BILL ANALYSIS �
SENATE GOVERNANCE & FINANCE COMMITTEE
Senator Lois Wolk, Chair
BILL NO: SB 948 HEARING: 5/4/11
AUTHOR: Governance & Finance Committee FISCAL: Yes
VERSION: 4/28/11 TAX LEVY: No
CONSULTANT: Grinnell
PROPERTY TAXATION
Changes the property tax collection laws.
Background
Each year, the former Revenue and Taxation Committee
authored a measure to enact several changes to Property Tax
Law sponsored by the California Association of County
Treasurer-Tax Collectors, who collect property tax
payments, execute tax sales, and manage local agencies'
money. Many of these measures are technical in nature, and
enacting them in separate measures isn't warranted.
Although SB 948 may not be germane under a strict
interpretation of the single-subject and germaneness rules
presented in Californians for an Open Primary v. McPherson
(2006), it implements important and necessary changes to
property tax laws without taxing legislative resources.
Proposed Law
Currently, treasurer-tax collectors (TTCs) must provide
notice to the right to claim proceeds to the last known
parties of interest in a tax sale that exceeds $150. If
the treasurer-tax collector cannot obtain the address, he
or she must publish notice in a newspaper of general
circulation in the county. Senate Bill 948 allows
treasurer-tax collectors not to publish the notice in a
newspaper of general circulation if the costs of
publication exceed the amount of the tax sale's proceeds.
Third party agents occasionally seek to recover excess
proceeds on behalf of individuals, and submit blanket
claims to treasurer-tax collectors with only the name of an
individual, but not the source of the proceeds that he or
she may be entitled to receive. The agents file the claims
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hoping to find proceeds that can then be marketed to the
individual contingent on a finder's fee, often exceeding
50%. Treasurer-tax collectors are concerned that they
would be able to locate these taxpayers without the agents,
and could benefit taxpayers by sending proceeds without the
finder's fee. Senate Bill 948 requires agents to submit
proof of the source of excess proceeds to which the
individual is entitled, so that agents that know specific
sources of proceeds can claim proceeds unhindered, but
those who don't cannot submit blanket claims.
Currently, the treasurer-tax collector must publish
specified notices in newspapers or three public places in
each township. Senate Bill 948 allows a board of
supervisors to enact a resolution authorizing the
treasurer-tax collector to post these notices on the TTC's
regularly -maintained website. The treasurer-tax collector
must continue to publish a shortened notice in a newspaper
stating that the full notice is available on the TTC's
website.
Taxpayers file property tax protests with the county
clerks, and make payments to treasurer-tax collectors;
however, Revenue and Taxation Code �620 states that
taxpayers must submit payments and protest claims with the
TTC. Senate Bill 948 clarifies that taxpayers file
protests with the county clerk, and pay taxes to the
treasurer-tax collector.
Revenue and Taxation Code �5150.5 requires counties to pay
interest to taxpayers when a court allows the taxpayer to
recover a penalty previously assessed under paragraphs (1),
(2), or (3) of subdivision (a) of Section 830. However,
the referenced penalties are in subdivision (c) of Section
830. Senate Bill 948 corrects the cross-reference.
State law prohibits assessors from disclosing information
and records, unless specifically exempted. Senate Bill 948
allows assessors to disclose information that assists
treasurer-tax collectors with tax sales, such as notifying
potential parties of interest. The treasurer tax-collector
must submit a written request certifying that he or she
needs the information to help administer the tax sale law,
which cannot include social security numbers. The assessor
may charge the treasurer-tax collector for his or her
costs, which the treasurer-tax collector must add to the
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delinquent tax amount.
The Government Code allows any county department, officer,
or employee that collects taxes, penalties, or other costs
to file an application for a "discharge of accountability"
whenever the costs of collection exceed the revenue
collected. Section 25257, 25258, 25259, and 25259.5
describe the process for county officials to file the
application, and were recently updated by the Legislature
(SB 857, Committee on Budget and Fiscal Review, 2010).
However, corresponding Revenue and Taxation Code �2611.1
still contains language allowing for discharges of
accountability which conflicts with the updated Government
Code sections. Senate Bill 948 amends the Revenue and
Taxation Code section regarding discharges of
accountability to require discharges under that section to
comply with the updated Government Code sections.
When a taxpayer overpays tax by more than $10, the
treasurer-tax collector must notify the taxpayer of the
overpayment. Senate Bill 948 clarifies that the
treasurer-tax collector determines whether an overpayment
exists takes place at the time the date and time the
payment is received. The measure also states that the tax
collector may process a refund without requesting that the
taxpayer file a refund claim.
Occasionally, taxpayers or their agents make payments on
the wrong property. If the taxpayer or his or her agent
can convince the treasurer-tax collector by substantial
evidence that the payment was intended for another
property, the treasurer-tax collector cancels the credit on
the unintended property and applies it to the correct
property within a specified time period. Treasurer-tax
collectors cancel the payment and refund the amount when
the taxpayer does not intend the payment to apply to
another piece of property. Senate Bill 948 requires the
treasurer-tax collector to transfer the payment to the
intended property or refund the payment to the taxpayer
within 60 days of verifying the mistake, or the date that
the payment is not subject to chargeback, dishonor, or
reversal. The measure additionally specifies that interest
shall only be paid if the treasurer-tax collector does not
transfer or refund the payment after that date.
Revenue and Taxation Code �5096 provides for that taxed
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paid before or after delinquency shall be refunded if the
payments exceed the equalized value of the property
determined by the county board of equalization. Senate
Bill 948 changes the reference for the section from the
county board of equalization to a recently updated section
that requires the county clerk to record changes each month
made by the assessment appeals board. The measure also
provides that the treasurer-tax collector shall refund
payments, as long as the overpayment exceeds $10.
If a treasurer-tax collector makes an error in a
publication, he or she may correct the error in a
supplementary publication lasting at least ten days in the
same manner as the original publication. Senate Bill 948
recasts this section to specify that the treasurer-tax
collector has 60 days after the original publication to
republish. The measure specifies that the republication
shall not affect the right of a taxpayer, assesse, or other
private party in a material way.
Currently, whenever a treasurer-tax collector proposes
property for a tax sale, the TTC may remove the parcel upon
the recommendation from the county counsel that the removal
is in the best interest of the county. The treasurer-tax
collector must notify the controller whenever he or she
removes a parcel. Senate Bill 948 removes the requirement
to notify the Controller.
State Revenue Impact
No estimate.
Comment
1. Purpose of the bill . SB 987 consolidates twelve 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 counties. Consolidating the measures into a single
bill negates the need for individual bills to enact each
change. Additionally, the measure only contains items with
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universal agreement; items that are controversial or
problematic will be removed from the bill
Support and Opposition (4/28/11)
Support : California Association of County Treasurer-Tax
Collectors
Opposition : Unknown.