BILL ANALYSIS Ó
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UNFINISHED BUSINESS
Bill No: SB 825
Author: Senate Governance and Finance Committee
Amended: 8/5/13
Vote: 21
SENATE GOVERNANCE & FINANCE COMMITTEE : 7-0, 5/1/13
AYES: Wolk, Knight, Beall, DeSaulnier, Emmerson, Hernandez, Liu
SENATE APPROPRIATIONS COMMITTEE : Senate Rule 28.8
SENATE FLOOR : 37-0, 5/16/13 (Consent)
AYES: Anderson, Beall, Berryhill, Block, Calderon, Cannella,
Corbett, Correa, De León, DeSaulnier, Emmerson, Evans, Fuller,
Gaines, Galgiani, Hancock, Hernandez, Hill, Hueso, Huff,
Jackson, Knight, Lara, Leno, Lieu, Liu, Monning, Nielsen,
Padilla, Pavley, Roth, Steinberg, Walters, Wolk, Wright,
Wyland, Yee
NO VOTE RECORDED: Price, Vacancy, Vacancy
ASSEMBLY FLOOR : 78-0, 8/30/13 (Consent) - See last page for
vote
SUBJECT : Committee on Governance and Finance
SOURCE : California Assessors Association
California Association of County Treasurer-Tax
Collectors
DIGEST : This bill enacts technical changes to property tax
collection law.
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Assembly Amendments add one more technical change and make
clarifying changes.
ANALYSIS : Each year, the former Senate 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 is not 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 . Existing law requires the county tax
collector (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. Last year, 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 tax.
This bill requires the penalty relief limitation information
to appear on the property tax bill.
II. Tax sale reporting . Existing law requires the collector to
report the sale of a tax-defaulted property to the assessor
within 10 days of the sale.
This bill extends this deadline from 10 to 30 days.
III. Code conformity . The Revenue and Taxation Code (RTC)
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 RTC.
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This bill conforms the list of acceptable forms of payment in
the two codes, and extends the authority for a collector to
charge 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.
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 1, 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 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/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 does not explicitly require the notification of
builders who rely on the rebuttable presumption.
This bill explicitly requires builders relying on the
rebuttable presumption to inform the assessor within 45 days
of renting, selling, or using the property, and also applies
the existing penalty for failing to notify the assessor of
the change.
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
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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.
This bill increases the amount from $25,000 to $50,000.
VI. Property tax postponement programs . 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
Senior Citizens Homeowners and Renters Property Tax
Assistance (Assistance) Law program provides a direct grant
to qualifying seniors and disabled individuals who own or
rent a residence. This program, administered by the
Franchise Tax Board, 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 or
disabled, regardless of their age.
Unlike the Assistance program that refunds a percentage of
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 State Controller'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
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of the budget reductions to the state's General Fund
programs. (SB 8X3 (Ducheny), Chapter 4, Statutes of 2009).
The funding of the program was eliminated and the Controller
was prohibited from accepting new applications after February
20, 2009.
Governor Brown 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.
The current postponement notice, as required by law, creates
unnecessary work for the Controller's Office. Specifically,
it requires the Controller 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.
This bill suspends the notice requirement of both the
assistance program and the Senior Citizens Postponement
program, as long as they remain unfunded. Therefore,
suspension of the notice requirement in RTC Section 2615.6
would also eliminate the additional workload created by
property owners interested in the program.
Comments
According to the Senate Governance and Finance Committee
analysis, this bill consolidates 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. This bill improves the
administration of property tax laws to help both taxpayers and
counties. Consolidating the measures into a single bill negates
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the need for individual bills to enact each change.
Additionally, this bill only contains items with universal
agreement; the Senate Governance and Finance Committee will
remove items should anyone object to one.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: Yes
SUPPORT : (Verified 8/30/13)
California Assessors Association (co-source)
California Association of County Treasurer-Tax Collectors
(co-source)
ASSEMBLY FLOOR : 78-0, 08/30/13
AYES: Achadjian, Alejo, Allen, Ammiano, Atkins, Bigelow, Bloom,
Bocanegra, Bonilla, Bonta, Bradford, Brown, Buchanan, Ian
Calderon, Campos, Chau, Chávez, Chesbro, Conway, Cooley,
Dahle, Daly, Dickinson, Donnelly, Eggman, Fong, Fox, Frazier,
Beth Gaines, Garcia, Gatto, Gomez, Gonzalez, Gordon, Gorell,
Gray, Grove, Hagman, Hall, Harkey, Roger Hernández, Holden,
Jones, Jones-Sawyer, Levine, Linder, Logue, Lowenthal,
Maienschein, Mansoor, Medina, Melendez, Mitchell, Morrell,
Mullin, Muratsuchi, Nazarian, Nestande, Olsen, Pan, Patterson,
Perea, V. Manuel Pérez, Quirk, Quirk-Silva, Rendon, Salas,
Skinner, Stone, Ting, Wagner, Waldron, Weber, Wieckowski,
Wilk, Williams, Yamada, John A. Pérez
NO VOTE RECORDED: Vacancy, Vacancy
AB:k 8/30/13 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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