BILL ANALYSIS Ó
AB 1012
Page 1
Date of Hearing: April 29, 2013
ASSEMBLY COMMITTEE ON REVENUE AND TAXATION
Raul Bocanegra, Chair
AB 1012 (Gomez) - As Introduced: February 22, 2013
Majority vote. Fiscal committee.
SUBJECT : County tax bill: notice: property tax assistance and
postponement
SUMMARY : Eliminates the Franchise Tax Board's (FTB's)
obligation to prepare a notice regarding the Property Tax
Postponement (Postponement) program. Specifically, this bill
eliminates the Senior Citizens Postponement Law notice
requirement under Revenue and Taxation Code (R&TC) Section
2615.6.
EXISTING LAW :
1)Establishes the Senior Citizens and Disabled Citizens
Postponement Law, the Senior Citizens Tenant-Stockholder
Postponement Law, the Senior Citizens Mobilehome Postponement
Law, and the Senior Citizens Possessory Interest Holder
Postponement Law in the R&TC, all of which allow the State
Controller (SC) to pay property taxes to county tax collectors
on behalf of individuals over the age of 62 or disabled
persons making less than $39,000. (R&TC Sections 20581-
20641).
2)Establishes the Senior Citizens Homeowners and Renters
Property Tax Assistance (Assistance) Law, administered by the
FTB, which is a direct grant program to income eligible senior
citizens. (R&TC Sections 20501 - 20561).
3)Establishes the County Deferred Property Tax Postponement for
Senior and Disabled Citizens, with participating counties, to
pay property taxes to county tax collectors on behalf of
individuals over the age of 62 or disabled persons making less
than $35,500. (R&TC Sections 20800 - 20825).
4)Requires the FTB to prepare a notice regarding property tax
assistance and postponement for senior citizens under the
Gonsalves-Deukmejian-Petris Senior Citizens Property Tax
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Assistance Law (also known as the Senior Citizens Homeowners
and Renters Assistance Law) and the Senior Citizens
Postponement Law. (R&TC Section 2615.6)
5)Requires a county, when it sends a tax bill to any person, to
include the notice regarding property tax assistance and
postponement programs, as prepared by the FTB. (R&TC Section
2615.6).
6)Suspends funding for the assistance and postponement programs
indefinitely.
FISCAL EFFECT : None.
COMMENTS :
1)The author has provided the following comment in support of
this bill:
Given the suspension of the [Property Tax Postponement]
Program, this is an obsolete requirement which requires
unnecessary work at the [State Controller's Office] to
annually prepare the statement and handle the flood of
inquiries received when county tax bills are mailed.
Furthermore, AB 1012 would save unnecessary frustration and
disappointment experienced by disabled people and senior
citizens when they discover they are responding to an
obsolete notice about a program that was suspended several
years ago.
2)Background . California has several property tax programs
benefiting the elderly and disabled individuals, including
property tax reappraisal relief, property tax assistance, and
property tax postponement. The assistance program provides a
direct grant to qualifying seniors and disabled individuals
who own or rent a residence. The assistance program, which is
administered by the FTB, was established in 1967 to provide
direct property tax relief to seniors living on a fixed
income. It was later expanded to include renters who meet the
income requirement, and to homeowners who are blind and or
disabled, regardless of their age.
Unlike the assistance programs that refunds a percentage of
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property taxes paid, the postponement program allows eligible
homeowners to defer payment of all, or a portion, of the
property taxes on their residence. The program was enacted in
1977, after the passage of a constitutional amendment
authorizing the postponement of property taxes (California
Constitution, Article 13, Section 8) and is administered by
the SC's Office. The constitutional amendment was in response
to concerns that senior homeowners on fixed incomes could lose
their homes because of the inability to pay raising property
tax bills. Originally designed for individuals over 62 years
of age, the program is now also available to eligible blind
and disabled persons, regardless of age.
The state has not provided funding for the assistance program
since the 2007-08 Budget, so the state has not paid claims
more recently than those made in 2008. On February 20, 2009,
the postponement program was indefinitely suspended as part of
the budget reductions to the state's General Fund programs.
[SBx3 8 (Ducheny), Chapter 4, Statutes of 2009]. The funding
of the program was eliminated and the SC was prohibited from
accepting new applications after February 20, 2009.
The governor signed AB 1090 (Blumenfield), Chapter 369,
Statutes of 2011, creating the County Deferred Property Tax
Program for Senior Citizens and Disabled Citizens. Under this
new program, counties may join the program by adopting a
resolution indicating the county's intention to participate.
Participating counties must establish a Property Tax Deferral
Fund within its Treasury, which will be used to make payments
equivalent to the amount of deferred property taxes. Payments
from the Property Tax Deferral Fund will be made to the county
and will be processed in the same manner as all other property
tax payments. As of the enactment of the program, only one
county adopted a resolution indicating its intention to
participate but the program is not currently operative.
3)Will this bill save money ? The author argues that the current
postponement notice, as required by law, creates unnecessary
work for the SC's Office. Specifically, it requires the SC to
answer a flood of inquiries about a program that has not been
funded since 2009. Since notice is required by law, taxpayers
receive information about the program, prompting questions.
Therefore, eliminating the notice requirement in R&TC Section
2615.6 would also eliminate the additional workload created by
property owners interested in the program.
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4)Implementation concerns . As noted in FTB's analysis, the
elimination of the postponement program notification
requirement would not reduce the FTB's notice preparation
workload. This is because the FTB will still be required to
administer and prepare a notice for the assistance program,
which has also not been funded since the 2007-08 Budget. The
FTB has advised eliminating the notice requirement for both
the postponement and assistance programs since both are
currently unfunded.
5)Suggested Amendments . AB 1012 eliminates the Senior Citizens
Postponement program notification requirement under R&TC
section 2615.6. However, eliminating the requirement prevents
taxpayers from becoming aware of the postponement program even
if the program becomes operational in the future.
Additionally, AB 1012 only addresses one of the unfunded
programs under R&TC section 2615.6. As such, the author may
wish to amend AB 1012 to suspend, and not eliminate, the
notification requirement for both the assistance and
postponement programs as long as they remain unfunded.
REGISTERED SUPPORT / OPPOSITION :
Support
None
Opposition
None
Analysis Prepared by : Carlos Anguiano / REV. & TAX. / (916)
319-2098