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HomeMy WebLinkAboutMINUTES - 06172014 - C.28RECOMMENDATION(S): ADOPT a "Support" position on AB 2231 (Gordon), as amended: State Controller: Property Tax Postponement, a bill that relates to claims for postponement under the Senior Citizens and Disabled Citizens Property Tax Postponement Law and makes changes concerning eligibility, repayment of postponed taxes, delinquent penalties and interest, electronic funds transfer requirements, the sale of tax-defaulted property, public meetings, and other matters, as recommended by the Legislation Committee. FISCAL IMPACT: 1) State General Fund costs to the Controller of approximately $3.5 million in FY 2015-16 to re-initiate the program, eventually decreasing to annual administration costs of approximately $3 million per year. Over the long term, these costs may be offset, at least in part, by ongoing interest on loans and the Fund, and fees generated by the program. 2) In order to re-initiate the PTP program, a source of initial seed capital funds and an appropriation to the Controller to make the first loans will be required. APPROVE OTHER RECOMMENDATION OF CNTY ADMINISTRATOR RECOMMENDATION OF BOARD COMMITTEE Action of Board On: 06/17/2014 APPROVED AS RECOMMENDED OTHER Clerks Notes: VOTE OF SUPERVISORS AYE:John Gioia, District I Supervisor Candace Andersen, District II Supervisor Mary N. Piepho, District III Supervisor Karen Mitchoff, District IV Supervisor Federal D. Glover, District V Supervisor Contact: L. DeLaney, 925-335-1097 I hereby certify that this is a true and correct copy of an action taken and entered on the minutes of the Board of Supervisors on the date shown. ATTESTED: June 17, 2014 David Twa, County Administrator and Clerk of the Board of Supervisors By: Stephanie L. Mello, Deputy cc: C. 28 To:Board of Supervisors From:LEGISLATION COMMITTEE Date:June 17, 2014 Contra Costa County Subject:Support position on AB 2231: State Controller: Property Tax Postponement (Gordon), as amended BACKGROUND: At its June 5, 2014 meeting, the Legislation Committee considered the recommendation from the County Treasurer-Tax Collector to recommend a position of "Support" to the Board of Supervisors on AB 2231. Chair Mitchoff has previously signed a letter of support, which is attached. CURRENT STATUS: 05/27/2014: In ASSEMBLY. Read third time. Passed ASSEMBLY. *****To SENATE. SUMMARY : This bill reinstates the Senior Citizens and Disabled Citizens Property Tax Postponement (PTP) program, allowing applications to the State Controller to provide property tax deferment to seniors and disabled persons to recommence on July 1, 2015. In summary, this bill: 1) Establishes the Senior Citizens and Disabled Citizens Property Tax Postponement Fund (Fund) within the State Treasury and annually appropriates funds for the purposes of paying costs and disbursements related to the PTP program; requires the Controller to transfer moneys in the Fund in excess of $10 million to the General Fund (GF). 2) Increases the amount of equity required of applicants in a residential dwelling from 20% to 40% of the full value of the property to be eligible for the PTP program. 3) Requires loan payments and funds derived from the voluntary sale of a residential dwelling that has a lien placed on it due to the PTP program to be deposited into the Fund. 4) Repeals current law allowing the Controller to subordinate liens for postponement of real property taxes, and instead requires all liens under the PTP program to have the priority of judgment liens. 5) Provides that taxes shall become due and payable in full if, in addition to current law, the claimant is refinancing the residential dwelling or has executed a reverse mortgage. 6) Requires a county tax collector to notify the Controller within 60 days of any property subject to a PTP program lien that becomes tax defaulted. 7) Requires the Controller, upon request of the tax collector, to provide information that is required for the preparation and enforcement of the sale of property. 8) Makes various other modifications to the procedures for filings for the PTP program as well as notifications and payments with respect to tax delinquent properties. COMMENTS 1) Purpose. According to the author, this bill would reinstate the PTP program and give seniors and disabled Californians some financial flexibility. The bill would also incorporate several changes to the suspended PTP program designed to secure the PTP Fund ensure the program's long-term sustainability. The author claims the PTP program provided assistance to nearly 6,000 California seniors and disabled persons over the 30 years it was previously in operation. After five years of suspension, the homes of some former participants in the program are now at risk of tax default sale. This bill would provide relief to those on fixed incomes who are unable to pay their tax bills and risk losing their homes. 2) Background to the PTP Program. The state currently has and has had several property tax relief programs benefitting elderly and disabled persons, including property tax reappraisal relief, property tax assistance, and property tax postponement. Unlike assistance programs that refund a percentage of property taxes paid, the PTP program provides a direct grant to qualifying seniors and disabled persons who own their residence, allowing recipients to defer payment of all or a portion of their property taxes. Historically, aggregate loan repayments have equaled or exceeded the program's administrative costs, and over the long-term, the program has been self-supporting. In addition to allowing program participants to remain in their homes, the PTP program has reduced county property tax default rates and increased county tax collection revenues. The state has not provided funding for the PTP program since the 2007-08 budget and has not paid claims since 2008. On February 20, 2009, the postponement program was indefinitely suspended as part of the budget reductions to the state's GF programs; the funding was eliminated, and the Controller was prohibited from accepting new applications from that date. 3) Implementation and Seed Capital. The bill currently contains no appropriation or other source of seed funding to reinitiate loans, and the Controller has identified several implementation concerns and areas where the program could be further refined and improved. Should this bill be passed by this Committee, the members may wish to encourage the author to continue working with the Controller to resolve these issues. 