California Legislature—2013–14 Regular Session

Assembly Bill No. 2231

Introduced by Assembly Members Gordon, Levine, and Patterson

February 20, 2014

An act to amend Sections 16182, 16186, 16190, 16200, 16210, 16211, 16211.5, and 16213 of, to repeal Sections 16185, 16212, and 16214 of, and to repeal and add Section 16180 of, the Government Code, and to amend Sections 2514, 3375, 20503, 20583, 20584, 20602, 20621, 20622, 20645.5, and 20645.6 of, to amend and repeal Section 20623 of, to repeal Section 20583.1 of, and to repeal Chapter 3.3 (commencing with Section 20639) of Part 10.5 of Division 2 of, the Revenue and Taxation Code, relating to state government, and making an appropriation therefor.

LEGISLATIVE COUNSEL’S DIGEST

AB 2231, as introduced, Gordon. State Controller: property tax postponement.

The Senior Citizens and Disabled Citizens Property Tax Postponement Law, until February 20, 2009, authorized a claimant, as defined, to file a claim with the Controller to postpone the payment of ad valorem property taxes, where household income, as defined, did not exceed specified amounts. That law authorized the Controller, upon approval of the claim, to either make a payment directly to specified entities, or to issue the claimant a certificate of eligibility that constituted a written promise of the state to pay the amount specified on the certificate, as provided. That law required these payments to be made out of specified funds appropriated to the Controller, and also required certain repaid property tax postponement payments to be paid into an impound account and transferred, as specified, to the General Fund. That law also required all sums paid by the Controller for postponed property taxes to be secured by a lien in favor of the State of California.

Existing law, on and after February 20, 2009, prohibits a person from filing a claim for postponement, and prohibits the Controller from accepting applications for postponement, under the Senior Citizens and Disabled Citizens Property Tax Postponement Law.

This bill would make inoperative the prohibition against a person filing a claim for postponement and the Controller from accepting applications for postponement under the program as of July 1, 2015, and would repeal these provisions on January 1, 2016. This bill would exclude losses and nonexpenses from “income” for purposes of these provisions. This bill would also exclude mobilehomes and houseboats from the scope of these provisions, would repeal the related Senior Citizens Mobilehome Property Tax Postponement Law, and make conforming changes to related provisions.

This bill would create in the State Treasury a Senior Citizens and Disabled Citizens Property Tax Postponement Fund. This bill would delete the requirement that funds be placed in an impound account and would, instead, require that repaid property tax postponement payments be directly deposited into the newly created fund. The bill would continuously appropriate these funds to the Controller for purposes of administering the property tax postponement program, as specified.

Existing law authorizes the Controller to subordinate the lien for postponed property taxes where the Controller determines subordination is appropriate.

This bill would eliminate that authorization.

Existing law requires that the owners equity interest in the residential dwelling be at least 20% of the full value of the property in order to be eligible to participate in the postponement program.

This bill would increase the equity requirement to at least 40%.

Existing law requires the repayment of postponed taxes in specified circumstances.

This bill would, in addition, require repayment if the claimant refinances the dwelling or has elected to participate in a revenue mortgage program for the dwelling. The bill would require that the county tax collector notify the Controller within 60 days of all property subject to a “Notice of Lien for Postponed Property Taxes” becoming tax defaulted or subject to collection procedures, as specified.

Existing law requires a claim for postponement to be filed after May 15 of the calendar year in which the fiscal year for which postponement is claimed begins, and on or before December 10 of that fiscal year.

This bill would instead require a claim for postponement to be filed after September 1 of the calendar year in which the fiscal year for which postponement is claimed begins, and on or before April 10 of that fiscal year.

Existing law makes optional certain duties of local agencies related to recordation of the tax lien.

This bill would delete that provision, thereby imposing a state-mandated local program.

The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that, if the Commission on State Mandates determines that the bill contains costs mandated by the state, reimbursement for those costs shall be made pursuant to these statutory provisions.

Vote: ²⁄₃. Appropriation: yes. Fiscal committee: yes. State-mandated local program: yes.

The people of the State of California do enact as follows:

SECTION 1.  

Section 16180 of the Government Code is
repealed.

begin delete

16180.  

Out of the amount appropriated to the Controller by
Section 16100, the sum of twelve million seven hundred thousand
dollars ($12,700,000) for the 1977-78 fiscal year and each fiscal
year thereafter is hereby made available to the Controller to pay
the face amount of all certificates of eligibility for the
postponement of property taxes submitted to the Controller which
are signed and countersigned in the manner specified in Sections
20602, 20603, 20639.6, 20640.6, and 20640.7 of the Revenue and
Taxation Code.

end delete

SEC. 2.  

Section 16180 is added to the Government Code, to
read:

16180.  

