BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                  AB 2643
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          ASSEMBLY THIRD READING
          AB 2643 (Ma) 
          As Amended  May 29, 2012
          Majority vote 

           LOCAL GOVERNMENT    8-0         REVENUE & TAXATION    7-0       
           
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          |Ayes:|Smyth, Alejo, Bradford,   |Ayes:|Perea, Harkey, Beall,     |
          |     |Campos, Davis, Gordon,    |     |Cedillo, Wagner, Gordon,  |
          |     |Hueso, Norby              |     |Nestande                  |
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           SUMMARY  :  Makes several changes to the statutes related to 
          property tax collection.  Specifically,  this bill  :  

          1)Deletes the exception for the return of replicated property 
            tax payments, for purposes of allowing the tax collector to 
            apply any refund due to a taxpayer, or the taxpayer's agent, 
            to any delinquent taxes due for the same property for which 
            the same taxpayer, or his or her agent, is liable, thereby 
            applying the provisions authorizing the tax collector to apply 
            any refund to any delinquent taxes.

          2)Limits penalty relief, for cases in which a taxpayer has 
            failed to pay taxes on an assessment that is the subject of a 
            pending informal review due to a decline in value as a result 
            of damage, destruction, depreciation, obsolescence, removal of 
            property, or other factors causing a decline in value, to the 
            difference between the county assessor's final determination 
            of value and the value on the assessment roll for the fiscal 
            year covered by the application.

          3)Restricts the penalty relief specified in 3) above to those 
            properties upon which an application for an informal review is 
            pending before the county assessor on the effective date of 
            the bill's implementation, or in situations where those 
            applications for an informal review are filed with the county 
            board after the date of the bill's implementation.

          4)Specifies for the penalty relief for any taxpayer that has 
            paid at least 80% of the amount of tax finally determined due 
            by the county assessor within 30 days of filing an application 
            for reassessment, that the tax collector must accept payment 








                                                                  AB 2643
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            of the balance of the tax due without penalties or interest.

          5)Requires the county tax collector to notify all taxpayers that 
            receive a tax bill of the provisions of the bill related to 
            penalty relief.

          6)Provides that the provisions of the bill related to penalty 
            relief may only become operative if the board of supervisors 
            of a county, with the approval of the county's tax collector 
            and the county's auditor, adopts a resolution or ordinance 
            approving this section.

          7)Extends, for purposes of calculating the interest on property 
            tax refunds, the time period the county treasurer has to 
            advise the State Controller of the county pool apportioned 
            rate and of computations made in deriving that rate from 60 to 
            90 days.



           EXISTING LAW  :

          1)Requires, when the amount of property taxes paid exceeds the 
            amount due by more than $10, the tax collector to send notice 
            of the overpayment to the taxpayer, and provides that the 
            notice must be mailed to the taxpayer's last known address and 
            state the amount of overpayment and that a refund claim may be 
            filed, as specified.

          2)Allows the tax collector to apply any refund due a taxpayer, 
            or the taxpayer's agent, to any delinquent taxes due on the 
            same property for which the same taxpayer or his or her agent 
            is liable, except as specified for the return of replicated 
            property tax payments.

          3)Limits, in the case in which a taxpayer has failed to pay 
            taxes on an assessment that is the subject of a pending 
            assessment appeal, as provided, the amount of penalty relief 
            to the difference between the final determination of value by 
            the county board, as defined, and the value on the assessment 
            roll for the fiscal year covered by the application. 

          4)Requires the county board to provide a specified notice to 
            taxpayers impacted by the penalty provisions.









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          5)Requires the payment of interest on property tax refunds at 
            the greater of 3% per annum or the county pool apportioned 
            rate.  

          6)Requires the county treasurer to advise the State Controller 
            of the county pool apportioned rate and of computations made 
            in deriving that rate, no later than 60 days after the end of 
            that fiscal year.

           FISCAL EFFECT  :  None

           COMMENTS  :  This bill is sponsored by the CACTTC and makes 
          several changes to the laws related to property tax collection.  
          The bill extends the time county treasurers have to calculate 
          the pool rate and report it to the State Controller from 60 days 
          to 90 days after the end of the fiscal year.  Current law 
          requires the payment of interest on property tax refunds at the 
          greater of 3% per annum or the county pool apportioned rate.

          Additionally, the bill limits penalty relief, for cases in which 
          a taxpayer has failed to pay taxes on an assessment that is the 
          subject of a pending informal review due to a decline in value 
          as a result of the damage, destruction, depreciation, 
          obsolescence, removal of property, or other facts causing a 
          decline in value, to the difference between the county 
          assessor's final determination of value and the value on the 
          assessment roll for that fiscal year.  The bill provides that 
          penalty relief only applies to those properties for which an 
          application for an informal review is pending before the county 
          assessor on or after the effective date of the bill's 
          implementation.

          Current law limits penalty relief, for cases in which a taxpayer 
          has failed to pay taxes on an assessment that is the subject of 
          a pending assessment appeal, to the difference between the 
          county board of supervisor's final determination of value and 
          the value on the assessment roll for that fiscal year.  Current 
          law requires the county board of supervisors to provide mailed 
          notice to each taxpayer upon an application for reduction in 
          assessment with the county board if that taxpayer will be 
          impacted by the penalty provisions, and also requires the board 
          of supervisors, with the approval of the county's tax collector 
          and auditor, to adopt an ordinance that approves this section of 
          law dealing with limiting penalty relief.  The penalty under 
          these provisions is 10% of the tax due.








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          Under current law, the penalty calculations are different 
          depending upon whether the assessor or the assessment appeals 
          board lowers the value.  This bill creates consistency in the 
          penalty calculations by making it the same for both types of 
          valuation decreases.  The sponsor indicates that this provision 
          will remove the incentive for taxpayers to pay tax bills late 
          when a value reduction is pending from the assessor.

          Amendments taken in the Assembly Revenue and Taxation Committee 
          include the 80% safe harbor rule and also require the county 
          assessor to notify taxpayers of the limited penalty relief upon 
          filing an application for an information review, and give the 
          county board of supervisors the authority to opt in to the 
          penalty relief provisions of the bill, with the approval of the 
          county's tax collector and the county's auditor.

          Support arguments:  Supporters argue that this bill clarifies 
          the statutes related to property tax collection and overpayment, 
          penalty relief, and gives county treasurers a longer period of 
          time to calculate the pool rate and report it to the State 
          Controller.

          Opposition arguments:  None on file.

           
          Analysis Prepared by  :    Debbie Michel / L. GOV. / (916) 
          319-3958 


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