BILL ANALYSIS Ó
SENATE COMMITTEE ON VETERANS AFFAIRS
Senator Jim Nielsen, Chair
2015 - 2016 Regular
Bill No: SB 1458 Hearing Date: 4/12/16
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|Author: |Bates |
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|Version: |4/6/16 |
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|Urgency: |No |Fiscal: |Yes |
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|Consultant:|Wade Teasdale |
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Subject: Property taxation: exemptions: disabled veterans
DESCRIPTION
Summary:
Expands eligibility of the "disabled veterans property tax
exemption" to include persons, who were discharged from military
service under "other than dishonorable conditions."
Existing law:
1)Authorizes the Legislature to exempt partially or fully from
property tax, the home of a disabled veteran - or the
veteran's spouse, including an unmarried surviving spouse - if
the veteran's disabling injury incurred in military service;
and the veteran is blind in both eyes; lost the use of two or
more limbs; or is totally disabled.
[California Constitution, Article XIII, Section 4(a)]
a) Applies also to the veteran's spouse, including an
unmarried surviving spouse, if the veteran has, as a result
of a service-connected injury or disease, died while on
active duty in military service.
b) Does not apply if the home is receiving another real
property exemption.
1)Provides a partial exemption for eligible disabled veterans.
(RTC Section 205.5)
2)Defines an eligible veteran as a person who, among other
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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. (RTC
Section 205.5)
This bill:
1)Regarding eligibility for the disabled veterans property tax
exemption, modifies the military discharge standard to include
both of the following criteria:
a) Discharged from military service "under other than
dishonorable conditions"; and
b) Determined by the United States Department of Veterans
Affairs (USDVA) to be eligible for federal veterans' health
and medical benefits.
2) Provides that no appropriation is made and the state shall
not reimburse local agencies for property tax revenues lost by
them pursuant to the bill.
BACKGROUND
Disabled Veterans Property Tax Exemption
California provides qualified disabled veterans and their
unmarried surviving spouses with a property tax exemption that
applies to their home's assessed value. Eligibility provisions
require that the claimant demonstrate award of disability rating
from the USDVA that:
1) Rates the veteran's disability at 100%; or
2) Rates the veteran's disability compensation at 100%
because the veteran is unable to secure and maintain
gainful employment.
The law also allows surviving spouses to receive the exemption
if the spouse's death was service-connected. To be eligible for
the exemption, surviving spouses must receive a USDVA
determination that the spouse's death was service-connected. A
USDVA determination is necessary for (1) active duty personnel
deaths (i.e., the service person was not a "veteran") and (2)
veterans without a 100% rating when alive, but whose cause of
death is deemed service-connected. Surviving spouses of veterans
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with a 100% disability rating during their lifetime continue to
receive the exemption after the veteran's death so long as they
do not remarry.
The exemption amount depends upon the claimant's income.
According to the State Board of Equalization, Fiscal year
2016-17, the basic exemption adjusted for inflation will be
$127,510. If the claimant's income is less than $57,258, the
exemption amount will be $191,266. For Fiscal Year 2015-16,
37,653 disabled veterans or their unmarried surviving spouses
were granted the exemption.
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| | | Lower |
| Qualification | | Income |
| | | Exemption |
| | Basic | Amount |
| | | $40,000 |
| | Exemptio| adjusted |
| | | for |
| | n | inflation |
| | | $57,258 |
| | Amount | |
| | | |
| | | |
| | | |
|-------------------------------------+-------------+-------------|
| Disabled Veteran | $100,000 | $150,000 |
| | | |
| Disability Rating = 100% | adjuste | adjuste |
| Disability Compensation = | d for | d for |
| 100% | inflati | inflati |
| Blind | on | on |
| Lost Two or More Limbs | | |
| | $127,510 |$191,266 |
| Spouse of Military Personnel | | |
| Surviving Spouse: Disabled | | |
| Veteran | | |
| Surviving Spouse: Active | | |
| Duty Death | | |
| Surviving Spouse: | | |
| | | |
| Posthumous service-connected | | |
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| | | |
| death finding | | |
| | | |
| | | |
| | | |
| | | |
| | | |
|-------------------------------------+-------------+-------------|
| Claims Granted: 37,653 | 33,196 | 4,457 |
| | | |
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| Source: California State Board of Equalization, Legislative |
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|and Research Division, 2016 |
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Types of Military Discharges
The military separates its personnel from active service by
formally discharging them. Discharges may be either
administrative or punitive. Each of the five different discharge
statuses is determined by the characterization of an
individual's service. The character of service slides along a
scale with "honorable" at the high end and "dishonorable" at the
low end.
The types of discharges fall under one of two categories:
"Administrative" or "punitive." Punitive discharges are reserved
for the most negative cases and imposed only by special and
general courts martial. Administrative separations cannot be
awarded by a court-martial and are not punitive in nature.
Enlisted personnel may be administratively separated with a
characterization of service or a description of separation.
Administrative discharges include:
1)Honorable. This is the most common discharge status. It
presumes creditable service and good behavior. All service
members will earn an Honorable Discharge unless they
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experience significant problems and receive a lower type of
discharge,
2)General (under honorable conditions).Sometimes referred to as
a "General Discharge," it is granted if an individual's
commander determines that the service has been generally
honest and faithful, even if the person ran into some trouble.
General Discharges are given for a variety of reasons,
including failure to progress in training; failure to maintain
military standards in, appearance, weight, or fitness; or for
disciplinary infractions, including drug or alcohol abuse.
