BILL ANALYSIS Ó
SENATE GOVERNANCE & FINANCE COMMITTEE
Senator Lois Wolk, Chair
BILL NO: AB 946 HEARING: 7/6/11
AUTHOR: Butler FISCAL: No
VERSION: 2/18/11 TAX LEVY: No
CONSULTANT: Grinnell
VETERAN'S PROPERTY TAX EXEMPTION
Consolidates disabled veterans exemption timelines.
Background and Existing Law
Section One of Article XIII of the California Constitution
provides that all property is taxable unless explicitly
exempted by the Constitution or federal law. The
Constitution limits the maximum amount of any ad valorem
tax on real property at 1% of full cash value, plus any
locally-authorized bonded indebtedness. Assessors
reappraise property whenever it is purchased, newly
constructed, or when ownership changes. The Constitution
and statute define those terms.
Section Four of Article XIII allows the Legislature to
partially or wholly exempt from property taxes the value of
a disabled veteran's home if the veteran has lost one or
more limbs, is totally blind, or is totally disabled, as a
result of a service-connected injury, known as the
"disabled veterans' exemption." The Constitution allows
taxpayers to apply the disabled veterans' exemption,
currently provided by statute at the inflation adjusted
value of either $115,060 or $172,592 depending on the
taxpayer's income, but not in addition to the veterans or
homeowners' exemption. The Constitution additionally
allows the exemption for unmarried surviving spouses of
persons who die while on active duty, or subsequently die
as a result of service-connected injuries.
Currently, four sections of the Revenue and Taxation Code
detail the relevant time periods for taxpayers to receive
the disabled veterans' exemptions:
§75.22 provides 90 days from the date of the change
of ownership for the taxpayer to apply for an
exemption from supplemental assessments.
AB 946 -- 2/18/11 -- Page 2
§205.5 states that the property is eligible for the
exemption on the date the taxpayer purchases the
property.
§276.1 allows taxpayers to claim the exemption
within 30 days of receipt of the disability rating
from the United States Department of Veterans'
Affairs.
§279 states that the exemption remains in effect
until the title of the property changes, the property
is altered to no longer be a dwelling, the veteran is
no longer disabled, or until the owner no longer
occupies the property, subject to certain exceptions.
Proposed Law
Assembly Bill 946 imports the appropriate timelines and
effective dates from the three other sections into §279,
and adds a claimant spouse remarrying to the list of
disqualifying events.
State Revenue Impact
The Board of Equalization (BOE) estimates no revenue
impact.
Comments
1. Purpose of the bill . According to the Author, "AB 946
will aid the proper administration of the disabled
veterans' property tax exemption. The current laws are
widely dispersed and lack cross references. A
comprehensive section of code will greatly assist tax
administrators and tax practitioners and is particularly
useful to those who are new to this area or law or address
these issues infrequently.
Updating the code to provide complete and accurate
information also serves those families that have sacrificed
so much. It makes certain that the exemption available
will be granted as of the earliest possible date and will
alert persons receiving the exemption to those events that
cause ineligibility. These are nonsubstantive but
AB 946 -- 2/18/11 -- Page 3
important changes."
2. Upcoming Features . AB 188 (Block) contains an
identical change to AB 946, and also proposes amendments to
Section 279 to ensure that an unmarried surviving spouse
that is receiving the disabled veterans' exemption will
continue to receive the exemption if he or she is confined
to a hospital or care facility. The Committee will also
hear this measure at its June 29, 2011 hearing.
Assembly Actions
Assembly Revenue and Taxation: 9-0
Assembly Floor: 74-0
Support and Opposition (06/30/11)
Support : State Board of Equalization
Opposition : Unknown