BILL ANALYSIS Ó
SB 909
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Date of Hearing: August 3, 2016
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Lorena Gonzalez, Chair
SB 909
(Beall) - As Amended June 27, 2016
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|Policy |Local Government |Vote:|9 - 0 |
|Committee: | | | |
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| |Revenue and Taxation | |9 - 0 |
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Urgency: No State Mandated Local Program: YesReimbursable:
No
SUMMARY:
This bill adds the interests of beneficiaries of a special needs
trust to the list of ownership interests of a home qualifying
for the Senior Citizens and Disabled Citizens Property Tax
Postponement (PTP).
FISCAL EFFECT:
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Negligible state costs.
COMMENTS:
1)Background. The PTP Program was originally enacted by Chapter
1242 of 1977 to provide property tax relief to eligible senior
citizens, and was later expanded to include blind and disabled
persons. Eligible persons could defer payment of property
taxes by requesting that the State Controller's office (SCO)
pay the amount deferred to the county. The SCO recovers
payment by securing a lien on the property, ensuring repayment
of deferred property taxes with accrued interest upon sale of
the home, when the title changed hands, or when the homeowner
died or moved. The PTP Program was funded by an annual
General Fund allocation of $12.7 million appropriated to the
SCO to pay the face amount of all certificates of eligibility.
The PTP Program was permanently suspended in FY 2008-9 to
address severe General Fund shortfalls during the recession.
AB 2231 (Gordon), Chapter 703,2014, re-enacted the PTP
Program, with modifications that were intended to improve the
solvency over the long-term and better protect the state's
interests.
2)The PTP Program and special needs trusts. Current law allows
the State Controller to accept PTP Program applications from
ownership interests held in trusts if the trust is revocable,
or if the transferor of assets into the trust is also its
beneficiary. However, special needs trusts do not always
satisfy these criteria.
3)Purpose. SB 909 is intended to clarify the law to allow
low-income persons with disabilities to participate in the PTP
Program, regardless of whether their homes are held in special
needs trusts. According to the author, because the trust,
rather than the individual, is considered to be the owner of
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the home, special needs beneficiaries may be considered
ineligible for the program.
Analysis Prepared by:Luke Reidenbach / APPR. / (916)
319-2081