| 1 | | - | Senate Bill No. 934 CHAPTER 59 An act to amend Section 50650.5 of the Health and Safety Code, to amend Sections 23701, 23701r, and 23772 of, and to repeal and add Section 23778 of, the Revenue and Taxation Code, and to amend Section 5168 of the Vehicle Code, relating to taxation. [ Approved by Governor September 09, 2020. Filed with Secretary of State September 09, 2020. ] LEGISLATIVE COUNSEL'S DIGESTSB 934, Bates. Corporate taxes: exempt organizations: filing fees.The Corporation Tax Law exempts the income of various types of nonprofit organizations from taxes imposed by that law, except as provided, if an application for exemption is filed with, and a filing fee of $25 is paid to, the Franchise Tax Board and the Franchise Tax Board issues a determination exempting the organization from tax. Existing law also requires, among other things, that filing fee to be paid when an organization whose exemption was revoked applies to reestablish as an exempt organization.This bill would eliminate the $25 filing fee on January 1, 2021.The Corporation Tax Law requires specific tax-exempt organizations to file an annual return containing specified information and requires the return to be filed on or before the 15th day of the 5th full calendar month following the close of the taxable year. Existing law requires those organizations to pay a $10 filing fee on or before the due date for filing the annual return, determined with regard to any extension of time for filing the return, and increases that filing fee to $25 in case of failure to pay the fee on or before that due date.This bill would eliminate those filing fees on January 1, 2021.This bill would also make various nonsubstantive and conforming changes to, among other things, update cross references.Digest Key Vote: MAJORITY Appropriation: NO Fiscal Committee: YES Local Program: NO Bill TextThe people of the State of California do enact as follows:SECTION 1. Section 50650.5 of the Health and Safety Code is amended to read:50650.5. For the purposes of this chapter, all of the following shall apply:(a) Mutual housing, community land trusts, and limited equity cooperative housing shall be deemed to be forms of homeownership and developments of those types of housing, as defined in subdivision (b), shall be eligible to receive assistance under the CalHome Program. The department may require that mutual housing, community land trust, or limited equity cooperative applicants not simultaneously apply for and receive funding through the departments rental housing programs for the same projects for which CalHome assistance is sought. For mutual housing, community land trust projects that do not convey an interest in real estate to the homebuyer, and limited equity cooperative projects, all of the following shall apply:(1) Program funds shall be used for permanent financing only.(2) The department shall enter into a regulatory agreement limiting occupant incomes, occupancy charges, and share purchase terms for 55 years.(3) Notwithstanding Section 50650.3, program assistance shall be provided in the form of a deferred payment loan.(b) As used in this section, mutual housing development means a housing development owned and sponsored by a nonprofit corporation or a limited partnership in which the nonprofit corporation is the sole general partner, and all of the following requirements are met:(1) The nonprofit corporation is exempt from taxes under Section 501(c)(3) of the Internal Revenue Code or subdivision (b) of Section 23701 of the Revenue and Taxation Code.(2) The nonprofit corporation has as one of its principal purposes the advancement of mutual housing.(3) A majority of the board of directors of the nonprofit corporation sponsor are residents or former residents of developments sponsored by the nonprofit corporation.(4) The nonprofit corporation agrees to assist the residents of the development in setting up a resident council, and the operating budget for the development provides for ongoing financial support to allow the resident council to carry out its activities.(c) Lower income participants in a qualified mutual housing development that is assisted pursuant to this chapter shall not be required to have a vested ownership interest in the property.(d) (1) Funds provided under this chapter may be used to finance either of the following:(A) The purchase of land beneath a manufactured home or mobilehome by the owner of the home.(B) The purchase of both the land beneath a manufactured home or mobilehome and the home.(2) (A) A loan to purchase a subdivided lot in a manufactured housing community or mobilehome park, or both a subdivided lot and the manufactured home or mobilehome that is located on the lot, may be secured either by the land alone or by both the land and the manufactured home or mobilehome.(B) A loan to purchase an interest in an entity that owns a manufactured housing community or mobilehome park may be secured by an interest in the entity, a manufactured home, or a mobilehome, or both an interest in the entity and the home.(3) A manufactured home or mobilehome shall not be required to be placed on a permanent foundation as a condition of receiving financing under this chapter.(4) Funds provided under this chapter shall not be used for a loan to purchase the first lot or space in a manufactured housing community or mobilehome park at the time of the initial conversion of the park to resident ownership unless the conversion meets the two-thirds signature requirement in subdivision (a) of Section 66428.1 of the Government Code, or the transfer of the park to resident ownership has qualified for the change of ownership exclusion under Section 62.1 of the Revenue and Taxation Code.(5) For purposes of this subdivision, land beneath a manufactured home or mobilehome means either a subdivided lot in a manufactured housing community or mobilehome park or a membership, share, certificate, or other interest in the entity that owns the manufactured housing community or mobilehome park, including, but not limited to, a limited equity cooperative, community land trust, or mutual housing association.(e) Subdivision (a) shall not apply to the financing of an interest in a manufactured housing community or mobilehome park that is organized as mutual housing or a limited equity cooperative.SEC. 2. Section 23701 of the Revenue and Taxation Code is amended to read:23701. (a) Organizations which 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 both of the following occur:(1) An application for exemption is submitted in the form prescribed by the Franchise Tax Board.(2) 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, 23701g, or 23701w 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 organizations 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), (c)(7), or (c)(19) 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), (c)(7), or (c)(19) 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 organizations 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), (c)(7), or (c)(19) of the Internal Revenue Code and, if applicable, the organizations subordinate organization status under a federal group exemption letter. The effective date of an organizations exemption from state income tax pursuant to this subdivision shall be no later than the effective date of the organizations recognition of exemption from federal income tax as an organization described in Section 501(c)(3), (c)(4), (c)(5), (c)(6), (c)(7), or (c)(19) 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 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 organizations exemption from tax as an organization described in Section 501(c)(3), (c)(4), (c)(5), (c)(6), (c)(7), or (c)(19) 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 organizations 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), (c)(7), or (c)(19) 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.(e) The amendments made to this section by the act adding this subdivision shall become operative on January 1, 2021.SEC. 3. Section 23701r of the Revenue and Taxation Code is amended to read:23701r. (a) A political organization.However, a political organization shall be subject to tax under this part with respect to its political organization taxable income and such income shall be subject to tax as provided by Chapter 3 (commencing with Section 23501).(b) For purposes of this section, the political organization taxable income of any organization for any taxable year is an amount equal to the excess over one hundred dollars ($100) (if any) of(1) The gross income for the taxable year (excluding any exempt function income), over(2) The deductions allowed by this part which are directly connected with the production of the gross income (excluding exempt function income).(c) For purposes of this section, the term exempt function income means any amount received as(1) A contribution of money or other property,(2) Membership dues, a membership fee or assessment from a member of the political organization, or(3) Proceeds from a political fundraising or entertainment event, or proceeds from the sale of political campaign materials, which are not received in the ordinary course of any trade or business, to the extent such amount is segregated for use only for the exempt function of the political organization.(d) For purposes of this part, if any political organization(1) Contributes any amount to or for the use of any political organization which is treated as exempt from tax under subdivision (a) of this section,(2) Contributes any amount to or for the use of any organization described in paragraph (1) or (2) of Section 509(a) of the Internal Revenue Code of 1954, which is exempt from tax under Section 23701, or(3) Deposits any amount in the General Fund or the Treasury of the United States or in the General Fund of any state or local government, such amount shall be treated as an amount not diverted for the personal use of the candidate or any other person. No deduction shall be allowed under this part for the contribution or deposit of any amount described in the preceding sentence.(e) For purposes of this section(1) The term political organization means a party, committee, association, fund, (including the trust of an individual candidate) or other organization (whether or not incorporated) organized and operated primarily for the purpose of directly or indirectly accepting contributions or making expenditures, or both, for an exempt function.(2) The term exempt function means the function of influencing or attempting to influence the selection, nomination, election, or appointment of any individual to any federal, state, or local public office or office in a political organization, or the election of Presidential or Vice Presidential electors, whether or not such individual or electors are selected, nominated, elected, or appointed. The term includes the making of expenditures relating to an office described in the preceding sentence which, if incurred by the individual, would be allowable as a deduction under Section 162(a) of the Internal Revenue Code.(3) The term contributions has the same meaning as provided in paragraph (2) of subdivision (b) of Section 24434.(4) The term expenditures has the same meaning as provided in paragraph (3) of subdivision (b) of Section 24434.(f) For purposes of paragraph (1) of subdivision (e), a separate segregated fund (within the meaning of Section 610 of Title 18 of the United States Code or of any similar state statute, or within the meaning of any state statute which permits the segregation of dues money for exempt functions, within the meaning of paragraph (2) of subdivision (e)) which is maintained by an organization described in Sections 23701a through 23701p or Section 23701s which is exempt from tax under Section 23701 shall be treated as a separate organization.(g) (1) For purposes of this section, a fund established and maintained by an individual who holds, has been elected to, or is a candidate (within the meaning of paragraph (3)) for nomination or election to, any federal, state, or local elective public office for use by such individual exclusively for the preparation and circulation of such individuals newsletter shall, except as provided in paragraph (2), be treated as if such fund constituted a political organization.(2) In the case of any fund described in paragraph (1) the exempt function shall be only the preparation and circulation of the newsletter.(3) For purposes of paragraph (1), candidate means with respect to any federal, state, or local elective public office, an individual who does both of the following:(A) Publicly announces that they are a candidate for nomination or election to that office.(B) Meets the qualifications prescribed by law to hold that office.(h) The requirements set forth in subdivision (a) of Section 23701 shall not apply to a political organization or newsletter fund described in this section. However, in the case of a corporation incorporated or organized in this state or qualified to do business in this state, such corporation shall either pay the minimum tax provided in Section 23153 or obtain a certificate of exemption from the Franchise Tax Board before the corporation files with the Secretary of State its articles of incorporation or a duly certified copy thereof.(i) The requirements set forth in Section 23772 or Section 23774 shall not apply to a political organization or newsletter fund. Further, the requirements set forth in Sections 18505, 18506, and 18601 shall not apply to a political organization or newsletter fund described in this section, except that if it has political organization taxable income for any taxable year, the political organization shall be required to file income tax returns or statements as determined by the Franchise Tax Board under Chapter 3 (commencing with Section 23501).SEC. 4. Section 23772 of the Revenue and Taxation Code is amended to read:23772. (a) For the purposes of this part(1) Except as provided in paragraph (2), every organization exempt from taxation under Section 23701 and every trust treated as a private foundation because of Section 4947(a)(1) of the Internal Revenue Code shall file an annual return, stating specifically the items of gross income, receipts, and disbursements, and any other information for the purpose of carrying out the laws under this part as the Franchise Tax Board may by rules or regulations prescribe, and shall keep any records, render under oath any statements, make any other returns, and comply with any rules and regulations as the Franchise Tax Board may from time to time prescribe. The return shall be filed on or before the 15th day of the fifth full calendar month following the close of the taxable year.(2) Exceptions from filing(A) Mandatory exceptionsParagraph (1) shall not apply to(i) Churches, their integrated auxiliaries, and conventions or association of churches,(ii) An organization (other than a private foundation as defined in Section 23709), the gross receipts of which in each taxable year are normally not more than fifty thousand dollars ($50,000), or(iii) The exclusively religious activities of any religious order.(B) Discretionary exceptionsThe Franchise Tax Board may permit the filing of a simplified return for organizations based on either gross receipts or total assets or both gross receipts and total assets, or may permit the filing of an information statement (without fee), or may permit the filing of a group return for incorporated or unincorporated branches of a state or national organization where it determines that an information return is not necessary to the efficient administration of this part.(b) Every organization described in Section 23701d that is subject to the requirements of subdivision (a) is required to furnish annually information, at the time and in the manner as the Franchise Tax Board may by rules or regulations prescribe, setting forth all of the following:(1) Its gross income for the year.(2) Its expenses attributable to gross income and incurred within the year.(3) Its disbursements within the year for the purposes for which it is exempt.(4) A balance sheet showing its assets, liabilities, and net worth as of the beginning of that year.(5) The total of the contributions and gifts received by it during the year, and the names and addresses of all substantial contributors.(6) The names and addresses of its foundation manager (within the meaning of Section 4946 of the Internal Revenue Code) and highly compensated employees.(7) The compensation and other payments made during the year to each individual described in paragraph (6).(8) In the case of an organization with respect to which an election under Section 23704.5 is effective for the taxable year, the following amounts for that organization for that taxable year:(A) The lobbying expenditures (as defined in Section 4911(c)(1) of the Internal Revenue Code).(B) The lobbying nontaxable amount (as defined in Section 4911(c)(2) of the Internal Revenue Code).(C) The grassroots expenditures (as defined in Section 4911(c)(3) of the Internal Revenue Code).(D) The grassroots nontaxable amount (as defined in Section 4911(c)(4) of the Internal Revenue Code). For purposes of this paragraph, if Section 23740 applies to the organization for the taxable year, the organization shall furnish the amounts with respect to the affiliated group as well as with respect to the organization.(9) Other information with respect to direct or indirect transfers to, and other direct or indirect transactions and relationships with, other organizations described in Sections 23701a to 23701w, inclusive (other than Sections 23701d, 23701k, and 23701t), as the Franchise Tax Board may require to prevent either of the following:(A) Diversion of funds from the organizations exempt purpose.(B) Misallocation of revenue or expense.(10) Information with respect to qualified disaster relief activities.(11) Any other relevant information as the Franchise Tax Board may prescribe.(12) Each controlling organization, within the meaning of Section 512(b)(13) of the Internal Revenue Code, which is subject to the requirements of subdivision (a), shall include on the return required under subdivision (a) all of the following information:(A) Any interest, royalties, annuities, or rents received from each controlled entity, within the meaning of Section 512(b)(13) of the Internal Revenue Code.(B) Any loans made to each controlled entity.(C) Any transfers of funds between such controlling organization and each such controlled entity.(13) (A) Any organization, the gross receipts of which in any taxable year result in the organization being referred to in clause (ii) of subparagraph (A) of paragraph (2) of subdivision (a), or subparagraph (B) of paragraph (2) of subdivision (a), shall do both of the following:(i) Furnish annually, in electronic form, and at the time and in the manner as may be prescribed by the Franchise Tax Board, the legal name of the organization, any name under which the organization operates or does business, the organizations mailing address and the internet website address, if any, the organizations taxpayer identification number, the name and address of a principal officer, and evidence of the continuing basis for the organizations exemption from the filing requirements under paragraph (1) of subdivision (a).(ii) Upon termination of the existence of the organization, shall furnish notice of the termination.(B) This paragraph shall apply to notices and returns with respect to annual periods beginning on or after January 1, 2010.(14) (A) If an organization described in paragraph (1) of subdivision (a) or paragraph (13) of this subdivision fails to file an annual return or notice required under either paragraph (1) of subdivision (a) or paragraph (13) of this subdivision for three consecutive years, that organizations status as an organization exempt from tax under Section 23701 shall be considered revoked on and after the date set by the Franchise Tax Board for the filing of the third annual return or notice. The Franchise Tax Board shall publish and maintain a list of any organization for which the tax-exempt status is revoked.(B) Any organization for which the tax-exempt status is revoked under subparagraph (A) must apply for reinstatement of that status regardless of whether that organization was originally required to make an application for tax-exempt status.(C) If, upon application for reinstatement of status as an organization exempt from tax under Section 23701, an organization described in subparagraph (A) can show to the satisfaction of the Franchise Tax Board evidence of reasonable cause for the failure described in that subparagraph, the organizations exempt status may, in the discretion of the Franchise Tax Board, be reinstated effective from the date of the revocation under that subparagraph.(D) This paragraph shall apply to notices and returns with respect to annual periods beginning on or after January 1, 2010.(c) For the purposes of this part(1) In the case of a failure to file a return required under this section on the date and in the manner prescribed therefor (determined with regard to any extension of time for filing), unless it is shown that the failure is due to reasonable cause, there shall be paid (on notice and demand by the Franchise Tax Board and in the same manner as tax) by the exempt organization or trust failing so to file, five dollars ($5) for each month or part thereof during which the failure continues, but the total amount imposed hereunder on any organization for failure to file any return may not exceed forty dollars ($40).(2) The Franchise Tax Board may make written demand upon a private foundation failing to file under paragraph (1) of this subdivision specifying therein a reasonable future date by which the filing shall be made, and if the filing is not made on or before that date, and unless it is shown that failure so to file is due to reasonable cause, there shall be paid (on notice and demand by the Franchise Tax Board and in the same manner as tax) by the person failing so to file, in addition to the penalty prescribed in paragraph (1), a penalty of five dollars ($5) each month or part thereof after the expiration of the time specified in the written demand during which the failure continues, but the total amount imposed hereunder on all persons for the failure to file shall not exceed twenty-five dollars ($25). If more than one person is liable under this paragraph for a failure to file, all of those persons shall be jointly and severally liable with respect to the failure. The term person as used herein means any officer, director, trustee, employee, member, or other individual who is under a duty to perform the act in respect of which the violation occurs.(3) This subdivision shall not apply with respect to any notice required under paragraph (13) of subdivision (b).(d) The amendments made to this section by Chapter 858 of the Statutes of 2012 shall apply to taxable years beginning on or after January 1, 2012.(e) The amendments made to this section by the act adding this subdivision shall become operative on January 1, 2021.SEC. 5. Section 23778 of the Revenue and Taxation Code is repealed.SEC. 6. Section 23778 is added to the Revenue and Taxation Code, to read:23778. An organization whose exemption was revoked under Section 23703 or 23777 may be reestablished as an exempt organization upon:(a) The filing or payment of both of the following:(1) A new application for exemption.(2) Any returns, statements, or payment of any amounts due under this part or Part 10.2 (commencing with Section 18401) that were not previously submitted or paid and that resulted in the revocation.(b) When revocation occurred under subdivision (c) of Section 23777, satisfactory proof that all of the following have occurred:(1) The organization has corrected its nonexempt activities.(2) That it will operate in an exempt manner in the future.(3) The payment of any tax for periods the organization was not qualified for exemption.SEC. 7. Section 5168 of the Vehicle Code is amended to read:5168. (a) The fees specified in Section 5157 shall be imposed for the issuance, renewal, or transfer of the Pet Lovers specialized license plates. Notwithstanding subdivision (c) of Section 5157, after deducting its administrative costs, the department shall deposit the revenue derived from the additional fees into the Pet Lovers Fund, which is hereby established in the Specialized License Plate Fund.(b) Upon appropriation by the Legislature, the moneys in the Pet Lovers Fund shall be allocated to the Department of Food and Agriculture. There shall not be an allocation to the Department of Food and Agriculture pursuant to subdivision (c) of Section 5157.(c) The Department of Food and Agriculture shall allocate those grant funds to eligible veterinary facilities that offer low-cost or no-cost animal sterilization services.(1) In administering the grants, the Department of Food and Agriculture may prioritize both of the following:(A) Eligible veterinary facilities located in or serving underserved communities or those that can demonstrate financial need.(B) Eligible veterinary facilities that have previously provided or currently provide low-cost or no-cost animal sterilization services.(2) For the purposes of this subdivision, eligible veterinary facilities mean those facilities that are all of the following:(A) Registered and in good standing with the Veterinary Medical Board, pursuant to Section 4853 of the Business and Professions Code.(B) Overseen by a responsible licensee manager licensed and in good standing with the Veterinary Medical Board, pursuant to Chapter 11 (commencing with Section 4800) of Division 2 of the Business and Professions Code.(C) (i) Operated by a city, county, city and county, an animal care or control agency, or a nonprofit meeting the requirements of Section 501(c)(3) of the federal Internal Revenue Code that is registered and in good standing with the Secretary of State.(ii) A city, county, or city and county animal control agency or nonprofit shelter holding a municipal contract that offers spay and neuter services for dogs and cats owned by individual members of the public is required to be current on its yearly rabies reporting requirements to the State Department of Public Health, Veterinary Public Health Section.(d) Annual administrative costs for the program shall not exceed 25 percent of the funds collected from the issuance of the Pet Lovers license plates, and may include funds for marketing and other promotional activities associated with encouraging application for, or renewal of, Pet Lovers license plates and collaboration expenses. The Department of Food and Agriculture may contract with an eligible nonprofit organization to perform the marketing and promotional activities authorized.(1) The eligible nonprofit organization selected by the Department of Food and Agriculture pursuant to this subdivision shall not use more than 5 percent of the moneys received pursuant to this section for administrative costs.(2) For the purposes of this subdivision, eligible nonprofit organization means a nonprofit entity that is all of the following:(A) Qualifies for tax exempt status under Section 501(c)(3) of the Internal Revenue Code and subdivision (b) of Section 23701 of the Revenue and Taxation Code.(B) Registered and in good standing with the Secretary of State.(C) Chaptered and headquartered in this state.(D) Has demonstrated experience in advertising, marketing, and promoting specialized license plates in existence prior to 2016 pursuant to this article.(e) The Department of Food and Agriculture shall determine eligibility requirements for the grants, establish the grant application process, and develop program specifics. The Department of Food and Agriculture shall collaborate with an eligible nonprofit organization, as defined in paragraph (2) of subdivision (d), to provide advice and consultation for the purposes of developing and implementing the grant program. The Department of Food and Agriculture shall administer and oversee the grant program. |
