BILL NUMBER: AB 557 AMENDED
BILL TEXT
AMENDED IN ASSEMBLY MAY 28, 2015
INTRODUCED BY Assembly Member Irwin
FEBRUARY 23, 2015
An act to amend Sections 2117, 6210, and 8210 of, and to
add Sections 5008.9, 6610.5, 8610.5, and 9680.5
to, to the Corporations Code, and to add
Sections 19548.1 and Section 23156 to
the Revenue and Taxation Code, relating to nonprofit corporations.
LEGISLATIVE COUNSEL'S DIGEST
AB 557, as amended, Irwin. Nonprofit corporations: abatement:
dissolution: surrender.
The Nonprofit Corporation Law, among other things, generally
regulates the organization and operation of nonprofit public benefit
corporations, nonprofit mutual benefit corporations, and nonprofit
religious corporations.
(1) Within a specified period of time after the filing of its
original articles of incorporation and biennially thereafter,
existing law requires nonprofit public benefit corporations,
nonprofit mutual benefit corporations, and nonprofit religious
corporations to file a statement, known as a Statement of
Information, with the Secretary of State containing specified
information including the street address of its principal office and
its mailing address. Within a specified period of time after filing
its original statement and designation and annually thereafter,
existing law, the General Corporation Law, requires every foreign
corporation, including foreign nonprofit corporations, as specified,
to file a statement, known as a Statement of Information, with the
Secretary of State containing specified information, including the
street address of its principal executive office and its mailing
address.
This bill would authorize the Secretary of State to also obtain
address information from the Franchise Tax Board to use in providing
notices to a foreign corporation, including these foreign nonprofit
corporations. This bill would specifically authorize the Franchise
Tax Board to disclose this information.
(2)
(1) Existing law authorizes the corporate powers,
rights, and privileges of a domestic taxpayer to be suspended, and
the exercise of the corporate powers, rights, and privileges of a
foreign taxpayer in this state to be forfeited, if certain tax
liabilities are not paid or a taxpayer fails to file a tax return.
Existing law also authorizes the corporate powers, rights, and
privileges of a domestic corporation exempt from income tax to be
suspended and the exercise of the corporate powers, rights, and
privileges of a foreign corporation in this state exempt from income
tax to be forfeited if the organization fails to file the annual
information return or a specified statement for organizations not
required to file the information return or pay a specified amount
due. Existing law requires notice prior to the suspension or
forfeiture of a taxpayer's corporate powers, rights, and privileges.
Existing law requires the Franchise Tax Board to transmit to the
Secretary of State the names of those taxpayers subject to these
suspension or forfeiture provisions and thereby makes the suspension
or forfeiture effective. Under existing law, the Secretary of State's
certificate is prima facie evidence of the suspension or forfeiture.
Under existing law, a corporation that fails to file a Statement
of Information with the Secretary of State within a specified time
period and was certified for penalty is subject to suspension rather
than penalty. Existing law requires the Secretary of State to provide
a notice to the nonprofit corporation informing it that its
corporate powers, rights, and privileges will be suspended within a
specified time period if the Statement of Information is not filed.
If the nonprofit corporation does not file the Statement of
Information, existing law requires the Secretary of State to notify
the Franchise Tax Board and the nonprofit corporation of the
suspension and upon that notification the corporate powers, rights,
and privileges of the nonprofit corporation are suspended.
This bill would make a nonprofit public benefit corporation, a
nonprofit mutual benefit corporation, a nonprofit religious
corporation, and a foreign nonprofit corporation, subject to
administrative dissolution or administrative surrender, as specified,
if the nonprofit corporation's or foreign corporation's
corporate powers are, and have been, suspended or forfeited by the
Franchise Tax Board for a specified period of time or if the
nonprofit corporation has not filed a Statement of Information with
the Secretary of State for a specified period of time.
