Bill Text: CA SB964 | 2023-2024 | Regular Session | Amended
Bill Title: Property tax: tax-defaulted property sales.
Spectrum: Partisan Bill (Republican 1-0)
Status: (Introduced) 2024-05-16 - May 16 hearing: Held in committee and under submission. [SB964 Detail]
Download: California-2023-SB964-Amended.html
|
Amended
IN
Senate
April 16, 2024 |
|
Amended
IN
Senate
March 05, 2024 |
| Introduced by Senator Seyarto |
January 23, 2024 |
LEGISLATIVE COUNSEL'S DIGEST
Existing law generally authorizes a county tax collector to sell to any person tax-defaulted property 5 years or more, or 3 years or more, as applicable, after that property has become tax defaulted. Existing law authorizes a party of interest in the property to file with the county a claim for the excess proceeds, in proportion to that person’s
interest held with others of equal priority in the property at the time of sale, at any time before the expiration of one year following the recordation of the tax collector’s deed to the purchaser and provides for the distribution of those excess proceeds. Existing law requires, if excess proceeds from the sale of tax-defaulted property exceed $150, the county to provide notice of the right to claim the excess proceeds, as prescribed.
This bill would require a county to review a claim filed pursuant to the provisions described above and determine whether the claim is
complete and valid, and would prescribe a procedure for curing any deficiency in the claim. The bill would also require the notice described above to include certain information, including the consequences for failing to apply for excess proceeds within the claims period. By requiring a county to undertake new duties with respect to the claims process, the bill would impose a state-mandated local program.
Existing law authorizes certain excess proceeds from sales of property pursuant to the provisions described above to
be transferred to the county general fund, as specified. Existing law generally governs and regulates the receipt, custody, investment, management, disposal, and escheat of various classes of unclaimed property to the possession of which the state is, or may become, entitled under the provisions of certain law. Existing law creates the Unclaimed Property Fund and requires all money, except permanently escheated money, paid to the state or any officer or employee thereof for deposit in the State Treasury under those provisions to be deposited in the fund on order of the Controller. Existing law provides that moneys in that fund are continuously appropriated to the Controller for specified purposes.
This bill would instead require those excess proceeds from sales of property pursuant to the provisions described above to be transferred to the Controller for deposit in the Defaulted Tax Sale Subaccount, which this bill would establish in the fund to consist of moneys
received by the Controller pursuant to the bill’s provisions. The bill would provide that those moneys are available upon appropriation for specified purposes. By requiring a county to undertake new duties with respect to these moneys, this 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.
Digest Key
Vote: MAJORITY Appropriation: NO Fiscal Committee: YES Local Program:Bill Text
The people of the State of California do enact as follows:
(a)The Defaulted Tax Sale Subaccount is hereby established in the Unclaimed Property Fund.
(b)The Defaulted Tax Sale Subaccount shall consist of moneys received by the Controller and required to be deposited into the subaccount pursuant to Chapter 8 (commencing with Section 3771) of Part 6 of Division 1 of the Revenue and Taxation Code.
(c)Notwithstanding Section 1325, the moneys in the Defaulted Tax Sale Subaccount shall be available upon appropriation for the purposes of this title.
SEC. 2.SECTION 1.
Section 3777 is added to the Revenue and Taxation Code, immediately following Section 3776, to read:3777.
(a) Property or a property interest shall not be offered for sale under the provisions of this chapter if that property or property interest has not been offered for sale under the provisions of Chapter 7 (commencing with Section 3691) unless(1)The county’s property assessment shows that the property or property interest is worth less than the defaulted debt.
(2)Offering the property or property interest for sale under the provisions of Chapter 7 (commencing with Section 3691) would cost the county more than offering the property or property interest for sale under the provisions of this chapter.
(3)The county’s board of supervisors approved offering the property or property interest for sale under the provisions of this chapter by majority vote after the issue is discussed during a regularly scheduled open meeting or hearing that gave the community an opportunity to discuss the proposed offering for sale.
(b)When considering whether to approve offering the property or property interest for sale under the provisions of this chapter at an open meeting or hearing as described in paragraph (3) of
subdivision (a), the county’s board of supervisors shall consider all evidence and arguments presented during the meeting or hearing, including, but not limited to, evidence or arguments concerning both of the following:
(1)The value of the property or property interest and the county’s property assessment showing that value.
(2)The cost of offering the property or property interest for sale under the provisions of Chapter 7 (commencing with Section 3691) as compared to the cost of offering the property or property interest for sale under the provisions of this chapter.
Any excess in the proceeds deposited in the delinquent tax sale trust fund remaining after satisfaction of the amounts distributed under Sections 4672, 4672.1, 4672.2, 4673, and 4673.1 shall be retained in the fund on account of, and may be claimed by parties of interest in the property as provided in, Section 4675. At the expiration of the period specified in subdivision (e) of Section 4675, any excess proceeds not claimed under Section 4675 shall be transferred to the Controller for deposit in the Defaulted Tax Sale Subaccount in the Unclaimed Property Fund established pursuant to Section 1326 of the Code of Civil Procedure.
