BILL ANALYSIS                                                                                                                                                                                                    






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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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          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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          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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