4) Related Legislation. AB 1322 (Patterson) of 2013 was similar to this bill and would have reinstated the Senior Citizens' PTP program that provided property tax deferment to seniors and disabled persons. That bill was held on the Suspense File of this Committee. REGISTERED SUPPORT / OPPOSITION: Support California Association of County Treasurers and Tax Collectors (Sponsor) California State Association of Counties California Taxpayers Association Opposition None on file CONSEQUENCE OF NEGATIVE ACTION: Contra Costa County would not have a position on the bill. CHILDREN'S IMPACT STATEMENT: None. ATTACHMENTS AB 2231 Bill Text AB 2231 "Chair" support letter The Board of Supervisors County Administration Building 651 Pine Street, Room 106 Martinez, California 94553 John Gioia, 1st District Candace Andersen, 2nd District Mary N. Piepho, 3rd District Karen Mitchoff, 4th District Federal D. Glover, 5th District May 13, 2014 The Honorable Mike Gatto Chair, Assembly Appropriations Committee Capitol Building #2114 Sacramento, CA 95814 RE: AB 2231 (Gordon) Property Tax Postponement – SUPPORT, hearing May 14, 2014 Dear Assembly Member Gatto: As Chair of the Board of Supervisors of Contra Costa County, I write to inform you of my support for AB 2231, which reinstates the Senior Citizens and Disabled Citizens Property Tax Postponement (PTP) program to provide property tax deferment to seniors and disabled persons. California has several property tax programs benefiting the elderly and disabled individuals, including property tax reappraisal relief, property tax assistance, and property tax postponement. The assistance program provides a direct grant to qualifying seniors and disabled individuals who own or rent a residence and allows eligible homeowners to defer payment of all, or a portion, of the property taxes on their residence. Over the 30 years it was in operation, this property tax postponement program helped almost 6,000 California seniors and disabled citizens. Unfortunately, the State has not provided funding for the assistance program since the 2007-08 Budget, and in 2009, the postponement program was indefinitely suspended as part of budget reductions. After five years of non-payment, the homes of some former participants in this program are now at risk of tax sale. For those living on fixed incomes, a tax bill may mean losing their home. AB 2231 would reinstate the property-tax postponement program and incorporate several changes to increase the sustainability of the program, giving qualified seniors and disabled Californians some much needed financial flexibility. Additionally, the proposed program changes in AB 2231 will go a long way to helping secure the PTP Fund and to ensuring the long- term sustainability of the program. Reinstituting this program statewide would help all elderly and disabled Californians take advantage of this benefit to help them stay in their homes. David Twa Clerk of the Board and County Administrator (925) 335-1900 Contra Costa County AB 2231 (Gordon) Property Tax Postponement May 13, 2014 Page 2 of 2 For these reasons, I support AB 2231 and urge your Committee to support the bill. Sincerely, KAREN MITCHOFF Chair, Board of Supervisors cc: Members, Board of Supervisors Contra Costa County Legislative Delegation David Twa, County Administrator Members, Assembly Appropriations Committee Assembly Member Richard S. Gordon, author Russell Watts, Contra Costa County Treasurer-Tax Collector Cathy Christian, Nielsen Merksamer AMENDED IN ASSEMBLY APRIL 21, 2014 AMENDED IN ASSEMBLY MARCH 24, 2014 california legislature—2013–14 regular session ASSEMBLY BILL No. 2231 Introduced by Assembly Members Gordon, Levine, and Patterson February 20, 2014 An act to amend Sections 16181, 16182, 16184, 16186, 16190, 16200, 16210, 16211, 16211.5, and 16213 and 16211.5 of, to repeal Sections 16185, 16212, 16213, and 16214 of, and to repeal and add Section 16180 of, the Government Code, and to amend Sections 2514, 3375, 20503, 20583, 20584, 20602, 20621, 20622, 20645.5, and 20645.6 of, to amend and repeal Section 20623 of, to repeal Section 20583.1 of, to add Section 3376 to, and to repeal Chapter 3.3 (commencing with Section 20639) of Part 10.5 of Division 2 of, the Revenue and Taxation Code, relating to state government, and making an appropriation therefor. legislative counsel’s digest AB 2231, as amended, Gordon. State Controller: property tax postponement. The Senior Citizens and Disabled Citizens Property Tax Postponement Law, until February 20, 2009, authorized a claimant, as defined, to file a claim with the Controller to postpone the payment of ad valorem property taxes, where if household income, as defined, did not exceed specified amounts. That law authorized the Controller, upon approval of the claim, to either make a payment directly to specified entities, or to issue the claimant a certificate of eligibility that constituted a written promise of the state to pay the amount specified on the certificate, as 97 provided. That law required these payments to be made out of specified funds appropriated to the Controller, and also required certain repaid property tax postponement payments to be paid into an impound account and transferred, as specified, to the General Fund. That law also required all sums paid by the Controller for postponed property taxes to be secured by a lien in favor of the State of California. Existing law, on and after February 20, 2009, prohibits a person from filing a claim for postponement, and prohibits the Controller from accepting applications for postponement, under the Senior Citizens and Disabled Citizens Property Tax Postponement Law. This bill would make inoperative the prohibition against a person filing a claim for postponement and the Controller from accepting applications for postponement under the program as of July 1, 2015, and would repeal these provisions on January 1, 2016. This bill would exclude losses and nonexpenses from “income” for purposes of these provisions. This bill would also exclude mobilehomes and houseboats from the scope of these provisions, would repeal the related Senior Citizens Mobilehome Property Tax Postponement Law, and make conforming changes to related provisions. This bill would create in the State Treasury a Senior Citizens and Disabled Citizens Property Tax Postponement Fund. This bill would delete the requirement that funds be placed in an impound account and would, instead, require that repaid property tax postponement payments be directly deposited into the newly created fund. The bill would continuously appropriate these funds to the Controller for purposes of administering the property tax postponement program, as specified. Existing law authorizes the Controller to subordinate the lien for postponed property taxes where if the Controller determines subordination is appropriate. This bill would eliminate that authorization and make other conforming changes. Existing law requires that the owners equity interest in the residential dwelling be at least 20% of the full value of