Amended in Assembly May 16, 2016

Amended in Assembly April 28, 2016

Amended in Assembly March 28, 2016

Amended in Assembly February 25, 2016

California Legislature—2015–16 Regular Session

Assembly BillNo. 1556


Introduced by Assembly Members Mathis and Weber

(Coauthor: Assembly Member Chávez)

(Coauthors: Senators Bates and Fuller)

January 4, 2016


An act tobegin delete amendend deletebegin insert amend, repeal, and addend insert Section 205.5 of the Revenue and Taxation Code, relating to taxation, to take effect immediately, tax levy.

LEGISLATIVE COUNSEL’S DIGEST

AB 1556, as amended, Mathis. Property taxation: exemptions: disabled veterans.

Existing property tax law provides, pursuant to the authorization of the California Constitution, a disabled veterans’ property tax exemption for the principal place of residence of a veteran or a veteran’s spouse, including an unmarried surviving spouse, if the veteran, because of injury incurred in military service, is blind in both eyes, has lost the use of 2 or more limbs, or is totally disabled, as those terms are defined, or if the veteran has, as a result of a service-connected injury or disease, died while on active duty in military service. Existing law exempts that part of the full value of the residence that does not exceed $100,000, or $150,000, if the veteran’s household income does not exceed $40,000, adjusted annually for inflation, as specified.

This bill,begin delete for property tax lien dates for the 2017-18 fiscal year and for each fiscal year thereafter,end deletebegin insert commencing with the lien date for the 2017-18 fiscal year,end insert would instead exempt that portion of the full value of the principal place of residence of a veteran or veteran’s spouse that does not exceed $2,100,000, adjusted annually for inflation, as specified. The bill would also define the term “blind in both eyes” to mean that the veteran is a blind person, as defined in a specific statute. The bill would also specify that a “totally disabled” veteran includes a veteran so severely disabled as to be unable to move without the aid of an assistive device. The bill would make other technical and conforming changes to the disabled veterans’ property tax exemption.begin insert The bill would repeal these provisions on the earlier of January 1, 2020, or the first property tax lien date following a determination by the Commission on State Mandates that these provisions impose reimbursable costs mandated by the state that are payable from the General Fund.end insert

By changing the manner in which local tax officials administer the disabled veterans’ property tax exemption, this bill would impose a state-mandated local program.

Section 2229 of the Revenue and Taxation Code requires the Legislature to reimburse local agencies annually for certain property tax revenues lost as a result of any exemption or classification of property for purposes of ad valorem property taxation.

This bill would provide that, notwithstanding Section 2229 of the Revenue and Taxation Code, no appropriation is made and the state shall not reimburse local agencies for property tax revenues lost by them pursuant to the bill.

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.

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:

P3    1

SECTION 1.  

Section 205.5 of the Revenue and Taxation Code
2 is amended to read:

3

205.5.  

(a) Property that constitutes the principal place of
4residence of a veteran and that is owned by the veteran, the
5veteran’s spouse, or the veteran and the veteran’s spouse jointly
6is exempted from taxation on that part of the full value of the
7residence that does not exceed two million one hundredbegin insert thousandend insert
8 dollars ($2,100,000), as adjusted for the relevant assessment year
9as provided in subdivision (g), if the veteran is blind in both eyes,
10has lost the use of two or more limbs, or if the veteran is totally
11disabled as a result of injury or disease incurred in military service.

12(b) (1) For purposes of this section, “veteran” means either of
13the following:

14(A) A veteran as specified in subdivision (o) of Section 3 of
15Article XIII of the California Constitution, except for the limitation
16on the value of property owned by the veteran or the veteran’s
17spouse.

18(B) A person who would qualify as a veteran pursuant to
19paragraph (1) except that he or she has, as a result of a
20service-connected injury or disease, as determined by the United
21States Department of Veterans Affairs, died while on active duty
22in military service.

23(2) For purposes of this section, property is deemed to be the
24principal place of residence of a veteran, disabled as described in
25subdivision (a), who is confined to a hospital or other care facility,
26if that property would be that veteran’s principal place of residence
27were it not for his or her confinement to a hospital or other care
28facility, provided that the residence is not rented or leased to a
29third party. For the purposes of this paragraph, a family member
30that resides at the residence is not a third party.

31(c) (1) Property that is owned by, and that constitutes the
32principal place of residence of, the unmarried surviving spouse of
33a deceased veteran is exempt from taxation on that part of the full
34value of the residence that does not exceed two million one hundred
35begin insert thousandend insert dollars ($2,100,000), as adjusted for the relevant
36assessment year as provided in subdivision (g), if the deceased
37veteran was blind in both eyes, had lost the use of two or more
P4    1limbs, or was totally disabled, provided that either of the following
2conditions is met:

3(A) The deceased veteran during his or her lifetime qualified
4for the exemption pursuant to subdivision (a), or would have
5qualified for the exemption under the laws effective on January 1,
61977, except that the veteran died prior to January 1, 1977.

