BILL ANALYSIS �
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|SENATE RULES COMMITTEE | AB 2257|
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THIRD READING
Bill No: AB 2257
Author: Cooley (D)
Amended: 5/5/14 in Assembly
Vote: 21
SENATE GOVERNANCE & FINANCE COMMITTEE : 6-0, 6/25/14
AYES: Wolk, Knight, Beall, DeSaulnier, Hernandez, Walters
NO VOTE RECORDED: Liu
SENATE APPROPRIATIONS COMMITTEE : 7-0, 8/4/14
AYES: De Le�n, Walters, Gaines, Hill, Lara, Padilla, Steinberg
ASSEMBLY FLOOR : 73-0, 5/23/14 (Consent) - See last page for
vote
SUBJECT : Property tax: tax-defaulted property: excess
proceeds from sale
SOURCE : California Association of County Treasurers and Tax
Collectors
DIGEST : This bill directs excess proceeds from the sale of a
tax-defaulted property to the county general fund; provides that
a year must pass before any excess proceeds can be distributed
in the case where a county board of supervisors has rejected a
petition to rescind the sale, and the person has not
subsequently challenged the rejection in court.
ANALYSIS : Existing law allows property owners pay property
taxes in two annual installments: the first on November 1st,
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and the second on February 1st. Taxpayers who have not paid
their first property tax installment by December 10, or their
second installment by April 10, become delinquent and receive a
10% delinquency penalty on each amount, plus redemption
penalties of 1.5% a month until paid. Counties can issue tax
liens against property when an owner is late on paying property
taxes. Once unpaid real property taxes are delinquent, or "tax
defaulted," the county tax collector publishes the information
on the defaulted roll. If the owner fails to redeem the
property by full payment of the defaulted taxes, interest and
penalties, the property may be sold to the highest bidder at a
public sale.
Tax collectors can sell residential property in default for five
years and commercial property in default for three years, to pay
the back taxes, penalties, and costs. Prior to sale, the tax
collector must issue a notice, and record it with the county
recorder. The tax collector sends the notice to the board of
supervisors, who must approve the sale, to each taxing agency,
and each party of interest with a lien against the property or
with title or record to all or any portion of the property. The
tax collector must then publish notice of the intended sale once
a week for three successive weeks in a newspaper of general
circulation published in the county seat, and in a newspaper of
general circulation published in the judicial district in which
the property is situated. If the property is the primary
residence of the taxpayer, the tax collector must inform the
taxpayer that the property will be sold, and of the taxpayer's
right of redemption. Boards of supervisors can also rescind tax
sales in specified circumstances.
After the sale, proceeds first pay for the costs of newspaper
publishing, and recording fees. Funds are then distributed to
taxing agencies with valid claims, and to the tax collector to
pay for notices and contacting taxpayers. After that, proceeds
satisfy liens held by parties in interest. Any amounts left
over, known as "excess proceeds," are then divided up between
each taxing entity according to their appropriate share of the
property tax, after the county deducts specified costs.
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
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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 : Appropriation: No Fiscal Com.: Yes
Local: Yes
According to the Senate Appropriations Committee:
Unknown, likely minor property tax revenue loss to schools,
resulting in a corresponding minor increase in Proposition 98
General Fund expenditures.
Likely minor administrative savings to county
auditor-controllers. (Local)
SUPPORT : (Verified 8/6/14)
California Association of County Treasurers and Tax Collectors
(source)
Sacramento County Board of Supervisors
OPPOSITION : (Verified 8/6/14)
Department of Finance
ASSEMBLY FLOOR : 73-0, 5/23/14
AYES: Achadjian, Alejo, Allen, Ammiano, Bigelow, Bloom,
Bocanegra, Bonta, Bradford, Brown, Buchanan, Ian Calderon,
Campos, Chau, Ch�vez, Chesbro, Conway, Cooley, Dababneh,
Dahle, Daly, Dickinson, Donnelly, Eggman, Fong, Fox, Frazier,
Beth Gaines, Garcia, Gatto, Gomez, Gonzalez, Gordon, Gorell,
Gray, Grove, Hagman, Hall, Holden, Jones, Jones-Sawyer,
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Levine, Linder, Logue, Lowenthal, Maienschein, Mansoor,
Medina, Mullin, Muratsuchi, Nazarian, Olsen, Pan, Patterson,
Perea, John A. P�rez, Quirk, Quirk-Silva, Rendon,
Ridley-Thomas, Rodriguez, Salas, Skinner, Stone, Ting, Wagner,
Waldron, Weber, Wieckowski, Wilk, Williams, Yamada, Atkins
NO VOTE RECORDED: Bonilla, Harkey, Roger Hern�ndez, Melendez,
Nestande, V. Manuel P�rez, Vacancy
AB:e 8/6/14 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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