Senate Tax Rev — 2026-03-25

Thank you very much, Mr. 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 appropriation suspense file in the Assembly, but it did get all the way out of 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 Erwin 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 January 1st of 2026 until January 1st of 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 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

Yeah, I just want to say I really appreciate this. And, you know, talking to homeowners in Los Angeles, I mean, there's just such a vast array of fallout, so to speak, that they face. You know, even in the case of I was talking to a friend, and in theory there's a moratorium on property tax or on rent. I think you could take a rent moratorium. but he said in practice nobody does it because it will 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, it turns out are actually not that helpful to the people going through the disasters. So I think something like this is common sense and I really hope we can get over the finish line this time. Thank you.

Mr. Chair. Thank you so much. I want to thank the author. I'm a big proponent of local control, particularly in times of disasters. It's like they know best of what is needed there. And our role 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. I think you've got support in our side of the house. and hopefully we'll see you cross the finish line, and I'm ready to move when you're ready, Chair.

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.

Yes, sir.

I think you haven't established a quorum.

Oh, you did?

I'm sorry. Thanks for the awful tip. I just want to make sure that it works.

Senators McNerney? Aye. McNerney, aye. Alvarado Gill? Aye. Aye. Ashby? Becker? Aye. Becker, aye. Grayson? Aye. Grayson, aye.

All right. Well, thank you very much, Honorable Chair, and I'm here to present SB 888. First, I want to start out by thanking the committee for working with my staff on this important bill, and I will be accepting the committee amendments. 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 a Catch-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 veteran's 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 care costs. This bill 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 is custom for me.

Another bipartisan measure, common sense measure. What are we doing here in the legislature? Common sense, bipartisan measures. I appreciate you bringing this forward. And, yeah, this is something that we should do. And you know sometimes you there things you sort of you come up here and you assume like hey maybe this has already happened But you know it turns out it hasn And yeah I appreciate you bringing it forward I be supporting you today Thank you.

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

Thank you, Mr. Chair. I might as well join the party in comments. So I heard bipartisan, I heard from my other colleague on respect and showing that toward veterans. And I also want to 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.

Yes.

No, I just simply ask for an aye vote.

Senators McNerney.

McNerney, aye. Alvarado Gill.

Aye. Ashby.

Ashby, aye. Becker.

Becker, aye. Grayson.

Grayson, aye.

Senators McNerney. Aye.

Over to Gil. Aye.

Aye. Becker. Aye. Aye. Grayson. Aye. Aye.

This is SB 1053 by Senator Nilo. Current vote is 4-0.

Aye. Ashby aye.