Amended in Senate July 6, 2015

California Legislature—2015–16 Regular Session

Assembly Bill No. 1040

Introduced by Assembly Member Ting

February 26, 2015

begin delete An act to amend Section 19522 of the Revenue and Taxation Code, relating to taxation. end delete begin insert 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. end insert

LEGISLATIVE COUNSEL’S DIGEST

AB 1040, as amended, Ting. begin delete Franchise Tax Board: federal tax law changes: report. end delete begin insert Property taxation: change in ownership. end insert

begin insert

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.

end insert begin insert

Existing 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 requires the Franchise Tax Board to include a question on returns for partnerships, banks, and corporations to assist in the determination of whether a change in ownership under the circumstances described above has occurred.

end insert begin insert

This bill would additionally specify that if more than ___% of the direct or indirect ownership interests in a legal entity are sold or transferred in a single transaction, as defined, 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 obtains control, as defined. This bill would require the Franchise Tax Board to include an additional question on 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 prescribe regulations as may be necessary to carry out the purposes of this act. This bill would also require the State Board of Equalization to report to the Legislature, no later than January 1, 2021, 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.

end insert begin insert

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.

end insert begin insert

This bill would require a person or legal entity acquiring ownership interests in a legal entity, if more than ___% 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 15%, and would provide that the penalty shall apply for failure to file a complete statement with the State Board of Equalization following a transfer of legal entity ownership interests.

end insert begin insert

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.

end insert begin insert

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.

end insert begin insert

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.

end insert begin insert

This bill would provide that with regard to certain mandates no reimbursement is required by this act for a specified reason.

end insert begin insert

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.

end insert begin insert

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 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.

end insert begin insert

This bill would take effect immediately as a tax levy.

end insert begin delete

Existing law, requires the Franchise Tax Board to submit to the Legislature, and to make available to the public, on or before January 10 of each year, a report on all of the changes to the Internal Revenue Code enacted into law in the prior year, as provided.

end delete begin delete

This bill would instead require that report to be submitted and made available on or before February 1 of each year.

end delete

Vote:  begin delete majority end delete begin insert ²⁄₃ end insert . Appropriation: no. Fiscal committee:  begin delete no end delete begin insert yes end insert . State-mandated local program:  begin delete no end delete begin insert yes end insert .

The people of the State of California do enact as follows:

begin insert

begin insert SECTION 1. end insert   

end insert

begin insert Section 64 of the end insert begin insert Revenue and Taxation Code end insert begin insert is
amended to read: end insert

64.  

(a) Except as provided in subdivision (i) of Section 61 and
subdivisions (c) and begin delete (d) of this section, end delete begin insert (d), end insert the purchase or transfer
of ownership interests in legal entities, such as corporate stock or
partnership or limited liability company interests, begin delete shall end delete begin insert does end insert not
begin delete be deemed to end delete constitute a transfer of the real property of the legal
entity. This subdivision begin delete is applicable end delete begin insert applies end insert 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)  begin insert (A) end insert begin insert   end insert 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.

begin insert

(B) (i) When more than ___ percent of the direct or indirect
ownership interests in a legal entity are sold or transferred in a
single transaction, the purchase or transfer of the ownership
interests is a change in ownership of the real property owned by
the legal entity, including the real property owned by legal entities
under its control, whether or not any one legal entity or person
that is a party to the transaction obtains control, except when the
sale or transfer qualifies for an exclusion from change in ownership
under any other law or does not result in a change in ownership
under any other law.

end insert begin insert

(ii) For purposes of this subparagraph:

end insert begin insert

(I) “Control” means control as described in subparagraph (A).

end insert begin insert

(II) “Legal entity” means a corporation, partnership, limited
liability company, or other legal entity.

end insert begin insert

(III) “Ownership interests” means corporate voting stock,
partnership capital and profits interests, limited liability company
membership interests, and other ownership interests in legal
entities.

end insert begin insert

(IV) “Single transaction” means a plan consisting of one or
more sales or transfers of ownership interests that occur on or
after January 1, 2016. For purposes of this subclause, it shall be
rebuttably presumed that a sale or transfer is part of a single
transaction if either of the following occur:

end insert begin insert

(ia) The transferees are persons described in Section 267(b) of
Title 26 of the United States Code.

end insert begin insert

(ib) The sales or transfers occur with a 36-month period,
commencing on the date of the first sale or transfer of the
ownership interests that occurs on or after January 1, 2016.