Prior to the administrative dissolution or administrative surrender
of the nonprofit corporation or foreign corporation, the
bill would require either the Franchise Tax Board or the
Secretary of State the Franchise Tax Board to
provide notice to the nonprofit corporation of the
pending administrative dissolution or administrative surrender. The
bill would also require the Secretary of State to provide notice of
the pending administrative dissolution or administrative surrender on
its Internet Web site, as specified. The bill would authorize a
nonprofit corporation or foreign corporation to provide
the Franchise Tax Board or the Secretary of State
with a written objection to the administrative dissolution or
administrative surrender. If there is no written objection or the
written objection fails, the bill would require the
nonprofit corporation to be administratively dissolved or
administratively surrendered and would provide that the certificate
of the Secretary of State is prima facie evidence of the
administrative dissolution or administrative surrender. Upon
administrative dissolution or administrative surrender, the bill
would abate the nonprofit corporation's liabilities for qualified
taxes, interest, and penalties, as provided.
(3)
(2) Existing law, the Nonprofit Corporation Law,
authorizes a nonprofit public benefit corporation, nonprofit mutual
benefit corporation, and nonprofit religious corporation to elect
voluntarily to wind up and dissolve by either approval of a majority
of all members or approval of the board and approval of the members.
Under existing law, the General Corporation Law, when a corporation
has not issued shares, a majority of the directors, or, if no
directors have been named in the articles or have been elected, the
incorporator or a majority of the incorporators, are authorized to
sign and verify a specified certificate of dissolution. Existing law
requires the certificate to be filed with the Secretary of State and
requires the Secretary of State to notify the Franchise Tax Board of
the dissolution. Existing law provides that, upon the filing of the
certificate, a corporation is dissolved and its powers, rights, and
privileges cease.
This bill would enact provisions similar to those General
Corporation Law provisions and make them applicable to nonprofit
public benefit corporations, nonprofit mutual benefit corporations,
and nonprofit religious corporations. The bill would additionally
provide that liability to creditors, if any, is not discharged, the
liability of the directors of the dissolved nonprofit corporation is
not discharged, and the dissolution of a nonprofit corporation does
not diminish or adversely affect the ability of the Attorney General
to enforce specified liabilities.
(4)
(3) Existing law requires every corporation doing
business within the limits of this state and not expressly exempted
from taxation to annually pay to the state, for the privilege of
exercising its corporate franchises within this state, a tax
according to or measured by its net income, as specified. Under
existing law, every corporation, except as specified, is subject to
the minimum franchise tax until the effective date of dissolution or
withdrawal or, if later, the date the corporation ceases to do
business within the limits of this state. Upon certification by the
Secretary of State that a nonprofit public benefit corporation or a
nonprofit mutual benefit corporation has failed to file the required
Statement of Information, existing law requires the Franchise Tax
Board to assess a specified penalty.
This bill would require the Franchise Tax Board to abate, upon
written request by a qualified nonprofit corporation, as defined,
unpaid qualified taxes, interest, and penalties, as defined, for the
taxable years in which the nonprofit corporation certifies, under
penalty of perjury, that it was not doing business, as defined. The
bill would make this abatement conditioned on the dissolution of the
qualified corporation within a specified period of time of filing the
request for abatement. The bill would require the Franchise Tax
Board to prescribe rules and regulations to carry out these abatement
provisions and would exempt these rules and regulations from the
Administrative Procedure Act.
(5)
(4) Existing state constitutional law prohibits the
Legislature from making any gift, or authorizing the making of any
gift, of any public money or thing of value to any individual,
municipal, or other corporation.
This bill would make certain legislative findings and declarations
that abatement of a nonprofit corporation's liabilities for
specified taxes, penalties, and interest serves a statewide
public purpose, as provided.
(6)
(5) By expanding the crime of perjury, the bill would
impose a state-mandated local program.
The California Constitution requires the state to reimburse local
agencies and school districts for certain costs mandated by the
state. Statutory provisions establish procedures for making that
reimbursement.
This bill would provide that no reimbursement is required by this
act for a specified reason.
Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: yes.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. The Legislature finds and declares all of the
following:
(a) There are more than 150,000 nonprofit corporations in
California that provide a variety of programs and services in areas
as diverse as education, recreation, health care, legal, job
training, and housing to millions of Californians. These
organizations, depending on their formation status, are required to
register with the office of the Secretary of State, the Franchise Tax
Board, and the office of the Attorney General.
