Amended in Assembly April 1, 2014

California Legislature—2013–14 Regular Session

Assembly Bill No. 2175

Introduced by Assembly begin delete Member end delete begin insert Members end insert Daly begin insert and Ting end insert

February 20, 2014

An act begin insert to amend Section 20502 of, and to add Chapter 1.5 (commencing with Section 20565) to Part 10. end insert begin insert 5 of Division 2 of, the Revenue and Taxation Code, end insert relating to begin delete taxation. end delete begin insert taxpayer assistance. end insert

LEGISLATIVE COUNSEL’S DIGEST

AB 2175, as amended, Daly. begin delete Personal income tax: credit: long-term care. end delete begin insert Renter’s Tax Assistance Act. end insert

begin insert

Within the Senior Citizens Property Tax Assistance and Postponement Law, the Gonsalves-Deukmejian-Petris Senior Citizens Property Tax Assistance Law provides for payment of assistance by the Franchise Tax Board to low-income and elderly or disabled claimants, whether those claimants own or rent their residences, in accordance with schedules that reduce the amount of assistance provided as the amount of a claimant’s household income increases along a specified scale of household income amounts.

end insert begin insert

This bill would create the Renter’s Tax Assistance Act within the Senior Citizens Property Tax Assistance and Postponement Law to provide for payment of assistance by the Franchise Tax Board to individuals who rent their residences and have gross household income that do not exceed $42,588, in accordance with a schedule that reduces the amount of assistance provided as the amount of an individual’s household income increases along a specified scale of household income amounts. This bill would require each individual applying for assistance to file a claim under penalty of perjury with the board on a form supplied by the board, and would require the claim to include information in the form and manner prescribed by the board that establishes that the individual was eligible for assistance.

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Existing law provides that a tax preparer who endorses or otherwise negotiates any warrants made with respect to assistance claimed under the Senior Citizens Property Tax Assistance and Postponement Law and issued is guilty of a misdemeanor.

end insert begin insert

This bill would expand the scope of that misdemeanor to include a tax preparer who endorses or otherwise negotiates any warrants made with respect to assistance claimed under the Renter’s Tax Assistance Act.

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By expanding the crime of perjury and expanding the scope of the existing crime, this bill would impose a state-mandated local program.

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The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

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This bill would provide that no reimbursement is required by this act for a specified reason.

end insert begin delete

The Personal Income Tax Law and the Corporation Tax Law allow various credits against the taxes imposed by those laws.

end delete begin delete

This bill would state that it is the intent of the Legislature to enact legislation that would allow for a credit in the amount of $500 for costs paid or incurred for long-term care of a family member against the tax imposed by the Personal Income Tax Law.

end delete

Vote: majority. Appropriation: no. Fiscal committee:  begin delete no end delete begin insert yes end insert . State-mandated local program:  begin delete no end delete begin insert yes end insert .

The people of the State of California do enact as follows:

begin insert

begin insert SECTION 1. end insert   

end insert

begin insert Section 20502 of the end insert begin insert Revenue and Taxation Code end insert
begin insert is amended to read: end insert

20502.  

Unless the context otherwise requires, the definitions
given in this chapter shall govern construction of this part begin insert ,
excluding Chapter 1.5 (commencing with Section 20565) end insert .

begin insert

begin insert SEC. 2. end insert   

end insert

begin insert Chapter 1.5 (commencing with Section 20565) is added
to Part 10.5 of Division 2 of the end insert begin insert Revenue and Taxation Code end insert begin insert , to
read: end insert

begin insert

 

Chapter   begin insert 1.5. end insert Renter’s Tax Assistance Act

 

Article begin insert 1. end insert   General Provisions and Definitions

 

begin insert 20565. end insert   

This chapter shall be known, and may be cited, as the
Renter’s Tax Assistance Act.

begin insert 20565.5. end insert   

Unless the context otherwise requires, the definitions
given in this chapter shall govern construction of this chapter.

begin insert 20566. end insert   

(a) “Income” means adjusted gross income, as defined
in Section 17072, plus all of the following cash items:

(1) Public assistance and relief.

