BILL ANALYSIS Ó
SENATE GOVERNANCE & FINANCE COMMITTEE
Senator Lois Wolk, Chair
BILL NO: SB 825 HEARING: 5/1/13
AUTHOR: Committee on Governance & Finance FISCAL: Yes
VERSION: 3/20/13 TAX LEVY: No
CONSULTANT: Grinnell
GOVERNMENT FINANCE
Enacts five technical changes to property tax collection
law.
Background, Existing Law, and Proposed Law
Each year, the former Revenue and Taxation Committee
authored a measure to enact several changes to Property Tax
Law sponsored by the California Assessors' Association and
the California Association of County Treasurer-Tax
Collectors, who administer the property tax. Many of these
measures are technical in nature, and enacting them in
separate measures isn't warranted. Although omnibus bills
like this one 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.
I. Property Tax Bills. Current law requires the County
Tax Collector to include specified information as part of
the property tax bill, including the taxpayer's right to
request an informal review of the assessor's valuation of
the property, and to apply to the assessment appeals board
for a reduction in valuation if the taxpayer doesn't agree
with the valuation after the informal review. Last year,
AB 2643 (Ma) clarified the law to provide that penalty
relief is limited solely to the difference between the
assessor's initial valuation and the value that results
from the appeal or from informal review, ensuring that
taxpayers cannot escape penalties from failing to pay tax.
SB 825 requires the penalty relief limitation information
to appear on the property tax bill.
II. Tax sale reporting. Existing law requires the County
Tax Collector to report the sale of a tax-defaulted
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property to the assessor within ten days of the sale. SB
825 extends this deadline from ten to 30 days.
III. Code conformity. The Revenue and Taxation Code
specifies the forms of payment county tax collectors can
accept. However, the Government Code doesn't include all
the forms of payment specified in the Revenue and Taxation
Code. SB 825 conforms the list of acceptable forms of
payment in the two codes, and extends the authority for a
County Tax Collectors to charge a fee equal to their
reasonable costs whenever payment is offered, but returned
without payment. The bill also requires the charge to
become an underlying obligation, but not a lien on real
property, and allows the tax collector to prescribe a
different form of payment in the future.
IV. Builder's Exclusion. Generally, an assessor only
values a property for tax purposes based on its degree of
completion on the lien date of January 1st, and the
assessor issues a supplemental assessment based on its
value when completed later in the year. The builder's
exclusion additionally relieves builders of supplemental
assessments on properties constructed for sale that the
builder does not intend to occupy or use. Builders must
file apply with the Assessor for the exclusion within 30
days of commencing construction, and additionally notify
the Assessor within 45 days of renting, selling, or using
the property. When the owner fails to notify the assessor
that he or she does not intend to occupy or use the
property within 30 days of beginning construction, the
exclusion does not apply, and the Assessor issues the
supplemental assessment. However, the owner does not need
to notify the assessor, and is rebuttably presumed not to
intend to occupy or use the property, if the property has
been subdivided into more than five parcels in accordance
with the subdivision Map Act, the map describing the
parcels has been recorded, and zoning regulations require
the parcels be used for single-family residences. The law
explicitly requires builders who have notified the Assessor
to provide the second notification within 45 days of
renting, selling, or using the property, but doesn't
explicitly require the notification of builders who rely on
the rebuttable presumption. SB 825 explicitly requires
builders relying on the rebuttable presumption to inform
the Assessor within 45 days of renting, selling, or using
the property, and would also apply the existing penalty for
SB 825 - 3/20/13 -- Page 3
failing to notify the Assessor of the change for affected
builders failing to notify the Assessor.
V. Contiguous parcels. Local agencies impose the property
tax to all non-exempt properties within its jurisdiction.
However, Assessors occasionally assess a single property
that is situated in more than one "revenue district," where
one agency's boundaries encompass part of the property, but
not all of it. In such a case, each property must be
separately assessed unless the full value of any parcel is
less than $25,000, in which case the parcel may be combined
with the contiguous one with the highest value. The
smallest parcel in a tracts of land used for single-family
residences of less than 15,000 square feet may also be
combined with the largest contiguous parcel. SB 825
increases the amount from $25,000 to $50,000.
State Revenue Impact
No estimate.
Comments
1. Purpose of the bill . SB 825 consolidates five items
that make minor, technical changes to property tax law
sponsored by the California Association of County
Treasurer-Tax Collectors and the California Assessors
Association. 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
universal agreement; the Committee will remove items should
anyone object to one.
Support and Opposition (4/25/13)
Support : California Assessors Association; California
Association of County Treasurer-Tax Collectors
Opposition : None received.
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