BILL NUMBER: AB 82 INTRODUCED
BILL TEXT
INTRODUCED BY Assembly Member Dutton
JANUARY 6, 2003
An act to amend Sections 218 and 17053.5 of the Revenue and
Taxation Code, relating to taxation, to take effect immediately, tax
levy.
LEGISLATIVE COUNSEL'S DIGEST
AB 82, as introduced, Dutton. Taxation: homeowners' property
exemption: renter's credit.
Existing property tax law provides, pursuant to the authority of a
specified provision of the California Constitution, for a homeowners'
exemption in the amount of $7,000 of the full value of a "dwelling,"
as defined.
This bill would, pursuant to the Legislature's authority under the
California Constitution, increase the amount of this exemption from
$7,000 to $32,000 and would, beginning with the January 1, 2004,
property tax lien date, annually increase that amount by an inflation
factor, as provided.
The Personal and Income Tax Law authorizes various credits against
the taxes imposed by that law, including a credit for qualified
renters in an amount equal to $120 for married couples filing joint
returns, heads of household, and heads of household if adjusted gross
income is $50,000 or less, and in an amount equal to $60 for other
individuals if adjusted gross income is $25,000 or less. The
adjusted gross income amounts are adjusted annually for inflation.
This bill would provide that the credit is $370 for married
couples, heads of household, surviving spouses, and $185 for all
other individuals, would delete the adjusted gross income
limitations, and would adjust the credit amount for inflation for
taxable years beginning on or after January 1, 2004, as provided.
This bill would take effect immediately as a tax levy.
Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 218 of the Revenue and Taxation Code is amended
to read:
218. (a) The homeowners' property tax exemption is in
the amount of the assessed value of the dwelling specified in this
section, as authorized by subdivision (k) of Section 3 of Article
XIII of the Constitution. That exemption shall be in the amount of
seven thousand dollars ($7,000) thirty-two
thousand dollars ($32,000) of the full value of the dwelling.
The exemption does not extend to property which
that is rented, vacant, under construction on the lien
date, or which that is a vacation or
secondary home of the owner or owners, nor does it apply to property
on which an owner receives the veteran's exemption. "Owner" includes
a person purchasing the dwelling under a contract of sale or who
holds shares or membership in a cooperative housing corporation,
which the holding of which
is a requisite to the exclusive right of occupancy of a dwelling. As
used in this section, "dwelling" shall include:
(a)
(1) A single-family dwelling occupied by an owner thereof as
his or her principal place of residence on the lien date.
(b)
(2) A multiple-dwelling unit occupied by an owner thereof on
the lien date as his or her principal place of residence.
(c)
(3) A condominium occupied by an owner thereof as his or her
principal place of residence on the lien date.
(d)
(4) Premises occupied by the owner of shares or a membership
interest in a cooperative housing corporation, as defined in
subdivision (h) of Section 61, as his or her principal place of
residence on the lien date. Each exemption allowed pursuant to this
subdivision shall be deducted from the total assessed valuation of
the cooperative housing corporation. The exemption shall be taken
into account in apportioning property taxes among owners of share or
membership interests in the cooperative housing corporations so as to
benefit those owners who qualify for the exemption.
"Dwelling" means a building, structure or other shelter
constituting a place of abode, whether real property or personal
property, and any land on which it may be situated. For purposes of
this section a two-dwelling unit shall be considered as two separate
single-family dwellings.
Any dwelling that qualified for an exemption under this section
prior to October 20, 1991, that was damaged or destroyed by fire in a
disaster, as declared by the Governor, occurring on or after October
20, 1991, and before November 1, 1991, and that has not changed
ownership since October 20, 1991, shall may
not be disqualified as a "dwelling" or be denied an exemption
under this section solely on the basis that the dwelling was
temporarily damaged or destroyed or was being reconstructed by the
owner.
The
(b) The exemption provided for in subdivision (k) of Section
3 of Article XIII of the Constitution shall first be applied to the
building, structure or other shelter and the excess, if any, shall be
applied to any land on which it may be located.
(c) For the property tax lien date in 2004 and in each year
thereafter, the State Board of Equalization shall recompute the
amount of the exemption applied under this section, as follows:
(1) The California Department of Industrial Relations shall
transmit annually to the State Board of Equalization the percentage
change in the California Consumer Price Index for all items from June
of the prior calendar year to June of the current year, no later
than August 1 of the current calendar year.
(2) The State Board of Equalization shall compute an inflation
adjustment factor by adding 100 percent to the percentage change
figure that is furnished pursuant to paragraph (1) and dividing the
result by 100.
(3) The State Board of Equalization shall multiply the exemption
amount applied under this section for the current lien date by the
inflation adjustment factor determined in paragraph (2), and round
off the resulting product to the nearest one dollar ($1). The State
Board of Equalization shall, no later than the next following
property tax lien date, notify each county assessor in writing of the
new exemption amount.
