AGREEMENT REACHED ON “CHANGE OF OWNERSHIP” BILL

This week a potentially historic agreement was reached in the Assembly Revenue and Taxation Committee between some major figures in the business community and the main group that has been seeking to re-work the “Change of Ownership,” rules under Proposition 13 was announced, during a hearing of AB 2372 (Ammiano; D-San Francisco), a bill we have been opposing.

 Over the years, some complicated property purchase deals have given the appearance of an attempt to skirt Prop. 13’s change of ownership rules, whether they were doing that or not.  These “examples” have then become cause celebre and used as the main weapon to galvanize anti-Prop. 13 groups to undermine the law as a whole.  This agreement is meant to update some of the laws implementing statutes to address that appearance of “gaming” the system.

 Currently, a property is reassessed when it is sold and/or changes ownership. However, if none of the purchasers acquires more than a 50% interest reassessment may not necessarily be triggered.   AB 2372 will be amended to clarify that as long as 90% of a property is sold, a reassessment would be triggered, regardless of whether any individual buys more than 50% of the property.  Safeguards are being negotiated now to clarify that the change of ownership clarification does not apply to normal turnover of stock for publicly traded companies.

 As an organization, we have always staunchly defended Proposition 13 and will continue to do so.  However, part of an effective defense of the law recognizes that some of the original implementation language may need to be updated to assure the goals of Prop. 13 are being met.  We believe this is one of those cases.

 Click here for a press release from the author and from the chair of Assembly Revenue and Taxation Committee.

© 2007-2012 Building Owners and Managers Association of California (BOMA Cal)