BILL NUMBER: SB 1183 CHAPTERED 07/30/01 CHAPTER 121 FILED WITH SECRETARY OF STATE JULY 30, 2001 APPROVED BY GOVERNOR JULY 28, 2001 PASSED THE ASSEMBLY JULY 14, 2001 PASSED THE SENATE MAY 29, 2001 AMENDED IN SENATE MAY 1, 2001 AMENDED IN SENATE APRIL 18, 2001 INTRODUCED BY Committee on Revenue and Taxation (Senators Scott (Chair), Alpert, Bowen, and Burton) FEBRUARY 28, 2001 An act to amend Sections 2189.5, 2189.6, 3101, 3102, 3692, 3793.1, 4911, and 4911.1 of, and to add Section 3698.8 to, the Revenue and Taxation Code, relating to taxation. LEGISLATIVE COUNSEL'S DIGEST SB 1183, Committee on Revenue and Taxation. Property taxes: local rolls: assessments: administration. Existing law requires each county assessor to determine the assessed value of taxable real property and personal property, and requires each county tax collector to collect the taxes levied on those assessed values. Under existing law, if a taxpayer mistakenly pays property tax on property he or she does not own, the property tax is transferred to the property of the taxpayer for which the payment is intended. This bill would allow for the refund of taxes mistakenly paid in the case in which there is no property of the taxpayer to which the payment may be applied. This bill would also make technical, nonsubstantive changes to the laws governing the treatment and sale of tax-defaulted property. THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS: SECTION 1. Section 2189.5 of the Revenue and Taxation Code is amended to read: 2189.5. Every tax on personal property and improvements, located upon or appurtenant to a leasehold estate for the production of gas, petroleum or other hydrocarbon substances from beneath the surface of the earth, and belonging to the owner of the leasehold estate, may be secured by the leasehold estate, when, in the opinion of the assessor, the leasehold estate is of sufficient value to constitute security for the payment of all taxes upon that personal property or improvements and upon that leasehold estate. In the event of delinquency in the payment of that tax, the personal property, improvements, and leasehold estate shall be subject to seizure and sale in the same manner as provided for the seizure and sale of unsecured personal property, in Sections 2951 to 2962, inclusive, at any time within three years after the delinquency. Suit may be brought against an assessee of those taxes in the event of delinquency in the payment thereof. If the tax thereon remains unpaid at the time set for the declaration of default for delinquent taxes, the tax together with any penalty and costs as may have accrued thereon while on the secured roll shall be transferred to the unsecured roll. Those taxes that are delinquent at the time the amendment to this section, enacted at the 1973-74 Regular Session, goes into effect may also be transferred to the current unsecured roll. SEC. 2. Section 2189.6 of the Revenue and Taxation Code is amended to read: 2189.6. Improvements that constitute component parts of a water distribution system located in whole or in part on property assessed to a person other than the assessee of the land on which they are located shall be assessed as improvements on the secured roll. However, those assessments shall not be a lien on the land on which those improvements are located and that fact shall be noted on the secured roll. If the tax thereon is unpaid when any installment of secured taxes becomes delinquent, the tax collector may use the same collection procedures available for the collection of taxes on the unsecured roll. If the tax thereon remains unpaid at the time set for the declaration of default for delinquent taxes, the tax together with any penalty and costs that may have accrued thereon while on the secured roll shall be transferred to the unsecured roll. SEC. 3. Section 3101 of the Revenue and Taxation Code is amended to read: 3101. If any unsecured tax, interest, or penalty imposed under this part is not paid by the last day of the month succeeding the delinquency date, the official collecting taxes on the unsecured roll may file, no sooner than 10 days after the mailing of the notice required in subdivision (b), in the office of the clerk of the court, without fee, a certificate specifying as follows: (a) The fact that a notice of intent to file the certificate had been sent, by registered mail, to the assessee, at his or her last known address, not less than 10 days prior to the date of the certificate. (b) The fact that the notice required in subdivision (a) set forth the following information: (1) The name of the assessee. (2) The description of the property assessed. (3) The assessed value of the property. (4) The fact that judgment will be sought in the amount of the tax, penalty, and interest that is unpaid at the time of the filing of the certificate. (5) The fact that, upon the issuance and recordation of that judgment, additional penalties will continue to accrue at the rate prescribed by law, and that any bond premium posted or other costs to enforce the judgment shall be an added charge. (6) The fact that a recording fee in the amount set forth in Section 27361.3 of the Government Code will be required to be paid for the purpose of the recordation of any satisfaction of the judgment lien. (c) The name of the assessee. (d) The amount for which judgment is to be entered. (e) The fact that the county has complied with all provisions of this part in the computation and the levy of the tax, penalty, and interest. (f) The fact that a request is therein made for the issuance and entry of judgment against the assessee. SEC. 4. Section 3102 of the Revenue and Taxation Code is amended to read: 3102. The clerk of the court immediately upon the filing of the certificate shall enter a judgment for the county against the assessee in the amount of the tax, penalty, and interest set forth in the certificate. The clerk of the court may file the judgment in a looseleaf book entitled "County Unsecured Property Tax Judgments." SEC. 5. Section 3692 of the Revenue and Taxation Code is amended to read: 3692. (a) The tax collector shall attempt to sell tax-defaulted property as provided in this chapter within four years of the time that the