BILL NUMBER: AB 261 CHAPTERED
BILL TEXT
CHAPTER 288
FILED WITH SECRETARY OF STATE SEPTEMBER 21, 2011
APPROVED BY GOVERNOR SEPTEMBER 20, 2011
PASSED THE SENATE AUGUST 29, 2011
PASSED THE ASSEMBLY MAY 31, 2011
AMENDED IN ASSEMBLY MAY 11, 2011
INTRODUCED BY Assembly Member Dickinson
FEBRUARY 7, 2011
An act to amend Sections 3712, 3725, and 3731 of the Revenue and
Taxation Code, relating to taxation.
LEGISLATIVE COUNSEL'S DIGEST
AB 261, Dickinson. Property tax: tax-defaulted property.
Existing property tax law generally authorizes a county tax
collector to sell tax-defaulted property 5 years or more, or 3 years
or more, as applicable, after that property has become tax defaulted.
Under existing law, when tax-defaulted property is sold, the deed
conveys title to the purchaser free of all encumbrances of any kind
existing before the sale, with specified exceptions including an
exception for specified easements.
This bill would provide that easements of any kind, including
prescriptive easements, are included within those specified
exceptions to the conveyance of title free of encumbrances.
Existing law provides that a proceeding based on alleged
invalidity or irregularity of any proceedings instituted in a sale of
tax-defaulted property can only be commenced within one year after
the date of execution of the tax collector's deed. Existing law
authorizes the board of supervisors to rescind the sale of property
sold by tax deed by the tax collector, as provided, when it is
determined that the property should not have been sold.
This bill would for sales completed on or after January 1, 2012,
instead require any person wishing to have a tax deed sold by the tax
collector rescinded due to alleged invalidity or irregularity of any
proceeding to first petition the board of supervisors, as provided,
to have the tax sale rescinded before the proceeding described above
can be commenced in a court, and would require the court proceeding
to be commenced within one year of the date the board of supervisors
determines that the sale of property sold by a tax deed should not be
rescinded.
By imposing new duties upon county officials with respect to
tax-defaulted property, 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.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 3712 of the Revenue and Taxation Code is
amended to read:
3712. The deed conveys title to the purchaser free of all
encumbrances of any kind existing before the sale, except:
(a) Any lien for installments of taxes and special assessments,
that installments will become payable upon the secured roll after the
time of the sale.
(b) The lien for taxes or assessments or other rights of any
taxing agency that does not consent to the sale under this chapter.
(c) Liens for special assessments levied upon the property
conveyed that were, at the time of the sale under this chapter, not
included in the amount necessary to redeem the tax-defaulted
property, and, where a taxing agency that collects its own taxes has
consented to the sale under this chapter, not included in the amount
required to redeem from sale to the taxing agency.
(d) Easements of any kind, including prescriptive, constituting
servitudes upon or burdens to the property; water rights, the record
title to which is held separately from the title to the property; and
restrictions of record.
(e) Unaccepted, recorded, irrevocable offers of dedication of the
property to the public or a public entity for a public purpose, and
recorded options of any taxing agency to purchase the property or any
interest therein for a public purpose.
(f) Unpaid assessments under the Improvement Bond Act of 1915
(Division 10 (commencing with Section 8500) of the Streets and
Highways Code) that are not satisfied as a result of the sale
proceeds being applied pursuant to Chapter 1.3 (commencing with
Section 4671) of Part 8, or that are being collected through a
foreclosure action pursuant to Part 14 (commencing with Section 8830)
of Division 10 of the Streets and Highways Code. A sale pursuant to
this chapter shall not nullify, eliminate, or reduce the amount of a
foreclosure judgment pursuant to Part 14 (commencing with Section
8830) of Division 10 of the Streets and Highways Code.
(g) Any federal Internal Revenue Service liens that, pursuant to
provisions of federal law, are not discharged by the sale, even
though the tax collector has provided proper notice to the Internal
Revenue Service before that date.
