Amended in Senate March 29, 2016

Senate BillNo. 909


Introduced by Senator Beall

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(Coauthors: Senators Anderson and Hancock)

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January 26, 2016


An act to amendbegin delete Sections 16190 and 16191 of the Government Code, and to amend Sections 20505, 20583, 20627, 20639.11, 20640.2, 20640.3, 20640.5, and 20640.11end deletebegin insert Section 20583end insert of the Revenue and Taxation Code, relating to taxation.

LEGISLATIVE COUNSEL’S DIGEST

SB 909, as amended, 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.begin delete 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.end deletebegin insert Existing law requires that the residential dwelling be owned by the claimant, the claimant and spouse, or the claimant and specified another specified individual.end insert Existing law requires a claimant to file a claim containing specifiedbegin delete informationend deletebegin insert information, including a description of the residential dwelling,end insert under penalty of perjury.

This bill would provide thatbegin delete 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.end deletebegin insert “owned” for these purposes includes the interest of a beneficiary of a special needs trust, in which title is held in trust, as specified.end insert

By requiring a special needs trust claimant for property tax postponement to file certain information under penalty of perjury, thereby expandingbegin delete the expandingend delete 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:

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P2    1

SECTION 1.  

Section 16190 of the Government Code, as
2amended by Section 4 of Chapter 391 of the Statutes of 2015, is
3amended to read:

4

16190.  

All amounts owing pursuant to Article 1 (commencing
5with Section 16180) of this chapter shall become due if any of the
6following occurs:

7(a) The claimant, who is either the sole owner or sole possessory
8interestholder of the residential dwelling, as defined in Section
920583 or Section 20640 of the Revenue and Taxation Code, or a
10coowner or copossessory interestholder with a person other than
11a spouse or other individual eligible to postpone property taxes
12pursuant to Chapter 2 (commencing with Section 20581), Chapter
133 (commencing with Section 20625), Chapter 3.3 (commencing
14with Section 20639), or Chapter 3.5 (commencing with Section
1520640) of Part 10.5 of Division 2 of that code, or, in the case of a
16 special needs trust claimant, the beneficiary, ceases to occupy the
P3    1premises as his or her residential dwelling, dies, or sells, conveys,
2or disposes of the property, or allows any tax or special assessment
3on the premises described in Section 20583 of such code to become
4delinquent. If the sole owner or possessory interestholder claimant
5dies and his or her surviving spouse inherits the premises and
6continues to own and occupy it as his or her principal place of
7residence, then the lien amount does not become due and payable
8unless taxes or special assessments described in the preceding
9sentence become delinquent, or such surviving spouse dies, or
10sells, conveys, or disposes of the interest in the property.

11(b) The claimant, who is a coowner or copossessory
12interestholder of the residential dwelling, as defined in Section
1320583 or Section 20640.2 of the Revenue and Taxation Code, with
14a spouse or another individual eligible to postpone property taxes
15pursuant to Chapter 2 (commencing with Section 20581), Chapter
163 (commencing with Section 20625), Chapter 3.3 (commencing
17with Section 20639), or Chapter 3.5 (commencing with Section
1820640) of Part 10.5 of Division 2 of that code, or, in the case of a
19special needs trust claimant, the beneficiary, dies, and the surviving
20spouse or other surviving eligible individual allows any tax or
21special assessment on the premises described in Section 20583 of
22such code to become delinquent or such surviving spouse or other
23individual ceases to occupy the premises as a residential dwelling,
24dies, or conveys, or disposes of the interest in the property.

25(c) The claimant fails to perform those acts the claimant is
26required to perform where his or her performance is secured, or
27will be secured in the event of nonperformance, by a lien which
28is senior to that of the lien provided by Section 16182.

29(d) Postponement was erroneously allowed because eligibility
30requirements were not met.

31(e) The claimant is refinancing the residential dwelling.

32(f) The claimant has elected to participate in a reverse mortgage
33program for the residential dwelling.

34

SEC. 2.  

