BILL ANALYSIS
AB 759
Page 1
CORRECTED - August 24, 2010, per consultant.
CONCURRENCE IN SENATE AMENDMENTS
AB 759 (Ma)
As Amended August 18, 2010
Majority vote
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|ASSEMBLY: | |9May 28, 2009) |SENATE: |31-2 |(August 23, |
| | | | | |2010) |
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(vote not relevant)
Original Committee Reference: B. P. & C.P.
SUMMARY : Makes substantive changes to the California Taxpayer
and Shareholder Protection Act of 2003 (Act) by revising the
definition of an "expatriate corporation" to allow certain
foreign incorporated entities to contract with the state.
The Senate amendments delete the Assembly version of this bill,
and instead:
1)Revise the definition of an "expatriate corporation" for
purposes of Act (Chapter 1 (commencing with Section 10286) of
Part 2 of Division 2 of the Public Contract Code) to provide
that a foreign incorporated entity is not considered to be an
"expatriate corporation" if all of the following requirements
are met:
a) The foreign incorporate entity, or any predecessor, was
originally established in connection with a transaction
between unrelated publicly traded corporations;
b) Immediately after the transaction, not more than 70% of
that entity's stock is held by former shareholders of any
domestic corporation that was a party to such transaction;
c) The transaction, or series of related transactions, that
originally established the foreign incorporated entity, or
any predecessor, was a taxable transaction for any United
States (U.S.) shareholders of any domestic corporation that
was a party to such transaction; and,
AB 759
Page 2
d) The foreign country in which the entity is organized has
a comprehensive income tax treaty with the U.S. and the
entity is considered a resident of the foreign country for
purposes of that treaty.
2)State that if a foreign incorporated entity qualifies for the
exemption, then any successor corporation resulting from a
corporate reorganization, as defined in Internal Revenue Code
(IRC) Section 368, or a transaction satisfying the
requirements of IRC Section 351, is not considered to be an
"expatriate corporation." The successor must be organized in
a foreign country that has a comprehensive tax treaty with the
U.S. and be considered a resident of that country for purposes
of the treaty.
3)Clarify the intent of the Legislature to prohibit a state
agency from entering into any contract with an expatriate
corporation located in a foreign jurisdiction that does not
have an income tax treaty with the United States.
AS PASSED BY THE ASSEMBLY , this bill included architectural,
engineering, and information technology contracts in existing
reporting requirements on the participation levels of businesses
that include the owner's race, ethnicity, and gender in state
contracts.
FISCAL EFFECT : Unknown
COMMENTS : This bill was substantially amended in the Senate and
the Assembly-approved provisions of this bill were deleted.
This bill, as amended in the Senate is inconsistent with
Assembly actions.
Analysis Prepared by : Oksana Jaffe / REV. & TAX. / (916)
319-2098
FN: 0006338