BILL ANALYSIS
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|SENATE RULES COMMITTEE | SB 816|
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UNFINISHED BUSINESS
Bill No: SB 816
Author: Ducheny (D)
Amended: 8/31/09
Vote: 21
SENATE REVENUE & TAXATION COMMITTEE : 7-1, 4/22/09
AYES: Wolk, Alquist, Ashburn, Florez, Padilla, Runner,
Wiggins
NOES: Walters
SENATE APPROPRIATIONS COMMITTEE : Senate Rule 28.8
SENATE FLOOR : 32-2, 5/18/09
AYES: Alquist, Ashburn, Benoit, Calderon, Cogdill, Corbett,
Correa, Cox, Denham, DeSaulnier, Ducheny, Dutton,
Hancock, Harman, Huff, Kehoe, Leno, Liu, Lowenthal,
Maldonado, Negrete McLeod, Padilla, Pavley, Runner,
Simitian, Steinberg, Strickland, Wiggins, Wolk, Wright,
Wyland, Yee
NOES: Aanestad, Walters
NO VOTE RECORDED: Cedillo, Florez, Hollingsworth, Oropeza,
Romero
ASSEMBLY FLOOR : 49-27, 9/9/09 - See last page for vote
SUBJECT : Property taxation
SOURCE : California Assessors Association
DIGEST : This bill makes changes in the Documentary
CONTINUED
SB 816
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Transfer Tax law relative to: (1) city ordinances, (2)
assessor records, and (3) change of ownership statements.
Assembly Amendments made a clarifying change.
ANALYSIS : Existing law (California Constitution, Article
XIIIA, Section 4) prohibits transaction taxes or sales
taxes on transfers of real property; however, the Revenue
and Taxation Code authorizes counties to approve an
ordinance to impose a documentary transfer tax (DTT), which
applies to deeds of transfer of realty within that
jurisdiction and is based on the value of the transfer. In
counties, the rate is fifty-five cents ($0.55) for each
five hundred dollars ($500) of value. All of California's
58 counties apply the tax, which is modeled after the
repealed Federal Documentary Stamp Tax.
Existing law also allows cities to enact ordinances to
impose a DTT:
1.Noncharter cities within a County that impose a DTT may
apply its tax at half of the rate of the county and
applies as a credit against the county rate.
2.Charter cities may impose a DTT at a higher rate under
the municipal affairs doctrine in the California
Constitution (Article XI, Section 5). If they do so at a
higher rate than the non-charter rate, then the city DTT
does not serve as a credit against the county tax.
Existing law provides several exemptions to the tax,
including when any public agency acquires land, land
acquired as a result of a plan of reorganization or
adjustment such as bankruptcy, and certain transfers in
lieu of foreclosure, among others.
This bill allows DTT ordinances to include an
administrative appeal process to resolve disputes. The
measure additionally states that the when this
administrative process or a court of law fixes the value of
the property for purposes of applying the DTT, that
determination does not bind the value for property tax
purposes.
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Existing law provides that any information and records in
the Assessor's office are not public documents and shall
not be open to public inspection, unless specifically
exempted by law. Exemptions include information for law
enforcement agencies, county grand jury, or the Board of
Supervisors.
This bill requires the Assessor to disclose information,
furnish abstracts, and permit access to all records to the
County Recorder when conducting an investigation to
determine whether the documentary transfer tax is imposed.
Existing law requires the person acquiring ownership or
control of a corporation, partnership, limited liability
company, or other legal entity to submit a change in
ownership statement to the Board of Equalization (BOE),
signed under penalty of perjury, listing all the counties
in which the firm operates. If the person fails to file
the statement within 45 days of a written request from the
BOE, a penalty applies of 10 percent of the taxes
applicable to the new base year reflecting the change in
ownership or control. However, the penalty is extinguished
if the person files a change in ownership statement within
60 days of BOE notification of the penalty.
This bill provides that the penalty applies if the person
acquiring the corporation, partnership, limited liability
company, or other legal entity does not file the change of
ownership statement within the earlier of 45 days from the
BOE request or 45 days from the date in change of control
or ownership. The bill changes two sections of law, the
first which applies to changes in control of a firm, the
second which applies to changes in ownership. This bill
also deletes the provision requiring the penalty to be
extinguished if the person files the statement within 60
days of notification of the penalty.
Existing law also authorizes BOE to recommend to the county
board of supervisors that this penalty be abated, if the
person or legal entity establishes to the satisfaction of
BOE that the failure to file the change in ownership
statement within 45 days was due to reasonable cause and
not due to willful neglect and the person or legal entity
has filed the change in ownership statement and an
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application for abatement of the penalty with BOE, as
provided.
This bill authorizes the county board of supervisors to
order that this penalty be abated, if the person or legal
entity establishes to the satisfaction of the county board
of supervisors that the failure to file the change in
ownership statement within 45 days was due to reasonable
cause and not due to willful neglect and the person or
legal entity has filed the change in ownership statement
with BOE and an application for abatement of the penalty
with the county board of supervisors, as provided.
According to the author's office, "SB 816 requires that the
existing 10 percent penalty be applied on taxes due for the
year when a new business owner fails to file a change in
ownership statement with the BOE within 45 days of a change
of ownership or control. Under current law, the penalty is
only applied after a written request for filing is sent
from the BOE. This has resulted in multi-year delays in
reassessments of business properties and losses of hundreds
of millions in taxes to State and Local Governments."
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: Yes
SUPPORT : (Verified 9/9/09)
California Assessors' Association (source)
Building Owners and Managers Association International
California Business Properties Association
California Chamber of Commerce
California Taxpayers Association
Commercial Real Estate Development Association
International Council of Shopping Centers
League of Women Voters
Los Angeles County
ASSEMBLY FLOOR :
AYES: Ammiano, Arambula, Beall, Block, Blumenfield,
Brownley, Buchanan, Caballero, Charles Calderon, Carter,
Chesbro, Coto, Davis, De La Torre, De Leon, Eng, Evans,
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Feuer, Fong, Fuentes, Furutani, Galgiani, Hall, Hayashi,
Hernandez, Hill, Huber, Huffman, Jones, Krekorian, Lieu,
Bonnie Lowenthal, Ma, Mendoza, Monning, Nava, John A.
Perez, V. Manuel Perez, Portantino, Ruskin, Saldana,
Skinner, Solorio, Swanson, Torlakson, Torres, Torrico,
Yamada, Bass
NOES: Adams, Anderson, Bill Berryhill, Tom Berryhill,
Conway, Cook, DeVore, Duvall, Emmerson, Fletcher, Fuller,
Gaines, Garrick, Gilmore, Hagman, Harkey, Jeffries,
Knight, Logue, Miller, Niello, Nielsen, Silva, Smyth,
Audra Strickland, Tran, Villines
NO VOTE RECORDED: Blakeslee, Nestande, Salas, Vacancy
DLW:nl 9/10/09 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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