BILL ANALYSIS Ó
AB 820
Page 1
Date of Hearing: April 11, 2011
ASSEMBLY COMMITTEE ON REVENUE AND TAXATION
Henry T. Perea, Chair
AB 820 (Gordon) - As Introduced: February 17, 2011
Majority vote.
SUBJECT : Property taxation: fee: preparation of certificate.
SUMMARY : Removes the $1 limitation on the amount of fee that a
county assessor, tax collector or auditor may charge for the
preparation of a certificate-of-payment showing taxes paid.
Specifically, this bill :
1)Requires a county assessor, tax collector, and auditor to
charge and collect a fee to cover the actual and reasonable
costs incurred in preparing a certificate-of-payment showing
taxes paid, instead of the existing $1 fee.
2)Provides that the amount of the fee shall be established by
the board of supervisors of the county and shall be subject to
the requirements of Chapter 12.5 (commencing with Section
54985) of Part 1 of Division 2 of Title 5 of the Government
Code (GC).
EXISTING LAW provides that the assessor, tax collector, and
auditor shall charge and collect a $1 fee for the preparation of
a certified copy of a redemption certificate, a certified copy
of an installment redemption receipt, a certificate-of-payment
showing tax paid, and a certified copy of an assessment as
entered on the assessment roll.
FISCAL EFFECT : Unknown.
COMMENTS :
1)Author's Statement . The author states that, "This fee has not
been adjusted in over 60 years. Obviously, the cost of
providing this service has increased considerably over the
years, and it is critical that local governments be given the
flexibility to charge a fee that more accurately reflects the
cost of providing this service. The process of setting local
fees for cost-recovery, as described in Government Code 54986,
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is a proven system that allows for local variance and
inflation over time."
2)Arguments in Support . The proponents of this bill argue that
the $1 limit "has become a challenge to ensuring cost-recovery
for more complicated certificates." They state that, "while
most certificates do only require a modest amount of time and
resources to produce, in some cases, producing that
certificate can take several hours of work and research." In
addition, the proponents assert that, in these difficult
financial times, "cost recovery for work provided to an
individual taxpayer is absolutely critical to ensuring that
the overall level of service to all taxpayers in the county is
not diminished," and charging actual costs "will reduce
pressure on county finances, and specifically on tax
collectors' offices, which provide many services to
California's taxpayers."
3)Background . Under existing law, a county tax collector is
allowed to charge only $1 for the preparation of a
certificate-of-payment showing taxes paid. The $1 amount was
originally set in 1947 and has never been modified in the last
75 years. According to the California Association of County
Treasurers and Tax Collectors, most requests for a
certificate-of-payment are for the current year and could be
easily and quickly provided. However, many requests - such as
those for certificates for a probate court or subdivision
maps, or from previous years - require additional time and
research, so that the average cost to prepare certificates in
more complex cases is far greater than $1 currently permitted.
4)What Does This Bill Do ? AB 820 repeals the $1 limitation and,
instead, requires a county assessor, tax collector, and
auditor to charge and collect a fee to cover the" actual and
reasonable costs" incurred in preparing a
certificate-of-payment showing taxes paid. Under this bill, a
county board of supervisors must determine what constitutes
the "actual and reasonable costs" and establish the fee
amount, as provided by GC Section 54986.
5)"Actual and Reasonable" Costs . GC Section 54986 prescribes
the rules that the board of supervisors must follow before
approving any new fee or increasing an existing fee. Thus,
the board must hold at least one public meeting, and at least
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14 days prior to the meeting, a written notice is required to
be mailed to interested parties who have filed for written
notifications. Finally, at least 10 days prior to the
meeting, the data indicating the amount of the cost, or
estimated cost, must be made available to the public.
Under existing law, the majority of all fees and charges imposed
by a treasurer-tax collector in connection with the
administration of property taxes are established and approved
by the board of supervisors under GC Section 54985, which
allows the treasurer-tax collector to recover actual costs.
Specifically, a county board of supervisors has the authority
to set the amount of a fee or charge that is authorized to be
levied by another provision of law. The amount of the fee or
charge must be the amount reasonably necessary to recover the
cost of providing any product or service or the cost of
enforcing any regulation. The fee or charge may be the
average cost and can include direct and indirect costs. The
board of supervisors may request the county auditor to conduct
a study to determine whether the fee or charge is reasonable.
A study typically involves a review of the methodology used in
calculating the estimated costs. Many counties have the
auditor conduct a study prior to presenting the amount of a
new fee or an increase of an existing fee to the board of
supervisors for approval.
Unlike the majority of those fees and charges, the fee imposed
for the preparation of a certificate-of-payment showing taxes
paid is set at $1 and, consequently, does not allow a tax
collector to recover the actual costs incurred.
6)Proposition 26 . On November 2, 2010, the voters approved
Proposition 26, an initiative constitutional amendment, that
expanded the definition of a "tax" to include many state and
local government assessments previously classified as "fees."
Among other provisions, Proposition 26 amended Section 1 of
Article XIII C of the California Constitution to define the
term "tax" as any levy, charge, or exaction of any kind
imposed by a local government, except certain enumerated fees.
One type of those enumerated exactions is "a charge imposed
for a specific government service or product provided directly
to the payor that is not provided to those not charged, and
which does not exceed the reasonable costs to the local
government of providing the service or product."
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The fee imposed for a certificate-of-payment showing taxes paid
is one of those fees that are charged for the service provided
by a local government. As such, it must comply with the
requirements of Proposition 26. The actual and reasonable
costs of providing this service may vary from county to county
and may very well be more than $1. By authorizing a local
board of supervisors to set the fee, within the confines of
both GC Section 54986 and Proposition 26, this bill would
allow local governments the flexibility needed to recover the
actual costs incurred by them in providing the service of
preparing the certificates-of-payment.
7)Related Legislation .
AB 902 (Alejo), introduced in the current legislative session,
would allow a tax collector to recover the actual and
reasonable costs incurred in administering a sale of
tax-defaulted property. AB 902 is set to be heard in this
Committee on April 25, 2011.
REGISTERED SUPPORT / OPPOSITION :
Support
California Association of County Treasurers and Tax Collectors
(CACTTC)
California State Association of Counties (CSAC)
County of Santa Clara Board of Supervisors
Opposition
None on file
Analysis Prepared by : Oksana Jaffe / REV. & TAX. / (916)
319-2098