the property in order to be eligible to participate in the postponement program. This bill would increase the equity requirement to at least 40%. Existing law requires the repayment of postponed taxes in specified circumstances. This bill would, in addition, require repayment if the claimant refinances the dwelling or has elected to participate in a revenue mortgage program for the dwelling. The bill would require that the 97 — 2 —AB 2231 county tax collector notify the Controller within 60 days of all property subject to a “Notice of Lien for Postponed Property Taxes” becoming tax defaulted or subject to collection procedures, as specified. Existing law requires a claim for postponement to be filed after May 15 of the calendar year in which the fiscal year for which postponement is claimed begins, and on or before December 10 of that fiscal year. This bill would instead require a claim for postponement to be filed after September 1 of the calendar year in which the fiscal year for which postponement is claimed begins, and on or before April 10 of that fiscal year. Existing law makes optional certain duties of local agencies related to recordation of the tax lien. This bill would delete that provision, thereby imposing a state-mandated local program. Existing law requires, if a postponement claim, as specified, is filed timely but before the delinquency date of the first or 2nd installment of property taxes, that any delinquent penalties and interest for the fiscal year be canceled unless the failure to perfect the claim was due to willful neglect on the part of the claimant or representative, in which case the certificates of eligibility for the fiscal year can be used to pay delinquent taxes only if accompanied by sufficient amounts to pay the delinquent interest and penalties. This bill would instead require, if a postponement claim is filed timely before the delinquency date of the 2nd installment of property taxes on the secured roll, that any delinquent penalties, costs, fees, and interest accrued for the fiscal year be canceled. This bill would instead require, in the event of willful neglect to perfect the claim, that an electronic funds transfer for that current fiscal year be used to pay only the delinquent taxes. This bill would authorize the tax collector, if the payment amount sufficient to pay all of the delinquent penalties, costs, fees, and interest is not received by the tax collector within 30 days from the date of the electronic funds transfer, to return the electronic funds transfer to the Controller to deny the postponement claim. This bill would require the Controller to provide a specified notification to the claimant and a copy of the notification to the tax collector. This bill would also require the Controller, upon written request of the tax collector, to provide the tax collector with information that is required for the preparation and enforcement of the sale of tax-defaulted property, and would require the tax collector or his or her designee to certify, under penalty of perjury, that the information is requested for 97 AB 2231— 3 — these purposes. This bill would also provide that any information provided to the tax collector is not a public record and is not open to public inspection. By requiring the tax collector to make a certification under penalty of perjury, this bill would expand the crime of perjury thereby imposing a state-mandated local program. Existing constitutional provisions require that a statute that limits the right of access to the meetings of public bodies or the writings of public officials and agencies be adopted with findings demonstrating the interest protected by the limitation and the need for protecting that interest. This bill would make legislative findings to that effect. The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement. This bill would provide that with regard to certain mandates no reimbursement is required by this act for a specified reason. With regard to any other mandates, this bill would provide that, if the Commission on State Mandates determines that the bill contains costs so mandated by the state, reimbursement for those costs shall be made pursuant to the statutory provisions noted above. Vote: 2⁄3. Appropriation: yes. Fiscal committee: yes. State-mandated local program: yes. The people of the State of California do enact as follows: line 1 SECTION 1. Section 16180 of the Government Code is line 2 repealed. line 3 SEC. 2. Section 16180 is added to the Government Code, to line 4 read: line 5 16180. (a)  There is hereby created in the State Treasury a line 6 Senior Citizens and Disabled Citizens Property Tax Postponement line 7 Fund. Subject to subdivision (b) and notwithstanding Section line 8 13340, the fund is continuously appropriated to the Controller, line 9 commencing January 1, 2015, for purposes of administering this line 10 chapter, including, but not limited to, necessary administrative line 11 costs and disbursements relating to the postponement of property line 12 taxes pursuant to the Senior Citizens and Disabled Citizens line 13 Property Tax Postponement Law (Chapter 2 (commencing with line 14 Section 20581) of Part 10.5 of Division 2 of the Revenue and line 15 Taxation Code). 97 — 4 —AB 2231 line 1 (b)  The Controller shall transfer any moneys in the fund in line 2 excess of ten million dollars ($10,000,000) to the General Fund. line 3 (c)  Any loan repayments relating to the Senior Citizens and line 4 Disabled Citizens Property Tax Postponement Law shall be line 5 deposited into the Senior Citizens and Disabled Citizens Property line 6 Tax Postponement Fund. line 7 SEC. 3. Section 16181 of the Government Code is amended to line 8 read: line 9 16181. (a)  The Controller shall maintain a record of all line 10 properties against which a notice of lien for postponed property line 11 taxes has been recorded. The record shall include, but not be line 12 limited to, the names of each claimant, a description of the real line 13 property against which the lien is recorded, the identification line 14 number of the notice of lien assigned by the Controller, and the line 15 amount of the lien. line 16 (b)  The Controller shall maintain a record of all properties line 17 against which the Department of Housing and Community line 18 Development has been notified to withhold the transfer of title. line 19 The record shall include, but not be limited to, the names of each line 20 claimant, a description of the mobilehome against which a lien is line 21 charged, and the amount of the lien. line 22 (c) line 23 (b)  Upon written request of any person or entity, or the agent line 24 of either, having a legal or equitable interest in real property or a line 25 mobilehome which that is subject to a lien for postponed taxes, line 26 the