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F I S C A L I M P A C T R E P O R T

SPONSOR Ortiz y Pino

DATE TYPED 03/14/05 HB

SHORT TITLE Poverty Level Property Tax Exemption, CA

SB SJR 9/aSRC

ANALYST Ford

REVENUE

Estimated Revenue

Subsequent

Years Impact

Recurring

or Non-Rec

Fund

Affected

FY05

FY06

($0.1)

Minimal

Recurring

Local Funds

(Parenthesis ( ) Indicate Revenue Decreases)

Relates to HJR 12, HJR 13

SOURCES OF INFORMATION

LFC Files

Responses Received From

Department of Finance and Administration (DFA)

SUMMARY

Synopsis of SRC Amendment

The Senate Rules Committee amendment changes the title of the resolution to accurately reflect

the effect of the resolution. The new title makes clear that the property tax exemption applies to

persons whose family income is at or below the poverty level and are determined to be disabled

or blind.

Synopsis of Original Bill

Senate Joint Resolution 9 proposes to amend the state constitution to exempt from property taxes

the property of persons whose income is at or below the federal poverty level and who is blind or

permanently disabled pursuant to the federal social security act and is determined to have a

permanent and total disability pursuant to the workers’ compensation act. The proposed

amendment is subject to voter approval.

Senate Joint Resolution 9/aSRC -- Page 2

Significant Issues

The resolution proposes to enact a property tax exemption for a small group of people – those

who are at or below the federal poverty level and are blind or permanently disabled pursuant to

the social security act and have permanent total disability pursuant to the workers’ compensation

act. It may be that the intent for the bill was for either of these two latter conditions to be met,

not both; however, as written, both conditions would have to be met.

FISCAL IMPLICATIONS

If approved by the voters, this resolution would result in a revenue loss to local funds. Because

the affected group of taxpayers is small, the impact is likely to be minimal. An analysis by the

Taxation and Revenue Department is not yet available.

CONFLICT, DUPLICATION, COMPANIONSHIP, RELATIONSHIP

House Joint Resolution 12 would increase the maximum limit of mills that can be levied on

property without a special election and would impose the first 2 mills statewide with revenue

dedicated to public school funding. House Joint Resolution 13 would amend the constitution to

exempt certain properties from taxation.

TECHNICAL ISSUES

The resolution incorrectly references the federal poverty “level.” As DFA notes, it should refer-

ence the federal poverty “guidelines” which is the correct technical term used by the federal gov-

ernment.

It is unclear if the resolution intends for persons to meet both disability requirements or just one

of the two.

It is unclear if the exemption is intended to apply only to those whose permanent disability is the

result of a job-related injury or if the reference to the workers’ compensation act is meant only to

provide a set of guidelines for determining disability. This provision should be clarified.

EF/lg:yr