BILL ANALYSIS Ó
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Date of Hearing: April 6, 2016
ASSEMBLY COMMITTEE ON LOCAL GOVERNMENT
Susan Talamantes Eggman, Chair
AB 1952
(Gordon) - As Introduced February 12, 2016
SUBJECT: Property tax postponement.
SUMMARY: Makes a number of changes to the Senior Citizens and
Disabled Citizens Property Tax Postponement Program.
Specifically, this bill:
1)Makes a number of changes to the Senior Citizens and Disabled
Citizens Property Tax Postponement Program (PTP Program), as
follows:
a) Requires the Controller, on June 30, 2018, and on June
30 each year thereafter, to transfer any moneys in the PTP
fund in excess of $15 million not otherwise needed to pay
claims approved by the Controller for the postponement of
property taxes, as specified, to the General Fund (GF);
b) Allows, if the Controller determines that there are
insufficient moneys in the fund to pay all approved claims
for the postponement of property taxes, the Director of the
Department of Finance (DOF), upon receiving the
notification from the Controller, to authorize expenditures
from the GF in an amount necessary to pay those claims not
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sooner than 30 days after providing written notification of
the necessity of authorizing those expenditures to the
chairpersons of the fiscal committees of each house of the
Legislature and the chairperson of the Joint Legislative
Budget Committee;
c) Requires the recorder to provide the county assessor
with a copy of the notice of lien which has been executed;
d) Specifies the order with which a payment received shall
be applied, as follows;
i) To any interest due on the loan;
ii) To the principal property tax amount; and,
iii) The remaining balance, if any, to administrative
fees.
e) Requires, upon receipt of the electronic fund transfer
by the Controller, the tax collector to enter the fact that
taxes on the property have been postponed in the
appropriate columns on the roll. Provides, in the case of
the secured roll, that this information may be entered in
that portion of the roll which has been designated for tax
default information, as specified; and,
f) Makes several other minor, technical changes.
EXISTING LAW:
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1)Creates the PTP Program in the State Treasury, which is
continuously appropriated to the Controller for purposes of
administering the PTP Program, including, but not limited to,
necessary administrative costs and disbursements relating to
the postponement of property taxes pursuant to the PTP Law.
2)Requires the Controller, pursuant to the PTP Program, to do
both of the following:
a) On June 30, 2017, transfer any moneys in the fund in
excess of $20 million to the GF; and,
b) On June 30, 2018, and on June 30 each year thereafter,
transfer any moneys in the fund in excess of $15 million to
the GF.
3)Requires, on or after January 1, 2015, any loan repayments
relating to the PTP Program to be deposited into the PTP Fund.
4)Requires all sums paid by the Controller to be secured by a
lien in favor of the State of California when funds are
transferred to the county by the Controller upon the real
property for which property taxes have been postponed.
5)Allows the Controller to start accepting new applications for
the PTP Program on July 1, 2016.
FISCAL EFFECT: This bill is keyed fiscal.
COMMENTS:
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1)Bill Summary. This bill makes a number of changes to the PTP
Program. First, the bill specifies that moneys in the PTP
Fund are only transferred to the GF if they are not needed to
pay claims approved by the Controller for the postponement of
property taxes. The bill also gives DOF the authority to
augment the PTP Fund to pay all the claims, and designates how
payments on PTP loans will be applied to existing PTP
accounts. AB 1952 makes a number of other technical and
clarifying changes to the PTP Program, including the removal
of erroneous code section references, and modifying
application dates.
This bill is sponsored by State Controller Betty Yee.
2)Author's Statement. According to the author, "The PTP
program, as reestablished by
AB 2231 (Gordon), Chapter 703, Statutes of 2014, allows
California's seniors over 62 or disabled persons with an
income of less than $35,000 per year to receive a loan from
the state to pay their property taxes. Any repayments to
these loans are deposited into the PTP Fund, but the State
Controller must transfer to the GF any amounts in the PTP Fund
that exceed $20 million as of June 30, 2017, and $15 million
each June 30 thereafter.