(a) There is hereby created in the State Treasury a
Senior Citizens and Disabled Citizens Property Tax Postponement
Fund. Subject to subdivision (b) and notwithstanding Section
13340, the fund is continuously appropriated to the Controller,
commencing January 1, 2015, for purposes of administering this
chapter, including, but not limited to, necessary administrative
costs and disbursements relating to the postponement of property
taxes pursuant to the Senior Citizens and Disabled Citizens
Property Tax Postponement Law (Chapter 2 (commencing with
Section 20581) of Part 10.5 of Division 2 of the Revenue and
Taxation Code).

(b) The Controller shall transfer any moneys in the fund in
excess of ten million dollars ($10,000,000) to the General Fund.

(c) Any loan repayments relating to the Senior Citizens and
Disabled Citizens Property Tax Postponement Law shall be
deposited into the Senior Citizens and Disabled Citizens Property
Tax Postponement Fund.

SEC. 3.  

Section 16182 of the Government Code is amended
to read:

16182.  

(a) All sums paid by the Controller under the provisions
of this chapter, together with interest thereon, shall be secured by
a lien in favor of the State of California begin insert when funds are transferred
to the county by the Controller end insert upon the real property begin delete or a
mobilehome end delete for which property taxes have been postponed begin delete , or
both end delete . In the case of a residential dwelling which is part of a larger
parcel taxed as a unit, such as a duplex, farm, or multipurpose or
multidwelling building, the lien shall be against the entire tax
parcel.

(b) In the case of real property:

(1) The lien shall be evidenced by a notice of lien for postponed
property taxes executed by the Controller, or the authorized
delegate of the Controller, and shall secure all sums paid or owing
pursuant to this chapter, including amounts paid subsequent to the
initial payment of postponed taxes on the real property described
in the notice of lien.

(2) The notice of lien may bear the facsimile signature of the
Controller. Each signature shall be that of the person who shall be
in the office at the time of execution of the notice of lien; provided,
however, that such notice of lien shall be valid and binding
notwithstanding any such person having ceased to hold the office
of Controller before the date of recordation.

(3) The form and contents of the notice of lien for postponed
property taxes shall be prescribed by the Controller and shall
include, but not be limited to, the following:

(A) The names of all record owners of the real property for
which the Controller has advanced funds for the payment of real
property taxes.

(B) A description of the real property for which real property
taxes have been paid.

(C) The identification number of the notice of lien which has
been assigned the lien by the Controller.

(4) The notice of lien shall be recorded in the office of the
county recorder for the county in which the real property subject
to the lien is located.

(5) The recorded notice of lien shall be indexed in the Grantor
Index to the names of all record owners of the real property and
in the Grantee Index to the Controller of the State of California.

(6) After the notice of lien has been duly recorded and indexed,
it shall be returned by the county recorder to the office of the
Controller. The recorder shall provide the county tax collector with
a copy of the notice of lien which has been recorded by the
Controller.

(7) From the time of recordation of a notice of lien for postponed
property taxes, a lien shall attach to the real property described
therein and shall have the priority of a judgment lien for all
amounts secured thereby, except that the lien shall remain in effect
until begin delete either of the following occurs: end delete begin insert it is released by the Controller
in the manner prescribed by Section 16186. end insert

begin delete

(A) It is released by the Controller in the manner prescribed by
Section 16186.

end delete begin delete

(B) The foreclosure or sale of an obligation secured by a lien
which is senior in priority to the lien of the State of California.

end delete begin delete

(c) In the case of mobilehomes:

end delete begin delete

(1) The lien shall be evidenced by a notice of lien for postponed
property taxes executed by the Controller, or the authorized
delegate of the Controller, and shall secure all sums paid or owing
pursuant to this chapter.

end delete begin delete

(2) The notice of lien may bear the facsimile signature of the
Controller. The signature shall be that of the person who is in the
office at the time of execution of the notice of lien. However, the
notice of lien is valid and binding notwithstanding the person
having ceased to hold the office of Controller before the date of
filing.

end delete begin delete

(3) The form and contents of the notice of lien for postponed
property taxes shall be prescribed by the Controller and shall
include, but not be limited to, all of the following:

end delete begin delete

(A) The name or names of the registered owner or owners, legal
owner or owners, if different than the registered owner or owners
and the names, if any, of all junior lienholders.

end delete begin delete

(B) The identification number of the notice of lien which has
been assigned the lien by the Controller.

end delete begin delete

(4) The notice of lien shall be transmitted to the Department of
Housing and Community Development at its office in Sacramento,
California.

end delete begin delete

(5) Upon receipt of the notice of lien for postponed property
taxes from the Controller, the Department of Housing and
Community Development shall amend the permanent title record
of the mobilehome to reflect that the property taxes on the
mobilehome are subject to postponement.

end delete begin delete

(6) The Department of Housing and Community Development
shall provide the Controller with an acknowledgement of receipt
and amendment of the permanent title record.

end delete begin delete

(7) From the time the Department of Housing and Community
Development receives the notice of lien from the Controller, the
department shall impose a moratorium on any other amendments
to the permanent title record of the mobilehome for purposes of
transferring any ownership interest or transferring or creating any
security interest in the mobilehome, until released by the Controller
in the manner prescribed by Section 16186 or an authorization for
the amendments is given by the Controller in writing.

end delete begin delete

(d) From the time of filing a notice of lien, a lien shall attach to
the mobilehome for which eligibility for the postponement of
property taxes has been granted.

end delete begin delete

(e) Notwithstanding any other provision in this section, any
action required of a local agency by this section in order to give
effect to the Senior Citizens Mobilehome Property Tax
Postponement Law (Chapter 3.3 (commencing with Section
20639)) of Part 10.5 of Division 2 of the Revenue and Taxation
Code, and that has been determined by the Commission on State
Mandates to be a reimbursable mandate, shall be optional.

end delete

SEC. 4.  

