BILL NUMBER: AB 2715 CHAPTERED 09/22/06 CHAPTER 423 FILED WITH SECRETARY OF STATE SEPTEMBER 22, 2006 APPROVED BY GOVERNOR SEPTEMBER 22, 2006 PASSED THE ASSEMBLY AUGUST 30, 2006 PASSED THE SENATE AUGUST 28, 2006 AMENDED IN SENATE AUGUST 23, 2006 AMENDED IN SENATE AUGUST 10, 2006 AMENDED IN ASSEMBLY MAY 1, 2006 AMENDED IN ASSEMBLY APRIL 17, 2006 INTRODUCED BY Assembly Member Sharon Runner FEBRUARY 24, 2006 An act to amend Sections 7171 and 31000.6 of the Government Code, relating to government, and declaring the urgency thereof, to take effect immediately. LEGISLATIVE COUNSEL'S DIGEST AB 2715, Sharon Runner Government. Existing law authorizes an agency, as defined, that creates a state tax lien, as defined, with respect to real property to record notice of that lien with the county recorder. Existing law authorizes an agency creating a state tax lien with respect to personal property to file a notice of that lien with the Secretary of State. This bill would authorize the transmission, recording, and indexing of notices of these liens and related documents by electronic or magnetic means, as provided. Existing law requires a county board of supervisors, upon request of the county assessor or sheriff, to contract with legal counsel to assist the assessor or sheriff with duties for which the assessor or sheriff would have a conflict of interest. This bill would apply this requirement to matters brought after an assessor or sheriff leaves office if certain conditions are met. By requiring county boards of supervisors to contract for legal counsel under these conditions, this bill would impose a state-mandated local program. 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 these statutory provisions. This bill would declare that it is to take effect immediately as an urgency statute. THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS: SECTION 1. Section 7171 of the Government Code is amended to read: 7171. (a) With respect to real property, at any time after creation of a state tax lien, the agency may record in the office of the county recorder of the county in which the real property is located a notice of state tax lien. (b) With respect to personal property, at any time after creation of a state tax lien, the agency may file a notice of state tax lien with the Secretary of State pursuant to Chapter 14.5 (commencing with Section 7220). (c) (1) The notice of state tax lien recorded or filed pursuant to subdivision (a) or (b) shall include all of the following: (A) The name and last known address of the taxpayer. (B) The name of the agency giving notice of the lien. (C) The amount of the unpaid tax. (D) A statement that the amount of the unpaid tax is a lien on all real or personal property and rights to that property, including all after-acquired property and rights to property, belonging to the taxpayer. (E) A statement that the agency has complied with all of the provisions of the applicable law for determining and assessing the tax. (2) Notwithstanding paragraph (4) of subdivision (b) of Section 27390, the transmission, filing, recording, and indexing of notices of state tax liens recorded or filed pursuant to subdivision (a) or (b), and all documents that relate to or affect those liens, including, but not limited to, a release, an extension, or a subordination, by electronic or magnetic means using computerized data processing, telecommunications, the other similar information technologies available to the filing offices shall be permitted. A facsimile signature that complies with the requirements of paragraph (2) of subdivision (b) of Section 27201 shall be accepted on any document relating to a state tax lien filed or recorded pursuant to this paragraph. (d) If the notice of state tax lien recorded in any county reflects an out-of-state address as the last known address of the taxpayer, the agency shall pay the fees required by Sections 27361, 27361.2, 27361.4, and 27361.8. (e) The agency recording a notice of state tax lien pursuant to subdivision (d) may collect from the taxpayer, in any manner provided by law for the collection of the tax, the cost of recording. SEC. 2. Section 31000.6 of the Government Code is amended to read: 31000.6. (a) Upon request of the assessor or the sheriff of the county, the board of supervisors shall contract with and employ legal counsel to assist the assessor or the sheriff in the performance of his or her duties in any case where the county counsel or the district attorney would have a conflict of interest in representing the assessor or the sheriff. (b) In the event that the board of supervisors does not concur with the assessor or the sheriff that a conflict of interest exists, the assessor or the sheriff, after giving notice to the county counsel or the district attorney, may initiate an ex parte proceeding before the presiding judge of the superior court. The county counsel or district attorney may file an affidavit in the proceeding in opposition to, or in support of, the assessor's or the sheriff's position. (c) The presiding superior court judge that determines in any ex parte proceeding that a conflict actually exists, must, if requested by one of the parties, also rule whether representation by the county counsel or district attorney through the creation of an "ethical wall" is appropriate. The factors to be considered in this determination of whether an "ethical wall" should be created are: (1) equal representation, (2) level of support, (3) access to resources, (4) zealous representation, or (5) any other consideration that relates to proper representation. (d) If a court determines that the action brought by the assessor or sheriff is frivolous and in bad faith, the assessor's office or sheriff's office shall pay their own legal costs and all costs incurred in the action by the opposing party. As used in this section, "bad faith" and "frivolous" have the meaning given in Section 128.5 of the Code of Civil Procedure. (e) If the presiding judge determines that a conflict of interest does exist, and that representation by the county counsel or district attorney through the creation of an ethical wall is inappropriate, the board of supervisors shall immediately employ legal counsel to assist the assessor or the sheriff. (f) As used in this section, "conflict of interest" means a conflict of interest as defined in Rule 3-310 of the Rules of Professional Conduct of the State Bar of California, as construed for public attorneys. (g) This section shall also apply to any matter brought after an assessor or sheriff leaves office if the matter giving rise to the need for independent legal counsel was within the scope of the duties of the assessor or sheriff while in office, and the assessor or sheriff would have been authorized under this section to request the appointment of independent legal counsel. SEC. 3. If the Commission on State Mandates determines that this act contains costs mandated by the state, reimbursement to local agencies and school districts for those costs shall be made pursuant to Part 7 (commencing with Section 17500) of Division 4 of Title 2 of the Government Code. SEC. 4. This act is an urgency statute necessary for the immediate preservation of the public peace, health, or safety within the meaning of Article IV of the Constitution and shall go into immediate effect. The facts constituting the necessity are: In order to allow the Franchise Tax Board to record liens in the most efficient method possible to prevent the unnecessary expense of state tax dollars, and to ensure county officials are able to carry out their official duties as prescribed by law for actions taken in their official capacity, it is necessary that this act take effect immediately.