BILL ANALYSIS
SENATE REVENUE & TAXATION COMMITTEE
Senator Lois Wolk, Chair
AB 2314 - Block
Introduced: February 19, 2010
Hearing: June 9, 2010 Fiscal: Yes
SUMMARY: Makes Two Changes to Eligibility Criteria for
Taxpayers to Apply for Cancellation or Taxes and
Refunds when Filing a Late Disabled Veterans'
Exemption Claim.
EXISTING LAW (California Constitution) allows the
Legislature to partially or wholly exempt from property
taxes the value of a disabled veteran's home if the veteran
has lost one or more limbs, is totally blind, or is totally
disabled, as a result of a service-connected injury. The
Constitution allows taxpayers to apply the disabled
veterans' exemption, currently provided by statute at the
inflation adjusted value of either $115,060 or $172,592
depending on the taxpayer's income, but not in addition to
the veterans or homeowners' exemption. The Constitution
additionally allows the exemption for unmarried surviving
spouses of persons who die while on active duty, or
subsequently die as a result of service-connected injuries.
EXISTING LAW provides the specific statutory exemption
amounts, and requires taxpayers eligible for the exemption
to file a claim for the exemption once with the Assessor.
Taxpayers who file claims after February 15th obtain
partial exemptions of either 85% or 90% for the first year,
then the full exemption in subsequent years; however,
taxpayers may obtain a cancellation of taxes and a refund
AB 2314 - Block
Page 2
for a claim filed after that date when the U.S. Department
of Veterans Affairs (USDVA) has not finished processing the
veteran's disability rating certification. Taxpayers
receive refunds when they submit an appropriate claim with
the disability rating letter from the USDVA the later of 30
days after receiving the letter or on or before the next
lien date (January 1st), giving taxpayers waiting for the
certification some leeway to obtain the full exemption.
Additionally, the law also requires the taxpayer to have an
application pending with the USDVA when filing the
exemption.
THIS BILL extends from 30 days to 90 days the deadline
for taxpayers applying for the disabled veterans' exemption
to submit the USDVA rating letter. The measure also
repeals the requirement that the taxpayer have an
application pending with the USDVA to be eligible for tax
cancellation and subsequent refund.
FISCAL EFFECT:
According to the BOE, AB 2314 does not impact
revenues.
COMMENTS:
A. Purpose of the Bill
The author provides the following statement:
This bill removes unnecessary impediments to receiving
the disabled veterans' property tax exemption
retroactively which the Board of Equalization has
identified and would assist disabled veterans in
getting full retroactive property tax exemptions on
their home should they become eligible for the
exemption at a future date.
AB 2314 - Block
Page 2
A disabled veterans' exemption is available to persons
with a 100% disability rating from the USDVA. (The
exemption is also available to surviving spouses of
persons killed in active duty.) The exemption is up
to $175,592 for those with household incomes below
$51,669 and applies to the principal place of
residence.
It can take a number of years to receive a disability
rating from the USDVA, particularly if the veteran
appeals the initial disability rating. In 2000,
legislation was enacted to allow disabled veterans to
receive the full amount of the exemption retroactively
once they received a qualifying disability rating with
a back dated effective date - but they were only given
30 days to file the claim. Thirty days will not
always be enough time since there are a variety of
materials as well as various programs and benefits
that disabled veterans' and their families must sort
through after receiving their disability rating which
can be overwhelming. This bill would give disabled
veterans' more time (up to 90 days) to file for the
property tax exemption for which they become newly
qualified.
This bill would also eliminate references to having a
pending application with the USDVA which may allow
more disabled veterans to receive the exemption
retroactively to the effective date of disability. In
some instances, there may not have necessarily been a
pending application and in others tax administrators
have requested proof of the pending application which
was not easy to obtain. This is an unnecessary
condition and counter to the intent to provide any
subsequently eligible disabled veteran the full amount
of the exemption retroactively.
Support and Opposition
Support:Board of Equalization (sponsor)
AB 2314 - Block
Page 2
Oppose: None received.
---------------------------------
Consultant: Colin Grinnell