BILL NUMBER: SB 1430 AMENDED
BILL TEXT
AMENDED IN SENATE MARCH 24, 2010
INTRODUCED BY Senator Walters
FEBRUARY 19, 2010
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
SB 1430, as amended, Walters. Taxation: homeowners' property tax
exemption and qualified renters' income tax credit: senior citizens.
(1) 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 would, beginning on the lien date for the 2011-12 fiscal
year, increase the homeowners' exemption from $7,000 to $27,000 of
the full value of a dwelling for assessees who are 62 years of age or
older. This bill would also require, for the 2012-13 fiscal year and
for each fiscal year thereafter, the county assessor to adjust the
amount of the homeowners' exemption for assessees who are 62 years of
age or older by the percentage change, for the first 3 quarters of
the prior calendar year, in the House Price Index for California, as
specified.
(2) 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 or after January
1, 2010, increase this credit for qualified renters who are 62 years
of age or older. This bill would establish the credit amount as $151
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 a credit amount of $75 for other
individuals if adjusted gross income is $25,000 or less, as adjusted
for inflation. This bill would also require, for taxable years
beginning on or after January 1, 2011, the Franchise Tax Board to
annually adjust for inflation, based upon the California Consumer
Price Index, the amount of these credits. This bill would also make
technical, nonsubstantive changes to the renters' credit.
(3) By requiring county officials to implement a new amount for
the property tax homeowners' exemption, this bill would impose a
state-mandated local program.
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.
(4) 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. The Legislature finds and declares both of the
following:
(a) Since September 1968, the property tax exemption for all
California homeowners has been seven thousand dollars ($7,000), with
no adjustments for inflation over the past 40 years.
(b) Seniors are particularly impacted by this failure to increase
the homeowners' property tax exemption, since many seniors live on a
reduced income.
SEC. 2. Section 218 of the Revenue and Taxation Code is amended to
read:
218. (a) (1) The homeowners' property tax exemption is in the
amount of the assessed value of the dwelling specified in this
section, as authorized by subdivision (k) of Section 3 of Article
XIII of the California Constitution. That exemption is, except as
provided in paragraph (2), in the amount of seven thousand dollars
($7,000) of the full value of the dwelling.
(2) (A) Beginning on the lien date for the 2010-12
2011-12 fiscal year, if the assessee for a
dwelling is 62 years of age or older, the exemption is in the amount
of twenty-seven thousand dollars ($27,000) of the full value of the
dwelling.
(B) Beginning on the lien date for the 2012-13 fiscal year and for
each fiscal year thereafter, if the assessee is 62 years of age or
older, 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) 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.
(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) Any dwelling that qualified for an exemption under this
section prior to October 20, 1991, that was damaged or destroyed by
fire in a disaster, as declared by the Governor, occurring on or
after October 20, 1991, and before November 1, 1991, and that has not
changed ownership since October 20, 1991, shall not be disqualified
as a "dwelling" or be denied an exemption under this section solely
on the basis that the dwelling was temporarily damaged or destroyed
or was being reconstructed by the owner.
(e) Any dwelling that qualified for an exemption under this
section prior to October 15, 2003, that was damaged or destroyed by
fire or earthquake in a disaster, as declared by the Governor, during
October, November, or December 2003, and that has not changed
ownership since October 15, 2003, shall not be disqualified as a
"dwelling" or be denied an exemption under this section solely on the
basis that the dwelling was temporarily damaged or destroyed or was
being reconstructed by the owner.
(f) Any dwelling that qualified for an exemption under this
section prior to June 3, 2004, that was damaged or destroyed by flood
in a disaster, as declared by the Governor, during June 2004, and
that has not changed ownership since June 3, 2004, shall not be
disqualified as a "dwelling" or be denied an exemption under this
section solely on the basis that the dwelling was temporarily damaged
or destroyed or was being reconstructed by the owner.