end insert begin insert

(V) “Sold or transferred” does not include a sale of stock or
interests of a publicly traded corporation or a publicly traded
partnership in the regular course of a trading activity on an
established securities market, as defined in Section 1.7704-1(b)
of Title 26 of the Code of Federal Regulations, unless shares are
acquired as part of a merger, acquisition, private equity buyout,
transfer of partnership shares, or any other means by which a
change in ownership would otherwise occur pursuant to this
subparagraph.

end insert

(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.

begin insert

(3) For purposes of this section, indirect ownership or transfer
of ownership interests shall be measured proportionately.

end insert

(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)  begin insert (1) end insert begin insert   end insert 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):

begin delete

If

end delete

begin insert (A) end insert begin insert   end insert begin insert If end insert 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.)

begin insert

(B) If the corporation (or partnership or limited liability
company) owns real property in California, has more than ___
percent of the direct or indirect ownership interests in that legal
entity been sold or transferred (1) in a single transaction, or (2)
amongst persons described in Section 267(b) of Title 26 of the
United States Code, or (3) in multiple transactions (other than
those occurring on an established securities market) within a
36-month period? (See instructions.)

end insert

begin insert (2) end insert begin insert   end insert If the entity answers “yes” to begin delete (1) or (2) in end delete begin insert any of end insert the above
begin delete question, end delete begin insert questions, end insert 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.

begin insert

(f) For purposes of this section, ownership interests counted to
determine that a change in control or change in ownership of a
legal entity has occurred shall not be counted again in determining
whether any other sale or transfer of ownership interests results
in a change in ownership of the real property reassessed as a result
of the change in control or change in ownership.

end insert begin insert

(g) The board shall prescribe regulations as may be necessary
to carry out the purposes of the act adding this subdivision.

end insert

begin insert

begin insert SEC. 2. end insert   

end insert

begin insert Section 480.1 of the end insert begin insert Revenue and Taxation Code end insert begin insert is
amended to read: end insert

480.1.  

(a) Whenever there is a change in control of any
corporation, partnership, limited liability company, or other legal
entity, as defined in begin insert subparagraph (A) of paragraph (1) of end insert
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 90 days
from the date of the change in control 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 begin delete such end delete begin insert that end insert 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 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 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 90 days from the date of the change in control 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 of the legal entity has occurred. The
failure to file a change in ownership statement within 90 days from
the earlier of the date of the change in control 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 begin delete 10 end delete begin insert 15 end insert percent of the taxes applicable to the new
base year value reflecting the change in control of the real property
owned by the corporation, partnership, limited liability company,
or legal entity (or begin delete 10 end delete begin insert 15 end insert percent of the current year’s taxes on that
property if no change in control 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 as defined
in begin insert subparagraph (A) of paragraph (1) of end insert subdivision (c) of Section
64 has occurred. The corporation, partnership, limited liability
company, or legal entity begin delete shall end delete begin insert shall, end insert upon request, make those
documents available to the board during normal business hours.

begin insert

begin insert SEC. 3. end insert   

end insert

begin insert Section 480.2 of the end insert begin insert Revenue and Taxation Code end insert begin insert is
amended to read: end insert

480.2.  

(a) Whenever there is a change in ownership of any
corporation, partnership, limited liability company, or other legal
entity, as defined in begin insert subparagraph (B) of paragraph (1) of end insert
subdivision begin insert (c) or subdivision end insert (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 90
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 begin delete and end delete under penalty of
perjury and shall give begin delete such end delete begin insert that end insert 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 begin insert subparagraph (B) of paragraph (1) of end insert
subdivision begin insert (c) or subdivision end insert (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 90 days from the date that shares or other ownership
interests representing begin insert either (1) end insert 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
begin delete transactions. end delete begin insert transactions, or (2) when more than ___ percent of
the direct or indirect ownership interests in a legal entity are sold
or transferred in a single transaction, as defined in subparagraph
(B) of paragraph (1) of subdivision (c) of Section 64. end insert 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 90 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 begin insert State end insert Board of Equalization, results in a penalty of
begin delete 10 end delete begin insert 15 end insert 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 begin delete 10 end delete begin insert 15 end insert 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 begin insert subparagraph (B) of paragraph (1) of end insert subdivision begin insert (c)
or subdivision end insert (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.

begin insert

begin insert SEC. 4. end insert   

end insert

begin insert Section 480.9 is added to the end insert begin insert Revenue and Taxation
Code end insert begin insert , to read: end insert

begin insert

begin insert 480.9. end insert   

The board shall notify assessors if a change in control
or a change in ownership described in Section 64 has occurred.

end insert

begin insert

begin insert SEC. 5. end insert   

end insert

begin insert Section 482 of the end insert begin insert Revenue and Taxation Code end insert begin insert is
amended to read: end insert

482.  

