BILL ANALYSIS
Senate Appropriations Committee Fiscal Summary
Senator Christine Kehoe, Chair
1546 (Calderon)
Hearing Date: 08/17/2009 Amended: 08/17/2009
Consultant: Mark McKenzie Policy Vote: Rev&Tax 5-2
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BILL SUMMARY: AB 1546 would require a canceled domestic limited
partnership (LP) seeking to revive its active status to pay
outstanding fees and file missing tax returns with the Franchise
Tax Board (FTB) in addition to other existing requirements. FTB
would be authorized to charge a $100 service fee for expedited
reinstatement until January 1, 2011, and establish future fee
amounts through regulation based upon direct and indirect costs
of providing the service. This bill would also make technical
and clarifying changes to recently enacted budget provisions.
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Fiscal Impact (in thousands)
Major Provisions 2009-10 2010-11 2011-12 Fund
Expedited service fees minor annual fee revenue gains General
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STAFF COMMENTS:
All domestic limited partnerships, regardless of the date of
formation, will be subject to the Uniform Limited Partnerships
Act (ULPA) of 2008 as of January 1, 2010. The ULPA requires a
domestic LP to file a certificate of cancellation with the
Secretary of State to complete the dissolution process, and to
file a certificate of revival to revive active status. The
certificate of revival must be accompanied by certification by
FTB that the domestic LP has paid all annual taxes, penalties,
and interest due, including amounts for periods between
dissolution and revival. Current law requires corporations that
are suspended by FTB and seeking to revive active status to file
a certificate of revival accompanied by written confirmation by
FTB that the corporation has filed all delinquent tax returns
and paid any outstanding taxes, penalties, interest, and fees.
Corporations seeking expedited processing of a revival request
must pay a $100 service fee.
While existing law requires corporations seeking revival to pay
any outstanding fees and file tax returns, these requirements do
not apply to domestic LPs seeking revival. Furthermore, there
is no existing authorization for FTB to charge a service fee
when a domestic LP seeks expedited processing of certification
requests. AB 1546 would require domestic LPs seeking to revive
active status to pay any outstanding fees and file missing tax
returns with FTB, in addition to other requirements, and would
authorize FTB to charge a $100 specialized service fee for LP
revival confirmation letter requests until January 1, 2011.
After that date, FTB would establish the fees based upon direct
and indirect costs for providing the service through regulation.
Approximately 240 domestic LPs canceled registration in fiscal
year 2007-08. FTB estimates that few canceled domestic LPs with
outstanding fees would seek revival. If 5 percent of canceled
domestic LPs seek revival and pay the $100 expedited processing
fee, there would be a minor revenue gain of $1,200 annually.
Page 2
AB 1546 (Calderon)
AB 1546 would also clean up provisions enacted in ABX3 3
(Evans), Chapter 15 of the 2009 Third Extraordinary Session, and
SBX3 15 (Calderon), Chapter 17 of the 2009 Third Extraordinary
Session. Specifically, this bill would:
Clarify the operative date for the changes to the dependent
exemption credit.
Correct cross referencing errors for the underpayment of
estimated tax penalty.
Clarify the operative date and correct a cross referencing
error in provisions that authorize businesses that apportion
income to make an annual irrevocable election to utilize a
"single sales factor" apportionment formula.