BILL ANALYSIS Ó ------------------------------------------------------------ |SENATE RULES COMMITTEE | SB 874| |Office of Senate Floor Analyses | | |1020 N Street, Suite 524 | | |(916) 651-1520 Fax: (916) | | |327-4478 | | ------------------------------------------------------------ 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. CONTINUED SB 874 Page 2 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 CONTINUED SB 874 Page 3 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, CONTINUED SB 874 Page 4 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 **** END **** CONTINUED