BILL ANALYSIS �
AB 2415
Page 1
CONCURRENCE IN SENATE AMENDMENTS
AB 2415 (Ting)
As Amended August 21, 2014
Majority vote
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|ASSEMBLY: |48-26|(May 29, 2014) |SENATE: |22-12|(August 25, |
| | | | | |2014) |
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Original Committee Reference: NAT. RES.
SUMMARY : Establishes a statewide structure for the regulation
of Property Tax Agents.
The Senate amendments :
1)Expand the activities that are not considered to be
influencing official action, and require a person to file an
application for registration as a Property Tax Agent within 10
business days of becoming engaged in influencing official
action.
2)Alter the statement that must be included in an application
for a Property Tax Agent registration by limiting disclosure
of prohibited activities to the prior 10 years and including
disclosure of convictions of any misdemeanor under state or
federal tax laws applicable to acts or omissions during
representation of any client.
3)Specify that providing false information on an application for
registration as a Property Tax Agent shall disqualify an
individual from registering as a Property Tax Agent.
4)Delete language requiring a Property Tax Agent to pay the
Secretary of State (SOS) a registration fee of $250 or a fee
not to exceed the amount necessary to administer the
provisions of this bill, and instead require a Property Tax
Agent to pay a fee of $100 or a fee established by the SOS in
an amount so that the total amount of fees collected do not
exceed the amount necessary to administer the provisions of
this bill.
5)Allow the SOS to cancel the registration of a Property Tax
Agent if payment of fees is not made, as specified.
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6)Clarify that a Property Tax Agent registration expires two
years after the date of issuance unless and until the Property
Tax Agent terminates the registration, the SOS issues a cease
and desist order, or a court suspends or terminates the
person's eligibility to register.
7)Make it a misdemeanor for a person to act as Property Tax
Agent if that person provided false information relating to
specified statements required in the application for
registration as a Property Tax Agent, as specified.
8)Clarify that the SOS shall develop a list of registered
Property Tax Agents who have been issued a cease and desist
order, fined for or convicted of a violation of this bill's
provisions, or whose license as an attorney, certified public
accountant (CPA), public accountant, or actuary has been
revoked, and shall post the names and business addresses of
those Property Tax Agents on the SOS Internet Web site
(website).
9)Provide that specified prohibited activities shall subject
Property Tax Agents to civil penalties, and may subject them
to suspension or termination of their Property Tax Agent
registration, including (among other activities) the
following:
a) Acting as a Property Tax Agent in a county in which he
or she serves as a county supervisor or as a member of the
assessment appeals board; and,
b) Making a campaign contribution to a county assessor, a
candidate for office of county assessor, or member of the
State Board of Equalization (BOE).
10)Clarify that the SOS shall issue a cease and desist order to
a registered Property Tax Agent if the SOS is notified, as
specified, or otherwise discovers that certain violations have
occurred within the past 10 years, and includes in those
violations any misdemeanor under state or federal tax laws
applicable to acts or omissions occurring during
representation of any client.
11)Require the SOS to suspend or permanently terminate a
Property Tax Agent's registration and update the list of
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Property Tax Agents specified in 8) above, if the SOS is
notified by the Attorney General (AG), a district attorney, or
a city attorney of specified violations by the Property Tax
Agent, as specified.
12)Grant the courts the authority to determine if a person who
violates this bill's provisions shall remain eligible to be a
Property Tax Agent or if that person's eligibility shall be
suspended or permanently terminated, and to consider relevant
circumstances in doing so, as specified.
13)Delete language that prohibited a penalty from being imposed
if the first noncompliance with, or violation of, this bill's
provisions is cured within 30 days of the date on which the
SOS issues a cease and desist order, as specified.
14)Establish special filing fees for a Property Tax Agent
registration as follows:
a) Filing a Property Tax Agent registration: $100 or a fee
established by the SOS in an amount so that the total
amount of fees collected do not exceed the amount necessary
to administer this bill's provisions; and,
b) Filing updated information for an unexpired Property Tax
Agent registration: no fee.
15)Make technical, clarifying and conforming changes.
EXISTING LAW :
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
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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.
AS PASSED BY THE ASSEMBLY , this bill:
1)Required each Property Tax Agent to file, under penalty of
perjury, with the 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
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
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understands the duties and prohibitions contained in this
bill's provisions.
2)Stated 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)Required 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)Required 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)Required, beginning on January 1, 2016, the SOS to accept
applications for a registration from Property Tax Agents.
6)Prohibited, 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.
7)Provided 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)Required 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)Required registration fees collected pursuant to this bill to
be deposited in the SOS Business Fees Fund established
pursuant to current law.
10)Prohibited 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.
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11)Required 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)Required, when a Property Tax Agent ceases all activities
related to influencing official action, this fact to be
reported to the SOS.
13)Provided 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)Provided 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)Required the SOS to develop a list of registered Property Tax
Agents and make that list available to the public on its
website.
16)Required the SOS to develop a list of registered Property Tax
Agents who, after exhausting their administrative remedies,
have been fined, or whose license has been revoked, and post
the names and business addresses of those Property Tax Agents
on the SOS website.
17)Prohibited 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
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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 making of any gift from any other person.
18)Required 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, CPA,
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 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)Required a person who violates this bill to be subject to a
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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)Required 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)Required, 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)Prohibited 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.
23)Required 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)Stated 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
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any county official for the purpose of influencing official
action regarding a property tax assessment.
25)Provided 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 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;
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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)Provided 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.
FISCAL EFFECT : According to the Senate Appropriations
Committee, as amended August 5, 2014:
1)SOS indicates that it would incur costs of $70,000 in 2015-16
and $220,000 in 2016-17 to implement the provisions of the
bill (Business Fees Fund). Costs to the department thereafter
would be under $100,000 annually.
2)This bill specifies a $100 fee and would generate increased
fee revenue of 300,000 to $500,000 biannually (Business Fees
Fund).
3)The Department of Justice would incur minor and absorbable
costs.
COMMENTS :
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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 bill prohibits anyone from registering if they have been
convicted within the prior 10 years of any misdemeanor under
state or federal tax laws applicable to acts or omissions
during representation of any client or 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, CPA, 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 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
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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 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
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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 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 an elected position.
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
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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.
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 this bill's provisions
if the Commission on State Mandates determines that this 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 argue that this bill
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-empts local control to oversee the
property tax assessment process, and that the bill imposes a
redundant and needlessly burdensome layer of regulation.
Analysis Prepared by : Angela Mapp / L. GOV. / (916) 319-3958
FN: 0005387
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