BILL NUMBER: AB 2492	AMENDED
	BILL TEXT

	AMENDED IN ASSEMBLY  MAY 18, 2010
	AMENDED IN ASSEMBLY  MAY 3, 2010
	AMENDED IN ASSEMBLY  APRIL 8, 2010

INTRODUCED BY   Assembly Member Ammiano

                        FEBRUARY 19, 2010

   An act to amend  Section 64   Sections 64,
480.1, 480.2, and 482  of, and to add Section 480.8 to, the
Revenue and Taxation Code, relating to taxation, to take effect
immediately, tax levy.



	LEGISLATIVE COUNSEL'S DIGEST


   AB 2492, as amended, Ammiano. Property taxation: change in
ownership.
   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 when 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.
   This bill would instead specify that when 100% of  the
ownership interests in a legal entity, as defined, are sold or
transferred in a single transaction, as specified, the real property
owned by that legal entity has changed ownership, whether or not any
one legal entity  or person  that is a party to the
transaction acquires more than 50% of the ownership interests. The
bill would require the State Board of Equalization to notify
assessors when a change in ownership as so described occurs. 
   Existing law requires a person or legal entity that obtains a
controlling or majority ownership interest in a legal entity, or an
entity that makes specified transfers of ownership interests in the
legal entity, to file a change in ownership statement signed under
penalty of perjury with the State Board of Equalization, 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 require a person or legal entity acquiring
ownership interests in a legal entity, when 100% of the ownership
interests in the legal entity are sold or transferred, as described
above, to file a change in ownership statement signed under penalty
of perjury with the State Board of Equalization. This bill would
increase the penalties for failure to file a change in ownership
statement, as described above, from 10% to 20%.  
   By expanding the crime of perjury, 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 no reimbursement is required by this
act for a specified reason. 
   This bill would result in a change in state taxes for the purpose
of increasing state revenues within the meaning of Section 3 of
Article XIII A of the California Constitution, and thus would require
for passage the approval of 2/3 of the membership of each house of
the Legislature.
   This bill would take effect immediately as a tax levy.
   Vote: 2/3. Appropriation: no. Fiscal committee: yes.
State-mandated local program:  no   yes  .



THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

  SECTION 1.  It is the intent of the Legislature in enacting this
act to specify those circumstances under which real property owned by
banks and financial institutions that have been subject to mergers
and acquisitions by other banks and financial institutions, such as
the mergers that occurred during the financial crisis of 2008,
undergo a change in ownership, to ensure that the real property owned
by those banks and financial institutions undergo a change in
ownership.
  SEC. 2.  Section 64 of the Revenue and Taxation Code is amended to
read:
   64.  (a) Except as provided in subdivision (i) of Section 61 and
subdivisions (c) and (d), the purchase or transfer of ownership
interests in legal entities, such as corporate stock or partnership
or limited liability company interests, does not constitute a
transfer of the real property of the legal entity. This subdivision
applies to the purchase or transfer of ownership interests in a
partnership without regard to whether it is a continuing or a
dissolved partnership.
   (b) Any corporate reorganization, where all of the corporations
involved are members of an affiliated group, and that qualifies as a
reorganization under Section 368 of the United States Internal
Revenue Code and that is accepted as a nontaxable event by similar
California statutes, or any transfer of real property among members
of an affiliated group, or any reorganization of farm credit
institutions pursuant to the federal Farm Credit Act of 1971 (Public
Law 92-181), as amended, shall not be a change of ownership. The
taxpayer shall furnish proof, under penalty of perjury, to the
assessor that the transfer meets the requirements of this
subdivision.
   For purposes of this subdivision, "affiliated group" means one or
more chains of corporations connected through stock ownership with a
common parent corporation if both of the following conditions are
met:
   (1) One hundred percent of the voting stock, exclusive of any
share owned by directors, of each of the corporations, except the
parent corporation, is owned by one or more of the other
corporations.
   (2) The common parent corporation owns, directly, 100 percent of
the voting stock, exclusive of any shares owned by directors, of at
least one of the other corporations.
   (c) (1) (A) When a corporation, partnership, limited liability
company, other legal entity, or any other person obtains control
through direct or indirect ownership or control of more than 50
percent of the voting stock of any corporation, or obtains a majority
ownership interest in any partnership, limited liability company, or
other legal entity through the purchase or transfer of corporate
stock, partnership, or limited liability company interest, or
ownership interests in other legal entities, including any purchase
or transfer of 50 percent or less of the ownership interest through
which control or a majority ownership interest is obtained, the
purchase or transfer of that stock or other interest shall be a
change of ownership of the real property owned by the corporation,
partnership, limited liability company, or other legal entity in
which the controlling interest is obtained.
   (B)  (i)    When 100 percent of the ownership
interests in a legal entity are sold or transferred in a single
transaction  to a legal entity or person  , whether by
merger, acquisition, private equity buyout, transfer of partnership
shares, or any other means by which a legal entity  or person
 acquires the ownership interests of another legal entity,
including the subsidiaries or affiliates of the legal entity and the
property owned by those subsidiaries or affiliates, the purchase or
transfer of the ownership interests shall be a change of ownership of
the real property owned by the legal entity, whether or not any one
legal entity  or person  that is a party to the transaction
acquires more than 50 percent of the ownership interests. 
   (ii) Clause (i) shall not apply to the sale or transfer of
ownership interests between either of the following:  
   (I) Parents and their children.  
   (II) Grandparents and their grandchildren.  
   (iii) For purposes of this subparagraph, all of the following
shall apply:  
   (I) "Children" has the same meaning as defined in Section 63.1.
 