Section 16191 of the Government Code, as amended
35by Section 5 of Chapter 391 of the Statutes of 2015, is amended
36to read:

37

16191.  

The amounts paid pursuant to Section 16180 shall
38continue to draw interest but amounts owing pursuant to Article
391 (commencing with Section 16180) of this chapter shall not
40become due and payable if any of the following occurs:

P4    1(a) The claimant, or, in the case of a special needs trust claimant,
2the beneficiary, continues to own and occupy or hold the
3possessory interest and occupy the premises as a residential
4dwelling, but ceases to postpone property taxes pursuant to Chapter
52 (commencing with Section 20581), Chapter 3 (commencing with
6Section 20625), Chapter 3.3 (commencing with Section 20639),
7or Chapter 3.5 (commencing with Section 20640) of Part 10.5 of
8Division 2 of the Revenue and Taxation Code, and does not allow
9any tax or assessment against the premises, as described in Section
1020583 of such code, to become delinquent.

11(b) The surviving spouse of a claimant, or, in the case of a
12special needs trust claimant, the beneficiary, continues to own and
13occupy or hold the possessory interest and occupy the premises
14as a residential dwelling, but is ineligible to postpone property
15taxes pursuant to Chapter 2 (commencing with Section 20581),
16Chapter 3 (commencing with Section 20625), Chapter 3.3
17(commencing with Section 20639), or Chapter 3.5 (commencing
18with Section 20640) of Part 10.5 of Division 2 of the Revenue and
19Taxation Code, or elects not to postpone such taxes, and does not
20allow any tax or assessment against the premises, as described in
21Section 20583 of such code, to become delinquent.

22(c) The surviving individual otherwise eligible to postpone
23property taxes pursuant to Chapter 2 (commencing with Section
2420581), Chapter 3 (commencing with Section 20625), Chapter 3.3
25(commencing with Section 20639), or Chapter 3.5 (commencing
26with Section 20640) of Part 10.5 of Division 2 of the Revenue and
27Taxation Code continues to own and occupy or hold the possessory
28interest and occupy the premises as a residential dwelling, but
29elects not to postpone the property taxes pursuant to such chapter,
30and does not allow any tax or assessment against the premises, as
31described in Section 20583 of such code, to become delinquent.

32

SEC. 3.  

Section 20505 of the Revenue and Taxation Code, as
33amended by Section 8 of Chapter 391 of the Statutes of 2015, is
34amended to read:

35

20505.  

“Claimant” means an individual who--

36(a) For purposes of this chapter was either (1) 62 years of age
37or older on the last day of the calendar year or approved fiscal year
38designated in subdivision (b) or (c) of Section 20503, whichever
39is applicable, or (2) blind or disabled, as defined in Section 12050
40of the Welfare and Institutions Code on the last day of the calendar
P5    1year or approved fiscal year designated in subdivision (b) of
2Section 20503, who was a member of the household, and who was
3either: (1) the owner and occupier of a residential dwelling on the
4last day of the year designated in subdivision (b) or (c) of Section
520503, or (2) the renter of a rented residence on or before the last
6day of the year designated in subdivision (b) of Section 20503. An
7individual who qualifies as an owner-claimant may not qualify as
8a renter-claimant for the same year.

9(b) (1) For purposes of Chapter 2 (commencing with Section
1020581), Chapter 3 (commencing with Section 20625), Chapter 3.3
11(commencing with Section 20639), and Chapter 3.5 (commencing
12with Section 20640), was a member of the household and either
13an owner-occupant, or a tenant stockholder occupant, or a
14possessory interestholder occupant, or a mobilehome
15owner-occupant, as the case may be, of the residential dwelling
16as to which postponement is claimed on the last day of the year
17designated in subdivision (b) or (c) of Section 20503, and who
18was (1) 62 years of age or older by December 31 of the fiscal year
19for which postponement is claimed, or (2) blind or disabled, as
20defined in Section 12050 of the Welfare and Institutions Code, at
21the time of application or on December 10 of the fiscal year for
22which postponement is claimed, whichever is earlier.

