Amended in Senate January 14, 2016

Amended in Senate June 29, 2015

Senate BillNo. 259


Introduced by Senator Bates

February 18, 2015


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, and declaring the urgency thereof, to take effect immediately.

LEGISLATIVE COUNSEL’S DIGEST

SB 259, as amended, Bates. 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 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.

This bill would additionally specify that if 90% or more 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, thebegin delete economicend deletebegin insert revenueend insert impact and frequency of reassessments of real property owned by legal entities.begin insert The bill would require the Legislative Analyst’s Office to report to the Legislature no later than January 1, 2021, regarding the economic impact of this bill.end 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.

This bill would require a person or legal entity acquiring ownership interests in a legal entity, if 90% or more 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.

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

By expanding the crime of perjury and by imposing new duties upon local county officials with respect to changes in ownership, this bill would impose a state-mandated local program.

The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

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

With regard to any other mandates, this bill would provide that, if the Commission on State Mandates determines that the bill contains costs so mandated by the state, reimbursement for those costs shall be made pursuant to the statutory provisions noted above.

This bill would declare that it is to take effect immediately as an urgency statute.

Vote: 23. Appropriation: no. Fiscal committee: yes. State-mandated local program: yes.

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

P3    1

SECTION 1.  

Section 64 of the Revenue and Taxation Code is
2amended to read:

3

64.  

(a) Except as provided in subdivision (i) of Section 61 and
4subdivisions (c) and (d), the purchase or transfer of ownership
5interests in legal entities, such as corporate stock or partnership or
6limited liability company interests, does not constitute a transfer
7of the real property of the legal entity. This subdivision applies to
8the purchase or transfer of ownership interests in a partnership
9without regard to whether it is a continuing or a dissolved
10partnership.

11(b) Any corporate reorganization, where all of the corporations
12involved are members of an affiliated group, and that qualifies as
13a reorganization under Section 368 of the United States Internal
14Revenue Code and that is accepted as a nontaxable event by similar
15California statutes, or any transfer of real property among members
16of an affiliated group, or any reorganization of farm credit
17institutions pursuant to the federal Farm Credit Act of 1971 (Public
18Law 92-181), as amended, shall not be a change of ownership.
19The taxpayer shall furnish proof, under penalty of perjury, to the
20assessor that the transfer meets the requirements of this subdivision.

P4    1For purposes of this subdivision, “affiliated group” means one
2 or more chains of corporations connected through stock ownership
3with a common parent corporation if both of the following
4conditions are met:

5(1) One hundred percent of the voting stock, exclusive of any
6share owned by directors, of each of the corporations, except the
7parent corporation, is owned by one or more of the other
8corporations.

9(2) The common parent corporation owns, directly, 100 percent
10of the voting stock, exclusive of any shares owned by directors,
11of at least one of the other corporations.

12(c) (1) (A) When a corporation, partnership, limited liability
13company, other legal entity, or any other person obtains control
14through direct or indirect ownership or control of more than 50
15percent of the voting stock of any corporation, or obtains a majority
16ownership interest in any partnership, limited liability company,
17or other legal entity through the purchase or transfer of corporate
18stock, partnership, or limited liability company interest, or
19ownership interests in other legal entities, including any purchase
20or transfer of 50 percent or less of the ownership interest through
21which control or a majority ownership interest is obtained, the
22purchase or transfer of that stock or other interest shall be a change
23of ownership of the real property owned by the corporation,
24partnership, limited liability company, or other legal entity in which
25the controlling interest is obtained.

26(B) (i) When 90 percent or more of the direct or indirect
27ownership interests in a legal entity are sold or transferred in a
28single transaction, the purchase or transfer of the ownership
29interests is a change in ownership of the real property owned by
30the legal entity, including the real property owned by legal entities
31under its control, whether or not any one legal entity or person that
32is a party to the transaction obtains control, except when the sale
33or transfer qualifies for an exclusion from change in ownership
34under any other law or does not result in a change in ownership
35under any other law.