Controller shall within 10 working days following receipt of line 27 the request issue a written statement showing the amount of the line 28 obligation secured by the lien as of the date of such the statement line 29 and such any other information as will reasonably enable the person line 30 or entity, or the agent of either, to determine the amount to be paid line 31 the Controller in order to obtain a certificate of release or discharge line 32 of the lien for postponed taxes. line 33 (d) line 34 (c)  The Controller shall adopt regulations necessary to line 35 implement the provisions of this chapter and may establish a line 36 reasonable fee, not to exceed ten dollars ($10), for the provision line 37 of the statement of lien status provided for herein. line 38 SEC. 3. line 39 SEC. 4. Section 16182 of the Government Code is amended line 40 to read: 97 AB 2231— 5 — line 1 16182. (a)  All sums paid by the Controller under the provisions line 2 of this chapter, together with interest thereon, shall be secured by line 3 a lien in favor of the State of California when funds are transferred line 4 to the county by the Controller upon the real property for which line 5 property taxes have been postponed. In the case of a residential line 6 dwelling which is part of a larger parcel taxed as a unit, such as a line 7 duplex, farm, or multipurpose or multidwelling building, the lien line 8 shall be against the entire tax parcel. line 9 (b)  In the case of real property: line 10 (1)  The lien shall be evidenced by a notice of lien for postponed line 11 property taxes executed by the Controller, or the authorized line 12 delegate of the Controller, and shall secure all sums paid or owing line 13 pursuant to this chapter, including amounts paid subsequent to the line 14 initial payment of postponed taxes on the real property described line 15 in the notice of lien. line 16 (2)  The notice of lien may bear the facsimile signature of the line 17 Controller. Each signature shall be that of the person who shall be line 18 in the office at the time of execution of the notice of lien; provided, line 19 however, that such notice of lien shall be valid and binding line 20 notwithstanding any such person having ceased to hold the office line 21 of Controller before the date of recordation. line 22 (3)  The form and contents of the notice of lien for postponed line 23 property taxes shall be prescribed by the Controller and shall line 24 include, but not be limited to, the following: line 25 (A)  The names of all record owners of the real property for line 26 which the Controller has advanced funds for the payment of real line 27 property taxes. line 28 (B)  A description of the real property for which real property line 29 taxes have been paid. line 30 (C)  The identification number of the notice of lien which has line 31 been assigned the lien by the Controller. line 32 (4)  The notice of lien shall be recorded in the office of the line 33 county recorder for the county in which the real property subject line 34 to the lien is located. line 35 (5)  The recorded notice of lien shall be indexed in the Grantor line 36 Index to the names of all record owners of the real property and line 37 in the Grantee Index to the Controller of the State of California. line 38 (6)  After the notice of lien has been duly recorded and indexed, line 39 it shall be returned by the county recorder to the office of the line 40 Controller. The recorder shall provide the county tax collector with 97 — 6 —AB 2231 line 1 a copy of the notice of lien which has been recorded by the line 2 Controller. line 3 (7)  From the time of recordation of a notice of lien for postponed line 4 property taxes, a lien shall attach to the real property described line 5 therein and shall have the priority of a judgment lien for all line 6 amounts secured thereby, except that the lien shall remain in effect line 7 until it is released by the Controller in the manner prescribed by line 8 Section 16186. line 9 SEC. 5. Section 16184 of the Government Code is amended to line 10 read: line 11 16184. The Controller shall reduce the amount of the obligation line 12 secured by the lien against the real property or mobilehome by the line 13 amount of any payments received for that purpose and by line 14 notification of any amounts paid by the Franchise Tax Board line 15 pursuant to Section 20564 or by any amounts authorized pursuant line 16 to subdivision (f) of Section 20621 of the Revenue and Taxation line 17 Code. The Controller shall also increase the amount of the line 18 obligation secured by such the lien by the amount of any line 19 subsequent payments made pursuant to Section 16180 with respect line 20 to the real property and to reflect the accumulation of interest. All line 21 such increases and decreases shall be entered in the record line 22 described in Section 16181. line 23 SEC. 4. line 24 SEC. 6. Section 16185 of the Government Code is repealed. line 25 SEC. 5. line 26 SEC. 7. Section 16186 of the Government Code is amended line 27 to read: line 28 16186. If at any time the amount of the obligation secured by line 29 the lien for postponed property taxes is paid in full or otherwise line 30 discharged, the Controller, or the authorized delegate of the line 31 Controller, shall in the case of real property: line 32 (a)  Execute and cause to be recorded in the office of the county line 33 recorder of the county wherein the real property described in the line 34 lien is located, a release of the lien conclusively evidencing the line 35 satisfaction of all amounts secured by the lien. The cost of line 36 recording the release of the lien shall be added to and become part line 37 of the obligation secured by the lien being released. line 38 (b)  Direct the tax collector to remove from the secured roll, the line 39 information required to be entered thereon by paragraph (1) of 97 AB 2231— 7 — line 1 subdivision (a) of Section 2514 of the Revenue and Taxation Code line 2 with respect to the property described in the lien. line 3 (c)  Direct the assessor to remove from the assessment records line 4 applicable to the property described in the lien, the information line 5 required to be entered on such records by Section 2515 of the line 6 Revenue and Taxation Code. line 7 SEC. 6. line 8 SEC. 8. Section 16190 of the Government Code is amended line 9 to read: line 10 16190. All amounts owing pursuant to Article 1 (commencing line 11 with Section 16180) of this chapter shall become due if any of the line 12 following occurs: line 13 (a)  The claimant, who is either the sole owner or sole possessory line 14 interest holder of the residential dwelling, as defined in Section line 15 20583 or Section 20640 of the Revenue and Taxation Code, or a line 16 coowner or copossessory interest holder