Senate Standing Committee on Revenue and Taxation

Grayson?

Grayson here. Becker, I apologize. Becker?

Here.

Here.

Becker here.

Grayson. Here. Grayson

here. We have a quorum.

We'll first author presentation, we will now hear from Senator Nilo. Please, Senator Nilo, you may present your bill.

Thank you very much, mister chair. I appreciate the opportunity to go in front of my good friend, Senator Sayarto, and present SB 1053. And I told him that I thought this would go quickly because one year ago, you passed SB 603 which is a virtually identical bill and it passed unanimously. It unfortunately died in the killing fields that is known as the appropriations suspense file in the assembly. But it did get all the way out of this the Senate.

So existing property tax law already provides that the property tax base year value of real property that is substantially damaged or destroyed by a governor declared disaster may be transferred to a comparable property located within the same county that's acquired or newly constructed within five years after the disaster as replacement property. This has been of great benefit to homeowners who are navigating obviously a very difficult time dealing with that disaster and the rebuilding process affecting the property.

Recent fire events have shown that unfortunately five years is proving a very difficult time to satisfy. So in recognition of this dilemma the legislature has extended the five years numerous times over the past several years. Once, by Senator Allen in 2025, by, Assemblywoman Irwin in 2023, by Senator Borges in 2021, by Assemblyman Gallagher in 2023, then Assemblyman Anderson in 2010, just to name a few.

Given the unprecedented wildfires in Los Angeles last year and the risk California continues to face, it's going to be a huge challenge to see any rebuilding completed in five years. I think it's time for the legislature to consider allowing the local land and tax use authorities make this decision on an ongoing basis because it seems routinely it will be anyway. Whether it's fire, floods, mudslides, earthquakes, local boards of supervisors are closer to the problem affecting their communities and can adjust the time period if needed.

SB 1053 authorizes the county board of supervisors of any county affected by a disaster declared by the governor on or after 01/01/2026 until 01/01/2031 to extend the five year time period to transfer property tax base year value by up to three years for properties located in that county. I don't have any witnesses today as I presented this before.

And also as I said, it was approved unanimously and I would be pleased as punch if it was again today.

I thank the Senator are there any anyone in the audience that wishes to stand up in support of the bill? Seeing none. Are there any witnesses or folks in the audience that wish to speak in opposition of the bill? Seeing none, I'll turn this to committee. Any members of the committee wish to a question or have comments?

Senator Becker?

Yeah. I just wanna say I really appreciate this. And, you know, talking to homeowners in in Los Angeles, I mean, there's just such a, you know, vast array of of fallout, so to speak, that they they face, you know, even in the case of I was talking to a friend and in theory, there's a a a moratorium on property tax and you you could or on on rent. I think you could take a rent moratorium.

But he said in practice nobody does it because of where it'll affect your credit rating and you still have to pay it back at the end of the day.

So even some of the things that we've done that we think would be helpful, turns out are actually not that helpful to people going through the disasters. So I think something like this is is common sense and and

I really hope we can get over the finish line this time.

Thanks. Thank you.

Any other movements committee?

Mister chair. Vice chair's recognition. Thank you so much. I wanna thank the author. I'm a big proponent of local control, particularly in times of disasters.

It's like they know best of what what is needed there. And our our role as in the state is to help provide those resources, so that people can rebuild and get back to their lives. I think it's traumatic enough to lose one's livelihood. And sometimes, you know, family members, people's lives are lost as well. So thank you for this.

Thank you. You've got support in our side of the house. And hopefully, we'll see you across the finish line. And I'm ready to move when when you're ready to share. Thank you.

Any other committee members wish to make comments or questions? Seeing none, I would like to say that this is thoughtful. I appreciate it. Your your doggedness on this, Senator Nileo, it's needed. We've all seen some of the damage that these wildfires have caused and and the and the deep emotional distress that puts the folks in and requiring them to get it done in a certain very short time frame.

Five years seems like a long while, but isn't in this situation. Just adds to their their problems. And so with that, I would like to support the bill. Senator, would you like to close?

Yes. I would very much appreciate an aye vote. And again, I thank my pal, Senator Sayardo, for letting me go first. Thank you very much.

Thank you. And there is a motion on the bill? Put it please call the roll.

I think you haven't established a quorum.

We established it.

Oh, you did. Okay. I'm sorry.

Thanks for the Yeah. Thoughtful tip.

I just wanna make sure that it works.

Motion is do passed to the committee on appropriations. Senators McNerney.

Aye.

Aye. Ashby Becker.

McNerney, aye. Alvarado-Gil.

Aye.

Becker, aye. Grayson.

Aye.

Aye.

Grayson, aye.

The roll is 4-0 and the bill is on call. Thank you, Senator Nilo.

Thank you very much.

Next, we have file item one. And this is Senator Seyarto. Thank you for, allowing Senator Nilo to proceed you in order and, would you proceed with your presentation?

Alright. Well, thank you very much, honorable Chair. And I'm here to present SB 888. First, I wanna start out by thanking the committee for working with my staff on this important Bill, and I will be accepting the committee amendment. SB 888 addresses a critical flaw in the system that unfairly penalizes disabled veterans by counting their disability benefits as income when determining eligibility for the disabled veterans property tax exemption.

