HomeMy WebLinkAbout0291.091-
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. llay 23, un
t'HE BONOIlAl!Ll! CITY COUIIcrL
P&lo Alto, california
nOln" DI' 'oaull" "oro" IWpu'r,At. -" .2 ClpRP.
1\epgrt: in )rier
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The Co~ncl1 1. requested to estnbliah a position on S8 82, Senator
Quentin ICOpp'8 propoaed legislation, which would redefine when
property owned by businesses or corporations shall be deemed to
have cbanged ownership tor purposes of property tax reassessments.
If enacted, S8 82 would result in more frequent reaBBe.amant of
corporate, partnerahip and other legd entity property. This
change would bring .ignificant new property tax revenue to local
government.
lAekqrcund
senate Bill 82 would refora current transfer of ownership law 80
that business property i. treated more like the sale of an
individual'. r .. idenet for purpo... of reasses •• ant under
Proposition 13. ProposiUon 13, passed by th .. vot ...... of Cditornia
In ~978, mandates that real property be assessed at full .arke~
value when it is purchased, newly constructe~ or whenlver a change
in ownership occur.. In 1979, the Legislature enacted an
i.plementing statute to define ·change of ownersbip· for business
property. It provides that whenever control of an entity cucb as
a corporation or II partnership is acquirecS (i.e .. , lIore than SO
percent of the ownership ia acquired) by another entity or person,
then a chan;e In owner.hlp bas occurred and a r •• ppra.i .. al must take
place. simply put, ·change in control-trigqe.r5 reassessment under
current law ..
By the current derinition, most publicly-traded corporations will
never chang_ hands, de.pi te continuoull stock ownership changes.
The •• properties continue to be e •• essed at the 19'5-76 tax base
year values, increasing by the maximum annual inflation rate of two
percent.. When a reassessment doe5 occur it i. u.ually the result
of a corporate .erger or acqui8ition.
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Unc:!er S3 92, a change of ownership would. occur when .. c'.lmulatiyc1y,
more than 50 percent of e fira r • voting stock or other ownership
interest has changed hands. {This provision is concerned with
wh.ther more than 50 percent of the ovnership interest is
transferred, no matte~ to whom. CUrrent law involves transfer of
more than majority interest to II. sinqle entity., Senate Bill 82
requires that, in order to constitute a change ot owner.hip, the
transfers of stock or other ownership int.rests be made up of
different shares (and not the same share trading several times or
·churning-), and excludes transfers of stock or other ownership
interests between spouses in determininq whether a chanqe of
ownership hilS occurred.
This bill would provide that a company's California property would
be reassessed as of the day on which the last share to constitute
a change of ownership traded hands. It would affect chanqes of
ownership occurring on or after Kareh 1, 1975, but its resulting
aaseSSlllents would first beqin to be applied with tbe 1992-93
assessment year.. It. does not authorize any as:sas51I1ents with
respect to fiscal years preceedir.q the 1992-93 fiscal ye4r.
Businesses owninq property would be required to file reports
annually with the california state SOard of Equ.li~ation (BOE) to
Indicate whether or not llIore Ulan 50 percent of the ownership
interests had been transferred since the date of their last
appraisal. The California Franchise Tax Board (FTB} would be
required to amend its business tax returns to include a apecifiec
question with respect to change in ownership.
Senate Bill 82 passed tha Senate Revenue and T~xation Committee on
April 10~ lS91. Its current location is with the Senate
Appropriations Comnittee where a number of hearings have been
postponed at the author's request. At thi5 tim~ no hearing has
been schedulecS.
Fi Bea 1 Ana lys...i§
The BOE ind.icates that if all business property were-to be
reassessed to full market value, local qovernments wouleS receive
revenue 94ins of between $1 billion and $2 billion from increased
property tax assessements. Property tax revenue is distri~uted as
follows:
Counties
Cities
Special Districts
SChool Districts
JH
13\ ($130 to $260 million est.)
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However, actual revenue qains of this magnitude are unlikely~ for
the following rea50ns~
CHR:291:91
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'1'he •••• ur. ..equi .... that corporation. be able to identify the
exact own .... of thei ... tock or owner.hip intereou. Excludingo
cla.ely held corporationa, indicationa are that trackingo corporate
-.toc:lt tran .. actiona 10 a very difficult proc.... It .ay not be
po.aible tor a corporation to atate with certainty whether or not
50' of ita aharas bad, cumulatively, eh.ngoad banda over a 9ivan
period of tiJoe. PerhOpa the .. oat difficult problem vill be to
•• parate aharea which bave ·churned-trom thoae which have tr.de~
for the first ti ••• ince the Iftst r.apprai •• l.