(g) Any dwelling that qualified for an exemption under this
section prior to August 11, 2004, that was damaged or destroyed by
the wildfires and any other related casualty that occurred in Shasta
County in a disaster, as declared by the Governor, during August
2004, and that has not changed ownership since August 11, 2004, shall
not be disqualified as a "dwelling" or be denied an exemption under
this section solely on the basis that the dwelling was temporarily
damaged or destroyed or was being reconstructed by the owner.
(h) Any dwelling that qualified for an exemption under this
section prior to December 28, 2004, that was damaged or destroyed by
severe rainstorms, floods, mudslides, or the accumulation of debris
in a disaster, as declared by the Governor, during December 2004,
January 2005, February 2005, March 2005, or June 2005, and that has
not changed ownership since December 28, 2004, shall not be
disqualified as a "dwelling" or be denied an exemption under this
section solely on the basis that the dwelling was temporarily damaged
or destroyed or was being reconstructed by the owner, or was
temporarily uninhabited as a result of restricted access to the
property due to floods, mudslides, the accumulation of debris, or
washed-out or damaged roads.
(i) Any dwelling that qualified for an exemption under this
section prior to December 19, 2005, that was damaged or destroyed by
severe rainstorms, floods, mudslides, or the accumulation of debris
in a disaster, as declared by the Governor in January 2006, April
2006, May 2006, or June 2006, and that has not changed ownership
since December 19, 2005, shall not be disqualified as a "dwelling" or
be denied an exemption under this section solely on the basis that
the dwelling was temporarily damaged or destroyed or was being
reconstructed by the owner, or was temporarily uninhabited as a
result of restricted access to the property due to floods, mudslides,
the accumulation of debris, or washed-out or damaged roads.
(j) Any dwelling that qualified for an exemption under this
section prior to July 9, 2006, that was damaged or destroyed by the
wildfires and any other related casualty that occurred in the County
of San Bernardino, as declared by the Governor in July 2006, and that
has not changed ownership since July 9, 2006, shall not be
disqualified as a "dwelling" or be denied an exemption under this
section solely on the basis that the dwelling was temporarily damaged
or destroyed or was being reconstructed by the owner, or was
temporarily uninhabited as a result of restricted access to the
property due to the wildfires.
(k) Any dwelling that qualified for an exemption under this
section prior to the commencement dates of the wildfires listed in
the Governor's proclamations of 2006 that was damaged or destroyed by
the wildfires and any other related casualty that occurred in the
Counties of Riverside and Ventura, and that has not changed ownership
since the commencement dates of these disasters as listed in the
Governor's proclamations of 2006 shall not be disqualified as a
"dwelling" or be denied an exemption under this section solely on the
basis that the dwelling was temporarily damaged or destroyed or was
being reconstructed by the owner, or was temporarily uninhabited as a
result of restricted access to the property due to the wildfires.
(l) Any dwelling that qualified for an exemption under this
section prior to January 11, 2007, that was damaged or destroyed by
severe freezing conditions, commencing January 11, 2007, and any
other related casualty that occurred in the Counties of El Dorado,
Fresno, Imperial, Kern, Kings, Madera, Merced, Monterey, Riverside,
San Bernardino, San Diego, San Luis Obispo, Santa Barbara, Santa
Clara, Stanislaus, Tulare, Ventura, and Yuba as a result of a
disaster as declared by the Governor, and that has not changed
ownership since January 11, 2007, shall not be disqualified as a
"dwelling" or be denied an exemption under this section solely on the
basis that the dwelling was temporarily damaged or destroyed or was
being reconstructed by the owner, or was temporarily uninhabited as a
result of restricted access to the property due to severe freezing
conditions.
(m) Any dwelling that qualified for an exemption under this
section prior to June 24, 2007, that was damaged or destroyed by the
wildfires and any other related casualty that occurred as a result of
this disaster in the County of El Dorado, as declared by the
Governor in June 2007, and that has not changed ownership since June
24, 2007, shall not be disqualified as a "dwelling" or be denied an
exemption under this section solely on the basis that the dwelling
was temporarily damaged or destroyed or was being reconstructed by
the owner, or was temporarily uninhabited as a result of restricted
access to the property due to the wildfires.
