BILL NUMBER: SB 909 INTRODUCED
BILL TEXT
INTRODUCED BY Senator Beall
JANUARY 26, 2016
An act to amend Sections 16190 and 16191 of the Government Code,
and to amend Sections 20505, 20583, 20627, 20639.11, 20640.2,
20640.3, 20640.5, and 20640.11 of the Revenue and Taxation Code,
relating to taxation.
LEGISLATIVE COUNSEL'S DIGEST
SB 909, as introduced, Beall. Property tax postponement: special
needs trust claimants.
Existing law authorizes the Controller, upon approval of a claim
for the postponement of ad valorem property taxes, to directly pay a
county tax collector for the property taxes owed by the claimant, as
provided. Existing law requires all sums paid for the postponement of
property taxes pursuant to these provisions to be secured by a lien
in favor of the state. Amounts owed by a claimant are due if the
claimant, or his or her surviving spouse, ceases to occupy the
premises as his or her residential dwelling, dies, disposes of the
property, or allows specified taxes and special assessments to become
delinquent, as provided. Existing law requires that a claimant,
generally, be an individual who is a member of the household, is
either an owner-occupant, tenant stockholder occupant, or possessory
interestholder occupant of the residential dwelling as to which
postponement is claimed, and is either 62 years of age or older,
blind, or disabled. Existing law requires a claimant to file a claim
containing specified information under penalty of perjury.
This bill would provide that a claimant for property tax
postponement also includes a special needs trust claimant, defined as
a special needs trust of which the primary beneficiary is an
individual who meets the above-described criteria. The bill would
also make various technical and conforming changes.
By requiring a special needs trust claimant for property tax
postponement to file certain information under penalty of perjury,
thereby expanding the expanding the crime of perjury, this bill would
impose a state-mandated local program.
The California Constitution requires the state to reimburse local
agencies and school districts for certain costs mandated by the
state. Statutory provisions establish procedures for making that
reimbursement.
This bill would provide that no reimbursement is required by this
act for a specified reason.
Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: yes.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 16190 of the Government Code, as amended by
Section 4 of Chapter 391 of the Statutes of 2015, is amended to read:
16190. All amounts owing pursuant to Article 1 (commencing with
Section 16180) of this chapter shall become due if any of the
following occurs:
(a) The claimant, who is either the sole owner or sole possessory
interestholder of the residential dwelling, as defined in Section
20583 or Section 20640 of the Revenue and Taxation Code, or a coowner
or copossessory interestholder with a person other than a spouse or
other individual eligible to postpone property taxes pursuant to
Chapter 2 (commencing with Section 20581), Chapter 3 (commencing with
Section 20625), Chapter 3.3 (commencing with Section 20639), or
Chapter 3.5 (commencing with Section 20640) of Part 10.5 of Division
2 of that code, or, in the case of a special needs
trust claimant, the beneficiary, ceases to occupy the premises
as his or her residential dwelling, dies, or sells,
conveys, or disposes of the property, or allows any tax or special
assessment on the premises described in Section 20583 of such code to
become delinquent. If the sole owner or possessory interestholder
claimant dies and his or her surviving spouse inherits the premises
and continues to own and occupy it as his or her principal place of
residence, then the lien amount does not become due and payable
unless taxes or special assessments described in the preceding
sentence become delinquent, or such surviving spouse dies, or sells,
conveys, or disposes of the interest in the property.
(b) The claimant, who is a coowner or copossessory interestholder
of the residential dwelling, as defined in Section 20583 or Section
20640.2 of the Revenue and Taxation Code, with a spouse or another
individual eligible to postpone property taxes pursuant to Chapter 2
(commencing with Section 20581), Chapter 3 (commencing with Section
20625), Chapter 3.3 (commencing with Section 20639), or Chapter 3.5
(commencing with Section 20640) of Part 10.5 of Division 2 of that
code, or, in the case of a special needs trust claimant, the
beneficiary, dies, and the surviving spouse or other surviving
eligible individual allows any tax or special assessment on the
premises described in Section 20583 of such code to become delinquent
or such surviving spouse or other individual ceases to occupy the
premises as a residential dwelling, dies, or conveys, or disposes of
the interest in the property.
