Legislative Updates

By Staci Hardy, VP Internal Audit & QC Manager

LERETA’s compliance team regularly monitors and tracks statewide property tax legislation that impacts tax service for our customers. This quarter we are including details on introduced legislation and the progression of seven new bills that we are following. None of these will have any impact to LERETA’s processes at this time, but they are beneficial to review.

This legislative update is provided by LERETA as a service to its customers. It should not be construed as legal advice or legal opinion. The contents are intended for general informational purposes only, and you are urged to consult your own attorney regarding the law and specific legal questions you have. LERETA does not guarantee the accuracy, reliability or timeliness of the information contained in its legislative updates.

Monitored Bills

Arkansas

AR HB 1263 Property Tax
Status: Introduced January 26th 2023-100% Progression.
Update: Passed March 10th, 2023

Summary
To amend the law concerning the sale and redemption of tax-delinquent property. Additional details available upon request.

California

CA AB 556 Property Tax
Status: Introduced July 03rd 2023-100% Progression
Update: Passed October 08th, 2023, to take effect immediately

Summary
Property taxation: transfer of base year value: disaster relief. Existing property tax law provides, pursuant to a requirement of the California Constitution, that the property tax base year value of real property that is substantially damaged or destroyed by a disaster, as declared by the Governor, may be transferred to a comparable property located within the same county that is acquired or newly constructed within 5 years after the disaster as a replacement property.

This bill would extend the 5-year time period described above by 3 years if the property was substantially damaged or destroyed by the 2018 Camp Fire disaster, as proclaimed by the Governor, on or after November 1, 2018, but on or before November 20, 2018. The bill would make these provisions applicable to the determination of base year values for the 2018–19 fiscal year and fiscal years thereafter. The bill would make related legislative findings. By imposing additional duties on local tax officials, the bill would create a state-mandated local program.

CA AB 1528 Property Tax
Status: Introduced February 17th 2023-100% Progression.
Update: Passed October 08th, 2023, to take effect immediately


Summary
The California Constitution provides that all property is taxable and requires property to be taxed in proportion to its full value. The California Constitution exempts certain property from property taxation, including property owned by a local government, as specified. The California Constitution authorizes the Legislature to exempt from taxation, in whole or in part, property that is used exclusively for religious, hospital, or charitable purposes, and is owned or held in trust by a nonprofit entity.

The Housing Authorities Law establishes a public body corporate and politic, known as a housing authority, within each county and city. Upon enactment of a resolution by the county or city declaring that there is need for a housing authority to function, existing law authorizes the authority to undertake various specified activities relating to affordable housing. Existing law specifies that the property and bonds of a housing authority are exempt from taxation.

This bill would specify that property held by a nonprofit public benefit corporation that is controlled by a housing authority, as described, is exempt from taxation. The bill would require any outstanding ad valorem tax, interest, or penalty that was levied on the property of a housing authority to be canceled, and any tax, interest, or penalty levied that was paid prior to January 1, 2024, to be refunded.

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.

Existing law requires the state to reimburse local agencies annually for certain property tax revenues lost as a result of any exemption or classification of property for purposes of ad valorem property taxation.

This bill would provide that, notwithstanding those provisions, no appropriation is made and the state shall not reimburse local agencies for property tax revenues lost by them pursuant to the bill.

This bill would make findings and declarations related to a gift of public funds.

CA AB 1093 Property Tax-Manufactured Homes
Status: Introduced February 15th 2023-50% Progression
Update: 09/01/23-In committee: held under submission

Summary
(1) Existing law, the Manufactured Home Property Tax Law, establishes a process governing the taxation of manufactured homes, including mobile homes, as defined. Existing law requires the county tax collector, upon application, to issue a tax clearance certificate or a conditional tax clearance certificate if specified requirements are met. Existing law requires a tax clearance certificate issued to be used to permit registration of used manufactured homes and for other purposes prescribed by the Controller. The tax clearance certificate may indicate that the county tax collector finds that no local property tax is due or is likely to become due or that any applicable local property taxes have been paid or are to be paid in a manner not requiring the withholding of registration or the transfer of registration. Existing law requires a conditional tax clearance certificate issued to indicate that the county tax collector finds that a tax liability exists, the amount due, and the final date that amount may be paid before a further tax liability is incurred.

