BILL ANALYSIS
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|SENATE RULES COMMITTEE | AB 992|
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THIRD READING
Bill No: AB 992
Author: Lieu (D)
Amended: 06/30/09 in Senate
Vote: 21
SENATE JUDICIARY COMMITTEE : 4-1, 6/23/09
AYES: Corbett, Harman, Florez, Leno
NOES: Walters
SENATE APPROPRIATIONS COMMITTEE : Senate Rule 28.8
ASSEMBLY FLOOR : 66-10, 5/26/09 - See last page for vote
SUBJECT : Residential Property Taxes: assessment appeal
application
filing services
SOURCE : Los Angeles District Attorneys Office
DIGEST : This bill recasts provisions in existing law
relating to property assessment appeal filing services.
Specifically, this bill (1) removes an exemption for
persons who actively advocate, thus including those
individuals within the definition of an assessment
reduction filing service; (2) prohibits any statement that
a late fee is required if a person fails to respond to a
solicitation by a specified date; (3) clarifies the
prohibition on an assessment reduction filing service
charging, demanding, or collecting advance fees, as
specified; (4) clarifies the definition of "assessment
CONTINUED
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reduction filing service" to include the providing of
comparable sales information in connection with an
application or request for reduction; (5) makes it unlawful
to file a request or application for an assessment
reduction without obtaining a written authorization from
the property owner; (6) requires a copy of that
authorization to be submitted with any request or
application for reduction in assessment; and (7) requires
the offer or to maintain the original written authorization
for a period of three years and require it to be available
for inspection and copying, as specified.
ANALYSIS :
Existing law states that it is unlawful for any person to
make any untrue or misleading statements in any manner in
connection with the offering or performance of an
assessment appeal application filing service. (Business &
Professions Code Section 17537.9.)
Existing law defines "assessment appeal application filing
service" as any service performed or to be performed for
compensation in connection with an application for
reduction in assessment of residential property, as
specified. Existing law exempts any service performed by
a person who actively advocates, in person or by written
and oral communications, on the behalf of the person to
whom a solicitation is made before the assessment appeals
board or the assessor's office from that definition.
(Business & Professions Code Section 17537.9.)
This bill recasts those provisions to instead make them
applicable to an "assessment reduction filing service,"
which is defined as any service performed or offered to be
performed for compensation in connection with an
application, or request of any kind, for reduction in
assessment of real property, as specified, including the
provision of comparable sales information in connection
with an application or request for reduction in assessment
of real property.
This bill removes the above exemption for persons who
actively advocate, thus including those individuals within
the definition of "assessment reduction filing service."
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This bill recasts the definition of "untrue or misleading
statement," and include within that definition any
statement that a late fee is required if the person to whom
the solicitation is sent fails to respond to the offeror of
the assessment reduction filing service by a date stated in
the solicitation.
This bill prohibits an assessment reduction filing service
from charging, demanding, or collecting money in connection
with a request for review, or in connection with an
assessment appeal application until after the request is
filed with the assessor or until after the application is
filed with the clerk of the assessment appeals board, as
specified.
This bill makes it unlawful for an offeror of an assessment
reduction filing service to file a request or application
of any kind for reduction in assessment without first
obtaining a written authorization from the property owner.
This bill requires a copy of the authorization to be
submitted with any request or application for reduction in
assessment, and require the offeror to maintain the
original written authorization for a period of three years
and require it to be available for inspection and copying
within 24 hours of a request without a warrant to law
enforcement, the Attorney General, district attorney, or
city attorney.
Background
Proposition 13, enacted by the voters on June 6, 1978,
established the guidelines for determining property taxes.
The annual tax rate is limited to 1 percent of the
property's assessed value; however, the assessed value may
only be increased by a maximum of 2 percent per year. If
the property changes ownership, a low assessed value may be
reassessed to full current market value (but future
assessments are restricted to 2 percent of the annual
maximum increase). Proposition 8, enacted in November of
1978, allows for a temporary reduction in assessed value
when the current market value of a property is less than
the value shown on the property tax bill.
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Due to the recent housing and economic downturn, homeowners
who purchased their home at or near the top of the market
may have an assessed value that is higher than the market
value. In that case, the homeowner is entitled to a
temporary reduction in property taxes. In response to a
recent wave of property tax scams, Attorney General Edmund
G. Brown issued the following warning on February 12, 2009:
Companies are sending deceptive mailers to homeowners
offering help in reducing property tax assessments, if the
homeowner pays the company hundreds of dollars in fees.
