Bill Closing Tax Loophole Squeaks by Sentate Panel

A bill aimed at closing a tax loophole that has enabled major office buildings to escape tax hikes when they are sold squeaked through the state Senate Revenue and Taxation Committee on Tuesday, although only after it was amended to apply exclusively to future sales.

The legislation, AB 25428, sponsored by Assemblyman David Elder (D-Long Beach), would make it clear that buyers of office buildings may not avoid reappraisal of the buildings by leasing space in them back to the buildings’ former owners.

As amended, the bill would not affect the sales of the Industrial Indemnity, Burroughs and Fluor Corp. buildings in Orange County or Security Pacific Corp.’s Pacific Bank Towers in Los Angeles, or of the Bank of America headquarters and Crocker Plaza in San Francisco.

Before becoming law, the bill would also have to be approved by a majority vote of the entire Senate and passed back to the Assembly for concurrence on the amendment.