This bill would revise the above-described procedures for issuing a tax clearance certificate or a conditional tax clearance certificate and for the collection of unpaid, estimated taxes. With respect to the collection of taxes that are not yet payable, the bill would require those taxes to be computed by a certificate or statement prepared by the tax collector, upon request by an escrow officer, as provided, giving their estimate of those taxes or assessments for the current fiscal year and one succeeding fiscal year. The bill would require the tax collector to issue a tax clearance certificate or a conditional tax clearance certificate upon payment of the estimate of taxes or assessments, as provided.

The bill would make conforming changes with respect to the provision governing conditional tax clearance certificates issued, requiring the certificate to indicate the final date for payment of a tax liability. The bill would also make conforming changes with respect to the procedure for an escrow agent to receive and satisfy an estimate of those taxes or assessments for the current fiscal year and the first succeeding fiscal year. By placing new duties on local government officials with respect to these property tax collection procedures, the bill would impose a state-mandated local program.

(2) Existing law authorizes the conditional tax clearance to be in any form as prescribed by the Controller. Existing law also makes the issuance, alteration, forgery, or use of any tax clearance certificate or conditional certificate in a manner contrary to the requirements of the Controller a misdemeanor. By changing the procedures for issuing tax clearance certificates, the bill would expand the scope of an existing crime, thereby imposing a state-mandated local program.

(3) 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.

CA AB 445 Property Tax
Status: Introduced February 06th 2023-25% Progression.
Update: 2023-04-24 – In committee: Set, second hearing. Hearing canceled at the request of author

Summary
Existing law governs the sale to certain entities of a property that has been tax defaulted for 5 years or more, or 3 years or more, as applicable, in an applicable county, including by authorizing the state, county, any revenue district the taxes of which on the property are collected by county officers, or a redevelopment agency created pursuant to the California Community Redevelopment Law, to purchase the property or any part thereof, as prescribed. Existing law also authorizes a nonprofit organization to purchase, with the approval of the board of supervisors of the county in which it is located, a residential or vacant property that has been tax-defaulted for 5 years or more, or 3 years or more if the property is subject to a nuisance abatement lien, as prescribed. Existing law requires the sales price of a property sold pursuant to the provisions described or referenced above to include certain amounts, including all default taxes and assessments and all associated penalties and costs.

This bill would prohibit a property or property interest from being offered for sale under the provisions described above if that property or property interest has not been offered for sale under the provisions described below.

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 increase the claims period described above to 2 years if the county does not receive any claims before the expiration of one year following the recordation of the tax collector’s deed to the purchaser and would make conforming changes. 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 administer the claims period for a longer time period and to include additional information in the required notice of the right to claim excess proceeds, 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.

Colorado

CO SB 304 Property Tax
Status: Introduced May 01st 2023-100% Progression
Update: Passed May 24th, 2023

Summary
Concerning changes to property tax valuation practices, and, in connection therewith, requiring property tax assessors to consider certain information when valuing real property, requiring certain counties use an alternative protest and appeal procedure in any year of general reassessment of real property that is valued biennially, and clarifying that data that a property tax assessor is required to provide at the request of a taxpayer must include certain information.


Illinois

IL SB 1675 Property Tax
Status: Introduced February 08th 2023-100% Progression
Update: August 11th 2023

Summary
Amends the Property Tax Code. Makes changes concerning interest penalties due on delinquent amounts in counties with 3,000,000 or more inhabitants beginning in tax year 2023. Specifies that counties shall be the designated holders of all tax liens and certificates that are forfeited to the State or county. Makes changes concerning sales in error and forfeited tax certificates in provisions concerning the assignment of tax certificates; databases of properties available for sale; scavenger sales; forfeited tax liens and certificates; records of forfeitures; payments for property purchased at tax sales; certificates of purchase; refunds of costs; redemption of properties; special assessments; partial settlements; notices; and the issuance and contents of deeds. Provides that, in the case of a sale in error because of an error by the assessor, chief county assessment officer, board of review, board of appeals, or other county official, the error must be material to the tax certificate at issue. Provides that, in the case of a sale in error because of a bankruptcy, provides that the bankruptcy case must be open on the date the collector’s application for judgment was filed. Provides that, in Cook County, service of process may be made by a person who is licensed or registered as a private detective (currently, those provisions apply in counties other than Cook).

 

IL HB 3303 Property Tax
Status: Introduced February 17th 2023-25% Progression
Update: N/A

Summary
Creates the Business Improvement District Law. Provides for the establishment of business improvement districts by a county or municipality by ordinance after petition of a percentage of property owners or business owners, creation of a district plan, notice, and hearings. Provides that a business improvement district may impose district charges on property owners whose real properties are located within the business improvement district or on businesses within a business improvement district. Provides that the county or municipality shall contract with a district management association to administer or implement activities and improvements specified in the district plan. Contains provisions relating to district plans, formation of a district, district boundaries, issuance of bonds, terms and renewal of districts, amendment to district plans, governance of the district, reports of a district management association, dissolution, and legislative purpose. Limits the concurrent exercise of home rule powers. Defines terms. Effective 120 days after becoming law.

