BILL ANALYSIS Ó
SENATE GOVERNANCE & FINANCE COMMITTEE
Senator Lois Wolk, Chair
BILL NO: AB 820 HEARING: 6/29/11
AUTHOR: Gordon FISCAL: No
VERSION: 2/17/11 TAX LEVY: No
CONSULTANT: Grinnell
FEES FOR PREPARING CERTIFICATES OF TAXES PAID
Allows County Boards of Supervisors to Increase Fees for
Certificates of Taxes Paid from $1 to its Reasonable Costs
Background and Existing Law
County boards of supervisors can levy authorized fees or
charges in amounts reasonably necessary to recover the
costs of providing products or services or the cost of
enforcing regulations (AB 151, Hannigan, 1983). The fees
or charges may reflect the average cost of providing
products or services or enforcing regulations, plus limited
indirect costs. If any person disputes the fee, then the
board of supervisors may request the auditor to study
whether the fee is reasonable.
Despite generally deregulating county fees 30 years ago,
state law set a large number of fees, including civil fees,
county recorder fees, and fees charged by agricultural
commissioners in absolute amounts until the Legislature
updated many of these by tying them instead to the county's
reasonable costs (SB 676, Wolk, 2009). However, many fees
charged by treasurer-tax collectors remain as dollar
amounts fixed in law long ago, among those the fee for
preparing a certificate of payment showing taxes paid
currently set at $1 and unchanged since 1947. The
certificate of taxes paid is part of a list of documents
that also include certified copies of redemption
certificates, installment redemption receipts, and
assessments as entered on the assessment roll. The fee for
providing a copy of a record or document by the
photovoltaic process of the above documents shall be the
actual cost plus $1. The California Association of
Treasurer-Tax Collectors wants to remove it from the list
of documents subject to the $1 cap and tie the fee instead
to the county's reasonable costs.
AB 820 -- 2/17/11 -- Page 2
Proposed Law
AB 820 deletes a certificate of taxes paid from the list of
documents that an assessor, tax collector, and auditor
charges $1 for preparing. The measure instead provides
that the assessor, tax collector, or auditor shall charge
and collect a fee to cover the actual and reasonable costs
incurred to prepare the certificate of taxes paid as
established by the Board of Supervisors.
State Revenue Impact
No estimate.
Comments
1. Purpose of the bill . According to the Author,
"Existing law limits the amount a county tax collector is
allowed to charge for a certificate-of-payment showing
taxes paid. The current limit of $1.00 is a figure set in
1947. Most requests for a certificate-of-payment are for
the current year and are easily and quickly provided.
However, many certificates are from Probate court,
Subdivision Maps, or are for older years. These all
require additional research to provide. In some cases,
such as for Subdivision Maps with numerous parcels, it can
take a significant amount of time to research. The average
cost to provide certificates in these more complex cases is
far greater than the $1 charge currently permitted.
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, is a
proven system that allows for local variance and inflation
over time."
2. The monster in the closet . In November, 2010, voters
approved Proposition 26, which reclassifies as taxes many
AB 820 -- 2/17/11 -- Page 3
charges previously defined as fees, thereby triggering the
California Constitution's 2/3 vote requirements. The
initiative excluded from the definition of tax "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." Despite variances in reasonable costs from case
to case and county to county, AB 820's tie to the
reasonable costs of preparing a certificate of taxes paid
complies with the plain language of Proposition 26, and
therefore the Legislature can be enact the measure by a
majority vote of each house of the Legislature, and not the
2/3 supermajority required for bills increasing taxes.
While Proposition 26 affects increases in everything from
environmental fees to tax swap bills to charges for using
parks and renting equipment, and many of those effects are
not yet tangible or even clearly understood, the initiative
does not change the Legislatures' authority to allow boards
of supervisors to increase fees to reflect reasonable costs
by majority vote.
3. Two for the road . The Committee will also hear AB 902
(Alejo) at its June 29, 2011 hearing. That measure
similarly deletes statutory caps on fees necessary to
conduct tax sales and replaces it with the tax collector's
reasonable costs as established by the board of
supervisors.
Assembly Actions
Assembly Revenue and Taxation: 5-1
Assembly Floor: 51-22
Support and Opposition (06/22/11)
Support : California Association of County-Treasurer Tax
Collectors, California State Association of Counties,
County of San Mateo, Dave Cortese, President, Board of
Supervisors, Santa Clara County; Sacramento County Board of
Supervisors.
Opposition : Unknown.
AB 820 -- 2/17/11 -- Page 4