BILL ANALYSIS
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|SENATE RULES COMMITTEE | SB 823|
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CONSENT
Bill No: SB 823
Author: Senate Revenue and Taxation Committee
Amended: As introduced
Vote: 21
SENATE REVENUE & TAXATION COMMITTEE : 8-0, 4/22/09
AYES: Wolk, Walters, Alquist, Ashburn, Florez, Padilla,
Runner, Wiggins
SUBJECT : Property tax collection law
SOURCE : California Association of Treasurer-Tax
Collectors
DIGEST : This bill makes various changes in the Property
Tax Collection Law relative to (1) electronic payments, (2)
replicated payments, and (3) tax sale recissions. It also
removes some statutory conflicts and renumbers a section of
law.
ANALYSIS :
1.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
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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.
2.Replicated Payments
Existing law requires that replicated payments must be
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.
3.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
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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
rescission in writing, provided that all of the following
conditions are satisfied:
A. The property has not been transferred or
conveyed by the purchaser at the tax sale to a bona
fide purchaser for value;
B. The property has not become subject to a bona
fide encumbrance for value subsequent to the
recordation of the tax deed;
C. A hearing is scheduled before the board of
supervisors; and
D. 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
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tax collector before the county tax collector records the
rescission with the county recorder.
4.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 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.
5.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.
Purpose of the Bill
The bill 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.
FISCAL EFFECT : Appropriation: No Fiscal Com.: No
Local: No
SUPPORT : (Verified 4/23/09)
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California Association of Treasurer-Tax Collectors (source)
DLW:nl 4/27/09 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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