7(B) The veteran died from a disease that was service-connected,
8as determined by the United States Department of Veterans Affairs.

9(2) Property that is owned by, and that constitutes the principal
10place of residence of, the unmarried surviving spouse of a veteran
11described in subparagraph (B) of paragraph (1) of subdivision (b)
12is exempt from taxation on that part of the full value of the
13residence that does not exceed two million one hundredbegin insert thousandend insert
14 dollars ($2,100,000), as adjusted for the relevant assessment year
15as provided in subdivision (g).

16(3) Property is deemed to be the principal place of residence of
17the unmarried surviving spouse of a deceased veteran, who is
18confined to a hospital or other care facility, if that property would
19be the unmarried surviving spouse’s principal place of residence
20were it not for his or her confinement to a hospital or other care
21facility, provided that the residence is not rented or leased to a
22third party. For purposes of this paragraph, a family member who
23resides at the residence is not a third party.

24(d) As used in this section, “property that is owned by a veteran”
25or “property that is owned by the veteran’s unmarried surviving
26spouse” includes all of the following:

27(1) Property owned by the veteran with the veteran’s spouse as
28a joint tenancy, tenancy in common, or as community property.

29(2) Property owned by the veteran or the veteran’s spouse as
30separate property.

31(3) Property owned with one or more other persons to the extent
32of the interest owned by the veteran, the veteran’s spouse, or both
33the veteran and the veteran’s spouse.

34(4) Property owned by the veteran’s unmarried surviving spouse
35with one or more other persons to the extent of the interest owned
36by the veteran’s unmarried surviving spouse.

37(5) That portion of the property of a corporation that constitutes
38the principal place of residence of a veteran or a veteran’s
39unmarried surviving spouse when the veteran, the veteran’s spouse,
40or the veteran’s unmarried surviving spouse is a shareholder of
P5    1the corporation and the rights of shareholding entitle one to the
2possession of property, legal title to which is owned by the
3corporation. The exemption provided by this paragraph shall be
4shown on the local roll and shall reduce the full value of the
5corporate property. Notwithstanding any law or articles of
6incorporation or bylaws of a corporation described in this
7paragraph, any reduction of property taxes paid by the corporation
8shall reflect an equal reduction in any charges by the corporation
9to the person who, by reason of qualifying for the exemption, made
10possible the reduction for the corporation.

11(e) For purposes of this section, the following definitions shall
12apply:

13(1) “Being blind in both eyes” means that the veteran is a blind
14person, as that term is defined in Section 19153 of the Welfare
15and Institutions Code as that section read on January 1, 2016.

16(2) “Lost the use of two or more limbs” means that the limb has
17been amputated or its use has been lost by reason of ankylosis,
18progressive muscular dystrophies, or paralysis.

19(3) “Totally disabled” means that the veteran has a disability
20which the United States Department of Veterans Affairs or the
21military service from which the veteran was discharged has rated
22 at 100 percent, or rated the disability compensation at 100 percent
23by reason of being unable to secure or follow a substantially gainful
24occupation, or the veteran is so severely disabled as to be unable
25to move without the aid of an assistive device.

26(f) An exemption granted to a claimant pursuant to this section
27shall be in lieu of the veteran’s exemption provided by subdivisions
28(o), (p), (q), and (r) of Section 3 of Article XIII of the California
29Constitution and any other real property tax exemption to which
30the claimant may be entitled. No other real property tax exemption
31shall be granted to any other person with respect to the same
32residence for which an exemption has been granted pursuant to
33this section; provided, that if two or more veterans qualified
34pursuant to this section coown a property in which they reside,
35each is entitled to the exemption to the extent of his or her interest.

36(g) Commencing on January 1, 2018, and for each assessment
37year thereafter, the exemption amounts set forth in subdivisions
38(a) and (c) shall be compounded annually by an inflation factor
39that is the annual percentage change, measured from February to
40February of the two previous assessment years, rounded to the
P6    1nearest one-thousandth of 1 percent, in the California Consumer
2Price Index for all items, as determined by the California
3Department of Industrial Relations.