36(ii) For purposes of this subparagraph:

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

38(II) “Legal entity” means a corporation, partnership, limited
39liability company, or other legal entity.

P5    1(III) “Ownership interests” means corporate voting stock,
2 partnership capital and profits interests, limited liability company
3membership interests, and other ownership interests in legal
4entities.

5(IV) “Single transaction” means a plan consisting of one or
6more sales or transfers of ownership interests that occur on or after
7January 1, 2016. For purposes of this subclause, it shall be
8rebuttably presumed that a sale or transfer is part of a single
9transaction if either of the following occur:

10(ia) The transferees are persons described in Section 267(b) of
11Title 26 of the United States Code.

12(ib) The sales or transfers occur with a 36-month period,
13commencing on the date of the first sale or transfer of the
14ownership interests that occurs on or after January 1, 2016.

15(V) “Sold or transferred” does not include either of the
16following:

17(ia) A transfer of ownership interests that occurs upon death,
18without payment for the ownership interests, other than taxes due
19with respect to the transfer, paid by or on behalf of the transferee.

20(ib) A sale of stock or interests of a publicly traded corporation
21or a publicly traded partnership in the regular course of a trading
22activity on an established securities market, as defined in Section
231.7704-1(b) of Title 26 of the Code of Federal Regulations, unless
24shares are acquired as part of a merger, acquisition, private equity
25buyout, transfer of partnership shares, or any other means by which
26a change in ownership would otherwise occur pursuant to this
27subparagraph.

28(2) On or after January 1, 1996, when an owner of a majority
29ownership interest in any partnership obtains all of the remaining
30ownership interests in that partnership or otherwise becomes the
31sole partner, the purchase or transfer of the minority interests,
32subject to the appropriate application of the step-transaction
33doctrine, shall not be a change in ownership of the real property
34owned by the partnership.

35(3) For purposes of this section, indirect ownership or transfer
36of ownership interests shall be measured proportionately.

37(d) If property is transferred on or after March 1, 1975, to a
38legal entity in a transaction excluded from change in ownership
39by paragraph (2) of subdivision (a) of Section 62, then the persons
40holding ownership interests in that legal entity immediately after
P6    1the transfer shall be considered the “original coowners.” Whenever
2shares or other ownership interests representing cumulatively more
3than 50 percent of the total interests in the entity are transferred
4by any of the original coowners in one or more transactions, a
5change in ownership of that real property owned by the legal entity
6shall have occurred, and the property that was previously excluded
7from change in ownership under the provisions of paragraph (2)
8of subdivision (a) of Section 62 shall be reappraised.

9The date of reappraisal shall be the date of the transfer of the
10ownership interest representing individually or cumulatively more
11than 50 percent of the interests in the entity.

12A transfer of shares or other ownership interests that results in
13a change in control of a corporation, partnership, limited liability
14company, or any other legal entity is subject to reappraisal as
15provided in subdivision (c) rather than this subdivision.

16(e) (1) To assist in the determination of whether a change of
17ownership has occurred under subdivisions (c) and (d), the
18Franchise Tax Board shall include a question in substantially the
19following form on returns for partnerships, banks, and corporations
20(except tax-exempt organizations):

21(A) If the corporation (or partnership or limited liability
22company) owns real property in California, has cumulatively more
23than 50 percent of the voting stock (or more than 50 percent of
24total interest in both partnership or limited liability company capital
25and partnership or limited liability company profits) (1) been
26transferred by the corporation (or partnership or limited liability
27company) since March 1, 1975, or (2) been acquired by another
28legal entity or person during the year? (See instructions.)

29(B) If the corporation (or partnership or limited liability
30company) owns real property in California, has 90 percent or more
31of the direct or indirect ownership interests in that legal entity been
32sold or transferred (1) in a single transaction, or (2) amongst
33persons described in Section 267(b) of Title 26 of the United States
34Code, or (3) in multiple transactions (other than those occurring
35on an established securities market) within a 36-month period?
36(See instructions.)

