Change of Ownership Reporting Requirement & Penalty Bill Resurfaces

By Loretta Macktal, Executive Assistant to the Vice President, Government Relations

Capitol Update, Aug. 20, 2004 Share this on FacebookTweet thisEmail this to a friend

SB 17 (Martha Escutia, D-Whittier) imposes new reporting requirements for publicly traded companies that undergo a change of ownership and imposes new and substantial penalties for filing violations. Due to successful lobbying efforts by opponents, the bill has been on the Assembly Floor "inactive file" since last September.

The author has long been an advocate of a "split roll" property tax system. Her bill targets the change of ownership of publicly traded companies. Sponsors claim the intent of the bill is just to tighten reporting requirements in order to capture entities that fail to report change of ownership. But in order to accomplish this, the bill would require those companies to provide a list of shareholders and partners, upon request of the county assessors or Board of Equalization, as part of the new reporting requirements. If one fails to submit – or even has an "incomplete" submission – penalties will be assessed equivalent to 10% of the taxes on a given property.

The bill may be a first step towards a system that would declare a change of ownership whenever the cumulative stock transfers exceed 50 percent of the outstanding shares.

The author, who is openly seeking the Senate leadership position being vacated by Senator John Burton (D-San Francisco), has taken the bill off of the inactive file and reached out to CMTA and others to make amendments that would remove our opposition to the bill. As of Friday, we have been unable to come to an agreement with the Senator’s office and we remain opposed to SB 17.
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