BILL ANALYSIS Ó
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|SENATE RULES COMMITTEE | SB 371|
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THIRD READING
Bill No: SB 371
Author: Hancock (D)
Amended: 4/6/15
Vote: 21
SENATE GOVERNANCE & FIN. COMMITTEE: 5-1, 5/6/15
AYES: Hertzberg, Beall, Hernandez, Lara, Pavley
NOES: Moorlach
NO VOTE RECORDED: Nguyen
SUBJECT: School districts: special taxes
SOURCE: Author
DIGEST: This bill clarifies that school districts can exempt
any, not all, of three sets of persons from its parcel tax.
ANALYSIS:
Existing law:
1)Requires 2/3 voter approval when a local agency wants to
impose or increase a special tax (Section XIIIA of the
California Constitution, as added by Proposition 13, 1978).
2)Requires the Legislature to grant specific taxing power to
local agencies to impose taxes (Proposition 62, 1986).
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Page 2
3)Allows school and community college districts to impose
qualified special taxes that applied uniformly, to all
taxpayers or real property within the district (AB 1440,
Hannigan, Chapter 100, Statutes of 1987).
4)Permits school districts to exempt from the tax "all of the
following" persons:
a) Over the age of 65 years (AB 1440, Hannigan, 1987).
b) Receiving Supplemental Security Income (SSI) regardless
of age (AB 385, Lieber, Chapter 41, Statutes of 2006).
c) Receiving Social Security Disability Insurance (SSDI),
whose yearly income was less than 250% of 2012 federal
poverty guidelines (SB 874, Hancock, Chapter 791, Statutes
of 2012).
This bill:
1)Provides that school districts can exempt "any or all," not
"all," of the above persons from the parcel tax.
2)States that its provisions are declaratory of existing law.
Comments
1)During the consideration of SB 874 (Hancock, 2012), a drafting
mistake deleted the word "or" and instead inserted the words
"all of the following." The bill was subsequently enacted. As
a result, some school districts think the statute requires
them to either exempt all three categories (individuals over
65, SSI recipients, and SSDI recipients), or exempt no one at
all. SB 371 corrects this error, and deems the change
declaratory of existing law.
2)AB 1440 (Hannigan, 1987) allowed school districts to impose
qualified special taxes, commonly known as parcel taxes.
Parcel taxes are not ad valorem or assessed based on the value
of a property like property taxes; instead they are generally
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a flat rate assessed per parcel regardless of its size, or per
square foot of a parcel or its improvements. Also used by
cities and special districts, local agencies can use revenues
in almost any way that serves local needs, such as ongoing
expenses, programs, or buildings. Counties collect parcel
taxes with property taxes, and then remit funds to the agency
imposing the tax. Property tax law generally guides parcel
tax collection.
FISCAL EFFECT: Appropriation: No Fiscal
Com.:NoLocal: No
SUPPORT: (Verified5/8/15)
None received
OPPOSITION: (Verified5/8/15)
Howard Jarvis Taxpayers Association
ARGUMENTS IN SUPPORT: According to the author, "Existing law
allows school districts and community college districts to
impose special taxes (parcel taxes) that apply to taxpayers or
real property within the school district. K-12 school districts
may exempt persons 65 years of age and older persons who receive
supplemental security income (SSI) regardless of age from paying
these taxes and/or persons who receive Social Security
Disability Insurance (SSDI). In 2011, SB 874 (Hancock) gave
school districts the option of exempting property owners who
receive SSDI, but in 2015 the Santa Clara County Counsel's
office raised an issue with this new exemption. The County
Counsel's office interpreted Government Code Section 50079 (b)
(1) which states, "all of the following taxpayers," to mean that
a parcel tax must either have no exemptions or must meet all
three exemptions, an interpretation that goes against the
intention of SB 874. SB 371 simply clarifies that school
districts can provide the exemption to any or all of exempted
categories of tax payers."
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Page 4
ARGUMENTS IN OPPOSITION: Taxpayer groups argue that it is
flawed public policy to deceive voters by encouraging them to
vote for taxes under the premise that they may not have to pay
them. Additionally, many districts require exempt taxpayers to
opt out of the tax each year, instead of on a one-time basis for
the duration the tax is effective, which imposes a burden on the
taxpayer, and can cause confusion for taxpayers who voted for a
tax thinking that they were permanently exempt from it. Without
a one-time permanent exemption process, any exemption expansion
may be unwarranted.
Prepared by:Colin Grinnell / GOV. & F. / (916) 651-4119
5/8/15 15:09:20
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