BILL NUMBER: AB 1370 CHAPTERED 09/10/01 CHAPTER 266 FILED WITH SECRETARY OF STATE SEPTEMBER 10, 2001 APPROVED BY GOVERNOR SEPTEMBER 8, 2001 PASSED THE ASSEMBLY AUGUST 30, 2001 PASSED THE SENATE AUGUST 23, 2001 AMENDED IN SENATE AUGUST 23, 2001 AMENDED IN SENATE JULY 5, 2001 AMENDED IN ASSEMBLY APRIL 30, 2001 INTRODUCED BY Assembly Member Wiggins (Principal coauthor: Senator Poochigian) FEBRUARY 23, 2001 An act to amend Sections 20543 and 20544 of the Revenue and Taxation Code, relating to taxation, and declaring the urgency thereof, to take effect immediately. LEGISLATIVE COUNSEL'S DIGEST AB 1370, Wiggins. Tax forms: taxpayers 65 or older: study: property tax assistance. Existing income tax laws require the use of various tax forms. This bill would require the Franchise Tax Board to conduct a study of those forms relative to taxpayers who are 65 years of age or older, and to make a report on the results of that study to the Legislature, as provided. The Gonsalves-Deukmejian-Petris Senior Citizens Property Tax Assistance Law provides for payment of assistance by the Franchise Tax Board to claimants, whether those claimants own or rent their residences, in accordance with schedules that reduce the amount of assistance provided as the amount of a claimant's household income increases along a specified scale of household income amounts. The amount of assistance for a claimant owning his or her residential dwelling is a specified percentage, based on household income, of tax on the first $34,000 of full value. The amount of assistance for a claimant renting his or her residence is a specified percentage, based on household income, of the statutory property tax equivalent of $250. For the 2001 calendar year and each year thereafter, the household figures used to calculate the assistance payments were to be increased by 45%. This bill would eliminate the provisions increasing the household income figures used to calculate the assistance payments by 45% and would instead increase the property tax assistance payments by 45% for the 2001 calendar year and each calendar year thereafter. This bill would declare that it is to take effect immediately as an urgency statute. THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS: SECTION 1. The Franchise Tax Board shall conduct a study of all current tax forms that affect taxpayers who are 65 years of age or older and ascertain which changes are necessary and appropriate to ensure that the needs of those taxpayers are served to the greatest benefit. The board shall make a report on the results of that study to the Legislature on or before January 1, 2002, or as soon thereafter as is practicable. SEC. 2. Section 20543 of the Revenue and Taxation Code, as amended by Section 8 of Chapter 156 of the Statutes of 2001, is amended to read: 20543. (a) (1) The amount of assistance for a claimant owning his or her residential dwelling shall be based on claimant's household income for the period set forth in Section 20503. (2) For claims filed with respect to the 2001 calendar year and each calendar year thereafter, the percentage of assistance for which each claimant owning his or her residential dwelling shall be eligible shall be based on the following scale: The percentage of tax on the first $34,000 of full value If the total household income (as determined for tax (as defined in this part) purposes) used to provide is not more than: assistance is: $8,812 .................................. 139% 9,400 .................................. 136 9,987 .................................. 133 10,575 .................................. 131 11,163 .................................. 128 11,750 .................................. 125 12,337 .................................. 122 12,925 .................................. 119 13,513 .................................. 116 14,101 .................................. 113 14,688 .................................. 110 15,275 .................................. 106 15,863 .................................. 100 16,451 .................................. 94 17,038 .................................. 88 17,626 .................................. 83 18,213 .................................. 77 18,800 .................................. 71 19,389 .................................. 65 19,976 .................................. 59 20,564 .................................. 54 21,151 .................................. 49 21,738 .................................. 45 22,327 .................................. 41 22,914 .................................. 36 23,500 .................................. 32 24,088 .................................. 29 24,675 .................................. 26 25,263 .................................. 23 25,851 .................................. 20 26,438 .................................. 17 27,908 .................................. 15 29,376 .................................. 12 30,846 .................................. 10 32,314 .................................. 9 33,783 .................................. 7 35,251 .................................. 