,
rounded to the nearest one-thousandth of 1 percent, in the House
Price Index for California for the first three quarters of the prior
calendar year, as determined by the federal Housing Finance Agency.
(b) (1) The exemption does not extend to property that is rented,
vacant, under construction on the lien date, or that is a vacation or
secondary home of the owner or owners, nor does it apply to property
on which an owner receives the veteran's exemption.
(2) Notwithstanding paragraph (1), if a person receiving the
exemption is not occupying the dwelling on the lien date because the
dwelling was damaged in a misfortune or calamity, the person shall be
deemed to occupy that same dwelling as his or her principal place of
residence on the lien date, provided the person's absence from the
dwelling is temporary and the person intends to return to the
dwelling when possible to do so. Except as provided in paragraph (3),
when a dwelling has been totally destroyed, and thus no dwelling
exists on the lien date, the exemption provided by this section shall
not be applicable until the structure has been replaced and is
occupied as a dwelling.
(3) A dwelling that was totally destroyed in a disaster for which
the Governor proclaimed a state of emergency, that qualified for the
exemption provided by this section prior to the commencement date of
the disaster and that has not changed ownership since the
commencement date of the disaster, shall be deemed occupied by the
person receiving the exemption on the lien date provided the person
intends to reconstruct a dwelling on the property and occupy the
dwelling as his or her principal place of residence when it is
possible to do so.
(c) For purposes of this section, all of the following apply:
(1) "Owner" includes a person purchasing the dwelling under a
contract of sale or who holds shares or membership in a cooperative
housing corporation, which holding is a requisite to the exclusive
right of occupancy of a dwelling.
(2) (A) "Dwelling" means a building, structure, or other shelter
constituting a place of abode, whether real property or personal
property, and any land on which it may be situated. A two-dwelling
unit shall be considered as two separate single-family dwellings.
(B) "Dwelling" includes the following:
(i) A single-family dwelling occupied by an owner thereof as his
or her principal place of residence on the lien date.
(ii) A multiple-dwelling unit occupied by an owner thereof on the
lien date as his or her principal place of residence.
(iii) A condominium occupied by an owner thereof as his or her
principal place of residence on the lien date.
(iv) Premises occupied by the owner of shares or a membership
interest in a cooperative housing corporation, as defined in
subdivision (i) of Section 61, as his or her principal place of
residence on the lien date. Each exemption allowed pursuant to this
subdivision shall be deducted from the total assessed valuation of
the cooperative housing corporation. The exemption shall be taken
into account in apportioning property taxes among owners of share or
membership interests in the cooperative housing corporations so as to
benefit those owners who qualify for the exemption.
(d) The exemption provided for in subdivision (k) of Section 3 of
Article XIII of the California Constitution shall first be applied to
the building, structure, or other shelter and the excess, if any,
shall be applied to any land on which it may be located.
SEC. 2. Section 17053.5 of the Revenue and Taxation Code is
amended to read:
17053.5. (a) (1) For a qualified renter, there shall be allowed a
credit against his or her "net tax," as defined in Section 17039.
The amount of the credit shall be as follows:
(A) (i) For married couples filing joint returns, heads of
household, and surviving spouses, as defined in Section 17046, the
credit shall be equal to one hundred twenty dollars ($120) if
adjusted gross income is fifty thousand dollars ($50,000) or less.
(ii) For taxable years beginning on or after January 1, 2016, the
credit shall be equal to four hundred twenty-eight dollars ($428) for
taxpayers described in clause (i). For taxable years beginning on or
after January 1, 2017, the Franchise Tax Board shall adjust the
amount of the credit as provided by subdivision (j).
(B) (i) For other individuals, the credit shall be equal to sixty
dollars ($60) if adjusted gross income is twenty-five thousand
dollars ($25,000) or less.
(ii) For taxable years beginning on or after January 1, 2016, the
credit shall be equal to two hundred fourteen dollars ($214) for
taxpayers described in clause (i). For taxable years beginning on or
after January 1, 2017, the Franchise Tax Board shall adjust the
amount of the credit as provided by subdivision (j).