(h) Unpaid special taxes under the Mello-Roos Community Facilities
Act of 1982 (Chapter 2.5 (commencing with Section 53311) of Part 1
of Division 2 of Title 5 of the Government Code) that are not
satisfied as a result of the sale proceeds being applied pursuant to
Chapter 1.3 (commencing with Section 4671) of Part 8, or that are
being collected through a foreclosure action pursuant to Section
53356.1 of the Government Code. A sale pursuant to this chapter shall
not nullify, eliminate, or reduce the amount of a foreclosure
judgment pursuant to Section 53356.1 of the Government Code.
SEC. 2. Section 3725 of the Revenue and Taxation Code is amended
to read:
3725. (a) A proceeding based on alleged invalidity or
irregularity of any proceedings instituted under this chapter can
only be commenced in a court if both of the following are satisfied:
(1) The person commencing the proceeding has first petitioned the
board of supervisors pursuant to Section 3731 within one year of the
date of the execution of the tax collector's deed.
(2) The proceeding is commenced within one year of the date the
board of supervisors determines that a tax deed sold under this part
should not be rescinded pursuant to Section 3731.
(b) Sections 351 to 358, inclusive, of the Code of Civil Procedure
do not apply to the time within which a proceeding may be brought
under this section.
(c) The amendments made to this section by the act adding this
subdivision shall apply to sales that are completed on or after
January 1, 2012.
SEC. 3. Section 3731 of the Revenue and Taxation Code is amended
to read:
3731. (a) When a tax deed to a purchaser of property sold by the
tax collector pursuant to this part is recorded and it is determined
that the property should not have been sold, the sale may be
rescinded by the board of supervisors with the written consent of the
county legal adviser and the purchaser of the property or a
successor in interest in the property, except a bona fide purchaser
for value, under any of the following circumstances:
(1) The property has not been transferred or conveyed by the
purchaser at the tax sale to a bona fide purchaser for value.
(2) The property has not become subject to a bona fide encumbrance
for value subsequent to the recordation of the tax deed.
(b) If the written consent of the purchaser of the property or a
successor in interest is not obtained pursuant to subdivision (a),
the sale may be rescinded by the board of supervisors pursuant to the
circumstances specified in subdivision (a), if both of the following
conditions are met:
(1) Notwithstanding Section 3731.1, a hearing is scheduled before
the board of supervisors.
(2) (A) A notification is provided to the purchaser of the
property or a successor in interest that contains all of the
following information:
(i) The date, time, and place of the hearing.
(ii) A description of the property that was sold.
(iii) The reason for rescinding the sale of the property.
(iv) A statement that a refund will be issued to the purchaser of
the property or the successor in interest, if applicable, for the
purchase amount of the property plus interest at the county pool
apportioned rate as specified in Section 5151 from the date of the
purchase of the property.
(B) The tax collector shall send the notice, not less than 45 days
prior to the date of the hearing, to the purchaser of the property
or a successor in interest by certified mail with return receipt
requested. The notice shall be sent to the last known mailing address
of the purchaser of the property or a successor in interest.
(c) When the sale of tax-defaulted property is rescinded pursuant
to this section, the purchaser or a successor in interest is entitled
to a refund of the amount paid as the purchase price plus interest
at the county pool apportioned rate as specified in Section 5151 from
the date of the purchase of the property after rescission of the tax
deed is recorded.
(d) The rescission shall be executed by the county tax collector
and, if rescinded pursuant to subdivision (a), also by the purchaser
or a successor in interest. The signature of both the county tax
collector and the purchaser or a successor in interest shall be
acknowledged by the county clerk, without charge, and the county tax
collector shall then record the rescission with the county recorder,
without charge. When the rescission is recorded, the tax deed becomes
null and void as though never issued and all provisions of law
relating to tax-defaulted property shall apply to the property.
(e) The holder of a tax certificate who received all or any part
of the amount paid by the purchaser or a successor in interest shall
not be obligated to make any refund or repayment of any amount to the
purchaser, the delinquent taxpayer, the county, or any other person.
The tax collector may use amounts on deposit in the Tax Certificate
Redemption Fund to make the refund, but only to the extent those
amounts were paid to the holder of the applicable tax certificate.
(f) Subdivision (b) shall apply to sales that are completed on or
after January 1, 2010.
(g) A proceeding may be commenced in a court pursuant to Section
3725 only if the person commencing the proceeding first petitions the
board of supervisors to rescind the sale of a tax deed pursuant to
this section.
SEC. 4. 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.