BILL ANALYSIS �
AB 188
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Date of Hearing: March 7, 2011
ASSEMBLY COMMITTEE ON REVENUE AND TAXATION
Henry T. Perea, Chair
AB 188 (Block) - As Introduced: January 25, 2011
Majority vote. Tax levy. Fiscal committee.
SUBJECT : Property tax exemption: principal residence:
disabled veterans' unmarried surviving spouses.
SUMMARY : Ensures that the disabled veterans' property tax
exemption on a principal residence received by an unmarried
surviving spouse will continue to be available for a spouse who
is confined to a hospital or other care facility. Specifically,
this bill :
1)Extends the disabled veterans' property tax to the disabled
veteran's unmarried spouse who is confined to a hospital or
other care facility.
2)Applies for property tax lien dates for fiscal year (FY)
2012-13 and each FY thereafter.
3)Takes effect immediately as a tax levy.
EXISTING LAW:
1)Authorizes a property tax exemption for the principal
residence of a disabled veteran or his/her spouse, including
an unmarried surviving spouse. For purposes of this
exemption, the disability rating must be 100%, generally
occurring for a veteran that is blind in both eyes, or has
lost the use of two or more limbs, is totally disabled, or the
veteran dies from an injury that is determined to be
service-related by the United States Department of Consumer
Affairs. The property tax exemption is equal to the assessed
value of the property, up to $100,000, as adjusted for
inflation. If the household income does not exceed $40,000,
as adjusted, the maximum property tax exemption is increased
to $150,000, as adjusted. The exemption amounts and income
limitation are adjusted annually for the change in the
California Consumer Price Index for all items, as determined
by the California Department of Industrial Relations. For the
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2011-12 FY, the disabled veterans' exemption amount will be
$175,269 of assessed value for those with a household income
below $52,470 (low income exemption). For all others, the
disabled veteran's exemption amount will be $116,845 (basic
exemption).
2)Provides that a disabled veterans' property tax exemption,
once granted, remains in continuous effect unless any of the
following conditions occurs:
a) The title to the property changes;
b) The property is altered so the property no longer
qualifies as a residence;
c) The owner is no longer considered disabled; or,
d) The owner does not occupy the property as his/her
principal place of residence on the property tax lien date,
unless the disable veteran is confined to a hospital or
other care facility or the residence was damaged in a
misfortune or calamity.
FISCAL EFFECT : The Board of Equalization (BOE) staff estimates
that the annual revenue loss from this bill will be negligible.
COMMENTS :
1)The author states that, "In 2003, legislation was enacted to
ensure that a disabled veteran who must leave his or her home
to enter an assisted living facility (and thus is unable to
occupy their home as their principal residence place of
residence) would continue to receive the exemption, provided
the home is not rented out to a third party. However,
inadvertently, the legislation failed to extend these
provisions to another group of persons eligible for the
exemption: unmarried surviving spouses. AB 188 corrects this
error."
The author goes on to state that, "This bill would assist a
widow or widower who moves to an assisted living facility and
does not want to sell their home with the hope that he or she
can return home. The unexpected loss of the property tax
exemption on top of the significant additional burden of
assisted living costs in inequitable. This bill will help
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them continue to afford their home."
2)The BOE staff notes that the original legislation, AB 322
(Parra), Chapter 278, Statutes of 2003, was intended to
include unmarried surviving spouses confined to a hospital or
other care facility. BOE staff further states that AB 188
would remedy this unintentional omission.
3)Committee staff notes that the disabled veteran exemption,
unlike the homeowner's exemption, does not require the state
to reimburse the counties for the full amount of property tax
revenues lost. This bill may impact counties that are home to
a large number of disabled veterans and surviving spouses.
4)Related legislation.
AB 2568 (Houston), introduced in the 2007-08 Legislative
Session, would have removed the existing maximum exemptions.
AB 2568 was held under submission in this committee.
AB 322 (Parra), Chapter 278, Statutes of 2003, ensures that a
disabled veteran, who is confined to a hospital or other care
facility, will continue to receive the disabled veterans'
property tax exemption.
REGISTERED SUPPORT / OPPOSITION :
Support
State Board of Equalization
Veterans of Foreign Wars of the United States, Department of
California
Opposition
None on file
Analysis Prepared by : Myriam Bouaziz / Oksana Jaffe / REV. &
TAX. / (916) 319-2098
AB 188
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