BILL ANALYSIS �
AB 2415
Page 1
ASSEMBLY THIRD READING
AB 2415 (Ting)
As Amended May 23, 2014
Majority vote
LOCAL GOVERNMENT 6-2 REVENUE & TAXATION 6-2
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|Ayes:|Levine, Alejo, Bradford, |Ayes:|Bocanegra, Gordon, |
| |Gordon, Mullin, Rendon | |Mullin, Pan, |
| | | |V. Manuel P�rez, Ting |
|-----+--------------------------+-----+--------------------------|
|Nays:|Wagner, Waldron |Nays:|Beth Gaines, Nestande |
| | | | |
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APPROPRIATIONS 12-4
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|Ayes:|Gatto, Bocanegra, | | |
| |Bradford, | | |
| |Ian Calderon, Campos, | | |
| |Eggman, Gomez, Holden, | | |
| |Pan, Quirk, | | |
| |Ridley-Thomas, Weber | | |
| | | | |
|-----+--------------------------+-----+--------------------------|
|Nays:|Bigelow, Donnelly, Jones, | | |
| |Wagner | | |
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SUMMARY : Establishes a statewide structure for the regulation of
Property Tax Agents. Specifically, this bill :
1)Requires each Property Tax Agent to file, under penalty of
perjury, with the Secretary of State (SOS) an application for a
registration containing the following information:
a) The Property Tax Agent's full name, business address,
business telephone number, business email address, date of
birth, and previous Property Tax Agent number issued by the
SOS, if applicable;
b) The name of the Property Tax Agent's employing tax agent
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firm, if applicable;
c) A statement affirming that the person has not:
i) Been convicted of any felony under state or federal tax
laws;
ii) Been convicted of any other criminal offense involving
dishonesty, breach of trust, or moral turpitude; or,
iii) Had his or her professional license to practice as an
attorney, certified public accountant, public accountant, or
actuary revoked by any duly constituted authority of any
state, territory, or possession of the United States,
including a commonwealth, or the District of Columbia, any
court of record, or any agency, body, or board.
d) A statement that the Property Tax Agent has read and
understands the duties and prohibitions contained in this
bill's provisions.
2)States that providing false information on the application for
registration shall subject the Property Tax Agent to a cease and
desist order by the SOS.
3)Requires a Property Tax Agent to pay the SOS a registration fee in
the amount of $250 or a fee not to exceed the amount necessary to
administer this bill.
4)Requires the SOS to issue a Property Tax Agent registration number
to the Property Tax Agent within an unspecified number of business
days, if a Property Tax Agent has registered and paid the fee as
specified above.
5)Requires, beginning on January 1, 2016, the SOS to accept
applications for a registration from Property Tax Agents.
6)Prohibits, beginning April 1, 2016, any Property Tax Agent from
representing taxpayers before a county official without first
being registered and issued a registration number pursuant to this
bill, and requires the SOS to provide the Property Tax Agent the
same registration number should that Property Tax Agent register
at a subsequent date.
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7)Provides that a registration issued pursuant to this bill shall
expire two years from its date
of issuance unless and until that person terminates the registration
or the registration is revoked pursuant to this bill's provisions.
8)Requires the SOS, 30 days prior to the expiration of the
registration, to send to the Property Tax Agent a notice of the
registration's expiration.
9)Requires registration fees collected pursuant to this bill to be
deposited in the SOS Business Fees Fund established pursuant to
current law.
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 they currently serve as a county supervisor or as a member
of a county assessment appeals board.
11)Requires a Property Tax Agent to file updated registration
information with the SOS within 10 days of any change in any of
the registration information submitted pursuant to this bill.
12)Requires, when a Property Tax Agent ceases all activities related
to influencing official action, this fact to be reported to the
SOS.
13)Provides that it shall be a misdemeanor for any person to act as
a Property Tax Agent if that person is not registered as a
Property Tax Agent pursuant to this bill or if that person was
previously registered as a Property Tax Agent pursuant to this
bill but that person is no longer registered as a Property Tax
Agent.
14)Provides that nothing in this bill shall be construed to prohibit
a county from, by ordinance, enacting Property Tax Agent reporting
requirements for campaign contributions to elected officials in
that county or prohibiting such campaign contributions.
15)Requires the SOS to develop a list of registered Property Tax
Agents and make that list available to the public on its Internet
Web site.
16)Requires the SOS to develop a list of registered Property Tax
Agents who, after exhausting their administrative remedies, have
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been fined, or whose license has been revoked, and post the names
and business addresses of those Property Tax Agents on the SOS Web
site.