23(2) For purposes of this subdivision, “claimant” shall include a
24special needs trust claimant. “Special needs trust claimant” means
25a special needs trust of which the primary beneficiary is an
26individual who would qualify as a “claimant” pursuant to paragraph
27(1).

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28

begin deleteSEC. 4.end delete
29
begin insertSECTION 1.end insert  

Section 20583 of the Revenue and Taxation Code
30 is amended to read:

31

20583.  

(a) “Residential dwelling” means a dwelling occupied
32as the principal place of residence of thebegin delete claimant, or, in the case
33of a special needs trust claimant, the beneficiary,end delete
begin insert claimantend insert and so
34much of the land surrounding it as is reasonably necessary for use
35of the dwelling as a home, owned by the claimant,begin delete the beneficiary
36of a special needs trust claimant,end delete
the claimant and spouse, or by
37the claimant and either another individual eligible for postponement
38under this chapter or an individual described in subdivision (a),
39(b), or (c) of Section 20511 and located in this state. It shall include
40condominiums that are assessed as realty for local property tax
P6    1purposes. It also includes part of a multidwelling or multipurpose
2building and a part of the land upon which it is built.

3(b) As used in this chapter in reference to ownership interests
4in residential dwellings, “owned” includes (1) the interest of a
5vendee in possession under a land sale contract provided that the
6contract or memorandum thereof is recorded and only from the
7date of recordation of the contract or memorandum thereof in the
8office of the county recorder where the residential dwelling is
9located, (2) the interest of the holder of a life estate provided that
10the instrument creating the life estate is recorded and only from
11the date of recordation of the instrument creating the life estate in
12the office of the county recorder where the residential dwelling is
13located, but “owned” does not include the interest of the holder of
14any remainder interest or the holder of a reversionary interest in
15the residential dwelling, (3) the interest of a joint tenant or a tenant
16in common in the residential dwelling or the interest of a tenant
17where title is held in tenancy by the entirety or a community
18property interest where title is held as community property,begin delete andend delete
19 (4) the interest in the residential dwelling in which the title is held
20in trust, as described in subdivision (d) of Section 62,begin insert and (5) the
21interest of a beneficiary of a special needs trust, in which title is
22held in trust, as described in subdivision (d) of Section 62,end insert
provided
23that the Controller determines that the state’s interest is adequately
24protected.

25(c) Except as provided in subdivision (c), and Chapter 3
26(commencing with Section 20625), ownership must be evidenced
27by an instrument duly recorded in the office of the county where
28the residential dwelling is located.

29(d) “Residential dwelling” does not include any of the following:

30(1) Any residential dwelling in which the owners do not have
31 an equity of at least 40 percent of the full value of the property as
32determined for purposes of property taxation or at least 40 percent
33of the fair market value as determined by the Controller and where
34the Controller determines that the state’s interest is adequately
35protected. The 40-percent equity requirement shall be met each
36time the claimant or authorized agent files a postponement claim.

37(2) Any residential dwelling in which the claimant’s interest is
38held pursuant to a contract of sale or under a life estate, unless the
39claimant obtains the written consent of the vendor under the
40contract of sale, or the holder of the reversionary interest upon
P7    1termination of the life estate, for the postponement of taxes and
2the creation of a lien on the real property in favor of the state for
3amounts postponed pursuant to this act.

4(3) Any residential dwelling on which the claimant does not
5receive a secured tax bill.

6(4) Any residential dwelling in which the claimant’s interest is
7held as a possessory interest, except as provided in Chapter 3.5
8(commencing with Section 20640).

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9

SEC. 5.  

Section 20627 of the Revenue and Taxation Code, as
10amended by Section 15 of Chapter 391 of the Statutes of 2015, is
11amended to read:

12

20627.  

