AB 2372 - An Act to Amend Sections 64, 480.1, 480.2, and 482 Of, to Add Section 480.9 To, and to Add and Repeal Section 486 Of, the Revenue and Taxation Code, Relating to Taxation, to Take Effect Immediately, Tax Levy.

Property taxation: change in ownership. 2013-2014 Legislature. View bill details
Author(s):
Summary:
The California Constitution generally limits ad valorem taxes on real property to 1% of the full cash value of that property. For purposes of this limitation, “full cash value” is defined as the assessor’s valuation of real property as shown on the 1975–76 tax bill under “full cash value” or, thereafter, the appraised value of that real property when purchased, newly constructed, or a… More
The California Constitution generally limits ad valorem taxes on real property to 1% of the full cash value of that property. For purposes of this limitation, “full cash value” is defined as the assessor’s valuation of real property as shown on the 1975–76 tax bill under “full cash value” or, thereafter, the appraised value of that real property when purchased, newly constructed, or a change in ownership has occurred.

Existing property tax law specifies those circumstances in which the transfer of ownership interests in a corporation, partnership, limited liability company, or other legal entity results in a change in ownership of the real property owned by that entity, and generally provides that a change in ownership as so described occurs if a legal entity or other person obtains a controlling or majority ownership interest in the legal entity. Existing law also specifies other circumstances in which certain transfers of ownership interests in legal entities result in a change in ownership of the real property owned by those legal entities. Existing law requires the Franchise Tax Board to include a question on corporation and income returns for partnerships, banks, and corporations to assist in the determination of whether a change in ownership as so described has occurred.

This bill would specify that if, on or after January 1, 2015, 90% or more of the direct or indirect ownership interests in a legal entity are cumulatively transferred in one or more transactions, the transfer of the ownership interest is a change in ownership of the real property owned by the legal entity, whether or not any one legal entity or person acquires control of the ownership interests. This bill would require the Franchise Tax Board to include an additional question on corporation and income returns for partnerships, banks, and corporations to assist in the determination of whether a change in ownership as so described has occurred. This bill would require the State Board of Equalization to report to the Legislature, no later than January 1, 2020, regarding the implementation of these changes in ownership, including, but not limited to, the economic impact and frequency of reassessments of real property owned by legal entities.

Existing law requires, upon a change in control or change in ownership of a legal entity that owns an interest in real property in this state, or when requested by the State Board of Equalization, that the person or legal entity acquiring ownership or control, or the legal entity that has undergone a change in ownership, file a change in ownership statement with the board, as specified. Existing law requires a penalty of 10% of the taxes applicable to the new base year value, as specified, or 10% of the current year’s taxes on the property, as specified, to be added to the assessment made on the roll if a person or legal entity required to file a change in ownership statement fails to do so.

This bill would also require, in the case of a change in ownership when 90% or more of the ownership interests in the legal entity are cumulatively transferred, as described above, the corporation, partnership, limited liability company, or other legal entity that underwent the change in ownership to file a change in ownership statement signed under penalty of perjury with the State Board of Equalization, as specified. This bill would increase the penalties for failure to file a change in ownership statement, as described above, from 10% to 15%.

This bill would require the State Board of Equalization to notify assessors if a change in control or a change in ownership of a legal entity has occurred.

By expanding the crime of perjury and by imposing new duties upon local county officials with respect to changes in ownership, this 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 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.

This bill would include a change in state statute that would result in a taxpayer paying a higher tax within the meaning of Section 3 of Article XIIIA of the California Constitution, and thus would require for passage the approval of 23 of the membership of each house of the Legislature.

This bill would take effect immediately as a tax levy. Hide
 
Status:
The bill was voted on by a Senate committee on August 4, 2014. 
Assembly Vote: On Passage

PASSED on May 29, 2014.

voted YES: 57 voted NO: 13
9 voted present/not voting

Other Votes:

An Act to Amend Sections 64, 480.1, 480.2, and 482 Of, to Add Section 480.9 To, and to Add and Repeal Section 486 Of, the Revenue and Taxation Code, Relating to Taxation, to Take Effect Immediately, Tax Levy.

