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Split Roll Property Tax


  • A Pricey Proposition by David M. Drucker as reported in the Los Angeles Daily News, June 26, 2005.

  • Californians to Stop Higher Taxes, a coalition of business and taxpayer organizations.

  • A Taxing Proposition for All Californian by Larry McCarthy, as published in the Sacramento Business Journal, June 17, 2005 and the Silicon Valley/San Jose Business Journal, June 27, 2005

  • County Assessors: Reassessment Split Roll Creates Nearly Impossible Situation as reported in Caltaxletter, June 10, 2005.

  • Senate Rev&Tax: Escutia Change-in-Ownership Bill Advances as reported in Caltaxletter, April 29, 2005.

  • Business Leaders in Fresno Blast Property Tax Initiative. Part of a statewide coalition (Californians to Stop Higher Taxes), a group of Fresno-area business leaders on April 21, 2005 hammered an initiative that would reassess commercial and industrial property annually. According to the Fresno Bee, the $2.8 billion-a-year tax increase ¡°is going to result in skyrocketing taxes for business owners,¡± said Fran Blackney of the Clovis Chamber of Commerce. Lorraine Salazar, co-owner of Sal¡¯s Mexican Restaurant in Fresno and Selma, said, ¡°Passage of this measure would have a negative impact on my employees and customers as I¡¯m forced to make tough decisions to deal with these tax increases. Proponents may be targeting small business, but all Californians will pay.¡± The so-called ¡°Tax Fairness Act¡± is sponsored by the California Teachers Association and the California Correctional Peace Officers Association. Time is running short to qualify this for a special election this year, should the governor call one for other purposes, but backers have 150 days from March 23 to circulate petitions for a spot on the June 2006 ballot.

  • Split-Roll Initiative Petitions in Circulation as reported in Caltaxletter, April 1, 2005.

  • Another Split Roll Initiative and More as reported in Caltaxletter, February 11, 2005.

  • Report: Split Roll Hammers Commercial Property as reported in Caltaxletter, February 4, 2005.

  • More Anti-Business Initiatives are Filed as reported in Caltaxletter, February 4, 2005.

  • Cal-Tax e-Alert: "Split Roll" Property Tax Threats, January 28, 2005.

  • Ballot Box Update: Another Split Roll Tax Initiative as reported in Caltaxletter, January 28, 2005.

  • Ballot Initiatives: Two More Split Roll Initiatives are Submitted, Governor's Reform Measures are Submitted as reported in Caltaxletter, January 21, 2005.

  • Teachers Go for Another Split Roll Initiative as reported in Caltaxletter, January 14, 2005.

  • Split Roll. SB 17 (Escutia) creates a ¡°split roll¡± property tax system that treats non-residential property differently than other property. Under this bill, property owned by corporations would be reassessed when 50 percent of the stock in a corporation is transferred. For transfers of less than 50 percent, the bill provides for a change of ownership of property in the same proportion as the transferred ownership interests.

    The bill attempts to define day as night by creating several untrue conclusive presumptions:

    • It conclusively presumes every corporation has had 50 percent of its stock transferred between 2003 and 2006, triggering a reassessment of all corporate property for 2006.

    • It conclusively presumes that there will be a 50 percent change of ownership every three years, if not sooner, thus re-triggering a reassessment every three years.

    • It conclusively presumes that a single share of corporate stock does not transfer more than once between reassessments.

    (Caltaxletter, December 17, 2004)

  • Split Roll Issue Returns to Assembly Floor as reported in Caltaxletter, August 13, 2004.

  • Split Roll Tax Sales Bill Defeated. Legislation establishing a split roll for sales of tax-delinquent property was defeated on a 3-3 vote (June 9, 2004). AB 2144 (Ridley-Thomas) provides that business property is subject to a sale for delinquent taxes after three years while residential property can only be put up for sale after five years. The city of Los Angeles is the bill¡¯s sponsor.

  • Split Roll Benefit Assessments to Pay for Local Government Services. The Senate on May 26, 2004 approved SB 1404 (Soto), authorizing local government to establish new districts that will be authorized to impose split roll benefit assessments to raise revenues for services generally paid for by taxes. The bill allows governments to impose these assessments without a public vote as required by Proposition 218. Instead the assessments will be approved unless weighted ballots exceeding one-third of the value are received.

    The new ¡°Multifamily Improvement Districts¡± can include any areas that include some multifamily dwellings and the assessments will be imposed on businesses and rental residential properties.

    Funds can be used for police services in the area, landscape maintenance, sanitation, street cleaning, building inspection and ¡°other public services supplemental to those normally provided by the city.¡±

    The vote on the measure was 21-9.

    Senator Nell Soto said the measure will allow cities to clean up blighted areas (although this is what their redevelopment agencies are supposed to do). Not surprisingly, she said the bill is supported by the police union (as it holds out the promise of more money for potentially more members).