"Since the current program limits the amount of money that can
be in the PTP Fund, the PTP program will eventually run out of
money. Estimates from the State Controller's Office project
that this will likely occur in the 2017-18 fiscal year. At
that point, the PTP program will not be able to fund new loans
to qualified California homeowners in need of assistance.
"AB 1952 will help make the existing PTP Program more
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sustainable and accessible for eligible applicants. By
permitting DOF to augment the budget or authorize additional
funding for the PTP program, this bill will ensure that the
PTP program is able to fulfill the purpose for which it was
developed, and assist as many qualified Californians as
possible."
3)Background. California has several property tax programs
benefiting elderly and disabled individuals, including
property tax reappraisal relief, property tax assistance, and
the PTP program. Unlike the property tax assistance program
that refunds a percentage of property taxes paid, the PTP
program allows eligible homeowners to defer payment of all or
a portion of the property taxes on their residences. The
program was enacted in 1977, after the passage of a
constitutional amendment authorizing the postponement of
property taxes (California Constitution Article XIII, Section
8) and is administered by the 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 rising property tax bills.
Originally designed for persons over 62 years of age, the
program is now also available to eligible blind and disabled
persons, regardless of age.
Suspension of the PTP Program. On February 20, 2009, the PTP
Program was indefinitely suspended as part of the budget
reductions to the state's GF programs [SB 8 X3 (Ducheny),
Chapter 4, Statutes of 2009-10 Third Extraordinary Session].
The funding for the program was eliminated and the Controller
was prohibited from accepting any new applications after
February 20, 2009. In response to the negative impacts of the
suspension of the PTP Program, AB 1718 (Blumenfield) of 2010
was introduced. AB 1718 would have established the County
Deferred Property Tax Program for Senior Citizens and Disabled
Citizen, but was vetoed by Governor Schwarzenegger.
Subsequently, the Legislature enacted AB 1090 (Blumenfield),
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Chapter 369, Statutes of 2011, creating the County Deferred
Property Tax Program. AB 1090 was substantially similar to AB
1718, except that it did not allow the county treasurer-tax
collector to secure the deferral with a superior priority
status lien.
In contrast to the PTP program that was funded exclusively by
GF moneys, the County Deferred PTP program was self-financing.
It was funded by a participating county through a fund to be
established within its treasury. Upon adoption of a
resolution by the county's governing body, and with the
consent of the county treasurer, excess county funds are
deposited in the fund for the purpose of providing property
tax postponement loans to qualified claimants. AB 1090
established uniform statewide eligibility criteria for the
claimants and certain rules and guidelines for a County
Deferred Property Tax program. Since the passage of AB 1090,
the Legislature was only aware of one county (Santa Cruz
County) that implemented the optional program.
AB 2231 (Gordon), Chapter 703, Statutes of 2014, reinstated a
modified PTP Program to provide property tax deferment to
seniors and disabled persons and allows income-eligible senior
citizens and disabled persons to apply to the Controller to
defer payment of property taxes, beginning on July 1, 2016.
Though the funding for the previous program was eliminated in
2009, the statute remained. This bill was sponsored by the
California Association of County Treasurers and Tax
Collectors.
1)Arguments in Support. Supporters argue that this bill will
ensure the sustainability of the PTP Program while protecting
the General Fund during times of economic uncertainty.
2)Arguments in Opposition. None on file.
3)Double-Referral. This bill is double-referred to the Revenue
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and Taxation Committee.
REGISTERED SUPPORT / OPPOSITION:
Support
State Controller Betty Yee [SPONSOR]
California Association of Treasurers and Tax Collectors
California Special Districts Association
California State Association of Counties
Rural County Representatives of California
Santa Clara County Board of Supervisors
Opposition
None on file
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Analysis Prepared by:Debbie Michel / L. GOV. / (916) 319-3958