BILL ANALYSIS Ó
SB 690
Page 1
Date of Hearing: August 10, 2016
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Lorena Gonzalez, Chair
SB 690
(Stone) - As Amended August 4, 2016
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|Policy |Revenue and Taxation |Vote:|8 - 0 |
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Urgency: No State Mandated Local Program: YesReimbursable:
Yes
SUMMARY:
This bill creates two property tax benefits for veteran
taxpayers. Specifically, this bill:
1)Eliminates the inflation adjustment of the assessed value of a
qualified veteran's primary home starting on January 1, 2017.
A disabled veteran taxpayer is qualified if he or she is 65
years of age or older, was discharged honorably from military
service, and has an annual income of $50,000 or less, if
single, and $100,000 or less, if married.
SB 690
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2)Expands the partial property tax exemption for disabled
veterans (Disabled Veterans' Exemption) whose household does
not exceed $40,000 to a full property tax exemption for
property tax lien dates on or after January 1, 2017.
3)Requires any claimant of the inflationary adjustment
elimination to provide all information required by an
affidavit furnished by the assessor to determine whether the
claimant is a "qualified veteran." The assessor may require
additional proof of information provided in the affidavit
before granting the claimant the benefit.
FISCAL EFFECT:
1)Annual property tax loss of approximately $13.3 million,
resulting in GF costs of approximately $6.2 million as a
result of the Proposition 98 guarantee.
2)Minor and absorbable costs to the Board of Equalization (BOE)
to modify forms, publications, and website materials.
3)Unknown and possibly reimbursable costs for local assessors to
verify the income of qualified seniors.
COMMENTS:
1)Purpose. According to the author, SB 690 will help veterans
who have sacrificed the most receive tax relief in order to
stay in their homes.
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2)Background on inflation adjustment. When a home is purchased,
its assessed value is the purchase price, or "acquisition
value." Each year thereafter, the property's assessed value
increases by 2% or the rate of inflation, whichever is lower.
This process continues until the property is sold, at which
point the county assessor again assigns it an assessed value
equal to its most recent purchase price.
3)Background on the Disabled Veterans' Exemption. The Disabled
Veterans' Exemption exempts a portion of the assessed value of
a principal place of residents from property tax for qualified
veterans and their spouses. In 2016, most qualified veterans
will not pay property taxes on the first $127,510 of their
home's value. Low-income disabled veterans are granted a more
generous exemption. In 2016, disabled veterans and their
spouses with a household income of $57,258 or less will be
exempt from property taxes on the first $191,266 of their
principal place of residence.
Existing law defines the conditions under which a disabled
veteran may receive the Disabled Veterans' Exemption. This
includes a veteran who is blind in both eyes, lost use of 2 or
more limbs, or has a total disability, which is a veteran who
is designated 100 percent disabled by the United States
Department of Veterans Affairs or the military service from
which he or she was discharged.
4)Related legislation. SB 690 is one of a number of bills this
legislative session that aims expand property tax benefits to
veterans through the Disabled Veterans' Exemption:
a) AB 1556 (Mathis) in 2016 would have increased the
Disabled Veterans' Exemption to $2.1 million. That bill was
held in this committee's suspense file.
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b) SB 1458 (Bates) in 2016 would expand the definition of
disabled veterans eligible for the Disabled Veterans'
Exemption. That bill is pending on the Assembly floor.
1)Prior legislation. A number of bills in recent years have
tried to expand the Disabled Veterans' Exemption. These bills
were either held in a policy committee or this committee.
These bills are:
a) SB 764 (Morrow) of 2003 would have increased the
exemptions to $200,000 and $250,000;
b) AB 1845 (Jefferies) of 2007 would have increased the
exemption to $200,000 and $250,000; and,
c) AB 2568 (Houston) of 2008 would have granted a full
exemption to eligible disabled veterans and their spouses.
Analysis Prepared by:Luke Reidenbach / APPR. / (916)
319-2081