BILL ANALYSIS �
SENATE GOVERNANCE & FINANCE COMMITTEE
Senator Lois Wolk, Chair
BILL NO: SB 874 HEARING: 1/11/12
AUTHOR: Hancock FISCAL: No
VERSION: 1/4/12 TAX LEVY: No
CONSULTANT: Grinnell
QUALIFIED SPECIAL TAXES
Expands Exemptions for Qualified Special Taxes Imposed by
School and Community College Districts
Background and Existing Law
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 2/3 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 (AB 385, Lieber, 2006). However, school
districts cannot exempt persons receiving Social Security
Disability Insurance (SSDI) from the tax.
Proposed Law
SB 874 allows school districts to exempt persons receiving
SSDI from qualified special taxes.
State Revenue Impact
SB 874 -- 03/21/11 -- Page 2
No estimate.
Comments
1. Purpose of the bill . 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."
2. What's the difference ? 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 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. SB 874 provides
parity for local parcel taxes by allowing school districts
to exempt SSDI recipients from the tax.
Support and Opposition (04/25/11)
Support : Community College League of California.
Opposition : California Taxpayers Association.
SB 874 -- 03/21/11 -- Page 3