BILL ANALYSIS Ó
SB 825
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Date of Hearing: June 26, 2013
ASSEMBLY COMMITTEE ON LOCAL GOVERNMENT
K.H. "Katcho" Achadjian, Chair
SB 825 (Committee on Governance and Finance) - As Introduced:
March 20, 2013
SENATE VOTE : 37-0
SUBJECT : Government finance.
SUMMARY : Makes changes to property tax collection laws.
Specifically, this bill :
1)Expands the types of payments the state, city, county,
district, or department, board, commission, body or agency
within, shall accept to include corporate check, cashier's
check, money order, or other draft method.
2)Authorizes county tax collectors to impose a reasonable charge
to recover the public agency's processing and collection costs
if a credit card, debit card draft, electronic transfer, or
other payment offered in payment is returned without payment.
Allows this charge to be added to any underlying obligation,
other than a lien on real property. Authorizes county tax
collectors to prescribe a different method of payment for that
payment and future payments.
3)Clarifies notification requirements for property owners that
do not intend to occupy or use the property to provide
notification to the assessor within 45 days, as specified.
4)Increases the value, from $25,000 to $50,000, that a parcel
may be combined with the contiguous parcel with the greatest
assessed valuation.
5)Requires additional information on a county tax bill that
provides if an informal or formal assessment review is
requested, relief from penalties applies only to the
difference between the county assessor's final determination
of value and the value of the assessment roll for the fiscal
year covered.
6)Increases, from ten to thirty, the number of days after the
sale that a tax collector shall report the sale of a tax
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defaulted property to the assessor.
7)Provides that if the Commission on State Mandates determines
this bill contains costs mandated by the state, reimbursement
to local agencies and school districts for those costs shall
be made pursuant to current law.
8)Makes other technical changes.
EXISTING LAW :
1)Provides methods of payment local agencies shall accept.
2)Requires that the owner of any property who notifies the
assessor that he or she does not intend to occupy or use the
property to provide notification within 45 days of renting,
selling, or using the property.
3)Provides when any tract of land is situated in two or more
revenue districts, the part in each district shall be
separately assessed, except for the following:
a) Where the owner of two or more contiguous parcels
comprising the tract is identical, and the full value of
any parcels is less than $25,000, that parcel may be
combined with the contiguous parcel with the greatest
assessed valuation; and,
b) Where the owner of two or more contiguous parcels
comprising the tract is identical, and the tract of land is
being used for a single family residence and is 45,000
square feet or less, the smallest parcel may be combined
with the largest contiguous parcel.
4)Requires specified information to be included in each county
tax bill, including information regarding an informal or
formal assessment review that a taxpayer who disagrees with
the assessed value on the tax bill can request.
5)Requires the county tax collector to report the sale of a tax
defaulted property to the assessor within ten days of the
sale.
FISCAL EFFECT : This bill is keyed fiscal.
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COMMENTS :
1)In prior years the Senate Governance and Finance Committee
(formerly the Senate Revenue & Taxation Committee) has
authored a measure annually to enact several changes to
property tax collection laws that is sponsored and approved
unanimously by the California Association of County Treasurers
and Tax Collectors and the California Assessors' Association.
This bill is intended to improve the administration of
property tax collection laws to help both taxpayers and
counties. Consolidating the measures into a single bill
negates the need for individual bills to enact each change.
As such, all items in the bill have been vetted through
interested parties and have universal agreement to be included
in the bill.
2)This bill contains five changes to local property tax
assessment:
a) 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 does not agree with the valuation
after the informal review. AB 2643 (Ma), Chapter 161,
Statutes of 2012, 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
taxes. This bill requires the penalty relief limitation
information to appear on the property tax bill.
b) Existing law requires the county tax collector to report
the sale of a tax-defaulted property to the assessor within
ten days of the sale. This bill extends this deadline from
ten to 30 days.
c) The Revenue and Taxation Code specifies the forms of
payment county tax collectors can accept. However, the
Government Code does not include all the forms of payment
specified in the Revenue and Taxation Code. This bill
conforms the list of acceptable forms of payment, and
extends the authority for a county tax collector to charge
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a fee equal to their reasonable costs whenever payment is
offered, but returned without payment. This 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.
d) Assessors generally only value a property for tax
purposes based on its degree of completion on the lien date
of January 1, and the assessor issues a supplemental
assessment based on its value when completed later in the
year. The builder's exclusion relieves builders of
supplemental assessments on properties constructed for sale
that the builder does not intend to occupy or use. Current
law requires builders to file with the assessor for the
exclusion within 30 days of commencing construction, and
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. Current
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.
This bill requires builders relying on the rebuttable
presumption to inform the assessor within 45 days of
renting, selling, or using the property. This bill also
applies the existing penalty for failing to notify the
assessor of the change for affected builders failing to
notify the assessor.
e) Local agencies impose property tax to all non-exempt
properties within the 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
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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. This bill increases
the amount from $25,000 to $50,000.
3)Support arguments : Supporters argue that this bill makes
noncontroversial changes to property tax collection laws.
Opposition arguments : None
4)This bill is double-referred to the Assembly Revenue and
Taxation Committee.
REGISTERED SUPPORT / OPPOSITION :
Support
California Assessors' Association
California Association of County Treasurers and Tax Collectors
Opposition
None on file
Analysis Prepared by : Misa Yokoi-Shelton / L. GOV. / (916)
319-3958