BILL ANALYSIS                                                                                                                                                                                                    




                     SENATE GOVERNANCE & FINANCE COMMITTEE
                            Senator Lois Wolk, Chair
          

          BILL NO:  SB 948                      HEARING:  5/4/11
          AUTHOR:  Governance & Finance Committee FISCAL:  Yes
          VERSION:  4/28/11                     TAX LEVY:  No
          CONSULTANT:  Grinnell                 

                               PROPERTY TAXATION
          

                   Changes the property tax collection laws.


                                    Background

           Each year, the former Revenue and Taxation Committee 
          authored a measure to enact several changes to Property Tax 
          Law sponsored by the California Association of County 
          Treasurer-Tax Collectors, who collect property tax 
          payments, execute tax sales, and manage local agencies' 
          money.  Many of these measures are technical in nature, and 
          enacting them in separate measures isn't warranted.  
          Although SB 948 may not be germane under a strict 
          interpretation of the single-subject and germaneness rules 
          presented in Californians for an Open Primary v. McPherson 
          (2006), it implements important and necessary changes to 
          property tax laws without taxing legislative resources.


                                   Proposed Law  

          Currently, treasurer-tax collectors (TTCs) must provide 
          notice to the right to claim proceeds to the last known 
          parties of interest in a tax sale that exceeds $150.  If 
          the treasurer-tax collector cannot obtain the address, he 
          or she must publish notice in a newspaper of general 
          circulation in the county.  Senate Bill 948 allows 
          treasurer-tax collectors not to publish the notice in a 
          newspaper of general circulation if the costs of 
          publication exceed the amount of the tax sale's proceeds.

          Third party agents occasionally seek to recover excess 
          proceeds on behalf of individuals, and submit blanket 
          claims to treasurer-tax collectors with only the name of an 
          individual, but not the source of the proceeds that he or 
          she may be entitled to receive.  The agents file the claims 




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          hoping to find proceeds that can then be marketed to the 
          individual contingent on a finder's fee, often exceeding 
          50%.  Treasurer-tax collectors are concerned that they 
          would be able to locate these taxpayers without the agents, 
          and could benefit taxpayers by sending proceeds without the 
          finder's fee.  Senate Bill 948 requires agents to submit 
          proof of the source of excess proceeds to which the 
          individual is entitled, so that agents that know specific 
          sources of proceeds can claim proceeds unhindered, but 
          those who don't cannot submit blanket claims.

          Currently, the treasurer-tax collector must publish 
          specified notices in newspapers or three public places in 
          each township.  Senate Bill 948 allows a board of 
          supervisors to enact a resolution authorizing the 
          treasurer-tax collector to post these notices on the TTC's 
          regularly -maintained website.  The treasurer-tax collector 
          must continue to publish a shortened notice in a newspaper 
          stating that the full notice is available on the TTC's 
          website.  

          Taxpayers file property tax protests with the county 
          clerks, and make payments to treasurer-tax collectors; 
          however, Revenue and Taxation Code 620 states that 
          taxpayers must submit payments and protest claims with the 
          TTC.  Senate Bill 948 clarifies that taxpayers file 
          protests with the county clerk, and pay taxes to the 
          treasurer-tax collector.

          Revenue and Taxation Code 5150.5 requires counties to pay 
          interest to taxpayers when a court allows the taxpayer to 
          recover a penalty previously assessed under paragraphs (1), 
          (2), or (3) of subdivision (a) of Section 830.  However, 
          the referenced penalties are in subdivision (c) of Section 
          830.  Senate Bill 948 corrects the cross-reference.

          State law prohibits assessors from disclosing information 
          and records, unless specifically exempted.  Senate Bill 948 
          allows assessors to disclose information that assists 
          treasurer-tax collectors with tax sales, such as notifying 
          potential parties of interest.  The treasurer tax-collector 
          must submit a written request certifying that he or she 
          needs the information to help administer the tax sale law, 
          which cannot include social security numbers.  The assessor 
          may charge the treasurer-tax collector for his or her 
          costs, which the treasurer-tax collector must add to the 





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          delinquent tax amount.

