BILL ANALYSIS
AB 824
Page 1
Date of Hearing: April 20, 2009
ASSEMBLY COMMITTEE ON REVENUE AND TAXATION
Charles M. Calderon, Chair
AB 824 (Harkey) - As Introduced: February 26, 2009
Majority vote. Fiscal committee.
SUBJECT : Property taxation: assessment procedures: alternate
assessment appeals board.
SUMMARY : Allows an assessment appeals board (board) to hear and
decide property tax appeals filed in another county by a person
who has a conflict of interest with the board in his/her county.
Extends the application of existing conflict-of-interest
provisions to certain employees of the office of county counsel.
Specifically, this bill :
1)Prohibits employees of the office of county counsel who advise
the board or represent the assessor before the board from
representing an applicant for compensation on any application
for equalization filed pursuant to Revenue & Taxation Code
(R&TC) Section 1603.
2)Requires those county counsel employees to notify the clerk
immediately upon filing an application on his/her own behalf,
or upon his/her decision to represent his/her spouse, parent
or child in an assessment appeal.
3)Authorizes the chief clerk of a board, at his/her discretion,
to refer to a special alternate board the applications for
equalization filed by a member or an alternate member of the
regular board or the applications in which that member
represents his/her spouse, parent, or child.
4)Specifies that an alternate board must consist of three
special alternate board members who are qualified and in good
standing in another county.
5)Provides that a special alternative board member may hear
applications for equalization set forth in the transmittal
document prepared by the clerk of the board of the county in
which the application was filed.
AB 824
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EXISTING LAW:
1)Contains various conflict of interest provisions intended to
ensure the integrity and impartiality of decisions rendered by
a county board.
2)Prohibits sitting members of the board from knowingly
participating in any appeal proceeding if they have an
interest in the subject matter that could reasonably be
expected to influence the impartiality of their judgment in
the proceeding. (R&TC Section 1624.2).
3)Prohibits specified employees, members, alternate members, and
hearing officers of the board from representing any person
filing an appeal for compensation before that board. (R&TC
Sections 1612.5, 1612.7, 1624.3, 1622.6, 1636.2, and 1636.5).
Those specified employees include employees of the office of
the clerk of the county board of equalization (BOE) and county
assessment appeals board.
4)Requires those specified employees, members, alternate
members, and hearing offices of the board to notify the clerk
of the board when they file an appeal application on their own
behalf, or when they decide to represent a spouse, parent, or
child in an assessment appeal before the board.
5)Requires that those types of appeals be heard by a special
board panel consisting of three special alternate members
appointed by the presiding judge of the superior court in the
county where the application is filed.
FISCAL EFFECT : The BOE estimates that this bill would not
impact state revenues.
Proposition 98 Effect : None
COMMENTS :
1)Author's Statement . The author states that, "AB 824 will
provide counties with a common-sense solution to enable a
quick, cost effective approach to establishing a special board
without having to appoint a special board for each separate
application filed. This is a voluntary option for both
counties involved. Enabling counties with an efficient new
method to address potential conflicts of interest in the
AB 824
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appeals arena benefits both taxpayers and counties alike.
This bill enhances the likelihood of a sound decision on the
matter before the board."
2)The purpose of this bill . This bill is sponsored by the
California Association of Clerks and Election Officials. The
sponsor states that the purpose of this bill is to correct an
oversight created in 1999 by SB 1231 (Committee on Revenue and
Taxation), Chapter 941, Statutes of 1999, that required the
appeals of assessment hearing officers and employees of the
clerk's office to be heard by a special alternate assessment
board. The sponsor notes that creating a special panel is
time consuming. AB 824 is intended to allow the use of
another county's already assembled operating board,
guaranteeing that the members of the special panel would be
individuals who are technically qualified and are experienced
in adjudicating property tax assessment appeals. The program
would be voluntary for both counties involved and
reimbursement for travel and other expenses would be
negotiated between the participating counties.
3)Proponents' Statements . The proponents of this bill argue
that the proposed changes to existing law would resolve any
possible appearance of conflict or impropriety issues in the
appeals process and will improve and streamline the assessment
appeal process to ensure finalization of appeals within the
statutory two-year limit. The proponents also state that this
bill would eliminate the costs of setting up an alternate
board in each county and would provide simple, common-sense
rules to prevent conflicts of interest in the assessment
appeals process.
4)The Committee staff notes all of the following:
a) Background . Local boards are established to resolve
disputes between county assessors and property owners. All
counties in California provide for assessment appeals
proceedings. In 19 counties, the county boards of
supervisors hear the appeals. In the other 39 counties,
board members are appointed by the local boards of
supervisors. A local county board of supervisors may
appoint the members to the local board by utilizing one of
two statutorily prescribed methods. The board of
supervisors may nominate individuals to the assessment
board and the presiding judge of the superior court of the
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count would select three members. (R&TC Section 1622).
