BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                  SB 948
                                                                  Page  1

          Date of Hearing:  June 27, 2011

                     ASSEMBLY COMMITTEE ON REVENUE AND TAXATION
                                Henry T. Perea, Chair

             SB 948 (Committee on Governance and Finance) - As Amended:  
                                    June 7, 2011

          Majority vote.  Fiscal committee.

           SENATE VOTE  :  39-0
           
          SUBJECT  :  Property taxation.

           SUMMARY  :  Makes several technical changes to the property tax 
          law relating to collection of tax.   Specifically,  this bill  :   

          1)Requires a local county assessor to provide to the tax 
            collector, upon written request from the tax collector, 
            certain confidential information for the preparation and 
            enforcement of tax sales, as specified.  Specifies that this 
            information will remain confidential, not subject to public 
            inspection, and requires the tax collector to reimburse the 
            assessor for the actual and reasonable costs incurred by the 
            assessor in providing this information. 

          2)Modifies the procedure of filing property tax protests by 
            specifying that taxpayers must file a protest with the county 
            clerk, and pay taxes to the treasurer-tax collector.

          3)Amends Revenue and Taxation Code (R&TC) Section 2611.1, 
            relating to discharges of accountability by a county 
            department, officer, or employee who collects taxes, to 
            require discharges under that section to comply with updated 
            Government Code sections that describe the process for county 
            officials to file an application for a "discharge of 
            accountability on the grounds that the amount owed is too 
            small to justify the costs of collection."

          4)States that an overpayment of tax is determined by the tax 
            collector as of the date and time that the tax payment is 
            received.  Allows the tax collector, if the refund is due the 
            taxpayer, to process a refund without sending a notice of 
            overpayment to the taxpayer.









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          5)Deletes the requirement to notify the State Controller in the 
            situation when a treasurer-tax collector proposes property for 
            a tax sale but then later removes it from the sale upon the 
            recommendation from the county counsel.

          6)Requires third-party agents, who are acting on behalf of any 
            party of interest with respect to filing a claim for any 
            excess proceeds from the tax sale, to submit proof that the 
            source of those proceeds have been disclosed to the party of 
            interest and that a claim to recover those proceeds may be 
            filed by the party of interest directly with the county at no 
            cost.

          7)Allows treasurer-tax collectors, when they are required to 
            provide notice of the right to claim proceeds that exceed $150 
            to the last known mailing address of the parties of interest 
            in a tax sale but cannot obtain the address, to forego the 
            requirement to publish the notice in a newspaper of general 
            circulation if the costs of publication exceed the amount of 
            the tax sale proceeds.

          8)Revises the provision dealing with the correction of errors in 
            publications published by a treasurer-tax collector to specify 
            that the treasurer-tax collector has 60 days after the 
            original publication to republish, and  specifies that the 
            re-publication may not affect the right of a taxpayer, 
            assessee, or other private party in a material way.

          9)Requires the treasurer-tax collector, when taxpayers or their 
            agents make payments on the wrong property, 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 
            when the payment is not subject to chargeback, dishonor, or 
            reversal.  Specifies that interest shall only be paid if the 
            treasurer-tax collector has failed to transfer or refund the 
            payment as required.  

          10)Makes other technical corrections to property tax collection 
            laws to update incorrect cross- references and correct 
            outdated code sections.

          11)Provides that no reimbursement is required by the provisions 
            of this bill because the only costs that may be incurred by a 
            local agency or school district are the result of a program 
            for which legislative authority was requested by that local 








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            agency or school district.

           EXISTING LAW  :

          1)Requires the treasurer-tax collector to publish various 
            notices in a newspaper or three public places including, among 
            others, notice of impending default for failure to pay taxes 
            on real property and notice of intended sale of tax-defaulted 
            property by the tax collector.  Authorizes a treasurer-tax 
            collector, in the case of an error in a publication, to 
            correct the error in a supplementary publication lasting at 
            least ten days in the same manner as the original publication. 


          2)Requires assessors to keep certain information confidential.  
            ÝR&TC Section 408(a)].  Provides an exception to the general 
            rule of confidentiality for certain governmental agencies or 
            representatives.  Requires the county assessor to disclose 
            information, furnish abstracts, or permit access to all 
            records in his/her office to law enforcement agencies, the 
            county grand jury, and other specified entities, including the 
            county recorder in the case of an investigation to determine 
            whether a documentary transfer tax (DTT) is imposed.  ÝR&TC 
            Section 408(b)].  

          3)Establishes a procedure by which an assessee of property taxes 
            may pay taxes under protest in cases in which the assessor 
            does not, upon or prior to completion of the local tax roll, 
            send a notice to an assessee whose property was not on the 
            prior year's secured roll, or to an assessee of real property 
            on the local secured roll whose property's full value has 
            increased.  Requires a protest to be filed with the tax 
            collector, together with the payment of taxes, as specified. 

          4)Allows any county department, officer, or employee who 
            collects taxes, penalties, or other costs to file an 
            application for a "discharge of accountability" whenever the 
            costs of collection exceed the revenue collected.  

          5)Requires the treasurer-tax collector, when a taxpayer overpays 
            tax by more than $10, to notify the taxpayer of the 
            overpayment.  

          6)Authorizes a county tax collector to sell tax-defaulted 
            property after a specified amount of time.  Allows the 








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            treasurer-tax collector, whenever a treasurer-tax collector 
            proposes property for a tax sale, to remove the parcel upon 
            recommendation from the county counsel, that the removal is in 
            the best interest of the county, and requires the 
            treasurer-tax collector to notify the State Controller of the 
            removal of the parcel for sale.

