BILL ANALYSIS
AB 211
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Date of Hearing: March 17, 2003
ASSEMBLY COMMITTEE ON REVENUE AND TAXATION
Ed Chavez, Chair
AB 211 (Maze) - As Introduced: January 29, 2003
Majority vote. Tax levy. Fiscal Committee.
SUBJECT : Taxation: Senior Citizens: Homeowners' Property Tax
Exemption and Renters' Benefits.
SUMMARY : Increases the homeowners' property tax exemption for
senior citizens for assessment years beginning on or after
January 1, 2004. Specifically, this bill :
1)Increases the homeowners' property tax exemption to $17,000 if
the assessee of a dwelling is aged 62 years or older.
2)States that the amount of an exemption allowed to a late claim
filed by an assessee that is aged 62 years or older is the
lesser or $13,600 or 80% of the full value of the dwelling.
3)States legislative intent that the annual Budget Act provides
for reimbursements to local governments as required by Section
25 of Article XIII of the California Constitution.
4)States legislative intent that a program be implemented to
provide a comparable benefit for qualified renters aged 62
years or older as required by Section 3 of Article XIII of the
California Constitution.
EXISTING LAW
1)Exempts from property tax the first $7,000 of the assessed
value of a dwelling that is the principal place of residence
of the owner. Section 25 of Article XIII of the California
Constitution requires the state to reimburse each local
government for the revenue loss from the homeowners'
exemption. Under Section 3(k) of Article XIII of the
California Constitution, any legislative increase to the
amount of the homeowners' exemption is ineffective unless the
Legislature also (a) increases the rate of state taxes in an
amount sufficient to fund subventions to local governments,
AB 211
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and (b) increases benefits to qualified renters by a
comparable amount.
2)States the California Personal Income Tax Law (PITL) generally
allows an individual to deduct real property taxes if that
taxpayer reports itemized deductions in a taxable year. PITL
currently allows a renters' credit to qualified taxpayers.
3)Provides several programs or other benefits for senior
citizens including the Homeowner's and Renters Assistance
(HRA) program offering a partial reimbursement of property
taxes, limited transfer of assessed value from one primary
residence to another for taxpayers over the age of 55, and
postponement of property tax payment for persons aged 62 years
or older.
FISCAL EFFECT : The Board of Equalization (BOE) estimates that
the average annual property tax savings would be $185, up from
the current average annual property tax savings of $75 for the
homeowners' exemption. The BOE estimates that the total revenue
loss to local governments (which amount must be reimbursed by
the state) to be $163.8 million for each fiscal year (FY).
The Franchise Tax Board (FTB) estimates revenue gains related to
reduced deductions for real property taxes for FY 2004-05 of
$1.5 million, FY 2005-06 of $3.0 million, and FY 2006-07 of $3.0
million.
No revenue estimate has been provided relating to increased
benefits due to renters.
COMMENTS :
1)The current amount of the homeowners' exemption has not been
changed since 1974. Since 1974, numerous measures have been
introduced in the Legislature to increase the exemption
amount. AB 82 (Duttton), introduced in the 2003-2004
Legislative Session increases the amount of the homeowners'
exemption to $32,000 and increases the amount of the renters
credit to $185 or $370, depending upon filing status. AB 82
is currently in the Assembly Committee on Revenue and
Taxation. In the 2001-2002 Legislative Session, two bills
were introduced that impacted the homeowners' exemption. AB
1844 (Mountjoy) increased the exemption amount to $17,000 for
persons over age 62, disabled, or blind. AB 1844 was held in
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the Assembly Revenue and Taxation Committee. SB 48
(McClintock) increased the exemption amount to $25,000, plus
added an inflation index. SB 48 was held in the Senate
Appropriations Committee.
2)BOE and FTB raised the following implementation concerns:
Uncertainty as to the date at which the age of the taxpayer is
determined; need for senior citizens to file with the counties
in order to claim the increased exemption based on age; impact
of the increased exemption amount on the HRA
3)This bill states legislative intent to confer a comparable
benefit to renters. Since the PITL currently contains a
renters' credit program, revising such a program would offer
more guidance and direction than the current intent language.
4)Amendments to make this bill clearer should address: Specific
date at which the age of the assessee is determined, and
availability of the increased exemption if there is more than
one assessee for a dwelling but only one qualifies.
REGISTERED SUPPORT / OPPOSITION :
Support
California Senior Legislature
Opposition
California Tax Reform Association
Analysis Prepared by : Kimberly Bott / REV. & TAX. / (916)
319-2098