BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                      



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          |SENATE RULES COMMITTEE            |                   SB 874|
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                              UNFINISHED BUSINESS


          Bill No:  SB 874
          Author:   Hancock (D)
          Amended:  8/7/12
          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

           SENATE FLOOR  :  35-0, 1/30/12
          AYES:  Alquist, Anderson, Berryhill, Blakeslee, Cannella, 
            Corbett, Correa, De León, DeSaulnier, Dutton, Emmerson, 
            Evans, Fuller, Gaines, Hancock, Harman, Hernandez, Huff, 
            La Malfa, Leno, Lieu, Liu, Lowenthal, Negrete McLeod, 
            Padilla, Pavley, Price, Simitian, Steinberg, Strickland, 
            Vargas, Walters, Wolk, Wright, Yee
          NO VOTE RECORDED:  Calderon, Kehoe, Rubio, Runner, Wyland

           ASSEMBLY FLOOR  :  59-11, 8/16/12 - See last page for vote


           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. 
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           Assembly Amendments  add to the exemption stipulations that 
          the yearly income does not exceed 250% of the 2012 federal 
          poverty guidelines and make other clarifying changes. 

           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 
          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 ÝAB 385 (Lieber), Chapter 41, Statutes of 
          2006].  However, school districts cannot exempt persons 
          receiving SSDI from the tax.

          This bill authorizes school districts to exempt disabled 
          persons from special taxes.  Specifically, this bill 
          expands an existing exemption from "qualified special 
          taxes" that may be imposed by school districts to include 
          persons receiving SSDI, regardless of age, whose yearly 
          income does not exceed 250% of the 2012 federal poverty 
          guidelines issued by the United States Department of Health 
          and Human Services, as provided. 

           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 

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          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) (unable to reverify at time 
          of writing)

          Disability Rights California

           OPPOSITION  :    (Verified  1/11/12) (unable to reverify at 
          time of writing)

          Howard Jarvis Taxpayers Association

           ARGUMENTS IN SUPPORT  :    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."

           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." 
           

           ASSEMBLY FLOOR  : 59-11, 08/16/12
          AYES: Achadjian, Alejo, Allen, Ammiano, Atkins, Beall, Bill 
            Berryhill, Block, Blumenfield, Bonilla, Bradford, 
            Brownley, Buchanan, Butler, Charles Calderon, Campos, 
            Carter, Cedillo, Chesbro, Davis, Dickinson, Eng, Feuer, 

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            Fletcher, Fong, Fuentes, Furutani, Galgiani, Gatto, 
            Gordon, Hall, Hayashi, Roger Hernández, Hill, Huber, 
            Hueso, Huffman, Jeffries, Jones, Bonnie Lowenthal, Ma, 
            Mendoza, Mitchell, Monning, Nielsen, Olsen, Pan, Perea, 
            V. Manuel Pérez, Portantino, Silva, Skinner, Solorio, 
            Swanson, Torres, Wieckowski, Williams, Yamada, John A. 
            Pérez
          NOES: Conway, Cook, Donnelly, Beth Gaines, Halderman, 
            Knight, Logue, Mansoor, Miller, Morrell, Smyth
          NO VOTE RECORDED: Garrick, Gorell, Grove, Hagman, Harkey, 
            Lara, Nestande, Norby, Valadao, Wagner


          AGB:m  8/17/12   Senate Floor Analyses 

                         SUPPORT/OPPOSITION:  SEE ABOVE

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