BOMA Oakland-East Bay: In the News


UPDATE: May 28, 2010 SPLIT ROLL BILL HELD IN COMMITTEE – MOVE TO BUDGET DISCUSSIONS The bill targeting Proposition 13 protections, AB 2492 (Ammiano; D-San Francisco) was “held” in the Assembly Appropriations Committee today. All “tax levy” bills were held in order to allow them to be considered in total as part of budget discussions. Because the measures require a 2/3 vote for passage, normal legislative deadlines do not apply, so the bill remains alive though its progress is stalled for the time being. However, what this means is that we now need to be vigilant throughout the budget process to make sure it split roll does not become part of any budget “solution.” ----------------------------------- Prop 13 Under Attack - Fight Split Roll Legislation AB 2492 - JOIN THE EFFORT NOW BOMA CALIFORNIA: A split roll threat has once again resurfaced in the California Legislature. Below please find information to help you help your industry stave-off this bad idea. AB 2492 (Ammiano) proposes dramatic changes to our property tax system which would have the effect of targeting commercial properties for removal of Proposition 13 protections and enacting a “split roll” property tax. Such a split roll tax is intended by advocates to increase property taxes on corporations. The bill is set for hearing on May 10, 2010 in Assembly Revenue and Taxation Committee. Although it requires a two-thirds vote of the Legislature, in committee it only needs a simple majority vote, so we need your help to stop the bill in committee. See below for more information and resources to help us defeat this Split Roll measure. Free to pass this along to others that may be interested. If you have any questions about the bill, its potential impacts, or efforts to defeat it, please simply respond to this email or call 916-443-4676. Respectfully, Matthew Matthew Hargrove BOMA California Administration 1121 L Street, Suite 809 Sacramento, CA 95814 916-443-4676 phone 916-248-9533 mobile 916-443-0938 fax mhargrove@cbpa.com HOW YOU CAN HELP DEFEAT THIS MEASURE: AUTHORIZE YOUR COMPANY/ASSOCIATION Be added to the attached Coalition Letter. To do that, simply respond to this email with your Logo. AND/OR SEND YOUR OWN LETTER: If you are so inclined, please send your own letter to the Assembly revenue and Taxation Committee. Below is a sample letter with the address for the Chair. Be sure to “cc:” your own Assemblymember. Find your member by clicking here: http://www.leginfo.ca.gov/yourleg.html AB 2492 FAQ Oppose Split Roll – AB 2492 (Ammiano) Removes Proposition 13 Protections What Does AB 2492 Do? AB 2492 proposes a split roll by dramatically revising a number of change of ownership rules for business properties, including: A significant expansion of the change of ownership definition so that even small or partial ownership transfers (such as sales of stock) of less than 50% trigger a reassessment. A new rebuttable preemption that corporate-owned property has changed ownership, and is thus subject to reassessment, every 3 years. What Is “Split Roll”? A “split roll” property tax seeks to divide the tax treatment of commercial and residential properties by removing Proposition13 protections from commercial properties, while leaving those protections intact for residential properties. Currently, Proposition 13 protects both residential and commercial property owners by capping property tax rates at 1 percent of assessed value and to a growth rate of 2 percent a year. Why is Change of Ownership Significant? Only when ownership changes or there is new construction may the value of the property be reassessed at more than 2 percent. Corporate property is often owned by multiple interests such as through shares of stock. Under current law, when an individual obtains more than 50% of ownership or control in a corporation, a property reassessment is triggered. Why Oppose Split Roll? A “split roll” tax would undermine the intent of the protections cemented in Proposition 13, and have a negative effect on job-producing operations and the state’s well-regarded property tax structure. Commercial properties already contribute significantly in tax dollars — generating approximately two-thirds of the property tax revenues, just as they did before the passage of Proposition 13. Implementation of a “split roll” tax would mean significantly higher property taxes for California businesses, likely exceeding $3 billion or more. Property owners may be forced to pass along some of the increased costs in the form of higher rents and higher consumer prices. Since many small businesses rent rather than own building space, they will be hardest-hit. Higher property taxes reduce capital available for investment in rental housing and business plants and equipment within California, meaning fewer jobs. AB 2492 would also result in a tremendous paperwork and tracking burden for both companies and assessors. -------------------------- SAMPLE LETTER TO REVENUE AND TAXATION COMMITTEE CHAIR – PLEASE FEEL FREE TO PERSONALIZE TO EXPRESS YOUR OWN CONCERNS WITH AB 2492 April 21, 2010 The Honorable Anthony Portantino Chair, Assembly Revenue & Taxation Committee 1020 N Street, Room 162 Sacramento, CA 95814 Re: AB 2492 (Ammiano) Property Taxation – Onerous Change in Ownership Requirements Assemblymember Portantino: We respectfully OPPOSE AB 2492 (Ammiano) which would change Proposition 13 to make it easier to raise property taxes on corporations. AB 2492 creates a “rebuttable presumption” that, as of January 1, 2011, and on January 1 of each 3rd fiscal year thereafter, all of the real property owned by corporations in the state have undergone a change in ownership and requires assessors to notify publicly traded companies of this presumption and allow an assessee or an assessor to rebut this presumption in a specified manner. AB 2492 basically requires companies to prove that their stock has not changed hands by more than 50% every three years. This seems to be a “guilty until proven innocent” approach whose only purpose is to trigger a reassessment in order to raise revenue from property taxes. Split roll tax proposals are based on the faulty assumption that there has been a major statewide shift in tax burden from businesses to homeowners. In fact analyses show that statewide commercial properties generate approximately two-thirds of the property tax revenues -- just as they did before the passage of Proposition 13. This bill is simply a way around Propositions 13 in an attempt to raise property taxes on businesses. This would have a negative impact on jobs, investments, and the state’s overall economy. Levying such a complicated formula for a tax increase during this economic downturn is a sure way to further stall our state’s economic recovery. Therefore I respectfully request that you OPPOSE AB 2942 and vote “NO”when it comes before you in committee. Sincerely, *cc: Your own Assemblymember. Find your Assemblymember by clicking here: http://www.leginfo.ca.gov/yourleg.html* FOR MORE INFORMATION ON POLICY IMPACTS OF RAISING COMMERCIAL PROPERTY TAXES http://www.cbpa.com/documents/split_roll_final_report.pdf