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| 1 | + | Enrolled August 26, 2020 Passed IN Senate June 24, 2020 Passed IN Assembly August 25, 2020 Amended IN Senate June 18, 2020 Amended IN Senate April 29, 2020 CALIFORNIA LEGISLATURE 20192020 REGULAR SESSION Senate Bill No. 934Introduced by Senator Bates(Coauthor: Senator Portantino)(Coauthors: Assembly Members Brough, Choi, Mathis, and Voepel)February 06, 2020 An act to amend Section 50650.5 of the Health and Safety Code, to amend Sections 23701, 23701r, and 23772 of, and to repeal and add Section 23778 of, the Revenue and Taxation Code, and to amend Section 5168 of the Vehicle Code, relating to taxation. LEGISLATIVE COUNSEL'S DIGESTSB 934, Bates. Corporate taxes: exempt organizations: filing fees.The Corporation Tax Law exempts the income of various types of nonprofit organizations from taxes imposed by that law, except as provided, if an application for exemption is filed with, and a filing fee of $25 is paid to, the Franchise Tax Board and the Franchise Tax Board issues a determination exempting the organization from tax. Existing law also requires, among other things, that filing fee to be paid when an organization whose exemption was revoked applies to reestablish as an exempt organization.This bill would eliminate the $25 filing fee on January 1, 2021.The Corporation Tax Law requires specific tax-exempt organizations to file an annual return containing specified information and requires the return to be filed on or before the 15th day of the 5th full calendar month following the close of the taxable year. Existing law requires those organizations to pay a $10 filing fee on or before the due date for filing the annual return, determined with regard to any extension of time for filing the return, and increases that filing fee to $25 in case of failure to pay the fee on or before that due date.This bill would eliminate those filing fees on January 1, 2021.This bill would also make various nonsubstantive and conforming changes to, among other things, update cross references.Digest Key Vote: MAJORITY Appropriation: NO Fiscal Committee: YES Local Program: NO Bill TextThe people of the State of California do enact as follows:SECTION 1. Section 50650.5 of the Health and Safety Code is amended to read:50650.5. For the purposes of this chapter, all of the following shall apply:(a) Mutual housing, community land trusts, and limited equity cooperative housing shall be deemed to be forms of homeownership and developments of those types of housing, as defined in subdivision (b), shall be eligible to receive assistance under the CalHome Program. The department may require that mutual housing, community land trust, or limited equity cooperative applicants not simultaneously apply for and receive funding through the departments rental housing programs for the same projects for which CalHome assistance is sought. For mutual housing, community land trust projects that do not convey an interest in real estate to the homebuyer, and limited equity cooperative projects, all of the following shall apply:(1) Program funds shall be used for permanent financing only.(2) The department shall enter into a regulatory agreement limiting occupant incomes, occupancy charges, and share purchase terms for 55 years.(3) Notwithstanding Section 50650.3, program assistance shall be provided in the form of a deferred payment loan.(b) As used in this section, mutual housing development means a housing development owned and sponsored by a nonprofit corporation or a limited partnership in which the nonprofit corporation is the sole general partner, and all of the following requirements are met:(1) The nonprofit corporation is exempt from taxes under Section 501(c)(3) of the Internal Revenue Code or subdivision (b) of Section 23701 of the Revenue and Taxation Code.(2) The nonprofit corporation has as one of its principal purposes the advancement of mutual housing.(3) A majority of the board of directors of the nonprofit corporation sponsor are residents or former residents of developments sponsored by the nonprofit corporation.(4) The nonprofit corporation agrees to assist the residents of the development in setting up a resident council, and the operating budget for the development provides for ongoing financial support to allow the resident council to carry out its activities.(c) Lower income participants in a qualified mutual housing development that is assisted pursuant to this chapter shall not be required to have a vested ownership interest in the property.(d) (1) Funds provided under this chapter may be used to finance either of the following:(A) The purchase of land beneath a manufactured home or mobilehome by the owner of the home.(B) The purchase of both the land beneath a manufactured home or mobilehome and the home.(2) (A) A loan to purchase a subdivided lot in a manufactured housing community or mobilehome park, or both a subdivided lot and the manufactured home or mobilehome that is located on the lot, may be secured either by the land alone or by both the land and the manufactured home or mobilehome.(B) A loan to purchase an interest in an entity that owns a manufactured housing community or mobilehome park may be secured by an interest in the entity, a manufactured home, or a mobilehome, or both an interest in the entity and the home.(3) A manufactured home or mobilehome shall not be required to be placed on a permanent foundation as a condition of receiving financing under this chapter.(4) Funds provided under this chapter shall not be used for a loan to purchase the first lot or space in a manufactured housing community or mobilehome park at the time of the initial conversion of the park to resident ownership unless the conversion meets the two-thirds signature requirement in subdivision (a) of Section 66428.1 of the Government Code, or the transfer of the park to resident ownership has qualified for the change of ownership exclusion under Section 62.1 of the Revenue and Taxation Code.(5) For purposes of this subdivision, land beneath a manufactured home or mobilehome means either a subdivided lot in a manufactured housing community or mobilehome park or a membership, share, certificate, or other interest in the entity that owns the manufactured housing community or mobilehome park, including, but not limited to, a limited equity cooperative, community land trust, or mutual housing association.(e) Subdivision (a) shall not apply to the financing of an interest in a manufactured housing community or mobilehome park that is organized as mutual housing or a limited equity cooperative.SEC. 2. Section 23701 of the Revenue and Taxation Code is amended to read:23701. (a) Organizations which 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 both of the following occur:(1) An application for exemption is submitted in the form prescribed by the Franchise Tax Board.(2) 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, 23701g, or 23701w 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 organizations 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), (c)(7), or (c)(19) 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), (c)(7), or (c)(19) 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 organizations 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), (c)(7), or (c)(19) of the Internal Revenue Code and, if applicable, the organizations subordinate organization status under a federal group exemption letter. The effective date of an organizations exemption from state income tax pursuant to this subdivision shall be no later than the effective date of the organizations recognition of exemption from federal income tax as an organization described in Section 501(c)(3), (c)(4), (c)(5), (c)(6), (c)(7), or (c)(19) 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 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 organizations exemption from tax as an organization described in Section 501(c)(3), (c)(4), (c)(5), (c)(6), (c)(7), or (c)(19) 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 organizations 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), (c)(7), or (c)(19) 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.(e) The amendments made to this section by the act adding this subdivision shall become operative on January 1, 2021.SEC. 3. Section 23701r of the Revenue and Taxation Code is amended to read:23701r. (a) A political organization.However, a political organization shall be subject to tax under this part with respect to its political organization taxable income and such income shall be subject to tax as provided by Chapter 3 (commencing with Section 23501).(b) For purposes of this section, the political organization taxable income of any organization for any taxable year is an amount equal to the excess over one hundred dollars ($100) (if any) of(1) The gross income for the taxable year (excluding any exempt function income), over(2) The deductions allowed by this part which are directly connected with the production of the gross income (excluding exempt function income).(c) For purposes of this section, the term exempt function income means any amount received as(1) A contribution of money or other property,(2) Membership dues, a membership fee or assessment from a member of the political organization, or(3) Proceeds from a political fundraising or entertainment event, or proceeds from the sale of political campaign materials, which are not received in the ordinary course of any trade or business, to the extent such amount is segregated for use only for the exempt function of the political organization.(d) For purposes of this part, if any political organization(1) Contributes any amount to or for the use of any political organization which is treated as exempt from tax under subdivision (a) of this section,(2) Contributes any amount to or for the use of any organization described in paragraph (1) or (2) of Section 509(a) of the Internal Revenue Code of 1954, which is exempt from tax under Section 23701, or(3) Deposits any amount in the General Fund or the Treasury of the United States or in the General Fund of any state or local government, such amount shall be treated as an amount not diverted for the personal use of the candidate or any other person. No deduction shall be allowed under this part for the contribution or deposit of any amount described in the preceding sentence.(e) For purposes of this section(1) The term political organization means a party, committee, association, fund, (including the trust of an individual candidate) or other organization (whether or not incorporated) organized and operated primarily for the purpose of directly or indirectly accepting contributions or making expenditures, or both, for an exempt function.(2) The term exempt function means the function of influencing or attempting to influence the selection, nomination, election, or appointment of any individual to any federal, state, or local public office or office in a political organization, or the election of Presidential or Vice Presidential electors, whether or not such individual or electors are selected, nominated, elected, or appointed. The term includes the making of expenditures relating to an office described in the preceding sentence which, if incurred by the individual, would be allowable as a deduction under Section 162(a) of the Internal Revenue Code.(3) The term contributions has the same meaning as provided in paragraph (2) of subdivision (b) of Section 24434.(4) The term expenditures has the same meaning as provided in paragraph (3) of subdivision (b) of Section 24434.(f) For purposes of paragraph (1) of subdivision (e), a separate segregated fund (within the meaning of Section 610 of Title 18 of the United States Code or of any similar state statute, or within the meaning of any state statute which permits the segregation of dues money for exempt functions, within the meaning of paragraph (2) of subdivision (e)) which is maintained by an organization described in Sections 23701a through 23701p or Section 23701s which is exempt from tax under Section 23701 shall be treated as a separate organization.(g) (1) For purposes of this section, a fund established and maintained by an individual who holds, has been elected to, or is a candidate (within the meaning of paragraph (3)) for nomination or election to, any federal, state, or local elective public office for use by such individual exclusively for the preparation and circulation of such individuals newsletter shall, except as provided in paragraph (2), be treated as if such fund constituted a political organization.(2) In the case of any fund described in paragraph (1) the exempt function shall be only the preparation and circulation of the newsletter.(3) For purposes of paragraph (1), candidate means with respect to any federal, state, or local elective public office, an individual who does both of the following:(A) Publicly announces that they are a candidate for nomination or election to that office.(B) Meets the qualifications prescribed by law to hold that office.(h) The requirements set forth in subdivision (a) of Section 23701 shall not apply to a political organization or newsletter fund described in this section. However, in the case of a corporation incorporated or organized in this state or qualified to do business in this state, such corporation shall either pay the minimum tax provided in Section 23153 or obtain a certificate of exemption from the Franchise Tax Board before the corporation files with the Secretary of State its articles of incorporation or a duly certified copy thereof.(i) The requirements set forth in Section 23772 or Section 23774 shall not apply to a political organization or newsletter fund. Further, the requirements set forth in Sections 18505, 18506, and 18601 shall not apply to a political organization or newsletter fund described in this section, except that if it has political organization taxable income for any taxable year, the political organization shall be required to file income tax returns or statements as determined by the Franchise Tax Board under Chapter 3 (commencing with Section 23501).SEC. 4. Section 23772 of the Revenue and Taxation Code is amended to read:23772. (a) For the purposes of this part(1) Except as provided in paragraph (2), every organization exempt from taxation under Section 23701 and every trust treated as a private foundation because of Section 4947(a)(1) of the Internal Revenue Code shall file an annual return, stating specifically the items of gross income, receipts, and disbursements, and any other information for the purpose of carrying out the laws under this part as the Franchise Tax Board may by rules or regulations prescribe, and shall keep any records, render under oath any statements, make any other returns, and comply with any rules and regulations as the Franchise Tax Board may from time to time prescribe. The return shall be filed on or before the 15th day of the fifth full calendar month following the close of the taxable year.(2) Exceptions from filing(A) Mandatory exceptionsParagraph (1) shall not apply to(i) Churches, their integrated auxiliaries, and conventions or association of churches,(ii) An organization (other than a private foundation as defined in Section 23709), the gross receipts of which in each taxable year are normally not more than fifty thousand dollars ($50,000), or(iii) The exclusively religious activities of any religious order.(B) Discretionary exceptionsThe Franchise Tax Board may permit the filing of a simplified return for organizations based on either gross receipts or total assets or both gross receipts and total assets, or may permit the filing of an information statement (without fee), or may permit the filing of a group return for incorporated or unincorporated branches of a state or national organization where it determines that an information return is not necessary to the efficient administration of this part.(b) Every organization described in Section 23701d that is subject to the requirements of subdivision (a) is required to furnish annually information, at the time and in the manner as the Franchise Tax Board may by rules or regulations prescribe, setting forth all of the following:(1) Its gross income for the year.(2) Its expenses attributable to gross income and incurred within the year.(3) Its disbursements within the year for the purposes for which it is exempt.(4) A balance sheet showing its assets, liabilities, and net worth as of the beginning of that year.(5) The total of the contributions and gifts received by it during the year, and the names and addresses of all substantial contributors.(6) The names and addresses of its foundation manager (within the meaning of Section 4946 of the Internal Revenue Code) and highly compensated employees.(7) The compensation and other payments made during the year to each individual described in paragraph (6).(8) In the case of an organization with respect to which an election under Section 23704.5 is effective for the taxable year, the following amounts for that organization for that taxable year:(A) The lobbying expenditures (as defined in Section 4911(c)(1) of the Internal Revenue Code).(B) The lobbying nontaxable amount (as defined in Section 4911(c)(2) of the Internal Revenue Code).(C) The grassroots expenditures (as defined in Section 4911(c)(3) of the Internal Revenue Code).(D) The grassroots nontaxable amount (as defined in Section 4911(c)(4) of the Internal Revenue Code). For purposes of this paragraph, if Section 23740 applies to the organization for the taxable year, the organization shall furnish the amounts with respect to the affiliated group as well as with respect to the organization.(9) Other information with respect to direct or indirect transfers to, and other direct or indirect transactions and relationships with, other organizations described in Sections 23701a to 23701w, inclusive (other than Sections 23701d, 23701k, and 23701t), as the Franchise Tax Board may require to prevent either of the following:(A) Diversion of funds from the organizations exempt purpose.(B) Misallocation of revenue or expense.(10) Information with respect to qualified disaster relief activities.(11) Any other relevant information as the Franchise Tax Board may prescribe.(12) Each controlling organization, within the meaning of Section 512(b)(13) of the Internal Revenue Code, which is subject to the requirements of subdivision (a), shall include on the return required under subdivision (a) all of the following information:(A) Any interest, royalties, annuities, or rents received from each controlled entity, within the meaning of Section 512(b)(13) of the Internal Revenue Code.(B) Any loans made to each controlled entity.(C) Any transfers of funds between such controlling organization and each such controlled entity.(13) (A) Any organization, the gross receipts of which in any taxable year result in the organization being referred to in clause (ii) of subparagraph (A) of paragraph (2) of subdivision (a), or subparagraph (B) of paragraph (2) of subdivision (a), shall do both of the following:(i) Furnish annually, in electronic form, and at the time and in the manner as may be prescribed by the Franchise Tax Board, the legal name of the organization, any name under which the organization operates or does business, the organizations mailing address and the internet website address, if any, the organizations taxpayer identification number, the name and address of a principal officer, and evidence of the continuing basis for the organizations exemption from the filing requirements under paragraph (1) of subdivision (a).(ii) Upon termination of the existence of the organization, shall furnish notice of the termination.(B) This paragraph shall apply to notices and returns with respect to annual periods beginning on or after January 1, 2010.(14) (A) If an organization described in paragraph (1) of subdivision (a) or paragraph (13) of this subdivision fails to file an annual return or notice required under either paragraph (1) of subdivision (a) or paragraph (13) of this subdivision for three consecutive years, that organizations status as an organization exempt from tax under Section 23701 shall be considered revoked on and after the date set by the Franchise Tax Board for the filing of the third annual return or notice. The Franchise Tax Board shall publish and maintain a list of any organization for which the tax-exempt status is revoked.(B) Any organization for which the tax-exempt status is revoked under subparagraph (A) must apply for reinstatement of that status regardless of whether that organization was originally required to make an application for tax-exempt status.(C) If, upon application for reinstatement of status as an organization exempt from tax under Section 23701, an organization described in subparagraph (A) can show to the satisfaction of the Franchise Tax Board evidence of reasonable cause for the failure described in that subparagraph, the organizations exempt status may, in the discretion of the Franchise Tax Board, be reinstated effective from the date of the revocation under that subparagraph.(D) This paragraph shall apply to notices and returns with respect to annual periods beginning on or after January 1, 2010.(c) For the purposes of this part(1) In the case of a failure to file a return required under this section on the date and in the manner prescribed therefor (determined with regard to any extension of time for filing), unless it is shown that the failure is due to reasonable cause, there shall be paid (on notice and demand by the Franchise Tax Board and in the same manner as tax) by the exempt organization or trust failing so to file, five dollars ($5) for each month or part thereof during which the failure continues, but the total amount imposed hereunder on any organization for failure to file any return may not exceed forty dollars ($40).(2) The Franchise Tax Board may make written demand upon a private foundation failing to file under paragraph (1) of this subdivision specifying therein a reasonable future date by which the filing shall be made, and if the filing is not made on or before that date, and unless it is shown that failure so to file is due to reasonable cause, there shall be paid (on notice and demand by the Franchise Tax Board and in the same manner as tax) by the person failing so to file, in addition to the penalty prescribed in paragraph (1), a penalty of five dollars ($5) each month or part thereof after the expiration of the time specified in the written demand during which the failure continues, but the total amount imposed hereunder on all persons for the failure to file shall not exceed twenty-five dollars ($25). If more than one person is liable under this paragraph for a failure to file, all of those persons shall be jointly and severally liable with respect to the failure. The term person as used herein means any officer, director, trustee, employee, member, or other individual who is under a duty to perform the act in respect of which the violation occurs.(3) This subdivision shall not apply with respect to any notice required under paragraph (13) of subdivision (b).(d) The amendments made to this section by Chapter 858 of the Statutes of 2012 shall apply to taxable years beginning on or after January 1, 2012.(e) The amendments made to this section by the act adding this subdivision shall become operative on January 1, 2021.SEC. 5. Section 23778 of the Revenue and Taxation Code is repealed.SEC. 6. Section 23778 is added to the Revenue and Taxation Code, to read:23778. An organization whose exemption was revoked under Section 23703 or 23777 may be reestablished as an exempt organization upon:(a) The filing or payment of both of the following:(1) A new application for exemption.(2) Any returns, statements, or payment of any amounts due under this part or Part 10.2 (commencing with Section 18401) that were not previously submitted or paid and that resulted in the revocation.(b) When revocation occurred under subdivision (c) of Section 23777, satisfactory proof that all of the following have occurred:(1) The organization has corrected its nonexempt activities.(2) That it will operate in an exempt manner in the future.(3) The payment of any tax for periods the organization was not qualified for exemption.SEC. 7. Section 5168 of the Vehicle Code is amended to read:5168. (a) The fees specified in Section 5157 shall be imposed for the issuance, renewal, or transfer of the Pet Lovers specialized license plates. Notwithstanding subdivision (c) of Section 5157, after deducting its administrative costs, the department shall deposit the revenue derived from the additional fees into the Pet Lovers Fund, which is hereby established in the Specialized License Plate Fund.(b) Upon appropriation by the Legislature, the moneys in the Pet Lovers Fund shall be allocated to the Department of Food and Agriculture. There shall not be an allocation to the Department of Food and Agriculture pursuant to subdivision (c) of Section 5157.(c) The Department of Food and Agriculture shall allocate those grant funds to eligible veterinary facilities that offer low-cost or no-cost animal sterilization services.(1) In administering the grants, the Department of Food and Agriculture may prioritize both of the following:(A) Eligible veterinary facilities located in or serving underserved communities or those that can demonstrate financial need.(B) Eligible veterinary facilities that have previously provided or currently provide low-cost or no-cost animal sterilization services.(2) For the purposes of this subdivision, eligible veterinary facilities mean those facilities that are all of the following:(A) Registered and in good standing with the Veterinary Medical Board, pursuant to Section 4853 of the Business and Professions Code.(B) Overseen by a responsible licensee manager licensed and in good standing with the Veterinary Medical Board, pursuant to Chapter 11 (commencing with Section 4800) of Division 2 of the Business and Professions Code.(C) (i) Operated by a city, county, city and county, an animal care or control agency, or a nonprofit meeting the requirements of Section 501(c)(3) of the federal Internal Revenue Code that is registered and in good standing with the Secretary of State.(ii) A city, county, or city and county animal control agency or nonprofit shelter holding a municipal contract that offers spay and neuter services for dogs and cats owned by individual members of the public is required to be current on its yearly rabies reporting requirements to the State Department of Public Health, Veterinary Public Health Section.(d) Annual administrative costs for the program shall not exceed 25 percent of the funds collected from the issuance of the Pet Lovers license plates, and may include funds for marketing and other promotional activities associated with encouraging application for, or renewal of, Pet Lovers license plates and collaboration expenses. The Department of Food and Agriculture may contract with an eligible nonprofit organization to perform the marketing and promotional activities authorized.(1) The eligible nonprofit organization selected by the Department of Food and Agriculture pursuant to this subdivision shall not use more than 5 percent of the moneys received pursuant to this section for administrative costs.(2) For the purposes of this subdivision, eligible nonprofit organization means a nonprofit entity that is all of the following:(A) Qualifies for tax exempt status under Section 501(c)(3) of the Internal Revenue Code and subdivision (b) of Section 23701 of the Revenue and Taxation Code.(B) Registered and in good standing with the Secretary of State.(C) Chaptered and headquartered in this state.(D) Has demonstrated experience in advertising, marketing, and promoting specialized license plates in existence prior to 2016 pursuant to this article.(e) The Department of Food and Agriculture shall determine eligibility requirements for the grants, establish the grant application process, and develop program specifics. The Department of Food and Agriculture shall collaborate with an eligible nonprofit organization, as defined in paragraph (2) of subdivision (d), to provide advice and consultation for the purposes of developing and implementing the grant program. The Department of Food and Agriculture shall administer and oversee the grant program. |
