BILL ANALYSIS                                                                                                                                                                                                    �



                                                                  SB 1113
                                                                  Page  1

          Date of Hearing:   July 2, 2014

                        ASSEMBLY COMMITTEE ON APPROPRIATIONS
                                  Mike Gatto, Chair

                    SB 1113 (Knight) - As Amended:  April 1, 2014

          Policy Committee:                              Revenue &  
          Taxation     Vote:                            9-0

          Urgency:     No                   State Mandated Local Program:  
          Yes    Reimbursable:              Yes

           SUMMARY  

          This bill extends the statute of limitations for filing a  
          property tax refund claim from four to eight years for claims  
          filed on or after January 1, 2015 that relate to the disabled  
          veterans' exemption.

           FISCAL EFFECT  

          1)Minor and absorbable costs to the Board of Equalization to  
            advise county assessors and others on the law changes;  
            potentially minor reimbursable administration costs to  
            counties.

          2)Estimated reduction in local property tax revenues of  
            approximately $240,000 annually.  Under Proposition 98, that  
            reduction would trigger an increase in General Fund support  
            for K-14 education of 40% - 50%, or up to $120,000 annually.   
            The exact amount would depend on the actual number of disabled  
            veteran claimants and the specific factors which determine the  
            Proposition 98 minimum funding guarantee.

          COMMENTS  

          1)  Purpose.   Qualified veterans who receive a 100% disability  
            rating from the US Department of Veterans Affairs (VA) are  
            entitled to a property tax reduction in California.  Under  
            current law, veterans become eligible to claim the exemption  
            as of the effective date of their 100% disability rating, and  
            veterans are entitled to claim a refund for up to four years  
            of back taxes paid, as may happen when disability ratings are  
            granted with retroactive effect.








                                                                  SB 1113
                                                                  Page  2


            According to the author, some veterans struggle with the VA to  
            obtain this disability rating, leading to appeals and  
            litigation.  In some cases, incorrect determinations are only  
            remedied years later.  Those veterans who are forced to wait  
            beyond the current four-year statute of limitations are unable  
            to claim their full amount of retroactive property tax  
            benefit.  The author believes doubling the current statute of  
            limitations will better balance veterans' need for relief with  
            government's need for certainty of revenue.

          2)  Disabled Veterans Exemption.   A veteran must receive a  
            disability certification from the VA or the military and file  
            a timely claim with the county assessor before specified  
            deadlines in order to qualify for the property tax exemption.   
            Exemption amounts can be up to $124,932 or $187,399 of  
            assessed value in 2014, depending on circumstances.


           Analysis Prepared by  :    Joel Tashjian / APPR. / (916) 319-2081