 

IL SB 142 Property Tax
Status: Introduced January 24th 2023-25% Progression
Update: Referred to Assignments

Summary
Amends the Property Tax Code. Provides that buildings, structures, and improvements that are not permanently attached to the land are not considered property for the purposes of the Code. Effective immediately.

 

Indiana

IN SB 296 Property Tax
Status: Introduced January 19th 2023-100% Progression
Update: Passed April 5th 2023

Summary
Sale of tax delinquent real property. Defines the term “severed interest” as an improvement, mineral rights, air rights, water rights, or other rights in property in, on, under, or above the land for which the owner or holder of the interest identified in the current real property tax records of the county auditor is sent a separate property tax statement. Provides that the estate in fee simple that is vested in a grantee by a tax deed executed under the law on the sale of tax delinquent property is subject to a lease shown by public record if the tax deed conveys only a severed interest located in, on, under, or above the land. Provides that the rights that an owner of land has in the land, in a lease shown by public record, or in a memorandum of a lease shown by public record are not limited or abrogated by a tax deed conveying an interest in one or more severed improvements.


IN HB 1627 Property Tax
Status: Introduced January 19th 2023-100% Progression
Update: Passed May 1st, 2023

Summary
Sale of tax sale properties to nonprofits. Provides that a tax sale statute concerning the sale of real property to eligible nonprofit entities for low- or moderate-income housing applies to all counties. (Current law provides that the provision only applies to a county having a consolidated city).

Kentucky

KY SB 141 Property Tax
Status: Introduced January 19th 2023-100% Progression
Update: Passed March 29th, 2023

Summary
Create a new section of KRS 65.8801 to KRS 65.8839 to allow cities that have chosen to use their own collection procedure for the collection of property taxes to place unpaid code enforcement liens on the property tax bill; establish certain requirements for the lien and make provisions for the collection of the unpaid or delinquent lien; amend KRS 91.481 to include any city adopting these provisions within the definition of “collector.”

 

Maryland

MD HB 867 & SB766 Property Tax
Status: Introduced February 10th 2023-25% Progression
Update: Referred to Budget and Taxation March 2023

Summary
Authorizing the Mayor and City Council of Baltimore City to establish an installment payment program for taxes in arrears on residential property; authorizing the Mayor of Baltimore City to cancel the annual tax sale; authorizing the Mayor and City Council of Baltimore City to establish a program to divert residential property from the private tax lien sale process into an alternative program for the payment of taxes in arrears; etc.


MD HB 43 Property Tax
Status: Introduced January 10th 2023-100% Progression
Update: Passed May 3rd, 2023

Summary
Requiring each county to establish a process for a person entitled to any balance over the amount required for the payment of taxes, interest, penalties, and costs of sale to claim the balance after a tax sale foreclosure; and requiring the collector of taxes for a county to notify the prior property owner, within 90 days after delivering a deed to a purchaser, of the amount of a certain balance and the process for claiming the balance.

MD HB 235 Property Tax
Status: Introduced January 24th 2023-100% Progression
Update: Passed May 3rd, 2023

Summary
Prohibiting in all counties, rather than Baltimore City only, a holder of a certificate of sale from filing a complaint to foreclose the right of redemption for owner-occupied residential property until 9 months from the date of sale; prohibiting in all counties, rather than Baltimore City only, a certain notice from being sent to certain persons with an interest in owner-occupied residential property sold at tax sale until 7 months after the date of sale; etc.

Massachusetts

MA SB 1876 Property Tax
Status: Introduced February 16th 2023-25% Progression
Update: N/A

Summary
Legislation to protect homeowners from unfair tax lien practices by cities and towns.

 

Ohio

OH HB 90 Property Tax
Status: Introduced March 7th 2023-25% Progression
Update: N/A

Summary
To amend sections 323.152 and 4503.065 of the Revised Code to authorize a total property tax exemption for the homesteads of totally disabled veterans and their surviving spouses.

 

New York

NY AB 6268 Property Tax
Status: Introduced April 10th 2023-25% Progression
Update: N/A

Summary
Grants a real property assessment freeze and property tax freeze to persons sixty-five years of age or older.