AB 2372 — 2013-2014 Legislature

Summary
The California Constitution generally limits ad valorem taxes on real property to 1% of the full cash value of that property. For purposes of this limitation, “full cash value” is defined as the assessor’s valuation of real property as shown on the 1975–76 tax bill under “full cash value” or, thereafter, the appraised value of that real property when purchased, newly constructed, or a change in ownership has occurred.

Existing property tax law specifies those circumstances in which the transfer of ownership interests in a corporation, partnership, limited liability company, or other legal entity results in a change in ownership of the real property owned by that entity, and generally provides that a change in ownership as so described occurs if a legal entity or other person obtains a controlling or majority ownership interest in the legal entity. Existing law also specifies other circumstances in which certain transfers of ownership interests in legal entities result in a change in ownership of the real property owned by those legal entities. Existing law requires the Franchise Tax Board to include a question on corporation and income returns for… More
The California Constitution generally limits ad valorem taxes on real property to 1% of the full cash value of that property. For purposes of this limitation, “full cash value” is defined as the assessor’s valuation of real property as shown on the 1975–76 tax bill under “full cash value” or, thereafter, the appraised value of that real property when purchased, newly constructed, or a change in ownership has occurred.

Existing property tax law specifies those circumstances in which the transfer of ownership interests in a corporation, partnership, limited liability company, or other legal entity results in a change in ownership of the real property owned by that entity, and generally provides that a change in ownership as so described occurs if a legal entity or other person obtains a controlling or majority ownership interest in the legal entity. Existing law also specifies other circumstances in which certain transfers of ownership interests in legal entities result in a change in ownership of the real property owned by those legal entities. Existing law requires the Franchise Tax Board to include a question on corporation and income returns for partnerships, banks, and corporations to assist in the determination of whether a change in ownership as so described has occurred.

This bill would specify that if, on or after January 1, 2015, 90% or more of the direct or indirect ownership interests in a legal entity are cumulatively transferred in one or more transactions, the transfer of the ownership interest is a change in ownership of the real property owned by the legal entity, whether or not any one legal entity or person acquires control of the ownership interests. This bill would require the Franchise Tax Board to include an additional question on corporation and income returns for partnerships, banks, and corporations to assist in the determination of whether a change in ownership as so described has occurred. This bill would require the State Board of Equalization to report to the Legislature, no later than January 1, 2020, regarding the implementation of these changes in ownership, including, but not limited to, the economic impact and frequency of reassessments of real property owned by legal entities.

Existing law requires, upon a change in control or change in ownership of a legal entity that owns an interest in real property in this state, or when requested by the State Board of Equalization, that the person or legal entity acquiring ownership or control, or the legal entity that has undergone a change in ownership, file a change in ownership statement with the board, as specified. Existing law requires a penalty of 10% of the taxes applicable to the new base year value, as specified, or 10% of the current year’s taxes on the property, as specified, to be added to the assessment made on the roll if a person or legal entity required to file a change in ownership statement fails to do so.

This bill would also require, in the case of a change in ownership when 90% or more of the ownership interests in the legal entity are cumulatively transferred, as described above, the corporation, partnership, limited liability company, or other legal entity that underwent the change in ownership to file a change in ownership statement signed under penalty of perjury with the State Board of Equalization, as specified. This bill would increase the penalties for failure to file a change in ownership statement, as described above, from 10% to 15%.

This bill would require the State Board of Equalization to notify assessors if a change in control or a change in ownership of a legal entity has occurred.

By expanding the crime of perjury and by imposing new duties upon local county officials with respect to changes in ownership, this 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 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.

This bill would include a change in state statute that would result in a taxpayer paying a higher tax within the meaning of Section 3 of Article XIIIA of the California Constitution, and thus would require for passage the approval of 23 of the membership of each house of the Legislature.

