BILL ANALYSIS �
AB 2257
Page 1
Date of Hearing: May 14, 2014
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Mike Gatto, Chair
AB 2257 (Cooley) - As Amended: May 5, 2014
Policy Committee: Local
GovernmentVote:9-0
Revenue & Taxation 9-0
Urgency: No State Mandated Local Program:
Yes Reimbursable: Yes
SUMMARY
This bill makes the following changes to the distribution of
excess proceeds from the sale of tax-defaulted property:
1)Requires that, in cases where the county board of supervisors
has been petitioned to rescind a tax sale, any excess proceeds
only be distributed to the parties of interest after one year
of the date the board of supervisors determines the tax sale
should not be rescinded, and only if the petitioner has not
commenced a court proceeding to challenge the validity of the
tax sale.
2)Prohibits a distribution of excess proceeds to parties of
interest if a court proceeding challenging the validity of the
tax sale has been commenced, until a final order is issued.
3)Authorizes the transfer of excess proceeds from the sale of
tax-defaulted property to the relevant county general fund
instead of the taxing agencies.
FISCAL EFFECT
Insignificant costs to counties, likely reimbursable state
mandates; possible minor cost savings.
COMMENTS
1) Purpose. According to the author, the distribution of any
excess proceeds following a tax default sale to a county
general fund after the time in which any claimants may make
AB 2257
Page 2
additional claims has elapsed will result in cost savings for
counties and simplify procedures.
2) Distribution in Tax-Defaulted Property Sales. A property may
be declared tax-defaulted by a county tax collector if
property taxes are not paid when due. If the owner fails to
pay the full taxes, interest, and penalties within five years
(or, in certain cases, three years), the county may conduct a
public sale of the property.
Proceeds from the sale are distributed to the state, county,
and taxing agencies to cover taxes owed and the costs of
giving the relevant notices and conducting the sale. Any
excess proceeds remaining after that distribution must be
dispersed again, in another round of distributions, to the
local taxing agencies entitled to share in the proceeds.
This bill simplifies the distribution procedure by allowing
the remaining amounts, after the lienholders or former owners
had a chance to claim their share of proceeds, to be
transferred to the relevant county general fund instead of
going back to the taxing agencies for another round of
distribution.
Analysis Prepared by : Joel Tashjian / APPR. / (916) 319-2081