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
California
CA AB 556 Property Tax-Manufactures Homes
Status: Introduced February 15, 2023-50% Progression
Update: September 1, 2023 – In committee: Held under submission
Update: May 1, 2024 – No change
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.
California
CA AB 1528 Property Tax
Status: Introduced February 17th 2023-50% Progression
Update: Hearing: Aug 14 @ 10:00 am
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.
California
CA AB 445 Property Tax
Status: Introduced February 6, 2023-25% Progression
Update: April 24, 2023 – In committee: Set, second hearing, Hearing canceled at the request of author
Update: May 1, 2024 – 100% progression
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 108 Property Tax
Status: Introduced January 1, 2023 – 100% Progression
Update: June 5, 2023 – This act takes effect at 12:01 a.m. on the day following the expiration of the ninety-day period after final adjournment of the general assembly; except that, if a referendum petition is filed pursuant to section 1 (3) of article V of the state constitution against this act or an item, section, or part of this act within such period, then the act, item, section, or part will not take effect unless approved by the people at the general election to be held in November 2024 and, in such case, will take effect on the date of the official declaration of the vote thereon by the governor.
Update: May 1, 2024 – Enrolled on April 23, 2024 – 75% progression. Action: April 23, 2024 – Sent to the Governor
Summary
Property tax relief by a temporary reduction in property taxes due, any local government may approve and certify a temporary property tax credit or temporary mill levy rate reduction as set forth in this section. A district, as definite in section 22-54-103(5), may not reduce a mill levy below the minimum amounts provided in section 22-54-106. The procedures set forth in this section shall be deemed to be a reasonable method for effecting refunds in accordance with section 20 of article X of the state constitution and for providing temporary property tax relief. A temporary reduction in property taxes due for the purpose of property tax relief is subject to annual renewal.
Colorado
CO SB 304 Property Tax
Status: Introduced May 01st 2023-50% 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 8, 2023-100% Progression
Update: May 1, 2024 – Passed on August 11, 2023 – 100% Progression
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).
Illinois
IL HB 3303 Property Tax
Status: Introduced February 17, 2023-25% Progression
Update: Added Co-Sponsor Rep. Kimberly Du Buclet on 9/11/2023.
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.
Maryland
MD HB 867 & SB766 Property Tax
Status: Introduced February 14, 2024 -25% Progression
Update: Hearing Scheduled for March 5, 2024
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.
Massachusetts
MA SB 1876 Property Tax
Status: Introduced February 16, 2023-25% Progression
Update: Pending: Joint Revenue Committee. Last hearing date 10/24/23.
Summary
Legislation to protect homeowners from unfair tax lien practices by cities and towns.
New York
NY AB 6268 Property Tax
Status: Introduced April 10, 2023-25% Progression
Update: Referred to governmental operations on March 1, 2024
Summary
Grants a real property assessment freeze and property tax freeze to persons sixty-five years of age or older.
New York
NY AB 4702 Property Tax
Status: Introduced February 22, 2023-25% Progression
Update: Referred to real property taxation on 03/01/2024.
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.
New York
NY AB 3957 Property Tax
Status: Introduced February 8, 2023-25% Progression
Update: Referred to real property taxation on 03/01/2024.
Summary
Authorizes the city of Albany to add unpaid housing code violation penalties, costs and fines to such city’s annual tax levy.
New York
NY AB 3097 Property Tax
Status: Introduced February 2, 2023-25% Progression
Update: Referred to real property taxation on 03/01/2024.
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.
New York
NY AB 1130 Property Tax
Status: Introduced January 13, 2023-25% Progression
Update: Referred to real property taxation on 03/01/2024.
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.
New York
NY AB 1543 Property Tax
Status: Introduced January 12, 2023-25% Progression
Update: Referred to higher education on 03/01/2024.
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.
New York
NY AB 248 Property Tax
Status: Introduced January 4, 2023-25% Progression
Update: Referred to real property taxation on 03/01/2024
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.