AB 2257, as introduced, Cooley. Property tax: tax-defaulted property: excess proceeds from sale.
(1) Existing law generally authorizes a county tax collector to sell tax-defaulted property 5 years or more, or 3 years or more, as applicable, after that property has become tax defaulted. Existing law requires the proceeds from the sale of tax-defaulted property to be deposited in the delinquent tax sale trust fund, and requires the proceeds in the fund to be distributed to the state, to the county for reimbursement of specified costs relating to the sale of the tax-defaulted property, and among taxing agencies, as provided. Existing law requires any proceeds remaining in the delinquent tax sale trust fund after distribution of the proceeds to be retained in the fund subject to being claimed by parties of interest, as provided. Existing law requires, at the expiration of one year following the recordation of the tax deed to the purchaser, that any excess proceeds not claimed be distributed among taxing agencies, as provided.
This bill would eliminate the requirement that any excess proceeds not claimed be distributed among taxing agencies, and would instead authorize any excess proceeds to be transferred to the county general fund at the expiration of a specified time period.
(2) Existing law authorizes any party of interest to file with the county a claim for the excess proceeds from the sale of tax-defaulted property, as specified, at any time prior to the expiration of one year following the recordation of the tax collector’s deed to the purchaser. Existing law prohibits the excess proceeds from being distributed to the parties of interest, as specified, sooner than one year following the recordation of the tax collector’s deed to the purchaser.
This bill would prohibit the distribution of any excess proceeds to the parties of interest as described above if the board of supervisors has been petitioned to rescind the tax sale, as specified, and would instead require the excess proceeds to be distributed no sooner than one year following the date the board of supervisors determines the tax sale should not be rescinded, and only if the person who petitioned the board of supervisors has not commenced a proceeding in court, as specified. If a proceeding has been commenced in a court, this bill would prohibit any excess proceeds from being distributed until final court order has been issued.
By changing the manner in which excess proceeds from the sale of tax-defaulted are distributed by local county officials to parties of interest, this bill would impose a state-mandated local program
(3) Existing law requires the county, when excess proceeds from the sale of tax-defaulted property exceed $150, to provide notice of the right to claim the excess proceeds by mailing a written notice to the last known mailing address of parties of interest, as defined. Existing law requires the county, if the last known address of a party of interest cannot be obtained, to publish the notice in a newspaper, as specified, except when the cost to publish is equal to or greater than the amount of the excess proceeds.
This bill would revise the exception to the newspaper publication of notice requirement.
The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.
This bill would provide that, if the Commission on State Mandates determines that the bill contains costs mandated by the state, reimbursement for those costs shall be made pursuant to these statutory provisions.
Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: yes.
The people of the State of California do enact as follows:
Section 4674 of the Revenue and Taxation Code
2 is amended to read:
Any excess in the proceeds deposited in the delinquent
4tax sale trust fund remaining after satisfaction of the amounts
5distributed under Sections 4672, 4672.1, 4672.2, 4673, and 4673.1
6shall be retained in the fund on account of, and may be claimed
7by parties of interest in the property as provided in, Section 4675.
8At the expiration ofbegin delete one year following the recordation of the tax begin insert end insertbegin insertthe period specified in subdivision (e) of
9deed to the purchaserend delete
10Section 4675end insert, any excess proceeds not claimed under Section 4675
11begin delete shall be distributed as provided in paragraph (2) of subdivision (a) begin insert
may be transferred to the county
12of Section 4673.1, except prior to the distribution, the county may
13deduct those costs of maintaining the redemption and tax-defaulted
14property files, and those costs of administering and processing the
15claims for excess proceeds, that have not been recovered under
16any other provision of law.end delete
17general fund.end insert
Section 4675 of the Revenue and Taxation Code is
19amended to read:
(a) Any party of interest in the property may file with
21the county a claim for the excess proceeds, in proportion to his or
22her interest held with others of equal priority in the property at the
23time of sale, at any time prior to the expiration of one year
24following the recordation of the tax collector’s deed to the
25purchaser.