(b) Every year, hundreds of nonprofit corporations seek
administrative changes to expand their mission or alter their tax
status, and, in some cases, to even go out of existence. This
dissolution process, which involves the winding down of the nonprofit
corporation's affairs, is very cumbersome and protracted.
(c) In order to more effectively analyze and monitor the status,
finances, and activities of a nonprofit corporation, it is in the
public's interest to establish a streamlined process to efficiently
dissolve a nonprofit corporation. The act of dissolving the nonprofit
corporation and abating unpaid taxes, interest, and penalties serves
a statewide public purpose by ensuring that nonprofit corporations
that have been suspended or forfeited tax exempt
tax-exempt status are no longer able to do business in the
state, which will relieve the citizens of California from
unknowingly donating to a nonprofit corporation that is not complying
with the laws of the state, and does not constitute a gift of public
funds within the meaning of Section 6 of Article XVI of the
California Constitution.
SEC. 2. Section 2117 of the Corporations Code
is amended to read:
2117. (a) Every foreign corporation (other than a foreign
association) qualified to transact intrastate business shall file,
within 90 days after the filing of its original statement and
designation of foreign corporation and annually thereafter during the
applicable filing period, on a form prescribed by the Secretary of
State, a statement containing the following:
(1) The name of the corporation as registered in California and
the California Secretary of State's file number.
(2) The names and complete business or residence addresses of its
chief executive officer, secretary, and chief financial officer.
(3) The street address of its principal executive office.
(4) The mailing address of the corporation, if different from the
street address of its principal executive office.
(5) The street address of its principal business office in this
state, if any.
(6) If the corporation chooses to receive renewal notices and any
other notifications from the Secretary of State by email instead of
by United States mail, the corporation shall include a valid email
address for the corporation or for the corporation's designee to
receive those notices.
(7) A statement of the general type of business that constitutes
the principal business activity of the corporation (for example,
manufacturer of aircraft; wholesale liquor distributor; or retail
department store).
(b) The statement required by subdivision (a) shall also
designate, as the agent of the corporation for the purpose of service
of process, a natural person residing in this state or a corporation
that has complied with Section 1505 and whose capacity to act as the
agent has not terminated. If a natural person is designated, the
statement shall set forth the person's complete business or residence
street address. If a corporate agent is designated, no address for
it shall be set forth.
(c) The statement required by subdivision (a) shall be available
and open to the public for inspection. The Secretary of State shall
provide access to all information contained in the statement by means
of an online database.
(d) In addition to any other fees required, a foreign corporation
shall pay a five-dollar ($5) disclosure fee upon filing the statement
required by subdivision (a). One-half of the fee shall,
notwithstanding Section 12176 of the Government Code, be deposited
into the Business Programs Modernization Fund established in
subdivision (k) of Section 1502, and one-half shall be deposited into
the Victims of Corporate Fraud Compensation Fund established in
Section 2280.
(e) Whenever any of the information required by subdivision (a) is
changed, the corporation may file a current statement containing all
the information required by subdivisions (a) and (b). In order to
change its agent for service of process or the address of the agent,
the corporation shall file a current statement containing all the
information required by subdivisions (a) and (b). Whenever any
statement is filed pursuant to this section, it supersedes any
previously filed statement and the statement in the filing pursuant
to Section 2105.
(f) Subdivisions (c), (d), (f), and (g) of Section 1502 apply to
statements filed pursuant to this section, except that "articles"
shall mean the filing pursuant to Section 2105, and "corporation"
shall mean a foreign corporation.
(g) The Secretary of State may obtain address information from the
Franchise Tax Board to use to provide notice to a foreign nonprofit
corporation, pursuant to Section 19548.1 of the Revenue and Taxation
Code.
SEC. 3. SEC. 2. Section 5008.9 is
added to the Corporations Code, to read:
5008.9. (a) A nonprofit corporation described in Section 5059,
5060, or 5061, or a foreign nonprofit corporation, as
described in Chapter 21 (commencing with Section 2100) of Division 1,
defined in Section 5053, that has qualified to
transact intrastate business, shall be subject to administrative
dissolution or administrative surrender in accordance with this
section if, as of January 1, 2016, or later, at least one of
the following applies: the nonprofit corporation's or
foreign corporation's corporate powers are, and have been, suspended
or forfeited by the Franchise Tax Board for a period of not less
than 48 continuous months.