Furthermore, it may not be po •• ible for the .tat. to verify with
any degree of accuracy. the statement. of corporations •• to
ownership interest.. since the burden of proof woulc5 r •• t witb the
state to .how that more than 50 percent of ahares chang.~ bands 4 . the .tate'. ability to enforce these requir .... nt .. would be lillited.
Additionally, althouqb it ia likely to be siqnificant, it i. not
claar what portion of all corporate property baa actually ehanged
ownership ainca 1975.
Althouqh local qovernaents would benetit froa SB 82, .tat2 income
and corporation tax revenue. would .uffer, since higher property
t:ax •• are deductfble tor income tax purposes. haec! on prelbinary
•• tl.at •• by the rrB, such reva.nuea reduction. would .. ount to ten.
of .illions .nnually. However, increased local property tax
revenue q01n9 to .chool distr icb under this bill will probably
reduce future .tate K-14 education costa. The -combined funding
toraula currently in ~se, allows the .tate to decrea.e its funding
when local revenue. increa.... Theretore, the a.asure could re .. ult
in • potential net state cast .av1ngos of $100 .Ullon or .are
annually, begir~ingo in 1992-9J.
Although thi. bill 'Would create a significant tax souree, as
currently written, it would also create substantial administrative
problems for both corporations and the .tllte. Significant
amendment. to the .assure are expecteel; the.lr provisions could.
include a rebuttable presumption that at least 50 percent of ahares
have trade~ aince 1t75, and that for subsequent years there 1. a
rebuttable presumption that at le •• t 50 percent of sharea trade
every five years.
rhe bill is supported by the Leaque of California Citie., the Board
of Equalization, various teachers' associations and numerous
cit!... Proponent. of the bill claim that it 10 neces.ary to
correct an inequity in Propoaition 13 that allo .... budn ... pr0p2rty
to e.cap2 taxation.
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The bill is opposed by the Calitornia Chamber of Commerce, the
Department. of Commerce and Finance, various business associations,
and numeroua corporations. Opponents of the bill arque that it
will drive businesses and jobs out of California. They say that
the existing business property tax laws are one of the tew positive
tectors in California's business climate, and that it enacted this
bill will change that fr~m a .ajor positive to a major negative~
Aerospace, electronics, tourism and financial aervi(:e3 are expected
to be hardest hit. Opponents state that this measure would result
in publicly traded companies being subject to reassessement several
tl ••• a year.
RCcpmmendation
-Staff requests Council to adopt one of the followinq positions on
the p~oposed leqislation:
a)
bl
Support SB 82 (Xopp) concerning the
reappraisal o~ business property;
Support 58 82 (~opp)
amendments 'Which
ad.miniatratlon;
11': concept, b>.lt req-..zest
would simplify it ..
c) Oppose 58 82 (Ropp) concerning the reappraisal
of business property; or
d) Take no position on 58 82.
Attachment:
CHR:29l:91
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, .' AMENDED IN SENATE APmL 16, 19111
"AMEND~'1N,SENA'J;E MAlICH 13, 1991 .
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SENATE BILL. , No. 82
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,,' , Intn>duced by Sen.tor Kopp
(Prine/pal <Oau,lIon s-alor A1I"1o) ,
, (1'riIH:IJMI COlluM"" AMambly Member /Oelu)
(Cool"",,-~ A.\01, Cra_ :8\\\ CnoM, aM
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. .';: (CMutfJor. A.wmbly Member Eo" .... ) '. .,," .. -
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'Ii', "':-';"~'.:: ,OeeeJ:qber:7. 1990 . , ,
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L . ./on '1OCt toomend Sectiona 84,110; 0180.1, and 0180.2 or.-and·
10 add ,SectIOn 0180.2$ to.-the Rev.muo and Taxation Code,
relating, 10 .property talc.lion.· , '.
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'. ... LOCIllU,'nVI!'oou,,"a," DlODr, L SB 82,u, omendod, KopP,' '!'luper.Iy taxation: change in
ownen.blp .. •· . , . . ,
Emtlng proviaiollll of ·the. Calltomia Conatitution, with
=taIn exceptions, place allntitation on ad valorem property
talces on·;"a1 properly'of 1,.. of the full euh value of that
property, For purpooes of thia limitation, fuD cuh value iI
defined AI the .-.sor', valuation of real properly u shown
On the.I97ll-76 tax bill under ·"fuD cam value" or, thereafter,
the appralaed value of.that ...,a1.ptoperty. when purchuod,
i L n_ly conatructed, or a change In' OWI'Ierihip h .. occurred
. , . oft"r the ·1975 .........., ... t. ExistIng law p1'<>vides, exCtlp! for
opeclRed exceplions·with retpeet' 10 change in ownership.
upon control or transfer of • m~or\ty of ownership Interests,
that the putch .... or tranafer of ownenhlp interest. in a legal
.entity,....,ha. corporate slock'Of partnership interests, ,hall
( not be deemed to CODf,tltule'atranofer of the real property of
'-tho Iegal·entlty.lt.'requlrei'the l"rmchlle Tal Board,for
purplllelof determining the applicabWIy of those exceptlono
-~~.n:
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estllbJishing change of QYlrlcrship of on entity's reol properly.
to include a specified qUB!ition on tax returns for pnttncnhips.
banks, and corporations. other thon tax-exompt orguni7.utions.
