Amended in Assembly May 19, 2014

Amended in Assembly April 1, 2014

California Legislature—2013–14 Regular Session

Assembly Bill No. 2372

Introduced by Assembly begin delete Member end delete begin insert Members end insert Ammiano begin insert and Bocanegra end insert

February 21, 2014

An act to amend Sections 64, 480.1, 480.2, and 482 of, and to add Sections 480.9, 486, 486.5, and 488 to, the Revenue and Taxation Code, relating to taxation, to take effect immediately, tax levy.

LEGISLATIVE COUNSEL’S DIGEST

AB 2372, as amended, 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. begin delete Existing end delete begin insert Existing property tax law provides that any corporate reorganization, where all of the corporations involved are members of an affiliated group, that qualifies as a reorganization under a specified provision of the Internal Revenue Code and that is accepted as a nontaxable event by similar California end insert begin insert laws; or any transfer of real property among members of an affiliated group, or any reorganization of farm credit institutions, as specified, is not end insert begin insert a change of ownership. Existing property tax law defines “affiliated group” to mean one or more chains of corporations connected through stock ownership with a common parent corporation if certain conditions are met, including, among others, that the common parent corporation owns, directly, 100% of the voting stock of at least one of the other corporations. end insert

begin insert

This bill would lower the percentage of voting stock of at least one of the other corporations required to be directly owned by the common parent corporation from 100% to 90%.

end insert

begin insert Existing end insert 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 if a legal entity or other person obtains a controlling or majority ownership interest in the legal entity. Existing law also specifies other circumstances in which certain transfers of ownership interests in legal entities result in a change in ownership of the real property owned by those legal entities. begin insert 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 of ownership under the circumstances described above has occurred. end insert

This bill would instead specify that if begin delete 100% end delete begin insert 90% or more end insert of the ownership interests in a begin insert nonaffiliated end insert legal entity begin delete , as defined, end delete are sold or transferred in a single transaction, as begin delete specified end delete begin insert defined end insert , 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 acquires more than 50% of the ownership interests. begin insert This bill would require the person or legal entity acquiring ownership of the corporation, partnership, limited liability company, or other legal entity as so described to answer the question included on returns by the Franchise Tax Board. end insert The bill would require the State Board of Equalization to notify assessors if a change in ownership as so described occurs.

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 begin insert or end insert 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.

begin insert This bill would eliminate the requirement that a change in ownership statement be filed upon a change in control of a legal entity that owns an interest in real property in this state. end insert This bill would require a person or legal entity acquiring ownership interests in a legal entity, if begin delete 100% end delete begin insert 90% or more end insert 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 begin delete 20% end delete begin insert 15% end insert .

This bill would also require a person or legal entity that acquires the ownership interest of a legal entity to report the change in ownership interests to the State Board of Equalization if any change in the ownership interests in a legal entity holding an interest in real property in this state occurs, as provided. This bill would require a legal entity to report subsequent changes in the ownership interests of the legal entity to the county assessor if a specified transfer between an individual or individuals and a legal entity or between legal entities occurs, as provided.

This bill would also require a deed to be recorded with the county recorder by the owner of the real property, even if the owner of the real property does not change, if a change of an ownership interest in a legal entity holding an interest in real property occurs.

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 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.

This bill would take effect immediately as a tax levy.

Vote: ²⁄₃. Appropriation: no. Fiscal committee: yes. State-mandated local program: yes.

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

SECTION 1.  

(a) The Legislature finds and declares all of the
following:

(1) The system for determining a change in ownership for the
purpose of assessment of commercial property is complex and
difficult to administer.

(2) Property begin delete owners use end delete begin insert ownership may include end insert complex legal
maneuvers and methods of dividing begin delete up, or obscuring, ownership
patterns, in order to avoid reassessment end delete begin insert up ownership end insert when
changes of ownership actually occur.

(3) There are begin delete many end delete circumstances in which changes of
ownership have legally taken place that begin delete are often end delete begin insert may end insert not begin insert be end insert known
to the assessor because they are deliberately obscured, for example,
if the property is kept in the name of the old property owner even
when a company is purchased.

(4) 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.

(5) Transactions occur that should be identified as changes of
ownership, for example, a begin delete 100-percent end delete begin insert 90 percent or more end insert purchase
of a company, that begin delete avoid reassessment end delete begin insert are not reassessed end insert because
of the begin delete ability to divide end delete begin insert division of end insert ownership shares.

begin delete

(6) 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.

(7) Changes in ownership may not trigger reassessment because
of leasehold interests that are not transparent to the assessor.

end delete

(b) Therefore, it is the intent of the Legislature 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.

(c) It is further the intent of the Legislature that changes in
ownership in which begin delete 100 end delete begin insert 90 end insert percent begin insert or more end insert of the ownership of
a business, whether through mergers, private equity buyouts,
transfer of ownership from one financial institution to another,
transfers of shares of limited liability companies or trusts, transfers
of partnership shares, or other changes by which begin delete 100 end delete begin insert 90 end insert percent
begin insert or more end insert is transferred shall constitute a change of ownership
subject to reassessment.

SEC. 2.  

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

64.  

