BILL ANALYSIS
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THIRD READING
Bill No: AB 1546
Author: Assembly Revenue and Taxation Committee
Amended: 8/17/09 in Senate
Vote: 21
SENATE REVENUE & TAXATION COMMITTEE : 5-2, 7/8/09
AYES: Wolk, Alquist, Florez, Padilla, Wiggins
NOES: Walters, Ashburn
NO VOTE RECORDED: Runner
SENATE APPROPRIATIONS COMMITTEE : 8-4, 8/17/09
AYES: Kehoe, Corbett, Hancock, Leno, Oropeza, Price, Wolk,
Yee
NOES: Cox, Denham, Runner, Walters
NO VOTE RECORDED: Wyland
ASSEMBLY FLOOR : 50-29, 5/28/09 - See last page for vote
SUBJECT : Taxation: limited partnerships: estimated
payments
SOURCE : Franchise Tax Board
DIGEST : This bill requires a canceled domestic limited
partnership 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 will be authorized to charge a $100
service fee for expedited reinstatement until January 1,
2011, and establish future fee amounts through regulation
CONTINUED
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based upon direct and indirect costs of providing the
service. This bill also makes technical and clarifying
changes to recently enacted budget provisions.
ANALYSIS : According to the FTB, the bill's sponsor, the
purpose of this bill is to maintain equitable treatment
among taxpayers by ensuring that the revival requirements
applicable to a domestic limited partnership (LP) are the
same as those applicable to a corporation.
All domestic LPs, 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. This bill requires
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 authorizes FTB to
charge a $100 specialized service fee for LP revival
confirmation letter requests until January 1, 2011. After
that date, FTB establishes the fees based upon direct and
indirect costs for providing the service through
regulation.
This bill cleans up provisions enacted in AB 3XXX (Evans),
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Chapter 15, Statutes of 2009, Third Extraordinary Session,
and SB 15XXX (Calderon), Chapter 17, Statutes of 2009,
Third Extraordinary Session. Specifically, this bill:
1. Clarifies the operative date for the changes to the
dependent exemption credit.
2. Corrects cross-referencing errors for the underpayment
of estimated tax penalty.
3. Clarifies 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.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: No
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
five 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.
SUPPORT : (Verified 8/18/09)
Franchise Tax Board (source)
ASSEMBLY FLOOR :
AYES: Ammiano, Arambula, Beall, Block, Blumenfield,
Brownley, Buchanan, Caballero, Charles Calderon, Carter,
Chesbro, Coto, Davis, De La Torre, De Leon, Eng, Evans,
Feuer, Fong, Fuentes, Furutani, Galgiani, Hall, Hayashi,
Hernandez, Hill, Huffman, Jones, Krekorian, Lieu, Bonnie
Lowenthal, Ma, Mendoza, Monning, Nava, John A. Perez, V.
Manuel Perez, Portantino, Price, Ruskin, Salas, Saldana,
Skinner, Solorio, Swanson, Torlakson, Torres, Torrico,
Yamada, Bass
NOES: Adams, Anderson, Bill Berryhill, Tom Berryhill,
Blakeslee, Conway, Cook, DeVore, Duvall, Emmerson,
Fletcher, Fuller, Gaines, Garrick, Gilmore, Hagman,
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Harkey, Huber, Jeffries, Knight, Logue, Miller, Niello,
Nielsen, Silva, Smyth, Audra Strickland, Tran, Villines
NO VOTE RECORDED: Nestande
DLW:mw 8/18/09 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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