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The rightmost 50% of Pat Bates.
Let us now praise State Senator Pat Bates. At least a little. At least provisionally.
Pat Bates has done something pretty extraordinary for a California State Legislator: she has tried to fix something wrong with Prop 13. Normally, I would call that an extremely brave thing to do — but it’s perhaps a little less so given that this change was favored by Bates’ bill is supported by the Howard Jarvis Taxpayers Association, the California Chamber of Commerce, the California Business Roundtable and the California Business Properties Association. Still, based on what appears on her page (including that legendary Bay Area Democratic legislator Tom Ammiano tried to do this before her), it seems like a good thing:
Senator Patricia Bates (R-Laguna Niguel) announced today that the Senate Governance and Finance Committee approved her Senate Bill 259 on a bipartisan vote. Her bill would correct an outdated interpretation of property “change of ownership” that has been the long running debate around commercial property and Proposition 13.
“It’s encouraging that Democrats and Republicans came together today to approve my bill to ensure that Proposition 13’s tax protections are not abused,” said Bates. “Proposition 13 exists to ensure that property taxes do not go out of control for any California homeowner or business. It does not exist to enable some to avoid paying the property taxes they legitimately owe. I hope my bill will continue to garner additional support and avoid the fate of a similar bipartisan reform effort in 2014.”
SB 259 would alter the definition of “change of ownership” in the California Revenue and Tax Code for determining the property tax base value of commercial property. Current law allows for a property to be reassessed if a majority of the ownership interest changes hands. SB 259 would require any property to be reassessed if 90 percent of the ownership interest changes hands within any three-year period.
So, if I’m not mistaken, this means that a building might have to set up some sort of arrangement like this: Two passive trusts of 10.001% ownership would be set up and owned (beneficially) by two extremely stable financial institutions that are not likely to change ownership. (Why two? In case one does change ownership. Then the other trust could be locked to the very foundation of the earth.) I’ll presume that the bill defines ownership interest in terms of actual control, actual value, and not something that could be evaded with different classes of stock that confer the same amount of “ownership” but not the same amount of actual financial benefit, such as what would occur if Class A stock was normal ownership that gets a regular timely share of annual profits and Class B stock, that held by the trusts, would receive only a residual equity stake or something like that, value to be determined by Class A owners.
It’s true that that would prevent someone from being able to avoid triggering a reassessment by setting up two entities that each had just 50% of the ownership and only allow one to be traded. Now, as I read the explanation of the bill, 79.998% (or 89.999% for real risk takers) could be traded a thousand times per year — or more, if, say, on a stock exchange — and so long as at least one of those trusts remains full anchored there would be no stopping it from being immune to reassessment under Prop 13.
You know — that doesn’t really sound right. I think that maybe I need to contact Tom Ammiano’s people to see if this was really the sort of cure he thought was right for the ailment. I’d hate to think that even a non-transactional lawyer could site down and figure out a way to evade the law, and the great-sounding principles that Sen. Bates discusses in the second paragraph of the quote from the story, within about two minutes. That would be sad.
Happy Dr. Martin Luther King Jr’s Birthday, OJ readers, and happy holiday of the same name on Monday. This is your Weekend Open Thread. Talk about that, the holiday, or anything else you’d like within reasonable bounds of discretion and decorum.
Just as long as this Bill is not part of a slippery slope that taxes grandma and grandpa out of their lifelong house and home. We don’t want to go back to the days when our seniors had to eat Gravy Train to afford the property tax bill, do we? I’m all for closing scam loopholes that allow big money to avoid paying their fair share in property taxes. I just don’t want the little people to get caught in the crossfire. It’s suspicious that this Bill originated in Pat Bate’s office. All of you must be aware that Pat is no pauper and didn’t fund her political career off the backs of the working class. Or could this be a preemptive strike to keep more extensive reforms at bay? Once we’re entrenced in the next economic meltdown (has it started?) the State will be desperate to find ways to separate you from your treasure. The jury is out until more information is forthcoming. It’s not easy to figure these people out.
Ringo is screwed again –
How does this work? Three examples demonstrate reassessments under current law and SB 259.
John buys 100% of ACME Tools from Anne. The assessor revalues ACME Tools’ property to fair market value under current law because John now controls ACME Tools, and under SB 259 because more than 90% of ACME tools transferred.
John, Paul, and George buy 100% of ACME Tools from Anne in equal shares within three years. The assessor does not reassess the property under current law, as no single new owner obtained more than a 50% interest. However, under SB 259, the assessor would reassess the property, because 90% or more of ACME Tools transferred, and the 50% threshold doesn’t apply.
John, Paul, and George buy a controlling interest in ACME Tools from Anne in equal shares, but Anne maintains an 11% ownership share. The Assessor would not reassess ACME Tools under either current law or the bill, because only 89% of the company was transferred. The assessor would reassess ACME tools if Anne sold the remaining 11% to John, Paul, and George within the three-year window, but would not if Anne sold the remaining share after the three-year window.
Just like in the old days, Shivas, you need to give credit when you take something from somewhere else.
yeah .. yeah .. yeah …
http://leginfo.legislature.ca.gov/faces/billAnalysisClient.xhtml
After just seeing an OC Register page heralding the NAMM show return, might the Council be asked why NOTHING has been heard about the SIGNED CONTRACT for NAMM, OR for Natural Foods Expo, which were used to cower the Council into the latest Convention Center Expansion ? The most Google yielded for me was the last contract year being 2018. You would expect that things are planned further ahead than that, and that our fair City would lose no opportunity to toot it’s own horn about the renewal. What’s up?
You mean they should have inked deals before putting $300,000,000 of tax payer money at risk?
You probably also would expect the city would independently verify ridership projections before spending $200,000,000 on a train station.
Or $300,000,000 on a street car to no where.
WHAT was I thinking ? (SMH) I momentarily forgot what City I was in ! Guess the passage of time does that as you get older. (What has it been, TWO Years, now ?) Sorry.
I just saw an old episode of the Andy Griffith Show in which Barney Fife buys his first car from a sweet little old lady and refuses to even look under the hood.
Now why was I put in mind of Curt Pringle and the members of the OCTA?
Speaking of 20 year-old photos.
Taken directly from her current State Senate page. But as it’s only half of her face, can’t we agree to call it a 10-year-old photo and check back in three years?
The other half looks just like it.
That picture must have been taken in the mid-Nineties.
She is almost 80 years old.
*Of course, why didn’t we think of this before? The ousting of Webster Guillory was all about Reassessment Values here in the country. Whether it was about Reassessing the values down or up…matters not. This undoubtedly was why he got dusted.
Hillary’s Campaign Accuses Intel IG Of Coordinating With GOP On Damning Email Reports – According to NBC’s Andrea Mitchell, Brian Fallon, Clinton’s communications director, believes that the Intelligence Community’s inspector general, I. Charles McCullough III, is “selectively” leaking information in coordination with Republicans.
The accusation is a throwback to Bill and Hillary Clinton’s complaints that a cabal of conservatives were involved in a “Vast right-wing conspiracy.”
http://dailycaller.com/2016/01/19/hillarys-campaign-accuses-intel-ig-of-coordinating-with-gop-on-damning-email-reports/#ixzz3xnsW1PAw
Oh — you mean to say that the accusation is credible?