(c) The failure of the claimant fails
to perform those acts the claimant is required to perform where
such his or her performance is
secured, or will be secured in the event of nonperformance, by a lien
which is senior to that of the lien provided by Section 16182.
(d) Postponement was erroneously allowed because eligibility
requirements were not met.
(e) The claimant is refinancing the residential dwelling.
(f) The claimant has elected to participate in a reverse mortgage
program for the residential dwelling.
SEC. 2. Section 16191 of the Government Code, as amended by
Section 5 of Chapter 391 of the Statutes of 2015, is amended to read:
16191. The amounts paid pursuant to Section 16180 shall continue
to draw interest but amounts owing pursuant to Article 1 (commencing
with Section 16180) of this chapter shall not become due and payable
if any of the following occurs:
(a) The claimant claimant, or, in the case
of a special needs trust claimant, the beneficiary, continues
to own and occupy or hold the possessory interest and occupy the
premises as a residential dwelling, but ceases to postpone property
taxes pursuant to Chapter 2 (commencing with Section 20581), Chapter
3 (commencing with Section 20625), Chapter 3.3 (commencing with
Section 20639), or Chapter 3.5 (commencing with Section 20640) of
Part 10.5 of Division 2 of the Revenue and Taxation Code, and does
not allow any tax or assessment against the premises, as described in
Section 20583 of such code, to become delinquent.
(b) The surviving spouse of a claimant
claimant, or, in the case of a special needs trust claimant, the
beneficiary, continues to own and occupy or hold the possessory
interest and occupy the premises as a residential dwelling, but is
ineligible to postpone property taxes pursuant to Chapter 2
(commencing with Section 20581), Chapter 3 (commencing with Section
20625), Chapter 3.3 (commencing with Section 20639), or Chapter 3.5
(commencing with Section 20640) of Part 10.5 of Division 2 of the
Revenue and Taxation Code, or elects not to postpone such taxes, and
does not allow any tax or assessment against the premises, as
described in Section 20583 of such code, to become delinquent.
(c) The surviving individual otherwise eligible to postpone
property taxes pursuant to Chapter 2 (commencing with Section 20581),
Chapter 3 (commencing with Section 20625), Chapter 3.3 (commencing
with Section 20639), or Chapter 3.5 (commencing with Section 20640)
of Part 10.5 of Division 2 of the Revenue and Taxation Code continues
to own and occupy or hold the possessory interest and occupy the
premises as a residential dwelling, but elects not to postpone the
property taxes pursuant to such chapter, and does not allow any tax
or assessment against the premises, as described in Section 20583 of
such code, to become delinquent.
SEC. 3. Section 20505 of the Revenue and Taxation Code, as amended
by Section 8 of Chapter 391 of the Statutes of 2015, is amended to
read:
20505. "Claimant" means an individual who--
(a) For purposes of this chapter was either (1) 62 years of age or
older on the last day of the calendar year or approved fiscal year
designated in subdivision (b) or (c) of Section 20503, whichever is
applicable, or (2) blind or disabled, as defined in Section 12050 of
the Welfare and Institutions Code on the last day of the calendar
year or approved fiscal year designated in subdivision (b) of Section
20503, who was a member of the household, and who was either: (1)
the owner and occupier of a residential dwelling on the last day of
the year designated in subdivision (b) or (c) of Section 20503, or
(2) the renter of a rented residence on or before the last day of the
year designated in subdivision (b) of Section 20503. An individual
who qualifies as an owner-claimant may not qualify as a
renter-claimant for the same year.