26(b) After the property has been sold, a party of interest in the
27property at the time of the sale may assign his or her right to claim
28the excess proceeds only by a dated, written instrument that
29explicitly states that the right to claim the excess proceeds is being
30assigned, and only after each party to the proposed assignment has
31disclosed to each other party to the proposed assignment all facts
32of which he or she is aware relating to the
value of the right that
33is being assigned. Any attempted assignment that does not comply
34with these requirements shall have no effect. This paragraph shall
35apply only with respect to assignments on or after the effective
36date of this paragraph.
37(c) Any person or entity who in any way acts on behalf of, or
38in place of, any party of interest with respect to filing a claim for
P4 1any excess proceeds shall submit proof with the claim that the
2amount and source of excess proceeds have been disclosed to the
3party of interest and that the party of interest has been advised of
4his or her right to file a claim for the excess proceeds on his or her
5own behalf directly with the county at no cost.
6(d) The claims shall contain any information and proof deemed
7necessary by the board of supervisors to establish the claimant’s
8rights to all or any portion of the excess proceeds.
9(e) begin deleteNo end deletebegin insert(1)end insertbegin insert end insertbegin insertExcept as provided in paragraph (2), no end insertsooner than
10one year following the recordation of the tax collector’s deed to
11the purchaser, and if the excess proceeds have been claimed by
12any party of interest as provided herein, the excess proceeds shall
13be distributed on order of the board of supervisors to the parties
14of interest who have claimed the excess proceeds in the order of
15priority set forth in subdivisions (a) and (b). For the purposes of
16this article, parties of interest and their order of priority are:
17(1)
end delete
18begin insert(A)end insert First, lienholders of record prior to the recordation of the
19tax deed to the purchaser in the order of their priority.
20(2)
end delete
21begin insert(B)end insert Second, any person with title of record to all or any portion
22of the property prior to the recordation of the tax deed to the
23purchaser.
24(2) (A) Notwithstanding paragraph (1), if the board of
25supervisors has been petitioned to rescind the tax sale pursuant
26to Section 3731, any excess proceeds shall not be distributed to
27the parties of interest as provided by
paragraph (1) sooner than
28one year following the date the board of supervisors determines
29the tax sale should not be rescinded, and only if the person who
30petitioned the board of supervisors pursuant to Section 3731 has
31not commenced a proceeding in court pursuant to Section 3725.
32(B) If a proceeding has been commenced in a court pursuant
33to Section 3725, any excess proceeds shall not be distributed to
34the parties of interest as provided by paragraph (1) until a final
35court order is issued.
36(f) In the event that a person with title of record is deceased at
37the time of the distribution of the excess proceeds, the heirs may
38submit an affidavit pursuant to Chapter 3 (commencing with
39Section 13100) of
Part 1 of Division 8 of the Probate Code, to
40support their claim for excess proceeds.
P5 1(g) Any action or proceeding to review the decision of the board
2of supervisors shall be commenced within 90 days after the date
3of that decision of the board of supervisors.
Section 4676 of the Revenue and Taxation Code is
5amended to read:
(a) When excess proceeds from the sale of tax-defaulted
7property exceed one hundred fifty dollars ($150), the county shall
8provide notice of the right to claim the excess proceeds, as provided
9in this section.
10(b) No later than 90 days after the sale of the property, the
11county shall mail written notice of the right to claim excess
12proceeds to the last known mailing address of parties of interest,
13as defined in Section 4675. The county shall make a reasonable
14effort to obtain the name and last known mailing address of parties
15of interest.
16(c) If the last known address of a party of interest cannot be
17obtained, the county shall publish notice of the right to claim excess
18proceeds in a newspaper of
general circulation in the county.
19Publication is not required if the cost to publish isbegin delete equal to orend delete
20 greater than the amount of the excess proceedsbegin insert or eliminates any
21excess proceeds available for distributionend insert. The notice shall be
22published once a week for three successive weeks and shall
23commence no later than 90 days after the sale of the property.
24(d) The cost of obtaining the name and last known mailing
25address of parties of interest and of mailing or publishing the
26notices required under this section shall be deducted from the
27excess proceeds and shall be distributed to the county general fund.
If the Commission on State Mandates determines that
29this act contains costs mandated by the state, reimbursement to
30local agencies and school districts for those costs shall be made
31pursuant to Part 7 (commencing with Section 17500) of Division
324 of Title 2 of the Government Code.
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