It also requires the filing of" specified change in ownership
statement with the State Board of Equllli;';Rtion where certain
of the exceptions establishing changes il\ ownership apply.
This bill would recDst those changes in ownership
provi!llions und would odditioOldly provide that whore a
transfer of ~ voting stock or other ownership intcrc.!Its of
{I corporation, partnership, or any other legal entity results in
the transfer of ownership interests representing individually
or cumuliltively more thnn ~% of the ownership interests in
that enUty, the trWlsfer of shares or other ownership interests
shall be a change in ownership of real property directly or
i"dlrectly owned or controlled by that entity. It would
provide_ that any interspousal transfer of nn owneorship
interest that would be excluded from cha.nge in oUlner.<ihip
pursuant to a specified statute if trans{,--~r were ImIde of real
property shall not be considered for purposes of r/etc>rminilli(
~ chlJl1ge In ownership pursuant to the provisions of this bill.
It would further provide that the dllte of IWy r('uppraisill
pursuant to these provision.v shllll be the date of lhl,~ trmJ.fi!i'r
con.vtituting the challJ(~ in ownership, It would aIM} pr()vidi;",
for purposes of these pro~/isiolJs, thnt iJ single, indNirlual,'/UJre
of votilJ/{ stock or other ownership ilJteJ'est trhlllJ /J(>I~OINlidered
to have been transferred no more than once ~1i:'Jb,'iNlucnt to
the most t'eCent reuppr;JisaJ. It would require each
('(}rporution, partnership. or other legal entity annually to lil~
with the State Board of J!.:qulJlizlJtion a written repart
indicating whether or not more than 50% of ownership
interests have been tl'Rnsferred sinre March 1. 1975, ur sincr!'
the la.,t reappraisal of real property directly or indirectly
owned or contro/led by the entity. It WQuid /llso reqtlire the
Franchise Tax Board to include a speCified question with
re!ipect to change in ownership on hue: returns for
partnership!!. bonks, and corporations, other than tax-exempt
orgnnizations, for the purpose of determining the
applicnbility of the new charlge in ownership provililion. It
would require the filing of a specified ~haDge in ownership
~tntement with the board where the new change in
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-3-SB 82
ownorship ptovisions apply. It would apply the 'provisions of
the bill to transfers of shutes or other ownership ;nterests of
u corporllUon. port(leftlhip, or other-legal entity occurring on
or after March I, 1975, for purpo.c;es of assessments to be mad~
commencing with the 1992-93 assessment year. il.l1d would
provide tllat its provisions shall not apply to, or 00 construed
to require or authori7e Imy aSSessments with respect to fiscal
years precedilJg thtt J992--93 fiscHIyelJr.
Vote: fIl1\iority. Appropriation: 00. Fiscal committee: Yelli.
State-mandated local program: no. r
• The prople of rhe State of G.llfornia do enBer as fOI/OS)
I SECTION 1. Section 64 of the Hevenue and Tar.tion
2 Code lS amended to read:
3 64. (Il) (I) (A) Where a transfer of '""""'" voting
4 stock or other ownership interests of 8 corporation,
.5 partnership, or any legal entity results in the trunsfer of
6 ownership int~re!lts mprc~nting individually or
7 cumulutively more than 50 pere("nt of the ownership
R interests in that ('ntily, that transfer of shares or othE'r
9 ownership interests shall be a change in ownership of rei'll
to property ~ either directly or irldirectly owned or
II control/"d by thllt entity.
12 (/J) Auy inter .. fpousul trtmsfer aran ownership int("rt!'51
13 that would ~ cxc/udcxJ from change in OWIJf"Y'W
14 pUrSUlIIJt to &!etion 63 if trlln~fer "'liS made ol\.li,l
1.~ property shall flat be considered ill determining II change
16 ill oWllership pursullnt to this pRrl#(rRph.
17 (C) Th" date of any ""Rpprai,<.1 pursuant to thi .•
I B paragraph ,h.1I be the dllte of til" transf .. r of voting stO<'k
19 or otller oW1Jership interests representing individUlJly or
20 cumulatively more thiln :;0 percent of th~ owntol'ship
21 interests in the elltity.