4(h) The amendments made to this section by the act adding this
5subdivisionbegin insert shallend insert apply begin deletefor property tax lien dates for the 2017-18
6fiscal year and for each fiscal year thereafter.end delete
begin insert commencing with
7the lien date for the 2017-18 fiscal year.end insert

begin insert

8
(i) This section shall remain in effect only until, and is repealed
9as of, the earlier of either of the following:

end insert
begin insert

10
(1) January 1, 2020.

end insert
begin insert

11
(2) The first property tax lien date following a determination
12 by the Commission on State Mandates that the amendments made
13to this section by the act adding this subdivision impose
14reimbursable costs mandated by the state pursuant to Part 7
15(commencing with Section 17500) of Division 4 of Title 2 of the
16Government Code that are payable from the General Fund.

end insert
17begin insert

begin insertSEC. 2.end insert  

end insert

begin insertSection 205.5 is added to the end insertbegin insertRevenue and Taxation
18Code
end insert
begin insert, to read:end insert

begin insert
19

begin insert205.5.end insert  

(a) Property that constitutes the principal place of
20residence of a veteran and that is owned by the veteran, the
21veteran’s spouse, or the veteran and the veteran’s spouse jointly
22is exempted from taxation on that part of the full value of the
23residence that does not exceed one hundred thousand dollars
24($100,000), as adjusted for the relevant assessment year as
25provided in subdivision (h), if the veteran is blind in both eyes,
26has lost the use of two or more limbs, or is totally disabled as a
27result of injury or disease incurred in military service. The
28one-hundred-thousand-dollar ($100,000) exemption shall be one
29hundred fifty thousand dollars ($150,000), as adjusted for the
30relevant assessment year as provided in subdivision (h), in the
31case of an eligible veteran whose household income does not
32exceed the amount of forty thousand dollars ($40,000), as adjusted
33for the relevant assessment year as provided in subdivision (g).

34
(b) (1) For purposes of this section, “veteran” means either of
35the following:

36
(A) A veteran as specified in subdivision (o) of Section 3 of
37Article XIII of the California Constitution without regard to any
38limitation contained therein on the value of property owned by the
39veteran or the veteran’s spouse.

P7    1
(B) Any person who would qualify as a veteran pursuant to
2paragraph (1) except that he or she has, as a result of a
3service-connected injury or disease, died while on active duty in
4military service. The United States Department of Veterans Affairs
5shall determine whether an injury or disease is service connected.

6
(2) For purposes of this section, property is deemed to be the
7principal place of residence of a veteran, disabled as described
8in subdivision (a), who is confined to a hospital or other care
9facility if that property would be that veteran’s principal place of
10residence were it not for his or her confinement to a hospital or
11other care facility, provided that the residence is not rented or
12leased to a third party. A family member that resides at the
13residence is not considered to be a third party.

14
(c) (1) Property that is owned by, and that constitutes the
15principal place of residence of, the unmarried surviving spouse of
16a deceased veteran is exempt from taxation on that part of the full
17value of the residence that does not exceed one hundred thousand
18dollars ($100,000), as adjusted for the relevant assessment year
19as provided in subdivision (h), in the case of a veteran who was
20blind in both eyes, had lost the use of two or more limbs, or was
21totally disabled provided that either of the following conditions is
22met:

23
(A) The deceased veteran during his or her lifetime qualified
24in all respects for the exemption or would have qualified for the
25exemption under the laws effective on January 1, 1977, except that
26the veteran died prior to January 1, 1977.

27
(B) The veteran died from a disease that was service connected
28as determined by the United States Department of Veterans Affairs.

29
The one-hundred-thousand-dollar ($100,000) exemption shall
30be one hundred fifty thousand dollars ($150,000), as adjusted for
31the relevant assessment year as provided in subdivision (h), in the
32case of an eligible unmarried surviving spouse whose household
33income does not exceed the amount of forty thousand dollars
34($40,000), as adjusted for the relevant assessment year as provided
35in subdivision (g).

36
(2) Commencing with the 1994-95 fiscal year, property that is
37owned by, and that constitutes the principal place of residence of,
38the unmarried surviving spouse of a veteran as described in
39subparagraph (B) of paragraph (1) of subdivision (b) is exempt
40from taxation on that part of the full value of the residence that
P8    1does not exceed one hundred thousand dollars ($100,000), as
2adjusted for the relevant assessment year as provided in
3subdivision (h). The one-hundred-thousand-dollar ($100,000)
4exemption shall be one hundred fifty thousand dollars ($150,000),
5as adjusted for the relevant assessment year as provided in
6subdivision (h), in the case of an eligible unmarried surviving
7spouse whose household income does not exceed the amount of
8forty thousand dollars ($40,000), as adjusted for the relevant
9assessment year as provided in subdivision (g).

10
(3) Beginning with the 2012-13 fiscal year and for each fiscal
11year thereafter, property is deemed to be the principal place of
12residence of the unmarried surviving spouse of a deceased veteran
13who is confined to a hospital or other care facility if that property
14would be the unmarried surviving spouse’s principal place of
15residence were it not for his or her confinement to a hospital or
16other care facility, provided that the residence is not rented or
17leased to a third party. For purposes of this paragraph, a family
18member who resides at the residence is not considered to be a
19third party.