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| 14 | 25 | | |
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| 15 | 26 | | LEGISLATIVE COUNSEL'S DIGEST |
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| 16 | 27 | | |
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| 17 | 28 | | ## LEGISLATIVE COUNSEL'S DIGEST |
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| 18 | 29 | | |
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| 19 | 30 | | SB 934, Bates. Corporate taxes: exempt organizations: filing fees. |
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| 20 | 31 | | |
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| 21 | 32 | | The Corporation Tax Law exempts the income of various types of nonprofit organizations from taxes imposed by that law, except as provided, if an application for exemption is filed with, and a filing fee of $25 is paid to, the Franchise Tax Board and the Franchise Tax Board issues a determination exempting the organization from tax. Existing law also requires, among other things, that filing fee to be paid when an organization whose exemption was revoked applies to reestablish as an exempt organization.This bill would eliminate the $25 filing fee on January 1, 2021.The Corporation Tax Law requires specific tax-exempt organizations to file an annual return containing specified information and requires the return to be filed on or before the 15th day of the 5th full calendar month following the close of the taxable year. Existing law requires those organizations to pay a $10 filing fee on or before the due date for filing the annual return, determined with regard to any extension of time for filing the return, and increases that filing fee to $25 in case of failure to pay the fee on or before that due date.This bill would eliminate those filing fees on January 1, 2021.This bill would also make various nonsubstantive and conforming changes to, among other things, update cross references. |
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| 22 | 33 | | |
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| 23 | 34 | | The Corporation Tax Law exempts the income of various types of nonprofit organizations from taxes imposed by that law, except as provided, if an application for exemption is filed with, and a filing fee of $25 is paid to, the Franchise Tax Board and the Franchise Tax Board issues a determination exempting the organization from tax. Existing law also requires, among other things, that filing fee to be paid when an organization whose exemption was revoked applies to reestablish as an exempt organization. |
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| 24 | 35 | | |
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| 25 | 36 | | This bill would eliminate the $25 filing fee on January 1, 2021. |
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| 26 | 37 | | |
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| 27 | 38 | | The Corporation Tax Law requires specific tax-exempt organizations to file an annual return containing specified information and requires the return to be filed on or before the 15th day of the 5th full calendar month following the close of the taxable year. Existing law requires those organizations to pay a $10 filing fee on or before the due date for filing the annual return, determined with regard to any extension of time for filing the return, and increases that filing fee to $25 in case of failure to pay the fee on or before that due date. |
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| 28 | 39 | | |
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| 29 | 40 | | This bill would eliminate those filing fees on January 1, 2021. |
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| 30 | 41 | | |
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| 31 | 42 | | This bill would also make various nonsubstantive and conforming changes to, among other things, update cross references. |
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| 32 | 43 | | |
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| 33 | 44 | | ## Digest Key |
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| 34 | 45 | | |
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| 35 | 46 | | ## Bill Text |
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| 36 | 47 | | |
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| 37 | 48 | | The people of the State of California do enact as follows:SECTION 1. Section 50650.5 of the Health and Safety Code is amended to read:50650.5. For the purposes of this chapter, all of the following shall apply:(a) Mutual housing, community land trusts, and limited equity cooperative housing shall be deemed to be forms of homeownership and developments of those types of housing, as defined in subdivision (b), shall be eligible to receive assistance under the CalHome Program. The department may require that mutual housing, community land trust, or limited equity cooperative applicants not simultaneously apply for and receive funding through the departments rental housing programs for the same projects for which CalHome assistance is sought. For mutual housing, community land trust projects that do not convey an interest in real estate to the homebuyer, and limited equity cooperative projects, all of the following shall apply:(1) Program funds shall be used for permanent financing only.(2) The department shall enter into a regulatory agreement limiting occupant incomes, occupancy charges, and share purchase terms for 55 years.(3) Notwithstanding Section 50650.3, program assistance shall be provided in the form of a deferred payment loan.(b) As used in this section, mutual housing development means a housing development owned and sponsored by a nonprofit corporation or a limited partnership in which the nonprofit corporation is the sole general partner, and all of the following requirements are met:(1) The nonprofit corporation is exempt from taxes under Section 501(c)(3) of the Internal Revenue Code or subdivision (b) of Section 23701 of the Revenue and Taxation Code.(2) The nonprofit corporation has as one of its principal purposes the advancement of mutual housing.(3) A majority of the board of directors of the nonprofit corporation sponsor are residents or former residents of developments sponsored by the nonprofit corporation.(4) The nonprofit corporation agrees to assist the residents of the development in setting up a resident council, and the operating budget for the development provides for ongoing financial support to allow the resident council to carry out its activities.(c) Lower income participants in a qualified mutual housing development that is assisted pursuant to this chapter shall not be required to have a vested ownership interest in the property.(d) (1) Funds provided under this chapter may be used to finance either of the following:(A) The purchase of land beneath a manufactured home or mobilehome by the owner of the home.(B) The purchase of both the land beneath a manufactured home or mobilehome and the home.(2) (A) A loan to purchase a subdivided lot in a manufactured housing community or mobilehome park, or both a subdivided lot and the manufactured home or mobilehome that is located on the lot, may be secured either by the land alone or by both the land and the manufactured home or mobilehome.(B) A loan to purchase an interest in an entity that owns a manufactured housing community or mobilehome park may be secured by an interest in the entity, a manufactured home, or a mobilehome, or both an interest in the entity and the home.(3) A manufactured home or mobilehome shall not be required to be placed on a permanent foundation as a condition of receiving financing under this chapter.(4) Funds provided under this chapter shall not be used for a loan to purchase the first lot or space in a manufactured housing community or mobilehome park at the time of the initial conversion of the park to resident ownership unless the conversion meets the two-thirds signature requirement in subdivision (a) of Section 66428.1 of the Government Code, or the transfer of the park to resident ownership has qualified for the change of ownership exclusion under Section 62.1 of the Revenue and Taxation Code.(5) For purposes of this subdivision, land beneath a manufactured home or mobilehome means either a subdivided lot in a manufactured housing community or mobilehome park or a membership, share, certificate, or other interest in the entity that owns the manufactured housing community or mobilehome park, including, but not limited to, a limited equity cooperative, community land trust, or mutual housing association.(e) Subdivision (a) shall not apply to the financing of an interest in a manufactured housing community or mobilehome park that is organized as mutual housing or a limited equity cooperative.SEC. 2. Section 23701 of the Revenue and Taxation Code is amended to read:23701. (a) Organizations which 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 both of the following occur:(1) An application for exemption is submitted in the form prescribed by the Franchise Tax Board.(2) 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, 23701g, or 23701w 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 organizations 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), (c)(7), or (c)(19) 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), (c)(7), or (c)(19) 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 organizations 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), (c)(7), or (c)(19) of the Internal Revenue Code and, if applicable, the organizations subordinate organization status under a federal group exemption letter. The effective date of an organizations exemption from state income tax pursuant to this subdivision shall be no later than the effective date of the organizations recognition of exemption from federal income tax as an organization described in Section 501(c)(3), (c)(4), (c)(5), (c)(6), (c)(7), or (c)(19) 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 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 organizations exemption from tax as an organization described in Section 501(c)(3), (c)(4), (c)(5), (c)(6), (c)(7), or (c)(19) 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 organizations 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), (c)(7), or (c)(19) 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.(e) The amendments made to this section by the act adding this subdivision shall become operative on January 1, 2021.SEC. 3. Section 23701r of the Revenue and Taxation Code is amended to read:23701r. (a) A political organization.However, a political organization shall be subject to tax under this part with respect to its political organization taxable income and such income shall be subject to tax as provided by Chapter 3 (commencing with Section 23501).(b) For purposes of this section, the political organization taxable income of any organization for any taxable year is an amount equal to the excess over one hundred dollars ($100) (if any) of(1) The gross income for the taxable year (excluding any exempt function income), over(2) The deductions allowed by this part which are directly connected with the production of the gross income (excluding exempt function income).(c) For purposes of this section, the term exempt function income means any amount received as(1) A contribution of money or other property,(2) Membership dues, a membership fee or assessment from a member of the political organization, or(3) Proceeds from a political fundraising or entertainment event, or proceeds from the sale of political campaign materials, which are not received in the ordinary course of any trade or business, to the extent such amount is segregated for use only for the exempt function of the political organization.(d) For purposes of this part, if any political organization(1) Contributes any amount to or for the use of any political organization which is treated as exempt from tax under subdivision (a) of this section,(2) Contributes any amount to or for the use of any organization described in paragraph (1) or (2) of Section 509(a) of the Internal Revenue Code of 1954, which is exempt from tax under Section 23701, or(3) Deposits any amount in the General Fund or the Treasury of the United States or in the General Fund of any state or local government, such amount shall be treated as an amount not diverted for the personal use of the candidate or any other person. No deduction shall be allowed under this part for the contribution or deposit of any amount described in the preceding sentence.(e) For purposes of this section(1) The term political organization means a party, committee, association, fund, (including the trust of an individual candidate) or other organization (whether or not incorporated) organized and operated primarily for the purpose of directly or indirectly accepting contributions or making expenditures, or both, for an exempt function.(2) The term exempt function means the function of influencing or attempting to influence the selection, nomination, election, or appointment of any individual to any federal, state, or local public office or office in a political organization, or the election of Presidential or Vice Presidential electors, whether or not such individual or electors are selected, nominated, elected, or appointed. The term includes the making of expenditures relating to an office described in the preceding sentence which, if incurred by the individual, would be allowable as a deduction under Section 162(a) of the Internal Revenue Code.(3) The term contributions has the same meaning as provided in paragraph (2) of subdivision (b) of Section 24434.(4) The term expenditures has the same meaning as provided in paragraph (3) of subdivision (b) of Section 24434.(f) For purposes of paragraph (1) of subdivision (e), a separate segregated fund (within the meaning of Section 610 of Title 18 of the United States Code or of any similar state statute, or within the meaning of any state statute which permits the segregation of dues money for exempt functions, within the meaning of paragraph (2) of subdivision (e)) which is maintained by an organization described in Sections 23701a through 23701p or Section 23701s which is exempt from tax under Section 23701 shall be treated as a separate organization.(g) (1) For purposes of this section, a fund established and maintained by an individual who holds, has been elected to, or is a candidate (within the meaning of paragraph (3)) for nomination or election to, any federal, state, or local elective public office for use by such individual exclusively for the preparation and circulation of such individuals newsletter shall, except as provided in paragraph (2), be treated as if such fund constituted a political organization.(2) In the case of any fund described in paragraph (1) the exempt function shall be only the preparation and circulation of the newsletter.(3) For purposes of paragraph (1), candidate means with respect to any federal, state, or local elective public office, an individual who does both of the following:(A) Publicly announces that they are a candidate for nomination or election to that office.(B) Meets the qualifications prescribed by law to hold that office.(h) The requirements set forth in subdivision (a) of Section 23701 shall not apply to a political organization or newsletter fund described in this section. However, in the case of a corporation incorporated or organized in this state or qualified to do business in this state, such corporation shall either pay the minimum tax provided in Section 23153 or obtain a certificate of exemption from the Franchise Tax Board before the corporation files with the Secretary of State its articles of incorporation or a duly certified copy thereof.(i) The requirements set forth in Section 23772 or Section 23774 shall not apply to a political organization or newsletter fund. Further, the requirements set forth in Sections 18505, 18506, and 18601 shall not apply to a political organization or newsletter fund described in this section, except that if it has political organization taxable income for any taxable year, the political organization shall be required to file income tax returns or statements as determined by the Franchise Tax Board under Chapter 3 (commencing with Section 23501).SEC. 4. Section 23772 of the Revenue and Taxation Code is amended to read:23772. (a) For the purposes of this part(1) Except as provided in paragraph (2), every organization exempt from taxation under Section 23701 and every trust treated as a private foundation because of Section 4947(a)(1) of the Internal Revenue Code shall file an annual return, stating specifically the items of gross income, receipts, and disbursements, and any other information for the purpose of carrying out the laws under this part as the Franchise Tax Board may by rules or regulations prescribe, and shall keep any records, render under oath any statements, make any other returns, and comply with any rules and regulations as the Franchise Tax Board may from time to time prescribe. The return shall be filed on or before the 15th day of the fifth full calendar month following the close of the taxable year.(2) Exceptions from filing(A) Mandatory exceptionsParagraph (1) shall not apply to(i) Churches, their integrated auxiliaries, and conventions or association of churches,(ii) An organization (other than a private foundation as defined in Section 23709), the gross receipts of which in each taxable year are normally not more than fifty thousand dollars ($50,000), or(iii) The exclusively religious activities of any religious order.(B) Discretionary exceptionsThe Franchise Tax Board may permit the filing of a simplified return for organizations based on either gross receipts or total assets or both gross receipts and total assets, or may permit the filing of an information statement (without fee), or may permit the filing of a group return for incorporated or unincorporated branches of a state or national organization where it determines that an information return is not necessary to the efficient administration of this part.(b) Every organization described in Section 23701d that is subject to the requirements of subdivision (a) is required to furnish annually information, at the time and in the manner as the Franchise Tax Board may by rules or regulations prescribe, setting forth all of the following:(1) Its gross income for the year.(2) Its expenses attributable to gross income and incurred within the year.(3) Its disbursements within the year for the purposes for which it is exempt.(4) A balance sheet showing its assets, liabilities, and net worth as of the beginning of that year.(5) The total of the contributions and gifts received by it during the year, and the names and addresses of all substantial contributors.(6) The names and addresses of its foundation manager (within the meaning of Section 4946 of the Internal Revenue Code) and highly compensated employees.(7) The compensation and other payments made during the year to each individual described in paragraph (6).(8) In the case of an organization with respect to which an election under Section 23704.5 is effective for the taxable year, the following amounts for that organization for that taxable year:(A) The lobbying expenditures (as defined in Section 4911(c)(1) of the Internal Revenue Code).(B) The lobbying nontaxable amount (as defined in Section 4911(c)(2) of the Internal Revenue Code).(C) The grassroots expenditures (as defined in Section 4911(c)(3) of the Internal Revenue Code).(D) The grassroots nontaxable amount (as defined in Section 4911(c)(4) of the Internal Revenue Code). For purposes of this paragraph, if Section 23740 applies to the organization for the taxable year, the organization shall furnish the amounts with respect to the affiliated group as well as with respect to the organization.(9) Other information with respect to direct or indirect transfers to, and other direct or indirect transactions and relationships with, other organizations described in Sections 23701a to 23701w, inclusive (other than Sections 23701d, 23701k, and 23701t), as the Franchise Tax Board may require to prevent either of the following:(A) Diversion of funds from the organizations exempt purpose.(B) Misallocation of revenue or expense.(10) Information with respect to qualified disaster relief activities.(11) Any other relevant information as the Franchise Tax Board may prescribe.(12) Each controlling organization, within the meaning of Section 512(b)(13) of the Internal Revenue Code, which is subject to the requirements of subdivision (a), shall include on the return required under subdivision (a) all of the following information:(A) Any interest, royalties, annuities, or rents received from each controlled entity, within the meaning of Section 512(b)(13) of the Internal Revenue Code.(B) Any loans made to each controlled entity.(C) Any transfers of funds between such controlling organization and each such controlled entity.(13) (A) Any organization, the gross receipts of which in any taxable year result in the organization being referred to in clause (ii) of subparagraph (A) of paragraph (2) of subdivision (a), or subparagraph (B) of paragraph (2) of subdivision (a), shall do both of the following:(i) Furnish annually, in electronic form, and at the time and in the manner as may be prescribed by the Franchise Tax Board, the legal name of the organization, any name under which the organization operates or does business, the organizations mailing address and the internet website address, if any, the organizations taxpayer identification number, the name and address of a principal officer, and evidence of the continuing basis for the organizations exemption from the filing requirements under paragraph (1) of subdivision (a).(ii) Upon termination of the existence of the organization, shall furnish notice of the termination.(B) This paragraph shall apply to notices and returns with respect to annual periods beginning on or after January 1, 2010.(14) (A) If an organization described in paragraph (1) of subdivision (a) or paragraph (13) of this subdivision fails to file an annual return or notice required under either paragraph (1) of subdivision (a) or paragraph (13) of this subdivision for three consecutive years, that organizations status as an organization exempt from tax under Section 23701 shall be considered revoked on and after the date set by the Franchise Tax Board for the filing of the third annual return or notice. The Franchise Tax Board shall publish and maintain a list of any organization for which the tax-exempt status is revoked.(B) Any organization for which the tax-exempt status is revoked under subparagraph (A) must apply for reinstatement of that status regardless of whether that organization was originally required to make an application for tax-exempt status.