property becomes subject to sale for nonpayment of taxes unless by other provisions of law the property is not subject to sale. If there are no acceptable bids at the attempted sale, the tax collector shall attempt to sell the property at intervals of no more than six years until the property is sold. (b) When oil, gas, or mineral rights are subject to sale for nonpayment of taxes, the tax collector may offer the interest at minimum bid to the holders of outstanding interests where the interest subject to sale is a partial interest or, where the interest subject to sale is a complete and undivided interest, to the owner or owners of the property to which the oil, gas, or mineral rights are appurtenant. (c) When parcels that are rendered unusable by their size, location, or other conditions are subject to sale for nonpayment of taxes, the tax collector may offer the parcel at a minimum bid to owners of contiguous parcels. The tax collector shall require that the successful bidder request the assessor and the planning director to combine the unusable parcel with his or her own parcel as a condition of sale. (d) Sealed bid sale procedures shall be used when offers are made pursuant to subdivision (b) or (c), and the property shall be sold to the highest eligible bidder. The offers shall remain in effect for 30 days or until notice is given pursuant to Section 3702, whichever is later. (e) The Notice of Power to Sell Tax-Defaulted Property, Notice of Power and Intent to Sell Tax-Defaulted Property, Notice to the Board of Supervisors, and Notice of Intended Sale of Tax-Defaulted Property shall indicate that any parcel remaining unsold may be reoffered within a 90-day period and any new parties of interest shall be notified in accordance with Section 3701. This subdivision shall not apply to properties sold pursuant to Chapter 8 (commencing with Section 3771). SEC. 6. Section 3698.8 is added to the Revenue and Taxation Code, to read: 3698.8. The tax collector, upon the recommendation of county counsel, may remove a parcel from the tax sale if it is deemed the removal is in the best interest of the county. The tax collector shall notify the controller, in writing, whenever a parcel is removed from a tax sale. SEC. 7. Section 3793.1 of the Revenue and Taxation Code is amended to read: 3793.1. (a) The sales price of any property sold under this article shall include, at a minimum, the amounts of all of the following: (1) All defaulted taxes and assessments, and all associated penalties and costs. (2) Redemption penalties and fees incurred through the month of the sale. (3) All costs of the sale. (b) If the property or property interests have been offered for sale under the provisions of Chapter 7 (commencing with Section 3691) at least once and no acceptable bids therefor have been received, the tax collector may, in his or her discretion and with the approval of the board of supervisors or that board's designee, offer that property or those interests at a minimum price that the tax collector deems appropriate. (c) The board of supervisors, or its designee, may permit a nonprofit organization to purchase property or property interests by way of installment payments. SEC. 8. Section 4911 of the Revenue and Taxation Code is amended to read: 4911. (a) If an assessee or agent of the assessee, by mistake, pays the tax on other than the property intended and by substantial evidence convinces the tax collector that the payment was intended for another property, the tax collector shall cancel the credit on the unintended property and transfer the payment to the property intended as prescribed in this article at any time before a guaranty or certificate of title issues respecting the unintended property and before two years have elapsed since the date of payment. (b) If through no fault of the assessee or agent of the assessee, a tax payment is credited to property other than the property intended and the taxpayer by substantial evidence convinces the tax collector that the payment should have been credited to another property, the tax collector shall cancel the credit on the unintended property and transfer the payment to the property intended as prescribed in this article at any time before a guaranty or certificate of title issues respecting the unintended property and before two years have elapsed since the date of the payment. (c) If any person mistakenly pays an amount of tax and there is no property of that person in the county to which that payment properly applies, the tax collector shall, by being convinced upon substantial evidence that the payment was a mistake, cancel the payment and return the amount paid to that person. SEC. 9. Section 4911.1 of the Revenue and Taxation Code is amended to read: 4911.1. (a) If through no fault of the assessee or agent of the assessee a tax payment is credited to property other than the property intended and after a guaranty or certificate of title issues respecting the unintended property, the taxpayer by substantial evidence convinces the tax collector that the payment should have been credited to another property, the tax collector shall transfer the payment in full to the property intended, and shall cancel the credit on the unintended property. In the event a transfer of payment is made, the person owning the unintended property immediately before issuance of the guaranty or certificate of title shall be personally liable for the amount so transferred that shall be collected in the manner specified for the collection of taxes on the unsecured roll. (b) If any person mistakenly pays an amount of tax on a property after a guaranty of certificate of title has been issued and there is no other property of that person in the county to which that payment properly applies, the tax collector shall, upon being convinced upon substantial evidence that the payment was a mistake, cancel the payment and return the amount paid to that person. Upon cancellation of the payment, the person owning the property immediately before issuance of the guaranty or certificate of title shall be personally liable for the subject tax amount, which shall be collected in the matter specified for the collection of taxes on the unsecured tax roll.