(1) The nonprofit corporation's corporate powers are, and have
been, suspended or forfeited by the Franchise Tax Board for a period
of not less than 48 continuous months.
(2) The nonprofit corporation has not filed a Statement of
Information with the Secretary of State, as provided by Section 2117,
6210, 8210, or 9660, for a period of not less than 48 continuous
months.
(b) Prior to the administrative dissolution or administrative
surrender of the nonprofit corporation or foreign
corporation, the nonprofit corporation shall be
notified of the pending administrative dissolution or administrative
surrender as follows:
(1) The Franchise Tax Board shall mail written notice to the last
known address of a nonprofit corporation or foreign
corporation meeting the requirement described in
paragraph (1) of subdivision (a).
(2) The Secretary of State shall provide a notice to the last
known address of a nonprofit corporation meeting the requirement
described in paragraph (2) of subdivision (a).
(3)
(2) If the nonprofit corporation or foreign
corporation does not have a valid address in the records of the
Franchise Tax Board or the Secretary of State,
Board, the notice provided in subdivision (d) shall be
deemed sufficient notice prior to administrative dissolution or
administrative surrender.
(c) The Franchise Tax Board shall transmit to the Secretary of
State the names of nonprofit corporations and foreign
corporations subject to the administrative dissolution or
administrative surrender provisions of this section.
(d) The Secretary of State shall provide 60 calendar days' notice
of the pending administrative dissolution or administrative surrender
on its Internet Web site by listing the corporation name,
the Secretary of State's file number, and California corporation
number, as applicable, for the nonprofit corporation.
corporation name and the Secretary of State's file number for the
nonprofit corporation or foreign corporation. The Secretary of State
shall also, in conjunction with the information above, provide
instructions for a nonprofit corporation or foreign corporation to
submit a written objection of the pending administrative dissolution
or administrative surrender to the Franchise Tax Board.
(e) (1) A nonprofit corporation or foreign corporation
may provide the Franchise Tax Board or the Secretary of
State with a written objection to the administrative
dissolution or administrative surrender.
(2) The Franchise Tax Board and the Secretary of State
shall notify each other the
Secretary of State if a written objection has been received.
(f) If no written objection to the administrative dissolution or
administrative surrender is received by the Secretary of
State or the Franchise Tax Board during the 60-day period
described in subdivision (d), the nonprofit corporation or
foreign corporation shall be administratively dissolved or
administratively surrendered in accordance with this section. The
certificate of the Secretary of State shall be prima facie evidence
of the administrative dissolution or administrative surrender.
(g) (1) If the written objection of a nonprofit corporation
or foreign corporation to the administrative dissolution or
administrative surrender has been received by the Franchise Tax Board
or the Secretary of State before the expiration
of the 60-day period described in subdivision (d), that nonprofit
corporation or foreign corporation shall have an
additional 90 days from the date the written objection is received by
the Franchise Tax Board or the Secretary of State
to pay or otherwise satisfy all accrued taxes, penalties, and
interest and to file a current Statement of Information with the
Secretary of State.
(2) (A) If the conditions in paragraph (1) are satisfied, the
administrative dissolution or administrative surrender shall be
canceled.
(B) If the conditions in paragraph (1) are not satisfied, the
nonprofit corporation or foreign corporation shall be
administratively dissolved or administratively surrendered in
accordance with this section as of the date that is 90 days after the
receipt of the written objection.
(3) The Franchise Tax Board or the Secretary of State
may extend the 90-day period in paragraph (1), but for no
more than one period of 90 days.
(h) Upon administrative dissolution or administrative surrender in
accordance with this section, the nonprofit corporation's or
the foreign corporation's liabilities for qualified taxes,
interest, and penalties as defined in Section 23156 of the Revenue
and Taxation Code, if any, shall be abated. Any actions taken by the
Franchise Tax Board to collect that abated liability shall be
released, withdrawn, or otherwise terminated by the Franchise Tax
Board, and no subsequent administrative or civil action shall be
taken or brought to collect all or part of that amount. Any amounts
erroneously received by the Franchise Tax Board in contravention of
this section may be credited and refunded in accordance with Article
1 (commencing with Section 19301) of Chapter 6 of Part 10.2 of
Division 2 of the Revenue and Taxation Code.
