Bill Text: CA SB690 | 2015-2016 | Regular Session | Amended
Bill Title: Property tax: senior and disabled veterans.
Spectrum: Partisan Bill (Republican 1-0)
Status: (Failed) 2016-11-30 - From Assembly without further action. [SB690 Detail]
Download: California-2015-SB690-Amended.html
BILL NUMBER: SB 690 AMENDED
BILL TEXT
AMENDED IN ASSEMBLY AUGUST 4, 2016
AMENDED IN ASSEMBLY JUNE 22, 2016
AMENDED IN ASSEMBLY SEPTEMBER 11, 2015
AMENDED IN SENATE APRIL 6, 2015
INTRODUCED BY Senator Stone
FEBRUARY 27, 2015
An act to amend Sections 51, 205.5, and 5813 of the Revenue and
Taxation Code, relating to taxation, to take effect immediately, tax
levy.
LEGISLATIVE COUNSEL'S DIGEST
SB 690, as amended, Stone. Property tax: senior and disabled
veterans.
(1) The California Constitution generally limits ad valorem taxes
on real property to 1% of the full cash value, as defined, of that
property, and provides that the full cash value base may be adjusted
each year by the inflationary rate not to exceed 2% for any given
year.
Existing property tax law implementing this constitutional
authority provides that the taxable value of real property is the
lesser of its base year value compounded annually by an inflation
factor not to exceed 2%, as provided, or its full cash value.
Existing property tax law also provides that the taxable value of a
manufactured home is the lesser of its base year value compounded
annually by an inflation factor not to exceed 2% or its full cash
value.
This bill, for any assessment year commencing on or after January
1, 2017, would provide that the inflation factor shall not apply to
the principal place of residence, including a manufactured home, of a
qualified veteran, as defined, who is 65 years of age or older on
the lien date, was honorably discharged from military service, and
meets specified requirements.
By changing the manner in which local tax officials calculate the
taxable value of real property owned by senior veterans, this bill
would impose a state-mandated local program.
(2) Existing property tax law provides, pursuant to the
authorization of the California Constitution, a disabled veteran's
property tax exemption for the principal place of residence of a
veteran or a veteran's 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 veteran's or spouse's household income
does not exceed $40,000, adjusted for inflation, as specified.
This bill, for property tax lien dates on an after January 1,
2017, would instead exempt the full value of the principal place of
residence of a veteran or veteran's spouse if the veteran's or spouse'
s household income does not exceed $40,000, adjusted for inflation.
The bill would also make technical and conforming changes to the
disabled veteran's property tax exemption.
By changing the manner in which local tax officials administer the
disabled veteran's property tax exemption, this bill would impose a
state-mandated local program.
(3) 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.
(4) 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.
(5) This bill would take effect immediately as a tax levy.
Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: yes.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 51 of the Revenue and Taxation Code is amended
to read:
51. (a) For purposes of subdivision (b) of Section 2 of Article
XIII A of the California Constitution, for each lien date after the
lien date in which the base year value is determined pursuant to
Section 110.1, the taxable value of real property shall, except as
otherwise provided in subdivision (b) or (c), be the lesser of:
(1) Its base year value, compounded annually since the base year
by an inflation factor, which shall be determined as follows:
(A) For any assessment year commencing prior to January 1, 1985,
the inflation factor shall be the percentage change in the cost of
living, as defined in Section 2212.
(B) For any assessment year commencing after January 1, 1985, and
prior to January 1, 1998, the inflation factor shall be the
percentage change, rounded to the nearest one-thousandth of 1
percent, from December of the prior fiscal year to December of the
current fiscal year in the California Consumer Price Index for all
items, as determined by the California Department of Industrial
Relations.
(C) For any assessment year commencing on or after January 1,
1998, the inflation factor shall be 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.
(D) The percentage increase for an assessment year determined
pursuant to subparagraph (A), (B), or (C) shall not exceed 2 percent
of the prior year's value.
(E) (i) Notwithstanding any other law, for any assessment year
commencing on or after January 1, 2017, the percentage increase for
any assessment year determined pursuant to subparagraph (A), (B), or
(C) shall not apply to the principal place of residence, including so
much of the land surrounding it as is reasonably necessary for use
of the dwelling as a home, of a qualified veteran who is 65 years of
age or older on the lien date and was honorably discharged from
military service.
(ii) For the purpose of this subparagraph, "qualified veteran"
means a person who meets the following criteria:
(I) He or she meets the criteria 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
veteran's spouse.
(II) If the qualified veteran is single, his or her annual
household income, as defined in Section 20504, is less
than fifty thousand dollars ($50,000).
($50,000) or less.
(III) If the qualified veteran is married, his or her annual
household combined annual income, as defined
in Section 20504, is less than one hundred
thousand dollars ($100,000). ($100,000) or
less.
(iii) When claiming the benefit provided by this subparagraph, the
claimant shall provide all information required by, and answer all
questions contained in, an affidavit furnished by the assessor to
determine that the claimant is a qualified veteran. The assessor may
require additional proof of the information or answers provided in
the affidavit before allowing the benefit provided by this
subparagraph.
