Property taxation: change in ownership: parent to child transfer: stock.

The California Constitution generally limits ad valorem taxes on real property to 1% of the full cash value of that property. For purposes of this limitation, "full cash value" is defined as, among other things, the appraised value of that real property when a change in ownership has occurred. Existing property tax law provides that specified transfers are not deemed a change in ownership. The California Constitution and existing property tax law exclude from the definition of "change in ownership" real property transfers of a principal residence and the first $1,000,000 of the value of other real property between parents and their children, as defined by the Legislature. Existing property tax law defines "real property" for purposes of this provision and excludes from this definition an interest in a legal entity. This bill would also exclude from the definition of "change in ownership" any parent to child transfer of stock in a qualified corporation, as defined, that results in a change in ownership of the qualified property, as defined, owned by the qualified corporation, provided that the transfer of stock is due to the death of a parent or parents. The bill would require the assessor to report quarterly to the State Board of Equalization all transfers for which a claim for exclusion is made and the amount of each exclusion claimed. By imposing new duties upon local county officials with respect to the change in ownership exclusion described above, this bill would impose a state-mandated local program. The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement. This bill would provide that, if the Commission on State Mandates determines that the bill contains costs mandated by the state, reimbursement for those costs shall be made pursuant to the statutory provisions noted above. Existing law requires the state to reimburse local agencies annually for certain property tax revenues lost as a result of any exemption or classification of property for purposes of ad valorem property taxation. This bill would provide that, notwithstanding those provisions, no appropriation is made and the state shall not reimburse local agencies for property tax revenues lost by them pursuant to the bill. This bill would take effect immediately as a tax levy.