BILL ANALYSIS Ó ------------------------------------------------------------ |SENATE RULES COMMITTEE | AB 2643| |Office of Senate Floor Analyses | | |1020 N Street, Suite 524 | | |(916) 651-1520 Fax: (916) | | |327-4478 | | ------------------------------------------------------------ CONSENT Bill No: AB 2643 Author: Ma (D) Amended: 5/29/12 in Assembly Vote: 21 SENATE GOVERNANCE & FINANCE COMMITTEE : 9-0, 6/28/12 AYES: Wolk, Dutton, DeSaulnier, Fuller, Hernandez, Kehoe, La Malfa, Liu, Yee ASSEMBLY FLOOR : 76-0, 5/31/12 - See last page for vote SUBJECT : Property taxation SOURCE : California Association of County Treasures Tax Collectors DIGEST : This bill makes several changes to the statutes related to property tax collection. ANALYSIS : 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. CONTINUED AB 2643 Page 2 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/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. 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. 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/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 CONTINUED AB 2643 Page 3 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 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. Comments According to the author, "AB 2643 makes some important changes to property tax collection procedures, to make the law clearer for taxpayers. Current law does not explicitly state what taxpayers' obligation is regarding property taxes during an informal assessment appeal. This bill will clarify that taxpayers must pay their property taxes during that time. Secondly, this measure authorizes tax CONTINUED AB 2643 Page 4 collectors to apply duplicate payments made on the same property to delinquent bills, instead of returning the duplicate payment and then sending the delinquent notice. Finally, this bill clarifies that tax collectors may wait 90 days to report the pool rate, instead of the current 60 days. This modest change in law is reflective of the time needed to do the calculation. These changes in law are intended to improve the taxpayer's experience by making the procedures clear and reducing confusion regarding the status of property tax payments made." FISCAL EFFECT : Appropriation: No Fiscal Com.: No Local: No SUPPORT : (Verified 7/2/12) California Association of County Treasurer-Tax Collectors California State Association of Counties ASSEMBLY FLOOR : 76-0, 5/31/12 AYES: Achadjian, Alejo, Allen, Ammiano, Atkins, Beall, Bill Berryhill, Block, Blumenfield, Bonilla, Bradford, Brownley, Buchanan, Butler, Charles Calderon, Campos, Carter, Cedillo, Chesbro, Conway, Cook, Davis, Dickinson, Donnelly, Eng, Feuer, Fletcher, Fong, Fuentes, Furutani, Beth Gaines, Galgiani, Garrick, Gatto, Gordon, Gorell, Grove, Hagman, Halderman, Hall, Harkey, Hayashi, Roger Hernández, Hill, Huber, Hueso, Huffman, Jeffries, Jones, Knight, Lara, Logue, Bonnie Lowenthal, Ma, Miller, Mitchell, Monning, Morrell, Nestande, Nielsen, Olsen, Pan, Perea, V. Manuel Pérez, Portantino, Silva, Skinner, Smyth, Solorio, Swanson, Torres, Wagner, Wieckowski, Williams, Yamada, John A. Pérez NO VOTE RECORDED: Mansoor, Mendoza, Norby, Valadao AB:d 7/3/12 Senate Floor Analyses SUPPORT/OPPOSITION: SEE ABOVE **** END **** CONTINUED AB 2643 Page 5 CONTINUED