with a person other than line 17 a spouse or other individual eligible to postpone property taxes line 18 pursuant to Chapter 2 (commencing with Section 20581), Chapter line 19 3.3 (commencing with Section 20639), or Chapter 3.5 line 20 (commencing with Section 20640) of Part 10.5 of Division 2 of line 21 such code, ceases to occupy the premises as his residential line 22 dwelling, dies, or sells, conveys, or disposes of the property, or line 23 allows any tax or special assessment on the premises described in line 24 Section 20583 of such code to become delinquent. If the sole owner line 25 or possessory interest holder claimant dies and his or her surviving line 26 spouse inherits the premises and continues to own and occupy it line 27 as his or her principal place of residence, then the lien amount does line 28 not become due and payable unless taxes or special assessments line 29 described in the preceding sentence become delinquent, or such line 30 surviving spouse dies, or sells, conveys or disposes of the interest line 31 in the property. line 32 (b)  The claimant, who is a coowner or copossessory interest line 33 holder of the residential dwelling, as defined in Section 20583 or line 34 Section 20640.2 of the Revenue and Taxation Code, with a spouse line 35 or another individual eligible to postpone property taxes pursuant line 36 to Chapter 2 (commencing with Section 20581), Chapter 3.3 line 37 (commencing with Section 20639), or Chapter 3.5 (commencing line 38 with Section 20640) of Part 10.5 of Division 2 of such code, dies, line 39 and the surviving spouse or other surviving eligible individual line 40 allows any tax or special assessment on the premises described in 97 — 8 —AB 2231 line 1 Section 20583 of such code to become delinquent or such surviving line 2 spouse or other individual ceases to occupy the premises as a line 3 residential dwelling, dies, or conveys, or disposes of the interest line 4 in the property. line 5 (c)  The failure of the claimant to perform those acts the claimant line 6 is required to perform where such performance is secured, or will line 7 be secured in the event of nonperformance, by a lien which is line 8 senior to that of the lien provided by Section 16182. line 9 (d)  Postponement was erroneously allowed because eligibility line 10 requirements were not met. line 11 (e)  The claimant is refinancing the residential dwelling. line 12 (f)  The claimant has elected to participate in a reverse mortgage line 13 program for the residential dwelling. line 14 SEC. 7. line 15 SEC. 9. Section 16200 of the Government Code is amended line 16 to read: line 17 16200. In the event that the Controller receives the notice line 18 described in Section 16187 of this code or Section 3375 of the line 19 Revenue and Taxation Code, the Controller may take any of the line 20 following actions which will best serve the interests of the state: line 21 (a)  Notify by United States mail the tax collector or other party line 22 that such notice has been received and that the Controller must be line 23 given at least 20 days prior notice of the date that the property will line 24 be sold at auction. If the Controller elects to proceed under this line 25 subdivision, the Controller may use funds appropriated by Section line 26 16100 to bid on the property at the auction up to the amount line 27 secured by the state’s lien on the property and any lien on such line 28 property having priority over the state’s lien. All additional line 29 amounts paid pursuant to this subdivision shall be added to the line 30 amount secured by the lien on such property provided for in Article line 31 1 (commencing with Section 16180) of this chapter. line 32 (b)  Acknowledge by United States mail that the notice required line 33 by Section 16187 of this code or Section 3375 of the Revenue and line 34 Taxation Code has been received. line 35 SEC. 8. line 36 SEC. 10. Section 16210 of the Government Code is amended line 37 to read: line 38 16210. In the event that the amount secured by the state’s lien line 39 provided for in Article 1 (commencing with Section 16180) is paid line 40 by reason of the sale or condemnation of the property on which 97 AB 2231— 9 — line 1 the lien attaches, the funds so received shall be placed in the Senior line 2 Citizens and Disabled Citizens Property Tax Postponement Fund. line 3 SEC. 9. line 4 SEC. 11. Section 16211 of the Government Code is amended line 5 to read: line 6 16211. The claimant under Chapter 2 (commencing with line 7 Section 20581), Chapter 3 (commencing with Section 20625), or line 8 Chapter 3.5 (commencing with Section 20640) of Part 10.5 of line 9 Division 2 of the Revenue and Taxation Code whose residential line 10 dwelling was sold or condemned may shall not draw upon the line 11 amount in the account to purchase a new residential dwelling, and line 12 the amount so drawn shall be secured by a new lien against the line 13 new residential dwelling from the time the Controller records the line 14 new lien against the new residential dwelling as provided for under line 15 Section 16182. Senior Citizens and Disabled Citizens Property line 16 Tax Postponement Fund. line 17 In the case of real property, the Controller shall subordinate the line 18 new lien to the lien of the note and deed of trust of the purchase line 19 money obligations used in the acquisition of the new residential line 20 dwelling, provided the claimant has an equity of at least 40 percent line 21 of the full value of the property, as required by paragraph (1) of line 22 subdivision (b) of Section 20583 of the Revenue and Taxation line 23 Code, prior to recordation of that subordination. The lien shall line 24 have priority over all subsequent liens, except as provided in line 25 Section 2192.1 of the Revenue and Taxation Code. line 26 SEC. 10. line 27 SEC. 12. Section 16211.5 of the Government Code is amended line 28 to read: line 29 16211.5. (a)  In the event that the real property securing the line 30 state’s lien provided for in Article 1 (commencing with Section line 31 16180) is the residential dwelling of a claimant under Chapter 2 line 32 (commencing with Section 20581) of Part 10.5 of Division 2 of line 33 the Revenue and Taxation Code and is voluntarily sold, the funds line 34 derived from the voluntary sale of the residential dwelling shall line 35 be placed in the Senior Citizens and Disabled Citizens Property line 36 Tax Postponement Fund. At that time, the Controller shall release line 37 the state’s lien in the manner prescribed by Section 16186. line 38 (b)  The claimant under Chapter 2 (commencing with Section line 39 20581) of Part 10.5 of Division 2 of the Revenue and Taxation line 40 Code whose residential dwelling was voluntarily sold shall not 97 — 10 —AB 2231 line 1 draw upon the amount