BILL ANALYSIS Ó
SENATE COMMITTEE ON GOVERNANCE AND FINANCE
Senator Robert M. Hertzberg, Chair
2015 - 2016 Regular
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|Bill No: |SB 801 |Hearing |4/29/15 |
| | |Date: | |
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|Author: |Committee on Governance and |Tax Levy: |No |
| |Finance | | |
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|Version: |3/24/15 |Fiscal: |No |
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|Consultant|Grinnell |
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PROPERTY TAX POSTPONEMENT
Makes minor, technical changes to the Property Tax Postponement
Program.
Background, Existing Law, and Proposed Law
The Senior Citizens and Disabled Citizens Property Tax
Postponement Law (PTP), allows the State Controller to pay
property taxes to county tax collectors, on behalf of
individuals over the age of 62 or disabled persons making less
than $39,000 in income per year. 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 out of sales proceeds, revenue flows back to
the Controller, who in turn uses these funds to pay property
taxes for new applicants.
Loans do not become due and payable if the claimant or the
claimant's spouse continues to occupy the home. However, the
Controller's lien is only paid off when proceeds remain after
previously filed liens have been satisfied; liens filed by
county tax collectors have "super priority" status, and
therefore must be satisfied before all others regardless of when
they're filed.
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In 2009, due to budgetary constraints, and fewer funds flowing
back to the Controller as a result of diminishing sales prices,
the Legislature prohibited persons from filing new claims for
property tax postponement, and the Controller from accepting
applications (SBx3 8, Ducheny, 2009). However, the Legislature
resuscitated the program last year by removing SBx3 8's
prohibition, albeit with tightened eligibility criteria, and a
requirement for the Controller to transfer to the General Fund
repayments received above a $20 million total (AB 2231, Gordon,
2014). The Controller wants to clean up some parts of existing
law that need to be changed after AB 2231's enactment.
I. Certificates of Eligibility. The PTP program formerly used
a process where the Controller provided "certificates of
eligibility" to applicants to pay their property taxes. The
Controller submitted these "checks" to the county. The renewed
program uses electronic funds transfers instead, and while AB
2231 removed almost all references to certificates of
eligibility, it didn't make the change in Government §16183,
which also contains two paragraphs labelled as (1). Senate Bill
801 removes the reference to certificates, and strikes the first
paragraph (1) label. Additionally, the bill clarifies in the
same section that interest rates for past loans are calculated
at the Pooled Money Investment Account rate as was the case
under the former program, while future loans pay the 7% percent
rate provided for in AB 2231.
II. Contents of Lien. The former PTP program required county
treasurers to add the property description to the lien for
properties owned by individuals enrolled in the program, and
then forward the lien to the county recorder for filing.
However, for the new program, AB 2231 instead directs the
Controller to prepare the lien and file it with the recorder.
SB 801 replaces references in the relevant section from county
tax collectors to the Controller, deletes the information
required as part of the lien because the Controller isn't likely
to be able to describe properties across the state, and changes
the appropriate verbs from "recorded" to "executed," because the
Controller doesn't actually record the document.
III. Replicated Payments. If the Controller denies a taxpayer
for the program, but the taxpayer successfully appeals, the
taxpayer may already have paid the county the taxes while the
appeal is pending. In this case, the Controller sends a payment
SB 801 (Committee on Governance and Finance) 3/24/15 Page 3
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to the county, but if the individual has already paid the taxes,
there may be an overpayment. The county should refund the
overpayment payment directly to the taxpayer, but the law
doesn't explicitly require it. SB 801 explicitly states that in
the event an appeal reverses the initial denial, and the
Controller sends a payment for taxes due in the same fiscal year
for which the taxpayer has paid the taxes, the county must
refund that amount.
State Revenue Impact
No estimate.
Comments
1. Purpose of the bill . When AB 2231 resurrected the PTP
program, it didn't change all the statutes necessary for the
Controller to ensure that the law would be administered
effectively. SB 801 consolidates several minor, technical
changes to PTP program statutes to assist the Controller
implement the program as she prepares to again begin accepting
applications in September. Senate Rule 23 requires all members
of the Committee to sign Committee Bills prior to introduction,
so SB 801 can only contain items with universal agreement;
should anyone object to a provision in the measure, it will be
removed.
2. Related Legislation . On April 22nd, the Committee approved
SB 477 (Leyva), which expands the renewed PTP program to mobile
homes. The Senate Committee on Appropriations will hear the
measure soon.
Support and
Opposition 4/23/15
Support : State Controller Betty Yee.
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Opposition :
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