What SB 888 does
An act to amend, repeal, and add Section 205.5 of the Revenue and Taxation Code, relating to taxation, to take effect immediately, tax levy.
The California Constitution provides that all property is taxable and requires that it be assessed at the same percentage of fair market value, unless otherwise provided by the California Constitution or federal law. The California Constitution and existing property tax law provide various exemptions from taxation, including, among others, a disabled veterans’ exemption. Under existing law, the disabled veterans’ exemption exempts from taxation part of the full value of property that constitutes the principal place of residence of a veteran, the veteran’s spouse, or the veteran and veteran’s spouse jointly, and the unmarried surviving spouse of a veteran, as provided, if the veteran incurred specified injuries or died while on active duty in military service, as described. Existing law exempts that part of the full value of the residence that does not exceed $100,000, or $150,000 if the household income of the claimant does not exceed $40,000, as adjusted for inflation, as specified.
This bill would, until January 1, 2037, exclude service-connected disability payments from the definition of “household income” for purposes of the disabled veterans’ exemption. The bill would also correct an erroneous cross-reference in the above-described provisions. By imposing additional duties on local tax officials, the bill would impose a state-mandated local program.
Existing law requires any bill authorizing a new tax expenditure to contain, among other things, specific goals, purposes, and objectives that the tax expenditure will achieve, detailed performance indicators, and data collection requirements.
This bill would include additional information required for any bill authorizing a new tax expenditure.
The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.
This bill would provide that, if the Commission on State Mandates determines that the bill contains costs mandated by the state, reimbursement for those costs shall be made pursuant to the statutory provisions noted above.
Existing law requires the state to reimburse local agencies annually for certain property tax revenues lost as a result of any exemption or classification of property for purposes of ad valorem property taxation.
This bill would provide that, notwithstanding those provisions, no appropriation is made and the state shall not reimburse local agencies for property tax revenues lost by them pursuant to the bill.
This bill would take effect immediately as a tax levy.
Summary from the Legislative Counsel's Digest of the amended senate text, March 26, 2026. Read the full text on leginfo.
How it got here
Senator Seyarto introduced SB 888 on January 14, 2026, with coauthors Senators Alvarado-Gil, Choi, Jones, Niello, Ochoa Bogh, Strickland, Valladares, Wahab, Richardson, and Rubio and Assembly Members Alanis, Jeff Gonzalez, Hadwick, Lackey, Davies, Schiavo, and Sanchez. The text was amended 1 time, and heard in 9 committee hearings before its final floor votes.
- Senate Floor, May 22, 2026: 33 ayes, 0 noes.
Committee votes along the way:
- Senate Revenue and Taxation, March 25, 2026: Do pass as amended, but first amend, and re-refer to the Committee on [Military and Veterans Affairs], 5-0.
- Senate Military and Veterans Affairs, April 20, 2026: Do pass, but first be re-referred to the Committee on [Appropriations], 4-0.
- Senate Appropriations, April 27, 2026: Placed on suspense file, 7-0.
- Senate Appropriations, May 14, 2026: Do pass, 7-0.
- Assembly Military and Veterans Affairs, June 16, 2026: Do pass and be re-referred to the Committee on [Revenue and Taxation], 8-0.
- Assembly Revenue and Taxation, June 29, 2026: Do pass and be re-referred to the Committee on [Appropriations], 7-0.
Who supports and opposes SB 888
The Assembly Revenue and Taxation analysis dated June 26, 2026 lists 10 organizations in support and 2 in opposition. When Senate Revenue and Taxation first listed positions on March 20, 2026, the count was 3 in support and 0 opposed. By the Assembly Revenue and Taxation analysis of June 26, 2026 it was 10 to 2.
In support: American Legion, Department of California; Amvets, Department of California; California State Board of Equalization; California State Commanders Veterans Council; California State Retirees; Military Officers Association of America, California Council of Chapters; Orange; County of; and 2 more.
Opposed: California Teachers Association; CFT – a Union of Educators & Classified Professionals, AFT, AFL-CIO.
Read the Assembly Revenue and Taxation analysis.
What happens next
It is in Assembly Appropriations. The last recorded action was on August 13, 2026.
The Governor can sign the bill, veto it, or let it become law without a signature. Until the decision, sign and veto request letters are the remaining channel, and the Department of Finance's enrolled bill report carries weight on anything with a fiscal effect. If signed, most provisions take effect January 1, and implementation moves to the agencies named in the bill.
What it means for aerospace organizations
This is the stage where language still changes. Amendments taken in committee are the ones that reach the Governor, so an organization with a stake in the drafting has a reason to be in that conversation now rather than after the vote.
The aerospace group at Capitol Axis handles that for aerospace clients.
Questions about SB 888
What does SB 888 do?
This bill would, until January 1, 2037, exclude service-connected disability payments from the definition of “household income” for purposes of the disabled veterans’ exemption. The bill would also correct an erroneous cross-reference in the above-described provisions. By imposing additional duties on local tax officials, the bill would impose a state-mandated local program.
Has SB 888 passed the California Legislature?
It is in Assembly Appropriations. The last recorded action was on August 13, 2026.
Who supports and opposes SB 888?
The Assembly Revenue and Taxation analysis dated June 26, 2026 lists 10 organizations in support and 2 in opposition. Supporters include American Legion, Department of California; Amvets, Department of California; California State Board of Equalization. Opponents include California Teachers Association; CFT – a Union of Educators & Classified Professionals, AFT, AFL-CIO.
What happens next with SB 888?
It still has committee and floor votes ahead of it. Amendments taken now are the ones that reach the Governor, so this is the stage where language changes are still possible.