          The Government Code allows any county department, officer, 
          or employee that collects taxes, penalties, or other costs 
          to file an application for a "discharge of accountability" 
          whenever the costs of collection exceed the revenue 
          collected.  Section 25257, 25258, 25259, and 25259.5 
          describe the process for county officials to file the 
          application, and were recently updated by the Legislature 
          (SB 857, Committee on Budget and Fiscal Review, 2010).  
          However, corresponding Revenue and Taxation Code 2611.1 
          still contains language allowing for discharges of 
          accountability which conflicts with the updated Government 
          Code sections.  Senate Bill 948 amends the Revenue and 
          Taxation Code section regarding discharges of 
          accountability to require discharges under that section to 
          comply with the updated Government Code sections.  

          When a taxpayer overpays tax by more than $10, the 
          treasurer-tax collector must notify the taxpayer of the 
          overpayment.  Senate Bill 948 clarifies that the 
          treasurer-tax collector determines whether an overpayment 
          exists takes place at the time the date and time the 
          payment is received.  The measure also states that the tax 
          collector may process a refund without requesting that the 
          taxpayer file a refund claim.

          Occasionally, taxpayers or their agents make payments on 
          the wrong property.  If the taxpayer or his or her agent 
          can convince the treasurer-tax collector by substantial 
          evidence that the payment was intended for another 
          property, the treasurer-tax collector cancels the credit on 
          the unintended property and applies it to the correct 
          property within a specified time period.  Treasurer-tax 
          collectors cancel the payment and refund the amount when 
          the taxpayer does not intend the payment to apply to 
          another piece of property.  Senate Bill 948 requires the 
          treasurer-tax collector to transfer the payment to the 
          intended property or refund the payment to the taxpayer 
          within 60 days of verifying the mistake, or the date that 
          the payment is not subject to chargeback, dishonor, or 
          reversal.  The measure additionally specifies that interest 
          shall only be paid if the treasurer-tax collector does not 
          transfer or refund the payment after that date.  

          Revenue and Taxation Code 5096 provides for that taxed 





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          paid before or after delinquency shall be refunded if the 
          payments exceed the equalized value of the property 
          determined by the county board of equalization.  Senate 
          Bill 948 changes the reference for the section from the 
          county board of equalization to a recently updated section 
          that requires the county clerk to record changes each month 
          made by the assessment appeals board.  The measure also 
          provides that the treasurer-tax collector shall refund 
          payments, as long as the overpayment exceeds $10. 

          If a treasurer-tax collector makes an error in a 
          publication, he or she may correct the error in a 
          supplementary publication lasting at least ten days in the 
          same manner as the original publication.  Senate Bill 948 
          recasts this section to specify that the treasurer-tax 
          collector has 60 days after the original publication to 
          republish.  The measure specifies that the republication 
          shall not affect the right of a taxpayer, assesse, or other 
          private party in a material way.

          Currently, whenever a treasurer-tax collector proposes 
          property for a tax sale, the TTC may remove the parcel upon 
          the recommendation from the county counsel that the removal 
          is in the best interest of the county.  The treasurer-tax 
          collector must notify the controller whenever he or she 
          removes a parcel.  Senate Bill 948 removes the requirement 
          to notify the Controller.  


                               State Revenue Impact
           
          No estimate.

                                         


                                    Comment  

          1.   Purpose of the bill  .  SB 987 consolidates twelve items 
          that make minor, technical changes to property tax law 
          sponsored by the California Association of County 
          Treasurer-Tax Collectors.  The bill improves the 
          administration of property tax laws to help both taxpayers 
          and counties.  Consolidating the measures into a single 
          bill negates the need for individual bills to enact each 
          change.  Additionally, the measure only contains items with 





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          universal agreement; items that are controversial or 
          problematic will be removed from the bill


                         Support and Opposition  (4/28/11)

           Support  :  California Association of County Treasurer-Tax 
          Collectors

           Opposition  :  Unknown.