In recent years, both California and the federal government have recognized that disability benefits are fundamentally different from earned income and have taken steps to exclude disability benefits from household income calculations. In the 2024 session, the legislature and congress acted to remove disability income from government housing eligibility, calculations. SB 888 simply extends that same principle to property tax relief for disabled veterans. The problem is clear.

Veterans must be disabled to qualify for the exemption, yet the very disability compensation they are receiving is counted as income, pushing many over the income threshold and making them ineligible for the low income tax exemption.

As a result, veterans disability benefits can unintentionally disqualify them from other critical resources, creating acatch 22 where veterans lose access to the very relief designed to keep them stable. Disability compensation is not a source of wealth. It is a recognition of service connected injuries and loss of earning capacity. Under current law, veterans with a household income under 81,131 qualify for a higher property tax exemption through the low income category of the disabled veterans property tax exemption. Currently, a veteran rated at 100% disability by

the VA with a spouse is awarded around $50,000 annually before any additional dependents or special allowances. Social security benefits also contribute significantly, and as a result, a 100% disabled veteran and spouse who have no earnings from work but solely rely on disability and social security may be disqualified from the low income exemption despite living on fixed benefits and paying for high medical and medical care costs.

This Bill is proactive is a proactive step to keep 100% disabled veterans in their homes and reduce the risk of homelessness or housing instability by ensuring the tax code does not punish them for receiving disability compensation. SB 888 simply excludes VA service connected disability compensation from the calculation of household income for the purposes of low income disabled veterans property tax exemption, so veterans are not penalized after receiving the benefits they have earned.

I respectfully ask for an aye vote, and I do not have any witnesses today as my as is custom for me.

I think the oath for the presentation, are there any witnesses that wish to come up in in support of the Bill? Please post the microphone.

Oh, he left. That was Roger. Yes.

Seeing none, are there any witnesses in opposition to the Bill? Seeing none, I will ask the Members of Committee, for comments or questions. Senator Becker, you're recognized.

So another bipartisan measure, common sense measure. What are we doing here in the legislature? Common sense, bipartisan measures. I I appreciate you, bringing this forward. And, yeah, this this is something that we should do.

And, you know, as soon as you the things you sort of you come up here as you assume like, hey, maybe this already happened. But, you know, it it turns out it hasn't. And and, yeah, appreciate you bringing forward, be supporting it today.

Thank you.

Thank you. Thank you, Senator Seyarto, and thank you for not giving up on our veterans. I think our our veterans, they receive so much more than what we've been able to provide them. And I think this is just a fraction of that dignity and respect to helping them, stay in California. As we know, affordability has been, you know, increasing to those on on fixed incomes.

And, this is a solution that will help put money back into their pockets and keep them here in California. So thank you so much. I will be supporting it as well. And we'll move it when when appropriate.

Any other comments? Yes. Mister Grayson, you're-

Thank you, Mister Chair. Might as well join the party in comments. I heard bipartisan. I heard from my other colleague on respect and showing that toward veterans. And I also wanna add on that this measure really helps government become what it's supposed to be for the people run efficiently and effectively.

And there are times when government gets into silos and that's why we have the conflicts that we have where we're trying to help but then we turn around and hurt at the same time. So breaking down the silo and making government work efficient and effective for the people is something this Bill does which is why I'll support it today.

Thank you. Appreciate it.

Again, I wanna thank the the author. You have been a step that step fast that you get for veterans and that's quite admirable. This Bill promotes basic fairness for those who have sacrificed greatly for our country. And I noticed you have accepted the committee amendments. Yes.

I'm happy to support your Bill. Would you like to close?

No. I just simply ask for an aye vote.

Thank you. The motion, has already been given and, do pass submit as amended to the committee on military and veterans affairs. Please call the roll.

Senators McNerney. Aye. McNerney, aye. Alvarado-Gil. Aye.

Aye. Ashby. Aye. Ashby, aye. Becker.

Aye. Becker, aye. Grayson. Aye. Grayson, aye.

Road is 5-0. The bill is out. Thank the author. We now have three bills which are on proposed for consent. These bills are file item two, SB 999 by Senator Weber Pierson.

File item four, SB 1073 by Senator Smallwood-Cuevas. And file item five by SB 881. Is there a motion? Yes. Motion is.

Please call the roll.

McNerney, aye. Alvarado-Gil?

Aye.

Motion is to adopt the consent calendar. Senators McNerney.

Aye.

Aye.

Aye. Becker?

Aye. Ashby?

Aye.

Aye. Grayson?

Aye.

Aye.

The consent calendar is adopted. And now we return to file item three. Yes. Which is, SB 1053 property taxation transfer of the base year value disaster relief. Please call the roll.

This is SB 1053 by Senator Nilo. Current vote is 4-0. Chair and vice chair voting, aye. Senator Ashby?

Aye.

Ashby, aye.

The vote is 5-0 and the bill is out. The committee will now come to an end.