BILL NUMBER: AB 2897 CHAPTERED 09/12/00 CHAPTER 415 FILED WITH SECRETARY OF STATE SEPTEMBER 12, 2000 APPROVED BY GOVERNOR SEPTEMBER 11, 2000 PASSED THE SENATE AUGUST 22, 2000 PASSED THE ASSEMBLY MAY 3, 2000 INTRODUCED BY Committee on Revenue and Taxation (Knox (Chair), Alquist, Aroner, Ducheny, Honda, and Romero) MARCH 9, 2000 An act to amend Section 6810 of the Corporations Code, and to amend Sections 19411 and 23188 of the Revenue and Taxation Code, relating to taxation. LEGISLATIVE COUNSEL'S DIGEST AB 2897, Committee on Revenue and Taxation. Taxation. Under existing law, the Franchise Tax Board may recover any refund or credit that is erroneously made or allowed, together with interest from the date demand for recovery was made. In the case of a corporation, interest is computed from the date the refund was made or the credit allowed, instead of the date a demand for recovery was made. This bill would instead provide that for all persons interest shall be computed beginning 30 days after the Franchise Tax Board mails a notice and demand for repayment. This bill would also correct certain statutory references and make nonsubstantive, technical changes relating to taxation. THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS: SECTION 1. Section 6810 of the Corporations Code is amended to read: 6810. (a) Upon the failure of a corporation to file the statement required by Section 6210, the Secretary of State shall mail a notice of that delinquency to the corporation. The notice shall also contain information concerning the application of this section, and advise the corporation of the penalty imposed by Section 19141 of the Revenue and Taxation Code for failure to timely file the required statement after notice of delinquency has been mailed by the Secretary of State. If, within 60 days after the mailing of the notice of delinquency, a statement pursuant to Section 6210 has not been filed by the corporation, the Secretary of State may pursuant to regulation certify the name of the corporation to the Franchise Tax Board. (b) Upon certification pursuant to subdivision (a), the Franchise Tax Board shall assess against the corporation a penalty of fifty dollars ($50) pursuant to Section 19141 of the Revenue and Taxation Code. (c) The penalty herein provided shall not apply to a corporation which on or prior to the date of certification pursuant to subdivision (a) has dissolved or has been merged into another corporation. (d) The penalty herein provided shall not apply and the Secretary of State need not mail a notice of delinquency to a corporation the corporate powers, rights, and privileges of which have been suspended by the Franchise Tax Board pursuant to Section 23301, 23301.5, or 23775 of the Revenue and Taxation Code on or prior to, and remain suspended on, the last day of the filing period pursuant to Section 6210. The Secretary of State need not mail a form pursuant to Section 6210 to a corporation the corporate powers, rights, and privileges of which have been so suspended by the Franchise Tax Board on or prior to, and remain suspended on, the day the Secretary of State prepares the forms for mailing. (e) If, after certification pursuant to subdivision (a) the Secretary of State finds the required statement was filed before the expiration of the 60-day period after mailing of the notice of delinquency, the Secretary of State shall promptly decertify the name of the corporation to the Franchise Tax Board. The Franchise Tax Board shall then promptly abate any penalty assessed against the corporation pursuant to Section 19141 of the Revenue and Taxation Code. (f) If the Secretary of State determines that the failure of a corporation to file a statement required by Section 6210 is excusable because of reasonable cause or unusual circumstances that justify the failure, the Secretary of State may waive the penalty imposed by this section and by Section 19141 of the Revenue and Taxation Code, in which case the Secretary of State shall not certify the name of the corporation to the Franchise Tax Board, or if already certified, the Secretary of State shall promptly decertify the name of the corporation. SEC. 2. Section 19411 of the Revenue and Taxation Code is amended to read: 19411. The Franchise Tax Board may recover any refund or credit or any portion thereof which is erroneously made or allowed, together with interest at the adjusted annual rate established pursuant to Section 19521 beginning 30 days after the board mails a notice and demand for repayment, in an action brought in a court of competent jurisdiction in the County of Sacramento in the name of the people of the State of California within whichever of the following periods expires the later: (a) Two years after the refund or credit was made. (b) During the period within which the Franchise Tax Board may mail a notice of proposed deficiency assessment. SEC. 3. Section 23188 of the Revenue and Taxation Code is amended to read: 23188. In the event that taxes, interest, or penalties have been or shall be assessed against, paid by, or collected from a taxpayer under a subdivision of Section 23181 or 23183.1, which assessment, payment, or collection should have been made under a different subdivision of those sections, the taxes, interest, or penalties shall be considered as having been assessed, paid, or collected under that different subdivision as of the date or dates they were made.