Section 16185 of the Government Code is repealed.

begin delete

16185.  

Notwithstanding the provisions of Section 16182,
provided the interests of the state are adequately protected, the
Controller may subordinate the lien for postponed real property
taxes where the Controller determines subordination is appropriate.

A recital in a certificate of subordination, executed by the
Controller, recorded in the county wherein the notice of lien for
postponed property taxes has been recorded, subordinating such
lien to specifically identified liens or encumbrances shall be
conclusive in favor of all persons or entities thereafter dealing with
the real property.

end delete

SEC. 5.  

Section 16186 of the Government Code is amended
to read:

16186.  

If at any time the amount of the obligation secured by
the lien for postponed property taxes is paid in full or otherwise
discharged, the Controller, or the authorized delegate of the
Controller, shall begin insert in the case of real property end insert :

begin delete

(a) In the case of real property:

end delete begin delete

(1)

end delete

begin insert (a) end insert  Execute and cause to be recorded in the office of the county
recorder of the county wherein the real property described in the
lien is located, a release of the lien conclusively evidencing the
satisfaction of all amounts secured by the lien. The cost of
recording the release of the lien shall be added to and become part
of the obligation secured by the lien being released.

begin delete

(2)

end delete

begin insert ( end insert begin insert b) end insert  Direct the tax collector to remove from the secured roll, the
information required to be entered thereon by paragraph (1) of
subdivision (a) of Section 2514 of the Revenue and Taxation Code
with respect to the property described in the lien.

begin delete

(3)

end delete

begin insert ( end insert begin insert c) end insert  Direct the assessor to remove from the assessment records
applicable to the property described in the lien, the information
required to be entered on such records by Section 2515 of the
Revenue and Taxation Code.

begin delete

(b) In the case of a mobilehome:

end delete begin delete

(1) Direct the tax collector to remove from the secured roll the
information required to be entered thereon by paragraph (1) of
subdivision (a) of Section 2514 of the Revenue and Taxation Code.

end delete begin delete

(2) Transmit a Release of Lien to the owner of the mobilehome
or the owner’s heirs or assigns. The owner, or the owner’s heirs
or assigns, shall transmit the Release of Lien, and a fee of six
dollars ($6), to the Department of Housing and Community
Development. Upon receipt of the Release of Lien and the fee, the
department shall terminate the restriction on the permanent title
record as provided by Section 16182.

end delete

SEC. 6.  

Section 16190 of the Government Code is amended
to read:

16190.  

All amounts owing pursuant to Article 1 (commencing
with Section 16180) of this chapter shall become due if any of the
following occurs:

(a) The claimant, who is either the sole owner or sole possessory
interest holder of the residential dwelling, as defined in Section
20583 or Section 20640 of the Revenue and Taxation Code, or a
coowner or copossessory interest holder with a person other than
a spouse or other individual eligible to postpone property taxes
pursuant to Chapter 2 (commencing with Section 20581), Chapter
3.3 (commencing with Section 20639), or Chapter 3.5
(commencing with Section 20640) of Part 10.5 of Division 2 of
such code, ceases to occupy the premises as his residential
dwelling, dies, or sells, conveys, or disposes of the property, or
allows any tax or special assessment on the premises described in
Section 20583 of such code to become delinquent. If the sole owner
or possessory interest holder claimant dies and his or her surviving
spouse inherits the premises and continues to own and occupy it
as his or her principal place of residence, then the lien amount does
not become due and payable unless taxes or special assessments
described in the preceding sentence become delinquent, or such
surviving spouse dies, or sells, conveys or disposes of the interest
in the property.

(b) The claimant, who is a coowner or copossessory interest
holder of the residential dwelling, as defined in Section 20583 or
Section 20640.2 of the Revenue and Taxation Code, with a spouse
or another individual eligible to postpone property taxes pursuant
to Chapter 2 (commencing with Section 20581), Chapter 3.3
(commencing with Section 20639), or Chapter 3.5 (commencing
with Section 20640) of Part 10.5 of Division 2 of such code, dies,
and the surviving spouse or other surviving eligible individual
allows any tax or special assessment on the premises described in
Section 20583 of such code to become delinquent or such surviving
spouse or other individual ceases to occupy the premises as a
residential dwelling, dies, or conveys, or disposes of the interest
in the property.