in the Senior Citizens and Disabled Citizens line 2 Property Tax Postponement Fund. line 3 SEC. 11. line 4 SEC. 13. Section 16212 of the Government Code is repealed. line 5 SEC. 12. Section 16213 of the Government Code is amended line 6 to read: line 7 16213. At the end of the six-month period specified in Section line 8 16210 or the six-month period specified in Section 16211.5, all line 9 funds remaining in an impound account shall be transferred to the line 10 Senior Citizens and Disabled Citizens Property Tax Postponement line 11 Fund, established pursuant to Section 16180. line 12 SEC. 14. Section 16213 of the Government Code is repealed. line 13 16213. At the end of the six-month period specified in Section line 14 16210 or the six-month period specified in Section 16211.5, all line 15 funds remaining in an impound account shall be transferred to the line 16 General Fund. line 17 SEC. 13. line 18 SEC. 15. Section 16214 of the Government Code is repealed. line 19 SEC. 14. line 20 SEC. 16. Section 2514 of the Revenue and Taxation Code is line 21 amended to read: line 22 2514. (a)  With respect to a claimant whose property taxes are line 23 paid by a lender from an impound, trust, or other type of account line 24 described in Section 2954 of the Civil Code, the tax collector shall line 25 notify the auditor of the claimant’s name and address, and the line 26 duplicate amount of money the Controller transferred to the tax line 27 collector via an electronic fund transfer. line 28 The county auditor, treasurer, or disbursing officer shall send a line 29 check in the amount of money based on the electronic transfer by line 30 the Controller, to the Controller within 60 days of the replicated line 31 payment. line 32 (b)  The procedures established by this chapter shall not be line 33 construed to require a lender to alter the manner in which a lender line 34 makes payment of the property taxes of such a claimant. line 35 SEC. 15. line 36 SEC. 17. Section 3375 of the Revenue and Taxation Code is line 37 amended to read: line 38 3375. The county tax collector shall notify the Controller within line 39 60 days, in the manner as the Controller shall direct, of all property line 40 subject to a “Notice of Lien for Postponed Property Taxes” 97 AB 2231— 11 — line 1 recorded pursuant to Section 16182 of the Government Code that line 2 becomes tax defaulted subsequent to the date of entry on the line 3 secured roll of the information required by subdivision (a) of line 4 Section 2514. line 5 SEC. 16. line 6 SEC. 18. Section 3376 is added to the Revenue and Taxation line 7 Code, to read: line 8 3376. (a)  Upon request of the tax collector, the Controller shall line 9 provide to the tax collector information that is required for the line 10 preparation and enforcement of the sale of property under Part 6 line 11 (commencing with Section 3351) of Division 1. This information line 12 may include social security numbers. line 13 (b)  The tax collector or his or her designee shall certify, under line 14 penalty of perjury, to the Controller, that the information requested line 15 pursuant to subdivision (a) is required for the purposes specified line 16 in subdivision (a). line 17 (c)  Any information provided to the tax collector pursuant to line 18 this subdivision is not a public record and is not open to public line 19 inspection. line 20 SEC. 17. line 21 SEC. 19. Section 20503 of the Revenue and Taxation Code is line 22 amended to read: line 23 20503. (a)  “Income” means adjusted gross income as defined line 24 in Section 17072 plus all of the following cash items: line 25 (1)  Public assistance and relief. line 26 (2)  Nontaxable amount of pensions and annuities. line 27 (3)  Social security benefits (except Medicare). line 28 (4)  Railroad retirement benefits. line 29 (5)  Unemployment insurance payments. line 30 (6)  Veterans’ benefits. line 31 (7)  Exempt interest received from any source. line 32 (8)  Gifts and inheritances in excess of three hundred dollars line 33 ($300), other than transfers between members of the household. line 34 Gifts and inheritances include noncash items. line 35 (9)  Amounts contributed on behalf of the contributor to a line 36 tax-sheltered retirement plan or deferred compensation plan. line 37 (10)  Temporary workers’ compensation payments. line 38 (11)  Sick leave payments. line 39 (12)  Nontaxable military compensation as defined in Section line 40 112 of the Internal Revenue Code. 97 — 12 —AB 2231 line 1 (13)  Nontaxable scholarship and fellowship grants as defined line 2 in Section 117 of the Internal Revenue Code. line 3 (14)  Nontaxable gain from the sale of a residence as defined in line 4 Section 121 of the Internal Revenue Code. line 5 (15)  Life insurance proceeds to the extent that the proceeds line 6 exceed the expenses incurred for the last illness and funeral of the line 7 deceased spouse of the claimant. “Expenses incurred for the last line 8 illness” includes unreimbursed expenses paid or incurred during line 9 the income calendar year and any expenses paid or incurred line 10 thereafter up until the date the claim is filed. For purposes of this line 11 paragraph, funeral expenses shall not exceed five thousand dollars line 12 ($5,000). line 13 (16)  If an alternative minimum tax is required to be paid line 14 pursuant to Chapter 2.1 (commencing with Section 17062) of Part line 15 10, the amount of alternative minimum taxable income (whether line 16 or not cash) in excess of the regular taxable income. line 17 (17)  Annual winnings from the California Lottery in excess of line 18 six hundred dollars ($600) for the current year. line 19 (b)  For purposes of this chapter, total income shall be determined line 20 for the calendar year (or approved fiscal year ending within that line 21 calendar year) which ends within the fiscal year for which line 22 assistance is claimed. line 23 (c)  For purposes of this chapter, all losses and nonexpenses shall line 24 be converted to zero for the purpose of determining whether the line 25 homeowner meets the Property Tax Postponement requirement. line 26 (d)  For purposes of Chapter 2 (commencing with Section line 27 20581), Chapter 3 (commencing with Section 20625), and Chapter line 28 3.5 (commencing with Section 20640), total income shall be line 29 determined for the calendar year ending immediately prior to the line 30 commencement of the fiscal year for which postponement is line 31 claimed. line 32 SEC. 18. line 33 SEC. 20. Section 20583 of the Revenue and Taxation Code is line 34 amended to read: line 35 20583. (a)  “Residential dwelling” means a dwelling occupied line 36 as the principal place of residence of the claimant, and so much line 37 of the land surrounding it as is reasonably necessary for use of the line 38 dwelling as a