22· (D) For purposes, of d .. termining a "hange in
23 ownership pursuant to thi,v paragraph. a ... ingle, indiyidulfl
24 shlllY! of voting stock or other ownership interest shull bP
23 cOllsidered to bu\'e been transferred no mOre than OI1('r
26 subsequent to the most rei"ent reappraisal of real
'l:1 property directly or indirectly controlled by the elltit.v.
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'j , -5-SB 82
.. :' 511 112 -4-r-i e " I (b) Any corporate reorganization, .. be,., all of th"
I (2) When a corporation, partnership, other legol 2 co~ratlon'lnvolved are members of an IlIflllated group,
2 ~tlty, or any other pel'!lOl1 obtain, control, .. dellned In, 3 a which quaun.,. .. a reorganization under Section 3tiII
3 Section 2111011, In any corporation, Or obtai .... mlllority 4 of the UnitOO Stal.,.lnlernai Revenue Code and which Is
4 owner,hip Inte ..... 1 In any partnership or other legal II accepted .. a nontuable event by Ilmilar CoIlfomlo
5 ~tity through the purchase or transfer of corporate II .tatutes, or any transfer of real property among memben
6 .tock, partnenhip Interesl, or ownerohlp intere.ts In • • 7 of an IlIflllated group, or any reorganiutlon of fann credit
7 other legal entltl.,., that purchase or transrer of stock or 8 Institution. purouant to tbe federal Farm Credit Act of
8 other In_to shaD be a change of ownership of property 9 1!m (Public Law 92-181), as amended, .hall not be "
!1 owned by the corporation, partnership, or other legal 10 change of ownership. The tup.yer shall fumis~roof,
10 entity In which the controlling Interest I. obta/nod. II under penalty of perjury, to the ......... that the Jer
11 (3) (A) If property 10 tr.nsferred on or aIler March 1,. 12 m""to the requl",ments of thl. ouhdlvision. '
12 1975, to • legal entity In a tr.nsactlon e.eluded from 13 For pu""""",, of this ouhdlvlsion "llIflllated group"
13 ch.nge In ownership by paragraph (2) ofsuhdlvlslon (a) , 14 meano one or D'ore chains ,of corporations connected
14 of Section 62, Ihen the pers<m' holding ownerohip 15 Ihrough stock ownerohip with a common parenl
HI Interests in that legal entity Immediately after the 16 corporation If, '
111 transfer .haD be considered the "orlglnol coowner .... 17 (I) One hundred percent of the voting stock.
17 Whenever ~ ""tfng ,tock or othe' owner.hlp 18 e<elusive of any .hare owned by director., of each of t~
18 Interests repre",ntlng cumulatively more than 110 19 ccrporaUonA, except the patent corporation, 'S owned b,'
19 percent of the total Interest. In the entity are tran.ferred • • 20 One or more of the other corpOrationl. .
20 by any of the original coowners in one or more 21 (2) The common parent corporation own .. directly,
21 transactions, a change In ownership of that teal property 9.2 100 percent of the voting stock, e.elusive of any ,har..,
22 owned by the Ieg.1 entlly shall have occurred, and the 2.3 owned by directors, of at leut O .. e of the other
23 property that was previou.ly .,.eluded from change In 24 corpor.tlo ....
24 ownership purouant to paragraph (2) of subdivl.lon (a) • • 211 (c) (J) In order to uIl.t In the determination 01
211 of Section 62 .hall be reappraised. 26 wh .. ther • change of ownership has oc'Curred • ~er
26 (B) The date of reappraiSlI pursuant to thl. paragraph 'ZT ouhdivlslon (a), the Franchise To Board .halllnd~_" •
27 .hall be the date of the tramrer of the ownership Interest 26 que.tion in .ub.tantlally the roUawing form on return. for
211 representing individually or cumulatively more than 50 29 partnenhip.. banko, and corporation. (excepl
29 percent of the Interests in the entity. JO I ...... empt organiratlo ... ),
JO (C) A transfer of """-voting stock or other 31 If the corporation (or partnership) own. real property
31 ownership interest. that results in a change in control of 32 In California, hOll cumulatively more than l!O percenl 01
32 a corporation, partnership, or any other legal entity I. • 33 the voUng .tock (or more than 50 ~t of total inleresl
33 ~bject to reappral.al as provided In paragraph (2), In • 34 In both partnership ca~ital and partnenhip profits) (1)
34 l,eu of th .. paragraph. 35 ,~n tran.ferred by t e corporation (or partnership)
35 (4) Except as provided in suhdlvi.ion (h) of Section til 36 sonce March 1,1975,0' (2) heen acqUired by another legal
36 and paragraph, (I) to (3), inclusive, the purchase or 37 entity or per""n during the year? (See Instruction .. )
:n transfer of ownership interests in I"gal entities, such as as If the enllty _en "yeo" to (1) or (2) In the abovr
as corporate ,tock or partnership Interest., ,hall not be 39 question, then the FranchlseTIU Board shall furnish th .. ! •
. 3!1 deemed to con.tltule a transfet ofthe real property of the .' • 40 name. and addre ..... of that entity and of the stock ?r )
