Senate Bill No. 1113

Introduced by Senator Knight

February 19, 2014

An act to amend Section 890.3 of the Military and Veterans Code, and to amend Section 5097 of the Revenue and Taxation Code, relating to taxation.

LEGISLATIVE COUNSEL’S DIGEST

SB 1113, as introduced, Knight. Property taxation: disabled veterans’ exemption: refunds: statute of limitations.

Existing tax law provides, pursuant to an authorization of the California Constitution, for the exemption from property taxation of specified amounts of the assessed value of the home of a disabled veteran, or a veteran’s spouse in the case in which the person has, as a result of a service-connected disease or injury, died while on active duty in military service, contingent upon a claim being filed, as specified. Existing law requires, if the exemption would have been available but for the claimant’s failure to receive a timely disability rating from the United States Department of Veterans Affairs, the refund or cancellation of taxes on that portion of the assessed value of the property that would have been exempt under a timely and appropriate claim, provided a claimant meets certain filing requirements. Existing law requires property taxes to be refunded upon the filing of a claim within 4 years after making the payment sought to be refunded.

This bill would, if a claim for a refund is filed under the circumstances described above for the disabled veterans’ exemption on or after January 1, 2015, extend the period of time for which a refund is required to be made from 4 years to 8 years. This bill would also correct an incorrect cross reference in a related provision.

By changing the manner in which local county officials administer property tax refunds with respect to the disabled veterans’ 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.

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 all of the
following:

(a) The disabled veterans’ property tax exemption law provides
honors and recognizes the service and sacrifice that members of
the military and their families gave, and continue to give, to this
country.

(b) The disabled veterans’ property tax exemption helps disabled
veterans defray the property taxes due on their homes. However,
this benefit provided by the state cannot be granted until the United
States Department of Veterans Affairs issues the disabled veteran
a 100 percent disability rating. In some cases, it can take many
years for the veteran to obtain the required 100 percent disability
rating. In these instances, the limitations on refunds of property
taxes paid can preclude veterans from receiving the benefit as of
their effective disability date.

(c) The voters of California have repeatedly affirmed their
support and commitment to disabled veterans and their spouses
by approving needed changes to this constitutionally provided
property tax exemption.

(d) By expanding the period to file a claim for refund, this act
implements subdivision (a) of Section 4 of Article XIII of the
California Constitution, and thereby fulfills a valid public purpose
of relieving economic hardship on persons and their spouses,
including unmarried surviving spouses, that have incurred injury
or death in military service to this country.

SEC. 2.  

Section 890.3 of the Military and Veterans Code is
amended to read:

890.3.  

(a) (1) Notwithstanding any other begin delete provision of end delete law, on
or after January 1, 2001, a claimant is not ineligible for a disabled
veterans’ benefit for lack of certification of disability of the veteran
with respect to whom the benefit is sought, if there is a currently
pending application to the United States Department of Veterans
Affairs (USDVA) for certification of disability for that veteran
and the subsequently received certification qualifies the veteran
for the benefit. An entity of state government, or any political
subdivision thereof, to which a claim for a disabled veterans’
benefit is made, shall require the claimant to provide written
verification that an application had been pending with the USDVA
at the time the claim for the disabled veterans’ benefit is submitted.

(2) For purposes of this subdivision, “disabled veterans benefit”
means an exemption, privilege, service, or other legal benefit that
is provided pursuant to law by the state, or a political subdivision
thereof, exclusively to a disabled veteran, or his or her surviving
spouse, parent, or child.

(b) (1) For purposes of applying the disabled veterans’ property
tax exemption set forth in Section 205.5 of the Revenue and
Taxation Code, any amount of tax, including any interest or penalty
thereon, levied upon that portion of the assessed value of real
property that would have been exempt if the veteran’s pending
application for certification of disability had been finalized, shall
be canceled or refunded if both of the following conditions are
met:

(A) The certification is received and is forwarded to the county
assessor.

(B) A return is made as required by Section 277 of the Revenue
and Taxation Code.

(2) Any refund issued pursuant to this subdivision is subject to
the limitations periods for refunds set forth in Section begin delete 5096 end delete begin insert 5097 end insert
of the Revenue and Taxation Code.

SEC. 3.  

Section 5097 of the Revenue and Taxation Code is
amended to read:

5097.  

(a)  begin delete No end delete begin insert An end insert order for a refund under this article shall begin insert not end insert
be made, except on a claim:

(1) Verified by the person who paid the tax, his or her guardian,
executor, or administrator.

(2) Except as provided in paragraph (3) begin insert or (4) end insert , filed within four
years after making the payment sought to be refunded, or within
one year after the mailing of notice as prescribed in Section 2635,
or the period agreed to as provided in Section 532.1, or within 60
days of the date of the notice prescribed by subdivision (a) of
Section 4836, whichever is later.

(3) (A) Filed within one year, if an application for a reduction
in an assessment or an application for equalization of an assessment
has been filed pursuant to Section 1603 and the applicant does not
state in the application that the application is intended to constitute
a claim for a refund, of either of the following events, whichever
occurs first:

(i) After the county assessment appeals board makes a final
determination on the application for reduction in assessment or on
the application for equalization of an escape assessment of the
property, and mails a written notice of its determination to the
applicant and the notice does not advise the applicant to file a claim
for refund.

(ii) After the expiration of the time period specified in
subdivision (c) of Section 1604 if the county assessment appeals
board fails to hear evidence and fails to make a final determination
on the application for reduction in assessment or on the application
for equalization of an escape assessment of the property.

(B) Filed within six months, if an application for a reduction in
an assessment or an application for equalization of an assessment
has been filed pursuant to Section 1603 and the applicant does not
state in the application that the application is intended to constitute
a claim for a refund, after the county assessment appeals board
makes a final determination on the application for reduction in
assessment or on the application for equalization of an escape
assessment, and mails a written notice of its determination to the
applicant and the notice advises the applicant to file a claim for
refund within six months of the date of the county assessment
appeals board’s final determination.

begin insert

(4) Filed within eight years after making the payment sought
to be refunded, if the claim is filed on or after January 1, 2015,
pursuant to Section 276.1.

end insert

(b) An application for a reduction in an assessment filed pursuant
to Section 1603 shall also constitute a sufficient claim for refund
under this section if the applicant states in the application that the
application is intended to constitute a claim for refund. If the
applicant does not so state, he or she may thereafter and within
the period provided in paragraph (3) of subdivision (a) file a
separate claim for refund of taxes extended on the assessment
which the applicant applied to have reduced pursuant to Section
1603 or Section 1604.

(c) If an application for equalization of an escape assessment
is filed pursuant to Section 1603, a claim may be filed on any taxes
resulting from the escape assessment or the original assessment
to which the escape relates within the period provided in paragraph
(3) of subdivision (a).

begin insert

(d) The amendments made to this section by the act adding this
subdivision shall apply to claims filed on or after January 1, 2015.

end insert

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.