BILL NUMBER: AB 1428	CHAPTERED  07/07/99

	CHAPTER   75
	FILED WITH SECRETARY OF STATE   JULY 7, 1999
	APPROVED BY GOVERNOR   JULY 7, 1999
	PASSED THE SENATE   JUNE 24, 1999
	PASSED THE ASSEMBLY   MAY 20, 1999
	AMENDED IN ASSEMBLY   MAY 3, 1999
	AMENDED IN ASSEMBLY   APRIL 22, 1999

INTRODUCED BY   Assembly Member Kaloogian

                        FEBRUARY 26, 1999

   An act to amend Section 11925 of the Revenue and Taxation Code,
relating to taxation.


	LEGISLATIVE COUNSEL'S DIGEST


   AB 1428, Kaloogian.  Taxation:  documentary transfer tax.
   Existing law authorizes counties and cities and counties to impose
a documentary transfer tax at a specified rate upon deeds,
instruments, or other writings by which specified property is
transferred.  Existing law exempts from the imposition of that tax,
for any realty held by a partnership, the transfer of an interest in
a partnership under specified conditions.
   This bill would additionally make that exemption applicable to an
entity treated as a partnership for federal income tax purposes.
   This bill would also preclude the imposition of that tax by reason
of any transfer between an individual or individuals and a legal
entity or between legal entities that results solely in a change in
the method of holding title to the realty and in which proportional
ownership interests in the realty, whether represented by stock,
membership interest, partnership interest, cotenancy interest, or
otherwise, directly or indirectly, remain the same immediately after
the transfer.


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


  SECTION 1.  Section 11925 of the Revenue and Taxation Code is
amended to read:
   11925.  (a) In the case of any realty held by a partnership or
other entity treated as a partnership for federal income tax
purposes, no levy shall be imposed pursuant to this part by reason of
any transfer of an interest in the partnership or other entity or
otherwise, if both of the following occur:
   (1) The partnership or other entity treated as a partnership is
considered a continuing partnership within the meaning of Section 708
of the Internal Revenue Code of 1986.
   (2) The continuing partnership or other entity treated as a
partnership continues to hold the realty concerned.
   (b) If there is a termination of any partnership or other entity
treated as a partnership for federal income tax purposes, within the
meaning of Section 708 of the Internal Revenue Code of 1986, for
purposes of this part, the partnership or other entity shall be
treated as having executed an instrument whereby there was conveyed,
for fair market value (exclusive of the value of any lien or
encumbrance remaining thereon), all realty held by the partnership or
other entity at the time of the termination.
   (c) Not more than one tax shall be imposed pursuant to this part
by a county, city and county or city by reason of a termination
described in subdivision (b), and any transfer pursuant thereto, with
respect to the realty held by a partnership or other entity treated
as a partnership at the time of the termination.
   (d) No levy shall be imposed pursuant to this part by reason of
any transfer between an individual or individuals and a legal entity
or between legal entities that results solely in a change in the
method of holding title to the realty and in which proportional
ownership interests in the realty, whether represented by stock,
membership interest, partnership interest, cotenancy interest, or
otherwise, directly or indirectly, remain the same immediately after
the transfer.