BILL ANALYSIS Ó
SB 1458
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Date of Hearing: August 3, 2016
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Lorena Gonzalez, Chair
SB 1458
(Bates) - As Amended June 29, 2016
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|Policy |Veterans Affairs |Vote:|7 - 0 |
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| |Revenue and Taxation | |9 - 0 |
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Urgency: No State Mandated Local Program: YesReimbursable:
Yes
SUMMARY:
This bill expands eligibility for the Disabled Veteran's
Property Tax Exemption (Disabled Veteran's Exemption) to include
a person who has been discharged under the "other than
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dishonorable conditions" but who is otherwise eligible for
federal veterans' health and medical benefits, as determined by
the U.S. Department of Veterans Affairs (USDVA). The bill also
contains technical provisions that clarify how the Board of
Equalization (BOE) can process corrections related to the
Disabled Veteran's Exemption.
FISCAL EFFECT:
1)Minor and absorbable administrative costs to BOE.
2)Modest GF costs as a result of expanded eligibility for the
Disabled Veteran's Exemption. Annual property tax revenue loss
is approximately $127,000 for every 100 newly-qualified
disabled veterans, resulting in GF costs of approximately
$63,500 as a result of the Proposition 98 guarantee. The exact
number of newly eligible veterans is unknown, but likely
small.
COMMENTS:
1)Purpose. According to the author, SB 1458 will make any
veterans receiving federal service-connected disability
benefits eligible for the Disabled Veteran's Exemption. The
author argues that this bill will ensure 100% disabled
veterans receive the benefits that they deserve.
2)Background. The Disabled Veteran's Exemption exempts a
portion of the assessed value of a principal place of
residence from property tax for qualified veterans and their
spouses. In 2016, most qualified veterans will not pay
property taxes on the first $127,510 of their home's value.
Low-income disabled veterans are granted a more generous
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exemption: In 2016, disabled veterans and their spouses with a
household income of $57,258 or less will be exempt from
property taxes on the first $191,266 of their principal place
of residence.
This exemption is also only available to those disabled
veterans who received an Honorable discharge from military
service.
3)Federal health and medical benefits. Under federal law, USDVA
benefits and services provided to a veteran depend on the
veteran's character of discharge from military service. A
veteran with an Honorable or General (under honorable
conditions) discharge is eligible for benefits. However, a
veteran with an Other Than Honorable (OTH), or Bad Conduct
discharge, may be eligible for benefits on a case by case
basis after an USDVA investigation; the circumstances
surrounding those discharges may leave the door open for the
USDVA to make its own character of discharge determination.
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 furnished by the
claimant or obtained from third parties. On a case-by-case
basis, USDVA determines whether the incidents that led to the
discharge may be found to have been "under conditions other
than dishonorable," and thus whether basic eligibility for
USDVA benefits can be established.
4)Recent amendments. The author amended the bill on June 29,
2016 to allow counties to process corrections beyond four
years, consistent with recent legislation. SB 1113 (Knight),
Chapter 656, Statutes of 2014, expanded from four years to
eight the time period in which disabled veterans otherwise
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eligible to receive the exemption could be refunded property
taxes previously paid. However, SB 1113 lacked provisions to
allow counties to use their existing correction process as the
administrative mechanism to provide these additional refunds.
The most recent amendments give counties the authority to use
their existing correction procedures to provide disabled
veterans' exemption refunds for additional prior tax years as
authorized by 2014's SB 1113, and supporters of the bill argue
these technical amendments will make implementing the Disabled
Veteran's Exemption less complex.
Analysis Prepared by:Luke Reidenbach / APPR. / (916)
319-2081