(c) The failure of the claimant to perform those acts the claimant
is required to perform where such performance is secured, or will
be secured in the event of nonperformance, by a lien which is
senior to that of the lien provided by Section 16182.

(d) Postponement was erroneously allowed because eligibility
requirements were not met.

begin insert

(e) The claimant is refinancing the residential dwelling.

end insert begin insert

(f) The claimant has elected to participate in a reverse mortgage
program for the residential dwelling.

end insert

SEC. 7.  

Section 16200 of the Government Code is amended
to read:

16200.  

In the event that the Controller receives the notice
described in Section 16187 of this code or Section 3375 of the
Revenue and Taxation Code, the Controller may take any of the
following actions which will best serve the interests of the state:

begin delete

(a) Out of the amount appropriated by Section 16100, the
Controller may pay the amount of any delinquent taxes, interest,
or penalties on the property or the amount of any other obligation
secured by a lien or encumbrance on the property and add such
amount to the amount secured by the lien on such property
provided for in Article 1 (commencing with Section 16180) of this
chapter.

end delete begin delete

(b)

end delete

begin insert (a) end insert  Notify by United States mail the tax collector or other party
that such notice has been received and that the Controller must be
given at least 20 days prior notice of the date that the property will
be sold at auction. If the Controller elects to proceed under this
subdivision, the Controller may use funds appropriated by Section
16100 to bid on the property at the auction up to the amount
secured by the state’s lien on the property and any lien on such
property having priority over the state’s lien. All additional
amounts paid pursuant to this subdivision shall be added to the
amount secured by the lien on such property provided for in Article
1 (commencing with Section 16180) of this chapter.

begin delete

(c)

end delete

begin insert (b) end insert  Acknowledge by United States mail that the notice required
by Section 16187 of this code or Section 3375 of the Revenue and
Taxation Code has been received.

SEC. 8.  

Section 16210 of the Government Code is amended
to read:

16210.  

In the event that the amount secured by the state’s lien
provided for in Article 1 (commencing with Section 16180) is paid
by reason of the sale or condemnation of the property on which
the lien attaches, the funds so received shall be placed in begin delete an
impound account for a period of six months. In connection with
the establishment of such an account, the Controller shall release
the state’s lien in the manner prescribed by Section 16186 end delete begin insert the
Senior Citizens and Disabled Citizens Property Tax Postponement
Fund end insert .

SEC. 9.  

Section 16211 of the Government Code is amended
to read:

16211.  

The claimant under Chapter 2 (commencing with
Section 20581), Chapter 3 (commencing with Section 20625),
begin delete Chapter 3.3 (commencing with Section 20639, end delete or Chapter 3.5
(commencing with Section 20640) of Part 10.5 of Division 2 of
the Revenue and Taxation Code whose residential dwelling was
sold or condemned may draw upon the amount in the account to
purchase a new residential dwelling, and the amount so drawn
shall be secured by a new lien against the new residential dwelling
from the time the Controller records the new lien against the new
residential dwelling as provided for under Section 16182.

In the case of real property, the Controller shall subordinate the
new lien to the lien of the note and deed of trust of the purchase
money obligations used in the acquisition of the new residential
dwelling, provided the claimant has an equity of at least 20 percent
of the full value of the property, as required by paragraph (1) of
subdivision (b) of Section 20583 of the Revenue and Taxation
Code, prior to recordation of that subordination. The lien shall
have priority over all subsequent liens, except as provided in
Section 2192.1 of the Revenue and Taxation Code.

SEC. 10.  

Section 16211.5 of the Government Code is amended
to read:

16211.5.  

(a) In the event that the real property securing the
state’s lien provided for in Article 1 (commencing with Section
16180) is the residential dwelling of a claimant under Chapter 2
(commencing with Section 20581) of Part 10.5 of Division 2 of
the Revenue and Taxation Code and is voluntarily sold, the funds
derived from the voluntary sale of the residential dwelling shall
be placed in begin delete an impound account for a period of six months. In
connection with the establishment of such account, end delete begin insert the Senior
Citizens and Disabled Citizens Property Tax Postponement Fund.
At that time, end insert the Controller shall release the state’s lien in the
manner prescribed by Section 16186.

(b) The claimant under Chapter 2 (commencing with Section
20581) of Part 10.5 of Division 2 of the Revenue and Taxation
Code whose residential dwelling was voluntarily sold begin delete may end delete begin insert shall
not end insert draw upon the amount in the begin delete account to purchase a new
residential dwelling, and the amount so drawn shall be secured by
a new lien against the new residential dwelling from the time the
Controller records the new lien against the new residential dwelling
as provided for under Section 16182 end delete begin insert Senior Citizens and Disabled
Citizens Property Tax Postponement Fund end insert .

begin delete

The Controller shall subordinate such new lien to the note and
deed of trust of the purchase money obligations used in the
acquisition of the new residential dwelling, provided the claimant
has an equity of at least 20 percent of the full value of the property,
as required by paragraph (1) of subdivision (b) of Section 20583
of the Revenue and Taxation Code, prior to recordation of such
subordination. Such lien shall have priority over all subsequent
liens, except as provided in Section 2192.1 of the Revenue and
Taxation Code.

end delete

SEC. 11.  

