Amended in Assembly June 29, 2016

Amended in Assembly June 23, 2016

Amended in Senate April 6, 2016

Senate Bill No. 1458

Introduced by Senator Bates

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(Coauthor: Senator Nguyen)

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February 19, 2016

An act to amend begin delete Section 205.5 of end delete begin insert Sections 205.5 and 5097 of, and to add Sections 4831.1 and 5097.3 to, end insert the Revenue and Taxation Code, relating to taxation, to take effect immediately, tax levy.

LEGISLATIVE COUNSEL’S DIGEST

SB 1458, as amended, 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, for property tax lien dates for the 2017- 18 fiscal year and each fiscal year thereafter, 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 and who has been determined by the United States Department of Veterans Affairs to be eligible for federal veterans’ health and medical benefits.

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Existing property tax law allows the correction of certain errors resulting in incorrect entries on the property tax roll within 4 years after the making of the assessment.

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This bill would extend the time for correcting errors to the roll related to the disabled veterans’ exemption to 8 years.

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Existing law requires property taxes to be refunded upon the filing of a claim within 8 years after making the payment sought to be refunded if the claim relates to the disabled veterans’ exemption.

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This bill would instead require a refund on a claim filed within 8 years after making the payment sought to be refunded, or within 60 days of the date of a specified notice, whichever is later.

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Existing property tax law authorizes any taxes paid before or after delinquency to be refunded by the county tax collector within 4 years after the date of payment under specified conditions.

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This bill would authorize any taxes paid before or after delinquency to be refunded by the county tax collector within 8 years after the date of payment if the amount paid exceeds the amount due on the property as a result of corrections to the roll that relate to the disabled veterans’ exemption.

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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.

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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.

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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.

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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.

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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.

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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:  begin delete no end delete begin insert yes end insert .

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

SECTION 1.  

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 person who is serving in or has served in and has been
discharged under other than dishonorable conditions from service
in the United States Army, Navy, Air Force, Marine Corps, or
Coast Guard, and served either in time of war or in time of peace
in a campaign or expedition for which a medal has been issued by
Congress, or in time of peace and because of a service-connected
disability was released from active duty, and who has been
determined by the United States Department of Veterans Affairs
to be eligible for federal veterans’ health and medical benefits.

(B) Any person who would qualify as a veteran pursuant to
subparagraph (A) except that he or she has, as a result of a
service-connected injury or disease, 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. For purposes of this paragraph, a family member who
resides at the residence is not 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 veteran who was blind
in both eyes, had lost the use of two or more limbs, or was totally
disabled provided that either of the following conditions is met:

(A) The deceased veteran during his or her lifetime qualified
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
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 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).

(3) Beginning with the 2012-13 fiscal year and for each fiscal
year thereafter, 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 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 property of a corporation as 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 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 blind in both eyes means
having a visual acuity of 5/200 or less, or concentric contraction
of the visual field to 5 degrees or less; losing the use of a limb
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 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 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 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.

(i) The amendments made to this section by the act adding this
subdivision shall apply for property tax lien dates for the 2017-18
fiscal year and for each fiscal year thereafter.

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begin insert SEC. 2. end insert   

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begin insert Section 4831.1 is added to the end insert begin insert Revenue and Taxation
Code end insert begin insert , to read: end insert

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begin insert 4831.1. end insert   

Notwithstanding any other law, corrections to the roll
that relate to the disabled veterans’ exemption described in Section
205.5 may be corrected within eight years after the making of the
assessment being corrected.

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begin insert SEC. 3. end insert   

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

5097.  

(a) An order for a refund under this article shall not 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) or (4), 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.

(4) Filed within eight years after making the payment sought
to be refunded, begin insert or within 60 days of the notice prescribed by
subdivision (a) of Section 4836, whichever is later, end insert if the claim for
refund is filed on or after January 1, 2015, and relates to the
disabled veterans’ exemption described in Section 205.5.

(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).

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

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begin insert SEC. 4. end insert   

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begin insert Section 5097.3 is added to the end insert begin insert Revenue and Taxation
Code end insert begin insert , to read: end insert

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begin insert 5097.3. end insert   

Notwithstanding any other law, any taxes paid before
or after delinquency may be refunded by the county tax collector
or the county auditor, within eight years after the date of payment,
if the amount paid exceeds the amount due on the property as the
result of corrections to the roll that relate to the disabled veterans’
exemption described in Section 205.5.

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begin insert SEC. 5. end insert   

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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.

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begin delete SEC. 2. end delete

begin insert SEC. 6. end insert   

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.

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begin insert SEC. 7. end insert   

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