(b) (1) For purposes of Chapter 2 (commencing with
Section 20581), Chapter 3 (commencing with Section 20625), Chapter
3.3 (commencing with Section 20639), and Chapter 3.5 (commencing with
Section 20640) 20640), was a member of
the household and either an owner-occupant, or a tenant stockholder
occupant, or a possessory interestholder occupant, or a mobilehome
owner-occupant, as the case may be, of the residential dwelling as to
which postponement is claimed on the last day of the year designated
in subdivision (b) or (c) of Section 20503, and who was (1) 62 years
of age or older by December 31 of the fiscal year for which
postponement is claimed, or (2) blind or disabled, as defined in
Section 12050 of the Welfare and Institutions Code, at the time of
application or on December 10 of the fiscal year for which
postponement is claimed, whichever is earlier.
(2) For purposes of this subdivision, "claimant" shall include a
special needs trust claimant. "Special needs trust claimant" means a
special needs trust of which the primary beneficiary is an individual
who would qualify as a "claimant" pursuant to paragraph (1).
SEC. 4. Section 20583 of the Revenue and Taxation Code is amended
to read:
20583. (a) "Residential dwelling" means a dwelling occupied as
the principal place of residence of the claimant, or, in the
case of a special needs trust claimant, the beneficiary, and so
much of the land surrounding it as is reasonably necessary for use
of the dwelling as a home, owned by the claimant, the
beneficiary of a special needs trust claimant, the claimant and
spouse, or by the claimant and either another individual eligible
for postponement under this chapter or an individual described in
subdivision (a), (b), or (c) of Section 20511 and located in this
state. It shall include condominiums that are assessed as realty for
local property tax purposes. It also includes part of a multidwelling
or multipurpose building and a part of the land upon which it is
built.
(b) As used in this chapter in reference to ownership interests in
residential dwellings, "owned" includes (1) the interest of a vendee
in possession under a land sale contract provided that the contract
or memorandum thereof is recorded and only from the date of
recordation of the contract or memorandum thereof in the office of
the county recorder where the residential dwelling is located, (2)
the interest of the holder of a life estate provided that the
instrument creating the life estate is recorded and only from the
date of recordation of the instrument creating the life estate in the
office of the county recorder where the residential dwelling is
located, but "owned" does not include the interest of the holder of
any remainder interest or the holder of a reversionary interest in
the residential dwelling, (3) the interest of a joint tenant or a
tenant in common in the residential dwelling or the interest of a
tenant where title is held in tenancy by the entirety or a community
property interest where title is held as community property, and (4)
the interest in the residential dwelling in which the title is held
in trust, as described in subdivision (d) of Section 62, provided
that the Controller determines that the state's interest is
adequately protected.
(c) Except as provided in subdivision (c), and Chapter 3
(commencing with Section 20625), ownership must be evidenced by an
instrument duly recorded in the office of the county where the
residential dwelling is located.
(d) "Residential dwelling" does not include any of the following:
(1) Any residential dwelling in which the owners do not have an
equity of at least 40 percent of the full value of the property as
determined for purposes of property taxation or at least 40 percent
of the fair market value as determined by the Controller and where
the Controller determines that the state's interest is adequately
protected. The 40-percent equity requirement shall be met each time
the claimant or authorized agent files a postponement claim.
(2) Any residential dwelling in which the claimant's interest is
held pursuant to a contract of sale or under a life estate, unless
the claimant obtains the written consent of the vendor under the
contract of sale, or the holder of the reversionary interest upon
termination of the life estate, for the postponement of taxes and the
creation of a lien on the real property in favor of the state for
amounts postponed pursuant to this act.
(3) Any residential dwelling on which the claimant does not
receive a secured tax bill.
(4) Any residential dwelling in which the claimant's interest is
held as a possessory interest, except as provided in Chapter 3.5
(commencing with Section 20640).