Section 16212 of the Government Code is repealed.

begin delete

16212.  

An amount drawn pursuant to Section 16211 or 16211.5
shall be treated as an amount paid pursuant to Section 16180 for
all purposes of this chapter.

end delete

SEC. 12.  

Section 16213 of the Government Code is amended
to read:

16213.  

At the end of the six-month period specified in Section
16210 or the six-month period specified in Section 16211.5, all
funds remaining in an impound account shall be transferred to the
begin delete General Fund end delete begin insert Senior Citizens and Disabled Citizens Property Tax
Postponement Fund, established pursuant to Section 16180 end insert .

SEC. 13.  

Section 16214 of the Government Code is repealed.

begin delete

16214.  

All moneys in an impound account created pursuant to
this article are continually appropriated to the Controller for the
purposes of this article.

end delete

SEC. 14.  

Section 2514 of the Revenue and Taxation Code is
amended to read:

begin delete

2514.  

(a) Upon receipt of a certificate of eligibility described
in Section 20602, Section 20639.6, or Section 20640.6 signed by
the claimant, the claimant’s spouse, or authorized agent appointed
under regulations adopted by the Controller pursuant to Section
20603 or Section 20640.7, the tax collector shall ascertain whether
the amount of money entered on the certificate by such claimant
or agent, when added to other amounts available for such purpose,
are sufficient to pay the amount due and owing.

If such is the case, the tax collector or his or her designee shall
countersign the certificate and mark the tax paid. Once signed and
countersigned, a certificate of eligibility shall be deemed a
negotiable instrument for purposes of all laws of this state, as
specified in subdivision (d) of Section 20602. Upon acceptance
of such a certificate:

(1) The tax collector shall enter the fact that taxes on the
property have been postponed in appropriate columns on the roll.
In the case of the secured roll, this information may be entered in
that portion of the roll which has been designated for tax default
information required by Section 3439.

(2) In the case of a certificate of eligibility issued pursuant to
Section 20602, the tax collector shall determine if the property
described in the certificate of eligibility is subject to a lien recorded
pursuant to Section 16182 of the Government Code. If the property
is not subject to such a lien, the tax collector shall enter the amount
paid by use of the certificate, the date of such payment, the
Controller’s identification number shown on the certificate of
eligibility, the address of the property covered by the certificate,
and the name of the claimant as shown on the certificate on a
“notice of lien for postponed property taxes” form which shall be
provided by the Controller. The tax collector shall thereafter
forward such notice of lien form to the assessor.

(3) 

end delete

begin insert

begin insert 2514. end insert   

end insert

begin insert (a) end insert begin insert   end insert With respect to a claimant whose property taxes are
paid by a lender from an impound, trust, or other type of account
described in Section 2954 of the Civil Code, the tax collector shall
notify the auditor of the claimant’s name and address, and the
begin insert duplicate end insert amount of money begin delete entered on the certificate end delete begin insert the Controller
transferred to the tax collector via an electronic fund transfer end insert .

The begin insert county end insert auditor, treasurer, or disbursing officer shall send a
check in the amount of money begin delete within 30 days following the date
on which the installment is paid by the lender or the certificate of
eligibility is received from the claimant, whichever is later end delete begin insert based
on the electronic transfer by the Controller, to the Controller
within 60 days of the replicated payment end insert .

(b) The procedures established by this chapter shall not be
construed to require a lender to alter the manner in which a lender
makes payment of the property taxes of such begin insert a end insert claimant.

begin delete

(c) Notwithstanding any other provision in this section, any
action required of a local agency by this section in order to give
effect to the Senior Citizens Mobilehome Property Tax
Postponement Law (Chapter 3.3 (commencing with Section
20639)) of Part 10.5 of Division 2, and that has been determined
by the Commission on State Mandates to be a reimbursable
mandate, shall be optional.

end delete

SEC. 15.  

Section 3375 of the Revenue and Taxation Code is
amended to read:

3375.  

The begin insert county end insert tax collector shall notify the Controller begin insert within
60 days end insert , in such manner as the Controller shall direct, of all
property subject to a “Notice of Lien for Postponed Property
Taxes” recorded pursuant to Section 16182 of the Government
Code, which:

(a) Becomes tax defaulted subsequent to the date of entry on
the secured roll of the information required by paragraph (1) of
subdivision (a) of Section 2514; or

(b) Becomes subject to those collection procedures that are
available for collection of delinquent taxes or assessments on the
unsecured roll.

SEC. 16.  

Section 20503 of the Revenue and Taxation Code is
amended to read:

20503.  

(a) “Income” means adjusted gross income as defined
in Section 17072 plus all of the following cash items:

(1) Public assistance and relief.

(2) Nontaxable amount of pensions and annuities.

(3) Social security benefits (except Medicare).