40 legal entity. I,
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SB 82 -6-
I po.rtner~hip ownership interest trnnsfetees to the State e CD
2 Hourd or Equalization.
3 (2) For purposes of parllgmpIJ (1) of subdivisioll (II),
4 a rorpqration. partnership, or Rny other legnl cntity
5 allnuoll." shall file with the State Board of Eq"tlJiZlltiOIl /I
6 wrjtten report indicating whether or IJOt· more tlum 50
7 pe~nt of the oWIJership interests In the entity have AI I 0
8 been transferred SillCB 1975 or since the Inst TeJlppraislIJ V .
9 of l'e~,J property directly or iudil'ectly owned or
10 controll..d by the entity.
11 SEC. 2. Section 110 of the Revenue and To~ution
12 Code is amended 10 read:
13 110, (a) Except uS is otherwise provided in Section
14 110.1, ~'full cash value-' Ot "fait market value" means the
1:5 amount of cllsh or its equivalent for which property
16 would bring if expo:red for sale in the open market under
17 conditions in which neither buyet nor seller ('ould tuke
18 adVantage of the exigencie, of Ihe other and bOlh Ihe
19 buyer and seller are I\ware of all of the USf'S and purposes
20 10 which the properly i, adapted and for which il i, • •
21 capable of being adapted and of the enforceable
22 re~tl'ictions upon those uscs and purpose!l.
23 (b) For purposes of determining the "full cm~h value"
24. or "fair market value" of rcal property. other thun
2.5 posl'iessory inlerests. being appraised upon Ii. pllrchuse. e! e
26 "full cosh value" or "fair market vRlue"' shall be the
27 purchase price pUid ill the transaction unlcss it is
28 eslubh,hed by a preponderance of Ihe evidenco Ihat Ihe
29 real property would not have transferrod for that
30 purcha'ie price-in an open market transaction, The
31 purchase price shall. however, be rebuttably presum~d to
32 be the "fuU cash value" or "fair market valuo" if the terms
.13 of the transaction were negotiated at urms length
.14 between a knowledgeable transferor and transferee e et
3:5 neither of which could take advttntuge of the exiRcncios
30 of the other. "Purchase price." as used in this scction,
37 means the totul considerntioll provided by the pur~hnsp.r
3H. or on the purchaser's behalr, valued in mon(,y. whether
39 pllid in money or otherwise, If 0 !lingle trllnsacLioll f("sulls
40 in [l change in ownership of more than one puree) of reul e I e
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I property, the purchase price ,han be a1localed omong
.2 tho"" parcels and olher a"eb,lr any, tran,ferred bued on
3 the rehdive fair mRrket value of each.
4 (cJ For real property, other than possessory int~r ... I',
~ the chnnge of ownership statement required pursuant to
6 Section 480, 480.1, 480.2, or 480,25, or the preliminary
7 change of ownership statement required pursuant to
8 Section 4IlO.4, 'han give any information os the board ,hall
9 prescribe relative to whether the terms of the transaction
10 were negotiated at "arms length", In the event that the
11 transaction includes property other than real pro~rty,
12 the change in ownership statement shall gtve infornl(""\n
13 as the board shall prescribe disclosing the portion oM.e
14 purch.,e price which is allocable to all elements of the
IS transaction. If the tRxpayer fails to provide the prescribed
16 information, the rebuttable presumption provided by
17 .ubdivi,ion (b) shall not apply.
18 S~;C. 3. Section 480.1 of the Revenue "nd Taxalion
19 Code i, amended 10 read:
20 480,1. (a) Whenever there is a change in control of
21 (Iny corporation, partner~hip. or other legal entity, 85
22 defined in -paragraph (2) of subdivision (0) of Section 64,
23 a signed change in ownership statement us provided (or
24 il1 ,ubdivision (bJ, .h.1I be filed by Ihe per50n or legol
2.IIj entity ncquiring ownel1lhip control of such corporation,
26 partncrship, or other legal entity with the board at Hr-
2:l office in Sa.crurnento. The l'Jtnterncnt shaJllist all co~s.
2R in whi~h the corporation. pllrtnenhip. or legal f\..Jty
29 owns renl property.
30 ,(b) The change in ownership "Itatement as required
31 pursuonl to ,ubdivi.ion (aJ. ,h.1I be declared 10 be Irue
32 under penalty of perjury and sholl give such information
33 relative to the ownership control acquisition transaction
34 ftS the board shuH prescribe after consultation with th(1
JS California Assessors' Assochttion. The information shull
36 include, but not be limited 10, a de!lCl"plion of Ih ..