  • Split Roll for Tax Sales of Defaulted Property Approved by Assembly. The Assembly on May 20, 2004 approved controversial legislation establishing, beginning in 2005, a ¡°split roll¡± for the sale of tax-defaulted property. AB 2144 (Ridley-Thomas), which was approved on a nearly party-line vote of 46-29 (Democrats: yes; Republicans and Assembly Member Lou Correa: no), provides that tax-defaulted ¡°non-residential commercial property¡± can be sold after three years and other property can be sold after five years. Non-residential commercial property is all property, except property used or intended to be used as a residence and agricultural property.

  • New Split Roll Assessments on Businesses and Rental Residential Property. SB 1404 (Soto) was amended on May 18, 2004 to allow, until 2012, the establishment of Multifamily Improvement Districts to impose assessments on business and rental residential property with such districts to finance certain improvements and activities. Many of the things that the assessment can be used to fund are normally supported by general taxes. They include security services, landscaping, promotion of economic development, building inspection and code enforcement, etc.

    The bill exempts these assessments from majority protest provisions and declares they are not special taxes.

  • Backers Dump Flawed Split-Roll Initiative as reported in Caltaxletter April 16, 2004.

  • Teachers Union Pushes First Split-Roll Initiative with Universal Preschool Programs as reported in Caltaxletter, January 9, 2004.

  • Another Split Roll Initiative as reported in Caltaxletter, December 19, 2003.

  • Bustamante Calls for Split Roll in $8 Billion Tax Plan as reported in Caltaxletter August 22, 2003.

  • Author Delays Split Roll Vote as reported in Caltaxletter, July 11, 2003.

  • e-Alert: Assembly Hearing on Split-Roll Legislation: Author Holds Up Vote on Split-Roll Measure

  • Press Release: ACA 16 (Hancock) Split Roll

  • Coalition for California Jobs: Scheme to Split Property Tax Roll is Among Leading Job-Killers That Threaten the Economy as reported in Caltaxletter, May 30, 2003.

  • Split Roll: ACA 16 Fact Sheet

  • Steps to Take to Oppose SB 3X (Escutia) and SB 17 (Escutia) Property Tax Reassessment (Split Roll) Measures

  • Split Roll: SB 17 Fact Sheet

  • Split Roll: California Commission on Tax Policy in the New Economy as reported in Caltaxletter, March 14, 2003.

  • Split Roll Urged at Assembly Hearing on Local Fiscal Structural Reform as reported in Caltaxletter, March 7, 2003.

  • Split Roll Promoted on Capitol Steps as  reported in Caltaxletter, February 28, 2003.

  • Teachers' Union Looks to Split-Roll Initiative as  reported in Caltaxletter, February 7, 2003.

  • Governor Asks Tax Commission for April Report as  reported in Caltaxletter, February 7, 2003.

  • State GOP Chief Seeks to Punish Big Business by Margaret Talev. Sacramento Bee December 10, 2002.

Legislation:

  • Property Tax: Change in Ownership. A party-line 22-14 vote on June 2 approved SB 17 (Escutia), which Senator Martha Escutia said would increase penalties for businesses that fail to report property transactions and changes in control which could trigger a change of ownership and Proposition 13 reassessment to current market value.

  • Split Roll Property Assessments: Non-Residential Property Loses Proposition 13 Acquisition Value Assessment Protection. ACA 16 (Hancock) institutes a ¡°split-roll¡± beginning with the 2005 lien date. Non-residential, other than commercial agricultural property, would be assessed each year at fair market value, rather than on acquisition value as provided by Proposition 13.

  • Business Changes-Of-Ownership Reporting and Penalties: Prelude to a Split Roll? Legislation expanding reporting requirements for businesses and increasing penalties for non-reporting of changes of ownership (SB 17, Escutia) was approved on a 4-3 party-line vote, with Democrats voting aye and Republicans voting no.

    SB 17 began life as a ¡°split roll¡± property tax assessment bill, seeking to remove Proposition 13¡¯s acquisition value assessment provisions from publicly traded corporate property. However, it was amended on April 21 to require all publicly traded corporations to file an annual real property statement with the BOE. The bill also increases the penalty for failure to file a change-of-ownership statement to the greater of $10,000 or 10 percent of current year¡¯s taxes. It also adds a new penalty for misrepresenting the occurrence of a change of ownership equal to the greater of $25,000 or 25 percent of current year¡¯s taxes. The Franchise Tax Board would also be required to report to the BOE the names of all corporations that do not answer the change-of-ownership question on tax returns.

    Lenny Goldberg spoke in support of the bill, saying it will address reporting and enforcement issues.

    Matt Sutton, speaking for the California Manufacturers & Technology Association, objected to the increase in penalties. Concern was also expressed by other business lobbyists that the provisions in the bill are simply a prelude to a split roll.

    (As Introduced) Split Roll. SB 17
    (Escutia) states legislative intent to provide for a ¡°split roll¡± and assess non-residential property at market value each year.

  • Split Roll: Business Property Tax Reassessments. SB 3X (Escutia) states legislative intent to enact a split roll, specifying when non-residential commercial and industrial property undergoes a change in ownership.

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