BILL ANALYSIS Ó
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|SENATE RULES COMMITTEE | SB 1458|
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UNFINISHED BUSINESS
Bill No: SB 1458
Author: Bates (R), et al.
Amended: 6/29/16
Vote: 21
SENATE VETERANS AFFAIRS COMMITTEE: 4-0, 4/12/16
AYES: Nielsen, Hueso, Allen, Roth
NO VOTE RECORDED: Nguyen
SENATE GOVERNANCE & FIN. COMMITTEE: 7-0, 4/27/16
AYES: Hertzberg, Nguyen, Beall, Hernandez, Lara, Moorlach,
Pavley
SENATE APPROPRIATIONS COMMITTEE: 7-0, 5/27/16
AYES: Lara, Bates, Beall, Hill, McGuire, Mendoza, Nielsen
SENATE FLOOR: 39-0, 5/31/16
AYES: Allen, Anderson, Bates, Beall, Berryhill, Block,
Cannella, De León, Fuller, Gaines, Galgiani, Glazer, Hall,
Hancock, Hernandez, Hertzberg, Hill, Hueso, Huff, Jackson,
Lara, Leno, Leyva, Liu, McGuire, Mendoza, Mitchell, Monning,
Moorlach, Morrell, Nguyen, Nielsen, Pan, Pavley, Roth, Stone,
Vidak, Wieckowski, Wolk
NO VOTE RECORDED: Runner
ASSEMBLY FLOOR: 79-0, 8/18/16 - See last page for vote
SUBJECT: Property taxation: exemptions: disabled veterans
SOURCE: George Runner, Member, State Board of Equalization
DIGEST: This bill expands eligibility for the Disabled
Veteran's Property Tax Exemption (Disabled Veteran's Exemption)
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to include a person who has been discharged under the "other
than dishonorable conditions" - but who is otherwise eligible
for federal veterans' health and medical benefits, as determined
by the United States Department of Veterans Affairs (USDVA).
This bill also contains technical provisions that allow county
assessors to process assessment roll corrections beyond four
years related to the Disabled Veteran's Exemption.
Assembly Amendments allow counties to process assessment roll
corrections beyond four years, consistent with recent
legislation.
ANALYSIS:
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.
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.
2)Defines an eligible veteran 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.
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3)Allows the correction of certain errors resulting in incorrect
entries on the property tax roll within four years after the
making of the assessment.
4)Requires property taxes to be refunded upon the filing of a
claim within eight years after making the payment sought to be
refunded if the claim relates to the disabled veterans'
exemption.
5)Authorizes any taxes paid before or after delinquency to be
refunded by the county tax collector within four years after
the date of payment under specified conditions.
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
b) Determined by the USDVA to be eligible for federal
veterans' health and medical benefits.
1)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.
2)Extends the time for correcting errors to the roll related to
the disabled veterans' exemption to eight years.
3)Requires a refund on a claim filed within eight years after
making the payment sought to be refunded, or within 60 days of
the date of a specified notice, whichever is later.
4)Authorizes any taxes paid before or after delinquency to be
refunded by the county tax collector within eight 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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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
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 (BOE), for 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.
Discharge Requirements for Veterans Benefits. The military
separates its personnel from active service by formally
discharging them. Discharges may be either administrative or
punitive. Each of five different discharge statuses is
determined by the characterization of an individual's service.
The character of service slides downward in merit along the
following scale:
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1)Honorable Discharge
2)General Discharge (under honorable conditions)
3)Other than Honorable (OTH) Discharge
4)Bad Conduct Discharge
5)Dishonorable Discharge
Basic eligibility for federal veterans benefits depends upon the
type of military service performed, duration of service, and
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 USDVA 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, USDVA 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 USDVA
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."
Comments
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This bill affects the small number of former military personnel
who meet all of the following criteria:
1)Rated by the USDVA as 100% service-connected disabled.
2)Received either an OTH or Bad Conduct discharge.
3)Appealed to the USDVA and had their character of service
reassessed and determined to be "other than dishonorable."
FISCAL EFFECT: Appropriation: No Fiscal
Com.:YesLocal: Yes
According to the Assembly Appropriations Committee:
Minor and absorbable administrative costs to the BOE.
Modest General Fund (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.
SUPPORT: (Verified8/19/16)
George Runner, Member, State Board of Equalization (source)
American G.I. Forum of California
American Legion - Department of California
AMVETS - Department of California
California Assessors Association
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
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OPPOSITION: (Verified8/19/16)
None received
ASSEMBLY FLOOR: 79-0, 8/18/16
AYES: Achadjian, Alejo, Travis Allen, Arambula, Atkins, Baker,
Bigelow, Bloom, Bonilla, Bonta, Brough, Brown, Burke,
Calderon, Campos, Chang, Chau, Chávez, Chiu, Chu, Cooley,
Cooper, Dababneh, Dahle, Daly, Dodd, Eggman, Frazier, Beth
Gaines, Gallagher, Cristina Garcia, Eduardo Garcia, Gatto,
Gipson, Gomez, Gonzalez, Gordon, Gray, Grove, Hadley, Harper,
Holden, Irwin, Jones, Jones-Sawyer, Kim, Lackey, Levine,
Linder, Lopez, Low, Maienschein, Mathis, Mayes, McCarty,
Medina, Melendez, Mullin, Nazarian, Obernolte, O'Donnell,
Olsen, Patterson, Quirk, Ridley-Thomas, Rodriguez, Salas,
Santiago, Steinorth, Mark Stone, Thurmond, Ting, Wagner,
Waldron, Weber, Wilk, Williams, Wood, Rendon
NO VOTE RECORDED: Roger Hernández
Prepared by:Wade Cooper Teasdale / V.A. / (916) 651-1503
8/19/16 19:37:21
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