BILL ANALYSIS
AB 143
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Date of Hearing: April 1, 2009
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Kevin De Leon, Chair
AB 143 (Jeffries) - As Introduced: January 22, 2009
Policy Committee: Revenue and
Taxation Vote: 9-0
Urgency: Yes State Mandated Local Program:
Yes Reimbursable: Yes
SUMMARY
This bill authorizes a county tax collector that has received
duplicate property tax payments for the same parcel of property
to refund the replicated payment to the payer that is not the
property owner. Specifically, the bill:
1)Authorizes the refund to be made upon receipt of a written
request by the owner-of-record, which is accompanied by a
certified copy of a deed or other instrument that legally
verifies ownership of the property.
2)Specifies that the tax collector is not responsible for
verifying ownership of the property.
FISCAL EFFECT
1)Negligible effect on local property tax revenues.
2)Negligible, if any, state- mandated costs.
COMMENTS
1)Background - adverse possession . Existing California law
allows a right of adverse possession, where a person can claim
title to a piece of land without written title by occupying
the land openly for five years, improving the property, and
paying all the state, county, and municipal taxes. Adverse
possession laws have been in effect for centuries and are
rooted in common law. They are generally intended to force
rightful owners to assert their legal rights in a timely
manner, and to protect those who have acquired, occupied, and
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developed land from long-dormant legal challenges to their
ownership.
While protecting owners in some instances, adverse possession
laws can, however, have the opposite impact in cases where a
rightful owner-of-record is subject to a hostile adverse
possession claim. In this regard, tax collectors in Riverside
and Lake counties report they have been receiving property tax
payments due on rural parcels of land from third parties who
are not the owners of record, but are attempting to establish
adverse possession of those parcels of land as one means of
establishing adverse possession.
2)Background - replicated property tax payments . A replicated
payment is a payment intended for application to a specific
tax has already been paid. Under existing law, the collection
agency is required to return a replicated property tax payment
within 60 days of receipt. As a result, if a non-owner makes a
tax payment is received by the tax collector prior to the
owner-of-record's payment, the payment from the non-owner is
held and the payment from the owner of record is automatically
returned.
This can be significant in cases where non owners attempt to
establish adverse possession of unused rural properties. In
adverse possession cases, tax collectors have been instructed
by the State Controller's Office to keep both payments so that
the payers have equal standing on the tax issue. However,
even under this system, rightful owners still do not have a
clear record of property tax payments and remain vulnerable to
adverse possession claims.
3)Purpose . This bill is sponsored by the California Association
of County Treasurers and Tax Collectors. It is intended to
create a method for tax collectors, in the cases of adverse
possession, to return a replicated property tax payment to the
non-property owner, thereby allowing the rightful property
owners the chance to retain property rights without resorting
to other legal remedies.
4)Related legislation . This bill is similar to AB 1959
(Jeffries) introduced in the 2007-08 Legislative Session. AB
1959 passed out of the Assembly 75-0 and was amended in the
Senate. When it was returned for concurrence in the Assembly,
it died in the Assembly Local Government Committee due to
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concerns regarding mandate language.
Analysis Prepared by : Brad Williams / APPR. / (916) 319-2081