BILL ANALYSIS Ó ----------------------------------------------------------------- |SENATE RULES COMMITTEE | SB 801| |Office of Senate Floor Analyses | | |(916) 651-1520 Fax: (916) | | |327-4478 | | ----------------------------------------------------------------- UNFINISHED BUSINESS Bill No: SB 801 Author: Committee on Governance and Finance Amended: 8/18/15 Vote: 21 SENATE GOVERNANCE & FIN. COMMITTEE: 6-0, 4/29/15 AYES: Hertzberg, Nguyen, Beall, Hernandez, Lara, Pavley NO VOTE RECORDED: Moorlach SENATE FLOOR: 36-0, 5/18/15 AYES: Allen, Anderson, Bates, Beall, Block, Cannella, De León, Fuller, Gaines, Galgiani, Hancock, Hernandez, Hertzberg, Hill, Hueso, Huff, Jackson, Lara, Leno, Leyva, Liu, McGuire, Mendoza, Mitchell, Monning, Moorlach, Morrell, Nguyen, Nielsen, Pan, Roth, Runner, Stone, Vidak, Wieckowski, Wolk NO VOTE RECORDED: Berryhill, Hall, Pavley ASSEMBLY FLOOR: 80-0, 9/1/15 - See last page for vote SUBJECT: Property tax postponement SOURCE: State Controller Betty Yee DIGEST: This bill makes minor, technical changes to the Property Tax Postponement (PTP) Program. Assembly Amendments change the definition of "claimant" in the four PTP laws to ensure consistency, change the application period, set consistent fee amounts for claimants to request PTP accounting statements, delete references in PTP law to mobilehomes, and make further technical changes. ANALYSIS: SB 801 Page 2 Existing law: 1) Establishes the Senior Citizens and Disabled Citizens PTP Law, 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) Allows postponement for homes, mobilehomes, tenant stockholder/cooperatives and possessory interests by establishing a separate law for each. 3) Directs the Controller to secure repayment of the loan 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. 4) Provides that until recently, prohibited persons from filing new claims for PTP 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). 5) Sets the application period from September 1st to April 10th. 6) 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. 7) 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. SB 801 Page 3 8) Sets a $30 fee for claimants requesting an accounting of PTP amounts postponed and interest charged, which was updated by AB 2231 from $10, but not in the tenant-cooperative law. 9) Contains references throughout PTP law to mobile homes. 10)Allows the Controller to pay delinquent taxes under the Possessory Interest Holder law, but not under the other three laws. 11)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. This bill: 1) Removes the reference to certificates in several sections. 2) 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. 3) Replaces references from county tax collectors to the Controller in sections for preparing liens. 4) Deletes the information required as part of the lien. 5) Revises the application period currently set as September 1st to April 10th to October 1st to February 10th, to ensure successful claimants can be notified before the first property tax installment is due. 6) Changes the verb from "recorded" to "executed" to appropriately reflect the Controller's role in the revised program. 7) Increases the fee to $30 fee for claimants requesting an accounting of PTP amounts postponed and interest charged in SB 801 Page 4 the tenant-cooperative law, making this fee amount consistent with all other PTP laws. 8) Removes references to mobilehomes throughout PTP laws. 9) Deletes authority for the Controller to pay delinquent taxes under the Possessory Interest Holder law. 10)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. 11)Corrects erroneous cross-references and section numbering, and removes other obsolete provisions. 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 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. Related Legislation SB 477 (Leyva, 2015) adds mobilehomes back into the PTP program by amending the general PTP law. The Assembly Appropriations Committee held the bill on its suspense file. FISCAL EFFECT: Appropriation: No Fiscal Com.:NoLocal: No SUPPORT: (Verified9/1/15) SB 801 Page 5 State Controller Betty Yee (source) OPPOSITION: (Verified9/1/15) None received ASSEMBLY FLOOR: 80-0, 9/01/15 AYES: Achadjian, Alejo, Travis Allen, Baker, Bigelow, Bloom, Bonilla, Bonta, Brough, Brown, Burke, Calderon, Campos, Chang, Chau, Chávez, Chiu, Chu, Cooley, Cooper, Dababneh, Dahle, Daly, Dodd, Eggman, Frazier, Beth Gaines, Gallagher, Cristina Garcia, Eduardo Garcia, Gatto, Gipson, Gomez, Gonzalez, Gordon, Gray, Grove, Hadley, Harper, Roger Hernández, Holden, Irwin, Jones, Jones-Sawyer, Kim, Lackey, Levine, Linder, Lopez, Low, Maienschein, Mathis, Mayes, McCarty, Medina, Melendez, Mullin, Nazarian, Obernolte, O'Donnell, Olsen, Patterson, Perea, Quirk, Rendon, Ridley-Thomas, Rodriguez, Salas, Santiago, Steinorth, Mark Stone, Thurmond, Ting, Wagner, Waldron, Weber, Wilk, Williams, Wood, Atkins Prepared by:Colin Grinnell / GOV. & F. / (916) 651-4119 9/1/15 21:12:30 **** END ****