(C) If, upon application for reinstatement of status as an organization exempt from tax under Section 23701, an organization described in subparagraph (A) can show to the satisfaction of the Franchise Tax Board evidence of reasonable cause for the failure described in that subparagraph, the organizations exempt status may, in the discretion of the Franchise Tax Board, be reinstated effective from the date of the revocation under that subparagraph.(D) This paragraph shall apply to notices and returns with respect to annual periods beginning on or after January 1, 2010.(c) For the purposes of this part(1) In the case of a failure to file a return required under this section on the date and in the manner prescribed therefor (determined with regard to any extension of time for filing), unless it is shown that the failure is due to reasonable cause, there shall be paid (on notice and demand by the Franchise Tax Board and in the same manner as tax) by the exempt organization or trust failing so to file, five dollars ($5) for each month or part thereof during which the failure continues, but the total amount imposed hereunder on any organization for failure to file any return may not exceed forty dollars ($40).(2) The Franchise Tax Board may make written demand upon a private foundation failing to file under paragraph (1) of this subdivision specifying therein a reasonable future date by which the filing shall be made, and if the filing is not made on or before that date, and unless it is shown that failure so to file is due to reasonable cause, there shall be paid (on notice and demand by the Franchise Tax Board and in the same manner as tax) by the person failing so to file, in addition to the penalty prescribed in paragraph (1), a penalty of five dollars ($5) each month or part thereof after the expiration of the time specified in the written demand during which the failure continues, but the total amount imposed hereunder on all persons for the failure to file shall not exceed twenty-five dollars ($25). If more than one person is liable under this paragraph for a failure to file, all of those persons shall be jointly and severally liable with respect to the failure. The term person as used herein means any officer, director, trustee, employee, member, or other individual who is under a duty to perform the act in respect of which the violation occurs.(3) This subdivision shall not apply with respect to any notice required under paragraph (13) of subdivision (b).(d) The amendments made to this section by Chapter 858 of the Statutes of 2012 shall apply to taxable years beginning on or after January 1, 2012.(e) The amendments made to this section by the act adding this subdivision shall become operative on January 1, 2021.SEC. 5. Section 23778 of the Revenue and Taxation Code is repealed.SEC. 6. Section 23778 is added to the Revenue and Taxation Code, to read:23778. An organization whose exemption was revoked under Section 23703 or 23777 may be reestablished as an exempt organization upon:(a) The filing or payment of both of the following:(1) A new application for exemption.(2) Any returns, statements, or payment of any amounts due under this part or Part 10.2 (commencing with Section 18401) that were not previously submitted or paid and that resulted in the revocation.(b) When revocation occurred under subdivision (c) of Section 23777, satisfactory proof that all of the following have occurred:(1) The organization has corrected its nonexempt activities.(2) That it will operate in an exempt manner in the future.(3) The payment of any tax for periods the organization was not qualified for exemption.SEC. 7. Section 5168 of the Vehicle Code is amended to read:5168. (a) The fees specified in Section 5157 shall be imposed for the issuance, renewal, or transfer of the Pet Lovers specialized license plates. Notwithstanding subdivision (c) of Section 5157, after deducting its administrative costs, the department shall deposit the revenue derived from the additional fees into the Pet Lovers Fund, which is hereby established in the Specialized License Plate Fund.(b) Upon appropriation by the Legislature, the moneys in the Pet Lovers Fund shall be allocated to the Department of Food and Agriculture. There shall not be an allocation to the Department of Food and Agriculture pursuant to subdivision (c) of Section 5157.(c) The Department of Food and Agriculture shall allocate those grant funds to eligible veterinary facilities that offer low-cost or no-cost animal sterilization services.(1) In administering the grants, the Department of Food and Agriculture may prioritize both of the following:(A) Eligible veterinary facilities located in or serving underserved communities or those that can demonstrate financial need.(B) Eligible veterinary facilities that have previously provided or currently provide low-cost or no-cost animal sterilization services.(2) For the purposes of this subdivision, eligible veterinary facilities mean those facilities that are all of the following:(A) Registered and in good standing with the Veterinary Medical Board, pursuant to Section 4853 of the Business and Professions Code.(B) Overseen by a responsible licensee manager licensed and in good standing with the Veterinary Medical Board, pursuant to Chapter 11 (commencing with Section 4800) of Division 2 of the Business and Professions Code.(C) (i) Operated by a city, county, city and county, an animal care or control agency, or a nonprofit meeting the requirements of Section 501(c)(3) of the federal Internal Revenue Code that is registered and in good standing with the Secretary of State.(ii) A city, county, or city and county animal control agency or nonprofit shelter holding a municipal contract that offers spay and neuter services for dogs and cats owned by individual members of the public is required to be current on its yearly rabies reporting requirements to the State Department of Public Health, Veterinary Public Health Section.(d) Annual administrative costs for the program shall not exceed 25 percent of the funds collected from the issuance of the Pet Lovers license plates, and may include funds for marketing and other promotional activities associated with encouraging application for, or renewal of, Pet Lovers license plates and collaboration expenses. The Department of Food and Agriculture may contract with an eligible nonprofit organization to perform the marketing and promotional activities authorized.(1) The eligible nonprofit organization selected by the Department of Food and Agriculture pursuant to this subdivision shall not use more than 5 percent of the moneys received pursuant to this section for administrative costs.(2) For the purposes of this subdivision, eligible nonprofit organization means a nonprofit entity that is all of the following:(A) Qualifies for tax exempt status under Section 501(c)(3) of the Internal Revenue Code and subdivision (b) of Section 23701 of the Revenue and Taxation Code.(B) Registered and in good standing with the Secretary of State.(C) Chaptered and headquartered in this state.(D) Has demonstrated experience in advertising, marketing, and promoting specialized license plates in existence prior to 2016 pursuant to this article.(e) The Department of Food and Agriculture shall determine eligibility requirements for the grants, establish the grant application process, and develop program specifics. The Department of Food and Agriculture shall collaborate with an eligible nonprofit organization, as defined in paragraph (2) of subdivision (d), to provide advice and consultation for the purposes of developing and implementing the grant program. The Department of Food and Agriculture shall administer and oversee the grant program. |
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| 38 | 49 | | |
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| 39 | 50 | | The people of the State of California do enact as follows: |
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| 40 | 51 | | |
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| 41 | 52 | | ## The people of the State of California do enact as follows: |
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| 42 | 53 | | |
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| 43 | 54 | | SECTION 1. Section 50650.5 of the Health and Safety Code is amended to read:50650.5. For the purposes of this chapter, all of the following shall apply:(a) Mutual housing, community land trusts, and limited equity cooperative housing shall be deemed to be forms of homeownership and developments of those types of housing, as defined in subdivision (b), shall be eligible to receive assistance under the CalHome Program. The department may require that mutual housing, community land trust, or limited equity cooperative applicants not simultaneously apply for and receive funding through the departments rental housing programs for the same projects for which CalHome assistance is sought. For mutual housing, community land trust projects that do not convey an interest in real estate to the homebuyer, and limited equity cooperative projects, all of the following shall apply:(1) Program funds shall be used for permanent financing only.(2) The department shall enter into a regulatory agreement limiting occupant incomes, occupancy charges, and share purchase terms for 55 years.(3) Notwithstanding Section 50650.3, program assistance shall be provided in the form of a deferred payment loan.(b) As used in this section, mutual housing development means a housing development owned and sponsored by a nonprofit corporation or a limited partnership in which the nonprofit corporation is the sole general partner, and all of the following requirements are met:(1) The nonprofit corporation is exempt from taxes under Section 501(c)(3) of the Internal Revenue Code or subdivision (b) of Section 23701 of the Revenue and Taxation Code.(2) The nonprofit corporation has as one of its principal purposes the advancement of mutual housing.(3) A majority of the board of directors of the nonprofit corporation sponsor are residents or former residents of developments sponsored by the nonprofit corporation.(4) The nonprofit corporation agrees to assist the residents of the development in setting up a resident council, and the operating budget for the development provides for ongoing financial support to allow the resident council to carry out its activities.(c) Lower income participants in a qualified mutual housing development that is assisted pursuant to this chapter shall not be required to have a vested ownership interest in the property.(d) (1) Funds provided under this chapter may be used to finance either of the following:(A) The purchase of land beneath a manufactured home or mobilehome by the owner of the home.(B) The purchase of both the land beneath a manufactured home or mobilehome and the home.(2) (A) A loan to purchase a subdivided lot in a manufactured housing community or mobilehome park, or both a subdivided lot and the manufactured home or mobilehome that is located on the lot, may be secured either by the land alone or by both the land and the manufactured home or mobilehome.(B) A loan to purchase an interest in an entity that owns a manufactured housing community or mobilehome park may be secured by an interest in the entity, a manufactured home, or a mobilehome, or both an interest in the entity and the home.(3) A manufactured home or mobilehome shall not be required to be placed on a permanent foundation as a condition of receiving financing under this chapter.(4) Funds provided under this chapter shall not be used for a loan to purchase the first lot or space in a manufactured housing community or mobilehome park at the time of the initial conversion of the park to resident ownership unless the conversion meets the two-thirds signature requirement in subdivision (a) of Section 66428.1 of the Government Code, or the transfer of the park to resident ownership has qualified for the change of ownership exclusion under Section 62.1 of the Revenue and Taxation Code.(5) For purposes of this subdivision, land beneath a manufactured home or mobilehome means either a subdivided lot in a manufactured housing community or mobilehome park or a membership, share, certificate, or other interest in the entity that owns the manufactured housing community or mobilehome park, including, but not limited to, a limited equity cooperative, community land trust, or mutual housing association.(e) Subdivision (a) shall not apply to the financing of an interest in a manufactured housing community or mobilehome park that is organized as mutual housing or a limited equity cooperative. |
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| 44 | 55 | | |
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| 45 | 56 | | SECTION 1. Section 50650.5 of the Health and Safety Code is amended to read: |
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| 46 | 57 | | |
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| 47 | 58 | | ### SECTION 1. |
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| 48 | 59 | | |
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| 49 | 60 | | 50650.5. For the purposes of this chapter, all of the following shall apply:(a) Mutual housing, community land trusts, and limited equity cooperative housing shall be deemed to be forms of homeownership and developments of those types of housing, as defined in subdivision (b), shall be eligible to receive assistance under the CalHome Program. The department may require that mutual housing, community land trust, or limited equity cooperative applicants not simultaneously apply for and receive funding through the departments rental housing programs for the same projects for which CalHome assistance is sought. For mutual housing, community land trust projects that do not convey an interest in real estate to the homebuyer, and limited equity cooperative projects, all of the following shall apply:(1) Program funds shall be used for permanent financing only.(2) The department shall enter into a regulatory agreement limiting occupant incomes, occupancy charges, and share purchase terms for 55 years.(3) Notwithstanding Section 50650.3, program assistance shall be provided in the form of a deferred payment loan.(b) As used in this section, mutual housing development means a housing development owned and sponsored by a nonprofit corporation or a limited partnership in which the nonprofit corporation is the sole general partner, and all of the following requirements are met:(1) The nonprofit corporation is exempt from taxes under Section 501(c)(3) of the Internal Revenue Code or subdivision (b) of Section 23701 of the Revenue and Taxation Code.(2) The nonprofit corporation has as one of its principal purposes the advancement of mutual housing.(3) A majority of the board of directors of the nonprofit corporation sponsor are residents or former residents of developments sponsored by the nonprofit corporation.(4) The nonprofit corporation agrees to assist the residents of the development in setting up a resident council, and the operating budget for the development provides for ongoing financial support to allow the resident council to carry out its activities.(c) Lower income participants in a qualified mutual housing development that is assisted pursuant to this chapter shall not be required to have a vested ownership interest in the property.(d) (1) Funds provided under this chapter may be used to finance either of the following:(A) The purchase of land beneath a manufactured home or mobilehome by the owner of the home.(B) The purchase of both the land beneath a manufactured home or mobilehome and the home.(2) (A) A loan to purchase a subdivided lot in a manufactured housing community or mobilehome park, or both a subdivided lot and the manufactured home or mobilehome that is located on the lot, may be secured either by the land alone or by both the land and the manufactured home or mobilehome.(B) A loan to purchase an interest in an entity that owns a manufactured housing community or mobilehome park may be secured by an interest in the entity, a manufactured home, or a mobilehome, or both an interest in the entity and the home.(3) A manufactured home or mobilehome shall not be required to be placed on a permanent foundation as a condition of receiving financing under this chapter.(4) Funds provided under this chapter shall not be used for a loan to purchase the first lot or space in a manufactured housing community or mobilehome park at the time of the initial conversion of the park to resident ownership unless the conversion meets the two-thirds signature requirement in subdivision (a) of Section 66428.1 of the Government Code, or the transfer of the park to resident ownership has qualified for the change of ownership exclusion under Section 62.1 of the Revenue and Taxation Code.(5) For purposes of this subdivision, land beneath a manufactured home or mobilehome means either a subdivided lot in a manufactured housing community or mobilehome park or a membership, share, certificate, or other interest in the entity that owns the manufactured housing community or mobilehome park, including, but not limited to, a limited equity cooperative, community land trust, or mutual housing association.(e) Subdivision (a) shall not apply to the financing of an interest in a manufactured housing community or mobilehome park that is organized as mutual housing or a limited equity cooperative. |
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| 50 | 61 | | |
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| 51 | 62 | | 50650.5. For the purposes of this chapter, all of the following shall apply:(a) Mutual housing, community land trusts, and limited equity cooperative housing shall be deemed to be forms of homeownership and developments of those types of housing, as defined in subdivision (b), shall be eligible to receive assistance under the CalHome Program. The department may require that mutual housing, community land trust, or limited equity cooperative applicants not simultaneously apply for and receive funding through the departments rental housing programs for the same projects for which CalHome assistance is sought. For mutual housing, community land trust projects that do not convey an interest in real estate to the homebuyer, and limited equity cooperative projects, all of the following shall apply:(1) Program funds shall be used for permanent financing only.(2) The department shall enter into a regulatory agreement limiting occupant incomes, occupancy charges, and share purchase terms for 55 years.(3) Notwithstanding Section 50650.3, program assistance shall be provided in the form of a deferred payment loan.(b) As used in this section, mutual housing development means a housing development owned and sponsored by a nonprofit corporation or a limited partnership in which the nonprofit corporation is the sole general partner, and all of the following requirements are met:(1) The nonprofit corporation is exempt from taxes under Section 501(c)(3) of the Internal Revenue Code or subdivision (b) of Section 23701 of the Revenue and Taxation Code.(2) The nonprofit corporation has as one of its principal purposes the advancement of mutual housing.(3) A majority of the board of directors of the nonprofit corporation sponsor are residents or former residents of developments sponsored by the nonprofit corporation.(4) The nonprofit corporation agrees to assist the residents of the development in setting up a resident council, and the operating budget for the development provides for ongoing financial support to allow the resident council to carry out its activities.(c) Lower income participants in a qualified mutual housing development that is assisted pursuant to this chapter shall not be required to have a vested ownership interest in the property.(d) (1) Funds provided under this chapter may be used to finance either of the following:(A) The purchase of land beneath a manufactured home or mobilehome by the owner of the home.(B) The purchase of both the land beneath a manufactured home or mobilehome and the home.(2) (A) A loan to purchase a subdivided lot in a manufactured housing community or mobilehome park, or both a subdivided lot and the manufactured home or mobilehome that is located on the lot, may be secured either by the land alone or by both the land and the manufactured home or mobilehome.(B) A loan to purchase an interest in an entity that owns a manufactured housing community or mobilehome park may be secured by an interest in the entity, a manufactured home, or a mobilehome, or both an interest in the entity and the home.(3) A manufactured home or mobilehome shall not be required to be placed on a permanent foundation as a condition of receiving financing under this chapter.(4) Funds provided under this chapter shall not be used for a loan to purchase the first lot or space in a manufactured housing community or mobilehome park at the time of the initial conversion of the park to resident ownership unless the conversion meets the two-thirds signature requirement in subdivision (a) of Section 66428.1 of the Government Code, or the transfer of the park to resident ownership has qualified for the change of ownership exclusion under Section 62.1 of the Revenue and Taxation Code.(5) For purposes of this subdivision, land beneath a manufactured home or mobilehome means either a subdivided lot in a manufactured housing community or mobilehome park or a membership, share, certificate, or other interest in the entity that owns the manufactured housing community or mobilehome park, including, but not limited to, a limited equity cooperative, community land trust, or mutual housing association.(e) Subdivision (a) shall not apply to the financing of an interest in a manufactured housing community or mobilehome park that is organized as mutual housing or a limited equity cooperative. |
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| 52 | 63 | | |
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| 53 | 64 | | 50650.5. For the purposes of this chapter, all of the following shall apply:(a) Mutual housing, community land trusts, and limited equity cooperative housing shall be deemed to be forms of homeownership and developments of those types of housing, as defined in subdivision (b), shall be eligible to receive assistance under the CalHome Program. The department may require that mutual housing, community land trust, or limited equity cooperative applicants not simultaneously apply for and receive funding through the departments rental housing programs for the same projects for which CalHome assistance is sought. For mutual housing, community land trust projects that do not convey an interest in real estate to the homebuyer, and limited equity cooperative projects, all of the following shall apply:(1) Program funds shall be used for permanent financing only.(2) The department shall enter into a regulatory agreement limiting occupant incomes, occupancy charges, and share purchase terms for 55 years.(3) Notwithstanding Section 50650.3, program assistance shall be provided in the form of a deferred payment loan.(b) As used in this section, mutual housing development means a housing development owned and sponsored by a nonprofit corporation or a limited partnership in which the nonprofit corporation is the sole general partner, and all of the following requirements are met:(1) The nonprofit corporation is exempt from taxes under Section 501(c)(3) of the Internal Revenue Code or subdivision (b) of Section 23701 of the Revenue and Taxation Code.(2) The nonprofit corporation has as one of its principal purposes the advancement of mutual housing.(3) A majority of the board of directors of the nonprofit corporation sponsor are residents or former residents of developments sponsored by the nonprofit corporation.(4) The nonprofit corporation agrees to assist the residents of the development in setting up a resident council, and the operating budget for the development provides for ongoing financial support to allow the resident council to carry out its activities.(c) Lower income participants in a qualified mutual housing development that is assisted pursuant to this chapter shall not be required to have a vested ownership interest in the property.(d) (1) Funds provided under this chapter may be used to finance either of the following:(A) The purchase of land beneath a manufactured home or mobilehome by the owner of the home.(B) The purchase of both the land beneath a manufactured home or mobilehome and the home.(2) (A) A loan to purchase a subdivided lot in a manufactured housing community or mobilehome park, or both a subdivided lot and the manufactured home or mobilehome that is located on the lot, may be secured either by the land alone or by both the land and the manufactured home or mobilehome.(B) A loan to purchase an interest in an entity that owns a manufactured housing community or mobilehome park may be secured by an interest in the entity, a manufactured home, or a mobilehome, or both an interest in the entity and the home.(3) A manufactured home or mobilehome shall not be required to be placed on a permanent foundation as a condition of receiving financing under this chapter.(4) Funds provided under this chapter shall not be used for a loan to purchase the first lot or space in a manufactured housing community or mobilehome park at the time of the initial conversion of the park to resident ownership unless the conversion meets the two-thirds signature requirement in subdivision (a) of Section 66428.1 of the Government Code, or the transfer of the park to resident ownership has qualified for the change of ownership exclusion under Section 62.1 of the Revenue and Taxation Code.(5) For purposes of this subdivision, land beneath a manufactured home or mobilehome means either a subdivided lot in a manufactured housing community or mobilehome park or a membership, share, certificate, or other interest in the entity that owns the manufactured housing community or mobilehome park, including, but not limited to, a limited equity cooperative, community land trust, or mutual housing association.(e) Subdivision (a) shall not apply to the financing of an interest in a manufactured housing community or mobilehome park that is organized as mutual housing or a limited equity cooperative. |
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| 54 | 65 | | |
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| 55 | 66 | | |
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| 56 | 67 | | |
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| 57 | 68 | | 50650.5. For the purposes of this chapter, all of the following shall apply: |
