BILL ANALYSIS �
AB 1888
Page 1
ASSEMBLY THIRD READING
AB 1888 (Ting)
As Amended March 27, 2014
Majority vote
LOCAL GOVERNMENT 9-0
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|Ayes:|Achadjian, Levine, Alejo, | | |
| |Bradford, Gordon, | | |
| |Melendez, Mullin, Rendon, | | |
| |Waldron | | |
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SUMMARY : Eliminates the option for the amount of documentary
transfer tax due to be shown on a separate paper, thereby
requiring the amount of tax due to be shown on the document that
serves to transfer real property. Specifically, this bill :
1)Repeals the requirement, if the party submitting the document
that serves to transfer real property for recordation
requests, that the amount of the documentary transfer tax due
be shown on a separate paper affixed to the document.
2)Replaces the terms "his" and "he" with "his or her" and "the
recorder."
3)Makes other technical and conforming changes.
EXISTING LAW :
1)Establishes the Documentary Transfer Tax Act which authorizes
cities and counties upon adoption of an ordinance by the board
of supervisors, to impose a tax on a deed, instrument, or
writing in which any land or other realty sold, based on the
value of the real property transfer, if the value exceeds
$100.
2)Authorizes counties to impose the tax at a rate of $0.55 for
each $500 of value.
3)Authorizes a city, upon adoption of the tax by the county, to
impose a documentary transfer tax at half the rate of the
county and apply it as credit against the county rate.
AB 1888
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4)Requires, if a county has imposed a documentary transfer tax,
that every document subject to tax which is submitted for
recordation show on the face of the document the amount of tax
due and the incorporated or unincorporated locations of the
lands, tenements or other realty described in the document.
5)Requires, if the party submitting the document for recordation
so requests, the amount of tax due to be shown on a separate
paper which shall be affixed to the document by the recorder
after the permanent record is made and before the original is
returned, as specified.
6)Prohibits, if a county has imposed a documentary transfer tax,
the recorder from recording any deed, instrument or writing
subject to the tax unless the tax is paid at the time of
recording. Requires a declaration of the amount of tax due,
signed by the party determining the tax, to appear on the face
of the document or on a separate paper.
7)Requires the declaration to include a statement that the
consideration or value on which tax due was computed was, or
that it was not, exclusive of the value of a lien or
encumbrance remaining on the interest or property conveyed at
the time of sales. Prohibits the failure to collect the tax
due from affecting the constructive notice otherwise imparted
by recording a deed, instrument or writing.
FISCAL EFFECT : None
COMMENTS :
1)Documentary Transfer Tax. The Documentary Transfer Tax,
established in 1967, is a general tax that authorizes cities
and counties to enact taxes on documents that serve to
transfer real property valued over $100. Existing law
establishes the tax rate for counties at $0.55 per $500 of the
property value. All 58 counties have enacted a documentary
transfer tax, which has enabled all cities to levy a tax at
half of the county rate. The transfer tax enacted by the city
is credited against the amount of the county tax due. In
other words, if a city enacts a documentary transfer tax, then
they receive one half of the revenue from the countywide rate.
If the city does not enact the tax, then the entire revenue
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goes to the county.
2)Purpose of this bill. Current law requires every document
that transfers real property subject to a documentary transfer
tax to show the amount of tax due and the location property on
the face of the document. The party submitting the document
for recordation can request to have the amount of tax due
shown on a separate paper, affixed to the document, after the
permanent record is made and before the original is returned.
This bill repeals the option that allows for the amount of tax
due to be shown on a separate paper. This bill is sponsored
by the Appraisal Institute.
3)Author's statement. According to the author, "The purpose of
this bill is to provide for transparency in the administration
of California's documentary transfer tax law, resolve an issue
relating to the availability of transfer tax information under
the California Public Records Act (CPRA), and ensure that real
estate appraisers have access to transfer tax information in
order to accurately appraise real property.
"Some county recorders make the information contained in these
separate documents available. In some counties where transfer
tax is recorded on a separate document, the public may only
obtain the information through a California Public Records Act
request. Submitting CPRA requests is a time-consuming and
onerous process for the requestor and for the public entity
which must respond to requests pursuant to the timelines
established in the Public Records Act. An opinion by the
California Attorney General in 2007 held that the receipt or
other document evidencing the amount of transfer tax paid was
a public record subject to disclosure under the CPRA, because
no specific exemption exists in the Public Records Act for
this information, and because the law requires the provisions
of the CPRA to be interpreted broadly to ensure public access
to information."
According to an informal survey, the County Recorders
Association of California found among 33 counties that
responded, 21 counties do not require a CPRA request, 11
counties require a CPRA request, and one county does not
provide the information even with a CPRA request in order to
access the separate document with the amount of documentary
transfer tax. Supporters argue due to the lack of
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accessibility and uniformity caused by this option in current
law, repealing it outright is the best option.
The author argues, "Because the public is entitled to the
information on the separate document concerning transfer
taxes, there is no longer any reason to continue the separate
document option. Removing the option resolves any Public
Records Act questions and eliminates the time and expense for
local assessors to respond to CPRA requests. Transparent
disclosure of the amount of transfer tax paid also helps
provide confidence in the fair administration of California's
tax laws. For consumers relying on appraisers to inform their
real estate decision, this bill ensures public access to
complete and accurate information."
4)Arguments in support. Supporters argue that in the interest
of tax transparency this bill eliminates archaic language in
the law permitting a separate statement of documentary
transfer taxes paid.
5)Arguments in opposition. None on file.
Analysis Prepared by : Misa Yokoi-Shelton / L. GOV. / (916)
319-3958
FN: 0003121