37(2) If the entity answers “yes” to any of the above questions,
38then the Franchise Tax Board shall furnish the names and addresses
39of that entity and of the stock or partnership or limited liability
P7    1company ownership interest transferees to the State Board of
2Equalization.

3(f) For purposes of this section, ownership interests counted to
4determine that a change in control or change in ownership of a
5legal entity has occurred shall not be counted again in determining
6whether any other sale or transfer of ownership interests results in
7a change in ownership of the real property reassessed as a result
8of the change in control or change in ownership.

9(g) The board shall prescribe regulations as may be necessary
10to carry out the purposes of the act adding this subdivision.

11

SEC. 2.  

Section 480.1 of the Revenue and Taxation Code is
12amended to read:

13

480.1.  

(a) Whenever there is a change in control of any
14corporation, partnership, limited liability company, or other legal
15entity, as defined in subparagraph (A) of paragraph (1) of
16subdivision (c) of Section 64, a signed change in ownership
17statement as provided for in subdivision (b), shall be filed by the
18person or legal entity acquiring ownership control of the
19corporation, partnership, limited liability company, or other legal
20entity with the board at its office in Sacramento within 90 days
21from the date of the change in control of the corporation,
22partnership, limited liability company, or other legal entity. The
23statement shall list all counties in which the corporation,
24partnership, limited liability company, or legal entity owns real
25property.

26(b) The change in ownership statement as required pursuant to
27subdivision (a), shall be declared to be true under penalty of perjury
28and shall give that information relative to the ownership control
29acquisition transaction as the board shall prescribe after
30consultation with the California Assessors’ Association. The
31information shall include, but not be limited to, a description of
32the property owned by the corporation, partnership, limited liability
33company, or other legal entity, the parties to the transaction, and
34the date of the ownership control acquisition. The change in
35ownership statement shall not include any question which is not
36germane to the assessment function. The statement shall contain
37a notice that is printed, with the title in at least 12-point boldface
38type and the body in at least 8-point boldface type, in the following
39form:

P8    1“Important Notice”
2

3“The law requires any person or legal entity acquiring ownership
4control in any corporation, partnership, limited liability company,
5or other legal entity owning real property in California subject to
6local property taxation to complete and file a change in ownership
7statement with the State Board of Equalization at its office in
8Sacramento. The change in ownership statement must be filed
9within 90 days from the date of the change in control of a
10corporation, partnership, limited liability company, or other legal
11entity. The law further requires that a change in ownership
12statement be completed and filed whenever a written request is
13made therefor by the State Board of Equalization, regardless of
14whether a change in control of the legal entity has occurred. The
15failure to file a change in ownership statement within 90 days from
16the earlier of the date of the change in control of the corporation,
17partnership, limited liability company, or other legal entity, or the
18date of a written request by the State Board of Equalization, results
19in a penalty of 15 percent of the taxes applicable to the new base
20year value reflecting the change in control of the real property
21owned by the corporation, partnership, limited liability company,
22or legal entity (or 15 percent of the current year’s taxes on that
23property if no change in control occurred). This penalty will be
24added to the assessment roll and shall be collected like any other
25delinquent property taxes, and be subject to the same penalties for
26nonpayment.”

27(c) In the case of a corporation, the change in ownership
28statement shall be signed either by an officer of the corporation or
29an employee or agent who has been designated in writing by the
30board of directors to sign such statements on behalf of the
31corporation. In the case of a partnership, limited liability company,
32or other legal entity, the statement shall be signed by an officer,
33partner, manager, or an employee or agent who has been designated
34in writing by the partnership, limited liability company, or legal
35entity.

36(d) No person or entity acting for or on behalf of the parties to
37a transfer of real property shall incur liability for the consequences
38of assistance rendered to the transferee in preparation of any change
39in ownership statement, and no action may be brought or
P9    1maintained against any person or entity as a result of that
2assistance.

3Nothing in this section shall create a duty, either directly or by
4implication, that such assistance be rendered by any person or
5entity acting for or on behalf of parties to a transfer of real property.