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| 58 | 69 | | |
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| 59 | 70 | | (a) Mutual housing, community land trusts, and limited equity cooperative housing shall be deemed to be forms of homeownership and developments of those types of housing, as defined in subdivision (b), shall be eligible to receive assistance under the CalHome Program. The department may require that mutual housing, community land trust, or limited equity cooperative applicants not simultaneously apply for and receive funding through the departments rental housing programs for the same projects for which CalHome assistance is sought. For mutual housing, community land trust projects that do not convey an interest in real estate to the homebuyer, and limited equity cooperative projects, all of the following shall apply: |
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| 60 | 71 | | |
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| 61 | 72 | | (1) Program funds shall be used for permanent financing only. |
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| 62 | 73 | | |
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| 63 | 74 | | (2) The department shall enter into a regulatory agreement limiting occupant incomes, occupancy charges, and share purchase terms for 55 years. |
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| 64 | 75 | | |
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| 65 | 76 | | (3) Notwithstanding Section 50650.3, program assistance shall be provided in the form of a deferred payment loan. |
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| 66 | 77 | | |
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| 67 | 78 | | (b) As used in this section, mutual housing development means a housing development owned and sponsored by a nonprofit corporation or a limited partnership in which the nonprofit corporation is the sole general partner, and all of the following requirements are met: |
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| 68 | 79 | | |
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| 69 | 80 | | (1) The nonprofit corporation is exempt from taxes under Section 501(c)(3) of the Internal Revenue Code or subdivision (b) of Section 23701 of the Revenue and Taxation Code. |
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| 70 | 81 | | |
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| 71 | 82 | | (2) The nonprofit corporation has as one of its principal purposes the advancement of mutual housing. |
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| 72 | 83 | | |
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| 73 | 84 | | (3) A majority of the board of directors of the nonprofit corporation sponsor are residents or former residents of developments sponsored by the nonprofit corporation. |
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| 74 | 85 | | |
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| 75 | 86 | | (4) The nonprofit corporation agrees to assist the residents of the development in setting up a resident council, and the operating budget for the development provides for ongoing financial support to allow the resident council to carry out its activities. |
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| 76 | 87 | | |
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| 77 | 88 | | (c) Lower income participants in a qualified mutual housing development that is assisted pursuant to this chapter shall not be required to have a vested ownership interest in the property. |
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| 78 | 89 | | |
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| 79 | 90 | | (d) (1) Funds provided under this chapter may be used to finance either of the following: |
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| 80 | 91 | | |
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| 81 | 92 | | (A) The purchase of land beneath a manufactured home or mobilehome by the owner of the home. |
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| 82 | 93 | | |
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| 83 | 94 | | (B) The purchase of both the land beneath a manufactured home or mobilehome and the home. |
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| 84 | 95 | | |
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| 85 | 96 | | (2) (A) A loan to purchase a subdivided lot in a manufactured housing community or mobilehome park, or both a subdivided lot and the manufactured home or mobilehome that is located on the lot, may be secured either by the land alone or by both the land and the manufactured home or mobilehome. |
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| 86 | 97 | | |
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| 87 | 98 | | (B) A loan to purchase an interest in an entity that owns a manufactured housing community or mobilehome park may be secured by an interest in the entity, a manufactured home, or a mobilehome, or both an interest in the entity and the home. |
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| 88 | 99 | | |
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| 89 | 100 | | (3) A manufactured home or mobilehome shall not be required to be placed on a permanent foundation as a condition of receiving financing under this chapter. |
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| 90 | 101 | | |
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| 91 | 102 | | (4) Funds provided under this chapter shall not be used for a loan to purchase the first lot or space in a manufactured housing community or mobilehome park at the time of the initial conversion of the park to resident ownership unless the conversion meets the two-thirds signature requirement in subdivision (a) of Section 66428.1 of the Government Code, or the transfer of the park to resident ownership has qualified for the change of ownership exclusion under Section 62.1 of the Revenue and Taxation Code. |
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| 92 | 103 | | |
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| 93 | 104 | | (5) For purposes of this subdivision, land beneath a manufactured home or mobilehome means either a subdivided lot in a manufactured housing community or mobilehome park or a membership, share, certificate, or other interest in the entity that owns the manufactured housing community or mobilehome park, including, but not limited to, a limited equity cooperative, community land trust, or mutual housing association. |
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| 94 | 105 | | |
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| 95 | 106 | | (e) Subdivision (a) shall not apply to the financing of an interest in a manufactured housing community or mobilehome park that is organized as mutual housing or a limited equity cooperative. |
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| 96 | 107 | | |
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| 97 | 108 | | SEC. 2. Section 23701 of the Revenue and Taxation Code is amended to read:23701. (a) Organizations which 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 both of the following occur:(1) An application for exemption is submitted in the form prescribed by the Franchise Tax Board.(2) 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, 23701g, or 23701w 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 organizations 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), (c)(7), or (c)(19) 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), (c)(7), or (c)(19) 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 organizations 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), (c)(7), or (c)(19) of the Internal Revenue Code and, if applicable, the organizations subordinate organization status under a federal group exemption letter. The effective date of an organizations exemption from state income tax pursuant to this subdivision shall be no later than the effective date of the organizations recognition of exemption from federal income tax as an organization described in Section 501(c)(3), (c)(4), (c)(5), (c)(6), (c)(7), or (c)(19) 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 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 organizations exemption from tax as an organization described in Section 501(c)(3), (c)(4), (c)(5), (c)(6), (c)(7), or (c)(19) 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 organizations 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), (c)(7), or (c)(19) 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.(e) The amendments made to this section by the act adding this subdivision shall become operative on January 1, 2021. |
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| 98 | 109 | | |
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| 99 | 110 | | SEC. 2. Section 23701 of the Revenue and Taxation Code is amended to read: |
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| 100 | 111 | | |
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| 101 | 112 | | ### SEC. 2. |
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| 102 | 113 | | |
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| 103 | 114 | | 23701. (a) Organizations which 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 both of the following occur:(1) An application for exemption is submitted in the form prescribed by the Franchise Tax Board.(2) 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, 23701g, or 23701w 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 organizations 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), (c)(7), or (c)(19) 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), (c)(7), or (c)(19) 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 organizations 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), (c)(7), or (c)(19) of the Internal Revenue Code and, if applicable, the organizations subordinate organization status under a federal group exemption letter. The effective date of an organizations exemption from state income tax pursuant to this subdivision shall be no later than the effective date of the organizations recognition of exemption from federal income tax as an organization described in Section 501(c)(3), (c)(4), (c)(5), (c)(6), (c)(7), or (c)(19) 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 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 organizations exemption from tax as an organization described in Section 501(c)(3), (c)(4), (c)(5), (c)(6), (c)(7), or (c)(19) 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 organizations 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), (c)(7), or (c)(19) 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.(e) The amendments made to this section by the act adding this subdivision shall become operative on January 1, 2021. |
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| 104 | 115 | | |
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| 105 | 116 | | 23701. (a) Organizations which 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 both of the following occur:(1) An application for exemption is submitted in the form prescribed by the Franchise Tax Board.(2) 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, 23701g, or 23701w 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 organizations 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), (c)(7), or (c)(19) 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), (c)(7), or (c)(19) 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 organizations 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), (c)(7), or (c)(19) of the Internal Revenue Code and, if applicable, the organizations subordinate organization status under a federal group exemption letter. The effective date of an organizations exemption from state income tax pursuant to this subdivision shall be no later than the effective date of the organizations recognition of exemption from federal income tax as an organization described in Section 501(c)(3), (c)(4), (c)(5), (c)(6), (c)(7), or (c)(19) 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 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 organizations exemption from tax as an organization described in Section 501(c)(3), (c)(4), (c)(5), (c)(6), (c)(7), or (c)(19) 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 organizations 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), (c)(7), or (c)(19) 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.(e) The amendments made to this section by the act adding this subdivision shall become operative on January 1, 2021. |
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| 106 | 117 | | |
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| 107 | 118 | | 23701. (a) Organizations which 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 both of the following occur:(1) An application for exemption is submitted in the form prescribed by the Franchise Tax Board.(2) 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, 23701g, or 23701w 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 organizations 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), (c)(7), or (c)(19) 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), (c)(7), or (c)(19) 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 organizations 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), (c)(7), or (c)(19) of the Internal Revenue Code and, if applicable, the organizations subordinate organization status under a federal group exemption letter. The effective date of an organizations exemption from state income tax pursuant to this subdivision shall be no later than the effective date of the organizations recognition of exemption from federal income tax as an organization described in Section 501(c)(3), (c)(4), (c)(5), (c)(6), (c)(7), or (c)(19) 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 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 organizations exemption from tax as an organization described in Section 501(c)(3), (c)(4), (c)(5), (c)(6), (c)(7), or (c)(19) 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 organizations 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), (c)(7), or (c)(19) 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.(e) The amendments made to this section by the act adding this subdivision shall become operative on January 1, 2021. |
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| 108 | 119 | | |
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| 109 | 120 | | |
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| 110 | 121 | | |
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| 111 | 122 | | 23701. (a) Organizations which 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 both of the following occur: |
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| 112 | 123 | | |
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| 113 | 124 | | (1) An application for exemption is submitted in the form prescribed by the Franchise Tax Board. |
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| 114 | 125 | | |
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| 115 | 126 | | (2) The Franchise Tax Board issues a determination exempting the organization from tax. |
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| 116 | 127 | | |
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| 117 | 128 | | (b) (1) Notwithstanding subdivision (a), an organization organized and operated for nonprofit purposes in accordance with Section 23701a, 23701d, 23701e, 23701f, 23701g, or 23701w 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: |
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| 118 | 129 | | |
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| 119 | 130 | | (A) A copy of the determination letter or ruling issued by the Internal Revenue Service recognizing the organizations 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), (c)(7), or (c)(19) of the Internal Revenue Code. |
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| 120 | 131 | | |
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| 121 | 132 | | (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), (c)(7), or (c)(19) of the Internal Revenue Code and substantiation that the organization is included in the federal group exemption letter as a subordinate organization. |
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| 122 | 133 | | |
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| 123 | 134 | | (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 organizations 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), (c)(7), or (c)(19) of the Internal Revenue Code and, if applicable, the organizations subordinate organization status under a federal group exemption letter. The effective date of an organizations exemption from state income tax pursuant to this subdivision shall be no later than the effective date of the organizations recognition of exemption from federal income tax as an organization described in Section 501(c)(3), (c)(4), (c)(5), (c)(6), (c)(7), or (c)(19) of the Internal Revenue Code, or its status as a subordinate organization under a federal group exemption letter, as applicable. |
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| 124 | 135 | | |
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| 125 | 136 | | (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 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. |
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| 126 | 137 | | |
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| 127 | 138 | | (3) If, for federal income tax purposes, an organizations exemption from tax as an organization described in Section 501(c)(3), (c)(4), (c)(5), (c)(6), (c)(7), or (c)(19) 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 organizations exemption under paragraph (1). |
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| 128 | 139 | | |
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| 129 | 140 | | (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), (c)(7), or (c)(19) of the Internal Revenue Code. |
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| 130 | 141 | | |
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| 131 | 142 | | (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). |
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| 132 | 143 | | |
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| 133 | 144 | | (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. |
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| 134 | 145 | | |
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| 135 | 146 | | (d) The Franchise Tax Board may prescribe rules and regulations to implement the provisions of this article. |
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| 136 | 147 | | |
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| 137 | 148 | | (e) The amendments made to this section by the act adding this subdivision shall become operative on January 1, 2021. |
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| 138 | 149 | | |
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| 139 | 150 | | SEC. 3. Section 23701r of the Revenue and Taxation Code is amended to read:23701r. (a) A political organization.However, a political organization shall be subject to tax under this part with respect to its political organization taxable income and such income shall be subject to tax as provided by Chapter 3 (commencing with Section 23501).(b) For purposes of this section, the political organization taxable income of any organization for any taxable year is an amount equal to the excess over one hundred dollars ($100) (if any) of(1) The gross income for the taxable year (excluding any exempt function income), over(2) The deductions allowed by this part which are directly connected with the production of the gross income (excluding exempt function income).(c) For purposes of this section, the term exempt function income means any amount received as(1) A contribution of money or other property,(2) Membership dues, a membership fee or assessment from a member of the political organization, or(3) Proceeds from a political fundraising or entertainment event, or proceeds from the sale of political campaign materials, which are not received in the ordinary course of any trade or business, to the extent such amount is segregated for use only for the exempt function of the political organization.(d) For purposes of this part, if any political organization(1) Contributes any amount to or for the use of any political organization which is treated as exempt from tax under subdivision (a) of this section,(2) Contributes any amount to or for the use of any organization described in paragraph (1) or (2) of Section 509(a) of the Internal Revenue Code of 1954, which is exempt from tax under Section 23701, or(3) Deposits any amount in the General Fund or the Treasury of the United States or in the General Fund of any state or local government, such amount shall be treated as an amount not diverted for the personal use of the candidate or any other person. No deduction shall be allowed under this part for the contribution or deposit of any amount described in the preceding sentence.(e) For purposes of this section(1) The term political organization means a party, committee, association, fund, (including the trust of an individual candidate) or other organization (whether or not incorporated) organized and operated primarily for the purpose of directly or indirectly accepting contributions or making expenditures, or both, for an exempt function.(2) The term exempt function means the function of influencing or attempting to influence the selection, nomination, election, or appointment of any individual to any federal, state, or local public office or office in a political organization, or the election of Presidential or Vice Presidential electors, whether or not such individual or electors are selected, nominated, elected, or appointed. The term includes the making of expenditures relating to an office described in the preceding sentence which, if incurred by the individual, would be allowable as a deduction under Section 162(a) of the Internal Revenue Code.(3) The term contributions has the same meaning as provided in paragraph (2) of subdivision (b) of Section 24434.(4) The term expenditures has the same meaning as provided in paragraph (3) of subdivision (b) of Section 24434.(f) For purposes of paragraph (1) of subdivision (e), a separate segregated fund (within the meaning of Section 610 of Title 18 of the United States Code or of any similar state statute, or within the meaning of any state statute which permits the segregation of dues money for exempt functions, within the meaning of paragraph (2) of subdivision (e)) which is maintained by an organization described in Sections 23701a through 23701p or Section 23701s which is exempt from tax under Section 23701 shall be treated as a separate organization.(g) (1) For purposes of this section, a fund established and maintained by an individual who holds, has been elected to, or is a candidate (within the meaning of paragraph (3)) for nomination or election to, any federal, state, or local elective public office for use by such individual exclusively for the preparation and circulation of such individuals newsletter shall, except as provided in paragraph (2), be treated as if such fund constituted a political organization.(2) In the case of any fund described in paragraph (1) the exempt function shall be only the preparation and circulation of the newsletter.(3) For purposes of paragraph (1), candidate means with respect to any federal, state, or local elective public office, an individual who does both of the following:(A) Publicly announces that they are a candidate for nomination or election to that office.(B) Meets the qualifications prescribed by law to hold that office.(h) The requirements set forth in subdivision (a) of Section 23701 shall not apply to a political organization or newsletter fund described in this section. However, in the case of a corporation incorporated or organized in this state or qualified to do business in this state, such corporation shall either pay the minimum tax provided in Section 23153 or obtain a certificate of exemption from the Franchise Tax Board before the corporation files with the Secretary of State its articles of incorporation or a duly certified copy thereof.(i) The requirements set forth in Section 23772 or Section 23774 shall not apply to a political organization or newsletter fund. Further, the requirements set forth in Sections 18505, 18506, and 18601 shall not apply to a political organization or newsletter fund described in this section, except that if it has political organization taxable income for any taxable year, the political organization shall be required to file income tax returns or statements as determined by the Franchise Tax Board under Chapter 3 (commencing with Section 23501). |
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| 140 | 151 | | |
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| 141 | 152 | | SEC. 3. Section 23701r of the Revenue and Taxation Code is amended to read: |
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| 142 | 153 | | |
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| 143 | 154 | | ### SEC. 3. |
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| 144 | 155 | | |