37 property owned by the corporation. partnf'f!lhlp, or othf'f
3H lega' entity. the partie!!! to the trftnfllochon, tunl the dul("
39 of the ownershil) control ncqui,ition, Th(' chilngc in
40 ownership stat.,mCllt shull not include any question
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.L SB 82 -8-
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• ,I 1 which Is not germane to the _ .. rnent function. The
rl 2 Ilaternent Ihall contain 8 nollce that I. printed, with the
3 tllle at leut 12-point boldface type and the body In at
I. ~ leut &-point boldface type, In the following form:
I II
I II "Important Notl",,"
I 7
8· "111e law requires any person or legal entity acquiring
9 owner.hip control In any corporation, partnership, or
10 other legal entity owning real property in esli£ornl.
11 rubject to local property wation to complete and file a
12 change in ownership lIIatem""t with Ihe State Board of
13 Equalization at III office In Sacramento. The change In
1~ owner,hlp .Iatement mu.t be flied within 45 days from
IS tbe dale of the change In 'control of R corporation,
,t
16 partnership, or other legal entity,' The law further
17 requires that a change In owner,hlp .tat"ment be
18 completed and flied whenever. written request is m.d"
19 therefor by Ihe State Board of Equalization, regard I" .. of
211 whether • change In control of Ihe legal entity has
21 occurred. The f.Uure to file a change in owner.hip
22 It.tem~.'t within ~ days from the date of a wrillen
23 request by the State Board 01' Equalization results In a
'U pen.lty of 10 percent uf the tox" •• pplic.ble to the new
25 b .... year value reflecting the change in control of the
!!Ii real property owned by the corporallon. partnership. or
27 legal entity (or 10 percenl of Ihe current year's I .. ". On
28 Ihat property If no change In conlrol occurred). This
29 penalty wiD be added to the ....... ment roll and shall be
30 collected like any olher delinquent property t.xes, and
31 be .ubJect to the same penalties for nonpayment."
32 (c) In Ihe case of a corpor.tion, the change 111
33 ownenhlp .tal"",ent ,hall be signed either by an officer
~ of the corporation or an emplo:;: or agent who has been
311 ' designated In writing by the rd of directors to sign
36 such statements Oil behalf of the corporation. In the CIL",
37 of a partnership or olher leg.1 entity, Ihe .tatement .hall
36 be signed by an officer, pattnef, or an employee or ap:ent
39 ... ho h .. been designated In writing by the partnerohip or
40 legal entity.
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-9-SB 82
I (d) No person or entity .. lihg for or on behalf 0/' the.
2 parties to a tran,fer of real prope1'ty shal11nC\lr liability
3 for the consequences of usislance rendered 10 lhe
.. tr.nsferee In prep.r.tion of any' change In ownership
II II.tement, and no action rna)' be brought or mointUned
6 agaln.t any such person or entity as a remit of ruch
7 assistance.
8 Nothing In this section shall create a duty, either
g directly or by Implication, th.t .uch assIatance be
10 rendered by an)' person or entity acting for or on behalf
11 of parti". to a tran.fer of real property. Q
12 (e) The board or ..... ssors may inspecl any all
13 records and document. of a corporation, parlnen p or
14 legal enlity to ."",rtUn whether a change in conlrol ..
15 defined In paragraph (2) of subdivision (a) of Section 64
16 hOI occurred. The corporation, partnership, or legal , .
17 entity IhaD, upon reqUMt, malte such documents ~
18 .... nil.ble 10 the board during normal busin"", houn.
19 SEC. 4. Section 480.2 of the Rovenu .. and Tax.tion
211 Code I. amended 10 read:
21 480.2. (a) Whenever there I. a change in ownenhip
22 of any corporation, partne .. hlp, or other legal entity, ps
23 defined In paragraph (3) of ,ubdivinon (a) of Section fi.',
U • signed chang., in ownership slatement as pro ... lded in
25 subdi ... lsion, (b) shall be liIed by such corpoootion,
211 p.rtnership, or other legal entity wilh lhe board at il>
Z1 office in Sacramento. The Itatement ,haD Hst all cc-'ies
28 In which the corporation, parlnenhip, or legal " .. lily
29 owns real property,
30 (b) The change in ownership statement required
31 punuanl to suhdlvislon (a) shall be declared to be true
32 and under penalty of perjury and .hall give such
33 Information relative to the own" .. hip inlerest acquisition
~ Iransactlon lIS the board sholl prescribe .ner consultation
311 with the California Assessors' A"""iotion. Thr
36 Information .h.n include, but not be limited to, •
37 descrlpllon of the properly owned by the ""rporation,
38 parlnershlp, or other legal entity, t"" portle. to thr
39 trpnsacUon" the date or the ownership intrr~~' .ro ocqul,ltlon, and oli.tlng oftbe "orlginol coow,,~ .. " ofth ..