6(e) The board or assessors may inspect any and all records and
7documents of a corporation, partnership, limited liability company,
8or legal entity to ascertain whether a change in control as defined
9in subparagraph (A) of paragraph (1) of subdivision (c) of Section
1064 has occurred. The corporation, partnership, limited liability
11company, or legal entity shall, upon request, make those documents
12available to the board during normal business hours.

13

SEC. 3.  

Section 480.2 of the Revenue and Taxation Code is
14amended to read:

15

480.2.  

(a) Whenever there is a change in ownership of any
16corporation, partnership, limited liability company, or other legal
17entity, as defined in subparagraph (B) of paragraph (1) of
18subdivision (c) or subdivision (d) of Section 64, a signed change
19in ownership statement as provided in subdivision (b) shall be filed
20by the corporation, partnership, limited liability company, or other
21legal entity with the board at its office in Sacramento within 90
22days from the date of the change in ownership of the corporation,
23partnership, limited liability company, or other legal entity. The
24statement shall list all counties in which the corporation,
25partnership, limited liability company, or legal entity owns real
26property.

27(b) The change in ownership statement required pursuant to
28subdivision (a) shall be declared to be true under penalty of perjury
29and shall give that information relative to the ownership interest
30acquisition transaction as the board shall prescribe after
31consultation with the California Assessors’ Association. The
32information shall include, but not be limited to, a description of
33the property owned by the corporation, partnership, limited liability
34company, or other legal entity, the parties to the transaction, the
35date of the ownership interest acquisition, and a listing of the
36“original coowners” of the corporation, partnership, limited liability
37company, or other legal entity prior to the transaction. The change
38in ownership statement shall not include any question which is not
39germane to the assessment function. The statement shall contain
40a notice that is printed, with the title in at least 12-point boldface
P10   1type and the body in at least 8-point boldface type, in the following
2form:

34“Important Notice”
5

6“The law requires any corporation, partnership, limited liability
7company, or other legal entity owning real property in California
8subject to local property taxation and transferring shares or other
9ownership interest in such legal entity which constitute a change
10in ownership pursuant to subparagraph (B) of paragraph (1) of
11subdivision (c) or subdivision (d) of Section 64 of the Revenue
12and Taxation Code to complete and file a change in ownership
13statement with the State Board of Equalization at its office in
14Sacramento. The change in ownership statement must be filed
15within 90 days from the date that shares or other ownership
16interests representing either (1) cumulatively more than 50 percent
17of the total control or ownership interests in the entity are
18transferred by any of the original coowners in one or more
19transactions, or (2) when 90 percent or more of the direct or indirect
20ownership interests in a legal entity are sold or transferred in a
21single transaction, as defined in subparagraph (B) of paragraph
22(1) of subdivision (c) of Section 64. The law further requires that
23a change in ownership statement be completed and filed whenever
24a written request is made therefor by the State Board of
25Equalization, regardless of whether a change in ownership of the
26legal entity has occurred. The failure to file a change in ownership
27statement within 90 days from the earlier of the date of the change
28in ownership of the corporation, partnership, limited liability
29company, or other legal entity, or the date of a written request by
30the State Board of Equalization, results in a penalty of 15 percent
31of the taxes applicable to the new base year value reflecting the
32change in ownership of the real property owned by the corporation,
33partnership, limited liability company, or legal entity (or 15 percent
34of the current year’s taxes on that real property if no change in
35ownership occurred). This penalty will be added to the assessment
36roll and shall be collected like any other delinquent property taxes,
37and be subject to the same penalties for nonpayment.”

38(c) In the case of a corporation, the change in ownership
39statement shall be signed either by an officer of the corporation or
40an employee or agent who has been designated in writing by the
P11   1board of directors to sign such statements on behalf of the
2corporation. In the case of a partnership, limited liability company,
3or other legal entity, the statement shall be signed by an officer,
4partner, manager, or an employee or agent who has been designated
5in writing by the partnership, limited liability company, or legal
6entity.