(2) Nontaxable amount of pensions and annuities.

(3) Social security benefits (except Medicare).

(4) Railroad retirement benefits.

(5) Unemployment insurance payments.

(6) Veterans’ benefits.

(7) Exempt interest received from any source.

(8) Gifts and inheritances in excess of three hundred dollars
($300), other than transfers between members of the household.
Gifts and inheritances include noncash items.

(9) Amounts contributed on behalf of the contributor to a
tax-sheltered retirement plan or deferred compensation plan.

(10) Temporary workers’ compensation payments.

(11) Sick leave payments.

(12) Nontaxable military compensation as defined in Section
112 of the Internal Revenue Code.

(13) Nontaxable scholarship and fellowship grants as defined
in Section 117 of the Internal Revenue Code.

(14) Nontaxable gain from the sale of a residence as defined in
Section 121 of the Internal Revenue Code.

(15) Life insurance proceeds to the extent that the proceeds
exceed the expenses incurred for the last illness and funeral of the
deceased spouse of the claimant. “Expenses incurred for the last
illness” includes unreimbursed expenses paid or incurred during
the income calendar year and any expenses paid or incurred
thereafter up until the date the claim is filed. For purposes of this
paragraph, funeral expenses shall not exceed five thousand dollars
($5,000).

(16) If an alternative minimum tax is required to be paid
pursuant to Chapter 2.1 (commencing with Section 17062) of Part
10, the amount of alternative minimum taxable income (whether
or not cash) in excess of the regular taxable income.

(17) Annual winnings from the California Lottery in excess of
six hundred dollars ($600) for the current year.

(b) For purposes of this chapter, total income shall be
determined for the calendar year (or approved fiscal year ending
within that calendar year) which ends within the fiscal year for
which assistance is claimed.

begin insert 20567. end insert   

“Household income” means all income received by all
persons of a household while members of that household. In the
case of a nonresident claimant, “household income” also includes
all income of the claimant during the year without regard to source.

begin insert 20567.5. end insert   

“Claimant” means an individual who was the renter
of a rented residence on or before the last day of the year
designated in subdivision (b) of Section 20566.

begin insert 20568. end insert   

(a) A claimant shall not lose his or her eligibility for
purposes of this chapter if he or she is temporarily confined to a
hospital or medical institution for medical reasons where the
residential dwelling was the principal place of residence of the
claimant immediately prior to such confinement.

(b) For purposes of this section, “medical institution” means
a facility operated by, or licensed by, the United States, one of the
several states, a political subdivision of a state, the State
Department of Public Health, or exempt from such licensure
pursuant to subdivision (a) of Section 1270 of the Health and Safety
Code.

begin insert 20568.5. end insert   

(a) “Rented residence” means premises rented and
occupied by the claimant as his or her principal place of residence
during the calendar year for which assistance is claimed. The term
“rented residence” shall not include:

(1) Premises which are exempt from property taxation, except
those premises on which the owner pays possessory interest taxes,
or makes payments in lieu of property taxes which are substantially
equivalent to property taxes paid on properties of comparable
market value.

(2) Premises which are not located in this state.

(b) 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, except in the case where the dwelling unit
is a mobilehome subject to the license fee imposed by Part 5
(commencing with Section 10701). “Rented residence” includes
a dwelling unit which is a mobilehome subject to the license fee
imposed by Part 5 (commencing with Section 10701) owned by
the claimant and located on land which is owned or rented by that
claimant.

begin insert 20569. end insert   

“Rent” means the amount paid at arms length solely
for the right of occupancy of a residence and utility payments
required to be paid by the rental agreement. At least fifty dollars
($50) per month must be paid by each renter claimant.

begin insert 20569.5. end insert   

When a “rented residence,” as defined in Section
20568.5, is rented and occupied by the claimant as his or her
principal place of residence for less than 12 months during the
calendar year for which assistance is claimed, the amount of
assistance as provided in Section 20572 shall be prorated pursuant
to rules provided by the Franchise Tax Board.

begin insert 20570. end insert   

(a) Assistance shall not be allowed under this chapter
if gross household income, after allowance for actual cash
expenditures that are reasonable, ordinary, and necessary to
realize income, exceeds forty-two thousand five hundred
eighty-eight dollars ($42,588).

