"Split Roll" Property Tax Legislation or Proposed Ballot Initiatives as of January 28, 2005
Compiled by the California Taxpayers’ Association

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. (Senator Martha Escutia carried split roll legislation with the same bill number in the 2003-04 session.)

The High Quality Classrooms Act (.30 percent)

The High Quality Classrooms Act (.50 percent)

The California Teachers Association is sponsoring two versions of a split roll property tax initiative. Depending on which version they go with, there would be an additional ad valorem property tax rate of .30 percent or .50 percent of acquisition value imposed on commercial real property (except residential rentals). This would be in addition to the 1 percent rate in current law, plus levies to pay for bonded indebtedness. The 1.5 percent rate could increase taxes on commercial property by $4 billion to $5 billion a year.

Tax Fairness for Homeowners Act of 2005

This initiative, sponsored by Lenny Goldberg of the California Tax Reform Association, would require annual reassessment of non-residential property to full cash value. Agricultural land would be exempt. There also would be a limited exclusion in personal property tax for all businesses, which Mr. Goldberg touts as a system simplifier and tax relief for small businesses. The initiative also would dedicate the additional revenue (perhaps $5 billion a year) to education and local government.

The Economic Recovery Tax Relief Act

The Remcho, Johansen & Purcell law firm, which represents Democratic Party interests and has already submitted split roll proposals on behalf of the California Teachers Association (The High Quality Classrooms Act, two versions), has also submitted this proposal to “close corporate loopholes in Proposition 13” and other taxes and in return lower state sales taxes. It would split the roll to tax business property, as proposed in the Goldberg initiative above, but also increase the corporate tax rate from 8.84 percent to 9.3 percent; impose a gross premiums tax on insurers, and levy an oil severance tax. The measure also would limit the aggregate amount of carryover tax credits.

Tax Fairness Act of 2005

This split roll initiative proposal was filed by Sacramento lobbyist and trial lawyer Wayne Ordos, which sources say was drafted for a local law enforcement group. This measure would require annual reassessment of non-residential property with some exceptions, such as qualified agricultural land. It would dedicate 50 percent of additional revenues to school districts within the county of collection, 15 percent to transportation projects, 20 percent of revenues would support the Senior Citizens’ Property Tax relief program, and 15 percent would be used to supplement funding of local public safety agencies.