7(d) No person or entity acting for or on behalf of the parties to
8a transfer of real property shall incur liability for the consequences
9of assistance rendered to the transferee in preparation of any change
10in ownership statement, and no action may be brought or
11maintained against any person or entity as a result of that
12assistance.

13Nothing in this section shall create a duty, either directly or by
14implication, that such assistance be rendered by any person or
15entity acting for or on behalf of parties to a transfer of real property.

16(e) The board or assessors may inspect any and all records and
17documents of a corporation, partnership, limited liability company,
18or legal entity to ascertain whether a change in ownership as
19defined in subparagraph (B) of paragraph (1) of subdivision (c) or
20subdivision (d) of Section 64 has occurred. The corporation,
21partnership, limited liability company, or legal entity shall upon
22request, make those documents available to the board during
23normal business hours.

24

SEC. 4.  

Section 480.9 is added to the Revenue and Taxation
25Code
, to read:

26

480.9.  

The board shall notify assessors if a change in control
27or a change in ownership described in Section 64 has occurred.

28

SEC. 5.  

Section 482 of the Revenue and Taxation Code is
29amended to read:

30

482.  

(a) (1) If a person or legal entity required to file a
31statement described in Section 480 fails to do so within 90 days
32from the date a written request is mailed by the assessor, a penalty
33of either: (A) one hundred dollars ($100), or (B) 10 percent of the
34taxes applicable to the new base year value reflecting the change
35in ownership of the real property or manufactured home, whichever
36is greater, but not to exceed five thousand dollars ($5,000) if the
37property is eligible for the homeowners’ exemption or twenty
38thousand dollars ($20,000) if the property is not eligible for the
39homeowners’ exemption if the failure to file was not willful, shall,
40except as otherwise provided in this section, be added to the
P12   1assessment made on the roll. The penalty shall apply for failure to
2file a complete change in ownership statement notwithstanding
3the fact that the assessor determines that no change in ownership
4has occurred as defined in Chapter 2 (commencing with Section
560) of Part 0.5. The penalty may also be applied if after a request
6the transferee files an incomplete statement and does not supply
7the missing information upon a second request.

8(2) The assessor shall mail the written request specified in
9paragraph (1) to the mailing address of the transferee as provided
10by subdivision (f).

11(b) If a person or legal entity required to file a statement
12described in Section 480.1 or 480.2 fails to do so within 90 days
13from the earlier of (1) the date of the change in control or the
14change in ownership of the corporation, partnership, limited
15liability company, or other legal entity, or (2) the date of a written
16request by the State Board of Equalization, a penalty of 15 percent
17of the taxes applicable to the new base year value reflecting the
18change in control or change in ownership of the real property
19owned by the corporation, partnership, or legal entity, or 15 percent
20of the current year’s taxes on that property if no change in control
21or change in ownership occurred, shall be added by the county
22assessor to the assessment made on the roll. The penalty shall apply
23for failure to file a complete statement with the board following a
24transfer of legal entity ownership interests notwithstanding the
25fact that the board determines that no change in control or change
26in ownership has occurred as defined in subdivision (c) or (d) of
27Section 64. The penalty may also be applied if after a request the
28person or legal entity files an incomplete statement and does not
29supply the missing information upon that second request to
30complete the statement. That penalty shall be in lieu of the penalty
31provisions of subdivision (a).

32(c) The penalty for failure to file a timely statement pursuant to
33Sections 480, 480.1, and 480.2 for any one transfer may be imposed
34only one time, even though the assessor may initiate a request as
35often as he or she deems necessary.

36(d) The penalty shall be added to the roll in the same manner
37as a special assessment and treated, collected, and subject to the
38same penalties for the delinquency as all other taxes on the roll in
39which it is entered.

P13   1(1) When the transfer to be reported under this section is of a
2portion of a property or parcel appearing on the roll during the
3fiscal year in which the 90-day period expires, the current year’s
4taxes shall be prorated so the penalty will be computed on the
5proportion of property which has transferred.

