BILL ANALYSIS Ó
SB 1458
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Date of Hearing: June 14, 2016
ASSEMBLY COMMITTEE ON VETERANS AFFAIRS
Jacqui Irwin, Chair
SB
1458 (Bates) - As Amended April 6, 2016
SENATE VOTE: 39-0
SUBJECT: Property taxation: exemptions: disabled veterans
SUMMARY: Expands eligibility for the disabled veterans property
tax exemption to include persons, who were discharged from
military service under "other than dishonorable conditions."
Specifically, this bill:
1)Modifies the military discharge standard, regarding
eligibility for the disabled veterans property tax exemption,
to include both of the following criteria:
a) Discharged from military service "under other than
dishonorable conditions"; and
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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 this bill.
EXISTING LAW:
The Code of Federal Regulations at, 38 C.F.R., requires that a
veteran's character of discharge (COD) must be under other than
dishonorable conditions to establish eligibility for Department
of Veterans Affairs (VA) benefits based on that individual's
military service.
The California Constitution states in pertinent part in section
3 ofArticle XIII:
(o) Property in the amount of $1,000 of a claimant who--
(1) is serving in or has served in and has been discharged
under
honorable conditions from service in the United States
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Army, Navy,
Air Force, Marine Corps, Coast Guard, or Revenue Marine
(Revenue
Cutter) Service; and--
(2) served either
(i) in time of war, or
(ii) in time of peace in a campaign or expedition for
which a
medal has been issued by Congress, or
(iii) in time of peace and because of a service-connected
disability was released from active duty; and--
(3) resides in the State on the current lien date.
California Revenue and Taxation Code section 205.5:
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(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 limitation contained therein on the value
of property owned by the veteran or the veteran's spouse.
FISCAL EFFECT: According to the Senate Appropriations
Committee:
1)The BOE indicates that this bill will result in an annual
property tax revenue loss of $127,000 for every 100
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newly-qualified disabled veterans. Lower local property tax
revenues lead to increased General Fund Proposition 98
spending by up to roughly 50 percent (the exact amount depends
on the specific amount of the annual Proposition 98 guarantee,
which in turns depends upon a variety of economic, demographic
and budgetary factors).
2)The BOE would incur minor implementation costs.
COMMENTS: This bill is double referred to the Revenue and
Taxation Committee, so this analysis will focus on the veterans
aspects of the bill, setting aside issues which are primarily
issues for that Committee.
According to the author:
Senate Bill 1458 makes California law consistent with federal
law so that any veteran receiving service-connected disability
benefits at 100% will be eligible to receive the state's
disabled veterans' property tax exemption on their home.
Currently, veterans who have the 100% disability rating are
unable to receive the property tax exemption unless they are
Honorably Discharged. It is unknown how many veterans fall
under the other types of discharge allowed by this bill
(General Discharge Under Honorable Conditions, Discharge Other
than Honorable Conditions), however it is expected to be a
small amount.
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A veteran should qualify for the state property tax exemption
if he/she received a 100% disability rating, did not receive a
dishonorable or bad conduct discharge, and if they qualify for
existing USDVA disability compensation benefits.
SB 1458 necessarily helps California veterans returning from
war receive a well-deserved property tax exemption, as long as
they meet the appropriate discharge eligibility from the
service.
It is not clear that there is a problem that the bill will
solve, in that no evidence has been provided that veterans are
generally more challenged by property taxes than other
subpopulations. However, the basis for this bill seems rooted
in the recognition of the service and sacrifice of veterans,
particularly those with 100% service connected disabilities
which is well established as a policy foundation in California.
The bill does generally conform the state property to the
federal standard for veterans benefits. Veterans who might be
included by the bill, though they may have received a discharge
less than honorable but more than dishonorable, nevertheless are
required to have a 100% service connected disability. In
recognition of this level of sacrifice, the author proposes to
extend the benefit.
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Related Legislation:
SB 1113 (Knight, 2014), chapter 656 - Property taxation:
disabled veterans' exemption: statute of limitations.
REGISTERED SUPPORT / OPPOSITION:
Support
BOE member George Runner (sponsor)
American Legion- Department of California
AMVETS- Department of California
California Association of County Veterans Service Officers
California State Commanders Veterans Council
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Military Officers Association of America
California Council of Chapters
San Diego Chapter of Disabled Veterans Assoc. of America
Veterans Association of North County (VANC)
Vietnam Veterans of America- California State Council.
Opposition
None on File.
Analysis Prepared by:Jenny Callison / V.A. / (916)
319-3550
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