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California Prop 13 Challenge Loses Support

by Scott Donald, Irvine, August 2014

 

For years, legislative proposals have been introduced to tweak California's Proposition 13. Assembly Bill 2372 is the latest attempt to change the law so that business and residential property is treated differently for tax purposes.

 

Under current law, business property is reassessed only when it changes ownership in one transaction. AB 2372 changes the law to require reassessment when 90% changes ownership in a three-year time period.

 

After initially praising AB 2372, Lenny Goldberg of the California Tax Reform Association later pulled his support. In a letter to sponsor Tom Ammiano, Goldberg complained that the law change should apply retroactively to previous transactions that meet the qualifications for reassessment.

 

"We supported it as a means of opening up the discussion which we have always sought. Our concern is that, like many bills in the legislature, it projects the image of reform, rather than substance, since it in effect grandfathers in the thousands of properties which have changed ownership without reassessment," Goldberg said.

 

AB 2372 passed the California Assembly and was re-referred to Senate Committee on Appropriations.

Another Business Property Tax Bill Rejected

 

The California Assembly Revenue and Tax Committee voted down Senate Bill 1021, which would have allowed school districts to impose higher parcel taxes on business property than homesteads.

 

SB 1021, sponsored by Senator Lois Wolk, won approval in the Senate but was rejected in the Assembly thanks to opposition from the California Chamber of Commerce, which categorized it as a "job killer."