3)Other than Honorable. An "OTH" discharge usually is given
when an individual's service represents a broader pattern of
departure from the conduct and performance expected of all
military members. It can result from notable drug or alcohol
problems, but also can be based on other misconduct, such as
abuse of authority, fraternization, or a pattern of continued
misconduct. OTH discharges bar the individual from reenlisting
into any component of the Armed Forces, including the federal
reserves and National Guard.
Punitive discharges are authorized punishments of courts-martial
and can only be imposed as an approved court-martial sentence
following an individual's conviction for violating the Uniform
Code of Military Justice. There are two types of punitive
discharges:
1)Bad Conduct Discharge. This can be imposed by both special and
general courts-martial. This discharge is usually given for
convictions of crimes such as absent without leave, drunk on
duty, driving while under the influence, adultery, writing bad
checks, and disorderly conduct.
2)Dishonorable Discharge. This is the worst type of military
discharge a service member can receive, and can be imposed
only by a general court-martial. In most cases, a Dishonorable
Discharge also involves being sentenced to serve time in a
military prison.
Discharge Requirements for Veterans Benefits
Basic eligibility for federal veterans benefits depends upon the
type of military service performed, duration of service, and
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character of discharge or separation. The discharging military
branch makes those determinations; the USDVA reviews the
military's description of the "character of discharge" to
determine whether a person meets the basic eligibility
requirements for receipt of VA benefits under title 38 of the
United States Code.
A discharge characterized by a military service as "under
honorable conditions" is binding on the USDVA and requires it to
provide benefits if other eligibility requirements are met. A
Dishonorable Discharge explicitly bars the USDVA from providing
benefits.
The OTH and Bad Conduct discharges bar an individual from
presumptive eligibility for federal benefits. In these cases,
however, the USDVA, as administering agency of benefits, may be
asked to make an independent assessment of the character of
service. The USDVA reviews facts and circumstances surrounding
the incident(s) that led to the discharge, as reported by the
military, as well as any supporting evidence from the claimant
or third parties. On a case-by-case basis, VA determines whether
the incidents that led to the OTH or Bad Conduct discharge may
be found to have been "under conditions other than
dishonorable," and thus whether basic eligibility for VA
benefits can be established.
Therefore, while recipients of OTH and Bad Conduct discharges
were not separated "under honorable conditions," for the
purposes of determining benefit eligibility, they may be found
to have been separated "under other than dishonorable
conditions."
Attached to this analysis is a table, which describes the
federal veterans benefits available to an individual based on
type of discharge. This table was produced by the United States
Army and provided by the California National Guard.
COMMENT
Committee comments :
1)The California Constitution does not condition the disabled
veteran property tax exemption on the nature of an
individual's discharge status. That condition, which is in
statute, is the provision of law which SB 1458 seeks to
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change.
2)Discharge status:
i) Traditionally, when defining the term "veteran" for
the purposes of establishing eligibility for
state-provided veterans benefits, California hews toward
Honorable Discharge, which is the highest federal
standard. The general definition of "veteran" is
contained in Military and Veterans Code (MVC) Sec. 980 is
"any person who did all of the following":
1) Served in the active military, naval, or air
service of the United States for a period of not less
than 90 consecutive days or was discharged from the
service due to a service-connected disability within
that 90-day period.
2) Received an Honorable Discharge or was
released from active duty under honorable conditions.
a) For example, the Military and Veterans Code (MVC)
Section 987.52 defines eligibility for the CalVet Home Loan
Program as meeting either of the following:
i) Any veteran as defined in MVC Section 980;
ii) Any person who is on active duty in the
military or naval service of the United States, whose
service may or may not have been continuous, and who is
in all other respects qualified pursuant to MVC Section
980.
b) One recent departure from tradition is the Veterans
Housing and Homelessness Prevention (VHHP) Program, which
does not condition its provision of housing or supportive
services on a potential beneficiary's discharge status. The
VHHP defines an eligible veteran as follows:
"Veteran" means any person who served in the active
military, naval, or air service of the United States,
or as a member of the National Guard who was called to
and released from active duty or active service, for a
period of not less than 90 consecutive days or was
discharged from the service due to a service-connected
disability within that 90-day period. [MVC
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Sec. 987.003(d)]
Related /Prior Legislation
SB 1104 (Stone, pending Senate Governance and Finance
Committee, 2016) fully exempts the home of a disabled veteran
from property tax and prohibits any future Proposition
13-related inflation adjustments to the assessed value of homes
of honorably discharged veterans over the age of 65.
SB 1183 (Bates, pending Senate Veterans Affairs Committee,
2016) fully exempts from property tax the home of any person
eligible for the disabled veterans' exemption.
AB 1556 (Mathis/Weber, pending Assembly Revenue and Taxation
Committee, 2016) almost identical to SB 1183 (Bates, 2016).
AB 188 (Block & Butler, Chapter 202, Statutes of 2011) provides
that the disabled veterans' property tax exemption applies when
an unmarried surviving spouse is confined to a health care
facility.
POSITIONS
Sponsor:
Hon. George Runner, Member, State Board of Equalization
Support:
American G.I. Forum of California
American Legion - Department of California
AMVETS - Department of California
California Association of County Veterans Service Officers
California State Commanders Veteran Council
Military Officers Association of America - California Council of
Chapters
Veterans of Foreign Wars - Department of California
Vietnam Veterans of American - California State Council
Oppose: None received
-- END --
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