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SB 82 -10-
I t'QrpOf(llion, partnership, or other legitl entity prior to thf"
2 trnllsaction. The change in ownelShip atalcmel'lt shull nol
J include any question which is not germane to thl'
... Bsse5!lment function. The sttltt:'!ment shall contnin a notice
5 that is printed,-with the·title in at-least 12-point boldrltce
'. 6 type and the body in at leost B-point boldface type, in the
7 following form:
8
9
10
II
12
13
14
1~
16
17
18
19
20
21
22
23
24
2.~
26
27
2R
29
30
31
32
33
34
35
36
"Important Notice"
"The Id.w t6Quites tiny corporation, pntlncTllJhip. or
other lel!;ol entity owning real properly in Culirorniu
subject to local pro~rty taJl:ution Ilnd trnn~rcrring lihnres
or other ownership interest in such legal entity which
constitute a ~h8nge in ownership pursuant to subdivision
(d) of Section 64 of the Revenue Rnd Taxation Coot" to
compleote and file a change in ownership stlltement with
the State Bourd of Equalization at it~ omcc in
Sacramento. The change in ownership statement mURt be
filed within 45 days from the date that ,hares or other
ownership interests representing cumu!utivdy mor('
than ~ percent of the total control Or ownership intcr("!IIh
in the entity are transft'rred by ony of the original
coowners in Olle or more transactions, The Jaw rurther
requires that R change in ownership Rtutcmenl be
cQmplet~d and filed whenever a written request i!i mnde
th£"refo{ by the State Board of EqualizIltion. regardless of
whether a chAnge In ownership 'of the legol entity has
occurred. The failure to me a change in ownt!r!lhip
statement within 45 days from the date of a wrHten
reqUflst by the Board of Equalization resu.lt~ 10 R penalty
of 10 percent of the taxes applicable to the new b9!'1e yeur
value reflecting the change in ownership' of the renl
property owned by the corporation, pd.rtnership. or If.'~nl
entity (or 10 percent of the current yeor's tuxes on that
rcal property jfno change in ownership occurred). This
37 per-olty will be .dde<l to the assessment roll and ,hall be
JR collected like any other delinquent property tuxes; nnd
39 be subject to the same penalties fol' nonpayment."
40
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-11-'SB 82
I (c) In the case of • corporation, Ihe change: in
2 ownership .totement shall be .IRoed eIther by an officer
3 of the corporation or an employee or agellt who'hu been
4 designated in writing by the board of directors to sign
5 such statements on bf!hatr of the corpotaUon. In the caR!
6 of a pnrtllorship or othel" legal entity, the statement sh'all
7 be signed by an officer. partner. or an empioYf'e Or 9gent
H who has been deSIgnated In wriling by the partnership or
9 legal entity. ' ,
10 (d) No person or entity acting for or on beholf of the
11 parties to a tr(l.nsrer of real, property dl81l,'incur liab~'l' '
12 for the consequence!'! of RssiRtance' 'rertdered' to
13 transferee in prepurlltion of Any change in Owners Ip
l4 statement, and no-action may be brought or maintained
J5 ap;ainst dlny l'Iuch person or entity as a result -of such
16 tlli~i-5tRnce. .
17 Nothing in this IK"ction sholl create a duty, either
IR directly or by implication, that sueh &s,istant'e bto
19 rendered by ony person or entity ncting fol" or on behnlr
20 of partie, to a transfer of renl property.
21 (e) The board or assessors may in'pect any and nil
22 records nnd documents of 0 corporation. partn~rship or
23 legol entity to ascertain whether II change iii Qwnership
24 . n~ defined in subdivision (d) of Section 64 has occurred,
2.~ The corporation, partnership, or legal entity .holl upon
26 r{"Quest, make such documents available to the boRrd z:r during normul busincs.~ h(}u1'l'l. -"I, t " t' ,""\
2R SEC. 5. Soction 480,25 Is added to "he Revenue lwofI
29 Ta);ation Codei to read:
30 48O.2.'S. (a)' Whcmwer there is u thilnge in ownership
31 or nny corporation, partnership, or 6ther legnl entity, "!i
32 defined in paragraph (I) of,ubdivl,ion (0) of Sec lion 64,
33 a signed chango in ownership !IItutement iI.! provided for
34 in subdivision (b), shall be filed'by the carper.tion,
~, partnership, or other legal entity with thebonrd at it,
36 office in Sacramento. The statement shall list all counties
37 in which the 'corporation, partnership, ,or: legal 'entity
38 own'! rCdll property.' . -',.'