(4) Railroad retirement benefits.

(5) Unemployment insurance payments.

(6) Veterans’ benefits.

(7) Exempt interest received from any source.

(8) Gifts and inheritances in excess of three hundred dollars
($300), other than transfers between members of the household.
Gifts and inheritances include noncash items.

(9) Amounts contributed on behalf of the contributor to a
tax-sheltered retirement plan or deferred compensation plan.

(10) Temporary workers’ compensation payments.

(11) Sick leave payments.

(12) Nontaxable military compensation as defined in Section
112 of the Internal Revenue Code.

(13) Nontaxable scholarship and fellowship grants as defined
in Section 117 of the Internal Revenue Code.

(14) Nontaxable gain from the sale of a residence as defined in
Section 121 of the Internal Revenue Code.

(15) Life insurance proceeds to the extent that the proceeds
exceed the expenses incurred for the last illness and funeral of the
deceased spouse of the claimant. “Expenses incurred for the last
illness” includes unreimbursed expenses paid or incurred during
the income calendar year and any expenses paid or incurred
thereafter up until the date the claim is filed. For purposes of this
paragraph, funeral expenses shall not exceed five thousand dollars
($5,000).

(16) If an alternative minimum tax is required to be paid
pursuant to Chapter 2.1 (commencing with Section 17062) of Part
10, the amount of alternative minimum taxable income (whether
or not cash) in excess of the regular taxable income.

(17) Annual winnings from the California Lottery in excess of
six hundred dollars ($600) for the current year.

(b) For purposes of this chapter, total income shall be determined
for the calendar year (or approved fiscal year ending within that
calendar year) which ends within the fiscal year for which
assistance is claimed.

begin insert

(c) For purposes of this chapter, all losses and nonexpenses
shall be converted to zero for the purpose of determining whether
the homeowner meets the Property Tax Postponement requirement.

end insert begin delete

(c)

end delete

begin insert (d) end insert  For purposes of Chapter 2 (commencing with Section
20581), Chapter 3 (commencing with Section 20625), and Chapter
3.5 (commencing with Section 20640), total income shall be
determined for the calendar year ending immediately prior to the
commencement of the fiscal year for which postponement is
claimed.

SEC. 17.  

Section 20583 of the Revenue and Taxation Code is
amended to read:

20583.  

(a) “Residential dwelling” means a dwelling occupied
as the principal place of residence of the claimant, and so much
of the land surrounding it as is reasonably necessary for use of the
dwelling as a home, owned by the claimant, the claimant and
spouse, or by the claimant and either another individual eligible
for postponement under this chapter or an individual described in
subdivision (a), (b), or (c) of Section 20511 and located in this
state. It shall include condominiums begin delete and mobilehomes end delete that are
assessed as realty for local property tax purposes. It also includes
part of a multidwelling or multipurpose building and a part of the
land upon which it is built. begin delete In the case of a mobilehome not
assessed as real property that is located on land owned by the
claimant, “residential dwelling” includes the land on which the
mobilehome is situated and so much of the land surrounding it as
reasonably necessary for use of the mobilehome as a home. end delete

(b) As used in this chapter in reference to ownership interests
in residential dwellings, “owned” includes (1) the interest of a
vendee in possession under a land sale contract provided that the
contract or memorandum thereof is recorded and only from the
date of recordation of the contract or memorandum thereof in the
office of the county recorder where the residential dwelling is
located, (2) the interest of the holder of a life estate provided that
the instrument creating the life estate is recorded and only from
the date of recordation of the instrument creating the life estate in
the office of the county recorder where the residential dwelling is
located, but “owned” does not include the interest of the holder of
any remainder interest or the holder of a reversionary interest in
the residential dwelling, (3) the interest of a joint tenant or a tenant
in common in the residential dwelling or the interest of a tenant
where title is held in tenancy by the entirety or a community
property interest where title is held as community property, and
(4) the interest in the residential dwelling in which the title is held
in trust, as described in subdivision (d) of Section 62, provided
that the Controller determines that the state’s interest is adequately
protected.

begin delete

(c) For purposes of this chapter, the registered owner of a
mobilehome shall be deemed to be the owner of the mobilehome.

end delete begin delete

(d)

end delete

begin insert (c) end insert  Except as provided in subdivision (c), and Chapter 3
(commencing with Section 20625), ownership must be evidenced
by an instrument duly recorded in the office of the county where
the residential dwelling is located.

begin delete

(e)

end delete

begin insert (d) end insert  “Residential dwelling” does not include any of the following:

(1) Any residential dwelling in which the owners do not have
an equity of at least begin delete 20 end delete begin insert 40 end insert percent of the full value of the property
as determined for purposes of property taxation or at least begin delete 20 end delete begin insert 40 end insert
percent of the fair market value as determined by the Controller
and where the Controller determines that the state’s interest is
adequately protected. The begin delete 20-percent end delete begin insert 40-percent end insert equity requirement
shall be met at the time the claimant or authorized agent files an
initial postponement claim and tenders to the tax collector the
initial certificate of eligibility described in Sections 20602,
20639.6, and 20640.6.