17)Prohibits a Property Tax Agent from engaging in any of the
following activities:
a) Use, or participate in the use of, any public communication
or private solicitation containing false, misleading,
fraudulent, or deceptive representations, or intimate that the
Property Tax Agent is able to improperly obtain special
consideration or action from the county of any county official;
b) Act as or attempt to act as, or claim to be the Property Tax
Agent of a taxpayer, or represent a taxpayer before a county or
any county official, without the authorization
of that taxpayer;
c) Violate provisions of current law governing business
advertising activities, as specified;
d) Knowingly aid and abet another person to practice as a
Property Tax Agent before the county or a county official
during a period when the other person has been deregistered as
a Property Tax Agent or otherwise is ineligible to lawfully act
as a Property Tax Agent;
e) Directly or indirectly attempt to influence, or offer or
agree to attempt to influence, the official action of any
county official by the use of threats, false accusations,
duress, or coercion, by the offer of any special inducement or
promise of an advantage or by bestowing any gift, campaign
contribution, favor, or thing of value;
f) Do anything with the purpose of placing any county official
under personal obligation to the Property Tax Agent or another;
g) Represent, either directly or indirectly, that the Property
Tax Agent can control the official action of any county
official; or,
h) Make a gift or gifts of any monetary value to a county
official. A Property Tax Agent shall not act as an agent or
intermediary in the making of any gift or arrange for the
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making of any gift from any other person.
18)Requires the SOS to issue a cease and desist order to a person
subject to the provisions of this bill who had his or her
professional license to practice as an attorney, certified public
accountant, public accountant, or actuary revoked, or has been
convicted of any felony under state or federal tax laws, or has
been convicted of any other criminal offense involving dishonesty,
breach of trust, or moral turpitude, and to provide a copy of the
notice to the Attorney General (AG). Prior to issuing such a
cease and desist order, the SOS must provide the person with
written notice and an opportunity to demonstrate that grounds for
disqualification do not exist.
19)Requires a person who violates this bill to be subject to a civil
penalty not to exceed $1,500 in a civil action for each violation
brought in the name of the people of the State of California by
the AG, a district attorney, or a city attorney.
20)Requires the court to impose a civil penalty for each violation
of this bill. In assessing the amount of the civil penalty, the
court may consider relevant circumstances presented, including,
but not limited to, the following: the nature and seriousness of
the misconduct; the number of violations; the persistence of the
misconduct; the length of time over which the misconduct occurred;
the willfulness of the defendant's misconduct; and, the
defendant's assets, liabilities, and net worth.
21)Requires, if the AG brings the action, one-half of the civil
penalty collected to be paid to the treasurer of the county in
which the judgment was entered, and one-half to the General Fund.
If a district attorney brings the action, the civil penalty
collected shall be paid to the treasurer of the county in which
the judgment was entered. If a city attorney brings the action,
one-half of the civil penalty collected shall be paid to the
treasurer of the city in which the judgment was entered, and
one-half to the treasurer of the county in which the judgment was
entered.
22)Prohibits a penalty from being imposed if the first noncompliance
with, or violation of, this bill is cured within 30 days of the
date on which the SOS issues a cease and desist order pursuant to
the provisions of this bill to a person subject to this bill's
requirements.
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23)Requires the AG, district attorney, or city attorney to notify
the SOS of both of the following:
a) Any conviction of a Property Tax Agent under the provisions
of this bill. The prosecuting office shall make this
notification; and,
b) Any civil penalty imposed against a Property Tax Agent
pursuant to this bill. The office bringing the action shall
make this notification.
24)States that the provisions of this chapter shall preempt and
supersede all local ordinances regarding the registration of any
individual who communicates directly or indirectly with any county
official for the purpose of influencing official action regarding
a property tax assessment.
25)Provides the following definitions for the purposes of this bill:
a) "County official" means the county assessor, an assessment
appeals board member, an assessment hearing officer, and any
other county employee within those offices whose duties are not
primarily clerical or manual;
b) "Gift" shall be defined as set forth in the Political Reform
Act of 1974 and the regulations adopted thereunder;
c) "Influencing official action" means representing a taxpayer
as an agent in connection with any matter before any county
official by promoting, supporting, influencing, seeking
modification of, opposing, or seeking delay of any official
action by any means. The following shall not be considered to
be influencing official action:
i) The filing or submitting of required county forms for
compliance purposes and communication relating to those
filings shall not be considered influencing official action;
or,
ii) The act of contacting, or being contacted by, a county
official solely for the purpose of ascertaining the current
status of any of the following: a property's taxable value; a
pending property tax refund; or, a pending property tax
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exemption application;
d) "Official action" means establishing a taxable value for any
property subject to property taxation, including initial value,
declines in value, corrections to values and any other changes
in the taxable value set; completing an assessment roll showing
the assessed values of all property; applying all legal
exemptions to assessments; issuing refunds; and deciding all
property assessment disputes between taxpayers and a county
official;
e) "Public official" and "public employee" mean any government
official or employee
of any state or local government agency;
f) "Property Tax Agent" means any individual who is employed,
under contract, or otherwise receives compensation to
communicate directly, or through agents, employees, or
subcontractors, with any county official for the purpose of
influencing official action. A Property Tax Agent shall not
include:
i) An elected or appointed public official or public
employee when acting in his or her official capacity;
ii) A person representing himself or herself, an immediate
family member, or an entity of which the person is a partner
or owner of 10% or more of the value of the entity;
iii) An in-house tax professional or in-house employee
representing his or her employer by influencing official
action; or,
iv) A person who, accompanying the taxpayer or a registered
Property Tax Agent, only provides their expert opinion to a
county official.