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| 145 | 156 | | 23701r. (a) A political organization.However, a political organization shall be subject to tax under this part with respect to its political organization taxable income and such income shall be subject to tax as provided by Chapter 3 (commencing with Section 23501).(b) For purposes of this section, the political organization taxable income of any organization for any taxable year is an amount equal to the excess over one hundred dollars ($100) (if any) of(1) The gross income for the taxable year (excluding any exempt function income), over(2) The deductions allowed by this part which are directly connected with the production of the gross income (excluding exempt function income).(c) For purposes of this section, the term exempt function income means any amount received as(1) A contribution of money or other property,(2) Membership dues, a membership fee or assessment from a member of the political organization, or(3) Proceeds from a political fundraising or entertainment event, or proceeds from the sale of political campaign materials, which are not received in the ordinary course of any trade or business, to the extent such amount is segregated for use only for the exempt function of the political organization.(d) For purposes of this part, if any political organization(1) Contributes any amount to or for the use of any political organization which is treated as exempt from tax under subdivision (a) of this section,(2) Contributes any amount to or for the use of any organization described in paragraph (1) or (2) of Section 509(a) of the Internal Revenue Code of 1954, which is exempt from tax under Section 23701, or(3) Deposits any amount in the General Fund or the Treasury of the United States or in the General Fund of any state or local government, such amount shall be treated as an amount not diverted for the personal use of the candidate or any other person. No deduction shall be allowed under this part for the contribution or deposit of any amount described in the preceding sentence.(e) For purposes of this section(1) The term political organization means a party, committee, association, fund, (including the trust of an individual candidate) or other organization (whether or not incorporated) organized and operated primarily for the purpose of directly or indirectly accepting contributions or making expenditures, or both, for an exempt function.(2) The term exempt function means the function of influencing or attempting to influence the selection, nomination, election, or appointment of any individual to any federal, state, or local public office or office in a political organization, or the election of Presidential or Vice Presidential electors, whether or not such individual or electors are selected, nominated, elected, or appointed. The term includes the making of expenditures relating to an office described in the preceding sentence which, if incurred by the individual, would be allowable as a deduction under Section 162(a) of the Internal Revenue Code.(3) The term contributions has the same meaning as provided in paragraph (2) of subdivision (b) of Section 24434.(4) The term expenditures has the same meaning as provided in paragraph (3) of subdivision (b) of Section 24434.(f) For purposes of paragraph (1) of subdivision (e), a separate segregated fund (within the meaning of Section 610 of Title 18 of the United States Code or of any similar state statute, or within the meaning of any state statute which permits the segregation of dues money for exempt functions, within the meaning of paragraph (2) of subdivision (e)) which is maintained by an organization described in Sections 23701a through 23701p or Section 23701s which is exempt from tax under Section 23701 shall be treated as a separate organization.(g) (1) For purposes of this section, a fund established and maintained by an individual who holds, has been elected to, or is a candidate (within the meaning of paragraph (3)) for nomination or election to, any federal, state, or local elective public office for use by such individual exclusively for the preparation and circulation of such individuals newsletter shall, except as provided in paragraph (2), be treated as if such fund constituted a political organization.(2) In the case of any fund described in paragraph (1) the exempt function shall be only the preparation and circulation of the newsletter.(3) For purposes of paragraph (1), candidate means with respect to any federal, state, or local elective public office, an individual who does both of the following:(A) Publicly announces that they are a candidate for nomination or election to that office.(B) Meets the qualifications prescribed by law to hold that office.(h) The requirements set forth in subdivision (a) of Section 23701 shall not apply to a political organization or newsletter fund described in this section. However, in the case of a corporation incorporated or organized in this state or qualified to do business in this state, such corporation shall either pay the minimum tax provided in Section 23153 or obtain a certificate of exemption from the Franchise Tax Board before the corporation files with the Secretary of State its articles of incorporation or a duly certified copy thereof.(i) The requirements set forth in Section 23772 or Section 23774 shall not apply to a political organization or newsletter fund. Further, the requirements set forth in Sections 18505, 18506, and 18601 shall not apply to a political organization or newsletter fund described in this section, except that if it has political organization taxable income for any taxable year, the political organization shall be required to file income tax returns or statements as determined by the Franchise Tax Board under Chapter 3 (commencing with Section 23501). |
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| 146 | 157 | | |
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| 147 | 158 | | 23701r. (a) A political organization.However, a political organization shall be subject to tax under this part with respect to its political organization taxable income and such income shall be subject to tax as provided by Chapter 3 (commencing with Section 23501).(b) For purposes of this section, the political organization taxable income of any organization for any taxable year is an amount equal to the excess over one hundred dollars ($100) (if any) of(1) The gross income for the taxable year (excluding any exempt function income), over(2) The deductions allowed by this part which are directly connected with the production of the gross income (excluding exempt function income).(c) For purposes of this section, the term exempt function income means any amount received as(1) A contribution of money or other property,(2) Membership dues, a membership fee or assessment from a member of the political organization, or(3) Proceeds from a political fundraising or entertainment event, or proceeds from the sale of political campaign materials, which are not received in the ordinary course of any trade or business, to the extent such amount is segregated for use only for the exempt function of the political organization.(d) For purposes of this part, if any political organization(1) Contributes any amount to or for the use of any political organization which is treated as exempt from tax under subdivision (a) of this section,(2) Contributes any amount to or for the use of any organization described in paragraph (1) or (2) of Section 509(a) of the Internal Revenue Code of 1954, which is exempt from tax under Section 23701, or(3) Deposits any amount in the General Fund or the Treasury of the United States or in the General Fund of any state or local government, such amount shall be treated as an amount not diverted for the personal use of the candidate or any other person. No deduction shall be allowed under this part for the contribution or deposit of any amount described in the preceding sentence.(e) For purposes of this section(1) The term political organization means a party, committee, association, fund, (including the trust of an individual candidate) or other organization (whether or not incorporated) organized and operated primarily for the purpose of directly or indirectly accepting contributions or making expenditures, or both, for an exempt function.(2) The term exempt function means the function of influencing or attempting to influence the selection, nomination, election, or appointment of any individual to any federal, state, or local public office or office in a political organization, or the election of Presidential or Vice Presidential electors, whether or not such individual or electors are selected, nominated, elected, or appointed. The term includes the making of expenditures relating to an office described in the preceding sentence which, if incurred by the individual, would be allowable as a deduction under Section 162(a) of the Internal Revenue Code.(3) The term contributions has the same meaning as provided in paragraph (2) of subdivision (b) of Section 24434.(4) The term expenditures has the same meaning as provided in paragraph (3) of subdivision (b) of Section 24434.(f) For purposes of paragraph (1) of subdivision (e), a separate segregated fund (within the meaning of Section 610 of Title 18 of the United States Code or of any similar state statute, or within the meaning of any state statute which permits the segregation of dues money for exempt functions, within the meaning of paragraph (2) of subdivision (e)) which is maintained by an organization described in Sections 23701a through 23701p or Section 23701s which is exempt from tax under Section 23701 shall be treated as a separate organization.(g) (1) For purposes of this section, a fund established and maintained by an individual who holds, has been elected to, or is a candidate (within the meaning of paragraph (3)) for nomination or election to, any federal, state, or local elective public office for use by such individual exclusively for the preparation and circulation of such individuals newsletter shall, except as provided in paragraph (2), be treated as if such fund constituted a political organization.(2) In the case of any fund described in paragraph (1) the exempt function shall be only the preparation and circulation of the newsletter.(3) For purposes of paragraph (1), candidate means with respect to any federal, state, or local elective public office, an individual who does both of the following:(A) Publicly announces that they are a candidate for nomination or election to that office.(B) Meets the qualifications prescribed by law to hold that office.(h) The requirements set forth in subdivision (a) of Section 23701 shall not apply to a political organization or newsletter fund described in this section. However, in the case of a corporation incorporated or organized in this state or qualified to do business in this state, such corporation shall either pay the minimum tax provided in Section 23153 or obtain a certificate of exemption from the Franchise Tax Board before the corporation files with the Secretary of State its articles of incorporation or a duly certified copy thereof.(i) The requirements set forth in Section 23772 or Section 23774 shall not apply to a political organization or newsletter fund. Further, the requirements set forth in Sections 18505, 18506, and 18601 shall not apply to a political organization or newsletter fund described in this section, except that if it has political organization taxable income for any taxable year, the political organization shall be required to file income tax returns or statements as determined by the Franchise Tax Board under Chapter 3 (commencing with Section 23501). |
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| 148 | 159 | | |
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| 149 | 160 | | 23701r. (a) A political organization.However, a political organization shall be subject to tax under this part with respect to its political organization taxable income and such income shall be subject to tax as provided by Chapter 3 (commencing with Section 23501).(b) For purposes of this section, the political organization taxable income of any organization for any taxable year is an amount equal to the excess over one hundred dollars ($100) (if any) of(1) The gross income for the taxable year (excluding any exempt function income), over(2) The deductions allowed by this part which are directly connected with the production of the gross income (excluding exempt function income).(c) For purposes of this section, the term exempt function income means any amount received as(1) A contribution of money or other property,(2) Membership dues, a membership fee or assessment from a member of the political organization, or(3) Proceeds from a political fundraising or entertainment event, or proceeds from the sale of political campaign materials, which are not received in the ordinary course of any trade or business, to the extent such amount is segregated for use only for the exempt function of the political organization.(d) For purposes of this part, if any political organization(1) Contributes any amount to or for the use of any political organization which is treated as exempt from tax under subdivision (a) of this section,(2) Contributes any amount to or for the use of any organization described in paragraph (1) or (2) of Section 509(a) of the Internal Revenue Code of 1954, which is exempt from tax under Section 23701, or(3) Deposits any amount in the General Fund or the Treasury of the United States or in the General Fund of any state or local government, such amount shall be treated as an amount not diverted for the personal use of the candidate or any other person. No deduction shall be allowed under this part for the contribution or deposit of any amount described in the preceding sentence.(e) For purposes of this section(1) The term political organization means a party, committee, association, fund, (including the trust of an individual candidate) or other organization (whether or not incorporated) organized and operated primarily for the purpose of directly or indirectly accepting contributions or making expenditures, or both, for an exempt function.(2) The term exempt function means the function of influencing or attempting to influence the selection, nomination, election, or appointment of any individual to any federal, state, or local public office or office in a political organization, or the election of Presidential or Vice Presidential electors, whether or not such individual or electors are selected, nominated, elected, or appointed. The term includes the making of expenditures relating to an office described in the preceding sentence which, if incurred by the individual, would be allowable as a deduction under Section 162(a) of the Internal Revenue Code.(3) The term contributions has the same meaning as provided in paragraph (2) of subdivision (b) of Section 24434.(4) The term expenditures has the same meaning as provided in paragraph (3) of subdivision (b) of Section 24434.(f) For purposes of paragraph (1) of subdivision (e), a separate segregated fund (within the meaning of Section 610 of Title 18 of the United States Code or of any similar state statute, or within the meaning of any state statute which permits the segregation of dues money for exempt functions, within the meaning of paragraph (2) of subdivision (e)) which is maintained by an organization described in Sections 23701a through 23701p or Section 23701s which is exempt from tax under Section 23701 shall be treated as a separate organization.(g) (1) For purposes of this section, a fund established and maintained by an individual who holds, has been elected to, or is a candidate (within the meaning of paragraph (3)) for nomination or election to, any federal, state, or local elective public office for use by such individual exclusively for the preparation and circulation of such individuals newsletter shall, except as provided in paragraph (2), be treated as if such fund constituted a political organization.(2) In the case of any fund described in paragraph (1) the exempt function shall be only the preparation and circulation of the newsletter.(3) For purposes of paragraph (1), candidate means with respect to any federal, state, or local elective public office, an individual who does both of the following:(A) Publicly announces that they are a candidate for nomination or election to that office.(B) Meets the qualifications prescribed by law to hold that office.(h) The requirements set forth in subdivision (a) of Section 23701 shall not apply to a political organization or newsletter fund described in this section. However, in the case of a corporation incorporated or organized in this state or qualified to do business in this state, such corporation shall either pay the minimum tax provided in Section 23153 or obtain a certificate of exemption from the Franchise Tax Board before the corporation files with the Secretary of State its articles of incorporation or a duly certified copy thereof.(i) The requirements set forth in Section 23772 or Section 23774 shall not apply to a political organization or newsletter fund. Further, the requirements set forth in Sections 18505, 18506, and 18601 shall not apply to a political organization or newsletter fund described in this section, except that if it has political organization taxable income for any taxable year, the political organization shall be required to file income tax returns or statements as determined by the Franchise Tax Board under Chapter 3 (commencing with Section 23501). |
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| 150 | 161 | | |
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| 151 | 162 | | |
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| 152 | 163 | | |
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| 153 | 164 | | 23701r. (a) A political organization.However, a political organization shall be subject to tax under this part with respect to its political organization taxable income and such income shall be subject to tax as provided by Chapter 3 (commencing with Section 23501). |
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| 154 | 165 | | |
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| 155 | 166 | | (b) For purposes of this section, the political organization taxable income of any organization for any taxable year is an amount equal to the excess over one hundred dollars ($100) (if any) of |
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| 156 | 167 | | |
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| 157 | 168 | | (1) The gross income for the taxable year (excluding any exempt function income), over |
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| 158 | 169 | | |
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| 159 | 170 | | (2) The deductions allowed by this part which are directly connected with the production of the gross income (excluding exempt function income). |
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| 160 | 171 | | |
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| 161 | 172 | | (c) For purposes of this section, the term exempt function income means any amount received as |
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| 162 | 173 | | |
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| 163 | 174 | | (1) A contribution of money or other property, |
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| 164 | 175 | | |
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| 165 | 176 | | (2) Membership dues, a membership fee or assessment from a member of the political organization, or |
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| 166 | 177 | | |
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| 167 | 178 | | (3) Proceeds from a political fundraising or entertainment event, or proceeds from the sale of political campaign materials, which are not received in the ordinary course of any trade or business, to the extent such amount is segregated for use only for the exempt function of the political organization. |
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| 168 | 179 | | |
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| 169 | 180 | | (d) For purposes of this part, if any political organization |
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| 170 | 181 | | |
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| 171 | 182 | | (1) Contributes any amount to or for the use of any political organization which is treated as exempt from tax under subdivision (a) of this section, |
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| 172 | 183 | | |
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| 173 | 184 | | (2) Contributes any amount to or for the use of any organization described in paragraph (1) or (2) of Section 509(a) of the Internal Revenue Code of 1954, which is exempt from tax under Section 23701, or |
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| 174 | 185 | | |
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| 175 | 186 | | (3) Deposits any amount in the General Fund or the Treasury of the United States or in the General Fund of any state or local government, such amount shall be treated as an amount not diverted for the personal use of the candidate or any other person. No deduction shall be allowed under this part for the contribution or deposit of any amount described in the preceding sentence. |
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| 176 | 187 | | |
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| 177 | 188 | | (e) For purposes of this section |
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| 178 | 189 | | |
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| 179 | 190 | | (1) The term political organization means a party, committee, association, fund, (including the trust of an individual candidate) or other organization (whether or not incorporated) organized and operated primarily for the purpose of directly or indirectly accepting contributions or making expenditures, or both, for an exempt function. |
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| 180 | 191 | | |
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| 181 | 192 | | (2) The term exempt function means the function of influencing or attempting to influence the selection, nomination, election, or appointment of any individual to any federal, state, or local public office or office in a political organization, or the election of Presidential or Vice Presidential electors, whether or not such individual or electors are selected, nominated, elected, or appointed. The term includes the making of expenditures relating to an office described in the preceding sentence which, if incurred by the individual, would be allowable as a deduction under Section 162(a) of the Internal Revenue Code. |
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| 182 | 193 | | |
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| 183 | 194 | | (3) The term contributions has the same meaning as provided in paragraph (2) of subdivision (b) of Section 24434. |
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| 184 | 195 | | |
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| 185 | 196 | | (4) The term expenditures has the same meaning as provided in paragraph (3) of subdivision (b) of Section 24434. |
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| 186 | 197 | | |
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| 187 | 198 | | (f) For purposes of paragraph (1) of subdivision (e), a separate segregated fund (within the meaning of Section 610 of Title 18 of the United States Code or of any similar state statute, or within the meaning of any state statute which permits the segregation of dues money for exempt functions, within the meaning of paragraph (2) of subdivision (e)) which is maintained by an organization described in Sections 23701a through 23701p or Section 23701s which is exempt from tax under Section 23701 shall be treated as a separate organization. |
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| 188 | 199 | | |
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| 189 | 200 | | (g) (1) For purposes of this section, a fund established and maintained by an individual who holds, has been elected to, or is a candidate (within the meaning of paragraph (3)) for nomination or election to, any federal, state, or local elective public office for use by such individual exclusively for the preparation and circulation of such individuals newsletter shall, except as provided in paragraph (2), be treated as if such fund constituted a political organization. |
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| 190 | 201 | | |
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| 191 | 202 | | (2) In the case of any fund described in paragraph (1) the exempt function shall be only the preparation and circulation of the newsletter. |
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| 192 | 203 | | |
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| 193 | 204 | | (3) For purposes of paragraph (1), candidate means with respect to any federal, state, or local elective public office, an individual who does both of the following: |
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| 194 | 205 | | |
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| 195 | 206 | | (A) Publicly announces that they are a candidate for nomination or election to that office. |
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| 196 | 207 | | |
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| 197 | 208 | | (B) Meets the qualifications prescribed by law to hold that office. |
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| 198 | 209 | | |
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| 199 | 210 | | (h) The requirements set forth in subdivision (a) of Section 23701 shall not apply to a political organization or newsletter fund described in this section. However, in the case of a corporation incorporated or organized in this state or qualified to do business in this state, such corporation shall either pay the minimum tax provided in Section 23153 or obtain a certificate of exemption from the Franchise Tax Board before the corporation files with the Secretary of State its articles of incorporation or a duly certified copy thereof. |
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| 200 | 211 | | |
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| 201 | 212 | | (i) The requirements set forth in Section 23772 or Section 23774 shall not apply to a political organization or newsletter fund. Further, the requirements set forth in Sections 18505, 18506, and 18601 shall not apply to a political organization or newsletter fund described in this section, except that if it has political organization taxable income for any taxable year, the political organization shall be required to file income tax returns or statements as determined by the Franchise Tax Board under Chapter 3 (commencing with Section 23501). |
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| 202 | 213 | | |
