BILL ANALYSIS
AB 211
Page 1
Date of Hearing: May 19, 2003
ASSEMBLY COMMITTEE ON REVENUE AND TAXATION
Ed Chavez, Chair
AB 211 (Maze) - As Amended: March 25, 2003
VOTE ONLY
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.
a) Requires the assessee to be aged 62 years or older on or
before the lien date.
b) Permits the increased exemption to be claimed where only
one assessee is aged 62 years or older, provided that all
assessees own and occupy the dwelling as a personal
residence.
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
AB 211
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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,
and (b) increases benefits to qualified renters by a
comparable amount.
2)Allows an individual, under the California Personal Income Tax
Law (PITL), to deduct real property taxes if that taxpayer
reports itemized deductions in a taxable year. PITL also
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
AB 211
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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
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)The BOE and FTB raised the following implementation concerns
that were not addressed in amendments: 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.
REGISTERED SUPPORT / OPPOSITION :
Support
California Senior Legislature
Howard Jarvis Taxpayers Association
Opposition
California Tax Reform Association
Analysis Prepared by : Kimberly Bott / REV. & TAX. / (916)
319-2098