BILL ANALYSIS �
AB 2415
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Date of Hearing: May 14, 2014
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Mike Gatto, Chair
AB 2415 (Ting) - As Amended: April 3, 2014
Policy Committee: Local
GovernmentVote:6-2
Revenue & Taxation 6-2
Urgency: No State Mandated Local Program:
No Reimbursable: No
SUMMARY
This bill establishes a regime to regulate property tax agents,
requiring property tax agents to register with the Secretary of
State (SOS) and prohibiting agents from representing taxpayers
before a county official without having registered. In summary,
this bill:
1)Requires each property tax agent, within 30 days of becoming a
property tax agent, to register with the SOS and pay a
biennial registration fee of $250, proceeds from which will be
deposited in the SOS Business Fees Fund; prohibits any
property tax agent from representing taxpayers before a county
official without first being registered beginning September 1,
2015.
2)Requires the SOS to issue a property tax agent registration
number within five business days of receipt of the
registration and proper fee.
3)Requires the SOS to create a list of registered property tax
agents and make it available on its public website; and
requires the SOS to post on its public website the names and
business addresses of registered property tax agents that have
been fined or had their licenses revoked.
4)Prohibits a property tax agent from registering or renewing if
that person has been convicted of a felony under state or
federal laws; convicted of any other crime involving
dishonesty, breach of trust, or moral turpitude; or had a
professional license to practice as an attorney, certified
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public accountant, public accountant, or actuary revoked.
5)Requires the SOS to conduct background checks on each
applicant.
6)Prohibits a property tax agent from making false, misleading,
fraudulent, or deceptive representations; intimating an
ability to obtain special consideration; acting without
authorization of the taxpayer; knowingly aiding or abetting a
deregistered property tax agent; using any improper action to
influence a county official; or making gifts of any monetary
value to a county official.
7)Allows any person to file a complaint with the SOS with
respect to any property tax agent that has not complied with,
or has violated, this bill.
8)Vests the SOS with discretion to pursue civil penalties for
noncompliance and designates the SOS as the enforcement
officer for determination and imposition of civil penalties;
provides that any violation is punishable by a civil penalty
not to exceed $1,500, with penalties collected to be
transferred to the GF.
9)Vests the SOS with the discretion to revoke any property tax
agent's registration due to specified reasons, and designates
the SOS as the enforcement officer for determination of
revocation of registrations.
10)Prohibits any county supervisor or member of a county
assessment appeals board from acting as a property tax agent
in the county in which the supervisor or member currently
serves.
11)Provides that the bill does not prohibit a county from
enacting property tax agent reporting requirements for
campaign contributions to elected officials in that county.
FISCAL EFFECT
Initial GF costs to SOS of $750,000 to $1.5 million to develop
systems, procedures, and regulations needed to administer the
program; ongoing GF costs of approximately $380,000 thereafter
for enforcement and to conduct background checks, largely offset
and recoverable over time through registration fee revenue.
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COMMENTS
1) Purpose. According to the author, this bill seeks to
strengthen public confidence in the property tax appeal
process without creating unreasonable burdens on property tax
consultants or their clients. The bill establishes a uniform
statewide property tax agent registration program and creates
a public list of agents who represent taxpayers in property
tax appeal cases.
2) Investigations in Los Angeles County. According to the
author, in 2011, the office of the Los Angeles County District
Attorney began investigating improper property tax reductions
granted to more than 100 property owners in the county. The
investigation began after employees at the assessor's office
claimed they had been pressured to lower property taxes for
individuals with political connections. In October 2012,
several individuals were arrested and indicted under charges
of bribery and corruption. The author claims the incident
cast an "ethical cloud" over the property tax appeals process
which this bill seeks to remedy.
In the wake of the investigation, Los Angeles County adopted a
registration process for property tax agents similar to that
proposed in this bill. There are currently approximately
1,200 agents registered under that program. The author
contends, however, that a county-by-county system would pose a
costly regulatory burden on county governments. This bill
establishes a uniform statewide registration, avoiding
possible conflicts or gaps in local regulation. The Los
Angeles County Board of Supervisors has endorsed a statewide
program.
3) Property Tax Agents. Property tax agents represent taxpayers
in the county property assessment process to help taxpayers
reduce their property tax bills. Currently there is no legal
definition of a "property tax agent" in California, and the
agents are not subject to any qualification, training, or
registration requirements. The state does regulate the
solicitation and representation of taxpayers by "assessment
reduction filing services," which requires specific
disclosures be made to the taxpayer and prohibits those
services from making false or misleading statements or
engaging in abusive practices.
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Many tax agents are professionals regulated in other fields,
such as attorneys, realtors, mortgage brokers, certified
public accountants, and former employees of county assessors'
offices. Taxpayers do not necessarily need to be represented
by a property tax agent to request a reassessment, however,
and many taxpayers choose to represent themselves in the
appeals process. If an agent is retained by the taxpayer, the
client must sign an affidavit or other form specifying the
agent is acting on behalf of that client.
Other states, including Texas and Tennessee, have enacted
similar statewide registration for property tax agents, and
agents who practice before the Internal Revenue Service are
required to register with the federal government as enrolled
agents.
4) Registration for Licensed Professionals. This bill would
require professionals regulated in other fields to also obtain
a property tax agent registration in order to represent
clients in property tax assessment appeals. In this manner,
the program is similar to that of registered lobbyists, which
requires attorneys and other professionals to register as
lobbyists in addition to their professional registration and
certification requirements.
Certain professional organizations, in particular the
California Society of Certified Public Accountants, oppose
this bill because it imposes additional registration
requirements on already-licensed professionals. These
opponents argue most professionals are already overseen by
state and federal agencies, and this bill imposes a redundant
and burdensome layer of additional regulation without any
standards for entrance, practice, or training as property tax
agents.
5) Implementation and Further Development. The SOS has opposed
this bill unless amended to resolve a number of implementation
concerns. At the time of this analysis, the author and the
SOS were working on amendments to refine the application
process, extend the implementation timeline, and reduce
certain regulatory burdens and cost pressures created by the
program.
6) Related Legislation. AB 1151 (Ting) of 2013 was the
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predecessor to this bill, and was held on the Suspense File of
this committee.
Analysis Prepared by : Joel Tashjian / APPR. / (916) 319-2081