BILL ANALYSIS
AB 2314
Page 1
Date of Hearing: April 19, 2010
ASSEMBLY COMMITTEE ON REVENUE AND TAXATION
Anthony J. Portantino, Chair
AB 2314 (Block) - As Introduced: February 19, 2010
Majority vote.
SUBJECT : Property tax exemption: disabled veterans:
procedure.
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
exemption.
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
applicants.
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.
REGISTERED SUPPORT / OPPOSITION :
Support
None on file
Opposition
None on file
Analysis Prepared by : Oksana Jaffe / REV. & TAX. / (916)
319-2098