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SB-812 Property taxation: tax-defaulted property sales: minimum price.(2017-2018)

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Date Published: 06/15/2017 04:00 AM
SB812:v98#DOCUMENT

Amended  IN  Assembly  June 14, 2017

CALIFORNIA LEGISLATURE— 2017–2018 REGULAR SESSION

Senate Bill No. 812


Introduced by Committee on Governance and Finance (Senators McGuire (Chair), Beall, Hernandez, Hertzberg, Lara, Moorlach, and Nguyen)

March 22, 2017


An act to amend Section 3698.5 of the Revenue and Taxation Code, relating to taxation.


LEGISLATIVE COUNSEL'S DIGEST


SB 812, as amended, Committee on Governance and Finance. Property taxation: tax-defaulted property sales: minimum price.
Under existing property tax law, taxes, assessments, penalties, and costs on real property, except as specified, become default by operation of law on July 1 at 12:01 a.m. Five years or more, or 3 years or more in the case of nonresidential commercial property, after the property has become tax defaulted, existing property tax law requires the tax collector to attempt to sell all or any portion of tax-defaulted property that has not been redeemed, as provided. Existing property tax law requires that the minimum price of tax-defaulted property at a tax sale generally be an amount not less than the total amount necessary to redeem, plus costs and the outstanding balance of any property tax postponement loan, determined as specified. If the property or property interests do not receive an acceptable bid at this minimum price, existing property tax law authorizes the tax collector, in his or her discretion and with the approval of the board of supervisors, to offer that same property or those interests at the same or next scheduled sale at a minimum price that the tax collector deems appropriate, as specified.
This bill would prohibit the current owner of tax-defaulted property subject to sale from purchasing that property property, directly or indirectly, below the minimum price determined, as described above. The bill would require that tax-defaulted property purchased at a price below that amount, as described above, be transferred by deed only to another person with no legal, contractual, financial, or familial connection with the current owner of the tax-defaulted property. The bill would also require the purchaser to provide any necessary documentation requested by the tax collector that the tax collector deems necessary to determine compliance with these provisions. prohibit a transfer of a deed to the current owner if the property is purchased by the current owner for lower than the minimum bid.
By imposing new duties on local tax collectors with respect to sales of tax-defaulted property, the bill would impose a state-mandated local program.
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, if the Commission on State Mandates determines that the bill contains costs mandated by the state, reimbursement for those costs shall be made pursuant to the statutory provisions noted above.
Vote: MAJORITY   Appropriation: NO   Fiscal Committee: YES   Local Program: YES  

The people of the State of California do enact as follows:


SECTION 1.

 Section 3698.5 of the Revenue and Taxation Code is amended to read:

3698.5.
 (a) Except as provided in Section 3698.7, the minimum price at which property may be offered for sale pursuant to this chapter shall be an amount not less than the total amount necessary to redeem, plus costs and the outstanding balance of any property tax postponement loan. For purposes of this subdivision:
(1) The “total amount necessary to redeem” is the sum of the following:
(A) The amount of defaulted taxes.
(B) Delinquent penalties and costs.
(C) Redemption penalties.
(D) A redemption fee.
(2) “Costs” are those amounts described in subdivision (c) of Section 3704.7, subdivisions (a) and (b) of Section 4112, Sections 4672, 4672.1, 4672.2, 4673, and subdivision (b) of Section 4673.1.
(3) The “outstanding balance of any property tax postponement loan” is the sum of the following:
(A) The tax payments made by the State Controller’s office on behalf of the claimant in the Property Tax Postponement Program.
(B) Accrued interest pursuant to Section 16183 of the Government Code, subject to Sections 20644 and 20644.5.
(C) Other associated fees and penalties as deemed appropriate by law.
(D) Less any payments already made on the property tax postponement loan.
(b) This section shall not apply to property or interests that qualify for sale in accordance with the provisions of subdivisions (b) and (c) of Section 3692.
(c) If property or property interests have been offered for sale at least once and the tax collector has received no acceptable bids for that property at the minimum price determined pursuant to subdivision (a), the tax collector may, in his or her discretion and with the approval of the board of supervisors, offer that same property or those interests at the same or next scheduled sale at a minimum price that the tax collector deems appropriate in light of the most current assessed valuation of that property or those interests, or any unique circumstance with respect to that property or those interests.
(d) The current owner of tax-defaulted property subject to sale under this chapter shall not purchase that property property, directly or indirectly, at a price below the minimum price determined pursuant to subdivision (a). Ownership of tax-defaulted property purchased at a price below the minimum price determined pursuant to subdivision (a), as provided in subdivision (c), shall be transferred by deed only to another person with no legal, contractual, financial, or familial connection with the current owner of the tax-defaulted property. The purchaser shall provide any documentation requested by the tax collector that the tax collector deems necessary to determine compliance with this subdivision. No deed shall be transferred to the current owner if the property is purchased by the current owner for lower than the minimum bid.

SEC. 2.

 If the Commission on State Mandates determines that this act contains costs mandated by the state, reimbursement to local agencies and school districts for those costs shall be made pursuant to Part 7 (commencing with Section 17500) of Division 4 of Title 2 of the Government Code.