   (II) "Grandchildren" has the same meaning as defined in Section
63.1.  
   (III) "Legal entity" means a corporation, a partnership, a limited
liability company, or other legal entity.  
   (IV) "Ownership interests" means corporate voting stock,
partnership capital and profits interests, limited liability company
membership interests, and other ownership interests in legal
entities.  
   (V) "Single transaction" means a transaction in which 100 percent
of the ownership interests are sold or transferred in either one
calendar year or within a three-year period beginning on the date of
the original transaction when any percentage of ownership interests
are sold or transferred. 
   (2) On or after January 1, 1996, when an owner of a majority
ownership interest in any partnership obtains all of the remaining
ownership interests in that partnership or otherwise becomes the sole
partner, the purchase or transfer of the minority interests, subject
to the appropriate application of the step-transaction doctrine,
shall not be a change in ownership of the real property owned by the
partnership.
   (d) If property is transferred on or after March 1, 1975, to a
legal entity in a transaction excluded from change in ownership by
paragraph (2) of subdivision (a) of Section 62, then the persons
holding ownership interests in that legal entity immediately after
the transfer shall be considered the "original coowners." Whenever
shares or other ownership interests representing cumulatively more
than 50 percent of the total interests in the entity are transferred
by any of the original coowners in one or more transactions, a change
in ownership of that real property owned by the legal entity shall
have occurred, and the property that was previously excluded from
change in ownership under the provisions of paragraph (2) of
subdivision (a) of Section 62 shall be reappraised.
   The date of reappraisal shall be the date of the transfer of the
ownership interest representing individually or cumulatively more
than 50 percent of the interests in the entity.
   A transfer of shares or other ownership interests that results in
a change in control of a corporation, partnership, limited liability
company, or any other legal entity is subject to reappraisal as
provided in subdivision (c) rather than this subdivision.
   (e) To assist in the determination of whether a change of
ownership has occurred under subdivisions (c) and (d), the Franchise
Tax Board shall include a question in substantially the following
form on returns for partnerships, banks, and corporations (except
tax-exempt organizations):

   If the corporation (or partnership or limited liability company)
owns real property in California, has cumulatively more than 50
percent of the voting stock (or more than 50 percent of total
interest in both partnership or limited liability company capital and
partnership or limited liability company profits) (1) been
transferred by the corporation (or partnership or limited liability
company) since March 1, 1975, or (2) been acquired by another legal
entity or person during the year? (See instructions.)

   If the entity answers "yes" to (1) or (2) in the above question,
then the Franchise Tax Board shall furnish the names and addresses of
that entity and of the stock or partnership or limited liability
company ownership interest transferees to the State Board of
Equalization.