This bill would take effect immediately as a tax levy. Hide
Learn More
At LegInfo.ca.gov
Title
An Act to Amend Sections 64, 480.1, 480.2, and 482 Of, to Add Section 480.9 To, and to Add and Repeal Section 486 Of, the Revenue and Taxation Code, Relating to Taxation, to Take Effect Immediately, Tax Levy.
Author(s)
Tom Ammiano, Raul Bocanegra
Co-Authors
    Subjects
    • Property taxation: change in ownership
    Major Actions
    Introduced2/21/2014
    Referred to Committee
    Passed Assembly Committee on Revenue and Taxation5/13/2014
    Passed Assembly Committee on Appropriations5/23/2014
    Passed Assembly5/29/2014
    Passed Senate Committee on Governance and Finance6/25/2014
    Passed Senate Committee on Appropriations8/04/2014
    Bill History
    Chamber/CommitteeMotionDateResult
    select this voteAssembly Committee on Revenue and TaxationDo pass as amended and be re-referred to the Committee on Appropriations.5/13/2014This motion PASSED the Assembly Committee on Revenue and Taxation
    6 voted YES 2 voted NO 1 voted present/not voting
    select this voteAssembly Committee on AppropriationsDo pass.5/23/2014This motion PASSED the Assembly Committee on Appropriations
    12 voted YES 3 voted NO 2 voted present/not voting
    currently selectedAssemblyAB 2372 AMMIANO Assembly Third Reading5/29/2014This bill PASSED the Assembly
    57 voted YES 13 voted NO 9 voted present/not voting
    select this voteSenate Committee on Governance and FinanceDo pass as amended, and re-refer to the Committee on Appropriations.6/25/2014This motion PASSED the Senate Committee on Governance and Finance
    5 voted YES 2 voted NO 0 voted present/not voting
    select this voteSenate Committee on AppropriationsPlaced on Appropriations Suspense file.8/04/2014This motion PASSED the Senate Committee on Appropriations
    7 voted YES 0 voted NO 0 voted present/not voting
    ActionDateDescription
    Introduced2/21/2014
    2/21/2014Introduced. To print.
    2/23/2014From printer. May be heard in committee March 25.
    2/24/2014Read first time.
    3/28/2014Referred to Com. on REV. & TAX.
    4/01/2014From committee chair, with author's amendments: Amend, and re-refer to Com. on REV. & TAX. Read second time and amended.
    4/02/2014Re-referred to Com. on REV. & TAX.
    select this voteVote5/13/2014Do pass as amended and be re-referred to the Committee on Appropriations.
    5/13/2014In committee: Set, first hearing. Referred to REV. & TAX. suspense file.
    5/15/2014From committee: Do pass as amended and re-refer to Com. on APPR. (Ayes 6. Noes 2.) (May 13).
    5/20/2014Re-referred to Com. on APPR.
    5/21/2014In committee: Set, first hearing. Referred to APPR. suspense file.
    5/23/2014Joint Rule 62(a), file notice suspended. From committee: Do pass. (Ayes 12. Noes 3.) (May 23).
    select this voteVote5/23/2014Do pass.
    5/27/2014Read second time. Ordered to third reading.
    5/28/2014Read third time and amended. Ordered to third reading.
    5/29/2014Assembly Rule 69(d) suspended. Read third time. Passed. Ordered to the Senate.
    5/29/2014In Senate. Read first time. To Com. on RLS. for assignment.
    currently selectedAssembly Vote on Passage5/29/2014AB 2372 AMMIANO Assembly Third Reading
    6/11/2014Referred to Com. on GOV. & F.
    6/16/2014In committee: Set, first hearing. Hearing canceled at the request of author.
    select this voteVote6/25/2014Do pass as amended, and re-refer to the Committee on Appropriations.
    7/01/2014From committee: Do pass as amended and re-refer to Com. on APPR. (Ayes 5. Noes 2.) (June 25).
    7/02/2014Read second time and amended. Re-referred to Com. on APPR.
    8/04/2014In committee: Placed on APPR. suspense file.
    select this voteVote8/04/2014Placed on Appropriations Suspense file.
    8/14/2014In committee: Held under submission.

    Total contributions given to Assemblymembers from Consumer groups, which…

    supported this bill

    Consumer groups$0
    $0

    1 Organization Supported and 0 Opposed; See Which Ones

    Organizations that took a position on
    An Act to Amend Sections 64, 480.1, 480.2, and 482 Of, to Add Section 480.9 To, and to Add and Repeal Section 486 Of, the Revenue and Taxation Code, Relating to Taxation, to Take Effect Immediately, Tax Levy.: AB 2372 AMMIANO Assembly Third Reading

    1 organization supported this bill

    california tax reform association
    Melanie Mason (2014, May 13). Howard Jarvis Group Won't Oppose Bill to Close Prop. 13 Loophole. LA Times. Retrieved May 15, 2014, from http://www.latimes.com/local/politics/la-me-prop13-20140514-story.html.

