SB 142

This bill allows municipalities to temporarily waive the interest and penalties

on late property tax payments and temporarily waives the timely filing requirement

for claims to recover property taxes.

Interest and penalties on late property tax payments

Under current law, a late installment payment of property taxes is subject to

interest and penalties, with the interest accruing from February 1 of the year in

which the taxes are due. For property taxes payable in 2020, if an installment

payment due after April 1, 2020, is late, current law allows a municipality to

temporarily waive the interest and penalties in cases of hardship. The entire amount

due must be paid no later than October 1, 2020, and both the county and municipality

must adopt resolutions authorizing the waiver.

The bill allows municipalities to similarly waive interest and penalties on late

installment payments of property taxes payable in 2021. Under the bill, for an

installment payment due after January 1, 2021, that is late, a municipality may

waive the interest and penalties if the municipality makes a general or case-by-case

finding of hardship and the total amount due is paid no later than October 1, 2021.

A municipality may waive the interest and penalties only if the county first adopts

a resolution authorizing the waiver and establishing criteria for determining

hardship and the municipality then adopts a similar resolution. Under the bill,

interest and penalties will accrue from October 1, 2021, for any property taxes

payable in 2021 that are delinquent after that date.

The bill requires a county that adopts a waiver resolution to settle the taxes,

interest, and penalties collected before August 1, 2021, on August 20, 2021, and to

settle the remaining unpaid taxes, interest, and penalties on September 20, 2021.

The August 20, 2021, settlement must be distributed proportionally to the

underlying taxing jurisdictions.

Filing claims to recover property taxes

Current law allows a person to file a claim to recover the unlawful imposition

of property taxes, a claim for the excessive assessment of property taxes, or a claim

to recover property taxes paid in protest due to an outstanding contested assessment.

However, no person may file a claim unless the person has paid his or her property

taxes on time. Current law provides an exception from this requirement for taxes

due and payable in 2020 if paid by October 1, 2020, or a later applicable installment

date.

The bill creates a similar exception for property taxes due and payable in 2021.

Under the bill, the timely payment requirement does not apply to these taxes if paid

by October 1, 2021, or a later applicable installment date.