home, owned by the claimant, the claimant and line 39 spouse, or by the claimant and either another individual eligible line 40 for postponement under this chapter or an individual described in 97 AB 2231— 13 — line 1 subdivision (a), (b), or (c) of Section 20511 and located in this line 2 state. It shall include condominiums that are assessed as realty for line 3 local property tax purposes. It also includes part of a multidwelling line 4 or multipurpose building and a part of the land upon which it is line 5 built. line 6 (b)  As used in this chapter in reference to ownership interests line 7 in residential dwellings, “owned” includes (1) the interest of a line 8 vendee in possession under a land sale contract provided that the line 9 contract or memorandum thereof is recorded and only from the line 10 date of recordation of the contract or memorandum thereof in the line 11 office of the county recorder where the residential dwelling is line 12 located, (2) the interest of the holder of a life estate provided that line 13 the instrument creating the life estate is recorded and only from line 14 the date of recordation of the instrument creating the life estate in line 15 the office of the county recorder where the residential dwelling is line 16 located, but “owned” does not include the interest of the holder of line 17 any remainder interest or the holder of a reversionary interest in line 18 the residential dwelling, (3) the interest of a joint tenant or a tenant line 19 in common in the residential dwelling or the interest of a tenant line 20 where title is held in tenancy by the entirety or a community line 21 property interest where title is held as community property, and line 22 (4) the interest in the residential dwelling in which the title is held line 23 in trust, as described in subdivision (d) of Section 62, provided line 24 that the Controller determines that the state’s interest is adequately line 25 protected. line 26 (c)  Except as provided in subdivision (c), and Chapter 3 line 27 (commencing with Section 20625), ownership must be evidenced line 28 by an instrument duly recorded in the office of the county where line 29 the residential dwelling is located. line 30 (d)  “Residential dwelling” does not include any of the following: line 31 (1)  Any residential dwelling in which the owners do not have line 32 an equity of at least 40 percent of the full value of the property as line 33 determined for purposes of property taxation or at least 40 percent line 34 of the fair market value as determined by the Controller and where line 35 the Controller determines that the state’s interest is adequately line 36 protected. The 40-percent equity requirement shall be met at the line 37 time the claimant or authorized agent files an initial postponement line 38 claim and tenders to the tax collector the initial certificate of line 39 eligibility described in Sections 20602, 20639.6, and 20640.6. 97 — 14 —AB 2231 line 1 (2)  Any residential dwelling in which the claimant’s interest is line 2 held pursuant to a contract of sale or under a life estate, unless the line 3 claimant obtains the written consent of the vendor under the line 4 contract of sale, or the holder of the reversionary interest upon line 5 termination of the life estate, for the postponement of taxes and line 6 the creation of a lien on the real property in favor of the state for line 7 amounts postponed pursuant to this act. line 8 (3)  Any residential dwelling on which the claimant does not line 9 receive a secured tax bill. line 10 (4)  Any residential dwelling in which the claimant’s interest is line 11 held as a possessory interest, except as provided in Chapter 3.5 line 12 (commencing with Section 20640). line 13 SEC. 19. line 14 SEC. 21. Section 20583.1 of the Revenue and Taxation Code line 15 is repealed. line 16 SEC. 20. line 17 SEC. 22. Section 20584 of the Revenue and Taxation Code is line 18 amended to read: line 19 20584. (a)  “Property taxes” means all ad valorem property line 20 taxes, special assessments, and other charges or user fees which line 21 are attributable to the residential dwelling on the county tax bill line 22 and the ad valorem property taxes, special assessments, or other line 23 charges or user fees appearing on the tax bill of any chartered city line 24 which levies and collects its own property taxes. line 25 (b)  Whenever a residential dwelling is an integral part of a larger line 26 tax unit, such as a duplex, farm or a multipurpose building, line 27 “property taxes” shall be the percentage of the total property taxes line 28 as the value of the residential dwelling is of the value of the total line 29 tax unit. line 30 (c)  “Property taxes” means property taxes for current fiscal line 31 years for which the claim is made and excludes delinquent taxes line 32 for prior fiscal years. line 33 SEC. 21. line 34 SEC. 23. Section 20602 of the Revenue and Taxation Code is line 35 amended to read: line 36 20602. Upon approval of a claim described in Section 20601, line 37 the Controller shall make payments directly to a county tax line 38 collector for the property taxes owed on behalf of a qualified line 39 claimant. Payments may, upon appropriation by the Legislature, line 40 be made out of the amounts otherwise appropriated pursuant to 97 AB 2231— 15 — line 1 Section 16100 of the Government Code that are secured by a line 2 secured tax lien and obligation as specified by Article 1 line 3 (commencing with Section 16180) of Chapter 5 of Division 4 of line 4 the Government Code. line 5 SEC. 22. line 6 SEC. 24. Section 20621 of the Revenue and Taxation Code is line 7 amended to read: line 8 20621. Each claimant applying for postponement under Article line 9 2 (commencing with Section 20601) shall file a claim under penalty line 10 of perjury with the Controller on a form supplied by the Controller. line 11 The claim shall contain all of the following: line 12 (a)  Evidence acceptable to the Controller that the person was a line 13 “senior citizen claimant” or a “blind or disabled claimant.” line 14 (b)  A statement showing the household income for the period line 15 set forth in Section 20503. line 16 (c)  A statement describing the residential dwelling in a manner line 17 that the Controller may prescribe. line 18 (d)  The name of the county in which the residential dwelling is line 19 located and the address of the residential dwelling. line 20 (e)  The county assessor’s parcel number applicable to the line 21 property for which the claimant is applying for the postponement line 22 of property taxes. line 23 (f)  (1)  Documentation evidencing the current existence of any line 24 abstract of judgment, federal tax lien, or state tax lien filed or line 25 recorded against the applicant, and any recorded mortgage or deed