(n) Any dwelling that qualified for an exemption under this
section prior to July 4, 2007, that was damaged or destroyed by the
Zaca Fire and any other related casualty that occurred as a result of
this disaster in the Counties of Santa Barbara and Ventura, as
declared by the Governor in August 2007, and that has not changed
ownership since July 4, 2007, may not be denied an exemption solely
on the basis that the dwelling was temporarily damaged or destroyed
or was being reconstructed by the owner, or was temporarily
uninhabited as a result of restricted access to the property due to
the Zaca Fire.
(o) Any dwelling that qualified for an exemption under this
section prior to July 6, 2007, that was damaged or destroyed by the
wildfires and any other related casualty that occurred as a result of
this disaster in the County of Inyo, as declared by the Governor in
July 2007, and that has not changed ownership since July 6, 2007, may
not be denied an exemption solely on the basis that the dwelling was
temporarily damaged or destroyed or was being reconstructed by the
owner, or was temporarily uninhabited as a result of restricted
access to the property due to the wildfires.
(p) Any dwelling that qualified for an exemption under this
section prior to the commencement dates of the wildfires listed in
the Governor's disaster proclamations of September 15, 2007, and
October 21, 2007, that was damaged or destroyed by the wildfires and
any other related casualty that occurred in the Counties of Los
Angeles, Orange, Riverside, San Bernardino, San Diego, Santa Barbara,
and Ventura, and that has not changed ownership since the
commencement dates of these disasters as listed in the proclamations
shall not be disqualified as a "dwelling" or be denied an exemption
under this section solely on the basis that the dwelling was
temporarily damaged or destroyed or was being reconstructed by the
owner, or was temporarily uninhabited as a result of restricted
access to the property due to the wildfires.
(q) Any dwelling that qualified for an exemption under this
section prior to October 20, 2007, that was damaged or destroyed by
the extremely strong and damaging winds and any other related
casualty that occurred as a result of this disaster in the County of
Riverside, as declared by the Governor in November 2007, and that has
not changed ownership since October 20, 2007, shall not be
disqualified as a "dwelling" or be denied an exemption under this
section solely on the basis that the dwelling was temporarily damaged
or destroyed or was being reconstructed by the owner, or was
temporarily uninhabited as a result of restricted access to the
property due to the extremely strong and damaging winds.
(r) Any dwelling that qualified for an exemption under this
section prior to the commencement dates of the wildfires listed in
the Governor's disaster proclamations of May, June, or July 2008,
that was damaged or destroyed by the wildfires and any other related
casualty that occurred in the Counties of Butte, Kern, Mariposa,
Mendocino, Monterey, Plumas, Santa Clara, Santa Cruz, Shasta, and
Trinity and that has not changed ownership since the commencement
dates of these disasters as listed in the proclamations shall not be
disqualified as a "dwelling" or be denied an exemption under this
section solely on the basis that the dwelling was temporarily damaged
or destroyed or was being reconstructed by the owner, or was
temporarily uninhabited as a result of restricted access to the
property due to the wildfires.
(s) Any dwelling that qualified for an exemption under this
section prior to July 1, 2008, that was damaged or destroyed by the
wildfires and any other related casualty that occurred as a result of
this disaster in the County of Santa Barbara, as declared by the
Governor in July 2008, and that has not changed ownership since July
1, 2008, may not be denied an exemption solely on the basis that the
dwelling was temporarily damaged or destroyed or was being
reconstructed by the owner, or was temporarily uninhabited as a
result of restricted access to the property due to the wildfires.
(t) Any dwelling that qualified for an exemption under this
section prior to July 12, 2008, that was damaged or destroyed by
severe rainstorms, floods, landslides, or the accumulation of debris
in a disaster, as declared by the Governor, in July 2008, and that
has not changed ownership since July 12, 2008, shall not be
disqualified as a "dwelling" or be denied an exemption under this
section solely on the basis that the dwelling was temporarily damaged
or destroyed or was being reconstructed by the owner, or was
temporarily uninhabited as a result of restricted access to the
property due to floods, landslides, the accumulation of debris, or
washed-out or damaged roads.