SEC. 5. Section 20627 of the Revenue and Taxation Code, as amended
by Section 15 of Chapter 391 of the Statutes of 2015, is amended to
read:
20627. (a) A tenant-stockholder claimant
(hereinafter referred to as "claimant") is an individual who, on the
last day of the calendar year ending immediately prior to the
commencement of the fiscal year for which postponement is claimed is:
(a) a tenant-stockholder in a cooperative housing corporation (as
defined in Section 216(b) of the Internal Revenue Code) and (b)
occupies as a principal place of residence a residential unit in the
cooperative housing corporation (notwithstanding Section 216(b) of
the Internal Revenue Code). For the purposes of this chapter, a
claimant must be (1) 62 years of age or older on or before December
31 of the fiscal year for which postponement is claimed or (2) blind
or disabled, as defined in Section 12050 of the Welfare and
Institutions Code, at the time of application or on December 10 of
the fiscal year for which the postponement is claimed, whichever is
earlier.
(b) For purposes of this chapter, "tenant-stockholder claimant"
and "claimant" shall include a special needs trust claimant. "Special
needs trust claimant" means a special needs trust of which the
primary beneficiary is an individual who would qualify as a
"tenant-stockholder claimant" or "claimant" pursuant to subdivision
(a).
SEC. 6. Section 20639.11 of the Revenue and Taxation Code is
amended to read:
20639.11. All amounts postponed pursuant to this chapter shall be
due if any of the following occurs:
(a) The claimant claimant, or, in the case
of a special needs trust claimant, the beneficiary, ceases to
occupy the residential dwelling as the principal place of residence,
sells, or otherwise disposes of his or her mobilehome.
(b) The claimant claimant, or,
in the case of a special needs trust claimant, the
beneficiary, dies. However, if the surviving spouse was
previously approved pursuant to this chapter continues to occupy the
mobilehome, then the postponed amounts shall not be due unless that
person dies or ceases to occupy the residential dwelling.
(c) The failure of a claimant fails
to perform those acts required by the legal owner or junior
lienholder.
(d) The claimant allows any subsequent taxes to remain unpaid or
to be transferred to the unsecured roll.
(e) Postponement was erroneously allowed because eligibility
requirements were not met.
SEC. 7. Section 20640.2 of the Revenue and Taxation Code, as
amended by Section 28 of Chapter 391 of the Statutes of 2015, is
amended to read:
20640.2. For the purposes of this chapter:
chapter, the following definitions shall apply:
(a) "Possessory interest" means (1) possession of, or right to the
possession of land located in this state whether or not coupled with
ownership of the residential dwelling on the same, or (2) a
possessory interest or right of occupancy on tax exempt
land; land.
(b) "Residential dwelling" means a dwelling occupied as the
principal place of residence of the claimant, or, in the case of
a special needs trust claimant, the beneficiary, and so much
of the land surrounding it as is reasonably necessary for use of the
dwelling as a home, located on possessory interest property. It shall
include condominiums upon which property taxes, as defined in
subdivision (c), are assessed. It also includes part of a
multidwelling or multipurpose building and a part of the land upon
which it is built.
(c) "Property taxes" means the amount of property tax for which
the claimant is personally liable as assessee or is obligated to pay
directly to the tax collector pursuant to the terms of the agreement
establishing the possessory interest, including all ad valorem
property taxes, special assessments, capitalization of leasehold
interest, and other charges or user fees which are attributable to
the residential dwelling on the county tax bill and the ad valorem
property taxes, special assessments, capitalization of leasehold
interest, or other charges or user fees appearing on the tax bill of
any chartered city which levies and collects its own property taxes.