    0 organizations opposed this bill

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    Includes reported contributions to campaigns of Assemblymembers in office on day of vote, from Consumer groups interest groups, January 1, 2011 – December 31, 2012.
    Contributions data source: FollowTheMoney.org

    Contributions by Legislator

    Namesort iconPartyDistrict$ From Interest Groups
    That Supported
    $ From Interest Groups
    That Opposed
    Vote
    Katcho AchadjianRCA-35$0$0
    Luis AlejoDCA-30$0$0
    Travis AllenRCA-72$0$0
    Tom AmmianoDCA-17$0$0
    Toni G. AtkinsDCA-78$0$0
    Frank BigelowRCA-5$0$0
    Richard BloomDCA-50$0$0
    Raul BocanegraDCA-39$0$0
    Susan BonillaDCA-14$0$0
    Rob BontaDCA-18$0$0
    Steven BradfordDCA-62$0$0
    Cheryl BrownDCA-47$0$0
    Joan BuchananDCA-16$0$0
    Ian C. CalderonDCA-57$0$0
    Nora CamposDCA-27$0$0
    Ed ChauDCA-49$0$0
    Rocky J. ChavezRCA-76$0$0
    Wesley ChesbroDCA-2$0$0
    Connie ConwayRCA-26$0$0
    Ken CooleyDCA-8$0$0
    Matthew DababnehDCA-45$0$0
    Brian DahleRCA-1$0$0
    Tom DalyDCA-69$0$0
    Roger DickinsonDCA-7$0$0
    Tim DonnellyRCA-33$0$0
    Susan Talamantes EggmanDCA-13$0$0
    Paul FongDCA-28$0$0
    Steve FoxDCA-36$0$0
    Jim FrazierDCA-11$0$0
    Beth GainesRCA-6$0$0
    Cristina GarciaDCA-58$0$0
    Mike GattoDCA-43$0$0
    Jimmy GomezDCA-51$0$0
    Lorena S. GonzalezDCA-80$0$0
    Rich GordonDCA-24$0$0
    Jeff GorellRCA-44$0$0
    Adam C. GrayDCA-21$0$0
    Shannon GroveRCA-34$0$0
    Curt HagmanRCA-55$0$0
    Isadore HallDCA-64$0$0
    Diane HarkeyRCA-73$0$0
    Roger HernandezDCA-48$0$0
    Chris R. HoldenDCA-41$0$0
    Brian JonesRCA-71$0$0
    Reginald B. Jones-Sawyer, Sr.DCA-59$0$0
    Marc LevineDCA-10$0$0
    Eric LinderRCA-60$0$0
    Dan LogueRCA-3$0$0
    Bonnie LowenthalDCA-70$0$0
    Brian MaienscheinRCA-77$0$0
    Allan MansoorRCA-74$0$0
    Jose MedinaDCA-61$0$0
    Melissa A. MelendezRCA-67$0$0
    Kevin MullinDCA-22$0$0
    Al MuratsuchiDCA-66$0$0
    Adrin NazarianDCA-46$0$0
    Brian NestandeRCA-42$0$0
    Kristin OlsenRCA-12$0$0
    Richard PanDCA-9$0$0
    Jim PattersonRCA-23$0$0
    Henry PereaDCA-31$0$0
    John PerezDCA-53$0$0
    Manuel PerezDCA-56$0$0
    Bill QuirkDCA-20$0$0
    Sharon Quirk-SilvaDCA-65$0$0
    Anthony RendonDCA-63$0$0
    Sebastian Ridley-ThomasDCA-54$0$0
    Freddie RodriguezDCA-52$0$0
    Rudy SalasDCA-32$0$0
    Nancy SkinnerDCA-15$0$0
    Mark StoneDCA-29$0$0
    Philip Y. TingDCA-19$0$0
    Don WagnerRCA-68$0$0
    Marie WaldronRCA-75$0$0
    Shirley N. WeberDCA-79$0$0
    Bob WieckowskiDCA-25$0$0
    Scott WilkRCA-38$0$0
    Das WilliamsDCA-37$0$0
    Mariko YamadaDCA-4$0$0