(i) If the nonprofit corporation or foreign corporation
is administratively dissolved or administratively surrendered under
this section, the liability to creditors, if any, is not discharged.
The liability of the directors of, or other persons related to, the
administratively dissolved or administratively surrendered nonprofit
corporation or foreign corporation is not discharged. The
administrative dissolution or administrative surrender of a nonprofit
corporation or foreign corporation pursuant to this
section shall not diminish or adversely affect the ability of the
Attorney General to enforce liabilities as otherwise provided by law.
SEC. 4. Section 6210 of the Corporations Code
is amended to read:
6210. (a) Every corporation shall, within 90 days after the
filing of its original articles and biennially thereafter during the
applicable filing period, file, on a form prescribed by the Secretary
of State, a statement containing: (1) the name of the corporation
and the Secretary of State's file number; (2) the names and complete
business or residence addresses of its chief executive officer,
secretary, and chief financial officer; (3) the street address of its
principal office in this state, if any; (4) the mailing address of
the corporation, if different from the street address of its
principal executive office or if the corporation has no principal
office address in this state; and (5) if the corporation chooses to
receive renewal notices and any other notifications from the
Secretary of State by email instead of by United States mail, a valid
email address for the corporation or for the corporation's designee
to receive those notices.
(b) The statement required by subdivision (a) shall also
designate, as the agent of the corporation for the purpose of service
of process, a natural person residing in this state or any domestic
or foreign or foreign business corporation that has complied with
Section 1505 and whose capacity to act as an agent has not
terminated. If a natural person is designated, the statement shall
set forth the person's complete business or residence street address.
If a corporate agent is designated, no address for it shall be set
forth.
(c) For the purposes of this section, the applicable filing period
for a corporation shall be the calendar month during which its
original articles were filed and the immediately preceding five
calendar months. The Secretary of State shall provide a notice to
each corporation to comply with this section approximately three
months prior to the close of the applicable filing period. The notice
shall state the due date for compliance and shall be sent to the
last address of the corporation according to the records of the
Secretary of State or to the last email address according to the
records of the Secretary of State if the corporation has elected to
receive notices from the Secretary of State by email. Neither the
failure of the Secretary of State to send the notice nor the failure
of the corporation to receive it is an excuse for failure to comply
with this section.
(d) Whenever any of the information required by subdivision (a) is
changed, the corporation may file a current statement containing all
the information required by subdivisions (a) and (b). In order to
change its agent for service of process or the address of the agent,
the corporation must file a current statement containing all the
information required by subdivisions (a) and (b). Whenever any
statement is filed pursuant to this section, it supersedes any
previously filed statement and the statement in the articles as to
the agent for service of process and the address of the agent.
(e) The Secretary of State may obtain address information from the
Franchise Tax Board to use to provide notice to a corporation,
pursuant to Section 19548.1 of the Revenue and Taxation Code.
(f) The Secretary of State may destroy or otherwise dispose of any
statement filed pursuant to this section after it has been
superseded by the filing of a new statement.
(g) This section shall not be construed to place any person
dealing with the corporation on notice of, or under any duty to
inquire about, the existence or content of a statement filed pursuant
to this section.
SEC. 5. SEC. 3. Section 6610.5 is
added to the Corporations Code, to read:
6610.5. (a) Notwithstanding any other provision of this division,
when a corporation has not issued any memberships, a majority of the
directors, or, if no directors have been named in the articles or
have been elected, the incorporator or a majority of the
incorporators, may sign and verify a certificate of dissolution
stating all of the following:
(1) That the certificate of dissolution is being filed within 24
months from the date the articles of incorporation were filed.
(2) That the corporation does not have any debts or other
liabilities, except as provided in paragraph (3) and subdivision (d).
(3) That the tax liability will be satisfied on a taxes-paid basis
or that a person or corporation or other business entity assumes the
tax liability, if any, of the dissolving corporation and is
responsible for additional corporate taxes, if any, that are assessed
and that become due after the date of the assumption of the tax
liability.