(b) With respect to assistance that is provided by the Franchise
Tax Board pursuant to this chapter for the 2015 calendar year
and each calendar year thereafter, the gross household income
figure that applies to assistance provided by the Franchise Tax
Board during that period shall be the gross household income
figure that applied to assistance provided by the Franchise Tax
Board in the same period in the immediately preceding year,
multiplied by an inflation adjustment factor calculated as follows:

(1) On or before February 1 of each year, the Department of
Industrial Relations shall transmit to the Franchise Tax Board the
percentage change in the California Consumer Price Index for all
items from June of the second preceding calendar year to June of
the immediately preceding calendar year.

(2) The Franchise Tax Board shall add 100 percent to the
percentage change figure that is furnished pursuant to paragraph
(1) and divide the result by 100.

(3) The Franchise Tax Board shall multiply the gross household
income figure that applies in the immediately preceding year by
the inflation adjustment factor determined in paragraph (2), and
round off the resulting product to the nearest one dollar ($1).

 

Article begin insert 2. end insert   Computations

 

begin insert 20571. end insert   

Subject to the limitations provided in this chapter a
claimant may, to the extent provided in Section 20572, file with
the Franchise Tax Board, pursuant to Article 3 (commencing with
Section 20575), a claim for assistance from the State of California
of a sum equal to the percentage of the applicable statutory
property tax equivalent under Section 20572.

begin insert 20571.5. end insert   

(a) The Franchise Tax Board shall provide assistance
to the claimant based on the percentage of the statutory property
tax equivalent pursuant to Section 20572.

(b) (1) When two or more individuals pay rent for the same
premises and each individual meets the qualifications for a
renter-claimant, each qualified individual shall be entitled to
assistance under this chapter.

(2) For the purposes of this subdivision, a husband and wife
residing in the same premises shall be presumed to be one renter.

(c) The right to file a claim shall be personal to the claimant
and shall not survive his death; however, when a claimant dies
after having filed a timely claim, the amount thereof may be
disbursed to the surviving spouse and, if no surviving spouse, to
any other member of the household who is a qualified claimant.
If there is no surviving spouse or otherwise qualified claimant, the
claim shall be disbursed to any other member of the household.
In the event two or more individuals qualify for payment as either
an otherwise qualified claimant or a member of the household,
they may determine which of them will be paid. If they are unable
to agree, the matter shall be referred to the Franchise Tax Board
and its decision shall be final.

begin insert 20572. end insert   

(a) (1) The amount of assistance for a claimant renting
his or her residence shall be based on the claimant’s household
income for the time period set forth in Section 20566.

(2) For claims filed with respect to the 2015 calendar year, and
each calendar year thereafter, the percentage of assistance for
which each claimant renting his or her residence shall be eligible
shall be based on the following scale:

 

begin insert     end insert	begin insert     end insert	begin insert The percentage of the end insert
begin insert If the total household end insert	begin insert The statutory end insert	begin insert statutory property tax end insert
begin insert income (as defined in this end insert	begin insert property tax end insert	begin insert equivalent used to end insert
begin insert chapter) is: end insert	begin insert equivalent is: end insert	begin insert provide assistance is: end insert
begin insert   end insert	begin insert   end insert	begin insert   end insert
begin insert $0 to 11,490 end insert	begin insert $250 end insert	begin insert 139% end insert
begin insert 11,490.01 to 12,337 end insert	begin insert 250 end insert	begin insert 136 end insert
begin insert 12,337.01 to 12,925 end insert	begin insert 250 end insert	begin insert 133 end insert
begin insert 12,925.01 to 13,513 end insert	begin insert 250 end insert	begin insert 131 end insert
begin insert 13,513.01 to 14,101 end insert	begin insert 250 end insert	begin insert 128 end insert
begin insert 14,101.01 to 14,688 end insert	begin insert 250 end insert	begin insert 125 end insert
begin insert 14,688.01 to 15,275 end insert	begin insert 250 end insert	begin insert 122 end insert
begin insert 15,275.01 to 15,863 end insert	begin insert 250 end insert	begin insert 119 end insert
begin insert 15,863.01 to 16,451 end insert	begin insert 250 end insert	begin insert 116 end insert
begin insert 16,451.01 to 17,038 end insert	begin insert 250 end insert	begin insert 113 end insert
begin insert 17,038.01 to 17,626 end insert	begin insert 250 end insert	begin insert 110 end insert
begin insert 17,626.01 to 18,213 end insert	begin insert 250 end insert	begin insert 106 end insert
begin insert 18,213.01 to 42,588 end insert	begin insert 250 end insert	begin insert 100 end insert