(a) A tenant-stockholder claimant (hereinafter referred
13to as “claimant”) is an individual who, on the last day of the
14calendar year ending immediately prior to the commencement of
15the fiscal year for which postponement is claimed is: (a) a
16tenant-stockholder in a cooperative housing corporation (as defined
17in Section 216(b) of the Internal Revenue Code) and (b) occupies
18as a principal place of residence a residential unit in the cooperative
19housing corporation (notwithstanding Section 216(b) of the Internal
20Revenue Code). For the purposes of this chapter, a claimant must
21be (1) 62 years of age or older on or before December 31 of the
22fiscal year for which postponement is claimed or (2) blind or
23disabled, as defined in Section 12050 of the Welfare and
24Institutions Code, at the time of application or on December 10 of
25the fiscal year for which the postponement is claimed, whichever
26is earlier.

27(b) For purposes of this chapter, “tenant-stockholder claimant”
28and “claimant” shall include a special needs trust claimant. “Special
29needs trust claimant” means a special needs trust of which the
30primary beneficiary is an individual who would qualify as a
31“tenant-stockholder claimant” or “claimant” pursuant to subdivision
32(a).

33

SEC. 6.  

Section 20639.11 of the Revenue and Taxation Code
34 is amended to read:

35

20639.11.  

All amounts postponed pursuant to this chapter shall
36be due if any of the following occurs:

37(a) The claimant, or, in the case of a special needs trust claimant,
38the beneficiary, ceases to occupy the residential dwelling as the
39principal place of residence, sells, or otherwise disposes of his or
40her mobilehome.

P8    1(b) The claimant, or, in the case of a special needs trust claimant,
2the beneficiary, dies. However, if the surviving spouse was
3previously approved pursuant to this chapter continues to occupy
4the mobilehome, then the postponed amounts shall not be due
5unless that person dies or ceases to occupy the residential dwelling.

6(c) The claimant fails to perform those acts required by the legal
7owner or junior lienholder.

8(d) The claimant allows any subsequent taxes to remain unpaid
9or to be transferred to the unsecured roll.

10(e) Postponement was erroneously allowed because eligibility
11requirements were not met.

12

SEC. 7.  

Section 20640.2 of the Revenue and Taxation Code,
13as amended by Section 28 of Chapter 391 of the Statutes of 2015,
14is amended to read:

15

20640.2.  

For the purposes of this chapter, the following
16definitions shall apply:

17(a) “Possessory interest” means (1) possession of, or right to
18the possession of land located in this state whether or not coupled
19with ownership of the residential dwelling on the same, or (2) a
20possessory interest or right of occupancy on tax exempt land.

21(b) “Residential dwelling” means a dwelling occupied as the
22principal place of residence of the claimant, or, in the case of a
23special needs trust claimant, the beneficiary, and so much of the
24land surrounding it as is reasonably necessary for use of the
25dwelling as a home, located on possessory interest property. It
26shall include condominiums upon which property taxes, as defined
27in subdivision (c), are assessed. It also includes part of a
28multidwelling or multipurpose building and a part of the land upon
29which it is built.

30(c) “Property taxes” means the amount of property tax for which
31the claimant is personally liable as assessee or is obligated to pay
32directly to the tax collector pursuant to the terms of the agreement
33establishing the possessory interest, including all ad valorem
34property taxes, special assessments, capitalization of leasehold
35interest, and other charges or user fees which are attributable to
36the residential dwelling on the county tax bill and the ad valorem
37property taxes, special assessments, capitalization of leasehold
38interest, or other charges or user fees appearing on the tax bill of
39any chartered city which levies and collects its own property taxes.

P9    1

SEC. 8.  

Section 20640.3 of the Revenue and Taxation Code,
2as amended by Section 29 of Chapter 391 of the Statutes of 2015,
3is amended to read:

4

20640.3.  