(4) That a final franchise tax return, as described by Section
23332 of the Revenue and Taxation Code, has been or will be filed
with the Franchise Tax Board as required under Part 10.2 (commencing
with Section 18401) of Division 2 of the Revenue and Taxation Code.
(5) That the corporation was created in error.
(6) That the known assets of the corporation remaining after
payment of, or adequately providing for, known debts and liabilities
have been distributed as required by law or that the corporation
acquired no known assets, as the case may be.
(7) That a majority of the directors, or, if no directors have
been named in the articles or have been elected, the incorporator or
a majority of the incorporators authorized the dissolution and
elected to dissolve the corporation.
(8) That the corporation has not issued any memberships, and if
the corporation has received payments for memberships, those payments
have been returned to those making the payments.
(9) That the corporation is dissolved.
(b) A certificate of dissolution signed and verified pursuant to
subdivision (a) shall be filed with the Secretary of State. The
Secretary of State shall notify the Franchise Tax Board of the
dissolution.
(c) Upon filing a certificate of dissolution pursuant to
subdivision (b), a corporation shall be dissolved and its powers,
rights, and privileges shall cease.
(d) Notwithstanding the dissolution of a corporation pursuant to
this section, its liability to creditors, if any, is not discharged.
The liability of the directors of, or other persons related to, the
dissolved corporation is not discharged. The dissolution of a
corporation pursuant to this section shall not diminish or adversely
affect the ability of the Attorney General to enforce liabilities as
otherwise provided by law.
SEC. 6. Section 8210 of the Corporations Code
is amended to read:
8210. (a) Every corporation shall, within 90 days after the
filing of its original articles and biennially thereafter during the
applicable filing period, file, on a form prescribed by the Secretary
of State, a statement containing: (1) the name of the corporation
and the Secretary of State's file number; (2) the names and complete
business or residence addresses of its chief executive officer,
secretary, and chief financial officer; (3) the street address of its
principal office in this state, if any; (4) the mailing address of
the corporation, if different from the street address of its
principal executive office or if the corporation has no principal
office address in this state; and (5) if the corporation chooses to
receive renewal notices and any other notifications from the
Secretary of State by email instead of by United States mail, a valid
email address for the corporation or for the corporation's designee
to receive those notices.
(b) The statement required by subdivision (a) shall also
designate, as the agent of the corporation for the purpose of service
of process, a natural person residing in this state or any domestic
or foreign or foreign business corporation that has complied with
Section 1505 and whose capacity to act as an agent has not
terminated. If a natural person is designated, the statement shall
set forth the person's complete business or residence street address.
If a corporate agent is designated, no address for it shall be set
forth.
(c) For the purposes of this section, the applicable filing period
for a corporation shall be the calendar month during which its
original articles were filed and the immediately preceding five
calendar months. The Secretary of State shall provide a notice to
each corporation to comply with this section approximately three
months prior to the close of the applicable filing period. The notice
shall state the due date for compliance and shall be sent to the
last address of the corporation according to the records of the
Secretary of State or to the last email address according to the
records of the Secretary of State if the corporation has elected to
receive notices from the Secretary of State by email. Neither the
failure of the Secretary of State to send the notice nor the failure
of the corporation to receive it is an excuse for failure to comply
with this section.
(d) Whenever any of the information required by subdivision (a) is
changed, the corporation may file a current statement containing all
the information required by subdivisions (a) and (b). In order to
change its agent for service of process or the address of the agent,
the corporation must file a current statement containing all the
information required by subdivisions (a) and (b). Whenever any
statement is filed pursuant to this section, it supersedes any
previously filed statement and the statement in the articles as to
the agent for service of process and the address of the agent.
(e) The Secretary of State may obtain address information from the
Franchise Tax Board to use to provide notice to a corporation,
pursuant to Section 19548.1 of the Revenue and Taxation Code.
(f) The Secretary of State may destroy or otherwise dispose of any
statement filed pursuant to this section after it has been
superseded by the filing of a new statement.
(g) This section shall not be construed to place any person
dealing with the corporation on notice of, or under any duty to
inquire about, the existence or content of a statement filed pursuant
to this section.
