SCR1031: Property Tax exemption; Disabled Veterans
Purpose
Subject to voter approval, constitutionally enacts property tax exemptions for qualified disabled veterans, their spouses and unmarried surviving spouses.
Background
Article IX, section 2, of the Arizona Constitution exempts the property tax for honorably discharged veterans who served at least 60 days in the military or Naval service during World War I or prior wars and who became residents of Arizona prior to September 1, 1945. This provision was ruled unconstitutional in a Maricopa County Superior Court Minute Order in 1989 for the case Benjamin v. the Arizona Department of Revenue, which held that the residency requirements in the exemption violated the 14th Amendment to the U.S. Constitution. The Court also determined that the unconstitutional residency requirements could not be severed, thus invalidating the tax exemptions.
The fiscal impact of this bill is unknown.
Provisions
1. Removes language relating property tax exemption for honorably discharged veterans and disabled veterans who served at least 60 days in the military or Naval service during World War I or prior wars and who became residents of Arizona prior to September 1, 1945.
2. Exempts from taxation the primary residence owned by:
a) a disabled veteran;
b) a disabled veteran and the veteran’s spouse if the residence is owned jointly; and
c) an unmarried surviving spouse of a deceased disabled veteran, who died as a result of a service related disease or injury incurred while on active duty.
3. Conditions and limits the property tax exemption for disabled veterans or their spouses as follows:
a) the veteran must have been awarded the Purple Heart for injury or death while serving in the Armed Forces;
b) as result of injuries or disease incurred during service, the veteran must have a disability of 50 percent or greater as rated by the United States Department of Veterans Affairs (VA); and
c) prohibits the tax exemption if the property was conveyed to evade taxation.
4. Prohibits an individual from all other real property tax exemptions on a residence that has been granted a disabled veteran’s property tax exemption, except for a residence owned by two or more qualifying disabled veterans whom are entitled to an exemption based on their percentage share of ownership in the property.
5. Specifies that the VA determines whether an injury or disease is service connected.
6. Designates as eligible for exemption, the property of a disabled veteran where the veteran would reside if the veteran were not confined to a hospital or other health care facility and is not used to lease or rent to another occupant other than a family member.
7. Requires qualifying status be determined by July 1 of the valuation year.
8. Defines terms.
9. Makes technical and conforming changes.
10. Requires the Secretary of State to submit the proposition to the voters at the next general election.
11. Becomes effective if approved by the voters and on proclamation of the Governor.
Prepared by Senate Research
February 11, 2011
Introduced by: Senator Antenori; Representatives Montenegro, Stevens, Vogt
COMMITTEE ON VETERANS AND MILITARY AFFAIRS – First hearing – Tue, February 15, 9am – 11am at the Arizona State Senate – ROOM: SHR 3 (calendar link)