 

(b) With respect to assistance that is provided by the Franchise
Tax Board pursuant to this chapter for the 2016 calendar year
and each year thereafter, the household income figures that apply
to assistance provided by the Franchise Tax Board during that
period shall be the household income figures that applied to
assistance provided by the Franchise Tax Board in the same period
in the immediately preceding year, multiplied by an inflation factor
calculated as follows:

(1) On or before February 1 of each year, the Department of
Industrial Relations shall transmit to the Franchise Tax Board the
percentage change in the California Consumer Price Index for all
items from June of the second preceding calendar year to June of
the immediately preceding calendar year.

(2) The Franchise Tax Board shall add 100 percent to the
percentage change figure that is furnished pursuant to paragraph
(1) and divide the result by 100.

(3) The Franchise Tax Board shall multiply the immediately
preceding household income figure by the inflation adjustment
factor determined in paragraph (2), and round off the resulting
product to the nearest one dollar ($1).

 

Article begin insert 3. end insert   Claims

 

begin insert 20575. end insert   

(a) Each individual applying for assistance under
Article 2 (commencing with Section 20571) shall file a claim under
penalty of perjury with the Franchise Tax Board on a form supplied
by the board. The claim shall include information in the form and
manner prescribed by the Franchise Tax Board that establishes
that the individual was a claimant, as defined in Section 20567.5,
eligible for assistance under this chapter.

(b) If a claimant submits a claim that satisfies the requirements
of this section, the Franchise Tax Board shall compute the amount
of assistance and authorize payment. The amount of any assistance
otherwise payable under this chapter may be applied by the
Franchise Tax Board against any liability due from the claimant,
or the claimant’s spouse if a joint return is filed, under any law
administered by the Franchise Tax Board.

(c) The Franchise Tax Board is authorized to prescribe, by
regulation, the information necessary to constitute a valid claim
under this section.

begin insert 20576. end insert   

(a) The claim on which the assistance is based shall
be filed after June 30 of the fiscal year for which assistance is
claimed but on or before October 15 of the fiscal year succeeding
the fiscal year for which assistance is claimed. The Franchise Tax
Board may thereafter accept claims through June 30 of the fiscal
year succeeding the fiscal year for which assistance is claimed.

(b) The state shall assist the claimant after July 15 and before
November 15 of the calendar year in which the claim is filed,
except that if the claim is defective, assistance shall be made as
promptly as is practicable after the claim has been perfected.

(c) A claimant who, because of a medical incapacity, is
prevented from filing a timely claim, may file a claim within six
months after the end of his or her medical incapacity or three years
succeeding the end of the fiscal year for which assistance is
claimed, whichever date is earlier.

end insert

begin insert

begin insert SEC. 3. end insert   

end insert begin insert

No reimbursement is required by this act pursuant to
Section 6 of Article XIII B of the California Constitution because
the only costs that may be incurred by a local agency or school
district will be incurred because this act creates a new crime or
infraction, eliminates a crime or infraction, or changes the penalty
for a crime or infraction, within the meaning of Section 17556 of
the Government Code, or changes the definition of a crime within
the meaning of Section 6 of Article XIII B of the California
Constitution.

end insert

begin delete

SECTION 1.  

It is the intent of the Legislature to enact
legislation that would allow for a credit in the amount of $500 for
costs paid or incurred for long-term care of a family member
against the tax imposed by the Personal Income Tax Law.

end delete