          7)Allows a party of interest in the tax-defaulted property sold 
            at a tax sale to file a claim for the excess proceeds from the 
            sale, as specified.  Allows third party agents to recover 
            excess tax proceeds on behalf of a party of interest, as 
            specified. 

          8)Requires a county to provide notice, including publishing 
            notice in a newspaper, of the right to claim the excess 
            proceeds from the sale of a tax-defaulted property. 

          9)Allows the treasurer-tax collector, in the case where a 
            taxpayer makes a payment on the wrong property, to cancel the 
            credit on the unintended property and apply it to the correct 
            property within a specified time period.  If there is no 
            property to which the credit may be applied, the tax collector 
            is required, upon being convinced by substantial evidence of a 
            mistake, to refund the payment. 

          10)Requires treasurer-tax collectors to provide notice of the 
            right to claim proceeds to the last known address of parties 
            of interest in a tax sale that exceeds $150, and specifies 
            that if the treasurer-tax collector cannot obtain the address, 
            he/she must publish notice in a newspaper of general 
            circulation in the county of the tax-defaulted property.  

          11)Requires that property taxes be refunded if the payments 
            exceed the equalized value of the property, as determined by 
            the county Board of Equalization, and authorizes a county tax 
            collector or county auditor to refund taxes within four years 
            of payment if the amount paid exceeds the amount due on the 
            property as shown on the tax roll. 

          12)Requires counties to pay interest to taxpayers when a court 
            allows the taxpayer to recover a penalty previously assessed 
            under specified sections of R&TC Section 830.  

           FISCAL EFFECT  :   Unknown. 









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           COMMENTS  :   

           1)Purpose of this Bill  .  SB 948 is sponsored by the California 
            Association of County Treasurer-Tax Collectors.  According to 
            the author, this bill is intended to improve the 
            administration of property tax laws.  

           2)Access to Records in the County Assessor's Office  .  Existing 
            law provides that information and records in the county 
            assessor's office are not public documents and shall not be 
            open to public inspection, unless specifically exempted by 
            law.  Exemptions include sharing of information with law 
            enforcement agencies, county grand jury, and a board of 
            supervisors.  In 2009, the list of enumerated exemptions was 
            expanded to allow a county recorder access all records in the 
            assessor's office for purposes of determining whether a DTT is 
            due.  ÝR&TC Section 408(b)].  SB 948 would further amend R&TC 
            Section 408(b) to add local tax treasurers-collectors to the 
            list of agencies that may access the assessor's records for 
            purposes of preparing and enforcing tax sales.  
           
             Generally, critics of information sharing between government 
            entities are concerned about possible unlawful disclosure or 
            inspection of confidential tax information.  Thus, often, 
            provisions allowing information sharing contain safeguards 
            against, and penalties for, unlawful disclosure of 
            confidential taxpayers' information.  For example, an existing 
            information sharing program between the Franchise Tax Board 
            (FTB) and cities provides for criminal sanctions for unlawful 
            disclosure or inspection of such information, which 
            supplements FTB's institutional commitment to taxpayer 
            information confidentiality.  The information possessed by the 
            county assessor's office is considerably less sensitive than 
            the information found on income tax returns.  However, this 
            bill contains no protection against unlawful disclosure of 
            information acquired by a county treasurer-tax collector from 
            the county assessor.  

            Similar to this bill, AB 563 (Furutani), set to be heard June 
            29, 2011 in the Senate Governance and Finance Committee, 
            expands the list of authorized agencies that have access to 
            the assessor's records to include certain designated city 
            employees.  This Committee amended AB 563 to require a 
            designated employee of a city's finance office to submit a 
            written request to the assessor certifying, under penalty of 








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            perjury, that he/she needs the information to assist with the 
            preparation and enforcement of a DTT and that confidential 
            information will not become public record and will not be open 
            to public inspection.  The Committee may wish to amend SB 948 
            to include a similar provision, in order to ensure consistency 
            in the treatment of various agencies that are authorized to 
            have access to the assessor's records. 

           3)Double Referral  .  This bill was doubled-referred with the 
            Assembly Committee on Local Government, and passed out of that 
            Committee with a 9-0 vote on June 15, 2011.  For additional 
            discussion of this bill, please refer to that Committee's 
            analysis.

           4)Related Legislation. 

           AB 563 (Furutani), introduced in the current legislative 
            session, authorizes designated city employees to obtain or 
            access otherwise confidential information from the county 
            assessor when the city is conducting an investigation to 
            determine whether the documentary transfer tax (DTT) should be 
            imposed. AB 563 is currently pending in the Senate Governance 
            and Finance Committee. 

          SB 816 (Ducheny), Chapter 622, Statutes of 2009, made changes in 
            the DTT law relative to city ordinances, assessor records, and 
            change of ownership statements, including allowing county 
            recorders to assess the county assessors' records when 
            investigating if a DTT is due. 

            SB 1146 (Cedillo), Chapter 345, Statutes of 2008, extended the 
            sunset date for the program that allows the FTB to share 
            information with tax officials of any city in California until 
            December 31, 2014.

            SB 1374 (Cedillo), Chapter 513, Statutes of 2006, extended the 
            program that allows the FTB to provide information to tax 
            officials of any city in California until December 31, 2011.

            AB 63 (Cedillo), Chapter 915, Statutes of 2001, extended the 
            circumstances under which the FTB may disclose tax information 
            to tax officials of any city, until December 31, 2008.  
           
          REGISTERED SUPPORT / OPPOSITION  :









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           Support 
           
          California Association of County Treasurer-Tax Collectors 
           
            Opposition 
           
          Robert Pool, Esq., Gangloff, Gangloff & Pool

           Analysis Prepared by  :  Oksana Jaffe / REV. & TAX. / (916) 
          319-2098