   (f) The State Board of Equalization may prescribe those
regulations as may be necessary to carry out the purposes of this
section. 
   (g) For purposes of this section, both of the following shall
apply:  
   (1) "Legal entity" means a corporation, a partnership, a limited
liability company, or other legal entity.  
   (2) "Ownership interests" means corporate voting stock,
partnership capital and profits interests, limited liability company
membership interests, and other ownership interests in legal
entities. 
   SEC. 3.   Section 480.1 of the   Revenue and
Taxation Code   is amended to read:
   480.1.  (a) Whenever there is a change in control  or a change
in ownership  of any corporation, partnership, limited
liability company, or other legal entity, as defined in subdivision
(c) of Section 64, a signed change in ownership statement as provided
for in subdivision (b), shall be filed by the person or legal entity
acquiring ownership  control  of the corporation,
partnership, limited liability company, or other legal entity with
the board at its office in Sacramento within 45 days from the date of
the change in control  or the change in ownership  of the
corporation, partnership, limited liability company, or other legal
entity. The statement shall list all counties in which the
corporation, partnership, limited liability company, or legal entity
owns real property.
   (b) The change in ownership statement as required pursuant to
subdivision (a), shall be declared to be true under penalty of
perjury and shall give such information relative to the ownership
 control  acquisition transaction as the board shall
prescribe after consultation with the California Assessors'
Association. The information shall include, but not be limited to, a
description of the property owned by the corporation, partnership,
limited liability company, or other legal entity, the parties to the
transaction, and the date of the ownership control 
acquisition. The change in ownership statement shall not include any
question which is not germane to the assessment function. The
statement shall contain a notice that is printed, with the title at
least 12-point boldface type and the body in at least 8-point
boldface type, in the following form:
      "Important Notice"

   "The law requires any person or legal entity acquiring ownership
 control  in any corporation, partnership, limited
liability company, or other legal entity owning real property in
California subject to local property taxation to complete and file a
change in ownership statement with the State Board of Equalization at
its office in Sacramento. The change in ownership statement must be
filed within 45 days from the date of the change in control  or
the change in ownership  of a corporation, partnership, limited
liability company, or other legal entity. The law further requires
that a change in ownership statement be completed and filed whenever
a written request is made therefor by the State Board of
Equalization, regardless of whether a change in control  or a
change in ownership  of the legal entity has occurred. The
failure to file a change in ownership statement within 45 days from
the earlier of the date of the change in control  or the change
in ownership  of the corporation, partnership, limited liability
company, or other legal entity, or the date of a written request by
the State Board of Equalization, results in a penalty of  10
  20 percent of the taxes applicable to the new
base year value reflecting the change in control  or the change
in ownership  of the real property owned by the corporation,
partnership, limited liability company, or legal entity (or 
10  20  percent of the current year's taxes on that
property if no change in control  or change in ownership 
occurred). This penalty will be added to the assessment roll and
shall be collected like any other delinquent property taxes, and be
subject to the same penalties for nonpayment."