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| 203 | 214 | | SEC. 4. Section 23772 of the Revenue and Taxation Code is amended to read:23772. (a) For the purposes of this part(1) Except as provided in paragraph (2), every organization exempt from taxation under Section 23701 and every trust treated as a private foundation because of Section 4947(a)(1) of the Internal Revenue Code shall file an annual return, stating specifically the items of gross income, receipts, and disbursements, and any other information for the purpose of carrying out the laws under this part as the Franchise Tax Board may by rules or regulations prescribe, and shall keep any records, render under oath any statements, make any other returns, and comply with any rules and regulations as the Franchise Tax Board may from time to time prescribe. The return shall be filed on or before the 15th day of the fifth full calendar month following the close of the taxable year.(2) Exceptions from filing(A) Mandatory exceptionsParagraph (1) shall not apply to(i) Churches, their integrated auxiliaries, and conventions or association of churches,(ii) An organization (other than a private foundation as defined in Section 23709), the gross receipts of which in each taxable year are normally not more than fifty thousand dollars ($50,000), or(iii) The exclusively religious activities of any religious order.(B) Discretionary exceptionsThe Franchise Tax Board may permit the filing of a simplified return for organizations based on either gross receipts or total assets or both gross receipts and total assets, or may permit the filing of an information statement (without fee), or may permit the filing of a group return for incorporated or unincorporated branches of a state or national organization where it determines that an information return is not necessary to the efficient administration of this part.(b) Every organization described in Section 23701d that is subject to the requirements of subdivision (a) is required to furnish annually information, at the time and in the manner as the Franchise Tax Board may by rules or regulations prescribe, setting forth all of the following:(1) Its gross income for the year.(2) Its expenses attributable to gross income and incurred within the year.(3) Its disbursements within the year for the purposes for which it is exempt.(4) A balance sheet showing its assets, liabilities, and net worth as of the beginning of that year.(5) The total of the contributions and gifts received by it during the year, and the names and addresses of all substantial contributors.(6) The names and addresses of its foundation manager (within the meaning of Section 4946 of the Internal Revenue Code) and highly compensated employees.(7) The compensation and other payments made during the year to each individual described in paragraph (6).(8) In the case of an organization with respect to which an election under Section 23704.5 is effective for the taxable year, the following amounts for that organization for that taxable year:(A) The lobbying expenditures (as defined in Section 4911(c)(1) of the Internal Revenue Code).(B) The lobbying nontaxable amount (as defined in Section 4911(c)(2) of the Internal Revenue Code).(C) The grassroots expenditures (as defined in Section 4911(c)(3) of the Internal Revenue Code).(D) The grassroots nontaxable amount (as defined in Section 4911(c)(4) of the Internal Revenue Code). For purposes of this paragraph, if Section 23740 applies to the organization for the taxable year, the organization shall furnish the amounts with respect to the affiliated group as well as with respect to the organization.(9) Other information with respect to direct or indirect transfers to, and other direct or indirect transactions and relationships with, other organizations described in Sections 23701a to 23701w, inclusive (other than Sections 23701d, 23701k, and 23701t), as the Franchise Tax Board may require to prevent either of the following:(A) Diversion of funds from the organizations exempt purpose.(B) Misallocation of revenue or expense.(10) Information with respect to qualified disaster relief activities.(11) Any other relevant information as the Franchise Tax Board may prescribe.(12) Each controlling organization, within the meaning of Section 512(b)(13) of the Internal Revenue Code, which is subject to the requirements of subdivision (a), shall include on the return required under subdivision (a) all of the following information:(A) Any interest, royalties, annuities, or rents received from each controlled entity, within the meaning of Section 512(b)(13) of the Internal Revenue Code.(B) Any loans made to each controlled entity.(C) Any transfers of funds between such controlling organization and each such controlled entity.(13) (A) Any organization, the gross receipts of which in any taxable year result in the organization being referred to in clause (ii) of subparagraph (A) of paragraph (2) of subdivision (a), or subparagraph (B) of paragraph (2) of subdivision (a), shall do both of the following:(i) Furnish annually, in electronic form, and at the time and in the manner as may be prescribed by the Franchise Tax Board, the legal name of the organization, any name under which the organization operates or does business, the organizations mailing address and the internet website address, if any, the organizations taxpayer identification number, the name and address of a principal officer, and evidence of the continuing basis for the organizations exemption from the filing requirements under paragraph (1) of subdivision (a).(ii) Upon termination of the existence of the organization, shall furnish notice of the termination.(B) This paragraph shall apply to notices and returns with respect to annual periods beginning on or after January 1, 2010.(14) (A) If an organization described in paragraph (1) of subdivision (a) or paragraph (13) of this subdivision fails to file an annual return or notice required under either paragraph (1) of subdivision (a) or paragraph (13) of this subdivision for three consecutive years, that organizations status as an organization exempt from tax under Section 23701 shall be considered revoked on and after the date set by the Franchise Tax Board for the filing of the third annual return or notice. The Franchise Tax Board shall publish and maintain a list of any organization for which the tax-exempt status is revoked.(B) Any organization for which the tax-exempt status is revoked under subparagraph (A) must apply for reinstatement of that status regardless of whether that organization was originally required to make an application for tax-exempt status.(C) If, upon application for reinstatement of status as an organization exempt from tax under Section 23701, an organization described in subparagraph (A) can show to the satisfaction of the Franchise Tax Board evidence of reasonable cause for the failure described in that subparagraph, the organizations exempt status may, in the discretion of the Franchise Tax Board, be reinstated effective from the date of the revocation under that subparagraph.(D) This paragraph shall apply to notices and returns with respect to annual periods beginning on or after January 1, 2010.(c) For the purposes of this part(1) In the case of a failure to file a return required under this section on the date and in the manner prescribed therefor (determined with regard to any extension of time for filing), unless it is shown that the failure is due to reasonable cause, there shall be paid (on notice and demand by the Franchise Tax Board and in the same manner as tax) by the exempt organization or trust failing so to file, five dollars ($5) for each month or part thereof during which the failure continues, but the total amount imposed hereunder on any organization for failure to file any return may not exceed forty dollars ($40).(2) The Franchise Tax Board may make written demand upon a private foundation failing to file under paragraph (1) of this subdivision specifying therein a reasonable future date by which the filing shall be made, and if the filing is not made on or before that date, and unless it is shown that failure so to file is due to reasonable cause, there shall be paid (on notice and demand by the Franchise Tax Board and in the same manner as tax) by the person failing so to file, in addition to the penalty prescribed in paragraph (1), a penalty of five dollars ($5) each month or part thereof after the expiration of the time specified in the written demand during which the failure continues, but the total amount imposed hereunder on all persons for the failure to file shall not exceed twenty-five dollars ($25). If more than one person is liable under this paragraph for a failure to file, all of those persons shall be jointly and severally liable with respect to the failure. The term person as used herein means any officer, director, trustee, employee, member, or other individual who is under a duty to perform the act in respect of which the violation occurs.(3) This subdivision shall not apply with respect to any notice required under paragraph (13) of subdivision (b).(d) The amendments made to this section by Chapter 858 of the Statutes of 2012 shall apply to taxable years beginning on or after January 1, 2012.(e) The amendments made to this section by the act adding this subdivision shall become operative on January 1, 2021. |
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| 204 | 215 | | |
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| 205 | 216 | | SEC. 4. Section 23772 of the Revenue and Taxation Code is amended to read: |
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| 206 | 217 | | |
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| 207 | 218 | | ### SEC. 4. |
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| 208 | 219 | | |
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| 209 | 220 | | 23772. (a) For the purposes of this part(1) Except as provided in paragraph (2), every organization exempt from taxation under Section 23701 and every trust treated as a private foundation because of Section 4947(a)(1) of the Internal Revenue Code shall file an annual return, stating specifically the items of gross income, receipts, and disbursements, and any other information for the purpose of carrying out the laws under this part as the Franchise Tax Board may by rules or regulations prescribe, and shall keep any records, render under oath any statements, make any other returns, and comply with any rules and regulations as the Franchise Tax Board may from time to time prescribe. The return shall be filed on or before the 15th day of the fifth full calendar month following the close of the taxable year.(2) Exceptions from filing(A) Mandatory exceptionsParagraph (1) shall not apply to(i) Churches, their integrated auxiliaries, and conventions or association of churches,(ii) An organization (other than a private foundation as defined in Section 23709), the gross receipts of which in each taxable year are normally not more than fifty thousand dollars ($50,000), or(iii) The exclusively religious activities of any religious order.(B) Discretionary exceptionsThe Franchise Tax Board may permit the filing of a simplified return for organizations based on either gross receipts or total assets or both gross receipts and total assets, or may permit the filing of an information statement (without fee), or may permit the filing of a group return for incorporated or unincorporated branches of a state or national organization where it determines that an information return is not necessary to the efficient administration of this part.(b) Every organization described in Section 23701d that is subject to the requirements of subdivision (a) is required to furnish annually information, at the time and in the manner as the Franchise Tax Board may by rules or regulations prescribe, setting forth all of the following:(1) Its gross income for the year.(2) Its expenses attributable to gross income and incurred within the year.(3) Its disbursements within the year for the purposes for which it is exempt.(4) A balance sheet showing its assets, liabilities, and net worth as of the beginning of that year.(5) The total of the contributions and gifts received by it during the year, and the names and addresses of all substantial contributors.(6) The names and addresses of its foundation manager (within the meaning of Section 4946 of the Internal Revenue Code) and highly compensated employees.(7) The compensation and other payments made during the year to each individual described in paragraph (6).(8) In the case of an organization with respect to which an election under Section 23704.5 is effective for the taxable year, the following amounts for that organization for that taxable year:(A) The lobbying expenditures (as defined in Section 4911(c)(1) of the Internal Revenue Code).(B) The lobbying nontaxable amount (as defined in Section 4911(c)(2) of the Internal Revenue Code).(C) The grassroots expenditures (as defined in Section 4911(c)(3) of the Internal Revenue Code).(D) The grassroots nontaxable amount (as defined in Section 4911(c)(4) of the Internal Revenue Code). For purposes of this paragraph, if Section 23740 applies to the organization for the taxable year, the organization shall furnish the amounts with respect to the affiliated group as well as with respect to the organization.(9) Other information with respect to direct or indirect transfers to, and other direct or indirect transactions and relationships with, other organizations described in Sections 23701a to 23701w, inclusive (other than Sections 23701d, 23701k, and 23701t), as the Franchise Tax Board may require to prevent either of the following:(A) Diversion of funds from the organizations exempt purpose.(B) Misallocation of revenue or expense.(10) Information with respect to qualified disaster relief activities.(11) Any other relevant information as the Franchise Tax Board may prescribe.(12) Each controlling organization, within the meaning of Section 512(b)(13) of the Internal Revenue Code, which is subject to the requirements of subdivision (a), shall include on the return required under subdivision (a) all of the following information:(A) Any interest, royalties, annuities, or rents received from each controlled entity, within the meaning of Section 512(b)(13) of the Internal Revenue Code.(B) Any loans made to each controlled entity.(C) Any transfers of funds between such controlling organization and each such controlled entity.(13) (A) Any organization, the gross receipts of which in any taxable year result in the organization being referred to in clause (ii) of subparagraph (A) of paragraph (2) of subdivision (a), or subparagraph (B) of paragraph (2) of subdivision (a), shall do both of the following:(i) Furnish annually, in electronic form, and at the time and in the manner as may be prescribed by the Franchise Tax Board, the legal name of the organization, any name under which the organization operates or does business, the organizations mailing address and the internet website address, if any, the organizations taxpayer identification number, the name and address of a principal officer, and evidence of the continuing basis for the organizations exemption from the filing requirements under paragraph (1) of subdivision (a).(ii) Upon termination of the existence of the organization, shall furnish notice of the termination.(B) This paragraph shall apply to notices and returns with respect to annual periods beginning on or after January 1, 2010.(14) (A) If an organization described in paragraph (1) of subdivision (a) or paragraph (13) of this subdivision fails to file an annual return or notice required under either paragraph (1) of subdivision (a) or paragraph (13) of this subdivision for three consecutive years, that organizations status as an organization exempt from tax under Section 23701 shall be considered revoked on and after the date set by the Franchise Tax Board for the filing of the third annual return or notice. The Franchise Tax Board shall publish and maintain a list of any organization for which the tax-exempt status is revoked.(B) Any organization for which the tax-exempt status is revoked under subparagraph (A) must apply for reinstatement of that status regardless of whether that organization was originally required to make an application for tax-exempt status.(C) If, upon application for reinstatement of status as an organization exempt from tax under Section 23701, an organization described in subparagraph (A) can show to the satisfaction of the Franchise Tax Board evidence of reasonable cause for the failure described in that subparagraph, the organizations exempt status may, in the discretion of the Franchise Tax Board, be reinstated effective from the date of the revocation under that subparagraph.(D) This paragraph shall apply to notices and returns with respect to annual periods beginning on or after January 1, 2010.(c) For the purposes of this part(1) In the case of a failure to file a return required under this section on the date and in the manner prescribed therefor (determined with regard to any extension of time for filing), unless it is shown that the failure is due to reasonable cause, there shall be paid (on notice and demand by the Franchise Tax Board and in the same manner as tax) by the exempt organization or trust failing so to file, five dollars ($5) for each month or part thereof during which the failure continues, but the total amount imposed hereunder on any organization for failure to file any return may not exceed forty dollars ($40).(2) The Franchise Tax Board may make written demand upon a private foundation failing to file under paragraph (1) of this subdivision specifying therein a reasonable future date by which the filing shall be made, and if the filing is not made on or before that date, and unless it is shown that failure so to file is due to reasonable cause, there shall be paid (on notice and demand by the Franchise Tax Board and in the same manner as tax) by the person failing so to file, in addition to the penalty prescribed in paragraph (1), a penalty of five dollars ($5) each month or part thereof after the expiration of the time specified in the written demand during which the failure continues, but the total amount imposed hereunder on all persons for the failure to file shall not exceed twenty-five dollars ($25). If more than one person is liable under this paragraph for a failure to file, all of those persons shall be jointly and severally liable with respect to the failure. The term person as used herein means any officer, director, trustee, employee, member, or other individual who is under a duty to perform the act in respect of which the violation occurs.(3) This subdivision shall not apply with respect to any notice required under paragraph (13) of subdivision (b).(d) The amendments made to this section by Chapter 858 of the Statutes of 2012 shall apply to taxable years beginning on or after January 1, 2012.(e) The amendments made to this section by the act adding this subdivision shall become operative on January 1, 2021. |
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| 210 | 221 | | |
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| 211 | 222 | | 23772. (a) For the purposes of this part(1) Except as provided in paragraph (2), every organization exempt from taxation under Section 23701 and every trust treated as a private foundation because of Section 4947(a)(1) of the Internal Revenue Code shall file an annual return, stating specifically the items of gross income, receipts, and disbursements, and any other information for the purpose of carrying out the laws under this part as the Franchise Tax Board may by rules or regulations prescribe, and shall keep any records, render under oath any statements, make any other returns, and comply with any rules and regulations as the Franchise Tax Board may from time to time prescribe. The return shall be filed on or before the 15th day of the fifth full calendar month following the close of the taxable year.(2) Exceptions from filing(A) Mandatory exceptionsParagraph (1) shall not apply to(i) Churches, their integrated auxiliaries, and conventions or association of churches,(ii) An organization (other than a private foundation as defined in Section 23709), the gross receipts of which in each taxable year are normally not more than fifty thousand dollars ($50,000), or(iii) The exclusively religious activities of any religious order.(B) Discretionary exceptionsThe Franchise Tax Board may permit the filing of a simplified return for organizations based on either gross receipts or total assets or both gross receipts and total assets, or may permit the filing of an information statement (without fee), or may permit the filing of a group return for incorporated or unincorporated branches of a state or national organization where it determines that an information return is not necessary to the efficient administration of this part.(b) Every organization described in Section 23701d that is subject to the requirements of subdivision (a) is required to furnish annually information, at the time and in the manner as the Franchise Tax Board may by rules or regulations prescribe, setting forth all of the following:(1) Its gross income for the year.(2) Its expenses attributable to gross income and incurred within the year.(3) Its disbursements within the year for the purposes for which it is exempt.(4) A balance sheet showing its assets, liabilities, and net worth as of the beginning of that year.(5) The total of the contributions and gifts received by it during the year, and the names and addresses of all substantial contributors.(6) The names and addresses of its foundation manager (within the meaning of Section 4946 of the Internal Revenue Code) and highly compensated employees.(7) The compensation and other payments made during the year to each individual described in paragraph (6).(8) In the case of an organization with respect to which an election under Section 23704.5 is effective for the taxable year, the following amounts for that organization for that taxable year:(A) The lobbying expenditures (as defined in Section 4911(c)(1) of the Internal Revenue Code).(B) The lobbying nontaxable amount (as defined in Section 4911(c)(2) of the Internal Revenue Code).(C) The grassroots expenditures (as defined in Section 4911(c)(3) of the Internal Revenue Code).(D) The grassroots nontaxable amount (as defined in Section 4911(c)(4) of the Internal Revenue Code). For purposes of this paragraph, if Section 23740 applies to the organization for the taxable year, the organization shall furnish the amounts with respect to the affiliated group as well as with respect to the organization.(9) Other information with respect to direct or indirect transfers to, and other direct or indirect transactions and relationships with, other organizations described in Sections 23701a to 23701w, inclusive (other than Sections 23701d, 23701k, and 23701t), as the Franchise Tax Board may require to prevent either of the following:(A) Diversion of funds from the organizations exempt purpose.(B) Misallocation of revenue or expense.(10) Information with respect to qualified disaster relief activities.(11) Any other relevant information as the Franchise Tax Board may prescribe.(12) Each controlling organization, within the meaning of Section 512(b)(13) of the Internal Revenue Code, which is subject to the requirements of subdivision (a), shall include on the return required under subdivision (a) all of the following information:(A) Any interest, royalties, annuities, or rents received from each controlled entity, within the meaning of Section 512(b)(13) of the Internal Revenue Code.(B) Any loans made to each controlled entity.(C) Any transfers of funds between such controlling organization and each such controlled entity.(13) (A) Any organization, the gross receipts of which in any taxable year result in the organization being referred to in clause (ii) of subparagraph (A) of paragraph (2) of subdivision (a), or subparagraph (B) of paragraph (2) of subdivision (a), shall do both of the following:(i) Furnish annually, in electronic form, and at the time and in the manner as may be prescribed by the Franchise Tax Board, the legal name of the organization, any name under which the organization operates or does business, the organizations mailing address and the internet website address, if any, the organizations taxpayer identification number, the name and address of a principal officer, and evidence of the continuing basis for the organizations exemption from the filing requirements under paragraph (1) of subdivision (a).(ii) Upon termination of the existence of the organization, shall furnish notice of the termination.(B) This paragraph shall apply to notices and returns with respect to annual periods beginning on or after January 1, 2010.(14) (A) If an organization described in paragraph (1) of subdivision (a) or paragraph (13) of this subdivision fails to file an annual return or notice required under either paragraph (1) of subdivision (a) or paragraph (13) of this subdivision for three consecutive years, that organizations status as an organization exempt from tax under Section 23701 shall be considered revoked on and after the date set by the Franchise Tax Board for the filing of the third annual return or notice. The Franchise Tax Board shall publish and maintain a list of any organization for which the tax-exempt status is revoked.(B) Any organization for which the tax-exempt status is revoked under subparagraph (A) must apply for reinstatement of that status regardless of whether that organization was originally required to make an application for tax-exempt status.(C) If, upon application for reinstatement of status as an organization exempt from tax under Section 23701, an organization described in subparagraph (A) can show to the satisfaction of the Franchise Tax Board evidence of reasonable cause for the failure described in that subparagraph, the organizations exempt status may, in the discretion of the Franchise Tax Board, be reinstated effective from the date of the revocation under that subparagraph.(D) This paragraph shall apply to notices and returns with respect to annual periods beginning on or after January 1, 2010.(c) For the purposes of this part(1) In the case of a failure to file a return required under this section on the date and in the manner prescribed therefor (determined with regard to any extension of time for filing), unless it is shown that the failure is due to reasonable cause, there shall be paid (on notice and demand by the Franchise Tax Board and in the same manner as tax) by the exempt organization or trust failing so to file, five dollars ($5) for each month or part thereof during which the failure continues, but the total amount imposed hereunder on any organization for failure to file any return may not exceed forty dollars ($40).(2) The Franchise Tax Board may make written demand upon a private foundation failing to file under paragraph (1) of this subdivision specifying therein a reasonable future date by which the filing shall be made, and if the filing is not made on or before that date, and unless it is shown that failure so to file is due to reasonable cause, there shall be paid (on notice and demand by the Franchise Tax Board and in the same manner as tax) by the person failing so to file, in addition to the penalty prescribed in paragraph (1), a penalty of five dollars ($5) each month or part thereof after the expiration of the time specified in the written demand during which the failure continues, but the total amount imposed hereunder on all persons for the failure to file shall not exceed twenty-five dollars ($25). If more than one person is liable under this paragraph for a failure to file, all of those persons shall be jointly and severally liable with respect to the failure. The term person as used herein means any officer, director, trustee, employee, member, or other individual who is under a duty to perform the act in respect of which the violation occurs.(3) This subdivision shall not apply with respect to any notice required under paragraph (13) of subdivision (b).(d) The amendments made to this section by Chapter 858 of the Statutes of 2012 shall apply to taxable years beginning on or after January 1, 2012.(e) The amendments made to this section by the act adding this subdivision shall become operative on January 1, 2021. |