(2) Any residential dwelling in which the claimant’s interest is
held pursuant to a contract of sale or under a life estate, unless the
claimant obtains the written consent of the vendor under the
contract of sale, or the holder of the reversionary interest upon
termination of the life estate, for the postponement of taxes and
the creation of a lien on the real property in favor of the state for
amounts postponed pursuant to this act.

(3) Any residential dwelling on which the claimant does not
receive a secured tax bill.

(4) Any residential dwelling in which the claimant’s interest is
held as a possessory interest, except as provided in Chapter 3.5
(commencing with Section 20640).

begin delete

(f) Notwithstanding subdivision (c) of Section 20584, houseboats
and floating homes, as defined by Section 20583.1, on which
property taxes are delinquent at the time the application for
postponement under this chapter is made, shall not be eligible for
postponement.

end delete

SEC. 18.  

Section 20583.1 of the Revenue and Taxation Code
is repealed.

begin delete

20583.1.  

For purposes of Section 20583, “residential dwelling”
includes houseboats and floating homes.

end delete

SEC. 19.  

Section 20584 of the Revenue and Taxation Code is
amended to read:

20584.  

(a) “Property taxes” means all ad valorem property
taxes, special assessments, and other charges or user fees which
are attributable to the residential dwelling on the county tax bill
and the ad valorem property taxes, special assessments, or other
charges or user fees appearing on the tax bill of any chartered city
which levies and collects its own property taxes.

(b) Whenever a residential dwelling is an integral part of a larger
tax unit, such as a duplex, farm or a multipurpose building,
“property taxes” shall be the percentage of the total property taxes
as the value of the residential dwelling is of the value of the total
tax unit.

(c) “Property taxes” begin delete includes any property taxes end delete begin insert means property
taxes for current fiscal years for which the claim is made and
excludes delinquent taxes for prior fiscal years end insert that become
delinquent after the claimant was 62 years of age or after the
claimant became blind or disabled as defined in Section 12050 of
the Welfare and Institutions Code.

SEC. 20.  

Section 20602 of the Revenue and Taxation Code is
amended to read:

20602.  

begin delete (a) end delete begin delete   end delete Upon approval of a claim described in Section
20601, the Controller begin delete may do either of the following: end delete

begin delete (1) end delete begin delete   end delete begin delete Make end delete begin insert shall make end insert payments directly to a begin delete lender, mortgage
company, escrow company, or end delete county tax collector for the property
taxes owed on behalf of a qualified claimant. Payments may, upon
appropriation by the Legislature, be made out of the amounts
otherwise appropriated pursuant to Section 16100 of the
Government Code that are secured by a begin insert secured tax end insert lien and
obligation as specified by Article 1 (commencing with Section
16180) of Chapter 5 of Division 4 of the Government Code.

begin delete

(2) Issue to the claimant a certificate of eligibility, which shall
consist of two parts, both of which shall contain the name of the
claimant, the address of the residential dwelling on which the
claimant has applied for property tax postponement, and that other
information and in that form as the Controller shall prescribe. In
the event that that residential dwelling is located in a chartered
city which levies and collects its own taxes, the Controller shall
issue a duplicate certificate of eligibility to pay all or any part of
the property taxes appearing on that city’s tax bill. Each part of a
certificate of eligibility shall be payable in an unspecified amount
and shall contain statements to identify the property tax installment
to which it may be applied.

end delete begin delete

(b) The Controller shall prescribe the form of the certificates of
eligibility to pay all delinquent taxes and assessments authorized
by this chapter.

end delete begin delete

Upon or accompanying each certificate shall be a brief statement
explaining that (1) those taxpayers whose property taxes are paid
by a lender via an impound, trust or other similar account should
enter the total amount of each installment on their respective
certificates and mail both certificates to the tax collector at the
same time, and (2) those taxpayers will receive a refund check
from the county or city in the amount they entered on each
certificate, within 30 days following the date on which the
installment is paid by the lender or the certificate of eligibility is
received by the tax collector, whichever is later, and (3) the intent
of this procedure is to make sure the taxes on the claimant’s
dwelling are not paid twice.

end delete begin delete

(c) When a certificate of eligibility has been signed by the
claimant, his or her spouse, or authorized agent and countersigned
by the person authorized to collect property taxes or assessments
for the local agency, such certificate shall constitute a written
promise on the part of the State of California to pay the sum of
money specified therein and such signed and countersigned
certificate shall be deemed a negotiable instrument for the sole
purpose of the payment of property taxes owing in the name of
the claimant or his or her spouse for purposes of all laws of this
state.

end delete begin delete

(d) A certificate of eligibility shall be valid for the duration
prescribed thereon by the Controller.

end delete begin delete

(e) The Controller shall issue certificates of eligibility claims
approved on or before September 30 between October 15 and
November 1 of the fiscal year for which postponement is claimed.
Certificates for claims approved after September 30 shall be issued
at such times as the Controller determines will best implement the
purpose of this chapter.

end delete begin delete

(f) The Controller shall prescribe the manner in which a claimant
eligible under this chapter, who has been issued a certificate of
eligibility which is lost or destroyed prior to being filed with the
local agency pursuant to subdivision (b) may obtain a duplicate
copy of said certificate as a replacement. (Under such conditions
as may be prescribed by the Controller, a duplicate copy shall be
deemed as having been filed with the local agency as of the date
a claimant requests issuance of such duplicate copy.)

end delete

SEC. 21.  