(a)(1)Any party of interest in the property may file with the county a claim for the excess proceeds, in proportion to that person’s interest held with others of equal priority in the property at the time of sale, at any time before the expiration of one year following the recordation of the tax collector’s deed to the purchaser. The claim shall be postmarked on or before the one-year expiration date to be considered timely.
(2)(A)The county shall review a claim filed pursuant to paragraph (1) and determine whether the claim is complete and valid.
(B)If the county determines that a claim is incomplete or invalid, the county shall provide written notice to the claimant describing what is needed to cure the deficiency and informing the claimant that the claimant has 60 days to cure the deficiency.
(C)A claim reviewed pursuant to this paragraph is timely if originally postmarked on or before the one-year expiration date even if the 60-day cure period required by this paragraph extends beyond that one-year expiration date.
(b)After the property has been sold, a party of interest in the property at the time of the
sale may assign their right to claim the excess proceeds only by a dated, written instrument that explicitly states that the right to claim the excess proceeds is being assigned, and only after each party to the proposed assignment has disclosed to each other party to the proposed assignment all facts of which that party is aware relating to the value of the right that is being assigned. Any attempted assignment that does not comply with these requirements shall have no effect. This subdivision applies only with respect to assignments on or after the effective date of this subdivision.
(c)Any person or entity who in any way acts on behalf of, or in place of, any party of interest with respect to filing a claim for any excess proceeds shall submit proof with the claim that the amount and source of excess proceeds have been disclosed to the party
of interest and that the party of interest has been advised of their right to file a claim for the excess proceeds on their own behalf directly with the county at no cost.
(d)The claims shall contain any information and proof deemed necessary by the board of supervisors to establish the claimant’s rights to all or any portion of the excess proceeds.
(e)(1)Except as provided in paragraph (2), no sooner than the claim expiration date and any review and cure periods determined pursuant to subdivision (a), and if the excess proceeds have been claimed by any party of interest as provided herein, the excess proceeds shall be distributed on order of the board of
supervisors to the parties of interest who have claimed the excess proceeds in the order of priority set forth in subdivisions (a) and (b). For the purposes of this article, parties of interest and their order of priority are:
(A)First, lienholders of record before the recordation of the tax deed to the purchaser in the order of their priority.
(B)Second, any person with title of record to all or any portion of the property before the recordation of the tax deed to the purchaser.
(2)(A)If the board of supervisors has been petitioned to rescind the tax sale pursuant to Section 3731, any excess proceeds shall not be distributed to the parties of interest as provided by paragraph (1) before the
earlier of the claim expiration date and any review and cure periods determined pursuant to subdivision (a) or one year following the date the board of supervisors determines the tax sale should not be rescinded, and only if the person who petitioned the board of supervisors pursuant to Section 3731 has not commenced a proceeding in court pursuant to Section 3725.
(B)If a proceeding has been commenced in a court pursuant to Section 3725, any excess proceeds shall not be distributed to the parties of interest as provided by paragraph (1) until a final court order is
issued.
(f)If a person with title of record is deceased at the time of the distribution of the excess proceeds, the heirs may submit an affidavit pursuant to Chapter 3 (commencing with Section 13100) of Part 1 of Division 8 of the Probate Code, to support their claim for excess proceeds.
(g)Any action or proceeding to review the decision of the board of supervisors, or the county officer to whom the board delegated authority pursuant to Section 4675.1, to accept or deny the claim shall be commenced within 90 days after the date of that decision of the board of supervisors or the county officer.
(a)If excess proceeds from the sale of tax-defaulted property exceed one hundred fifty dollars ($150), the county shall provide notice of the right to claim the excess proceeds, as provided in this section.
(b)No later than 90 days after the sale of the property, the county shall mail written notice of the right to claim excess proceeds to the last known mailing address of parties of interest, as defined in Section 4675. The county shall make a reasonable effort to obtain the name and last known mailing address of parties of interest.
(c)If the last known address of a party of interest cannot be obtained, the county
shall publish notice of the right to claim excess proceeds in a newspaper of general circulation in the county. Publication is not required if the cost to publish is equal to or greater than the amount of the excess proceeds. The notice shall be published once a week for three successive weeks and shall commence no later than 90 days after the sale of the property.
(d)The cost of obtaining the name and last known mailing address of parties of interest and of mailing or publishing the notices required under this section shall be deducted from the excess proceeds and shall be distributed to the county general fund.
(e)A notice pursuant to this section shall contain all of the following information:
(1)The amount of the
tax debt with respect to which the tax-defaulted property was in default.
(2)The amount for which the property was sold.
(3)The consequences for failing to apply for excess proceeds within the time period prescribed in Section 4675.
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.