(2) Except as provided in subdivision (b), a husband and wife
shall receive but one credit under this section. If the husband and
wife file separate returns, the credit may be taken by either or
equally divided between them, except as follows:
(A) If one spouse was a resident for the entire taxable year and
the other spouse was a nonresident for part or all of the taxable
year, the resident spouse shall be allowed one-half the credit
allowed to married persons and the nonresident spouse shall be
permitted one-half the credit allowed to married persons, prorated as
provided in subdivision (e).
(B) If both spouses were nonresidents for part of the taxable
year, the credit allowed to married persons shall be divided equally
between them subject to the proration provided in subdivision (e).
(b) For a husband and wife, if each spouse maintained a separate
place of residence and resided in this state during the entire
taxable year, each spouse will be allowed one-half the full credit
allowed to married persons provided in subdivision (a).
(c) For purposes of this section, a "qualified renter" means an
individual who satisfies both of the following:
(1) Was a resident of this state, as defined in Section 17014.
(2) Rented and occupied premises in this state which constituted
his or her principal place of residence during at least 50 percent of
the taxable year.
(d) "Qualified renter" does not include any of the following:
(1) An individual who for more than 50 percent of the taxable year
rented and occupied premises that were exempt from property taxes,
except that an individual, otherwise qualified, is deemed a qualified
renter if he or she or his or her landlord pays possessory interest
taxes, or the owner of those premises makes payments in lieu of
property taxes that are substantially equivalent to property taxes
paid on properties of comparable market value.
(2) An individual whose principal place of residence for more than
50 percent of the taxable year is with any other person who claimed
that individual as a dependent for income tax purposes.
(3) An individual who has been granted or whose spouse has been
granted the homeowners' property tax exemption during the taxable
year. This paragraph does not apply to an individual whose spouse has
been granted the homeowners' property tax exemption if each spouse
maintained a separate residence for the entire taxable year.
(e) An otherwise qualified renter who is a nonresident for any
portion of the taxable year shall claim the credits set forth in
subdivision (a) at the rate of one-twelfth of those credits for each
full month that individual resided within this state during the
taxable year.
(f) A person claiming the credit provided in this section shall,
as part of that claim, and under penalty of perjury, furnish that
information as the Franchise Tax Board prescribes on a form supplied
by the board.
(g) The credit provided in this section shall be claimed on
returns in the form as the Franchise Tax Board may from time to time
prescribe.
(h) For purposes of this section, "premises" means a house or a
dwelling unit used to provide living accommodations in a building or
structure and the land incidental thereto, but does not include land
only, unless the dwelling unit is a mobilehome. The credit is not
allowed for any taxable year for the rental of land upon which a
mobilehome is located if the mobilehome has been granted a homeowners'
exemption under Section 218 in that year.
(i) This section shall become operative on January 1, 1998, and
applies to any taxable year beginning on or after January 1, 1998.
(j) For each taxable year beginning on or after January 1, 1999,
the Franchise Tax Board shall recompute the adjusted gross income
amounts set forth in subdivision (a). For each taxable year beginning
on or after January 1, 2017, the Franchise Tax Board shall also
recompute the amount of the credit set forth in subdivision (a).
These computations shall be made as follows:
(1) The Department of Industrial Relations shall transmit annually
to the Franchise Tax Board the percentage change in the California
Consumer Price Index for all items from June of the prior calendar
year to June of the current year, no later than August 1 of the
current calendar year.
(2) The Franchise Tax Board shall compute an inflation adjustment
factor by adding 100 percent to that portion of the percentage change
figure furnished pursuant to paragraph (1) and dividing the result
by 100.
(3) The Franchise Tax Board shall multiply the amounts in
paragraph (1) of subdivision (a) for the preceding taxable year by
the inflation adjustment factor determined in paragraph (2), and
round off the resulting products to the nearest one dollar ($1).
(4) In computing the amounts pursuant to this subdivision, the
amounts provided in subparagraph (A) of paragraph (1) of subdivision
(a) shall be twice the amount provided in subparagraph (B) of
paragraph (1) of subdivision (a).
SEC. 3. 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.