line 26 of trust that affects the subject residential dwelling, for the purpose line 27 of determining that the claimant possesses a 40-percent equity in line 28 the subject residential dwelling as required by paragraph (1) of line 29 subdivision (b) of Section 20583. line 30 (2)  Actual costs, not in excess of fifty dollars ($50), paid by the line 31 claimant to obtain the documentation shall reduce the amount of line 32 the lien for the year, but not the face amount of the payment line 33 prescribed in Section 16180 of the Government Code. line 34 (g)  Other information required by the Controller to establish line 35 eligibility. line 36 SEC. 23. line 37 SEC. 25. Section 20622 of the Revenue and Taxation Code is line 38 amended to read: line 39 20622. The claim for postponement shall be filed after line 40 September 1 of the calendar year in which the fiscal year for which 97 — 16 —AB 2231 line 1 postponement is claimed begins, and on or before April 10 of that line 2 fiscal year; if April 10th falls on Saturday, Sunday, or a legal line 3 holiday, the date is extended to the next business day. line 4 SEC. 24. line 5 SEC. 26. Section 20623 of the Revenue and Taxation Code is line 6 amended to read: line 7 20623. (a)  No person shall file a claim for postponement under line 8 this chapter on or after the effective date of the act adding this line 9 section, and the Controller shall not accept applications for line 10 postponement under this chapter on or after that date. line 11 (b)  This section shall become inoperative on July 1, 2015, and line 12 as of January 1, 2016, is repealed, unless a later enacted statute line 13 that is enacted before January 1, 2016, deletes or extends the dates line 14 on which it becomes inoperative and is repealed. line 15 SEC. 25. line 16 SEC. 27. Chapter 3.3 (commencing with Section 20639) of line 17 Part 10.5 of Division 2 of the Revenue and Taxation Code is line 18 repealed. line 19 SEC. 26. line 20 SEC. 28. Section 20645.5 of the Revenue and Taxation Code line 21 is amended to read: line 22 20645.5. (a)  If a postponement claim under Chapter 2 line 23 (commencing with Section 20581), Chapter 3.3 (commencing with line 24 Section 20639), or Chapter 3.5 (commencing with Section 20640) line 25 is filed timely before the delinquency date of the second installment line 26 of property taxes on the secured roll, then any delinquent penalties, line 27 costs, fees, and interest accrued for that fiscal year shall be canceled line 28 unless the failure to perfect the claim was due to willful neglect line 29 on the part of the claimant or representative. line 30 (b)  In the event of willful neglect, an electronic funds transfer line 31 for that current fiscal year can be used to pay delinquent taxes only line 32 if accompanied by sufficient amounts to pay all of the delinquent line 33 penalties, costs, fees, and interest. If an amount sufficient to pay line 34 all of the delinquent penalties, costs, fees, and interest is not line 35 received by the tax collector within 30 days from the date of the line 36 electronic funds transfer, the tax collector may return the electronic line 37 funds transfer to the Controller to deny the postponement claim. line 38 (c)  (1)  The Controller shall notify the claimant in writing when line 39 the electronic funds transfer has been submitted to the tax collector. 97 AB 2231— 17 — line 1 (2)  In the event of willful neglect, in addition to the information line 2 required pursuant to paragraph (1), the Controller shall also notify line 3 the claimant in writing and provide a copy of the notification to line 4 the tax collector, that a payment amount sufficient to pay all of line 5 the delinquent penalties, costs, fees, and interest must be received line 6 by the tax collector within 30 days from the date of the electronic line 7 funds transfer, and that if this payment is not received by the tax line 8 collector, the tax collector may return the electronic funds transfer line 9 to the Controller to deny the postponement claim. line 10 SEC. 27. line 11 SEC. 29. Section 20645.6 of the Revenue and Taxation Code line 12 is amended to read: line 13 20645.6. (a)  If the Controller denies a postponement claim line 14 under Chapter 2 (commencing with Section 20581), Chapter 3 line 15 (commencing with Section 20625), Chapter 3.3 (commencing with line 16 Section 20639), or Chapter 3.5 (commencing with Section 20640), line 17 and the denial is reversed after appeal pursuant to Section 20645.1, line 18 the Controller shall electronically transfer funds to the county, if line 19 the taxes for the fiscal year have been paid, for the amount of the line 20 taxes. If the taxes for the fiscal year are delinquent, any resulting line 21 penalties or interest shall be canceled. line 22 (b)  The Controller shall notify the claimant in writing when an line 23 electronic funds transfer has been made pursuant to subdivision line 24 (a). line 25 SEC. 28. line 26 SEC. 30. The Legislature finds and declares that Section 16 line 27 of this act, which adds Section 3376 to the Revenue and Taxation line 28 Code, imposes a limitation on the public’s right of access to the line 29 meetings of public bodies or the writings of public officials and line 30 agencies within the meaning of Section 3 of Article I of the line 31 California Constitution. Pursuant to that constitutional provision, line 32 the Legislature makes the following findings to demonstrate the line 33 interest protected by this limitation and the need for protecting line 34 that interest: line 35 In order to protect those persons subject to enforcement of Part line 36 6 (commencing with Section 3351) of Division 1 of the Revenue line 37 and Taxation Code against the risk of identity theft, it is in the line 38 state’s interest to limit public access to information. 97 — 18 —AB 2231 line 1 SEC. 29. line 2 SEC. 31. No reimbursement is required by this act pursuant line 3 to Section 6 of Article XIII B of the California Constitution for line 4 certain costs that may be incurred by a local agency or school line 5 district because, in that regard, this act creates a new crime or line 6 infraction, eliminates a crime or infraction, or changes the penalty line 7 for a crime or infraction, within the meaning of Section 17556 of line 8 the Government Code, or changes the definition of a crime within line 9 the meaning of Section 6 of Article XIII B of the California line 10 Constitution. line 11 However, if the Commission on State Mandates determines that line 12 this act contains other costs mandated by the state, reimbursement line 13 to local agencies and school districts for those costs shall be made line 14 pursuant to Part 7 (commencing with Section 17500) of Division line 15 4 of Title 2 of the Government Code. O 97 AB 2231— 19 —