BILL NUMBER: AB 2497 AMENDED
BILL TEXT
AMENDED IN ASSEMBLY MARCH 15, 2016
INTRODUCED BY Assembly Member Wagner
FEBRUARY 19, 2016
An act to amend Section 23701 of 18729 of,
and to add and repeal Article 3.6 (commencing with Section 18730) of
Chapter 3 of Part 10.2 of Division 2 of, the Revenue and
Taxation Code, relating to taxation.
LEGISLATIVE COUNSEL'S DIGEST
AB 2497, as amended, Wagner. Corporation Tax Law.
Voluntary contributions: California Senior Legislature
Fund: California Senior Citizen Advocacy Fund.
Under existing law, taxpayers are allowed to contribute amounts in
excess of their personal income tax liability for the support of the
California Senior Legislature Fund until the year in which the
minimum contribution is not received, or January 1, 2019, whichever
occurs first. Existing law also contains administrative provisions
that are generally applicable to voluntary contributions.
This bill would repeal these provisions regarding contributions
for the support of the California Senior Legislature Fund and would
instead allow a taxpayer, for taxable years beginning on or after
January 1, 2016, to designate an amount in excess of personal income
tax liability to be deposited to the California Senior Citizen
Advocacy Fund, which the bill would create. This bill would require
moneys transferred to the California Senior Citizen Advocacy Fund,
upon appropriation by the Legislature, to be allocated to the
Franchise Tax Board and the Controller, as provided, and to the
California Senior Legislature for the purpose of funding the
activities of the California Senior Legislature, as provided.
This bill would repeal these voluntary contribution provisions by
a specified date or, if contributions made on returns would be less
than a specified amount, by an earlier date as provided.
The Corporation Tax Law exempts various types of organizations
from taxes imposed by that law. Existing law establishes a method by
which an organization that has obtained a ruling or determination
from the Internal Revenue Service that it is exempt from federal
income taxes as an organization described in Section 501(c)(3), (c)
(4), (c)(5), (c)(6), or (c)(7) of the Internal Revenue Code may
obtain exemption from state taxes, as provided.
This bill would make nonsubstantive changes to that provision.
Vote: majority. Appropriation: no. Fiscal committee: no
yes . State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 18729 of the Revenue
and Taxation Code is amended to read:
18729. (a) Except as otherwise provided in subdivision
(b), this This article shall remain in effect
only for taxable years beginning before January 1, 2019,
2016, and as of December 1, 2019,
January 1, 2017, is repealed.
(b) (1) By September 1, 2015, and by September 1 of each
subsequent calendar year that the California Senior Legislature Fund
appears on the tax return, the Franchise Tax Board shall do all of
the following:
(A) Determine the minimum contribution amount required to be
received during the next calendar year for the fund to appear on the
tax return for the taxable year that includes that next calendar
year.
(B) Provide written notification to the California Senior
Legislature of the amount determined in subparagraph (A).
(C) Determine whether the amount of contributions estimated to be
received during the calendar year will equal or exceed the minimum
contribution amount determined by the Franchise Tax Board for the
calendar year pursuant to subparagraph (A). The Franchise Tax Board
shall estimate the amount of contributions to be received by using
the actual amounts received and an estimate of the contributions that
will be received by the end of that calendar year.
(2) If the Franchise Tax Board determines that the amount of the
contributions estimated to be received during a calendar year will
not at least equal the minimum contribution amount for the calendar
year, this article shall be inoperative with respect to taxable years
beginning on or after January 1 of that calendar year and shall be
repealed on December 1 of that year.
(3) For purposes of this section, the minimum contribution amount
for a calendar year means two hundred fifty thousand dollars
($250,000) for the second calendar year after the first appearance of
the California Senior Legislature Fund on the personal income tax
return or the minimum contribution amount as adjusted pursuant to
subdivision (c).
(c) For each calendar year, beginning with the third calendar year
after the first appearance of the California Senior Legislature Fund
on the personal income tax return, the Franchise Tax Board shall
adjust, on or before September 1 of that calendar year, the minimum
contribution amount specified in subdivision (b) as follows:
(1) The minimum estimated contribution amount for the calendar
year shall be an amount equal to the product of the minimum estimated
contribution amount for the calendar year multiplied by the
inflation factor adjustment as specified in subparagraph (A) of
paragraph (2) of subdivision (h) of Section 17041, rounded off to the
nearest dollar.
(2) The inflation factor adjustment used for the calendar year
shall be based on the figures for the percentage change in the
California Consumer Price Index for all items received on or before
August 1 of the calendar year pursuant to paragraph (1) of
subdivision (h) of Section 17041.
(d)
(b) Notwithstanding the repeal of this article, any
contribution amounts designated pursuant to this article prior to its
repeal shall continue to be transferred and disbursed in accordance
with this article as in effect immediately prior to that repeal.
SEC. 2. Article 3.6 (commencing with Section
18730) is added to Chapter 3 of Part 10.2 of Division 2 of the
Revenue and Taxation Code , to read:
Article 3.6. California Senior Citizen Advocacy Fund
18730. (a) For taxable years beginning on or after January 1,
2016, any individual may designate on the tax return that a
contribution in excess of the tax liability, if any, be made to the
California Senior Citizen Advocacy Fund established by Section 18731
to be used to conduct the sessions of the California Senior
Legislature and to support its ongoing activities on behalf of older
persons.