 

NY AB 4702 Property Tax
Status: Introduced February 22nd 2023-25% Progression
Update: N/A

Summary
Establishes provisions for real property tax lien transfers to assist homeowners facing foreclosure based on unpaid taxes; repeals existing provisions relating to acceptance of taxes from certain loan corporations.                                                                                  

NY AB 3957 Property Tax
Status: Introduced February 8th 2023-25% Progression
Update: N/A

Summary
Authorizes the city of Albany to add unpaid housing code violation penalties, costs and fines to such city’s annual tax levy.

NY AB 3097 Property Tax
Status: Introduced February 2nd 2023-25% Progression.
Update: N/A

Summary
Authorizes municipalities in the county of Rockland to add unpaid housing code violation penalties, costs and fines to such municipalities’ annual tax levy in accordance with applicable law.                                                                                                                               

NY AB 1130 Property Tax
Status: Introduced January 13th 2023-25% Progression
Update: N/A

Summary
Authorizes municipalities in the county of Orange to add unpaid housing code violation penalties, costs and fines to such municipalities’ annual tax levy in accordance with applicable law.

NY AB 1543 Property Tax
Status: Introduced January 12th 2023-25% Progression
Update: N/A

Summary
Provides that any installment of real property tax due and payable in calendar year 2023 shall be due and payable by December 31, 2023; relates to the payment of taxes in installments to counties, towns, certain school districts and city school districts by senior citizens and physically disabled persons.

NY AB 606 Property Tax-Substituted by S2222.
Status: Introduced January 5th 2023-100% Progression
Update: Passed March 8th, 2023. This act shall take effect on the same date and in the same manner as a chapter of the laws of 2022 amending the environmental conservation law relating to setting conservation goals for the state and including efforts to combat the biodiversity and climate crises in the state’s land acquisition policy, as proposed in legislative bills numbers S. 6191-A and A. 5390-B, takes effect.

Summary
Relates to authorizing counties to set interest rates imposed on late payment of property taxes and delinquencies and redemption of property subject to more than one tax lien.

 

NY AB 248 Property Tax
Status: Introduced January 4th 2023-25% Progression
Update: N/A

Summary
Authorizes municipalities to treat unpaid fines for building code and fire code violations as unpaid real property taxes and to impose a tax lien therefor.

 

Oregon

OR SB 999 Property Tax
Status: Introduced January 4th 2023-100% Progression
Update: Passed on August 15th , 2023.

Summary
Authorizes city or county to adopt five-year property tax exemption for newly constructed accessory dwelling unit, or newly converted duplex, triplex or quadplex, that is used as occupant’s primary residence. Provides] Authorizes city or county to adopt five-year property tax exemption for newly constructed accessory dwelling unit, or newly converted duplex, triplex or quadplex, that is used as occupant’s primary residence. Requires approval of affected taxing districts imposing majority of total combined rate of taxation on eligible property. Applies to property tax years beginning on or after July 1, 2024. Takes effect on 91st day following adjournment sine die.

Texas 

TX HB 740 Property Tax
Status: Introduced November 16th 2022-25% Progression
Update: February 28th, 2023- Referred to Ways & Means

Summary

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: SECTION 1.  Sections 33.065(a), (f), and (g), Tax Code, are amended to read as follows: (a)  An individual is entitled to defer collection of a tax or abate a suit to collect a delinquent tax imposed on the portion of the appraised value of property the individual owns and occupies as the individual’s residence homestead that exceeds the sum of: (1) 105 percent of the appraised value of the property for the preceding year; and (2) the market value of all new improvements to the property.

  

TX HB 721 Property Tax
Status: Introduced November 16th 2022-25% Progression
Update: February 28th, 2023- Referred to Ways & Means.

Summary
Relating to the rate at which interest accrues in connection with the deferral or abatement of the collection of ad valorem taxes on certain residence homesteads.  A tax lien remains on the property and interest continues to accrue during the period collection of taxes is deferred or abated under this section. The annual interest rate in effect for each calendar year or portion of a calendar year during the deferral or abatement period is the lower of the five-year Constant Maturity Treasury Rate reported by the Federal Reserve Board as of January 1 of that year or five percent instead of the rate provided by Section 33.01.

Virginia

VA HB 2110 Property Tax
Status: Introduced January 10th 2023-100% Progression
Update: Passed March 23rd, 2023

Summary
Delinquent tax lands. Extends the maximum duration of an installment agreement between a locality and a landowner to pay delinquent taxes from 60 to 72 months. Delinquent tax lands. Extends the maximum duration of an installment agreement between a locality and a landowner to pay delinquent taxes from 60 to 72 months.