SEC. 7. SEC. 4. Section 8610.5 is
added to the Corporations Code, to read:
8610.5. (a) Notwithstanding any other provision of this division,
when a corporation has not issued any memberships, a majority of the
directors, or, if no directors have been named in the articles or
have been elected, the incorporator or a majority of the
incorporators, may sign and verify a certificate of dissolution
stating the following:
(1) That the certificate of dissolution is being filed within 24
months from the date the articles of incorporation were filed.
(2) That the corporation does not have any debts or other
liabilities, except as provided in paragraph (3) and subdivision (d).
(3) That the tax liability will be satisfied on a taxes-paid
basis, or that a person or corporation or other business entity
assumes the tax liability, if any, of the dissolving corporation and
is responsible for additional corporate taxes, if any, that are
assessed and that become due after the date of the assumption of the
tax liability.
(4) That a final franchise tax return, as described by Section
23332 of the Revenue and Taxation Code, has been or will be filed
with the Franchise Tax Board as required under Part 10.2 (commencing
with Section 18401) of Division 2 of the Revenue and Taxation Code.
(5) That the corporation was created in error.
(6) That the known assets of the corporation remaining after
payment of, or adequately providing for, known debts and liabilities
have been distributed as required by law or that the corporation
acquired no known assets, as the case may be.
(7) That a majority of the directors, or, if no directors have
been named in the articles or have been elected, the incorporator or
a majority of the incorporators authorized the dissolution and
elected to dissolve the corporation.
(8) That the corporation has not issued any memberships, and if
the corporation has received payments for memberships, those payments
have been returned to those making the payments.
(9) That the corporation is dissolved.
(b) A certificate of dissolution signed and verified pursuant to
subdivision (a) shall be filed with the Secretary of State. The
Secretary of State shall notify the Franchise Tax Board of the
dissolution.
(c) Upon filing a certificate of dissolution pursuant to
subdivision (b), a corporation shall be dissolved and its powers,
rights, and privileges shall cease.
(d) Notwithstanding the administrative dissolution of a
corporation pursuant to this section, its liability to creditors, if
any, is not discharged. The liability of the directors of, or other
persons related to, the administratively dissolved corporation is not
discharged. The dissolution of a corporation pursuant to this
section shall not diminish or adversely affect the ability of the
Attorney General to
enforce liabilities as otherwise provided by law.
SEC. 8. SEC. 5. Section 9680.5 is
added to the Corporations Code, to read:
9680.5. (a) Notwithstanding any other provision of this division,
when a corporation has not issued any memberships, a majority of the
directors, or, if no directors have been named in the articles or
been elected, the incorporator or a majority of the incorporators,
may sign and verify a certificate of dissolution stating the
following:
(1) That the certificate of dissolution is being filed within 24
months from the date the articles of incorporation were filed.
(2) That the corporation does not have any debts or other
liabilities, except as provided in paragraph (3) and subdivision (d).
(3) That the tax liability will be satisfied on a taxes-paid basis
or that a person or corporation or other business entity assumes the
tax liability, if any, of the dissolving corporation and is
responsible for additional corporate taxes, if any, that are assessed
and that become due after the date of the assumption of the tax
liability.
(4) That a final franchise tax return, as described by Section
23332 of the Revenue and Taxation Code, has been or will be filed
with the Franchise Tax Board as required under Part 10.2 (commencing
with Section 18401) of Division 2 of the Revenue and Taxation Code.
(5) That the corporation was created in error.
(6) That the known assets of the corporation remaining after
payment of, or adequately providing for, known debts and liabilities
have been distributed as required by law or that the corporation
acquired no known assets, as the case may be.
(7) That a majority of the directors, or, if no directors have
been named in the articles or been elected, the incorporator or a
majority of the incorporators authorized the dissolution and elected
to dissolve the corporation.
(8) That the corporation has not issued any memberships, and if
the corporation has received payments for memberships, those payments
have been returned to those making the payments.
(9) That the corporation is dissolved.
(b) A certificate of dissolution signed and verified pursuant to
subdivision (a) shall be filed with the Secretary of State. The
Secretary of State shall notify the Franchise Tax Board of the
dissolution.
(c) Upon filing a certificate of dissolution pursuant to
subdivision (b), a corporation shall be dissolved and its powers,
rights, and privileges shall cease.
