BILL ANALYSIS �
AB 2643
Page 1
Date of Hearing: May 2, 2012
ASSEMBLY COMMITTEE ON LOCAL GOVERNMENT
Cameron Smyth, Chair
AB 2643 (Ma) - As Amended: April 24, 2012
SUBJECT : Property taxation.
SUMMARY : Makes several changes to the statutes related to
property tax collection. Specifically, this bill :
1)Authorizes the tax collector, when the amount of property
taxes paid exceeds the amount due as of the date and time the
payment is received, to process the refund without sending a
required notice and without the taxpayer filing a claim for
refund, if the tax collector establishes that a refund is due
to the taxpayer.
2)Deletes the exception for the return of replicated property
tax payments, for purposes of allowing the tax collector to
apply any refund due a taxpayer, or the taxpayer's agent, to
any delinquent taxes due for the same property for which the
same taxpayer, or his or her agent, is liable, thereby
applying the provisions authorizing the tax collector to apply
any refund to any delinquent taxes.
3)Limits penalty relief, for cases in which a taxpayer has
failed to pay taxes on an assessment that is the subject of a
pending informal review due to a decline in value as a result
of damage, destruction, depreciation, obsolescence, removal of
property, or other factors causing a decline in value, to the
difference between the county assessor's final determination
of value and the value on the assessment roll for the fiscal
year covered by the application.
4)Restricts the penalty relief specified in 3) above to those
properties upon which an application for an informal review is
pending before the county assessor on the effective date of
the bill's implementation, or in situations where those
applications for an informal review are filed with the county
board after the date of the bill's implementation.
5)Extends, for purposes of calculating the interest on property
tax refunds, the time period the county treasurer has to
advise the Controller of the county pool apportioned rate and
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of computations made in deriving that rate from 60 to 90 days.
EXISTING LAW :
1)Requires, when the amount of property taxes paid exceeds the
amount due by more than $10, the tax collector to send notice
of the overpayment to the taxpayer, and provides that the
notice must be mailed to the taxpayer's last known address and
state the amount of overpayment and that a refund claim may be
filed, as specified.
2)Allows the tax collector to apply any refund due a taxpayer,
or the taxpayer's agent, to any delinquent taxes due on the
same property for which the same taxpayer or his or her agent
is liable, except as specified for the return of replicated
property tax payments.
3)Limits, in the case in which a taxpayer has failed to pay
taxes on an assessment that is the subject of a pending
assessment appeal, as provided, the amount of penalty relief
to the difference between the final determination of value by
the county board, as defined, and the value on the assessment
roll for the fiscal year covered by the application.
4)Requires the county board to provide a specified notice to
taxpayers impacted by the penalty provisions.
5)Requires the payment of interest on property tax refunds at
the greater of 3% per annum or the county pool apportioned
rate.
6)Requires the county treasurer to advise the State Controller
of the county pool apportioned rate and of computations made
in deriving that rate, no later than 60 days after the end of
that fiscal year.
FISCAL EFFECT : None
COMMENTS :
1)AB 2643 is sponsored by the California Association of County
Treasurers and Tax Collectors (CACTTC) and makes several
changes to the laws related to property tax collection.
First, the bill authorizes treasurers and tax collectors to
issue a refund when one is due to a taxpayer because the
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amount of taxes paid exceeds the amount due. Current law
requires treasurers and tax collectors to send a notice to
taxpayers who must then file a claim to receive the
overpayment. The bill deletes the provisions in current law
that requires treasurers and tax collectors to notify
taxpayers of overpayment.
Second, the bill extends the time county treasurers have to
calculate the pool rate and report it to the State Controller
from 60 days to 90 days after the end of the fiscal year.
Current law requires the payment of interest on property tax
refunds at the greater of 3% per annum or the county pool
apportioned rate.
Lastly the bill limits penalty relief, for cases in which a
taxpayer has failed to pay taxes on an assessment that is the
subject of a pending informal review due to a decline in value
as a result of the damage, destruction, depreciation,
obsolescence, removal of property, or other facts causing a
decline in value, to the difference between the county
assessor's final determination of value and the value on the
assessment roll for that fiscal year. The bill provides that
penalty relief only applies to those properties for which an
application for an informal review is pending before the
county assessor on or after the effective date of the bill's
implementation.
2)Current law limits penalty relief, for cases in which a
taxpayer has failed to pay taxes on an assessment that is the
subject of a pending assessment appeal, to the difference
between the county board of supervisor's final determination
of value and the value on the assessment roll for that fiscal
year. Current law requires the county board of supervisors to
provide mailed notice to each taxpayer upon an application for
reduction in assessment with the county board if that taxpayer
will be impacted by the penalty provisions, and also requires
the board of supervisors, with the approval of the county's
tax collector and auditor, to adopt an ordinance that approves
this section of law dealing with limiting penalty relief. The
penalty under these provisions is 10% of the tax due.
3)Under current law, the penalty calculations are different
depending upon whether the assessor or the assessment appeals
board lowers the value. This bill creates consistency in the
penalty calculations by making it the same for both types of
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valuation decreases. The sponsor indicates that this
provision will remove the incentive for taxpayers to pay tax
bills late when a value reduction is pending from the
assessor.
4)Section 1 of this bill contains provisions that allow the
county tax collector to process a property tax refund without
sending the notice of overpayment to the taxpayer that is
required under current law. A similar provision was included
in early versions of SB 948 (Committee on Governance and
Finance) of 2011, but was removed when opposition to that
particular provision was voiced.
The opposition raised the concern that by deleting the tax
collector's ministerial duty to give notice to taxpayers of
the right to make a timely refund claim, the net effect would
be to deprive taxpayers of their constitutional right to due
process notice.
The Committee may wish to ask the author and sponsor to
discuss this issue further and determine whether the language
in Section 1 of the bill deprives taxpayers of notice of
overpayment, as well as the legal implications of changing
this statute on a going-forward basis for taxpayers.
5)Support arguments : Supporters argue that this bill clarifies
the statutes related to property tax collection and
overpayment, penalty relief, and gives county treasurers a
longer period of time to calculate the pool rate and report it
to the State Controller.
Opposition arguments : One might argue that this bill deprives
a taxpayer of the right to be notified when property tax
overpayment occurs.
6)This bill is double-referred to the Committee on Revenue and
Taxation.
REGISTERED SUPPORT / OPPOSITION :
Support
California Association of County Treasurers and Tax Collectors
(CACTTC) �SPONSOR]
California State Association of Counties
AB 2643
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Opposition
Law Offices of Robert A. Pool
Analysis Prepared by : Debbie Michel / L. GOV. / (916)
319-3958