SB 974: Property taxation: transfer of taxable value: severely and permanently disabled persons.

The California Constitution limits the amount of ad valorem taxes on real property to 1% of the full cash value of that property, defined as the county assessors valuation of real property as shown on the 197576 tax bill and, thereafter, the appraised value of the property when purchased, newly constructed, or a change in ownership occurs after the 1975 assessment, subject to an annual inflation adjustment not to exceed 2%. Existing property tax law, pursuant to specified provisions of the California Constitution, authorizes an owner of a primary residence who is over 55 years of age, severely and permanently disabled, or a victim of a wildfire or natural disaster to transfer the taxable value of property that is eligible for either the homeowners exemption or the disabled veterans exemption to any replacement dwelling that is purchased or newly constructed as that persons principal residence within 2 years of the sale of the original primary residence, as provided.

Existing law authorizes the establishment of a special needs trust if a court makes specific determinations, including that the minor or person with a disability has a disability that substantially impairs the individuals ability to provide for their own care.

This bill would require the county assessor to determine that a person is eligible as a severely and permanently disabled claimant under the above-described provisions relating to transfers of taxable value if the county assessor receives a letter certifying a special needs trust, as specified. The bill would authorize the county assessor to issue determination of preliminary eligibility, as provided, and would require the claimant be liable for property tax at the appraised value of the replacement dwelling at the time of transfer for the years since the transfer if the trust fails to produce the letter within 5 years. The bill would require the State Department of Health Care Services to develop and establish a method for a claimant to request, and the parameters for issuing, a letter certifying a special needs trust.