Section 20621 of the Revenue and Taxation Code is
amended to read:

20621.  

Each claimant applying for postponement under Article
2 (commencing with Section 20601) shall file a claim under penalty
of perjury with the Controller on a form supplied by the Controller.
The claim shall contain all of the following:

(a) Evidence acceptable to the Controller that the person was a
“senior citizen claimant” or a “blind or disabled claimant.”

(b) A statement showing the household income for the period
set forth in Section 20503.

(c) A statement describing the residential dwelling in a manner
that the Controller may prescribe.

(d) The name of the county in which the residential dwelling is
located and the address of the residential dwelling.

(e) The county assessor’s parcel number applicable to the
property for which the claimant is applying for the postponement
of property taxes.

(f) (1) Documentation evidencing the current existence of any
abstract of judgment, federal tax lien, or state tax lien filed or
recorded against the applicant, and any recorded mortgage or deed
of trust that affects the subject residential dwelling, for the purpose
of determining that the claimant possesses a begin delete 20-percent end delete begin insert 40-percent end insert
equity in the subject residential dwelling as required by paragraph
(1) of subdivision (b) of Section 20583.

(2) Actual costs, not in excess of fifty dollars ($50), paid by the
claimant to obtain the documentation shall begin delete , in the event the
Controller issues a certificate of eligibility, end delete reduce the amount of
the lien for the year, but not the face amount of the payment
prescribed in Section 16180 of the Government Code.

(g) Other information required by the Controller to establish
eligibility.

SEC. 22.  

Section 20622 of the Revenue and Taxation Code is
amended to read:

20622.  

The claim for postponement shall be filed after begin delete May
15 end delete begin insert September 1 end insert of the calendar year in which the fiscal year for
which postponement is claimed begins, and on or before begin delete December end delete
begin insert April end insert 10 of that fiscal year; if begin delete December end delete begin insert April end insert 10th falls on
Saturday, Sunday, or a legal holiday, the date is extended to the
next business day.

SEC. 23.  

Section 20623 of the Revenue and Taxation Code is
amended to read:

20623.  

begin insert (a) end insert begin insert   end insert No person shall file a claim for postponement under
this chapter on or after the effective date of the act adding this
section, and the Controller shall not accept applications for
postponement under this chapter on or after that date.

begin insert

(b) This section shall become inoperative on July 1, 2015, and
as of January 1, 2016, is repealed, unless a later enacted statute
that is enacted before January 1, 2016, deletes or extends the dates
on which it becomes inoperative and is repealed.

end insert

SEC. 24.  

Chapter 3.3 (commencing with Section 20639) of
Part 10.5 of Division 2 of the Revenue and Taxation Code is
repealed.

SEC. 25.  

Section 20645.5 of the Revenue and Taxation Code
is amended to read:

20645.5.  

If a postponement claim under Chapter 2
(commencing with Section 20581), Chapter 3.3 (commencing with
Section 20639), or Chapter 3.5 (commencing with Section 20640)
is filed timely but before delinquency date of the first or second
installment of property taxes, then any delinquent penalties and
interest for such fiscal year shall be canceled unless the failure to
perfect the claim was due to willful neglect on the part of the
claimant or representative. In the event of such willful neglect, begin delete the
certificates of eligibility end delete begin insert an electronic fund transfer end insert for begin delete such end delete begin insert that
current end insert fiscal year can be used to pay delinquent taxes only if
accompanied by sufficient amounts to pay the delinquent interest
and penalties.

SEC. 26.  

Section 20645.6 of the Revenue and Taxation Code
is amended to read:

20645.6.  

If the Controller denies a postponement claim under
Chapter 2 (commencing with Section 20581), Chapter 3
(commencing with Section 20625), Chapter 3.3 (commencing with
Section 20639), or Chapter 3.5 (commencing with Section 20640),
and such denial is reversed after appeal pursuant to Section
20645.1, the Controller shall begin delete issue a warrant to the claimant, end delete
begin insert electronically transfer funds to the county, end insert if the taxes for the fiscal
year have been paid, for the amount of such taxes. If the taxes for
the fiscal year are delinquent, any resulting penalties or interest
shall be canceled.

SEC. 27.  

If the Commission on State Mandates determines
that this act contains costs mandated by the state, reimbursement
to local agencies and school districts for those costs shall be made
pursuant to Part 7 (commencing with Section 17500) of Division
4 of Title 2 of the Government Code.