20
(d) As used in this section, “property that is owned by a veteran”
21or “property that is owned by the veteran’s unmarried surviving
22spouse” includes all of the following:

23
(1) Property owned by the veteran with the veteran’s spouse as
24a joint tenancy, tenancy in common, or community property.

25
(2) Property owned by the veteran or the veteran’s spouse as
26separate property.

27
(3) Property owned with one or more other persons to the extent
28of the interest owned by the veteran, the veteran’s spouse, or both
29the veteran and the veteran’s spouse.

30
(4) Property owned by the veteran’s unmarried surviving spouse
31with one or more other persons to the extent of the interest owned
32by the veteran’s unmarried surviving spouse.

33
(5) So much of the property of a corporation as constitutes the
34principal place of residence of a veteran or a veteran’s unmarried
35surviving spouse when the veteran, or the veteran’s spouse, or the
36veteran’s unmarried surviving spouse is a shareholder of the
37corporation and the rights of shareholding entitle one to the
38possession of property, legal title to which is owned by the
39corporation. The exemption provided by this paragraph shall be
40shown on the local roll and shall reduce the full value of the
P9    1corporate property. Notwithstanding any provision of law or
2articles of incorporation or bylaws of a corporation described in
3this paragraph, any reduction of property taxes paid by the
4corporation shall reflect an equal reduction in any charges by the
5corporation to the person who, by reason of qualifying for the
6exemption, made possible the reduction for the corporation.

7
(e) For purposes of this section, being blind in both eyes means
8having a visual acuity of 5/200 or less, or concentric contraction
9of the visual field to 5 degrees or less; losing the use of a limb
10means that the limb has been amputated or its use has been lost
11by reason of ankylosis, progressive muscular dystrophies, or
12paralysis; and being totally disabled means that the United States
13Department of Veterans Affairs or the military service from which
14the veteran was discharged has rated the disability at 100 percent
15or has rated the disability compensation at 100 percent by reason
16of being unable to secure or follow a substantially gainful
17occupation.

18
(f) An exemption granted to a claimant in accordance with the
19provisions of this section shall be in lieu of the veteran’s exemption
20provided by subdivisions (o), (p), (q), and (r) of Section 3 of Article
21XIII of the California Constitution and any other real property tax
22exemption to which the claimant may be entitled. No other real
23property tax exemption may be granted to any other person with
24respect to the same residence for which an exemption has been
25granted under the provisions of this section, provided that, if two
26or more veterans qualified pursuant to this section coown a
27property in which they reside, each is entitled to the exemption to
28the extent of his or her interest.

29
(g) Commencing on January 1, 2002, and for each assessment
30year thereafter, the household income limit shall be compounded
31annually by an inflation factor that is the annual percentage
32change, measured from February to February of the two previous
33assessment years, rounded to the nearest one-thousandth of 1
34percent, in the California Consumer Price Index for all items, as
35determined by the California Department of Industrial Relations.

36
(h) Commencing on January 1, 2006, and for each assessment
37year thereafter, the exemption amounts set forth in subdivisions
38(a) and (c) shall be compounded annually by an inflation factor
39that is the annual percentage change, measured from February to
40February of the two previous assessment years, rounded to the
P10   1nearest one-thousandth of 1 percent, in the California Consumer
2Price Index for all items, as determined by the California
3Department of Industrial Relations.

4
(i) This section shall become operative on the earlier of either
5of the following:

6
(1) January 1, 2020.

7
(2) The first property tax lien date following a determination
8by the Commission on State Mandates that the amendments made
9by the act adding this section impose reimbursable costs mandated
10by the state pursuant to Part 7 (commencing with Section 17500)
11of Division 4 of Title 2 of the Government Code that are payable
12from the General Fund.

end insert
13

begin deleteSEC. 2.end delete
14
begin insertSEC. 3.end insert  

Notwithstanding Section 2229 of the Revenue and
15Taxation Code, no appropriation is made by this act and the state
16shall not reimburse any local agency for any property tax revenues
17lost by it pursuant to this act.

18

begin deleteSEC. 3.end delete
19
begin insertSEC. 4.end insert  

If the Commission on State Mandates determines that
20this act contains costs mandated by the state, reimbursement to
21local agencies and school districts for those costs shall be made
22pursuant to Part 7 (commencing with Section 17500) of Division
234 of Title 2 of the Government Code.

24

begin deleteSEC. 4.end delete
25
begin insertSEC. 5.end insert  

This act provides for a tax levy within the meaning of
26Article IV of the California Constitution and shall go into
27immediate effect.



O

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