Assembly Committee Considers Proposal to Ensure Compliance with Proposition 13

 

The May 16th CalChamber Alert Newsletter reported that the cloud of uncertainty over property tax assessments may lift soon, as an Assembly committee heard a proposal to clarify what constitutes a "change of ownership" under Proposition 13 last week. Late amendments to AB 2372 (Ammiano; D-San Francisco), presented to the Assembly Revenue and Taxation Committee, would better define when a sale of a property to multiple owners would constitute an ownership change, which would then trigger reassessment of the property according to the terms of the landmark 1978 initiative.

Jennifer Barrera, policy advocate for the California Chamber of Commerce, told the committee that the CalChamber would add its support to the measure, once the amendments were officially added to the bill.

"When real property truly has a change of ownership, it should be reassessed in accordance with Proposition 13. These amendments will bring clarity and certainty to commercial real estate transactions and ensure compliance with Proposition 13," said Allan Zaremberg, CalChamber president and CEO.

Assemblyman Ammiano had unsuccessfully carried earlier legislation to mandate reassessment under a broader set of conditions, including when stock of publicly traded corporations turned over in the regular course of market activity.

The new amendments are narrower, and target actual abusive behaviors when property owners transfer fractions of ownership to various parties, which eventually add up to nearly the entire ownership changing hands.

It was these abuses that Assemblyman Ammiano targeted with the amendments. As Rex Hime, president of the California Business Properties Association, told the committee, "A sale of the property is a sale of the property."

AB 2372 was placed on the committee’s suspense file, an interim step before the committee votes on the bill.

Also due to be considered by the committee is the CalChamber-opposed "job killer" creating a split roll parcel tax at the local level.

SB 1021 (Wolk; D-Davis) authorizes school districts to impose a higher parcel tax on commercial property than residential property.

SB 1021 seeks to redefine the term "special taxes that apply uniformly" to mean special taxes that may be applied discriminatorily and unfairly.

There is nothing in SB 1021 that would prevent the school district from imposing both a parcel tax based upon use as well as a parcel tax based upon square footage, thereby allowing a district to impose layers of taxes against commercial versus residential property.

SB 1021 was assigned to Assembly Revenue and Taxation this week. No hearing date has been set.