6(2) Any penalty added to the roll pursuant to this section
7between January 1 and June 30 may be entered either on the
8unsecured roll or the roll being prepared. After January 1, the
9penalty may be added to the current roll only with the approval of
10the tax collector.

11(3) If the property is transferred or conveyed to a bona fide
12purchaser for value or becomes subject to a lien of a bona fide
13encumbrancer for value after the transfer of ownership resulting
14in the imposition of the penalty and before the enrollment of the
15penalty, the penalty shall be entered on the unsecured roll in the
16name of the transferee whose failure to file the change in ownership
17 statement resulted in the imposition of the penalty.

18(e) When a penalty imposed pursuant to this section is entered
19on the unsecured roll, the tax collector may immediately file a
20certificate authorized by Section 2191.3.

21(f) Notice of any penalty added to either the secured or
22unsecured roll pursuant to this section, which shall identify the
23parcel or parcels for which the penalty is assessed, and the written
24request to file a statement specified in subdivision (a), which shall
25identify the real property or manufactured home for which the
26statement is required to be filed, shall be mailed by the assessor
27to the transferee at his or her address contained in any recorded
28instrument or document evidencing a transfer of an interest in real
29property or manufactured home or the address specified for mailing
30tax information contained in the preliminary change in ownership
31report. If the transferee has subsequently notified the assessor of
32a change in address for mailing tax information, the assessor shall
33mail the notice of any penalty, or the written request to file a
34statement specified in subdivision (a), to this address. If there is
35no address specified for mailing tax information on either the
36recorded instrument, the document evidencing a transfer of an
37interest in real property or manufactured home, or on the filed
38preliminary change in ownership report, and the transferee has not
39provided an address for purposes of mailing tax information, the
40assessor shall mail the notice of any penalty, or the written request
P14   1to file a statement specified in subdivision (a), to the transferee at
2any address reasonably known to the assessor.

3

SEC. 6.  

Section 486 is added to the Revenue and Taxation
4Code
, to read:

5

486.  

(a) The board shall report to the Legislature, no later than
6January 1, 2021, regarding the implementation of subparagraph
7(B) of paragraph (1) of subdivision (c) of Section 64, including,
8but not limited to, thebegin delete economicend deletebegin insert revenueend insert impact and frequency of
9reassessments of real property owned by legal entities.

begin insert

10(b) The Legislative Analyst’s Office shall report to the
11Legislature no later than January 1, 2021, regarding the economic
12impact of this bill.

end insert
begin delete

16 13(b)

end delete

14begin insert(c)end insert (1) begin deleteA report end deletebegin insertReports end insertsubmitted pursuant tobegin delete subdivision (a)end delete
15begin insert subdivisions (a) and (b)end insert shall be submitted in compliance with
16Section 9795 of the Government Code.

17(2) Pursuant to Section 10231.5 of the Government Code, this
18section is repealed on January 1, 2025.

19

SEC. 7.  

No reimbursement is required by this act pursuant to
20Section 6 of Article XIII B of the California Constitution for certain
21costs that may be incurred by a local agency or school district
22because, in that regard, this act creates a new crime or infraction,
23eliminates a crime or infraction, or changes the penalty for a crime
24or infraction, within the meaning of Section 17556 of the
25Government Code, or changes the definition of a crime within the
26meaning of Section 6 of Article XIII B of the California
27Constitution.

28However, if the Commission on State Mandates determines that
29this act contains other costs mandated by the state, reimbursement
30to local agencies and school districts for those costs shall be made
31pursuant to Part 7 (commencing with Section 17500) of Division
324 of Title 2 of the Government Code.

33

SEC. 8.  

This act is an urgency statute necessary for the
34immediate preservation of the public peace, health, or safety within
35the meaning of Article IV of the Constitution and shall go into
36immediate effect. The facts constituting the necessity are:

37In order to close a loophole to provide fair and equitable tax
38treatment for all individuals in this state, as all property holders
P15   1should be treated equally with regards to the imposition of property
2taxes, it is necessary that this act take effect immediately.



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