Laws, Regulations & Annotations
Property Taxes Law Guide – Revision 2013
Property Tax Annotations
220.0000 CHANGE IN OWNERSHIP
220.0181 Employee Benefit Plan. The intent of Revenue and Taxation Code section 66 was to extend property tax benefits to pension plans. The sole purpose of section 66(a) was to eliminate any possibility of a reappraisal whenever a participant or a participant's beneficiary became eligible for benefits.
Revenue and Taxation Code section 66(b) excludes any contribution of real property to an employee benefit plan. A "contribution" has been defined as a voluntary transfer to a corporation with no consideration involved. See United Grocer's Ltd. v. U.S., 308 F.2d 634, and Commissioner of Internal Revenue v. Vandaveer, 114 F.2d 719. It is our opinion, therefore, that the contribution spoken of in section 66(b) is an original gift to the benefit plan.
Where property is transferred by a private firm to an employee benefit plan by conveyance and is then leased back for 15 years, plus options for 30 years, two changes in ownership have occurred, one when the property is conveyed, and the other when the property is leased back for a period, including options, of 35 years or more.
Where a non-California corporation wholly owned by a pension trust conveys title in real property back to the pension trust which, simultaneously, convey the property to several newly formed California nonprofit holding corporations, the pension trust's interest in the holding corporation being in the exact same proportions as its interests in the non-California corporation, a change in ownership has occurred and reappraisal is required. Such is not an original contribution of property to a pension trust, and under the entity theory, a transfer from a trust to a corporation does not qualify for exclusion from change in ownership. C 6/10/1980.