BILL NUMBER: AB 448	INTRODUCED
	BILL TEXT


INTRODUCED BY   Assembly Member Ammiano

                        FEBRUARY 15, 2011

   An act relating to taxation.


	LEGISLATIVE COUNSEL'S DIGEST


   AB 448, as introduced, 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 requires a person or 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, as provided, and imposes a
specified penalty if an assessee fails to file a change in ownership
statement, as provided.
   This bill would, pursuant to legislative findings and
declarations, state the intent of the Legislature to provide greater
clarity with regard to those circumstances in which a change in
ownership has occurred, to provide greater transparency in ownership
patterns with respect to the filing of deeds and with respect to
other real property and financial transactions, and to provide
improved reporting and stronger enforcement and penalties for the
failure to report changes in ownership.
   Vote: majority. Appropriation: no. Fiscal committee: no.
State-mandated local program: no.


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

  SECTION 1.  The Legislature finds and declares all of the
following:
   (a) The system for determining a change in ownership for the
purpose of assessment of commercial property is complex and difficult
to administer.
   (b) Property owners use complex legal maneuvers and methods of
dividing up, or obscuring, ownership patterns, in order to avoid
reassessment when changes of ownership actually occur.
   (c) There are many circumstances where changes of ownership have
legally taken place, which are often not known to the assessor
because they are deliberately obscured, such as keeping the property
in the name of the old property owner even when a company is
purchased.
   (d) Deeds are filed that describe ownership patterns of such
complexity that it is difficult for the legal powers of the counties,
and the enforcement powers of the assessor, to be exercised.
   (e) Transactions occur that should be identified as changes of
ownership, such as a 100-percent purchase of a company, which avoid
reassessment because of the ability to divide ownership shares.
   (f) Penalties for obscuring, or failing to report, transactions
are insufficient to provide incentives to purchasers to self-report,
making the job of identifying these transactions by the assessor and
the State Board of Equalization more difficult.
   (g) Changes in ownership may not trigger reassessment because of
leasehold interests that are not transparent to the assessor.
   (h) Therefore, it is the intent of the Legislature to enact
legislation to revise Sections 64, 480.1, 480.2, and 482 of the
Revenue and Taxation Code, in order to provide all of the following:
   (1) Greater clarity with regard to those circumstances in which a
change in ownership has occurred.
   (2) Greater transparency in ownership patterns with respect to the
filing of deeds and with respect to other real property and
financial transactions.
   (3) Improved reporting and stronger enforcement and penalties for
the failure to report changes in ownership.