BILL ANALYSIS Ó
SENATE GOVERNANCE & FINANCE COMMITTEE
Senator Lois Wolk, Chair
BILL NO: AB 1012 HEARING: 6/19/13
AUTHOR: Gomez FISCAL: Yes
VERSION: 5/7/13 TAX LEVY: No
CONSULTANT: Grinnell
COUNTY TAX BILLS
Renders inoperative requirement to include information
regarding defunded assistance programs on property tax
bills
Background and Existing Law
California has established several programs to assist
income-eligible, disabled, or seniors with costs of
housing, including the Senior Citizens and Disabled
Citizens Property Tax Postponement Law, the Senior Citizens
Tenant-Stockholder Property Tax Postponement Law, the
Senior Citizens Mobilehome Property Tax Postponement Law,
and the Senior Citizens Possessory Interest Holder Property
Tax Postponement Law. The programs allow the Controller 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 in income per year. The claimant must
repay the Controller upon sale of the home, who secures the
loan by recording a lien. Loans do not become due and
payable if the claimant or the claimant's spouse continues
to occupy the home secured by the lien. In 2009, the
Legislature prohibited persons from filing new claims for
property tax postponement, and the Controller from
accepting applications, due to the state's fiscal problems
(SBx3 8, Ducheny, 2009). owever, the Legislature
partially resurrected the program when it authorized
counties to similarly defer property taxes for fund
postponements for income-eligible seniors using its own
excess cash (AB 1090, Blumenfield, 2011). To date, only
Santa Cruz County has granted postponements under the bill.
These programs are distinct from the
Gonsalves-Deukmejian-Petris Senior Citizens Property Tax
Assistance Program (PTAP), administered by the Franchise
Tax Board, which is a direct grant program to
AB 1012 - 5/7/13 -- Page 2
income-eligible senior citizens. The State has not funded
PTAP since the 2007-08 Budget, so the state has not paid
claims more recently than those made in 2007.
The Legislature required each County Tax Collector to
include a notice with the property tax bill informing
taxpayers about PTAP and the Postponement Program, and
required FTB to prepare the notice for both programs (AB
199, Hannigan, 1979). As both programs are on indefinite
hold, the State Controller wants to absolve tax collectors
from having to include the notice on the bill, and FTB's
responsibility to prepare it, so that taxpayers aren't
notified of a program that doesn't offer benefits
currently.
Proposed Law
Assembly Bill 1012 renders inoperative the requirement that
counties send the notice regarding property tax assistance
and postponement along with the property tax bill until the
first lien date for which the state provides funding. The
bill does the same to FTB's mandate to prepare the notice.
State Revenue Impact
FTB states that the bill does not impact state revenues.
Comments
1. Purpose of the bill . According to the author,
"Assembly Bill 1012 would suspend an outdated notification
requirement in RTC 2615.6. Given the suspension of both
the postponement program and the assistance program this is
an obsolete requirement which requires unnecessary work at
the SCO and FTB to annually prepare the statement and
handle the flood of inquires 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 programs that were
suspended several years ago. When operational, the
programs provided property tax benefits for elderly and
disabled individuals who met certain criteria for
AB 1012 - 5/7/13 -- Page 3
low-income and equity in their property. The assistance
program provided a direct grant to qualifying seniors and
disabled individuals who own or rent a residence. The
postponement program allowed eligible homeowners to defer
payment of all or a portion of the property taxes on their
residence. When county tax collectors bill property owners
for annual property taxes owed, current law requires them
to include a notice on the bill informing taxpayers about
the programs. Even though both programs have been
suspended, every year, the Franchise Tax Board (FTB) and
the SCO, by law, must prepare the language for the notice
and provide it to the counties for inclusion in their tax
bills."
Assembly Actions
Assembly Revenue and Taxation9-0
Assembly Appropriations 17-0
Assembly Floor 74-0
Support and Opposition (06/13/13)
Support : State Controller John Chiang.
Opposition : None received.