Amended in Senate July 2, 2014

Amended in Assembly May 28, 2014

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 Members Ammiano and Bocanegra

February 21, 2014

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.

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.

Existing 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 corporation and income returns for partnerships, banks, and corporations to assist in the determination of whether a change in ownership as so described has occurred. end insert

This bill would begin delete instead end delete specify that if begin insert , on or after January 1, 2015, end insert 90% or more of the begin insert direct or indirect end insert ownership interests in a legal entity are begin delete sold or end delete begin insert cumulatively end insert transferred in begin delete a single transaction, as defined, the real property owned by that legal entity has changed ownership, end delete begin insert one or more transactions, the transfer of the ownership interest is a change in ownership of the real property owned by the legal entity, end insert whether or not any one legal entity or person begin delete that is a party to the transaction end delete acquires begin delete more than 50% end delete begin insert control end insert of the ownership interests. begin insert This bill would require the Franchise Tax Board to include an additional question on corporation and income returns for partnerships, banks, and corporations to assist in the determination of whether a change in ownership as so described has occurred. end insert This bill would require the State Board of Equalization to report to the Legislature, no later than January 1, 2020, 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.

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 begin delete require a person or legal entity acquiring ownership interests in a legal entity, if end delete begin insert also require, in the case of a change in ownership when end insert 90% or more of the ownership interests in the legal entity are begin delete sold or end delete begin insert cumulatively end insert transferred, as described above, begin insert the corporation, partnership, limited liability company, or other legal entity that underwent the change in ownership end insert to file a change in ownership statement signed under penalty of perjury with the State Board of Equalization begin insert , as specified end insert . This bill would increase the penalties for failure to file a change in ownership statement, as described above, from 10% to 15%.

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 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 ownership may include complex legal maneuvers
and methods of dividing up ownership when changes of ownership
actually occur.

(3) There are circumstances in which changes of ownership
have legally taken place that may not be 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 90 percent or more purchase of a
company, that are not reassessed because of the division of
ownership shares.

(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 90 percent or more 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 90 percent or more
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, 100 percent
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)  begin delete When end delete begin insert (I) end insert begin insert   end insert begin insert On or after January 1, 2015, whenever end insert 90
percent or more of the begin insert direct or indirect end insert ownership interests in a
legal entity are begin delete sold or end delete begin insert cumulatively end insert transferred in begin delete a single
transaction to a legal entity or person, whether by merger,
acquisition, private equity buyout, transfer of partnership shares,
or any other means by which a 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 end delete begin insert one or more transactions, the
transfer of the ownership interest is a change in ownership of the
real property owned by the legal entity, including the real property
owned by a legal entity under its control, whether or not any one
legal entity or person acquires control of the ownership interests end insert .

begin insert

(II) The date of reappraisal shall be the date of the transfer of
the ownership interest representing individually or cumulatively
90 percent of the ownership interest.

end insert

(ii) For purposes of this subparagraph:

begin insert

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

end insert begin delete

(I) “Established securities market” means an established
securities market as defined in Section 1.7704-1(b) of Title 26 of
the Code of Federal Regulations.

end delete

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

begin delete

(III) “Original transaction” means a transaction that occurs on
or after January 1, 2015.

end delete begin delete

(IV)

end delete

begin insert (III) 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

(V) (ia) “Single transaction” means a transaction in which 90
percent or more of the ownership interests are cumulatively sold
or transferred in either one calendar year or within a 36-month
period beginning on the date of the original transaction when any
percentage of ownership interests are sold or transferred.

(ib) For purposes of this subclause, whenever an ownership
interest is counted as having been sold or transferred in a single
transaction, that has resulted in a change of ownership, it shall not
be counted again in determining whether any other transaction
results in a change of ownership.

