BILL NUMBER: AB 278	INTRODUCED
	BILL TEXT


INTRODUCED BY   Assembly Member Charles Calderon

                        FEBRUARY 12, 2009

   An act to amend Section 18639 of the Revenue and Taxation Code,
relating to taxation.


	LEGISLATIVE COUNSEL'S DIGEST


   AB 278, as introduced, Charles Calderon. Franchise and income tax
law: information returns.
   Existing law requires every person who makes payments of
exempt-interest dividends, as specified, to any person, and every
person who receives payments of interest exempt from tax, as
specified, as a nominee and who makes payments to any person with
respect to the interest received to file an information return as
prescribed by the Franchise Tax Board and to furnish a statement to
each person named in the return.
   This bill would make a technical, nonsubstantive change to that
provision.
   Vote: majority. Appropriation: no. Fiscal committee: no.
State-mandated local program: no.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

  SECTION 1.  Section 18639 of the Revenue and Taxation Code is
amended to read:
   18639.  (a) (1) In addition to those reports required under
paragraph (8) of subdivision (c) of Section 18631, information
returns shall be required, at the time and in the form and manner and
to the extent that the Franchise Tax Board may prescribe, from both
of the following:
   (A) Every person who makes payments of exempt-interest dividends,
as described in Section 852(b)(5) of the Internal Revenue Code, that
are not exempt-interest dividends, as described in Section 17145 of
the Revenue and Taxation Code, aggregating ten dollars ($10) or more
to any person, other than to any person described in paragraph (2),
during any calendar year.
   (B) Every person who receives payments of interest as a nominee
and who makes payments aggregating ten dollars ($10) or more during
any calendar year to any other person, other than to any person
described in paragraph (2), with respect to the interest so received.
For purposes of this paragraph, "interest" is limited to interest on
any obligation if the interest is exempt from tax under Section 103
(a) of the Internal Revenue Code or if the interest is exempt from
tax, without regard to the identity of the holder, under any other
provision of Title 26 of the United States Code, but which is not
exempt from income tax under Part 10 (commencing with Section 17001).

   (2) For purposes of this subdivision, a person shall not be
required to make a report pursuant to paragraph (1) if the person
receiving the payment is any of the following:
   (A) A corporation.
   (B) An organization exempt from taxation under Section 23701 or an
individual retirement plan.
   (C) The United States or any wholly owned agency or
instrumentality thereof.
   (D) A state, the District of Columbia, a possession of the United
States, any political subdivision of any of the foregoing, or any
wholly owned agency or instrumentality of any one or more of the
foregoing.
   (E) A foreign government, a political subdivision of a foreign
government, or any wholly owned agency or instrumentality of any one
or more of the foregoing.
   (F) An international organization or any wholly owned agency or
instrumentality thereof.
   (G) A foreign central bank of issue.
   (H) A dealer in securities or commodities required to register
under the laws of the United States or a state, the District of
Columbia, or possession of the United States.
   (I) A real estate investment trust, as defined in Section 856 of
the Internal Revenue Code.
   (J) An investment company, as defined in Section 80a-3 of the
United States Code, registered at all times during the taxable year
under the Investment Company Act of 1940.
   (K) A common trust fund, as defined in Section 17671.
   (L) Any trust that is exempt from tax under Section 664(c)
 of Title 15  of the Internal Revenue Code.
   (b) Every person required to make a return under this section
shall also furnish a statement to each person whose name is set forth
in the return, as required to do so by the Internal Revenue Code.