BILL NUMBER: SB 507 AMENDED
BILL TEXT
AMENDED IN ASSEMBLY JULY 1, 2011
AMENDED IN SENATE MAY 11, 2011
AMENDED IN SENATE MAY 3, 2011
AMENDED IN SENATE MARCH 29, 2011
INTRODUCED BY Senator DeSaulnier
FEBRUARY 17, 2011
An act to amend Sections 480, 480.1, 480.2, 482, and 483 of the
Revenue and Taxation Code, relating to taxation.
LEGISLATIVE COUNSEL'S DIGEST
SB 507, as amended, DeSaulnier. Property taxation: change in
ownership statement.
Existing property tax law requires a transferee of real property
or a manufactured home that is locally assessed to file a change in
ownership statement no later than 45 days from the date of the change
in ownership with the county in which the property or manufactured
home is located, and authorizes the change in ownership statement to
be filed with the assessor through the United States mail. If a
county assessor makes a written request to a transferee to file a
change in ownership statement and the transferee fails to do so
within 45 days of that request, existing law imposes a penalty on the
transferee equal to the greater of either $100 or 10% of the
property taxes due on the property, but not to exceed $2,500 if the
failure was not willful.
This bill would require a change in ownership statement that is
filed with the assessor through the United States mail to be deemed
filed with the assessor on either the date of postmark affixed by the
United States Postal Service, or on the date certified by a bona
fide private courier service, on the envelope containing the
statement. This bill would remove increase
the $2,500 cap on the penalty for nonwillful failures to file a
change in ownership statement and would instead provide a
to $5,000 cap on the penalty
for a failure to file a change in ownership statement on
property that is eligible for the homeowners' property tax exemption
or a $20,000 cap if the
property is not eligible for the homeowners' exemption. This bill
would extend, from 45 days to 90 days, the time period for filing the
change in ownership statement when a change in ownership occurs or
if requested to do so by the assessor. This bill would also specify
to which addresses the assessor may mail this request or a notice of
a penalty. This bill would also require this request to identify the
real property or manufactured home for which the statement is
required to be filed, and would require the notice of penalty to
identify the parcel or parcels for which the penalty is assessed.
This bill would also make conforming changes to a related provision.
Existing law requires a corporation, partnership, limited
liability company, or other legal entity to file a change in
ownership statement within 45 days from the earlier of the date of
the change in control or the change in ownership, or the date of a
written request by the State Board of Equalization. Existing law
requires a penalty to be imposed if the person or legal entity
required to file a change in ownership statement fails to do so
within the 45-day period. Existing law authorizes the county board of
supervisors to order this penalty abated, if an assessee establishes
that the failure to file a change in ownership statement within the
45-day period was due to reasonable cause and not due to willful
neglect, and the assessee has filed the change in ownership statement
with either the assessor or the State Board of Equalization, as
applicable, and an application for abatement of the penalty with the
county board of supervisors, as provided.
This bill would extend, from 45 days to 90 days, the time period
for filing the change in ownership statement. This bill would
authorize the county board of equalization or assessment appeals
board, instead of the county board of supervisors, to order the
penalty abated, as provided, and would make related changes.
This bill would require the assessor to abate the penalty described
above, if a written request to file a change in ownership statement,
including a request to file a complete change in ownership statement,
is mailed by the State Board of Equalization to a person or legal
entity based on erroneous information provided by specified
persons and the person or legal entity notifies both the State
Board of Equalization and the county assessor of the error no later
than 60 days after the date on which the person or legal entity is
notified of the penalty. This bill would, if the county
board of supervisors has created an assessment appeals board,
authorize the assessment appeals board to order the penalty abated,
and would require an application for the abatement of the penalty to
be filed with the assessment appeals board.
By changing the manner in which county officials process property
tax penalties, 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, if the Commission on State Mandates
determines that the bill contains costs mandated by the state,
reimbursement for those costs shall be made pursuant to these
statutory provisions.
Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: yes.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 480 of the Revenue and Taxation Code is amended
to read:
480. (a) Whenever there occurs any change in ownership of real
property or of a manufactured home that is subject to local property
taxation and is assessed by the county assessor, the transferee shall
file a signed change in ownership statement in the county where the
real property or manufactured home is located, as provided for in
subdivision (c). In the case of a change in ownership where the
transferee is not locally assessed, no change in ownership statement
is required.
(b) The personal representative shall file a change in ownership
statement with the county recorder or assessor in each county in
which the decedent owned real property at the time of death that is
subject to probate proceedings. The statement shall be filed prior to
or at the time the inventory and appraisal is filed with the court
clerk. In all other cases in which an interest in real property is
transferred by reason of death, including a transfer through the
medium of a trust, the change in ownership statement or statements
shall be filed by the trustee (if the property was held in trust) or
the transferee with the county recorder or assessor in each county in
which the decedent owned an interest in real property within 150
days after the date of death.
(c) Except as provided in subdivision (d), the change in ownership
statement as required pursuant to subdivision (a) shall be declared
to be true under penalty of perjury and shall give that information
relative to the real property or manufactured home 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, the parties to the
transaction, the date of acquisition, the amount, if any, of the
consideration paid for the property, whether paid in money or
otherwise, and the terms of the transaction. The change in ownership
statement shall not include any question that is not germane to the
assessment function. The statement shall contain a notice informing
the transferee of the property tax relief available under Section
69.5. 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 transferee acquiring an interest in real
property or manufactured home subject to local property taxation, and
that is assessed by the county assessor, to file a change in
ownership statement with the county recorder or assessor. The change
in ownership statement must be filed at the time of recording or, if
the transfer is not recorded, within 90 days of the date of the
change in ownership, except that where the change in ownership has
occurred by reason of death the statement shall be filed within 150
days after the date of death or, if the estate is probated, shall be
filed at the time the inventory and appraisal is filed. The failure
to file a change in ownership statement within 90 days from the date
a written request is mailed by the assessor results in a penalty of
either: (1) one hundred dollars ($100), or (2) 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 that failure to file was not willful. 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."
(d) The change in ownership statement may be attached to or
accompany the deed or other document evidencing a change in ownership
filed for recording, in which case the notice, declaration under
penalty of perjury, and any information contained in the deed or
other transfer document otherwise required by subdivision (c) may be
omitted.
(e) If the document evidencing a change in ownership is recorded
in the county recorder's office, then the statement shall be filed
with the recorder at the time of recordation. However, the
recordation of the deed or other document evidencing a change in
ownership shall not be denied or delayed because of the failure to
file a change of ownership statement, or filing of an incomplete
statement, in accordance with this subdivision. If the document
evidencing a change in ownership is not recorded or is recorded
without the concurrent filing of a change in ownership statement,
then the statement shall be filed with the assessor no later than 90
days from the date the change in ownership occurs, except that where
the change in ownership has occurred by reason of death the statement
shall be filed within 150 days after the date of death or, if the
estate is probated, shall be filed at the time the inventory and
appraisal is filed.
(f) Whenever a change in ownership statement is filed with the
county recorder's office, the recorder shall transmit, as soon as
possible, the original statement or a true copy thereof to the
assessor along with a copy of every recorded document as required by
Section 255.7.
(g) (1) The change in ownership statement may be filed with the
assessor through the United States mail, properly addressed with the
postage prepaid.
(2) A change in ownership statement that is filed with the
assessor, as authorized by paragraph (1), shall be deemed filed on
either the date of the postmark affixed by the United States Postal
Service containing the statement or on the date certified by a bona
fide private courier service on the envelope containing the
statement.
(h) 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 those 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.
(i) 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 the assistance be rendered by any person or entity
acting for or on behalf of parties to a transfer of real property.