(VI) “Sold or transferred”

end delete

begin insert (IV) end insert begin insert   end insert begin insert “Transferred” end insert 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 begin insert , as defined in Section 1.7704-1(b) of Title 26 of
the Code of Federal Regulations, end insert 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.

begin insert

(V) Multiple transfers of the same ownership interest shall be
counted only once in determining whether cumulatively 90 percent
or more of the ownership interests have transferred.

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 subdivision (c) or (d), the Franchise
Tax Board shall include begin delete a question end delete begin insert questions end insert in substantially the
following form on returns for partnerships, banks, and corporations
(except tax-exempt organizations):

begin delete

If the

end delete

begin insert (A) end insert begin insert   end insert begin insert If the end insert 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 cumulatively 90
percent or more of the voting stock (or 90 percent or more of total
interest in both partnership or limited liability company capital
and partnership or limited liability company profits) of this
corporation (or partnership or limited liability company) been
transferred since January 1, 2015, during the year? (See
instructions.)

end insert begin delete

If the

end delete

begin insert (2) end insert begin insert   end insert begin insert If the end insert entity answers “yes” to begin delete (1) or (2) in the above question, end delete
begin insert any of the questions, end insert begin insert 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, legal entity ownership interests
owned by a legal entity shall be considered as being owned by or
transferred to its owners proportionately.

end insert begin insert

(g) A change in ownership of real property owned by a legal
entity under this section restarts the cumulating of transferred
ownership interests for purposes of determining whether another
change in ownership of that real property occurs under this section.

end insert begin delete

(f)

end delete

begin insert (h) end insert  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 a change in control or 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 begin delete by the person or legal entity
acquiring ownership of the corporation, partnership, limited
liability company, or other legal entity end delete with the board at its office
in begin delete Sacramento within 90 days from the date of the change in control
or the change in ownership of the corporation, partnership, limited
liability company, or other legal entity. end delete begin insert Sacramento. end insert The statement
shall list all counties in which the corporation, partnership, limited
liability company, or legal entity owns real property.

begin insert

(1) In the case of a change in control pursuant to subparagraph
(A) of paragraph (1) of subdivision (c) of Section 64, the statement
shall be filed by the person or legal entity acquiring ownership
control of the corporation, partnership, limited liability company,
or other legal entity. The statement shall be filed within 90 days
from the date of the change in control of the corporation,
partnership, limited liability company, or other legal entity.

end insert begin insert

(2) In the case of a change in ownership pursuant to
subparagraph (B) of paragraph (1) of subdivision (c), the statement
shall be filed by the corporation, partnership, limited liability
company, or other legal entity that underwent the change in
ownership. The statement shall be filed within 90 days from the
date that 90 percent or more of the ownership interests in this
entity cumulatively transferred.

end insert

(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 begin insert substantially end insert 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 the change in control or the change
in ownership of a corporation, partnership, limited liability
company, or other legal entity. begin insert In the case of a change in control
pursuant to subparagraph (A) of paragraph (1) of subdivision (c)
of Section 64 of the Revenue and Taxation Code, the statement
shall be filed by the person or legal entity acquiring ownership
control of the corporation, partnership, limited liability company,
or other legal entity. In the case of a change in ownership pursuant
to subparagraph (B) of paragraph (1) of subdivision (c) of Section
64 of the Revenue and Taxation Code, the statement shall be filed
by the corporation, partnership, limited liability company, or other
legal entity that underwent the change in ownership. 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 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 begin insert (1) end insert the date of the change in control or a change in
ownership of the corporation, partnership, limited liability
company, or other legal entity, or begin insert (2) end insert the date of a written request
by the State Board of Equalization, results in a penalty of 15
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 15 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
15 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 15 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 control
or a change in ownership described in 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 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 15 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 15 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) The board shall report to the Legislature, no later than
January 1, 2020, regarding the implementation of subparagraph
(B) of paragraph (1) of subdivision (c) of Section 64, including,
but not limited to, the begin delete economic end delete begin insert revenue end insert 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, 2024.

SEC. 8.  

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. 9.  

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