(a) Except as provided in subdivision (i) of Section 61 and
subdivisions (c) and (d), the purchase or transfer of ownership
interests in legal entities, such as corporate stock or partnership or
limited liability company interests, does not constitute a transfer
of the real property of the legal entity. This subdivision applies 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, begin delete 100 end delete begin insert 90 end insert
percent begin insert or more end insert of the voting stock, exclusive of any shares owned
by directors, of at least one of the other corporations.

(c) (1) (A) 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.

(B) (i) When begin delete 100 end delete begin insert 90 end insert percent begin insert or more end insert of the ownership interests
in a begin insert nonaffiliated end insert legal entity are sold or transferred in a single
transaction to a begin insert nonaffiliated end insert legal entity or person, whether by
merger, acquisition, private equity buyout, transfer of partnership
shares, or any other means by which a begin insert nonaffiliated end insert legal entity
or person acquires the ownership interests of another legal entity,
including the subsidiaries or affiliates of the legal entity and the
property owned by those subsidiaries or affiliates, the purchase or
transfer of the ownership interests is a change of ownership of the
real property owned by the legal entity, whether or not any one
legal entity or person that is a party to the transaction acquires
more than 50 percent of the ownership interests.

(ii) For purposes of this subparagraph:

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

begin insert

(II) “Original transaction” means a transaction that occurs on
or after the effective date of the act adding this subclause.

end insert begin delete

(II) 

end delete

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

begin delete

(III) 

end delete

begin insert (IV) end insert begin insert   end insert “Single transaction” means a transaction in which 100
percent of the ownership interests are sold or transferred in either
one calendar year or within a three-year period beginning on the
date of the original transaction when any percentage of ownership
interests are sold or transferred.

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 a
recognized stock exchange 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 of 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.

(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):

If 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.)

If the entity answers “yes” to (1) or (2) in the above question,
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

(2) Whenever there is a change in ownership pursuant to
subparagraph (B) of paragraph (1) of subdivision (c), the question
included on returns pursuant to this subdivision shall be answered
by the person or legal entity acquiring ownership of the
corporation, partnership, limited liability company, or other legal
entity.

end insert

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

SEC. 3.  

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

480.1.  

(a) Whenever there is begin delete a change in control or end delete a change
in ownership of any corporation, partnership, limited liability
company, or other legal entity, as defined in 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 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 begin delete the change in control
or end delete 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 as required pursuant to
subdivision (a), shall be declared to be true under penalty of perjury
and shall give such information relative to the ownership
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 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
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 begin delete the change in control or end delete the change
in ownership 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 or 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 begin delete the change in control or end delete a change in ownership 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 20 end delete begin insert 15 end insert percent of the taxes
applicable to the new base year value reflecting the change in
control or the change in ownership of the real property owned by
the corporation, partnership, limited liability company, or legal
entity (or begin delete 20 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). 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 or a change
in ownership as defined in subdivision (c) 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.

SEC. 4.  

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

480.2.  

(a) Whenever there is a change in ownership of any
corporation, partnership, limited liability company, or other legal
entity, as defined in subdivision (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 under penalty of perjury
and shall give that 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 that constitute a change in
ownership pursuant to subdivision (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 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 transactions. 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 State Board of Equalization, results in a penalty of
begin delete 20 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 20 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 subdivision (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.

SEC. 5.  

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

480.9.  

The board shall notify assessors if a change in ownership
described in subparagraph (B) of paragraph (1) of subdivision (c)
of Section 64 has occurred.

SEC. 6.  

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

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 begin delete the change in control or end delete 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 20 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 20 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
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.

SEC. 7.  

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

486.  

(a) Whenever there occurs a change in the ownership
interests, including a leasehold interest, of a legal entity holding
an interest in real property in this state, whether by merger,
acquisition, private equity buyout, transfer of partnership shares,
large stock transfer subject to the filing requirements of the United
States Securities and Exchange Commission, or any other means
by which a legal entity or person acquires an ownership interest
of another legal entity, the person or legal entity acquiring the
ownership interests shall report to the board the change in the
ownership interests, in the form and manner as specified by the
board, within 90 days of the date of the change in the ownership
interests.

(b) For purposes of this section, “legal entity” and “ownership
interests” have the same meaning as defined in Section 64.

SEC. 8.  

Section 486.5 is added to the Revenue and Taxation
Code, to read:

486.5.  

(a) Whenever there occurs a transfer between an
individual or individuals and a legal entity or between legal entities
as described in paragraph (2) of subdivision (a) of Section 62, the
legal entity shall report any subsequent changes in the ownership
interests of the legal entity to the county assessor, in the form and
manner as specified by the county assessor, within 90 days of the
date of the change in the ownership interests.

(b) For purposes of this section, “legal entity” and “ownership
interests” have the same meanings as defined in Section 64.

SEC. 9.  

Section 488 is added to the Revenue and Taxation
Code, to read:

488.  

(a) Whenever there occurs a change of an ownership
interest in a legal entity holding an interest in real property in this
state, a deed shall be recorded with the county recorder by the
owner of the real property, even if the owner of the real property
does not change.

(b) For purposes of this section, “legal entity” and “ownership
interest” have the same meanings as defined in Section 64.

SEC. 10.  

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.

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.

SEC. 11.  

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