BILL ANALYSIS Ó ----------------------------------------------------------------- |SENATE RULES COMMITTEE | SB 801| |Office of Senate Floor Analyses | | |(916) 651-1520 Fax: (916) | | |327-4478 | | ----------------------------------------------------------------- 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 SB 801 Page 2 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. SB 801 Page 3 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 SB 801 Page 4 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 **** END ****