SEC. 8. Section 20640.3 of the Revenue and Taxation Code, as
amended by Section 29 of Chapter 391 of the Statutes of 2015, is
amended to read:
20640.3. (a) A claimant is an individual
who:
(a)
(1) Holds a right to a possessory interest pursuant to
a validly recorded instrument conveying such possessory interest for
a term of years no less than 45 years beyond the last day of the
calendar year ending immediately prior to the fiscal year for which
taxes are initially postponed;
(b)
(2) Occupies as a principal place of residence the
residential dwelling affixed to such possessory interest real
property on the last day of the year designated in subdivision
(c) of Section 20503(c) 20503 of
this code;
(c)
(3) (1) Is
(1) 62 years of age or older on or before December 31 of the
fiscal year for which postponement is claimed or (2) blind or
disabled, as defined in Section 12050 of the Welfare and Institutions
Code, at the time of application or on December 10 of the fiscal
year for which the postponement is claimed, whichever is earlier.
(b) For purposes of this chapter, "claimant" shall include a
special needs trust claimant. "Special needs trust claimant" means a
special needs trust of which the beneficiary is an individual who
would qualify as a "claimant" pursuant to subdivision (a).
SEC. 9. Section 20640.5 of the Revenue and Taxation Code is
amended to read:
20640.5. (a) The Controller may require as security for the
postponement of property taxes pursuant to this chapter any of the
following:
1.
(1) An assignment to the State of California of the
remaining term of the claimant's or, in the case of a special
needs trust claimant, the beneficiary's, possessory interest.
2.
(2) A security interest in any improvement owned or
leased by the claimant or, in the case of a special
needs trust claimant, the beneficiary, located on the land
which is subject to the possessory interest.
3.
(3) Any other additional security interest, created and
perfected with respect to the rights of third persons in the manner
provided by law for such type of security interest, which the
Controller deems necessary to protect the interest of the state with
regard to the repayment of postponed amounts by the claimant or a
deceased claimant's estate.
(b) On the form supplied by the Controller, the claimant shall
obtain the written consent of any coholder of the possessory interest
and of the grantor of the possessory interest to the assignment by
claimant of the remaining term of claimant's or, in the case of
a special needs trust claimant, the beneficiary's possessory
interest. The consent shall be in such the
form and contain such those
provisions as prescribed by the Controller shall
prescribe, Controller, and shall provide for
written notice by the grantor of the possessory interest to the
Controller of the occurrence of a default by the claimant under the
terms of the instrument creating the possessory interest, a coholder
or a prior recorded possessory interest holder which would result in
the termination or diminution of claimant's or the beneficiary'
s, as applicable, interest.
The term "grantor of the possessory interest," as used in this
section shall be deemed to include the fee owner of the real property
subject to the possessory interest and the holders of all prior
recorded unterminated possessory interests.
SEC. 10. Section 20640.11 of the Revenue and Taxation Code is
amended to read:
20640.11. All amounts postponed pursuant to this chapter shall be
due if any of the following occurs:
(a) The claimant claimant, or, in the case
of a special needs trust claimant, the beneficiary, ceases to
occupy the residential dwelling as the principal place of residence,
sells or otherwise disposes of his possessory interest, or the
possessory interest agreement expires by its terms.
(b) The claimant claimant, or, in the case
of a special needs trust claimant, the beneficiary, dies.
However, if the surviving spouse or another person eligible to
postpone pursuant to this chapter continues to occupy the residential
dwelling, then the postponed amounts shall not be due unless such
person dies, or ceases to occupy the residential dwelling.
(c) The failure of the claimant, the fee title owner, or any owner
of a prior recorded possessory interest to perform those acts
required by a security interest holder which is senior to the state's
security interest for postponed amounts.
(d) Postponement was erroneously allowed because eligibility
requirements were not met.
SEC. 11. No reimbursement is required by this act pursuant to
Section 6 of Article XIII B of the California Constitution because
the only costs that may be incurred by a local agency or school
district will be incurred because this act creates a new crime or
infraction, eliminates a crime or infraction, or changes the penalty
for a crime or infraction, within the meaning of Section 17556 of the
Government Code, or changes the definition of a crime within the
meaning of Section 6 of Article XIII B of the California
Constitution.