BILL ANALYSIS                                                                                                                                                                                                    






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          |SENATE RULES COMMITTEE            |                        SB 801|
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                                   THIRD READING 


          Bill No:  SB 801
          Author:   Committee on Governance and Finance  
          Introduced:3/24/15  
          Vote:     21  

           SENATE GOVERNANCE & FIN. COMMITTEE:  6-0, 4/29/15
           AYES:  Hertzberg, Nguyen, Beall, Hernandez, Lara, Pavley
           NO VOTE RECORDED:  Moorlach

           SUBJECT:   Property tax postponement


          SOURCE:    State Controller Betty Yee


          DIGEST:  This bill makes minor, technical changes to the  
          Property Tax Postponement Program.


          ANALYSIS:   


          Existing law:


          1)Establishes the Senior Citizens and Disabled Citizens Property  
            Tax Postponement Law (PTP), which 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.  


          2)Directs the Controller to secure repayment of the loan by  








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            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.   


          3)Until recently, prohibited persons from filing new claims for  
            property tax postponement, and the Controller from accepting  
            applications (SBX3-8, Ducheny, Chapter 4, Statutes of 2009-10,  
            Third Extraordinary Session).  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, Chapter 703, Statutes of 2014).  


          4)States that under the prior PTP program, 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 Code (G.C.) 16183, which also contains  
            two paragraphs labelled as (1).  


          5)Requires county treasurers under the prior program 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.


          6)Provides, generally, that county tax collectors should refund  
            property tax overpayments directly to taxpayers; however, when  
            the Controller pays on behalf of a taxpayer who successfully  
            appeals the Controller's determination of eligibility, and  
            that taxpayer has already paid, the law doesn't explicitly  
            require the refund.  









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          This bill:


          1)Removes the reference to certificates in G.C. 16183


          2)Corrects duplicate numbering in that same section.


          3)Clarifies 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% rate  
            provided for in AB 2231.


          4)Replaces references from county tax collectors to the  
            Controller in sections for preparing liens.


          5)Deletes the information required as part of the lien.


          6)Changes the verb from "recorded" to "executed" to  
            appropriately reflect the Controller's role in the revised  
            program.


          7)States explicitly that in the event an appeal reverses the  
            initial denial of eligibility, 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.


          Comments


          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 a Committee to sign Committee Bills prior to  







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          introduction, so SB 801 can only contain items with universal  
          agreement; should anyone object to a provision in the measure,  
          it will be removed.


          FISCAL EFFECT:   Appropriation:    No          Fiscal  
          Com.:NoLocal:    No


          SUPPORT:   (Verified5/5/15)


          State Controller Betty Yee (source)


          OPPOSITION:   (Verified5/5/15)


          None received






          Prepared by:Colin Grinnell / GOV. & F. / (916) 651-4119
          5/6/15 16:16:33


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