Split roll legislation redux

By CMTA Staff

Capitol Update, Feb. 8, 2013 Share this on FacebookTweet thisEmail this to a friend

Once again, Assemblyman Tom Ammiano (D-San Francisco) has introduced legislation targeting provisions of Proposition 13 (1978) and calling for a split roll tax system. According to Ammiano, the current system provides a loophole for commercial properties to avoid triggering a value reassessment when a building/property is not owned 100 percent by one individual or business. As readers may recall, Prop 13 mandates all property value reassessments, regardless of commercial or residential status, only take place after a building changes ownership or undergoes major construction. Further, it caps state property taxes at one percent of property value and limits annual property value increases to two percent.

Under the proposed split roll system of AB 188, property value reassessments would be triggered when 100 percent of property ownership is transferred or sold, regardless of whether or not the property is shared by several owners or companies.  Currently, when commercial property is sold to an individual owner a reassessment is triggered; however, when a property is sold to several owners, a reassessment is not conducted since the property’s ownership interest was not sold to one owner in its entirety.  The bill also seeks to increase the penalty rate levied for failing to file a change-in-ownership statement from ten to twenty percent and requires the State Board of Equalization be notified by all parties involved in a property sale or transaction.

Similar legislation has been introduced in the past, but has failed to pass the Legislature. Ammiano is hoping that with the new Democratic super majority he will be able to pass AB 188, despite prior legislation receiving only partial support from Democrats.  Given the controversial nature of Ammiano’s proposal, not to mention its significant impact on California businesses, the bill is sure to be hotly contested during this year’s session.

To see the text of the bill, see http://www.leginfo.ca.gov/pub/13-14/bill/asm/ab_0151-0200/ab_188_bill_20130128_introduced.pdf

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