Alternatively, the board of supervisors may directly
appoint individuals to the assessments board. (R&TC
Section 1622.1). Appointments last for a three year term,
and members may be reappointed an unlimited number of
terms. While a board may be comprised of either three or
five members, individual appeals are only heard by a
three-member panel.
b) Conflicts of Interest . Basic conflict of interest
provisions applicable to assessors and members of the
boards have been in place since the 1960s. For example,
existing law prohibits the county assessor and the
employees of the assessor's office from engaging in any
gainful profession, trade, business or occupation that is
incompatible or involves a conflict of interest with their
duties as officers and employees of the county. (R&TC
Section 1365). The conflict-of-interest provisions also
include the prohibition on compensation and gifts from
private persons or firms for advice or other services
relating to the taxation or assessment of property. In
1999, SB 1231 imposed additional compensation restrictions
and notification requirements for employees of the clerk's
office of a county BOE or a county board. The assessment
hearing officers are also subject to the same restrictions.
It appears, however, that neither the members nor
employees of county boards of supervisors that act as local
BOEs are subject to similar conflict of interest
restrictions and requirements.
This bill would extend the existing conflict of interest
provisions to county counsel employees who either advise
the county board or represent the assessor before the
board, but would not apply to county counsel employees who
advise a county board of supervisors on assessment appeals
matters. It is unclear why county counsel employees who
advise the assessment appeals boards are treated
differently than county counsel employees who advise the
board of supervisors on assessment appeals matters. The
Committee may wish to consider amending this bill to ensure
that county counsel employees advising a county board of
supervisors on assessment appeals matters are also subject
to the same conflict of interest restrictions as proposed
by this bill. Furthermore, the Committee may wish to
clarify whether existing conflict of interest provisions
AB 824
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also apply to members of a county board of supervisors that
hear assessment appeals meeting as a county BOE.
c) Alternate Boards . Existing law requires that assessment
appeals applications filed by specific individuals be heard
by an alternate board panel. The alternate board panel
must be comprised of three special alternate board members
who are appointed by order of the presiding judge of the
superior court in the county in which the application is
filed. An alternate board member is authorized to hear
only the application or applications for equalization that
are specified in the court order appointing the member.
This bill would grant discretion to the clerk of the regular
board to set applications filed by specific individuals for
a hearing before an alternate board panel, where the panel
is comprised of the members appointed by a court order in
another county in California. Those special alternate
members would be able to hear applications listed in the
transmittal document prepared by the clerk. This bill
authorizes clerks to decide which applications for
equalization warrant a creation of a new alternate board in
their respective counties and which alternate boards could
be used to hear special cases. However, this bill does not
confer any authority on the clerks to appoint the alternate
board panel nor does it delegate to the clerks the
appointment power vested in a superior court judge.
Further, the authority granted to clerks under this bill
must be exercised within the confines of existing conflict
of interest provisions and is of a ministerial nature only.
In other words, this bill would allow the clerk to use an
already assembled alternate board of another county and
would eliminate the need for the presiding judge in the
county where the application was filed to create a special
alternate board for individual cases. The Committee staff
notes that a determination of whether one's property was
assessed correctly requires experience and knowledge of
local property values. Would the members of an alternate
board from a different county be well-informed about the
property in the county where the assessment appeal was
filed to make an impartial decision?
5)BOE Recommendations . BOE staff notes that existing conflict
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of interest provisions relating to prohibitions on
compensation and notification requirements are dispersed,
cumbersome and disjointed. Adding new stand alone provisions
for county counsel employees would further complicate the
R&TC. Therefore, BOE staff recommends the following
amendments to existing law to make those provisions more
user-friendly and cohesive:
a) Consolidate compensation prohibitions provisions into
existing R&TC Section 1612.5 by making necessary
amendments, repealing R&TC Sections 1624.2 and 1636.2, and
adding a reference to R&TC Section 1365.
b) Consolidate notification requirements into existing R&TC
Section 1612.7 by repealing R&TC Sections 1624.3 and 1636.5
and amending language out of R&TC Section 1622.6.
c) Consolidate reference to conflict of interest appeals
subject to a special appeals panel by repealing R&TC
Sections 1624.3 and 1636.5 and amending language out of
R&TC Section 1622.6.
d) Streamline the provisions of R&TC Section 1622.6 to
address only the hearing procedure.
e) To distinguish between the two options of creating a
special appeals panel to hear conflict of interest appeals,
use the phrase "special alternate assessment appeals panel"
for the panels appointed by the presiding judge and the
phrase "substitute assessment appeals board panel" for a
special alternate assessment appeals panel that already
exists in another county and is chosen by the clerk of the
local board to hear appeals filed before the local board by
specified individuals.
REGISTERED SUPPORT / OPPOSITION :
Support
Orange County Taxpayers Association
California Association of Clerks and Election Officials
AB 824
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Patricia C. Bates, Orange County Board of Supervisors,
Supervisor, Fifth District, Chair
Opposition
None on file
Analysis Prepared by : Oksana Jaffe / REV. & TAX. / (916)
319-2098