BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                      



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          |SENATE RULES COMMITTEE            |                   SB 874|
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                                 THIRD READING


          Bill No:  SB 874
          Author:   Hancock (D)
          Amended:  1/4/12
          Vote:     21

           
           SENATE GOVERNANCE & FINANCE COMMITTEE  :  8-0, 1/11/12
          AYES:  Wolk, Huff, DeSaulnier, Hancock, Hernandez, Kehoe, 
            La Malfa, Liu
          NO VOTE RECORDED:  Fuller


           SUBJECT  :    School districts:  community college districts: 
           parcel taxes:  
                      exemptions

           SOURCE  :     Author


           DIGEST  :    This bill allows school districts to exempt 
          persons receiving Social Security Disability Insurance 
          (SSDI) from qualified special taxes. 

           ANALYSIS  :    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 
          two-thirds 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 
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          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 ƯAB 385 (Lieber), Chapter 41, Statutes of 
          2006].  However, school districts cannot exempt persons 
          receiving SSDI from the tax.

          This bill allows school districts to exempt persons 
          receiving SSDI from qualified special taxes. 

           Comments  

          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.  
          This bill provides parity for local parcel taxes by 
          allowing school districts to exempt SSDI recipients from 
          the tax.

           FISCAL EFFECT  :    Appropriation:  No   Fiscal Com.:  No   
          Local:  No

           SUPPORT  :   (Verified  1/11/12)

          Disability Rights California

           OPPOSITION  :    (Verified  1/11/12)

          Howard Jarvis Taxpayers Association

           ARGUMENTS IN SUPPORT  :    According to the author, "This 
          bill gives school and districts options when crafting local 

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          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."

           ARGUMENTS IN OPPOSITION  :    According to the Howard Jarvis 
          Taxpayers Association, "This measure is deceptive.  While 
          superficially beneficial to seniors and the disabled, in 
          application, it is a bait and switch scheme.  Because 
          seniors and the disabled would have to opt-out annually - 
          something that most will forget to do - the real objective 
          of this measure is to create the appearance of an exception 
          as a means for additional votes in favor of tax increases."  
           

          AGB:mw  1/30/12   Senate Floor Analyses 

                         SUPPORT/OPPOSITION:  SEE ABOVE

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