BILL ANALYSIS
SENATE REVENUE & TAXATION COMMITTEE
Senator Lois Wolk, Chair
SB 823 - Committee on Revenue and Taxation
Introduced: March 10, 2009
Hearing: April 22, 2009 Fiscal: Yes
SUMMARY: Enacts Technical Changes to Property Tax
Collection Law
I. Electronic Payments
EXISTING LAW provides that taxpayers may send property
tax payments by delivery service, and have the payment
deemed timely if it arrives before 5pm on the next business
day following the delinquent date. Taxpayers may also use
electronic payments, which are deemed received on the date
the transaction was completed between the taxpayer and the
electronic payer, but does not specify a date and hour that
the electronic payer to deliver the payment to the tax
collector.
THIS BILL specifies that if payments are made through
the tax collector's authorized website of telephone number,
the payment is deemed received on the date the taxpayer
completes the electronic payment. For all other electronic
payments, the payment is deemed received on the date the
tax collector actually receives the payment.
II. Replicated Payments
EXISTING LAW requires that replicated payments must be
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refunded within 60 days of receipt, or interest must be
paid to the tendering party. However, credit card
payments, Automated Clearing House debits, and electronic
checks may be reversed up to 180 days after issuance,
creating a situation where counties must pay interest when
they are waiting for the reversible time period to expire.
THIS BILL restarts the sixty day period before
interest must be paid to 60 days after the payment becomes
finalized.
III. Tax Sale Recissions
EXISTING LAW provides that a tax collector has the
power to sell property that has been tax-defaulted for five
years or more, or three years or more in the case of
nonresidential commercial property. Tax-defaulted property
may be sold either to private persons (including taxing
authorities) by auction (R&TC Section 3691 et seq.), or to
state and local taxing agencies by agreement (R&TC Section
3791 et seq.). Current law states that, in the case where a
tax deed to a purchaser has been recorded and it is
determined that the property should not have been sold, the
county and the purchaser may agree to rescind the sale if
(a) the property has not been transferred by the purchaser
to a bona fide purchaser for value, and (b) the property
has not become subject to a bona fide encumbrance for value
after recordation [R&TC Section 3731(a)]. Tax collectors
must rarely rescind tax sales when conducted erroneously,
and the successor in interest may block any rescission,
prohibiting the tax collector from correcting the erroneous
sale and convey the property back to the former owner.
THIS BILL authorizes a county board of supervisors to
rescind a sale of tax-defaulted property, under specified
circumstances, with the written consent of the county legal
adviser and the purchaser's successor in interest in the
property. The measure authorizes a county board of
supervisors to rescind a sale of tax-defaulted property,
even if the purchaser of that property or his/her successor
in interest in that property does not agree to the
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rescission in writing, provided that all of the following
conditions are satisfied:
The property has not been transferred or conveyed
by the purchaser at the tax sale to a bona fide
purchaser for value;
The property has not become subject to a bona fide
encumbrance for value subsequent to the recordation of
the tax deed;
A hearing is scheduled before the board of
supervisors; and
Not less than 45 days prior to the hearing, the tax
collector sends a notice to the purchaser or his/her
successor in interest in the property, via certified
mail with return receipt requested, to the last known
mailing address.
THIS BILL requires that a notice sent by the tax
collector to the purchaser of tax-defaulted property
contain specified information, including the date, time,
and place of the hearing, a description of the property
sold, the reason for the rescission of the sale, and a
statement that a refund will be issued to the purchaser.
The measure also states that, when a sale of tax-defaulted
property is rescinded, the purchaser is entitled to a
refund of the amount paid as the purchase price plus
interest at the county pool rate from the date of purchase
after the rescission of the tax deed is recorded. The bill
requires the county clerk to acknowledge the signature of
the county tax collector before the county tax collector
records the rescission with the county recorder.
IV: Statute Conflict
EXISTING LAW allows county boards of supervisors to
appoint a designee to approve tax sales to public agencies
and non-profit corporations (AB 2229, Wiggins, 2000). In
2003, the Legislature amended that section of law to
require the Board of Supervisors to subsequently approve
sales authorized by the designee, however, the two statutes
which allowed the designee to approve those sales was not
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amended to add the board of supervisors approval
requirement.
THIS BILL removes mention of the board designee in the
two sections of law amended by the 2000 legislation to
remove the statutory conflict.
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V. Cross Reference
EXISTING LAW (Revenue and Taxation Code 4839.2)
requires the Board of Supervisors to approve tax sales and
transmit a copy of the resolution to the tax collector, but
is not close to other relevant statutes.
THIS BILL renumbers 4839.2 as 3699.
FISCAL EFFECT:
Committee Staff estimate no fiscal effect for SB 1776
COMMENTS:
A. Purpose of the Bill
SB 1045 consolidates five items that make minor,
technical changes to property tax law sponsored by the
California Association of County Treasurer-Tax Collectors.
The bill improves the administration of property tax laws
to help both taxpayers and tax collectors. Consolidating
the measures into a single bill negates the need for
individual bills to enact each change. Additionally, the
measure only contains items with universal agreement; items
that are controversial or problematic will be removed from
the bill.
Support and Opposition
Support:California Association of Treasurer-Tax
Collectors
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Oppose:None Received
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Consultant: Colin Grinnell