Bad-Check Fee for Property Tax Bills Rises : Supervisors: The board doubles to $20 the penalty for having to process a check returned for insufficient funds.

Orange County homeowners who write bad checks to cover annual property tax bills will face stiffer penalties under a measure adopted by the Board of Supervisors on Wednesday.

In a 3-0 vote, supervisors doubled to $20 the fee for processing a check returned to the county tax collector because there are insufficient funds in the homeowner’s account. The increased penalty will take effect Dec. 14, too late to cover those payments for the first 1990-91 property tax installment due Dec. 10.

Gary J. Cowan, chief of tax collection operations for the treasurer-tax collector’s office, said his agency received 2,600 bad checks for property tax bills last year. About 95% of those are usually made good after the writers are officially notified.

The county treasurer processes about 2 million property tax checks each year and the number of bad checks, Cowan said, increased at a rate of about 3% last year--about the same as the increase in property taxpayers in Orange County.

“Processing returned checks is very labor-intensive, very expensive,” Cowan said, adding that the $20 penalty would barely cover the administrative cost of correcting the property tax roll and sending an official notice telling the property owner that his taxes remain unpaid.

“When someone pays by check, he or she promises by law that the money is there,” Cowan said. “Paying your property taxes with a bad check is the same as not paying them at all.”

The hike in the fees was authorized in June by a state law that amended the Revenue and Taxation Code so counties could recover the cost of processing bad property tax checks. Orange County, according to Cowan, was one of the first in the state to take advantage of the increase because of the county’s continuing budget crisis. Because of massive state funding cutbacks, county officials predict a $40-million budget shortfall in the coming 1991-92 fiscal year.

The fee for processing bad checks written to other county agencies remains at $10, according to officials.

Like the tax collector, the courts and the county Probation Department handle their own payment collections. But the auditor-controller processes bad checks written to every other county agency.

Grady Nichols, of the auditor-controller’s office, said his agency processed about 1,700 bad checks during the last fiscal year.

“I always wondered why the $10 fee was not higher,” he said, noting that it did not “defray the costs of the labor-intensive” process of getting people to cover a bad check.

“This is a fine piece of legislation we are passing today, and one that has been needed for some time,” said Don R. Roth, supervisors’ board chairman.

The fee was approved with no opposition, although Supervisors Gaddi H. Vasquez and Harriett M. Wieder were absent.