BILL ANALYSIS Ó
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|SENATE RULES COMMITTEE | AB 2691|
|Office of Senate Floor Analyses | |
|(916) 651-1520 Fax: (916) | |
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THIRD READING
Bill No: AB 2691
Author: Holden (D)
Amended: 8/1/16 in Senate
Vote: 21
SENATE GOVERNANCE & FIN. COMMITTEE: 6-1, 6/8/16
AYES: Hertzberg, Nguyen, Beall, Hernandez, Lara, Pavley
NOES: Moorlach
ASSEMBLY FLOOR: 75-0, 5/2/16 - See last page for vote
SUBJECT: Property taxation: Monthly Property Tax Payment
Program
SOURCE: Author
DIGEST: This bill allows counties boards of supervisors to
implement monthly property tax payment programs.
Senate Floor Amendments of 8/1/16 add a provision that states
that the bill does not apply to escrow accounts, as defined.
Senate Floor Amendments of 6/21/16 add references to school
entities for purposes of the auditor's allocation of property
tax revenue.
ANALYSIS:
AB 2691
Page 2
Existing law:
1)Sets January 1 of each year as the "lien date," or the date
upon which the assessor values property, and property taxes
are imposed on its owner in the form of a lien against the
property.
2)Requires tax collectors to send bills to taxpayers on the
secured roll by November 1.
3)Requires taxpayers must pay their bills in two installments:
the first on November 1, which becomes delinquent December 10,
and the second on February 1, with delinquency occurring on
April 10, but allows taxpayers to pay in full in the first
installment.
4)Imposes a 10% penalty on each amount, and allows counties to
also apply administrative charges.
5)Provides that a property becomes tax defaulted if taxes remain
unpaid as of June 30th, triggering redemption penalties of
1.5% a month until the full amount is paid.
6)Allows the tax collector with approval by the board of
supervisors to sell a tax defaulted residential property to
satisfy back taxes, penalties, costs, and other liens; for
commercial property, the tax collector can do so after three
years.
7)Requires counties to allow taxpayers to pay in installments by
making an initial payment of 20% of the amount outstanding,
but only after a property becomes tax defaulted. Under an
installment plan, taxpayers must make one payment a year for
five years, in addition to paying current taxes. Failure to
make timely payments on an installment plan again places the
property in default; however, taxpayers can enter into another
installment plan at the beginning of the next fiscal year.
AB 2691
Page 3
8)Allows tax collectors to also accept partial payments from
delinquent taxpayers if authorized to do so by the board of
supervisors.
This bill:
1)Authorizes a county board of supervisors to adopt a resolution
or ordinance to implement a Monthly Property Tax Payment
Program, where qualified taxpayers can instead pay taxes on a
monthly basis.
2)Allows the ordinance or resolution authorizing the program to
set forth specific procedures for the tax collector to deem as
timely filed monthly installments paid late but within a
specified grace period due to reasonable cause for purposes of
determining delinquency and default.
3)Directs the auditor to apportion property tax payments to
cities, counties, special districts and school entities on a
proportional basis based on existing law.
4)Defines as "qualified taxpayers" those individuals who are 62
years of age or older, or who receive supplemental security
income.
5)Defines "school entities" by reference to the Revenue and
Taxation Code.
6)States that the bill not apply to escrow accounts, as defined
in Section 1024.17 of Title 12 of the Code of Federal
Regulations.
Background
AB 2691
Page 4
County tax collectors administer the property tax collection,
billing, and tax sale process. County tax collectors currently
send only two bills per year, one for each installment, so
administering a monthly payment system would increase printing,
mailing, and banking costs. Information technology may also
need to be reprogrammed, because most of the state's tax
collectors use the same collections software built around the
two-installment system, which does not currently allow for
monthly payments. Because AB 2691 allows, but does not require,
counties to allow monthly payments, this bill does not obligate
the state to pay these costs; instead, tax collectors would have
to ask their boards of supervisors for funding to implement the
program.
