BILL ANALYSIS Ó
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|SENATE RULES COMMITTEE | AB 404|
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THIRD READING
Bill No: AB 404
Author: Gatto (D)
Amended: 8/24/12 in Senate
Vote: 21
SENATE GOVERNANCE & FINANCE COMMITTEE : 5-3, 7/3/12
AYES: Wolk, DeSaulnier, Hernandez, Kehoe, Liu
NOES: Dutton, Fuller, La Malfa
NO VOTE RECORDED: Yee
SENATE APPROPRIATIONS COMMITTEE : 5-2, 8/16/12
AYES: Kehoe, Alquist, Lieu, Price, Steinberg
NOES: Walters, Dutton
ASSEMBLY FLOOR : Not relevant
SUBJECT : Local government: lobbyists: county assessors
SOURCE : Author
DIGEST : This bill requires any county that regulates
lobbying before the board of supervisors to adopt an
ordinance to regulate property tax agents and property tax
agent firms representing clients before the county
assessor's office. This bill requires the ordinance to
include specific provisions, including, but not limited to,
annual registration and a prohibition against property tax
agents and property tax agent firms from making any
political contributions to an elected county official or a
candidate for county office within that county. This bill
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authorizes the board to impose a reasonably necessary fee
to cover the costs to regulate the activities of the
property tax agents and property tax agents firms before a
county board of equalization, employees of the assessor,
and assessment hearing officers that make recommendations
to the county board of equalization or assessment appeals
board.
Senate Floor Amendments of 8/24/12 Reinsert accidentally
deleted language; further defines property tax agents and
property tax agent firms; allows property tax agents to
register with the county individually or as part of a firm;
limits campaign contribution ban on property tax agents
solely to candidates for county assessor; exempts trade
associations from campaign contribution ban and
registration requirement; and make technical changes.
ANALYSIS : Section One of Article XIII of the California
Constitution provides that all property is taxable unless
explicitly exempted by the Constitution or federal law.
The Constitution limits the maximum amount of any ad
valorem tax on real property at one percent of full cash
value, usually the purchase price, plus any
locally-authorized bonded indebtedness. Assessors
reappraise property whenever it is purchased, newly
constructed, or when ownership changes.
In recent years, the market value of property has declined
or stagnated in almost every market in California. As a
result, property tax appeals are on the rise, as Section
2(b) of Article XIIIA of the California Constitution allows
a temporary reduction in property tax when a property's
fair market value declines below its assessed value
(Proposition 8, 1978). The Legislative Analyst's Office
states that tax appeals have risen from 44,000 in 2006-07
to 173,000 in 2010-11.
When a taxpayer wants to appeal an assessor's valuation of
a property, Section 16 of Article XIII the California
Constitution provides that each county board of
supervisors, or an assessment appeals board of its own
creation, shall constitute the county board of equalization
to consider the appeal. Currently, 19 county boards of
supervisors perform this duty directly. Remaining counties
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can create up to five assessment appeals boards to hear and
adjudicate appeals, constituted of members selected by the
presiding judge of the superior court and nominated by the
County Board of Supervisors, or selected directly by the
Board. Taxpayers and assessors may appeal decisions of
these boards to Superior Court.
The term "tax agents" refers to individuals who represent
taxpayers in property tax appeals. The conduct of tax
agents before assessors and assessment appeals boards is
largely unregulated unless the individual is an attorney
licensed by the State Bar, or an accountant regulated by
the California Board of Accountancy. In 1999, the
Legislature did enact a statute regulating representations
made by firms that mail solicitations offering to file
assessment appeals on behalf of taxpayers.
This bill requires any board of supervisors that regulates
lobbying before the board adopt an ordinance to regulate
property tax agents and property tax agent firms
representing clients before a county board of equalization,
employees of the assessor, and assessment hearing officers
that make recommendations to the county board of
equalization or assessment appeals board.
An ordinance required shall include, but not be limited to,
all of the following requirements:
1.A property tax agent shall register with the executive
officer of the county board of supervisors within 10 days
of becoming, or performing the duties of, a property tax
agent by filing all necessary completed registration
forms provided by the executive officer.
2.A property tax agent, when filing the registration forms
required above shall pay any regulatory fee imposed.
3.A property tax agent firm that generates a majority of
its income from its employment of property tax agents,
shall register each individual it employs as a property
tax agent.
4.Registration pursuant to above shall be effective for one
calendar year, and fees shall be prorated if a property
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tax agent or a property tax agent firm registers during a
calendar year.
