SENATE BILL REPORT

SB 5490

This analysis was prepared by non-partisan legislative staff for the use of legislative members in their deliberations. This analysis is not a part of the legislation nor does it constitute a statement of legislative intent.

Background: The legislative authority in each county must levy a property tax against the taxable property of the county in a sum equal to the amount that would be raised by between $0.01125 - $0.27 per $1,000.00 of assessed value. This property tax must be levied and collected for the purpose of creating a veterans' assistance fund. Expenditures from the veterans' assistance fund and interest earned on the balance of the fund may only be used for the following purposes:

the veterans' assistance programs;
the burial or cremation of a deceased indigent veteran or a deceased family member of an indigent veteran; or
the direct and indirect costs incurred in the administration of the fund.

The sum of property tax rates is limited by the state constitution to a maximum of 1 percent of true and fair value, or $10.00 per $1,000.00 of assessed value. The constitution provides a procedure for voter approval for tax rates that exceed the 1 percent limit, which are called excess levies. Excess levies require not only voter approval, but most also require a 60 percent supermajority approval. Taxes imposed under the 1 percent constitutional limit are called regular taxes, and do not require voter approval.

The veterans' assistance levy is subject to the statutory provisions that are included with the aggregate note limit of $5.90 per $1,000.00 of assessed value.

Summary of Bill: The veterans' assistance levy is removed from the county levy and made to be a stand-alone levy. The levy is removed from the aggregate note limit of $5.90 per $1,000.00 of assessed value, but remains subject to the $10.00 constitutional limit. The levy is subject to prorationing at the same time that the county general levy is subject to prorationing.

The act applies to taxes levied for collection beginning in 2014.

Staff Summary of Public Testimony: PRO: The Veterans' Board was affected by both the cap and the law which reduced the surplus below the placement level in the statute. The veteran population is increasing and affected by suicide, murder, divorce, and dysfunctional children in schools. This comes at a time when veterans are affected by a massive Veterans' Administration backlog. There is increased veteran homelessness. Most counties assess the minimum levy amount, a few are assessing slightly more. There is a huge disincentive to assist veterans, because if you do so, you are taking a bite out of elections, deputies, and the health department. It would be very helpful to move this out of the county general levy. Counties support this bill because it provides additional flexibility to raise more revenue and take care of veterans.