AB 2257, as amended, Cooley. Property tax: tax-defaulted property: excess proceeds from sale.
(1) Existing
end deletebegin insertExistingend insert law generally authorizes a county tax collector to sell tax-defaulted property 5 years or more, or 3 years or more, as applicable, after that property has become tax defaulted. Existing law requires the proceeds from the sale of tax-defaulted property to be deposited in the delinquent tax sale trust fund, and requires the proceeds in the fund to be distributed to the state, to the county for reimbursement of specified costs relating to the sale of the tax-defaulted property, and among taxing agencies, as provided. Existing law requires any proceeds remaining in the delinquent tax sale trust fund after distribution of the proceeds to be retained in the fund subject to being claimed by parties of interest, as provided. Existing law requires, at the expiration of one year following the recordation of the tax deed to the purchaser, that any excess proceeds not claimed be distributed among taxing agencies, as provided.
This bill would eliminate the requirement that any excess proceeds not claimed be distributed among taxing agencies, and would instead authorize any excess proceeds to be transferred to the county general fund at the expiration of a specified time period.
(2) Existing
end deletebegin insertExistingend insert law authorizes any party of interest to file with the county a claim for the excess proceeds from the sale of tax-defaulted property, as specified, at any time prior to the expiration of one year following the recordation of the tax collector’s deed to the purchaser. Existing law prohibits the excess proceeds from being distributed to the parties of interest, as specified, sooner than one year following the recordation of the tax collector’s deed to the purchaser.
This bill would prohibit the distribution of any excess proceeds to the parties of interest as described above if the board of supervisors has been petitioned to rescind the tax sale, as specified, and would instead require the excess proceeds to be distributed no sooner than one year following the date the board of supervisors determines the tax sale should not be rescinded, and only if the person who petitioned the board of supervisors has not commenced a proceeding in court, as specified. If a proceeding has been commenced in a court, this bill would prohibit any excess proceeds from being distributed until final court order has been issued.
By changing the manner in which excess proceeds from the sale of tax-defaulted are distributed by local county officials to parties of interest, this bill would impose a state-mandated local program
(3) Existing law requires the county, when excess proceeds from the sale of tax-defaulted property exceed $150, to provide notice of the right to claim the excess proceeds by mailing a written notice to the last known mailing address of parties of interest, as defined. Existing law requires the county, if the last known address of a party of interest cannot be obtained, to publish the notice in a newspaper, as specified, except when the cost to publish is equal to or greater than the amount of the excess proceeds.
end deleteThis bill would revise the exception to the newspaper publication of notice requirement.
end deleteThe 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: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: yes.
The people of the State of California do enact as follows:
Section 4674 of the Revenue and Taxation Code
2 is amended to read:
Any excess in the proceeds deposited in the delinquent
4tax sale trust fund remaining after satisfaction of the amounts
5distributed under Sections 4672, 4672.1, 4672.2, 4673, and 4673.1
6shall be retained in the fund on account of, and may be claimed
7by parties of interest in the property as provided in, Section 4675.
8At the expiration of the period specified in subdivision (e) of
9Section 4675, any excess proceeds not claimed under Section 4675
10
may be transferred to the county general fund.
Section 4675 of the Revenue and Taxation Code is
12amended to read:
(a) Any party of interest in the property may file with
14the county a claim for the excess proceeds, in proportion to his or
15her interest held with others of equal priority in the property at the
16time of sale, at any time prior to the expiration of one year
17following the recordation of the tax collector’s deed to the
18purchaser.
19(b) After the property has been sold, a party of interest in the
20property at the time of the sale may assign his or her right to claim
21the excess proceeds only by a dated, written instrument that
22explicitly states that the right to claim the excess proceeds is being
23assigned, and only after each party to the proposed assignment has
24disclosed to each other
party to the proposed assignment all facts
25of which he or she is aware relating to the value of the right that
26is being assigned. Any attempted assignment that does not comply
27with these requirements shall have no effect. This paragraph shall
28apply only with respect to assignments on or after the effective
29date of this paragraph.
30(c) Any person or entity who in any way acts on behalf of, or
31in place of, any party of interest with respect to filing a claim for
32any excess proceeds shall submit proof with the claim that the
33amount and source of excess proceeds have been disclosed to the
34party of interest and that the party of interest has been advised of
P4 1his or her right to file a claim for the excess proceeds on his or her
2own behalf directly with the county at no cost.
3(d) The
claims shall contain any information and proof deemed
4necessary by the board of supervisors to establish the claimant’s
5rights to all or any portion of the excess proceeds.
6(e) (1) Except as provided in paragraph (2), no sooner than one
7year following the recordation of the tax collector’s deed to the
8purchaser, and if the excess proceeds have been claimed by any
9party of interest as provided herein, the excess proceeds shall be
10distributed on order of the board of supervisors to the parties of
11interest who have claimed the excess proceeds in the order of
12priority set forth in subdivisions (a) and (b). For the purposes of
13this article, parties of interest and their order of priority are:
14(A) First, lienholders of record prior to the recordation of the
15tax deed to the
purchaser in the order of their priority.
16(B) Second, any person with title of record to all or any portion
17of the property prior to the recordation of the tax deed to the
18purchaser.
19(2) (A) Notwithstanding paragraph (1), if the board of
20supervisors has been petitioned to rescind the tax sale pursuant to
21Section 3731, any excess proceeds shall not be distributed to the
22parties of interest as provided by paragraph (1) sooner than one
23year following the date the board of supervisors determines the
24tax sale should not be rescinded, and only if the person who
25petitioned the board of supervisors pursuant to Section 3731 has
26not commenced a proceeding in court pursuant to Section 3725.
27(B) If a proceeding has been commenced in a court pursuant to
28Section 3725, any excess proceeds shall not be distributed to the
29parties of interest as provided by paragraph (1) until a final court
30order is issued.
31(f) In the event that a person with title of record is deceased at
32the time of the distribution of the excess proceeds, the heirs may
33submit an affidavit pursuant to Chapter 3 (commencing with
34Section 13100) of Part 1 of Division 8 of the Probate Code, to
35support their claim for excess proceeds.
36(g) Any action or proceeding to review the decision of the board
37of supervisors shall be commenced within 90 days after the date
38of that decision of the board of supervisors.
Section 4676 of the Revenue and Taxation Code is
40amended to read:
(a) When excess proceeds from the sale of tax-defaulted
2property exceed one hundred fifty dollars ($150), the county shall
3provide notice of the right to claim the excess proceeds, as provided
4in this section.
5(b) No later than 90 days after the sale of the property, the
6county shall mail written notice of the right to claim excess
7proceeds to the last known mailing address of parties of interest,
8as defined in Section 4675. The county shall make a reasonable
9effort to obtain the name and last known mailing address of parties
10of interest.
11(c) If the last known address of a party of interest cannot be
12obtained, the county shall publish notice of the right to claim excess
13proceeds in a newspaper of
general circulation in the county.
14Publication is not required if the cost to publish is greater than the
15amount of the excess proceeds or eliminates any excess proceeds
16available for distribution. The notice shall be published once a
17week for three successive weeks and shall commence no later than
1890 days after the sale of the property.
19(d) The cost of obtaining the name and last known mailing
20address of parties of interest and of mailing or publishing the
21notices required under this section shall be deducted from the
22excess proceeds and shall be distributed to the county general fund.
If the Commission on State Mandates determines that
25this act contains costs mandated by the state, reimbursement to
26local agencies and school districts for those costs shall be made
27pursuant to Part 7 (commencing with Section 17500) of Division
284 of Title 2 of the Government Code.
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