SEC. 2. Section 17053.5 of the Revenue and Taxation Code is
amended to read:
17053.5. (a) (1) For a qualified renter, there shall be allowed a
credit against his or her "net tax"(as defined in Section 17039).
The amount of the credit shall be as follows:
(A) For married couples filing joint returns, heads of household
and surviving spouses (as defined in Section 17046) the credit shall
be equal to one hundred twenty dollars ($120) if adjusted
gross income is fifty thousand dollars ($50,000) or less
three hundred seventy dollars ($370) .
(B) For other individuals, the credit shall be equal to
sixty dollars ($60) if adjusted gross income is twenty-five thousand
dollars ($25,000) or less one hundred eighty-five
dollars ($185) .
(2) Except as provided in subdivision (b), a husband and wife
shall receive but one credit under this section. If the husband and
wife file separate returns, the credit may be taken by either or
equally divided between them, except as follows:
(A) If one spouse was a resident for the entire taxable year and
the other spouse was a nonresident for part or all of the taxable
year, the resident spouse shall be allowed one-half the credit
allowed to married persons and the nonresident spouse shall be
permitted one-half the credit allowed to married persons, prorated as
provided in subdivision (e).
(B) If both spouses were nonresidents for part of the taxable
year, the credit allowed to married persons shall be divided equally
between them subject to the proration provided in subdivision (e).
(b) For a husband and wife, if each spouse maintained a separate
place of residence and resided in this state during the entire
taxable year, each spouse will be allowed one-half the full credit
allowed to married persons provided in subdivision (a).
(c) For purposes of this section, a "qualified renter" means an
individual who:
(1) Was a resident of this state, as defined in Section 17014, and
(2) Rented and occupied premises in this state which constituted
his or her principal place of residence during at least 50 percent of
the taxable year.
(d) The term "qualified renter" does not include any of the
following:
(1) An individual who for more than 50 percent of the taxable year
rented and occupied premises that were exempt from property taxes,
except that an individual, otherwise qualified, is deemed a qualified
renter if he or she or his or her landlord pays possessory interest
taxes, or the owner of those premises makes payments in lieu of
property taxes that are substantially equivalent to property taxes
paid on properties of comparable market value.
(2) An individual whose principal place of residence for more than
50 percent of the taxable year is with any other person who claimed
such individual as a dependent for income tax purposes.
(3) An individual who has been granted or whose spouse has been
granted the homeowners' property tax exemption during the taxable
year. This paragraph does not apply to an individual whose spouse
has been granted the homeowners' property tax exemption if each
spouse maintained a separate residence for the entire taxable year.
(e) Any otherwise qualified renter who is a nonresident for any
portion of the taxable year shall claim the credits set forth in
subdivision (a) at the rate of one-twelfth of those credits for each
full month that individual resided within this state during the
taxable year.
(f) Every person claiming the credit provided in this section
shall, as part of that claim, and under penalty of perjury, furnish
that information as the Franchise Tax Board prescribes on a form
supplied by the board.
(g) The credit provided in this section shall be claimed on
returns in the form as the Franchise Tax Board may from time to time
prescribe.
(h) For the purposes of this section, the term "premises" means a
house or a dwelling unit used to provide living accommodations in a
building or structure and the land incidental thereto, but does not
include land only, unless the dwelling unit is a mobilehome. The
credit is not allowed for any taxable year for the rental of land
upon which a mobilehome is located if the mobilehome has been granted
a homeowners' exemption under Section 218 in that year.
(i) This section shall become operative on January 1, 1998, and
applies to any taxable year beginning on or after January 1, 1998.
(j) For each taxable year beginning on or after January 1,
1999, 2004, the Franchise Tax Board
shall recompute the adjusted gross income amounts
the amount of the credit set forth in subdivision (a).
That computation shall be made as follows:
(1) The California Department of Industrial Relations shall
transmit annually to the Franchise Tax Board the percentage change in
the California Consumer Price Index for all items from June of the
prior calendar year to June of the current year, no later than August
1 of the current calendar year.
(2) The Franchise Tax Board shall compute an inflation adjustment
factor by adding 100 percent to that portion of the percentage change
figure which is furnished pursuant to paragraph (1) and dividing the
result by 100. The inflation factor shall be expressed to the
third decimal place.
(3) The Franchise Tax Board shall multiply the amount in
subparagraph (B) of paragraph (1) of subdivision (d)
(a) for the preceding taxable year by the
inflation adjustment factor determined in paragraph (2), and round
off the resulting products to the nearest one dollar ($1).
(4) In computing the amounts pursuant to this subdivision, the
amounts provided in subparagraph (A) of paragraph (1) of subdivision
(a) shall be twice the amount provided in subparagraph (B) of
paragraph (1) of subdivision (a).
SEC. 3. This act provides for a tax levy within the meaning of
Article IV of the Constitution and shall go into immediate effect.