(d) Notwithstanding the dissolution of a nonprofit corporation
pursuant to this section, its liability to creditors, if any, is not
discharged. The liability of the directors of, or other persons
related to, the dissolved corporation is not discharged. The
dissolution of a nonprofit corporation pursuant to this section shall
not diminish or adversely affect the ability of the Attorney General
to enforce liabilities as otherwise provided by law.
SEC. 9. Section 19548.1 is added to the Revenue
and Taxation Code, to read:
19548.1. (a) The Franchise Tax Board, upon request by the
Secretary of State, pursuant to subdivision (g) of Section 2117, and
subdivision (e) of Sections 6210 and 8210, may disclose information
about addresses and email addresses to the Secretary of State to use
to provide notice to a nonprofit public benefit corporation,
nonprofit mutual benefit corporation, nonprofit religious
corporation, or foreign nonprofit corporation.
(b) Information disclosed to the Secretary of State pursuant to
subdivision (a) shall be disseminated by the Secretary of State only
as provided for by, and only for the purposes specified in, Division
2 (commencing with Section 5000) of Title 1 of the Corporations Code
and Chapter 21 (commencing with Section 2100) of Division 1 of Title
1 of the Corporations Code.
SEC. 10. SEC. 6. Section 23156 is
added to the Revenue and Taxation Code, to read:
23156. (a) The Franchise Tax Board shall abate, upon written
request by a qualified nonprofit corporation, unpaid qualified taxes,
interest, and penalties for the taxable years in which the qualified
nonprofit corporation certifies, under penalty of perjury, that it
was not doing business, within the meaning of subdivision (a) of
Section 23101.
(b) For purposes of this section:
(1) "Qualified nonprofit corporation" means a nonprofit
corporation identified in Section 5059, 5060, or 5061 of the
Corporations Code or a foreign nonprofit corporation, as
described in Chapter 21 (commencing with Section 2100) of Division 1
defined in Section 5053 of the Corporations Code
that has qualified to transact intrastate business in this state and
that satisfies any of the following conditions:
(A) Was operating and previously obtained tax-exempt status with
the Franchise Tax Board, but had its tax-exempt status revoked under
subdivision (c) of Section 23777.
(B) Was operating and previously obtained tax-exempt status with
the Internal Revenue Service, but had its tax-exempt status revoked
under Section 6033(j) of the Internal Revenue Code.
(C) Was never doing business, within the meaning of subdivision
(a) of Section 23101, in this state at any time after the time of its
incorporation in this state.
(2) "Qualified taxes, interest, and penalties" means tax imposed
under Section 23153 and associated interest and penalties, and any
penalties imposed under Section 19141. "Qualified taxes, interest,
and penalties" does not include tax imposed under Section 23501
or 23731, or associated interest or penalties.
(c) The qualified corporation must establish that it has ceased
all business operations at the time of filing the request for
abatement under this section.
(d) (1) The abatement of unpaid qualified tax, interest, and
penalties is conditioned on the dissolution of the qualified
corporation within 12 months from the date of filing the request for
abatement under this section.
(2) If the qualified corporation is not dissolved within 12 months
from the date of filing the request for abatement or restarts
business operations at any time after requesting abatement under this
section, the abatement of qualified tax, interest, and penalties
under this section shall be canceled and the qualified taxes,
interest, and penalties subject to that abatement shall be treated as
if the abatement never occurred.
(e) The Franchise Tax Board shall prescribe any rules and
regulations that may be necessary or appropriate to implement this
section. Chapter 3.5 (commencing with Section 11340) of Part 1 of
Division 3 of Title 2 of the Government Code shall not apply to any
standard, criterion, procedure, determination, rule, notice, or
guideline established or issued by the Franchise Tax Board pursuant
to this section.
SEC. 11. SEC. 7. No reimbursement
is required by this act pursuant to Section 6 of Article XIII B of
the California Constitution because the only costs that may be
incurred by a local agency or school district will be incurred
because this act creates a new crime or infraction, eliminates a
crime or infraction, or changes the penalty for a crime or
infraction, within the meaning of Section 17556 of the Government
Code, or changes the definition of a crime within the meaning of
Section 6 of Article XIII B of the California Constitution.