39 (b) The chanJ(e in ownership statl'ment us required
40 pursuant to subdivisiOll (8), shnlf be declared to be true
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. j;r,;~'-,':'\ ~> .. e'~", "'s"" '. ,.',",".1'".'"""'.,, .. ;', . -13-SB 82 'i;;1t.$'-: '., . ","> .. ,f I under penalty of perjurr and shan gi.,., that Information. • '
,; 1,~4,f.'\ ' '" ," , 'I Z relatlv'1 to the OWnershIP control acquuillOn ttanllllCtlon 1 delinquent Pl'Ilperty taxes: .... d ........ bied to the am<> "., , r.! 'I 3.s the board shall prercrib., aner consultation with the 2 penalties for nonpayment.
" . 4 California Aaesoon' Aaoclatlon. The Information ,hall 3 (c) In the cue of a corporation. the change In " I a Include. but not b., limited to. a d""criptlon of the 4 ownetahlp .tatement .hall be signed either by an olTlcer I 6 pI'Ilperty owned by the corporation. partner,hip, or other 11 of the corporation or an employee or agent who h .. been _,'
I 7 legal entity. and the date upon wt.lch lOore Ihan 50. .. 6 designated In writing by the board of directors to oIgn
8 percent of ownership interest. were Individually or V 7 tho.e statement. on behalf of !he'corpontlon.ln the cue
, 9 cumulatl~ly transferred. The change in ownership 8 of a partnership or other legal entity. the lllahmlent IhaII
10 .tatement shaD not include any question that u nol !I b.,.ignedbyanoffi""".parlnM.or ........ ployeeorr¥"t
11 germane to the usessment funCIIon. The .tatement shall 10 who has been designated In writing by \be partnerU or
12 con loin a notice that I. printed. with the title In at lea.t 11 legal entity.
13 12-point bolclJ1lce type and the body In at I_t 8-polnt 12 (d) No penon or entity acting for or on behalf of the
14 boldface type. In the following form, IJ, parties to R transr..r of _I property .hallincur liability
I~ 14 for the eonseqoences of asolstance rendered to the
t
16 "lm1Xlrtant Notice" 15 transferee In preporatlon of any change In ownership
17 . 16 statement. and no action may be brought 'or maintained
. 18 ''The Jaw requires any person or legal entity acquiring 17 against any such penon Or entity as a result of that
~ 19 owner~hip control In any corporation. partnership. 01' 18 assistance. t lin other legal entity owning. real pI'Ilperty In California • It 19 Nothing in this section ,han creat .. 'R du.ty. either t 21 subjffi to local pl'llperty taxation to complete and file a lin directly or by ilnpUcation. that such assistan<:e b.,
f 22 change in ownership statement with the State Board 01' 21 rendered by any person or entity aellng for or on b.,half
i 23 Equalization.t its office In Sacramento. The change in 22 . of parties to a transfer of real property. 1 24 ownership statement must be filed within 45 days fl'llm 23 (e) 'the board or asseSSOrs may Inspect any and all
I 2l! the date of the change In ownenhip or control of a • (t 24 records and documents of. corporation, partnersh;I), or
t 26 corporation. partnership, or other legal entity, The low 2l! legftl entity to uco.rtain whether a change in own' lip
'II further requires that a change in ownership .talement be 26 as deiined in paragraph (1) of subdlYbion (0) of s...,tion
28 completed and filed whenever a written request is made 'II 64 has occurred. The corporation, partnership. or Jegol
29 thertfor by the State Board of Equalization, regardless of 28 entity shall upon reque.t, moke those documents
JO whether a change in ownership or control of the legal 2!1 available to the board during normol business houl'll.
31 entity h .. occurred. The failure to iile 0 chonge in JO SEC. 6. The provisions of this Il<:t shall apply to
32 ownership statement within 4~ dayn from the date of • I 31 transfers of ,hares or Olber ownerohip interests of a
33 written request by the State Board of Equalization results I 32 corporation, partnership. or other legal entlly occurring
:w in a penalty of 10 percent of the lax"s applicable to th., • ' 0 33 on or after March I, J!I75. for purp0te5 of ....... ments to
35 new base year value reflffiing the change In ownership :w be made commencing with the 1992-93 IlSe$!ment year
J6 or conbol of tbe real property owned by the eorporatlon, 3.5 and thereafter. The provision. of thl'act ,httll not apply
:J1 partnership, or legal entity (or 10 percent of the current J6 to, or In any way be CO, .. truM to requlrr> Of' authorize, Blly
J8 year's t .. es on that property If no change in ownership J7 a..., .. rnenr. With respect to fiM:M/ )'NFl plY!Cedlng the ' .
39 or control occurred). Thl. penalty will be added to the J8 1!192-93 0"",,1 )Ir18r, •
. 40 ....... ment roll and ,hall be collected like any other • <.t
j " n !
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