(2) Its full cash value, as defined in Section 110, as of the lien
date, taking into account reductions in value due to damage,
destruction, depreciation, obsolescence, removal of property, or
other factors causing a decline in value.
(b) If the real property was damaged or destroyed by disaster,
misfortune, or calamity and the board of supervisors of the county in
which the real property is located has not adopted an ordinance
pursuant to Section 170, or any portion of the real property has been
removed by voluntary action by the taxpayer, the taxable value of
the property shall be the sum of the following:
(1) The lesser of its base year value of land determined under
paragraph (1) of subdivision (a) or full cash value of land
determined pursuant to paragraph (2) of subdivision (a).
(2) The lesser of its base year value of improvements determined
pursuant to paragraph (1) of subdivision (a) or the full cash value
of improvements determined pursuant to paragraph (2) of subdivision
(a).
In applying this subdivision, the base year value of the subject
real property does not include that portion of the previous base year
value of that property that was attributable to any portion of the
property that has been destroyed or removed. The sum determined under
this subdivision shall then become the base year value of the real
property until that property is restored, repaired, or reconstructed
or other provisions of law require establishment of a new base year
value.
(c) If the real property was damaged or destroyed by disaster,
misfortune or calamity and the board of supervisors in the county in
which the real property is located has adopted an ordinance pursuant
to Section 170, the taxable value of the real property shall be its
assessed value as computed pursuant to Section 170.
(d) For purposes of this section, "real property" means that
appraisal unit that persons in the marketplace commonly buy and sell
as a unit, or that is normally valued separately.
(e) Nothing in this section shall be construed to require the
assessor to make an annual reappraisal of all assessable property.
However, for each lien date after the first lien date for which the
taxable value of property is reduced pursuant to paragraph (2) of
subdivision (a), the value of that property shall be annually
reappraised at its full cash value as defined in Section 110 until
that value exceeds the value determined pursuant to paragraph (1) of
subdivision (a). In no event shall the assessor condition the
implementation of the preceding sentence in any year upon the filing
of an assessment appeal.
SEC. 2. Section 205.5 of the Revenue and Taxation Code is amended
to read:
205.5. (a) Property that constitutes the principal place of
residence of a veteran, that is owned by the veteran, the veteran's
spouse, or the veteran and the veteran's 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 the full
value of the property 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, except for the
limitation on the value of property owned by the veteran or the
veteran's spouse.
(B) A person who would qualify as a veteran pursuant to
paragraph (1) subparagraph (A) 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 veteran's 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 hundred thousand
dollars ($100,000), as adjusted for the relevant assessment year as
provided in subdivision (h), 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 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.
The one-hundred-thousand-dollar ($100,000) exemption shall be the
full value of the property 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
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
the full value of the property 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).
(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 spouse's 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 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) That portion of the property of a corporation that constitutes
the principal place of residence of a veteran or a veteran's
unmarried surviving spouse when the veteran, 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 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 having a visual acuity of
5/200 or less, or concentric contraction of the visual field to 5
degrees or less.
(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 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 pursuant to 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 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, 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.
(i) The amendments made to this section by the act adding this
subdivision shall apply for property tax lien dates on and after
January 1, 2017.
SEC. 3. Section 5813 of the Revenue and Taxation Code is amended
to read:
5813. (a) For each lien date after the lien date for which the
base year value is determined, the taxable value of a manufactured
home shall be the lesser of:
(1) Its base year value, compounded annually since the base year
by an inflation factor, which shall be the percentage change in the
cost of living, as defined in Section 51, provided, that any
percentage increase shall not exceed 2 percent of the prior year's
value.
(2) Its full cash value, as defined in Section 5803, as of the
lien date, taking into account reductions in value due to damage,
destruction, depreciation, obsolescence, or other factors causing a
decline in value.
(3) If the manufactured home is damaged or destroyed by disaster,
misfortune, or calamity, its value determined pursuant to paragraph
(2) shall be its base year value until the manufactured home is
restored, repaired or reconstructed or other provisions of law
require establishment of a new base year value.
(b) (1) Notwithstanding any other law, for any assessment year
commencing on or after January 1, 2017, the percentage increase for
an assessment year determined pursuant to paragraph (1) of
subdivision (a) shall not apply to the principal place of residence
of a qualified veteran who owns a manufactured home as his or her
principal place of residence and who is 65 years of age or older on
the lien date and was honorably discharged from military service.
(2) For the purpose of this subdivision, "qualified veteran"
means a person who meets the following criteria:
(A) He or she meets the criteria 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
veteran's spouse.
(B) If the qualified veteran is single, his or her annual
household income, as defined in Section 20504, is fifty thousand
dollars ($50,000) or less.
(C) If the qualified veteran is married, his or her
combined annual household income, as defined in Section
20504, is one hundred thousand dollars ($100,000) or less.
(3) When claiming the benefit provided by this subdivision, the
claimant shall provide all information required by, and answer all
questions contained in, an affidavit furnished by the assessor to
determine that the claimant is a qualified veteran. The assessor may
require additional proof of the information or answers provided in
the affidavit before allowing the benefit provided by this
subdivision.
SEC. 4. 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. 5. 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. 6. This act provides for a tax levy within the meaning of
Article IV of the Constitution and shall go into immediate effect.