5.A property tax agent or a property tax agent firm shall
report to the county assessor's office each quarter. The
report shall include, but not be limited to, the
assessor's parcel number for which a property valuation
was sought and the status of any appeal for each
property.
6.A property tax agent may register and report as an
individual or as an employee of a property tax agent
firm.
7.A property tax agent or a property tax agent firm shall
be prohibited from making any political contributions to
an elected county assessor or a candidate for county
assessor in that county.
This bill specifically states that its provision shall not
apply to a trade association or a property owner in
connection with any matter before a county assessor, an
employee of the county assessor, the county assessment
appeals board, the county board of equalization, or an
assessment hearing officer who makes recommendations to the
county board of equalization or the county assessment
appeals board.
This bill specifically provides that its provisions will
not prohibit a tax agent from charging a contingency fee in
connection with any matter before a county assessor,
employees of the county assessor, the county assessment
appeals board, the county board of equalization, or an
assessment hearing officer who makes recommendations to the
county board of equalization or the county assessment
appeals board.
This bill specifies that this bill is not to be construed
to imply that a person who is subject to the requirements
of the bill shall otherwise be deemed a lobbyist or deemed
to be conducting lobbying activities for purposes of any
other local ordinance that is not adopted pursuant to this
bill or any other state or federal law.
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This bill defines:
1."Property tax agent" means an individual who is
designated, or is an employee of an entity designated, as
an agent who acts on behalf of a person or business who
owns, controls, or possesses property valued by the
county assessor and who receives a fee for the analysis
and representation of any matter relating to the review
of ownership issues or the valuation of the person's or
business' property, real and personal, before the county
assessor.
2."Property tax agent" would not mean an employee of the
person owning, controlling, or possessing the property,
or an employee of an entity designated as a property tax
agent or property tax agent firm, if the employee is
performing a research, secretarial, clerical, or
administrative support function.
3."Property tax agent firm" means an entity that employs
property tax agents.
Comments
Currently, the Counties of Los Angeles, Orange, San
Francisco, Santa Clara, San Diego, and San Mateo have
ordinance regulating lobbying. Some ordinances apply only
to lobbying boards of supervisors, while others include
lobbying specified county positions or define the decision
that the lobbyists seeks to influence. Some of the
ordinances restrict campaign contributions, gifts, and
employing county officials, and prohibit intentionally
deceiving elected officials or misrepresenting themselves
or their clients. All of them require lobbyist
registration and reporting requirements for gifts and
campaign contributions. Violations in Santa Mateo County
are punishable as a misdemeanor, while other counties bar
violators from acting as lobbyists and impose monetary
penalties up with specified caps. San Francisco has an
Ethics Commission administer its ordinance.
Related Legislation
AB 2183 (Smyth) requires counties to set up a tax agent
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registration program, and requires tax agents to register
with counties.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: Yes
According to the Senate Appropriations Committee, unknown,
likely over $50,000 in state reimbursable costs (General).
This bill requires the state to reimburse local governments
for the costs of amending their ordinances to include
provisions that include tax agents who lobby county
assessors, as specified.
SUPPORT : (Verified 8/27/12)
California Association of Professional Employees
OPPOSITION : (Verified 8/27/12)
Ad Valorem Solutions, LLC
Aprea and Micheli
California Association of Clerks and Election Officials
Colony Realty Partners, LLC
Easley, LaTerra Fina USA, Inc.
Marvin F. Poer and Company
Paradigm Tax Group, LLC
Property Tax Assistance Co., Inc.
Property Tax Resource
PROTAX, LLC
Ryan, Inc.
ARGUMENTS IN SUPPORT : According to the author,
"Transparency in government is important to keeping those
who govern accountable to the citizens they represent.
Requiring those who lobby County Assessors to adhere to the
same lobbying rules as those who lobby County Boards of
Supervisors is a simple way to ensure that all are abiding
by the same rules. This simple requirement would result in
disclosure, to the media and public, of who is paying
so-called "tax agents" to obtain what are, in some cases,
multi-million-dollar windfalls for their clients through
favorable treatment by Assessors. It would also, in many
cases, prevent tax agents from making campaign
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contributions to Assessors, who then hear the tax agents'
clients' cases. AB 404 would not affect property owners
who advocate on their own behalf, nor would it take away
local control for counties to amend the fine points of
their lobbying ordinances. It seeks to improve the
assessment process by ensuring that all citizens are given
fair and equal access."
AGB:n 8/25/12 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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