AB 2691 allows counties to enact ordinances or resolutions
implementing a program for eligible taxpayers to pay property
taxes in monthly installments. However, shifting the payment
schedule from twice per year to monthly doesn't affect the
amount due, or positively impact the taxpayer's ability to pay.
For low-income home-owning taxpayers, the State Controller
administers the Property Tax Postponement Program, which allows
the state to loan funds to individuals over the age of 62 or
disabled persons with less than $39,000 in income per year to
pay their property taxes to the county tax collector. The
Controller secures repayment by recording a lien against the
claimant's property, which is satisfied when the home is sold or
refinanced. As liens are repaid, revenue flows back to the
Controller, who in turn uses these funds to pay property taxes
for new applicants, up to $20 million annually; the Controller
must shift any amounts received above that amount to the General
Fund.
FISCAL EFFECT: Appropriation: No Fiscal
Com.:NoLocal: No
SUPPORT: (Verified8/2/16)
AB 2691
Page 5
California State Retirees
Howard Jarvis Taxpayers Association
OPPOSITION: (Verified8/2/16)
California Association of County Treasurer-Tax Collectors
State Association of County Auditors
ARGUMENTS IN SUPPORT: According to the author, "Assembly
Bill 2691 would authorize a county board of supervisors to
implement a Monthly Property Tax Payment Program. The Program
would allow qualified individuals living on a fixed-income to
pay their property tax in monthly installments. The individual
would have to be 62 years of age or older or be receiving
supplemental security income for a disability, regardless of
age. By providing an option to pay property taxes in lower
monthly installments, AB 2691 makes it easier for individuals on
fixed incomes to pay the principal of the tax steadily, rather
than face the uncertainty of paying a month's worth of Social
Security Income. This bill provides the power to the county
board of supervisors to implement such a program."
ARGUMENTS IN OPPOSITION: According to the California
Association of County Treasurer-Tax Collectors, "The use of the
word installment suggests that the tax collector has the
capacity to send out monthly bills requiring that month's
payment and outstanding balances; tax collectors do not have
this capacity - this would require a significant investment at
the Board of Supervisors to upgrade tax collection systems to
produce those mailings and handle postage. Many counties'
systems are decades old and predicated on the December 10 and
April 10 collection dates. Changes to these systems take
enormous time and resources that the Tax Collector must request
from the County's General Fund, and compete with public safety,
health, and public works projects for local resources. There
are existing options to assist seniors who wish to remain
current on their taxes without creating new local, publicly
funded programs."
AB 2691
Page 6
ASSEMBLY FLOOR: 75-0, 5/2/16
AYES: Achadjian, Alejo, Travis Allen, Arambula, Atkins, Baker,
Bigelow, Bloom, Bonilla, Bonta, Brough, Brown, Burke,
Calderon, Campos, Chang, Chau, Chávez, Chiu, Chu, Cooley,
Cooper, Dababneh, Dahle, Daly, Dodd, Eggman, Frazier,
Gallagher, Cristina Garcia, Eduardo Garcia, Gatto, Gipson,
Gomez, Gonzalez, Gray, Grove, Hadley, Harper, Holden, Irwin,
Jones, Jones-Sawyer, Kim, Lackey, Levine, Linder, Lopez, Low,
Maienschein, Mathis, Mayes, McCarty, Medina, Melendez, Mullin,
Nazarian, Obernolte, O'Donnell, Olsen, Patterson, Quirk,
Rodriguez, Salas, Santiago, Steinorth, Mark Stone, Thurmond,
Ting, Wagner, Waldron, Weber, Wilk, Wood, Rendon
NO VOTE RECORDED: Beth Gaines, Gordon, Roger Hernández,
Ridley-Thomas, Williams
Prepared by:Colin Grinnell / GOV. & F. / (916) 651-4119
8/3/16 19:38:12
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