BILL ANALYSIS                                                                                                                                                                                                    Ó




                     SENATE GOVERNANCE & FINANCE COMMITTEE
                            Senator Lois Wolk, Chair
          

          BILL NO:  SB 874                      HEARING:  1/11/12
          AUTHOR:  Hancock                      FISCAL:  No
          VERSION:  1/4/12                      TAX LEVY:  No
          CONSULTANT:  Grinnell                 

                             QUALIFIED SPECIAL TAXES
          

           Expands Exemptions for Qualified Special Taxes Imposed by 
                     School and Community College Districts


                           Background and Existing Law  

          The California Constitution bars school districts from 
          imposing general taxes, but allows school districts, 
          community college districts, and county offices of 
          education to issue bonded indebtedness for school 
          facilities with 55% percent approval (Proposition 39, 
          2000).  However, state law allows school districts and 
          community college districts to levy "qualified special 
          taxes" with 2/3 vote of the electorate, so long as the tax 
          is uniform as applied to all taxpayers.  The districts may 
          implement the tax for as long as it wants, spend the 
          proceeds for any purpose, and apply any tax rate it 
          chooses.  To date, local agencies have only assessed parcel 
          taxes using this section.

          Under qualified special tax law, school districts may 
          exempt persons over the age of 65 from the tax, as well as 
          persons receiving Supplemental Security Income (SSI) 
          regardless of age (AB 385, Lieber, 2006).  However, school 
          districts cannot exempt persons receiving Social Security 
          Disability Insurance (SSDI) from the tax.


                                   Proposed Law  

          SB 874 allows school districts to exempt persons receiving 
          SSDI from qualified special taxes. 


                               State Revenue Impact
           




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          No estimate.
                                         


                                                                      
                                                                      
                                                                      
                                                                      
                                                                      
                                                                      
                                                                      
                                                                      
                                                                      
                                                   Comments  

          1.   Purpose of the bill  .  According to the Author, "This 
          bill gives school and districts options when crafting local 
          taxes measures by allowing them to exempt certain disabled 
          property owners from a parcel tax.  Individuals who are 
          disabled and are receiving SSDI may not be able to pay the 
          tax because their disability prevents or limits them from 
          working."

          2.   What's the difference  ?  The Social Security 
          Administration (SSA) administers both the SSI and SSDI 
          programs.  SSI is a federal income supplement program paid 
          out of general federal revenues for persons aged, blind, 
          disabled, and of limited income.  SSDI is funded from 
          federal payroll taxes and provides benefits to disabled 
          persons because their disability serves as a barrier to 
          employment, but unlike SSI, eligibility is not restricted 
          by an individual's income, instead based on the nature of 
          the disability.  While SSDI recipients may be economically 
          better off than SSI recipients, their disability can 
          inhibit their ability to generate income.  SB 874 provides 
          parity for local parcel taxes by allowing school districts 
          to exempt SSDI recipients from the tax.


                        Support and Opposition  (04/25/11)

          Support  :   Community College League of California.

           Opposition  :  California Taxpayers Association.   







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