(b) The contribution shall be in full dollar amounts and may be
made individually by each signatory on the joint return.
(c) A designation under subdivision (a) shall be made for any
taxable year on the initial return for that taxable year, and once
made shall be irrevocable. If payments and credits reported on the
return, together with any other credits associated with the
individual's account, do not exceed the individual's tax liability,
the return shall be treated as though no designation has been made.
(d) The Franchise Tax Board shall revise the form of the return to
include a space labeled "California Senior Citizen Advocacy Fund" to
allow for the designation permitted under subdivision (a). The form
shall also include in the instructions information that the
contribution may be in the amount of one dollar ($1) or more and that
the contribution shall be used to conduct the sessions of the
California Senior Legislature and to support its ongoing activities
on behalf of older persons.
(e) A deduction shall be allowed under Article 6 (commencing with
Section 17201) of Chapter 3 of Part 10 for any contribution made
pursuant to subdivision (a).
18731. (a) There is hereby established in the State Treasury the
California Senior Citizen Advocacy Fund to receive contributions made
pursuant to Section 18730. The Franchise Tax Board shall notify the
Controller of both the amount of money paid by taxpayers in excess of
their tax liability and the amount of refund money that taxpayers
have designated pursuant to Section 18730 to be transferred to the
California Senior Citizen Advocacy Fund. The Controller shall
transfer from the Personal Income Tax Fund to the California Senior
Citizen Advocacy Fund an amount not in excess of the sum of the
amounts designated by individuals pursuant to Section 18730 for
payment into that fund.
(b) The California Senior Citizen Advocacy Fund is the successor
fund of the California Senior Legislature Fund. All assets,
liabilities, revenues, and expenditures of the California Senior
Legislature Fund shall be transferred to, and become a part of, the
California Senior Citizen Advocacy Fund, as provided in Section 16346
of the Government Code. Any references in state law to the
California Senior Legislature Fund shall be construed to refer to the
California Senior Citizen Advocacy Fund.
18732. (a) All moneys transferred to the California Senior
Citizen Advocacy Fund pursuant to Section 18731, upon appropriation
by the Legislature, shall be allocated as follows:
(1) To the Franchise Tax Board and the Controller for
reimbursement of all costs incurred by the Franchise Tax Board and
the Controller in connection with their duties under this article.
(2) The balance to the California Senior Legislature, for its
ongoing activities on behalf of older persons.
(b) All moneys allocated pursuant to paragraph (2) of subdivision
(a) may be carried over from the year in which they were received and
encumbered in any following year.
(c) The funds allocated to the California Senior Legislature for
the purpose of funding the activities of the California Senior
Legislature shall be spent pursuant to the purview of the Joint Rules
Committee of the California Senior Legislature in a manner
consistent with the bylaws of the California Senior Legislature,
established through a majority vote of the California Senior
Legislature.
18733. (a) Except as otherwise provided in subdivision (b), this
article shall remain in effect only for taxable years beginning
before January 1, 2021, and as of December 1, 2021, is repealed.
(b) (1) By September 1, 2017, and by September 1 of each
subsequent calendar year that the California Senior Citizen Advocacy
Fund appears on the tax return, the Franchise Tax Board shall do all
of the following:
(A) Determine the minimum contribution amount required to be
received during the next calendar year for the fund to appear on the
tax return for the taxable year that includes that next calendar
year.
(B) Provide written notification to the California Senior
Legislature of the amount determined in subparagraph (A).
(C) Determine whether the amount of contributions estimated to be
received during the calendar year will equal or exceed the minimum
contribution amount determined by the Franchise Tax Board for the
calendar year pursuant to subparagraph (A). The Franchise Tax Board
shall estimate the amount of contributions to be received by using
the actual amounts received and an estimate of the contributions that
will be received by the end of that calendar year.
(2) If the Franchise Tax Board determines that the amount of the
contributions estimated to be received during a calendar year will
not at least equal the minimum contribution amount for the calendar
year, this article shall be inoperative with respect to taxable years
beginning on or after January 1 of that calendar year and shall be
repealed on December 1 of that year.
(3) For purposes of this section, the minimum contribution amount
for a calendar year means two hundred fifty thousand dollars
($250,000) for the second calendar year after the first appearance of
the California Senior Legislature Fund on the personal income tax
return or the minimum contribution amount as adjusted pursuant to
subdivision (c).
(c) For each calendar year, beginning with the third calendar year
after the first appearance of the California Senior Citizen Advocacy
Fund on the personal income tax return, the Franchise Tax Board
shall adjust, on or before September 1 of that calendar year, the
minimum contribution amount specified in subdivision (b) as follows:
(1) The minimum estimated contribution amount for the calendar
year shall be an amount equal to the product of the minimum estimated
contribution amount for the calendar year multiplied by the
inflation factor adjustment as specified in subparagraph (A) of
paragraph (2) of subdivision (h) of Section 17041, rounded off to the
nearest dollar.