    Add Data Filters:

    Legislator Filters
    Legislator Filters
    NamePartyDistrict$ From Interest Groups
    That Supported
    $ From Interest Groups
    That Opposed
    Vote
    Katcho AchadjianRCA-35$0$0
    Luis AlejoDCA-30$0$0
    Travis AllenRCA-72$0$0
    Tom AmmianoDCA-17$0$0
    Toni G. AtkinsDCA-78$0$0
    Frank BigelowRCA-5$0$0
    Richard BloomDCA-50$0$0
    Raul BocanegraDCA-39$0$0
    Susan BonillaDCA-14$0$0
    Rob BontaDCA-18$0$0
    Steven BradfordDCA-62$0$0
    Cheryl BrownDCA-47$0$0
    Joan BuchananDCA-16$0$0
    Ian C. CalderonDCA-57$0$0
    Nora CamposDCA-27$0$0
    Ed ChauDCA-49$0$0
    Rocky J. ChavezRCA-76$0$0
    Wesley ChesbroDCA-2$0$0
    Connie ConwayRCA-26$0$0
    Ken CooleyDCA-8$0$0
    Matthew DababnehDCA-45$0$0
    Brian DahleRCA-1$0$0
    Tom DalyDCA-69$0$0
    Roger DickinsonDCA-7$0$0
    Tim DonnellyRCA-33$0$0
    Susan Talamantes EggmanDCA-13$0$0
    Paul FongDCA-28$0$0
    Steve FoxDCA-36$0$0
    Jim FrazierDCA-11$0$0
    Beth GainesRCA-6$0$0
    Cristina GarciaDCA-58$0$0
    Mike GattoDCA-43$0$0
    Jimmy GomezDCA-51$0$0
    Lorena S. GonzalezDCA-80$0$0
    Rich GordonDCA-24$0$0
    Jeff GorellRCA-44$0$0
    Adam C. GrayDCA-21$0$0
    Shannon GroveRCA-34$0$0
    Curt HagmanRCA-55$0$0
    Isadore HallDCA-64$0$0
    Diane HarkeyRCA-73$0$0
    Roger HernandezDCA-48$0$0
    Chris R. HoldenDCA-41$0$0
    Brian JonesRCA-71$0$0
    Reginald B. Jones-Sawyer, Sr.DCA-59$0$0
    Marc LevineDCA-10$0$0
    Eric LinderRCA-60$0$0
    Dan LogueRCA-3$0$0
    Bonnie LowenthalDCA-70$0$0
    Brian MaienscheinRCA-77$0$0
    Allan MansoorRCA-74$0$0
    Jose MedinaDCA-61$0$0
    Melissa A. MelendezRCA-67$0$0
    Kevin MullinDCA-22$0$0
    Al MuratsuchiDCA-66$0$0
    Adrin NazarianDCA-46$0$0
    Brian NestandeRCA-42$0$0
    Kristin OlsenRCA-12$0$0
    Richard PanDCA-9$0$0
    Jim PattersonRCA-23$0$0
    Henry PereaDCA-31$0$0
    John PerezDCA-53$0$0
    Manuel PerezDCA-56$0$0
    Bill QuirkDCA-20$0$0
    Sharon Quirk-SilvaDCA-65$0$0
    Anthony RendonDCA-63$0$0
    Sebastian Ridley-ThomasDCA-54$0$0
    Freddie RodriguezDCA-52$0$0
    Rudy SalasDCA-32$0$0
    Nancy SkinnerDCA-15$0$0
    Mark StoneDCA-29$0$0
    Philip Y. TingDCA-19$0$0
    Don WagnerRCA-68$0$0
    Marie WaldronRCA-75$0$0
    Shirley N. WeberDCA-79$0$0
    Bob WieckowskiDCA-25$0$0
    Scott WilkRCA-38$0$0
    Das WilliamsDCA-37$0$0
    Mariko YamadaDCA-4$0$0

    Interest Groups that supported this bill

    $ Donated
    Consumer groups$0

    Interest Groups that opposed this bill

    $ Donated
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