Property taxation: tax-defaulted property sales: minimum price.
The impact of SB812 on state tax law is significant as it standardizes procedures for the sale of tax-defaulted properties and aims to protect the integrity of the tax sale process. By mandating that properties cannot be purchased below the set minimum price, the bill seeks to ensure that the sale proceeds adequately cover necessary costs and protects local tax revenues. Furthermore, the bill imposes new duties on local tax collectors, which may lead to increased administrative responsibilities for these offices, as they must adhere to the revisions in sales procedures dictated by the new law.
Senate Bill 812 (SB812), enacted on October 8, 2017, addresses the sale of tax-defaulted properties in California. This legislation amends the Revenue and Taxation Code, specifically Section 3698.5, outlining the minimum price at which such properties can be sold at auction. Under the provisions of SB812, properties that have been tax-defaulted for more than five years, or three years for nonresidential commercial properties, are required to be sold at a minimum price that reflects the outstanding taxes and associated costs necessary for redemption. Moreover, the bill now prohibits current owners of tax-defaulted properties from purchasing their own properties at prices lower than the predetermined minimum price, effectively eliminating potential conflicts of interest in the sale process.
The sentiment around SB812 appears to be constructive, with general agreement among legislative members on the necessity of the bill. Proponents argue that the bill enhances transparency and accountability within tax-defaulted property sales, thereby fostering fair competition in the market. However, some concerns were expressed about the additional administrative burdens it may place on local tax collectors, as they will have to adjust to new regulations and potentially receive training to comply with the updated statutes.
While SB812 primarily received support due to its clear objectives in regulating the sale of tax-defaulted properties, there was deliberation regarding the implications of increasing workloads for local government officials. Additionally, the bill’s enforcement mechanisms, including the state's commitment to reimburse local agencies for mandated costs, were debated to ensure that local governments would not bear undue financial strain as a result of this legislation. Ultimately, the legislation was seen as a necessary step toward refining the tax default process while maintaining expected revenue levels for municipalities.