26)Provides that, if the Commission on State Mandates determines
that this bill contains costs mandated by the state, reimbursement
to local agencies and school districts for those costs shall be
made pursuant to current law governing state mandated local costs.
EXISTING LAW :
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1)Establishes the position of county assessor, and requires every
assessor to assess all property subject to general property
taxation at its full value and to prepare an assessment roll in
which all property within the county which it is the assessor's
duty to assess is required to be listed.
2)Requires a county board of equalization or an assessment appeals
board to equalize the valuation of taxable property within the
county for the purpose of taxation.
3)Allows a taxpayer, with respect to each assessment year, to file
an application for a reduction in an assessment, as specified,
with the county board, which is the county board of supervisors
meeting as a county board of equalization or an assessment appeals
board.
4)Regulates the practice of a number of businesses and professions
through the boards and bureaus within the Department of Consumer
Affairs (DCA), and regulates attorneys through the State Bar of
California.
5)Provides a registration program for notaries public through the
SOS, and requires all applicants to complete an approved course of
study, pass an exam, file an oath and a bond, and undergo a
background check by the Federal Bureau of Investigation and the
California Department of Justice.
FISCAL EFFECT : According to the Assembly Appropriations Committee:
1)Initial General Fund (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.
2)Potentially minor reimbursable costs to local governments and
agencies to provide conviction notices to SOS.
COMMENTS :
1)Purpose of this bill. This bill establishes a registration
program for Property Tax Agents at the SOS and requires all
Property Tax Agents to register and pay a registration fee. This
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bill prohibits anyone from registering if they have been convicted
of a felony or any other offense involving dishonesty, breach of
trust, or moral turpitude. A person also cannot register if their
license to practice as an attorney, certified public accountant,
public accountant, or actuary has been revoked by any authority of
any state, territory, or possession of the United States, the
District of Columbia, any court of record, or any agency, body, or
board. This bill is sponsored by the author.
2)Author's statement. According to the author, "In 2011,
investigators for the Los Angeles County district attorney began
probing improper property tax reductions granted to more than 100
Los Angeles County property owners. The investigation was prompted
by complaints from assessor's office employees who claimed they
were pressured to lower property taxes for politically-connected
individuals. In October 2012, the investigations led to multiple
arrests and indictments, which included charges of bribery and
corruption. This incident cast an ethical cloud over the property
tax appeals process, which AB 2415 seeks to remedy."
3)County Assessors. County assessors are governed by the California
Constitution, the laws passed by the Legislature, and the rules
adopted by the Board of Equalization (BOE). The county assessor
must annually assess all taxable property in the county, except
for state-assessed property, to the person, business, or legal
entity owning, claiming, possessing, or controlling the property
on January 1. The duties of the county assessor are to discover
all assessable property, to inventory and list all taxable
property, and to enroll the property on the local assessment roll.
The assessor's primary responsibility is to annually determine
the proper taxable value for each property so the owner is assured
of paying the correct amount of property tax for the support of
local government.
The assessor must reassess real property to current market value
whenever there is a change in ownership or completed new
construction. In addition, the assessor may change the assessed
value of a property to recognize a decrease in value, to correct
an error, or to enroll an escaped (previously overlooked)
assessment. Property owners can appeal the value of the property
by filing an application for a changed assessment with the clerk
of the board of supervisors (sitting as a local board of
equalization) or the assessment appeals board. If the county
board denies the appeal, the taxpayer may file an action in
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superior court, but only under certain circumstances.
4)Property Tax Agents. Property Tax Agents are individuals who help
clients reduce their property tax bill by representing them during
the county's property assessment process. There is no general
definition in California law for Property Tax Agents, nor is any
training or registration legally required. However, state law
does regulate the solicitation and representation by "assessment
reduction filing services," which requires specified disclosures
and prohibits certain false or misleading statements and abusive
practices.