   (c) In the case of a corporation, the change in ownership
statement shall be signed either by an officer of the corporation or
an employee or agent who has been designated in writing by the board
of directors to sign such statements on behalf of the corporation. In
the case of a partnership, limited liability company, or other legal
entity, the statement shall be signed by an officer, partner,
manager, or an employee or agent who has been designated in writing
by the partnership, limited liability company, or legal entity.
   (d) No person or entity acting for or on behalf of the parties to
a transfer of real property shall incur liability for the
consequences of assistance rendered to the transferee in preparation
of any change in ownership statement, and no action may be brought or
maintained against any person or entity as a result of that
assistance.
   Nothing in this section shall create a duty, either directly or by
implication, that such assistance be rendered by any person or
entity acting for or on behalf of parties to a transfer of real
property.
   (e) The board or assessors may inspect any and all records and
documents of a corporation, partnership, limited liability company,
or legal entity to ascertain whether a change in control  or a
change in ownership  as defined in subdivision (c) of Section 64
has occurred. The corporation, partnership, limited liability
company, or legal entity shall upon request, make those documents
available to the board during normal business hours.
   SEC. 4.   Section 480.2 of the   Revenue and
Taxation Code   is amended to read:
   480.2.  (a) Whenever there is a change in ownership of any
corporation, partnership, limited liability company, or other legal
entity, as defined in subdivision (d) of Section 64, a signed change
in ownership statement as provided in subdivision (b) shall be filed
by the corporation, partnership, limited liability company, or other
legal entity with the board at its office in Sacramento within 45
days from the date of the change in ownership of the corporation,
partnership, limited liability company, or other legal entity. The
statement shall list all counties in which the corporation,
partnership, limited liability company, or legal entity owns real
property.
   (b) The change in ownership statement required pursuant to
subdivision (a) shall be declared to be true and under penalty of
perjury and shall give such information relative to the ownership
interest acquisition transaction as the board shall prescribe after
consultation with the California Assessors' Association. The
information shall include, but not be limited to, a description of
the property owned by the corporation, partnership, limited liability
company, or other legal entity, the parties to the transaction, the
date of the ownership interest acquisition, and a listing of the
"original coowners" of the corporation, partnership, limited
liability company, or other legal entity prior to the transaction.
The change in ownership statement shall not include any question
which is not germane to the assessment function. The statement shall
contain a notice that is printed, with the title in at least 12-point
boldface type and the body in at least 8-point boldface type, in the
following form:
      "Important Notice"

   "The law requires any corporation, partnership, limited liability
company, or other legal entity owning real property in California
subject to local property taxation and transferring shares or other
ownership interest in such legal entity which constitute a change in
ownership pursuant to subdivision (d) of Section 64 of the Revenue
and Taxation Code to complete and file a change in ownership
statement with the State Board of Equalization at its office in
Sacramento. The change in ownership statement must be filed within 45
days from the date that shares or other ownership interests
representing cumulatively more than 50 percent of the total control
or ownership interests in the entity are transferred by any of the
original coowners in one or more transactions. The law further
requires that a change in ownership statement be completed and filed
whenever a written request is made therefor by the State Board of
Equalization, regardless of whether a change in ownership of the
legal entity has occurred. The failure to file a change in ownership
statement within 45 days from the earlier of the date of the change
in ownership of the corporation, partnership, limited liability
company, or other legal entity, or the date of a written request by
the Board of Equalization, results in a penalty of  10
  20  percent of the taxes applicable to the new
base year value reflecting the change in ownership of the real
property owned by the corporation, partnership, limited liability
company, or legal entity (or  10   20 
percent of the current year's taxes on that real property if no
change in ownership occurred). This penalty will be added to the
assessment roll and shall be collected like any other delinquent
property taxes, and be subject to the same penalties for nonpayment."