(u) Any dwelling that qualified for an exemption under this
section prior to May 22, 2008, that was damaged or destroyed by the
wildfires and any other related casualty that occurred as a result of
this disaster in the County of Humboldt, as declared by the Governor
in August 2008, and that has not changed ownership since May 22,
2008, may not be denied an exemption solely on the basis that the
dwelling was temporarily damaged or destroyed or was being
reconstructed by the owner, or was temporarily uninhabited as a
result of restricted access to the property due to the wildfires.
(v) Any dwelling that qualified for an exemption under this
section prior to the commencement dates of the wildfires that were
the subject of the Governor's disaster proclamations of October 13,
2008, and November 15, 2008, that was damaged or destroyed by the
wildfires and any other related casualty that occurred in the
Counties of Los Angeles and Ventura and that has not changed
ownership since the commencement dates of these wildfires, shall not
be disqualified as a "dwelling" or be denied an exemption under this
section solely on the basis that the dwelling was temporarily damaged
or destroyed or was being reconstructed by the owner, or was
temporarily uninhabited as a result of restricted access to the
property due to the wildfires.
(w) Any dwelling that qualified for an exemption under this
section prior to November 13, 2008, that was damaged or destroyed by
the wildfires and any other related casualty that occurred as a
result of this disaster in the County of Santa Barbara, as declared
by the Governor in November 2008, and that has not changed ownership
since November 13, 2008, shall not be disqualified as a "dwelling" or
be denied an exemption under this section solely on the basis that
the dwelling was temporarily damaged or destroyed or was being
reconstructed by the owner, or was temporarily uninhabited as a
result of restricted access to the property due to the wildfires.
(x) Any dwelling that qualified for an exemption under this
section prior to the commencement dates of the wildfires listed in
the Governor's disaster proclamations of November 15, 2008, and
November 17, 2008, that was damaged or destroyed by the wildfires and
any other related casualty that occurred as a result of this
disaster in the Counties of Orange, Riverside, and San Bernardino, as
declared by the Governor in November 2008, and that has not changed
ownership since the commencement dates of these disasters as listed
in the proclamations, shall not be disqualified as a "dwelling" or be
denied an exemption under this section solely on the basis that the
dwelling was temporarily damaged or destroyed or was being
reconstructed by the owner, or was temporarily uninhabited as a
result of restricted access to the property due to the wildfires.
(y) Any dwelling that qualified for an exemption under this
section prior to May 5, 2009, that was damaged or destroyed by the
wildfires and any other related casualty that occurred as a result of
this disaster in the County of Santa Barbara, as declared by the
Governor in May 2009, and that has not changed ownership since May 5,
2009, shall not be disqualified as a "dwelling" or be denied an
exemption under this section solely on the basis that the dwelling
was temporarily damaged or destroyed or was being reconstructed by
the owner, or was temporarily uninhabited as a result of restricted
access to the property due to the wildfires.
(z) 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. 3. 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, 2010, the
credit shall be equal to one hundred fifty-one dollars ($151) for
taxpayers described in clause (i) who are 62 years of age or older.
For taxable years beginning on or after January 1, 2011, 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, 2010, the
credit shall be equal to seventy-five dollars ($75) for taxpayers
described in clause (i) who are 62 years of age or older. For taxable
years beginning on or after January 1, 2011, 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 another 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, 2011, the Franchise Tax Board shall also
recompute the amount of the credit set forth in clause (ii) of
subparagraph (A) of paragraph (1) of, and clause (ii) of subparagraph
(B) of paragraph (1) of, 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 the portion of the percentage change
figure which is 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. 4. 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. 5. This act provides for a tax levy within the meaning of
Article IV of the Constitution and shall go into immediate effect.