Senate BillNo. 1458


Introduced by Senator Bates

February 19, 2016


An act to amend Section 205.5 of the Revenue and Taxation Code, relating to taxation, to take effect immediately, tax levy.

LEGISLATIVE COUNSEL’S DIGEST

SB 1458, as introduced, Bates. Property taxation: exemptions: disabled veterans.

Existing property tax law provides, pursuant to the authorization of the California Constitution, a disabled veteran’s 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 an 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. That law defines a veteran for its purposes as a person who, among other things, is serving in or has served in and has been discharged under honorable conditions from service in the United States Army, Navy, Air Force, Marine Corps, or Coast Guard.

This bill would expand that definition of veteran to include a person who has been discharged in other than dishonorable conditions from service under those same conditions.

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.

This bill would take effect immediately as a tax levy.

Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: no.

The people of the State of California do enact as follows:

P2    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, that is owned by the veteran, the veteran’s
5spouse, or the veteran and the veteran’s spouse jointly, is exempted
6from taxation on that part of the full value of the residence that
7does not exceed one hundred thousand dollars ($100,000), as
8adjusted for the relevant assessment year as provided in subdivision
9(h), if the veteran is blind in both eyes, has lost the use of two or
10more limbs, or if the veteran is totally disabled as a result of injury
11or disease incurred in military service. The one hundred thousand
12dollar ($100,000) exemption shall be one hundred fifty thousand
13dollars ($150,000), as adjusted for the relevant assessment year as
14provided in subdivision (h), in the case of an eligible veteran whose
15household income does not exceed the amount of forty thousand
16dollars ($40,000), as adjusted for the relevant assessment year as
17provided in subdivision (g).

18(b) (1) For purposes of this section, “veteran” means either of
19the following:

begin delete

20(A) A veteran as specified in subdivision (o) of Section 3 of
21Article XIII of the California Constitution without regard to any
22limitation contained therein on the value of property owned by the
23veteran or the veteran’s spouse.

end delete
begin insert

24(A) A person who is serving in or has served in and has been
25discharged under other than dishonorable conditions from service
26in the United States Army, Navy, Air Force, Marine Corps, or
27Coast Guard, and served either in time of war or in time of peace
28in a campaign or expedition for which a medal has been issued
29by Congress, or in time of peace and because of a
30service-connected disability was released from active duty.

end insert

31(B) Any person who would qualify as a veteran pursuant to
32begin delete paragraph (1)end deletebegin insert subparagraph (A)end insert except that he or she has, as a
P3    1result of a service-connected injury or disease, died while on active
2duty in military service. The United States Department of Veterans
3Affairs shall determine whether an injury or disease is service
4connected.

5(2) For purposes of this section, property is deemed to be the
6principal place of residence of a veteran, disabled as described in
7subdivision (a), who is confined to a hospital or other care facility,
8if that property would be that veteran’s principal place of residence
9were it not for his or her confinement to a hospital or other care
10facility, provided that the residence is not rented or leased to a
11third party.begin delete Aend deletebegin insert For purposes of this paragraph, aend insert family member
12begin delete thatend deletebegin insert whoend insert resides at the residence is notbegin delete considered to beend delete a third
13party.

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 as
19provided in subdivision (h), in the case of a veteran who was blind
20in both eyes, had lost the use of two or more limbs, or was totally
21disabled provided that either of the following conditions is met:

22(A) The deceased veteran during his or her lifetime qualified
23begin delete in all respectsend delete for the exemptionbegin insert pursuant to subdivision (a),end insert or
24would have qualified for the exemption under the laws effective
25on January 1, 1977, except that the veteran died prior to January
261, 1977.

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

29The 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
P4    1does not exceed one hundred thousand dollars ($100,000), as
2adjusted for the relevant assessment year as provided in subdivision
3(h). The one hundred thousand dollar ($100,000) exemption shall
4be one hundred fifty thousand dollars ($150,000), as adjusted for
5the relevant assessment year as provided in subdivision (h), in the
6case of an eligible unmarried surviving spouse whose household
7income does not exceed the amount of forty thousand dollars
8($40,000), as adjusted for the relevant assessment year as provided
9in 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 notbegin delete considered to beend delete a third
19party.

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 as 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
40 shown on the local roll and shall reduce the full value of the
P5    1corporate property. Notwithstanding anybegin delete provision ofend delete 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 claimantbegin delete in accordance with the
19provisions ofend delete
begin insert pursuant toend insert this section shall be in lieu of the
20veteran’s exemption provided by subdivisions (o), (p), (q), and (r)
21of Section 3 of Article XIII of the California Constitution and any
22other real property tax exemption to which the claimant may be
23entitled. No other real property tax exemption may be granted to
24any other person with respect to the same residence for which an
25exemption has been grantedbegin delete under the provisions ofend deletebegin insert pursuant toend insert
26 this section; provided, that if two or more veterans qualified
27pursuant to this section coown a property in which they reside,
28each is entitled to the exemption to the 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 change,
32measured 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
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

SEC. 2.  

Notwithstanding Section 2229 of the Revenue and
5Taxation Code, no appropriation is made by this act and the state
6shall not reimburse any local agency for any property tax revenues
7lost by it pursuant to this act.

8

SEC. 3.  

This act provides for a tax levy within the meaning of
9Article IV of the Constitution and shall go into immediate effect.



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