BILL ANALYSIS                                                                                                                                                                                                    

                                                                  AB 2314
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          Date of Hearing:  April 19, 2010

                            Anthony J. Portantino, Chair

                 AB 2314 (Block) - As Introduced:  February 19, 2010

          Majority vote.

           SUBJECT  :  Property tax exemption:  disabled veterans:   

           SUMMARY  :   Extends the time period for a disabled veteran, who  
          has not yet received a disability rating from the United States  
          Department of Veterans Affairs (USDVA), to file a property tax  
          exemption claim, and deletes a requirement for the disabled  
          veteran to have a "pending" application with the USDVA.   
          Specifically,  this bill  :  

          1)Extends from 30 days to 90 days the time period during which a  
            disabled veteran must file a property tax exemption claim to  
            receive the full exemption amount retroactively to the  
            effective date of disability, where the rating letter issued  
            by the USDVA was not timely. 

          2)Deletes a requirement that a disabled veteran have had an  
            "application pending" with the USDVA.  

           EXISTING LAW  :

          1)Exempts from property tax, in whole or in part, the home of a  
            veteran who is totally disabled because of injury or disease  
            incurred in military service, or his/her surviving unmarried  
            spouse. [Article XIII, Section 4, California Constitution;  
            Revenue and Taxation Code (R&TC) Section 205.5].  The disabled  
            veterans' exemption is also available to the surviving spouse  
            of a person who has died as a result of service-connected  
            injuries while on active military duty.  The amount of the  
            exemption depends on the claimant's income.  The basic  
            exemption amount is $100,000, adjusted annually for inflation.  
             For low-income claimants, the exemption amount is $150,000,  
            adjusted annually for inflation.  For the 2010-11 fiscal year,  
            the disabled veterans' exemption amount will be $172,592 of  
            assessed value for those with a household income below $51,699  
            (the 'low-income' exemption), and $115,060 for all other  


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            disabled veterans (the 'basic' exemption).  

          2)Defines a "totally disable veteran" as a veteran who has a  
            disability rating from the USDVA or the military service from  
            which the veteran was discharged at 100%, or has a disability  
            compensation rating at 100% because he/she is unable to secure  
            or follow a substantially gainful occupation.  

          3)Requires a disabled veteran to file a claim with the local  
            county assessor to receive the exemption.  To receive the  
            basic exemption, a claimant need only file once.  To receive  
            the larger low-income exemption, the claimant must file a  
            claim each year to verify income eligibility.  The annual  
            filing period is between January 1 and February 15.  

          4)Specifies that, if a claim is filed after the deadline, the  
            exemption can still be obtained at a reduced level (either 90%  
            or 85% of the exemption amount) as outlined in R&TC Section  
            276.  However, an exception to this "partial exemption" rule  
            is allowed in the case of late-filed claims where the USDVA  
            has not finished processing the veterans' disability rating  
            certification.  If a person files a late claim due to a  
            pending disability rating from the USDVA, the full amount of  
            the exemption will be granted retroactively, effective on the  
            date of a disability, but the claim must be filed no later  
            than 30 days after receiving a disability rating letter from  
            the USDVA, or before the next following lien date (January 1).  

           FISCAL EFFECT  :  The State Board of Equalization (BOE) staff  
          estimates that this bill will have a negligible revenue impact.   

           COMMENTS  :   

           1)The Author's Statement  .  The author states that, veterans are  
            "designated 100% disabled if they have made tremendous  
            sacrifices in answering the call of duty resulting in extreme  
            physical and/or mental challenges.  At the state level, we  
            have determined that this designation should trigger certain  
            benefits in recognition of their honorable service.  One of  
            those is a property tax exemption on their home.  In providing  
            this benefit, we need to make sure that disabled veterans have  
            the opportunity to properly take advantage of this program.   
            This bill will remove unnecessary impediments identified by  


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            the Board of Equalization for disabled veterans' to receive a  
            property tax exemption retroactively on their home to the  
            effective date of the disability when they are belatedly  
            granted the 100% disability rating from the US Department of  
            Veterans Administration."

           2)The Bill's Purpose  .  According to BOE, the sponsor of this  
            bill, the purpose of this bill is to make it easier for  
            disabled veterans to receive the maximum amount of the  
            property tax exemption on their home on a retroactive basis.    

           3)Background  .  Under existing law, a veteran must receive a  
            disability certification from either the USDVA or the military  
            service, from which the veteran was discharged, in order to  
            qualify for the property tax exemption.  In addition, the  
            eligible veteran must file a timely claim with the county  
            assessor by the specified deadlines to receive the full amount  
            of the property tax exemption.  However, it may take years to  
            receive a final USDVA disability rating certification,  
            especially, if the veteran appeals the initial disability  
            rating.  In 2000, the law was changed to allow disabled  
            veterans to receive the maximum amount of the property tax  
            exemption retroactively, once they receive a qualifying  
            disability rating. [SB 1362 (Poochigian), Chapter 1085,  
            Statutes of 2000].   The effective date of the exemption in  
            those cases would be the same as the effective date of the  
            disability, as determined by the USDVA or the military  
            service.  The claim, however, must be filed within 30 days  
            after receiving a disability rating letter from the USDVA, or  
            before the next following lien date (January 1), whichever is  
            later. [SB 2092 (Senate Revenue and Taxation Committee),  
            Chapter 775, Statutes of 2002].  Thus, a veteran who receives  
            a disability rating certification in early January has almost  
            a full year to file the claim, whereas a disabled veteran who  
            receives the certification on December 31st has only 30 days  
            to file the claim. 

           4)The 30-day Deadline  .  This bill extends the existing 30-day  
            deadline to 90 days for a disabled veteran to file a property  
            tax exemption claim.  The author and the sponsor state that  
            disabled veterans, after receiving the letter of disability  
            certification, need some time to sort through various  
            documents and materials to learn of the available veteran  
            benefits and programs.  Some veterans become aware of the  


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            exemption after the 30-day filing deadline has passed.   In  
            such a case, the veterans would still be eligible for an 85%  
            partial exemption but not a full exemption.  If the filing  
            deadline proposed by this bill is extended to 90 days, a  
            disabled veteran would receive an extra $172, in the case of a  
            basic exemption, and $259, in the case of a low-income  

           5)The "Pending" Application Requirement  .  This bill would  
            eliminate the "pending" application requirement to allow more  
            disabled veterans to receive the exemption retroactively to  
            the effective date of the disability.  Some administrators  
            request proof or substantiation that an application had been  
            pending.  It is an unnecessary condition that could easily  
            disqualify a disabled veteran from receiving the full  
            exemption amount.  As long as the veteran obtains a final  
            disability certification letter, there is no reason for the  
            "pending application" requirement to remain in the statute.   
            Whether or not the veteran had an application pending with the  
            USDVA is irrelevant for the final eligibility determination  
            process and simply superfluous, if not detrimental to the  

           6)Related Legislation  .  AB 1948 (Knight), introduced in the  
            2009-10 legislative session, is similar to this bill in that  
            it proposes to extend the filing period to 90 days.  AB 1948  
            is referred to this Committee. 


          None on file

          None on file
          Analysis Prepared by  :  Oksana Jaffe / REV. & TAX. / (916)