Bill Text: CA AB2372 | 2013-2014 | Regular Session | Amended

NOTE: There are more recent revisions of this legislation. Read Latest Draft

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Bill Title: Property taxation: change in ownership.

Spectrum: Partisan Bill (Democrat 2-0)

Status: (Engrossed - Dead) 2014-08-14 - In committee: Held under submission. [AB2372 Detail]

Download: California-2013-AB2372-Amended.html

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BILL NUMBER: AB 2372	AMENDED
	BILL TEXT

	AMENDED IN ASSEMBLY  MAY 28, 2014
	AMENDED IN ASSEMBLY  MAY 19, 2014
	AMENDED IN ASSEMBLY  APRIL 1, 2014

INTRODUCED BY   Assembly Members Ammiano and Bocanegra

                        FEBRUARY 21, 2014

   An act to amend Sections 64, 480.1, 480.2, and 482 of, 
and  to add  Sections 480.9, 486, 486.5, and 488
  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 provides
that any corporate reorganization, where all of the corporations
involved are members of an affiliated group, that qualifies as a
reorganization under a specified provision of the Internal Revenue
Code and that is accepted as a nontaxable event by similar California
laws; or any transfer of real property among members of an
affiliated group, or any reorganization of farm credit institutions,
as specified, is not a change of ownership. Existing property tax law
defines "affiliated group" to mean one or more chains of
corporations connected through stock ownership with a common parent
corporation if certain conditions are met, including, among others,
that the common parent corporation owns, directly, 100% of the voting
stock of at least one of the other corporations.  
   This bill would lower the percentage of voting stock of at least
one of the other corporations required to be directly owned by the
common parent corporation from 100% to 90%. 
    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.  Existing law
requires the Franchise Tax Board to include a question on returns for
partnerships, banks, and corporations to assist in the determination
of whether a change of ownership under the circumstances described
above has occurred. 
   This bill would instead specify that if 90% or more of the
ownership interests in a  nonaffiliated  legal
entity are sold or transferred in a single transaction, as defined,
the real property owned by that legal entity has changed ownership,
whether or not any one legal entity or person that is a party to the
transaction acquires more than 50% of the ownership interests.
 This bill would require the person or legal entity acquiring
ownership of the corporation, partnership, limited liability
company, or other legal entity as so described to answer the question
included on returns by the Franchise Tax Board. The bill would
require the State Board of Equalization to notify assessors if a
change in ownership as so described occurs.   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 eliminate the requirement that a change
in ownership statement be filed upon a change in control of a legal
entity that owns an interest in real property in this state. This
 bill would require a person or legal entity acquiring
ownership interests in a legal entity, if 90% or more of the
ownership interests in the legal entity are sold or transferred, as
described above, to file a change in ownership statement signed under
penalty of perjury with the State Board of Equalization. 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.  
   This bill would also require a person or legal entity that
acquires the ownership interest of a legal entity to report the
change in ownership interests to the State Board of Equalization if
any change in the ownership interests in a legal entity holding an
interest in real property in this state occurs, as provided. This
bill would require a legal entity to report subsequent changes in the
ownership interests of the legal entity to the county assessor if a
specified transfer between an individual or individuals and a legal
entity or between legal entities occurs, as provided. 

   This bill would also require a deed to be recorded with the county
recorder by the owner of the real property, even if the owner of the
real property does not change, if a change of an ownership interest
in a legal entity holding an interest in real property occurs.

   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,  90
  100  percent  or more  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) When 90 percent or more of the ownership interests in a
 nonaffiliated  legal entity are sold or transferred
in a single transaction to a  nonaffiliated  legal
entity or person, whether by merger, acquisition, private equity
buyout, transfer of partnership shares, or any other means by which a
 nonaffiliated  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.
   (ii) For purposes of this subparagraph: 
   (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.  
   (I) 
    (II)  "Legal entity" means a corporation, partnership,
limited liability company, or other legal entity. 
   (II) 
    (III)  "Original transaction" means a transaction that
occurs on or after  the effective date of the act adding this
subclause.   January 1, 2015.  
   (III) 
    (IV)  "Ownership interests" means corporate voting
stock, partnership capital and profits interests, limited liability
company membership interests, and other ownership interests in legal
entities. 
   (IV) 
    (V)     (ia)    "Single
transaction" means a transaction in which  100  
90  percent  or more  of the ownership interests are
 cumulatively  sold or transferred in either one calendar
year or within a  three-year   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.  
   (V) 
    (VI)  "Sold or transferred" 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
 a recognized stock exchange   an established
securities market  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.
   (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)  (1)    To assist in the
determination of whether a change of ownership has occurred under
 subdivisions   subdivision  (c) 
and   or  (d), the Franchise Tax Board shall
include a question in substantially the following form on returns for
partnerships, banks, and corporations (except tax-exempt
organizations):

   If the 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.)

   If the entity answers "yes" to (1) or (2) in the above question,
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.

   (2) Whenever there is a change in ownership pursuant to
subparagraph (B) of paragraph (1) of subdivision (c), the question
included on returns pursuant to this subdivision shall be answered by
the person or legal entity acquiring ownership of the corporation,
partnership, limited liability company, or other legal entity.

   (f) 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 by the person or legal entity
acquiring ownership of 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
control or  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 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 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. 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 the date of
 the   change in control or  a 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
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 
subparagraph (B) of paragraph (1) of subdivision (c) of 
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 c  
ontrol 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) Whenever there occurs a change in the ownership
interests, including a leasehold interest, of a legal
                           entity holding an interest in real
property in this state, whether by merger, acquisition, private
equity buyout, transfer of partnership shares, large stock transfer
subject to the filing requirements of the United States Securities
and Exchange Commission, or any other means by which a legal entity
or person acquires an ownership interest of another legal entity, the
person or legal entity acquiring the ownership interests shall
report to the board the change in the ownership interests, in the
form and manner as specified by the board, within 90 days of the date
of the change in the ownership interests.
   (b) For purposes of this section, "legal entity" and "ownership
interests" have the same meaning as defined in Section 64. 

  SEC. 8.    Section 486.5 is added to the Revenue
and Taxation Code, to read:
   486.5.  (a) Whenever there occurs a transfer between an individual
or individuals and a legal entity or between legal entities as
described in paragraph (2) of subdivision (a) of Section 62, the
legal entity shall report any subsequent changes in the ownership
interests of the legal entity to the county assessor, in the form and
manner as specified by the county assessor, within 90 days of the
date of the change in the ownership interests.
   (b) For purposes of this section, "legal entity" and "ownership
interests" have the same meanings as defined in Section 64. 

  SEC. 9.    Section 488 is added to the Revenue and
Taxation Code, to read:
   488.  (a) Whenever there occurs a change of an ownership interest
in a legal entity holding an interest in real property in this state,
a deed shall be recorded with the county recorder by the owner of
the real property, even if the owner of the real property does not
change.
   (b) For purposes of this section, "legal entity" and "ownership
interest" have the same meanings as defined in Section 64. 
   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 economic 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. 10.   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. 11.   SEC. 9.   This act provides
for a tax levy within the meaning of Article IV of the Constitution
and shall go into immediate effect.