(2) The inflation factor adjustment used for the calendar year
shall be based on the figures for the percentage change in the
California Consumer Price Index for all items received on or before
August 1 of the calendar year pursuant to paragraph (1) of
subdivision (h) of Section 17041.
(d) Notwithstanding the repeal of this article, any contribution
amounts designated pursuant to this article prior to its repeal shall
continue to be transferred and disbursed in accordance with this
article as in effect immediately prior to that repeal.
SECTION 1. Section 23701 of the Revenue and
Taxation Code is amended to read:
23701. (a) Organizations that are organized and operated for
nonprofit purposes within the provisions of a specific section of
this article, or are defined in Section 23701h, relating to certain
title-holding companies, or Section 23701x, relating to certain
title-holding companies, are exempt from taxes imposed under this
part, except as provided in this article or in Article 2 (commencing
with Section 23731) of this chapter, if all of the following occur:
(1) An application for exemption is submitted in the form
prescribed by the Franchise Tax Board.
(2) A filing fee of twenty-five dollars ($25) is paid with each
application for exemption filed with the Franchise Tax Board after
December 31, 1969.
(3) The Franchise Tax Board issues a determination exempting the
organization from tax.
(b) (1) Notwithstanding subdivision (a), an organization organized
and operated for nonprofit purposes in accordance with Section
23701a, 23701d, 23701e, 23701f, or 23701g shall be exempt from taxes
imposed by this part, except as provided in this article or in
Article 2 (commencing with Section 23731), upon its submission to the
Franchise Tax Board of one of the following:
(A) A copy of the determination letter or ruling issued by the
Internal Revenue Service recognizing the organization's exemption
from federal income tax under Section 501(a) of the Internal Revenue
Code, as an organization described in Section 501(c)(3), (c)(4), (c)
(5), (c)(6), or (c)(7) of the Internal Revenue Code.
(B) A copy of the group exemption letter issued by the Internal
Revenue Service that states that both the central organization and
all of its subordinates are tax-exempt under Section 501(c)(3), (c)
(4), (c)(5), (c)(6), or (c)(7) of the Internal Revenue Code and
substantiation that the organization is included in the federal group
exemption letter as a subordinate organization.
(2) (A) Upon receipt of the documents required in subparagraph (A)
or (B) of paragraph (1), the Franchise Tax Board shall issue an
acknowledgment that the organization is exempt from taxes imposed by
this part, except as provided in this article or in Article 2
(commencing with Section 23731). The acknowledgment may refer to the
organization's recognition by the Internal Revenue Service of
exemption from federal income tax as an organization described in
Section 501(c)(3), (c)(4), (c)(5), (c)(6), or (c)(7) of the Internal
Revenue Code and, if applicable, the organization's subordinate
organization status under a federal group exemption letter. The
effective date of an organization's exemption from state income tax
pursuant to this subdivision shall be no later than the effective
date of the organization's recognition of exemption from federal
income tax as an organization described in Section 501(c)(3), (c)(4),
(c)(5), (c)(6), or (c)(7) of the Internal Revenue Code, or its
status as a subordinate organization under a federal group exemption
letter, as applicable.
(B) Notwithstanding any other provision of this subdivision, an
organization formed as a California corporation or qualified to do
business in California that, as of the date of receipt by the
Franchise Tax Board of the documents required under paragraph (1), is
listed by the Secretary of the State or Franchise Tax Board as
"suspended" or "forfeited" may not establish its exemption under
paragraph (1) and shall not receive an acknowledgment referred to
under subparagraph (A) from the Franchise Tax Board until that
corporation is listed by the Secretary of State and the Franchise Tax
Board as an "active" corporation.
(3) If, for federal income tax purposes, an organization's
exemption from tax as an organization described in Section 501(c)(3),
(c)(4), (c)(5), (c)(6), or (c)(7) of the Internal Revenue Code is
suspended or revoked, the organization shall notify the Franchise Tax
Board of the suspension or revocation, in the form and manner
prescribed by the Franchise Tax Board. Upon notification, the board
shall suspend or revoke, whichever is applicable, for state income
tax purposes, the organization's exemption under paragraph (1).
(4) This subdivision shall not be construed to prevent the
Franchise Tax Board from revoking the exemption of an organization
that is not organized or operated in accordance with California law,
this chapter, or Section 501(c)(3), (c)(4), (c)(5), (c)(6), or (c)(7)
of the Internal Revenue Code.
(5) If the Franchise Tax Board suspends or revokes the exemption
of an organization pursuant to paragraph (3) or (4), the exemption
shall be reinstated only upon compliance with this section,
regardless of whether the organization can establish exemption under
paragraph (1).
(c) This section shall not prevent a determination from having
retroactive effect and does not prevent the issuance of a
determination with respect to a domestic organization which was in
existence prior to January 1, 1970, and exempt under prior law
without the submission of a formal application or payment of a filing
fee. For the purpose of this section, the term "domestic" means
created or organized under the laws of this state.
(d) The Franchise Tax Board may prescribe rules and regulations to
implement the provisions of this article.