The companies use official-sounding names such as "Tax
Adjusters," "Tax Readjustment" or "Tax Review" to make
victims believe the company is a government agency.
Property tax reassessment is a free service provided by
county tax assessors. If homeowners believe their property
value has declined and they are paying too much in property
taxes, the local tax assessor will review the property
value for free for a possible downward assessment.
This bill seeks to respond to those scams by revising and
recasting the provisions that govern those assessment
services by strengthening those provisions, and eliminating
an exception that the sponsor contends is being used as a
loophole.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: Yes
SUPPORT : (Verified 7/10/09)
Los Angeles District Attorney's Office (source)
Apartment Association, CA Southern Cities
California Assessors' Association
California Association of Clerks and Election Officials
County of Orange Board of Supervisors
Kern County Board of Supervisors
Los Angles County Board of Realtors
Office of the Assessor, County of Los Angeles
Orange County District Attorney
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ARGUMENTS IN SUPPORT : According to the author's office,
property values have dropped dramatically since the
staggering increase that occurred during the real estate
boom earlier this decade. Against this backdrop, a blatant
and costly scam has arisen where private companies contact
homeowners and offer to help them lower their property tax
bill. The company offers to file a property tax reduction
request with the assessor's office, in return for an up
front fee of several hundred dollars. In addition to the
fee, there is a penalty charge assessed if payment is not
received by a specific date. The fact is that this same
service is free from the local assessor's office. There is
no need for anyone to pay a fee to facilitate a property
tax reduction. Current law regulates solicitations to
assist homeowners in having their property values
reassessed, including important disclosures to help
homeowners understand that solicitations don't come from
government agencies. However, an exception exists for
those who "actively advocate" on behalf of the property
owners. Solicitors are using this exemption as a loophole
to avoid any disclosures. This bill removes the "actively
advocate" exemption, while concurrently banning any advance
payment until after documents are actually filed on behalf
of the homeowner. In addition, this bill updates and
recasts provisions of existing law relating to a property
assessment appeal filing service to instead make them
applicable to an assessment reduction filing service, and
requires anyone filing an assessment reduction to first
obtain a written authorization from the property owner.
The Los Angeles County District Attorney's Office, the
sponsor of this bill states that the removal of the
exemption is intended to address a recurring consumer scam
in which mail order solicitors offer to assist homeowners
in obtaining re-evaluation of the assessed values of their
properties to help lower property taxes. The sponsor
further states:
These mass mailers - sent by the thousands during times
of lower property values - often mimic government
envelopes and forms, with pseudo-governmental seals and
with bogus organization names confusingly similar to
real agencies. The solicitations require the payment
of hundreds of dollars, and in some cases "late fees"
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are added if the owners don't respond promptly.
Many homeowners, and especially seniors, think these
solicitations come from governmental agencies. Most of
these homeowners are lead to believe they need to pay
for this service, when in fact they can request
reassessment easily on their own and at no cost, by
filling out simple forms available online.
ASSEMBLY FLOOR :
AYES: Adams, Ammiano, Anderson, Arambula, Beall, Block,
Blumenfield, Brownley, Buchanan, Caballero, Charles
Calderon, Carter, Chesbro, Cook, Coto, Davis, De La
Torre, De Leon, Emmerson, Eng, Evans, Feuer, Fong,
Fuentes, Furutani, Gaines, Galgiani, Garrick, Gilmore,
Hall, Harkey, Hayashi, Hernandez, Hill, Huber, Huffman,
Jones, Krekorian, Lieu, Bonnie Lowenthal, Ma, Mendoza,
Miller, Monning, Nava, Nestande, Niello, John A. Perez,
V. Manuel Perez, Portantino, Price, Ruskin, Salas,
Saldana, Silva, Skinner, Smyth, Solorio, Audra
Strickland, Swanson, Torlakson, Torres, Torrico, Tran,
Yamada, Bass
NOES: Tom Berryhill, Blakeslee, Conway, DeVore, Fletcher,
Fuller, Knight, Logue, Nielsen, Villines
NO VOTE RECORDED: Bill Berryhill, Duvall, Hagman, Jeffries
RJG:do 7/10/09 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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