(a) (1) If a person or legal entity required to file a
statement described in Section 480 fails to do so within 90 days
from the date a written request is mailed by the assessor, a penalty
of either: (A) one hundred dollars ($100), or (B) 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 five thousand dollars ($5,000) if the
property is eligible for the homeowners’ exemption or twenty
thousand dollars ($20,000) if the property is not eligible for the
homeowners’ exemption 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.

(2) The assessor shall mail the written request specified in
paragraph (1) to the mailing address of the transferee as provided
by subdivision (f).

(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 90 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 begin delete 10 end delete begin insert 15 end insert
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 begin delete 10 end delete begin insert 15 end insert
percent of the current year’s taxes on that property if no change
in control or change in ownership occurred, shall be added by the
county assessor to the assessment made on the roll. The penalty
shall apply for failure to file a complete statement with the board
begin insert following a transfer of legal entity ownership interests end insert
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 that second request to complete the statement. 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 90-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, which shall identify the
parcel or parcels for which the penalty is assessed, and the written
request to file a statement specified in subdivision (a), which shall
identify the real property or manufactured home for which the
statement is required to be filed, 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 the address specified for mailing
tax information contained in the preliminary change in ownership
report. If the transferee has subsequently notified the assessor of
a change in address for mailing tax information, the assessor shall
mail the notice of any penalty, or the written request to file a
statement specified in subdivision (a), to this address. If there is
no address specified for mailing tax information on either the
recorded instrument, the document evidencing a transfer of an
interest in real property or manufactured home, or on the filed
preliminary change in ownership report, and the transferee has not
provided an address for purposes of mailing tax information, the
assessor shall mail the notice of any penalty, or the written request
to file a statement specified in subdivision (a), to the transferee at
any address reasonably known to the assessor.

begin insert

begin insert SEC. 6. end insert   

end insert

begin insert Section 486 is added to the end insert begin insert Revenue and Taxation
Code end insert begin insert , to read: end insert

begin insert

begin insert 486. end insert   

(a) The board shall report to the Legislature, no later
than January 1, 2021, regarding the implementation of
subparagraph (B) of paragraph (1) of subdivision (c) of Section
64, including, but not limited to, the economic impact and
frequency of reassessments of real property owned by legal entities.

(b) (1) A report submitted pursuant to subdivision (a) shall be
submitted in compliance with Section 9795 of the Government
Code.

(2) Pursuant to Section 10231.5 of the Government Code, this
section is repealed on January 1, 2025.

end insert

begin insert

begin insert SEC. 7. end insert   

end insert begin insert

No reimbursement is required by this act pursuant to
Section 6 of Article XIII B of the California Constitution for certain
costs that may be incurred by a local agency or school district
because, in that regard, 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.

end insert begin insert

However, if the Commission on State Mandates determines that
this act contains other costs mandated by the state, reimbursement
to local agencies and school districts for those costs shall be made
pursuant to Part 7 (commencing with Section 17500) of Division
4 of Title 2 of the Government Code.

end insert

begin insert

begin insert SEC. 8. end insert   

end insert begin insert

This act provides for a tax levy within the meaning of
Article IV of the Constitution and shall go into immediate effect.

end insert

begin delete

SECTION 1.  

Section 19522 of the Revenue and Taxation Code
is amended to read:

19522.  

(a) (1) (A) On or before February 1 of each year, the
Franchise Tax Board shall submit to the Legislature a report on
all changes to the Internal Revenue Code enacted into law in the
prior year. To the extent possible, the report shall contain an
estimate of the revenue effect of conforming California law to
each of those changes.

(B) In the event that changes to the Internal Revenue Code are
enacted after September 15 of any year, the report described in
subparagraph (A) shall be submitted to the Legislature within 120
days after signature by the President of the United States, rather
than the 10th of January.

(2) The report required by this section shall be made available
to the public.

(3) It is the intent of the Legislature that the policy committee
of each house of the Legislature hold at least one public hearing
on the report required by this section.

(b) For any introduced bill which proposes changes in any of
the dates in Section 17024.5, the Franchise Tax Board shall prepare
a complete analysis of the bill which describes all changes to state
law which will automatically occur by reference to federal law as
of the changed date. The Franchise Tax Board shall immediately
update and supplement that analysis upon any amendment to the
bill. That analysis shall be made available to the public and shall
be submitted to the Legislature for publication in the daily journal
of each house of the Legislature. The digest of the Legislative
Counsel shall indicate that an analysis of the bill shall be prepared
by the Franchise Tax Board and printed in the daily journal of each
house of the Legislature.

end delete