   (c) In the case of a corporation, the change in ownership
statement shall be signed either by an officer of the corporation or
an employee or agent who has been designated in writing by the board
of directors to sign such statements on behalf of the corporation. In
the case of a partnership, limited liability company, or other legal
entity, the statement shall be signed by an officer, partner,
manager, or an employee or agent who has been designated in writing
by the partnership, limited liability company, or legal entity.
   (d) No person or entity acting for or on behalf of the parties to
a transfer of real property shall incur liability for the
consequences of assistance rendered to the transferee in preparation
of any change in ownership statement, and no action may be brought or
maintained against any person or entity as a result of that
assistance.
   Nothing in this section shall create a duty, either directly or by
implication, that such assistance be rendered by any person or
entity acting for or on behalf of parties to a transfer of real
property.
   (e) The board or assessors may inspect any and all records and
documents of a corporation, partnership, limited liability company,
or legal entity to ascertain whether a change in ownership as defined
in subdivision (d) of Section 64 has occurred. The corporation,
partnership, limited liability company, or legal entity shall upon
request, make those documents available to the board during normal
business hours.
   SEC. 3.   SEC. 5.   Section 480.8 is
added to the Revenue and Taxation Code, to read:
   480.8.  The board shall notify assessors when a change in
ownership described in subparagraph (B) of paragraph (1) of
subdivision (c) of Section 64 has occurred.
   SEC. 6.    Section 482 of the   Revenue and
Taxation Code   is amended to read: 
   482.  (a) If a person or legal entity required to file a statement
described in Section 480 fails to do so within 45 days from the date
of a written request by the assessor, a penalty of either: (1) one
hundred dollars ($100), or (2) 10 percent of the taxes applicable to
the new base year value reflecting the change in ownership of the
real property or manufactured home, whichever is greater, but not to
exceed two thousand five hundred dollars ($2,500) if the failure to
file was not willful, shall, except as otherwise provided in this
section, be added to the assessment made on the roll. The penalty
shall apply for failure to file a complete change in ownership
statement notwithstanding the fact that the assessor determines that
no change in ownership has occurred as defined in Chapter 2
(commencing with Section 60) of Part 0.5. The penalty may also be
applied if after a request the transferee files an incomplete
statement and does not supply the missing information upon a second
request.
   (b) If a person or legal entity required to file a statement
described in Section 480.1 or 480.2 fails to do so within 45 days
from the earlier of (1) the date of the change in control or the
change in ownership of the corporation, partnership, limited
liability company, or other legal entity, or (2) the date of a
written request by the State Board of Equalization, a penalty of
 10   20  percent of the taxes applicable
to the new base year value reflecting the change in control or change
in ownership of the real property owned by the corporation,
partnership, or legal entity, or  10   20 
percent of the current year's taxes on that property if no change in
control or change in ownership occurred, shall be added to the
assessment made on the roll. The penalty shall apply for failure to
file a complete statement notwithstanding the fact that the board
determines that no change in control or change in ownership has
occurred as defined in subdivision (c) or (d) of Section 64. The
penalty may also be applied if after a request the person or legal
entity files an incomplete statement and does not supply the missing
information upon a second request. That penalty shall be in lieu of
the penalty provisions of subdivision (a).
   (c) The penalty for failure to file a timely statement pursuant to
Sections 480, 480.1, and 480.2 for any one transfer may be imposed
only one time, even though the assessor may initiate a request as
often as he or she deems necessary.
   (d) The penalty shall be added to the roll in the same manner as a
special assessment and treated, collected, and subject to the same
penalties for the delinquency as all other taxes on the roll in which
it is entered.
   (1) When the transfer to be reported under this section is of a
portion of a property or parcel appearing on the roll during the
fiscal year in which the 45-day period expires, the current year's
taxes shall be prorated so the penalty will be computed on the
proportion of property which has transferred.
   (2) Any penalty added to the roll pursuant to this section between
January 1 and June 30 may be entered either on the unsecured roll or
the roll being prepared. After January 1, the penalty may be added
to the current roll only with the approval of the tax collector.
   (3) If the property is transferred or conveyed to a bona fide
purchaser for value or becomes subject to a lien of a bona fide
encumbrancer for value after the transfer of ownership resulting in
the imposition of the penalty and before the enrollment of the
penalty, the penalty shall be entered on the unsecured roll in the
name of the transferee whose failure to file the change in ownership
statement resulted in the imposition of the penalty.
   (e) When a penalty imposed pursuant to this section is entered on
the unsecured roll, the tax collector may immediately file a
certificate authorized by Section 2191.3.
   (f) Notice of any penalty added to either the secured or unsecured
roll pursuant to this section shall be mailed by the assessor to the
transferee at his or her address contained in any recorded
instrument or document evidencing a transfer of an interest in real
property or manufactured home or at any address reasonably known to
the assessor.
   SEC. 7.    No reimbursement is required by this act
pursuant to Section 6 of Article XIII B of the California
Constitution because the only costs that may be incurred by a local
agency or school district will be incurred because this act creates a
new crime or infraction, eliminates a crime or infraction, or
changes the penalty for a crime or infraction, within the meaning of
Section 17556 of the Government Code, or changes the definition of a
crime within the meaning of Section 6 of Article XIII B of the
California Constitution. 
   SEC. 4.   SEC. 8.   This act provides
for a tax levy within the meaning of Article IV of the Constitution
and shall go into immediate effect.