Property Tax Agents come from a variety of disciplines, including
attorneys, realtors, mortgage brokers and former employees of a
county assessor's office. Some Property Tax Agents possess
licenses in real estate appraisal, several levels of which are
issued by the California Office of Real Estate Appraisers. By
comparison, Tax Agents who practice before the Internal Revenue
Service (IRS) are heavily regulated at the federal level as
enrolled agents.
Homeowners and businesses do not need to be represented by a
Property Tax Agent in order to request a reassessment. Private
individuals can represent themselves and even other family
members. However, if a Property Tax Agent is retained for this
purpose, the client is required by law to sign an affidavit or
form specifying that that Property Tax Agent is representing that
client.
5)Noguez investigation. In February 2012, the Los Angeles County
District Attorney's Office announced it had launched an inquiry
into allegations of influence peddling in the office of Los
Angeles County Assessor John Noguez, who was elected in 2010.
While a lower-level employee was charged with fraud in May of
2012, the investigation ultimately focused on the possibility that
Noguez himself had directed staff to illegally reduce certain tax
assessments in exchange for campaign contributions. In June of
2012, Noguez was formally charged with 60 felonies and took an
indefinite, paid leave of absence from the office. He was
arrested in October 2012 for allegedly taking $185,000 in bribes
from a particular tax consultant and campaign contributor, Ramin
Salari, who has also been charged with corruption. Noguez posted
the $1.16 million bail set for his release after nearly five
months in jail. Noguez was charged with additional felony counts
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of embezzlement and grand theft in October 2013.
On November 6, 2012, Los Angeles County voters rejected (78% to
22%) an advisory measure asking if the county charter should be
changed to make the County Assessor an appointed position instead
of elected.
6)Joint Oversight Hearing on Property Tax Agents. On June 20, 2012,
the Assembly Local Government and Revenue and Taxation Committees
held a joint oversight hearing on Property Tax Agents and their
interactions with local governments. The members heard testimony
and recommendations from the Legislative Analyst's Office, the
Assessors of three counties, and various representatives of the
Property Tax Agent community.
7)Previous legislation. AB 1151 (Ting) of 2013, was substantially
similar to this bill. AB 1151 was held in the Assembly
Appropriations Committee.
AB 404 (Gatto) of 2012, would have required the board of
supervisors of a county that regulates lobbying to require annual
registration and quarterly reporting by any individual
representing a taxpayer for compensation before county assessment
or equalization officials, and also would have prohibited
registrants from making campaign contributions to an elected
county assessor or candidate. AB 404 died on the Senate Floor.
AB 2183 (Smyth) of 2012, would have required an agent representing
a taxpayer before the assessor, a county board of equalization, or
an assessment appeals board to register with the county prior to
representing a taxpayer. AB 2183 died in Senate Appropriations
Committee.
AB 2210 (Smyth) of 2012, would have required a county assessor to,
upon request, estimate whether annual property valuations for the
county have decreased by 3% or more and, if so, to notify the
requesting body and other public agencies of the decrease. AB
2210 died in the Senate Governance and Finance Committee.
SB 342 (Wolk) of 2011, would have prohibited a person from
charging a contingency fee for services rendered in connection
with any matter before the BOE, Franchise Tax Board, or an
assessment appeals board, or for any other tax imposed under state
law. SB 342 died in the Senate Judiciary Committee.
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AB 992 (Lieu), Chapter 496, Statutes of 2009, strengthened the
provisions that govern assessment services, and eliminated an
exception that was used as a loophole to capture, within the
definition of "assessment reduction filing service," persons who
actively advocate on behalf of a property owner.
8)State mandate. This bill is keyed a state mandate, which means
the state could be required to reimburse local agencies and school
districts for implementing the bill's provisions if the Commission
on State Mandates determines that the bill contains costs mandated
by the state.
9)Arguments in support. Supporters argue that this bill will
provide statewide uniformity in the regulation of Property Tax
Agents, improve services provided to taxpayers, and improve the
reliability and quality of tax representation for the state's
citizens, particularly homeowners and owners of small and
medium-sized businesses.
10)Arguments in opposition. Opponents to the prior version of this
bill, as amended on April 3, 2014, argued that AB 2415 would make
it more difficult for homeowners to exercise their legal right to
appeal unfair property tax assessments, that most of the
professionals who act as Property Tax Agents already practice
under the oversight of state and/or federal agencies, that the
bill pre-empted local control to oversee the property tax
assessment process, and that the bill imposed a redundant and
needlessly burdensome layer of regulation.
Analysis Prepared by : Angela Mapp / L. GOV. / (916) 319-3958
FN:
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