(a) A claimant is an individual who:

5(1) Holds a right to a possessory interest pursuant to a validly
6recorded instrument conveying such possessory interest for a term
7of years no less than 45 years beyond the last day of the calendar
8 year ending immediately prior to the fiscal year for which taxes
9are initially postponed;

10(2) Occupies as a principal place of residence the residential
11dwelling affixed to such possessory interest real property on the
12last day of the year designated in subdivision (c) of Section 20503
13of this code;

14(3) Is (1) 62 years of age or older on or before December 31 of
15the fiscal year for which postponement is claimed or (2) blind or
16disabled, as defined in Section 12050 of the Welfare and
17Institutions Code, at the time of application or on December 10 of
18the fiscal year for which the postponement is claimed, whichever
19is earlier.

20(b) For purposes of this chapter, “claimant” shall include a
21special needs trust claimant. “Special needs trust claimant” means
22a special needs trust of which the beneficiary is an individual who
23would qualify as a “claimant” pursuant to subdivision (a).

24

SEC. 9.  

Section 20640.5 of the Revenue and Taxation Code
25 is amended to read:

26

20640.5.  

(a) The Controller may require as security for the
27postponement of property taxes pursuant to this chapter any of the
28following:

29(1) An assignment to the State of California of the remaining
30term of the claimant’s or, in the case of a special needs trust
31claimant, the beneficiary’s, possessory interest.

32(2) A security interest in any improvement owned or leased by
33the claimant or, in the case of a special needs trust claimant, the
34beneficiary, located on the land which is subject to the possessory
35interest.

36(3) Any other additional security interest, created and perfected
37with respect to the rights of third persons in the manner provided
38by law for such type of security interest, which the Controller
39deems necessary to protect the interest of the state with regard to
P10   1the repayment of postponed amounts by the claimant or a deceased
2claimant’s estate.

3(b) On the form supplied by the Controller, the claimant shall
4obtain the written consent of any coholder of the possessory interest
5and of the grantor of the possessory interest to the assignment by
6claimant of the remaining term of claimant’s or, in the case of a
7special needs trust claimant, the beneficiary’s possessory interest.
8The consent shall be in the form and contain those provisions as
9prescribed by the Controller, and shall provide for written notice
10by the grantor of the possessory interest to the Controller of the
11occurrence of a default by the claimant under the terms of the
12instrument creating the possessory interest, a coholder or a prior
13recorded possessory interest holder which would result in the
14termination or diminution of claimant’s or the beneficiary’s, as
15applicable, interest.

16The term “grantor of the possessory interest,” as used in this
17section shall be deemed to include the fee owner of the real
18property subject to the possessory interest and the holders of all
19prior recorded unterminated possessory interests.

20

SEC. 10.  

Section 20640.11 of the Revenue and Taxation Code
21 is amended to read:

22

20640.11.  

All amounts postponed pursuant to this chapter shall
23be due if any of the following occurs:

24(a) The claimant, or, in the case of a special needs trust claimant,
25the beneficiary, ceases to occupy the residential dwelling as the
26principal place of residence, sells or otherwise disposes of his
27possessory interest, or the possessory interest agreement expires
28by its terms.

29(b) The claimant, or, in the case of a special needs trust claimant,
30the beneficiary, dies. However, if the surviving spouse or another
31person eligible to postpone pursuant to this chapter continues to
32occupy the residential dwelling, then the postponed amounts shall
33not be due unless such person dies, or ceases to occupy the
34residential dwelling.

35(c) The failure of the claimant, the fee title owner, or any owner
36of a prior recorded possessory interest to perform those acts
37required by a security interest holder which is senior to the state’s
38security interest for postponed amounts.

39(d) Postponement was erroneously allowed because eligibility
40requirements were not met.

end delete
P11   1

begin deleteSEC. 11.end delete
2
begin insertSEC. 2.end insert  

No reimbursement is required by this act pursuant to
3Section 6 of Article XIII B of the California Constitution because
4the only costs that may be incurred by a local agency or school
5district will be incurred because this act creates a new crime or
6infraction, eliminates a crime or infraction, or changes the penalty
7for a crime or infraction, within the meaning of Section 17556 of
8the Government Code, or changes the definition of a crime within
9the meaning of Section 6 of Article XIII B of the California
10Constitution.



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