|L to R: Asm. Ammiano; Asm. Bocanegra
Over the years, a few complex property purchase deals have given the appearance of an attempt to avert the Proposition 13 change of ownership rules. The transactions have been highlighted and used to commove the reform proponents of the property tax law. This current agreement between stakeholders is meant to update some of the laws implementing statutes to address this viewpoint.
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 by your BOMA California advocates in Sacramento now to clarify that the change of ownership amendments do not apply to normal turnover of stock for publicly traded companies.
As our organizations have done in the past, BOMA San Francisco and BOMA California will continue to defend Proposition 13 - an initiative that protects both residential and commercial properties. However, part of an effective defense of the property tax law is to recognize that the intent of the original language may need to be updated to assure the voter approved goals of the initiative are being met. BOMA believes this agreement does just that.
Split Roll Measures Still Loom
For 2014, various members of the California State Legislature continue to pursue public policies that would undermine the intent of the property tax protections approved by voters under Proposition 13. Indeed, there are upwards of nine California Constitutional Amendments seeking to lower voter thresholds to amend the initiative's tax protection on properties from 2/3rds (66.66%) to 55%.
Rest assured that your fellow BOMA California members are working hard to protect the industry's interest. Stay tuned for updates in future blog posts.