SEC. 2. Section 480.1 of the Revenue and Taxation Code is amended
to read:
480.1. (a) Whenever there is a change in control 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 control 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 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
control 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 control 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
control 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 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 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 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 10 percent of the taxes applicable to the new base year
value reflecting the change in control of the real property owned by
the corporation, partnership, limited liability company, or legal
entity (or 10 percent of the current year's taxes on that property if
no change in control 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 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. 3. 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 and under penalty of
perjury and shall give such 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 which 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 Board of Equalization, results in a penalty of 10 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 10 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. 4. 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) (1) 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 control 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 10 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 10 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).
(2) If a written request to file a change in ownership statement,
including a written request to file a complete change in ownership
statement, is mailed by the board to a person or legal entity as
specified in paragraph (1), and the assessor determines that the
written request was based on erroneous information in the possession
of the board provided by any person or entity, including, but not
limited to, the Franchise Tax Board, a county assessor, or board
staff, the assessor shall abate the penalty added by this subdivision
if the person or legal entity required to comply with the written
request notifies both the board and the county assessor responsible
for assessing the penalty of the error no later than 60 days after
the date on which the person or legal entity is notified of the
penalty.
(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. 5. Section 483 of the Revenue and Taxation Code is amended to
read:
483. (a) If the assessee establishes to the satisfaction of the
county board of supervisors equalization or
the assessment appeals board that the failure to file the
change in ownership statement within the time required by subdivision
(a) of Section 482 was due to reasonable cause and not due to
willful neglect, and has filed the statement with the assessor, the
county board of supervisors equalization or
the assessment appeals board may order the penalty abated,
provided the assessee has filed with the county board of
supervisors equalization or the assessment appeals
board a written application for abatement of the penalty no
later than 60 days after the date on which the assessee was notified
of the penalty.
If the penalty is abated it shall be canceled or refunded in the
same manner as an amount of tax erroneously charged or collected.
(b) The provisions of subdivision (a) shall not apply in any
county in which the board of supervisors adopts a resolution to that
effect. In that county the penalty provided for in subdivision (a) of
Section 482 shall be abated if the assessee files the change of
ownership statement with the assessor no later than 60 days after the
date on which the assessee was notified of the penalty.
If the penalty is abated it shall be canceled or refunded in the
same manner as an amount of tax erroneously charged or collected.
(c) (1) If a person or legal entity establishes to the
satisfaction of the county board of supervisors
equalization or the assessment appeals board that the
failure to file the change in ownership statement within the time
required by subdivision (b) of Section 482 was due to reasonable
cause and not due to willful neglect, and has filed the statement
with the State Board of Equalization, the county board of
supervisors equalization or the assessment appeals
board may order the penalty be abated, provided the person or
legal entity has filed with the county board of supervisors
equalization or the assessment appeals board a
written application for abatement of the penalty no later than 60
days after the date on which the person or legal entity was notified
of the penalty by the assessor.
(2) If a written request to file a change in ownership statement,
including a written request to file a complete change in ownership
statement, is mailed by the State Board of Equalization to a person
or legal entity as specified in subdivision (b) of Section 482, and
the assessor determines that the written request was based on
erroneous information in the possession of the board provided by any
person or entity, including, but not limited to, the Franchise Tax
Board, a county assessor, or board staff, the assessor shall abate
the penalty if the person or legal entity required to comply with the
written request notifies both the board and the county assessor
responsible for assessing the penalty of the error no later than 60
days after the date on which the person or legal entity is notified
of the penalty.
If the penalty is abated by the county board of supervisors, it
(3) If the penalty is
abated, it shall be canceled or refunded in the same manner as
an amount of tax erroneously charged or collected.
(2) For purposes of this subdivision, if the county board of
supervisors has created an assessment appeals board pursuant to
Section 1620, any reference to the term "county board of supervisors"
means the "assessment appeals board."
SEC. 6. If the Commission on State Mandates determines that this
act contains 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.