BILL NUMBER: SB 1104 INTRODUCED
BILL TEXT
INTRODUCED BY Senator Stone
FEBRUARY 17, 2016
An act to amend Sections 51 and 205.5 of the Revenue and Taxation
Code, relating to taxation, to take effect immediately, tax levy.
LEGISLATIVE COUNSEL'S DIGEST
SB 1104, as introduced, Stone. Property tax: senior and disabled
veterans.
(1) The California Constitution generally limits ad valorem taxes
on real property to 1% of the full cash value, as defined, of that
property, and provides that the full cash value base may be adjusted
each year by the inflationary rate not to exceed 2% for any given
year.
Existing property tax law implementing this constitutional
authority provides that the taxable value of real property is the
lesser of its base year value compounded annually by an inflation
factor not to exceed 2%, as provided, or its full cash value.
This bill would provide that the inflation factor shall not apply
to the principal place of residence of a veteran, as defined, who is
65 years of age or older and honorably discharged from military
service for any assessment year commencing on or after either January
1, 2017, or the veteran's 65th birthday, whichever occurs later.
By changing the manner in which local tax officials calculate the
taxable value of real property owned by senior veterans, this bill
would impose a state-mandated local program.
(2) 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 for inflation, as specified.
This bill, commencing with the lien date for the 2017-18 fiscal
year and for each fiscal year thereafter, would instead exempt the
full value of the principal place of residence of a veteran or
veteran's spouse. The bill would also make technical and conforming
changes to the disabled veterans' property tax exemption.
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.
(3) 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.
(4) 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.
(5) 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:
SECTION 1. Section 51 of the Revenue and Taxation Code is amended
to read:
51. (a) For purposes of subdivision (b) of Section 2 of Article
XIII A of the California Constitution, for each lien date after the
lien date in which the base year value is determined pursuant to
Section 110.1, the taxable value of real property shall, except as
otherwise provided in subdivision (b) or (c), be the lesser of:
(1) Its base year value, compounded annually since the base year
by an inflation factor, which shall be determined as follows:
(A) For any assessment year commencing prior to January 1, 1985,
the inflation factor shall be the percentage change in the cost of
living, as defined in Section 2212.
(B) For any assessment year commencing after January 1, 1985, and
prior to January 1, 1998, the inflation factor shall be the
percentage change, rounded to the nearest one-thousandth of 1
percent, from December of the prior fiscal year to December of the
current fiscal year in the California Consumer Price Index for all
items, as determined by the California Department of Industrial
Relations.
(C) For any assessment year commencing on or after January 1,
1998, the inflation factor shall be the percentage change, rounded to
the nearest one-thousandth of 1 percent, from October of the prior
fiscal year to October of the current fiscal year in the California
Consumer Price Index for all items, as determined by the California
Department of Industrial Relations.
(D) In no event shall the The
percentage increase for any an
assessment year determined pursuant to subparagraph (A), (B), or (C)
shall not exceed 2 percent of the prior year's value.
(E) Notwithstanding any other law, the percentage increase for an
assessment year determined pursuant to subparagraph (A), (B), or (C)
shall not apply to the principal place of residence of a veteran who
is 65 years of age or older and was honorably discharged from
military service for any assessment year commencing on or after
either January 1, 2017, or the veteran's 65th birthday, whichever
occurs later. For the purpose of this subparagraph, "veteran" means a
person who meets the criteria specified in subdivision (o) of
Section 3 of Article XIII of the California Constitution, except for
the limitation on the value of property owned by the veteran or the
veteran's spouse.
(2) Its full cash value, as defined in Section 110, as of the lien
date, taking into account reductions in value due to damage,
destruction, depreciation, obsolescence, removal of property, or
other factors causing a decline in value.
(b) If the real property was damaged or destroyed by disaster,
misfortune, or calamity and the board of supervisors of the county in
which the real property is located has not adopted an ordinance
pursuant to Section 170, or any portion of the real property has been
removed by voluntary action by the taxpayer, the taxable value of
the property shall be the sum of the following:
(1) The lesser of its base year value of land determined under
paragraph (1) of subdivision (a) or full cash value of land
determined pursuant to paragraph (2) of subdivision (a).
(2) The lesser of its base year value of improvements determined
pursuant to paragraph (1) of subdivision (a) or the full cash value
of improvements determined pursuant to paragraph (2) of subdivision
(a).
In applying this subdivision, the base year value of the subject
real property does not include that portion of the previous base year
value of that property that was attributable to any portion of the
property that has been destroyed or removed. The sum determined under
this subdivision shall then become the base year value of the real
property until that property is restored, repaired, or reconstructed
or other provisions of law require establishment of a new base year
value.
(c) If the real property was damaged or destroyed by disaster,
misfortune or calamity and the board of supervisors in the county in
which the real property is located has adopted an ordinance pursuant
to Section 170, the taxable value of the real property shall be its
assessed value as computed pursuant to Section 170.
(d) For purposes of this section, "real property" means that
appraisal unit that persons in the marketplace commonly buy and sell
as a unit, or that is normally valued separately.
(e) Nothing in this section shall be construed to require the
assessor to make an annual reappraisal of all assessable property.
However, for each lien date after the first lien date for which the
taxable value of property is reduced pursuant to paragraph (2) of
subdivision (a), the value of that property shall be annually
reappraised at its full cash value as defined in Section 110 until
that value exceeds the value determined pursuant to paragraph (1) of
subdivision (a). In no event shall the assessor condition the
implementation of the preceding sentence in any year upon the filing
of an assessment appeal.
SEC. 2. 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 Constitution, except for the limitation
contained therein on the value of property owned
by the veteran or the veteran's spouse.
(B) Any A 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, as determined
by the United States Department of Veterans Affairs, 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 For the purposes
of this paragraph, 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
if the deceased veteran who was blind in
both eyes, had lost the use of two or more limbs, or was totally
disabled 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 pursuant to
subdivision (a), 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 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
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).
taxation.
(3) Beginning with the 2012-13 fiscal year and for each
fiscal year thereafter, property 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 That portion of the
property of a corporation as that
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
the following definitions shall apply:
(1) "Being " blind in
both eyes eyes " means
having a visual acuity of 5/200 or less, or concentric contraction of
the visual field to 5 degrees or less; losing
less.
(2) "Lost the use of a
limb two or more limbs " 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 paralysis.
(3) "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 pursuant to 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
pursuant to 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.
(g) The amendments made to this section by the act adding this
subdivision apply for property tax lien dates for the 2017-18 fiscal
year and for each fiscal year thereafter.
SEC. 3. Notwithstanding Section 2229 of the Revenue and Taxation
Code, no appropriation is made by this act and the state shall not
reimburse any local agency for any property tax revenues lost by it
pursuant to this act.
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.
SEC. 5. This act provides for a tax levy within the meaning of
Article IV of the Constitution and shall go into immediate effect.
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