BILL NUMBER: AB 188 ENROLLED
BILL TEXT
PASSED THE SENATE JULY 14, 2011
PASSED THE ASSEMBLY AUGUST 15, 2011
AMENDED IN SENATE JUNE 29, 2011
INTRODUCED BY Assembly Members Block and Butler
(Coauthors: Assembly Members Blumenfield, Fletcher, Hagman, and
Jeffries)
JANUARY 25, 2011
An act to amend Sections 205.5 and 279 of the Revenue and Taxation
Code, relating to taxation.
LEGISLATIVE COUNSEL'S DIGEST
AB 188, Block. Property tax exemption: principal residence:
veterans and their unmarried surviving spouses.
Existing property tax law provides, pursuant to the authorization
of the California Constitution, for the exemption from property
taxation of the principal residence of a disabled veteran, a veteran'
s spouse, and the unmarried surviving spouse, in the case in which
the veteran has, as a result of a service-connected disease or
injury, died while on active duty in military service. Existing
property tax law specifies that property is a veteran's principal
residence if the veteran would principally reside at that property if
not for his or her confinement to a hospital or other care facility.
This bill would, beginning with the lien date for the 2012-13
fiscal year and for each fiscal year thereafter, specify that
property is an unmarried surviving spouse's principal residence if
the unmarried surviving spouse would principally reside at that
property if not for his or her confinement to a hospital or other
care facility. This bill would also correct an erroneous
cross-reference in this provision. This bill would additionally make
technical, nonsubstantive changes that would consolidate the
provisions relating to the date when property becomes eligible for
the disabled veterans' exemption, and would make other conforming
changes. This bill would also make other clarifying changes,
including clarifying that the exemption terminates for an unmarried
surviving spouse of a disabled veteran when that surviving spouse
remarries.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. 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 one hundred fifty thousand
dollars ($150,000), as adjusted for the relevant assessment year as
provided in subdivision (h), 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 without regard to any
limitation contained therein on the value of property owned by the
veteran or the veteran's spouse.
(B) Any person who would qualify as a veteran pursuant to
paragraph (1) except that he or she has, as a result of a
service-connected injury or disease, died while on active duty in
military service. The United States Department of Veterans Affairs
shall determine whether an injury or disease is service connected.
(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. A family member that resides at the
residence is not considered to be 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 in
all respects for the exemption 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 one
hundred fifty thousand dollars ($150,000), as adjusted for the
relevant assessment year as provided in subdivision (h), 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) Commencing with the 1994-95 fiscal year, property that is
owned by, and that constitutes the principal place of residence of,
the unmarried surviving spouse of a veteran as 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 one hundred
fifty thousand dollars ($150,000), as adjusted for the relevant
assessment year as provided in subdivision (h), 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) Beginning with the 2012-13 fiscal year and for each fiscal
year thereafter, 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 considered to be 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) So much of the property of a corporation as constitutes the
principal place of residence of a veteran or a veteran's unmarried
surviving spouse when the veteran, or 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 provision of 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, 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; losing the use of a limb
means that the limb has been amputated or its use has been lost by
reason of ankylosis, progressive muscular dystrophies, or paralysis;
and being 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 in accordance with the
provisions of 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 under the provisions of 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.
SEC. 2. Section 279 of the Revenue and Taxation Code is amended to
read:
279. (a) Subject to the provisions regarding cancellations and
the limitation periods on refunds, property becomes eligible for the
disabled veterans' property tax exemption, as described in Section
205.5, as of:
(1) The effective date of a disability rating, as determined by
the United States Department of Veterans Affairs, that qualifies the
claimant for the exemption.
(2) The date a qualified claimant purchases a property that
constitutes the principal place of residence, provided residency is
established within 90 days of purchase.
(3) The date a qualified claimant establishes residency at a
property owned by the claimant or the spouse, as specified in
subdivision (a) of Section 205.5.
(4) The date the veteran died, as a result of a service-connected
injury or disease, in the case where the unmarried surviving spouse
is the claimant.
(b) A claim for the disabled veterans' property tax exemption
filed by a qualified claimant, once granted, shall remain in
continuous effect unless any of the following occurs:
(1) Title to the property changes.
(2) The owner does not occupy the dwelling as his or her principal
place of residence.
(A) If the claimant is confined to a hospital or other care
facility but principally resided at a dwelling immediately prior to
that confinement, the claimant will be deemed to occupy that same
dwelling as his or her principal place of residence on the lien date,
provided that the dwelling has not been rented or leased as
described in Section 205.5.
(B) If a person receiving the disabled veterans' exemption is not
occupying the dwelling because the dwelling was damaged in a
misfortune or calamity, the person will be deemed to occupy that same
dwelling as his or her principal place of residence, provided the
person's absence from the dwelling is temporary and the person
intends to return to the dwelling when possible to do so. Except as
provided in subparagraph (C), when a dwelling has been totally
destroyed, and thus no dwelling exists, the exemption provided by
Section 205.5 is not applicable until the structure has been replaced
and is occupied as a dwelling.
(C) A dwelling that was totally destroyed in a disaster for which
the Governor proclaimed a state of emergency, that qualified for the
exemption provided by Section 205.5 and has not changed ownership
since the disaster, will be deemed occupied by the person receiving a
disabled veterans' exemption provided the person intends to
reconstruct a dwelling on the property and occupy the dwelling as his
or her principal place of residence when it is possible to do so.
(3) The property is altered so that it is no longer a dwelling.
(4) The veteran is no longer disabled as defined in Section 205.5.
(5) The unmarried surviving spouse claimant remarries.
(c) The assessor of each county shall verify the continued
eligibility of each person receiving a disabled veterans' exemption,
and shall provide for a periodic audit of, and establish a control
system to monitor, disabled veterans' exemption claims.