6 (b) With respect to assistance that is provided by the Franchise Tax Board pursuant to this chapter for the 2002 calendar year and each year thereafter, the household income figures that apply to assistance provided by the Franchise Tax Board during that period shall be the household income figures that applied to assistance provided by the Franchise Tax Board in the same period in the immediately preceding year, multiplied by an inflation factor calculated as follows: (1) On or before February 1 of each year, the Department of Industrial Relations shall transmit to the Franchise Tax Board the percentage change in the California Consumer Price Index for all items from June of the second preceding calendar year to June of the immediately preceding calendar year. (2) The Franchise Tax Board shall add 100 percent to the percentage change figure that is furnished pursuant to paragraph (1) and divide the result by 100. (3) The Franchise Tax Board shall multiply the immediately preceding household income figure by the inflation adjustment factor determined in paragraph (2), and round off the resulting product to the nearest one dollar ($1). SEC. 3. Section 20544 of the Revenue and Taxation Code, as amended by Section 9 of Chapter 156 of the Statutes of 2001, is amended to read: 20544. (a) (1) The amount of assistance for a claimant renting his or her residence shall be based on the claimant's household income for the time period set forth in Section 20503. (2) For claims filed with respect to the 2001 calendar year, and each calendar year thereafter, the percentage of assistance for which each claimant renting his or her residence shall be eligible shall be based on the following scale: If the total household The percentage of the income (as defined The statutory statutory property tax in this part) is not property tax equivalent used to more than: equivalent is: provide assistance is: $8,812 ................ $250 ................ 139% 9,400 ................ 250 ................ 136 9,987 ................ 250 ................ 133 10,575 ................ 250 ................ 131 11,163 ................ 250 ................ 128 11,750 ................ 250 ................ 125 12,337 ................ 250 ................ 122 12,925 ................ 250 ................ 119 13,513 ................ 250 ................ 116 14,101 ................ 250 ................ 113 14,688 ................ 250 ................ 110 15,275 ................ 250 ................ 106 15,863 ................ 250 ................ 100 16,451 ................ 250 ................ 94 17,038 ................ 250 ................ 88 17,626 ................ 250 ................ 83 18,213 ................ 250 ................ 77 18,800 ................ 250 ................ 71 19,389 ................ 250 ................ 65 19,976 ................ 250 ................ 59 20,564 ................ 250 ................ 54 21,151 ................ 250 ................ 49 21,738 ................ 250 ................ 45 22,327 ................ 250 ................ 41 22,914 ................ 250 ................ 36 23,500 ................ 250 ................ 32 24,088 ................ 250 ................ 29 24,675 ................ 250 ................ 26 25,263 ................ 250 ................ 23 25,851 ................ 250 ................ 20 26,438 ................ 250 ................ 17 27,908 ................ 250 ................ 15 29,376 ................ 250 ................ 12 30,846 ................ 250 ................ 10 32,314 ................ 250 ................ 9 33,783 ................ 250 ................ 7 35,251 ................ 250 ................ 6 (b) With respect to assistance that is provided by the Franchise Tax Board pursuant to this chapter for the 2002 calendar year and each year thereafter, the household income figures that apply to assistance provided by the Franchise Tax Board during that period shall be the household income figures that applied to assistance provided by the Franchise Tax Board in the same period in the immediately preceding year, multiplied by an inflation factor calculated as follows: (1) On or before February 1 of each year, the Department of Industrial Relations shall transmit to the Franchise Tax Board the percentage change in the California Consumer Price Index for all items from June of the second preceding calendar year to June of the immediately preceding calendar year. (2) The Franchise Tax Board shall add 100 percent to the percentage change figure that is furnished pursuant to paragraph (1) and divide the result by 100. (3) The Franchise Tax Board shall multiply the immediately preceding household income figure by the inflation adjustment factor determined in paragraph (2), and round off the resulting product to the nearest one dollar ($1). SEC. 4. The amendments made by Sections 2 and 3 of this act correct and clarify the amendments made by Sections 8 and 9 of Chapter 156 of the Statutes of 2001, and shall be operative with respect to assistance that is provided by the Franchise Tax Board for the 2001 calendar year and subsequent calendar years, as provided therein. SEC. 5. This act is an urgency statute necessary for the immediate preservation of the public peace, health, or safety within the meaning of Article IV of the Constitution and shall go into immediate effect. The facts constituting the necessity are: In order to make the necessary statutory changes to correctly implement the Budget Act of 2001, at the earliest possible time, it is necessary that this act go into immediate effect.