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| 212 | 223 | | |
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| 213 | 224 | | 23772. (a) For the purposes of this part(1) Except as provided in paragraph (2), every organization exempt from taxation under Section 23701 and every trust treated as a private foundation because of Section 4947(a)(1) of the Internal Revenue Code shall file an annual return, stating specifically the items of gross income, receipts, and disbursements, and any other information for the purpose of carrying out the laws under this part as the Franchise Tax Board may by rules or regulations prescribe, and shall keep any records, render under oath any statements, make any other returns, and comply with any rules and regulations as the Franchise Tax Board may from time to time prescribe. The return shall be filed on or before the 15th day of the fifth full calendar month following the close of the taxable year.(2) Exceptions from filing(A) Mandatory exceptionsParagraph (1) shall not apply to(i) Churches, their integrated auxiliaries, and conventions or association of churches,(ii) An organization (other than a private foundation as defined in Section 23709), the gross receipts of which in each taxable year are normally not more than fifty thousand dollars ($50,000), or(iii) The exclusively religious activities of any religious order.(B) Discretionary exceptionsThe Franchise Tax Board may permit the filing of a simplified return for organizations based on either gross receipts or total assets or both gross receipts and total assets, or may permit the filing of an information statement (without fee), or may permit the filing of a group return for incorporated or unincorporated branches of a state or national organization where it determines that an information return is not necessary to the efficient administration of this part.(b) Every organization described in Section 23701d that is subject to the requirements of subdivision (a) is required to furnish annually information, at the time and in the manner as the Franchise Tax Board may by rules or regulations prescribe, setting forth all of the following:(1) Its gross income for the year.(2) Its expenses attributable to gross income and incurred within the year.(3) Its disbursements within the year for the purposes for which it is exempt.(4) A balance sheet showing its assets, liabilities, and net worth as of the beginning of that year.(5) The total of the contributions and gifts received by it during the year, and the names and addresses of all substantial contributors.(6) The names and addresses of its foundation manager (within the meaning of Section 4946 of the Internal Revenue Code) and highly compensated employees.(7) The compensation and other payments made during the year to each individual described in paragraph (6).(8) In the case of an organization with respect to which an election under Section 23704.5 is effective for the taxable year, the following amounts for that organization for that taxable year:(A) The lobbying expenditures (as defined in Section 4911(c)(1) of the Internal Revenue Code).(B) The lobbying nontaxable amount (as defined in Section 4911(c)(2) of the Internal Revenue Code).(C) The grassroots expenditures (as defined in Section 4911(c)(3) of the Internal Revenue Code).(D) The grassroots nontaxable amount (as defined in Section 4911(c)(4) of the Internal Revenue Code). For purposes of this paragraph, if Section 23740 applies to the organization for the taxable year, the organization shall furnish the amounts with respect to the affiliated group as well as with respect to the organization.(9) Other information with respect to direct or indirect transfers to, and other direct or indirect transactions and relationships with, other organizations described in Sections 23701a to 23701w, inclusive (other than Sections 23701d, 23701k, and 23701t), as the Franchise Tax Board may require to prevent either of the following:(A) Diversion of funds from the organizations exempt purpose.(B) Misallocation of revenue or expense.(10) Information with respect to qualified disaster relief activities.(11) Any other relevant information as the Franchise Tax Board may prescribe.(12) Each controlling organization, within the meaning of Section 512(b)(13) of the Internal Revenue Code, which is subject to the requirements of subdivision (a), shall include on the return required under subdivision (a) all of the following information:(A) Any interest, royalties, annuities, or rents received from each controlled entity, within the meaning of Section 512(b)(13) of the Internal Revenue Code.(B) Any loans made to each controlled entity.(C) Any transfers of funds between such controlling organization and each such controlled entity.(13) (A) Any organization, the gross receipts of which in any taxable year result in the organization being referred to in clause (ii) of subparagraph (A) of paragraph (2) of subdivision (a), or subparagraph (B) of paragraph (2) of subdivision (a), shall do both of the following:(i) Furnish annually, in electronic form, and at the time and in the manner as may be prescribed by the Franchise Tax Board, the legal name of the organization, any name under which the organization operates or does business, the organizations mailing address and the internet website address, if any, the organizations taxpayer identification number, the name and address of a principal officer, and evidence of the continuing basis for the organizations exemption from the filing requirements under paragraph (1) of subdivision (a).(ii) Upon termination of the existence of the organization, shall furnish notice of the termination.(B) This paragraph shall apply to notices and returns with respect to annual periods beginning on or after January 1, 2010.(14) (A) If an organization described in paragraph (1) of subdivision (a) or paragraph (13) of this subdivision fails to file an annual return or notice required under either paragraph (1) of subdivision (a) or paragraph (13) of this subdivision for three consecutive years, that organizations status as an organization exempt from tax under Section 23701 shall be considered revoked on and after the date set by the Franchise Tax Board for the filing of the third annual return or notice. The Franchise Tax Board shall publish and maintain a list of any organization for which the tax-exempt status is revoked.(B) Any organization for which the tax-exempt status is revoked under subparagraph (A) must apply for reinstatement of that status regardless of whether that organization was originally required to make an application for tax-exempt status.(C) If, upon application for reinstatement of status as an organization exempt from tax under Section 23701, an organization described in subparagraph (A) can show to the satisfaction of the Franchise Tax Board evidence of reasonable cause for the failure described in that subparagraph, the organizations exempt status may, in the discretion of the Franchise Tax Board, be reinstated effective from the date of the revocation under that subparagraph.(D) This paragraph shall apply to notices and returns with respect to annual periods beginning on or after January 1, 2010.(c) For the purposes of this part(1) In the case of a failure to file a return required under this section on the date and in the manner prescribed therefor (determined with regard to any extension of time for filing), unless it is shown that the failure is due to reasonable cause, there shall be paid (on notice and demand by the Franchise Tax Board and in the same manner as tax) by the exempt organization or trust failing so to file, five dollars ($5) for each month or part thereof during which the failure continues, but the total amount imposed hereunder on any organization for failure to file any return may not exceed forty dollars ($40).(2) The Franchise Tax Board may make written demand upon a private foundation failing to file under paragraph (1) of this subdivision specifying therein a reasonable future date by which the filing shall be made, and if the filing is not made on or before that date, and unless it is shown that failure so to file is due to reasonable cause, there shall be paid (on notice and demand by the Franchise Tax Board and in the same manner as tax) by the person failing so to file, in addition to the penalty prescribed in paragraph (1), a penalty of five dollars ($5) each month or part thereof after the expiration of the time specified in the written demand during which the failure continues, but the total amount imposed hereunder on all persons for the failure to file shall not exceed twenty-five dollars ($25). If more than one person is liable under this paragraph for a failure to file, all of those persons shall be jointly and severally liable with respect to the failure. The term person as used herein means any officer, director, trustee, employee, member, or other individual who is under a duty to perform the act in respect of which the violation occurs.(3) This subdivision shall not apply with respect to any notice required under paragraph (13) of subdivision (b).(d) The amendments made to this section by Chapter 858 of the Statutes of 2012 shall apply to taxable years beginning on or after January 1, 2012.(e) The amendments made to this section by the act adding this subdivision shall become operative on January 1, 2021. |
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| 214 | 225 | | |
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| 215 | 226 | | |
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| 216 | 227 | | |
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| 217 | 228 | | 23772. (a) For the purposes of this part |
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| 218 | 229 | | |
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| 219 | 230 | | (1) Except as provided in paragraph (2), every organization exempt from taxation under Section 23701 and every trust treated as a private foundation because of Section 4947(a)(1) of the Internal Revenue Code shall file an annual return, stating specifically the items of gross income, receipts, and disbursements, and any other information for the purpose of carrying out the laws under this part as the Franchise Tax Board may by rules or regulations prescribe, and shall keep any records, render under oath any statements, make any other returns, and comply with any rules and regulations as the Franchise Tax Board may from time to time prescribe. The return shall be filed on or before the 15th day of the fifth full calendar month following the close of the taxable year. |
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| 220 | 231 | | |
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| 221 | 232 | | (2) Exceptions from filing |
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| 222 | 233 | | |
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| 223 | 234 | | (A) Mandatory exceptionsParagraph (1) shall not apply to |
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| 224 | 235 | | |
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| 225 | 236 | | (i) Churches, their integrated auxiliaries, and conventions or association of churches, |
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| 226 | 237 | | |
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| 227 | 238 | | (ii) An organization (other than a private foundation as defined in Section 23709), the gross receipts of which in each taxable year are normally not more than fifty thousand dollars ($50,000), or |
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| 228 | 239 | | |
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| 229 | 240 | | (iii) The exclusively religious activities of any religious order. |
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| 230 | 241 | | |
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| 231 | 242 | | (B) Discretionary exceptionsThe Franchise Tax Board may permit the filing of a simplified return for organizations based on either gross receipts or total assets or both gross receipts and total assets, or may permit the filing of an information statement (without fee), or may permit the filing of a group return for incorporated or unincorporated branches of a state or national organization where it determines that an information return is not necessary to the efficient administration of this part. |
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| 232 | 243 | | |
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| 233 | 244 | | (b) Every organization described in Section 23701d that is subject to the requirements of subdivision (a) is required to furnish annually information, at the time and in the manner as the Franchise Tax Board may by rules or regulations prescribe, setting forth all of the following: |
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| 234 | 245 | | |
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| 235 | 246 | | (1) Its gross income for the year. |
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| 236 | 247 | | |
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| 237 | 248 | | (2) Its expenses attributable to gross income and incurred within the year. |
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| 238 | 249 | | |
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| 239 | 250 | | (3) Its disbursements within the year for the purposes for which it is exempt. |
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| 240 | 251 | | |
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| 241 | 252 | | (4) A balance sheet showing its assets, liabilities, and net worth as of the beginning of that year. |
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| 242 | 253 | | |
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| 243 | 254 | | (5) The total of the contributions and gifts received by it during the year, and the names and addresses of all substantial contributors. |
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| 244 | 255 | | |
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| 245 | 256 | | (6) The names and addresses of its foundation manager (within the meaning of Section 4946 of the Internal Revenue Code) and highly compensated employees. |
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| 246 | 257 | | |
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| 247 | 258 | | (7) The compensation and other payments made during the year to each individual described in paragraph (6). |
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| 248 | 259 | | |
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| 249 | 260 | | (8) In the case of an organization with respect to which an election under Section 23704.5 is effective for the taxable year, the following amounts for that organization for that taxable year: |
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| 250 | 261 | | |
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| 251 | 262 | | (A) The lobbying expenditures (as defined in Section 4911(c)(1) of the Internal Revenue Code). |
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| 252 | 263 | | |
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| 253 | 264 | | (B) The lobbying nontaxable amount (as defined in Section 4911(c)(2) of the Internal Revenue Code). |
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| 254 | 265 | | |
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| 255 | 266 | | (C) The grassroots expenditures (as defined in Section 4911(c)(3) of the Internal Revenue Code). |
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| 256 | 267 | | |
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| 257 | 268 | | (D) The grassroots nontaxable amount (as defined in Section 4911(c)(4) of the Internal Revenue Code). For purposes of this paragraph, if Section 23740 applies to the organization for the taxable year, the organization shall furnish the amounts with respect to the affiliated group as well as with respect to the organization. |
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| 258 | 269 | | |
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| 259 | 270 | | (9) Other information with respect to direct or indirect transfers to, and other direct or indirect transactions and relationships with, other organizations described in Sections 23701a to 23701w, inclusive (other than Sections 23701d, 23701k, and 23701t), as the Franchise Tax Board may require to prevent either of the following: |
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| 260 | 271 | | |
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| 261 | 272 | | (A) Diversion of funds from the organizations exempt purpose. |
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| 262 | 273 | | |
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| 263 | 274 | | (B) Misallocation of revenue or expense. |
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| 264 | 275 | | |
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| 265 | 276 | | (10) Information with respect to qualified disaster relief activities. |
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| 266 | 277 | | |
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| 267 | 278 | | (11) Any other relevant information as the Franchise Tax Board may prescribe. |
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| 268 | 279 | | |
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| 269 | 280 | | (12) Each controlling organization, within the meaning of Section 512(b)(13) of the Internal Revenue Code, which is subject to the requirements of subdivision (a), shall include on the return required under subdivision (a) all of the following information: |
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| 270 | 281 | | |
|---|
| 271 | 282 | | (A) Any interest, royalties, annuities, or rents received from each controlled entity, within the meaning of Section 512(b)(13) of the Internal Revenue Code. |
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| 272 | 283 | | |
|---|
| 273 | 284 | | (B) Any loans made to each controlled entity. |
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| 274 | 285 | | |
|---|
| 275 | 286 | | (C) Any transfers of funds between such controlling organization and each such controlled entity. |
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| 276 | 287 | | |
|---|
| 277 | 288 | | (13) (A) Any organization, the gross receipts of which in any taxable year result in the organization being referred to in clause (ii) of subparagraph (A) of paragraph (2) of subdivision (a), or subparagraph (B) of paragraph (2) of subdivision (a), shall do both of the following: |
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| 278 | 289 | | |
|---|
| 279 | 290 | | (i) Furnish annually, in electronic form, and at the time and in the manner as may be prescribed by the Franchise Tax Board, the legal name of the organization, any name under which the organization operates or does business, the organizations mailing address and the internet website address, if any, the organizations taxpayer identification number, the name and address of a principal officer, and evidence of the continuing basis for the organizations exemption from the filing requirements under paragraph (1) of subdivision (a). |
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| 280 | 291 | | |
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| 281 | 292 | | (ii) Upon termination of the existence of the organization, shall furnish notice of the termination. |
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| 282 | 293 | | |
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| 283 | 294 | | (B) This paragraph shall apply to notices and returns with respect to annual periods beginning on or after January 1, 2010. |
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| 284 | 295 | | |
|---|
| 285 | 296 | | (14) (A) If an organization described in paragraph (1) of subdivision (a) or paragraph (13) of this subdivision fails to file an annual return or notice required under either paragraph (1) of subdivision (a) or paragraph (13) of this subdivision for three consecutive years, that organizations status as an organization exempt from tax under Section 23701 shall be considered revoked on and after the date set by the Franchise Tax Board for the filing of the third annual return or notice. The Franchise Tax Board shall publish and maintain a list of any organization for which the tax-exempt status is revoked. |
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| 286 | 297 | | |
|---|
| 287 | 298 | | (B) Any organization for which the tax-exempt status is revoked under subparagraph (A) must apply for reinstatement of that status regardless of whether that organization was originally required to make an application for tax-exempt status. |
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| 288 | 299 | | |
|---|
| 289 | 300 | | (C) If, upon application for reinstatement of status as an organization exempt from tax under Section 23701, an organization described in subparagraph (A) can show to the satisfaction of the Franchise Tax Board evidence of reasonable cause for the failure described in that subparagraph, the organizations exempt status may, in the discretion of the Franchise Tax Board, be reinstated effective from the date of the revocation under that subparagraph. |
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| 290 | 301 | | |
|---|
| 291 | 302 | | (D) This paragraph shall apply to notices and returns with respect to annual periods beginning on or after January 1, 2010. |
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| 292 | 303 | | |
|---|
| 293 | 304 | | (c) For the purposes of this part |
|---|
| 294 | 305 | | |
|---|
| 295 | 306 | | (1) In the case of a failure to file a return required under this section on the date and in the manner prescribed therefor (determined with regard to any extension of time for filing), unless it is shown that the failure is due to reasonable cause, there shall be paid (on notice and demand by the Franchise Tax Board and in the same manner as tax) by the exempt organization or trust failing so to file, five dollars ($5) for each month or part thereof during which the failure continues, but the total amount imposed hereunder on any organization for failure to file any return may not exceed forty dollars ($40). |
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| 296 | 307 | | |
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| 297 | 308 | | (2) The Franchise Tax Board may make written demand upon a private foundation failing to file under paragraph (1) of this subdivision specifying therein a reasonable future date by which the filing shall be made, and if the filing is not made on or before that date, and unless it is shown that failure so to file is due to reasonable cause, there shall be paid (on notice and demand by the Franchise Tax Board and in the same manner as tax) by the person failing so to file, in addition to the penalty prescribed in paragraph (1), a penalty of five dollars ($5) each month or part thereof after the expiration of the time specified in the written demand during which the failure continues, but the total amount imposed hereunder on all persons for the failure to file shall not exceed twenty-five dollars ($25). If more than one person is liable under this paragraph for a failure to file, all of those persons shall be jointly and severally liable with respect to the failure. The term person as used herein means any officer, director, trustee, employee, member, or other individual who is under a duty to perform the act in respect of which the violation occurs. |
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| 298 | 309 | | |
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| 299 | 310 | | (3) This subdivision shall not apply with respect to any notice required under paragraph (13) of subdivision (b). |
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| 300 | 311 | | |
|---|
| 301 | 312 | | (d) The amendments made to this section by Chapter 858 of the Statutes of 2012 shall apply to taxable years beginning on or after January 1, 2012. |
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| 302 | 313 | | |
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| 303 | 314 | | (e) The amendments made to this section by the act adding this subdivision shall become operative on January 1, 2021. |
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| 304 | 315 | | |
|---|
| 305 | 316 | | SEC. 5. Section 23778 of the Revenue and Taxation Code is repealed. |
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| 306 | 317 | | |
|---|
| 307 | 318 | | SEC. 5. Section 23778 of the Revenue and Taxation Code is repealed. |
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| 308 | 319 | | |
|---|
| 309 | 320 | | ### SEC. 5. |
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| 310 | 321 | | |
|---|
| 311 | 322 | | |
|---|
| 312 | 323 | | |
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| 313 | 324 | | SEC. 6. Section 23778 is added to the Revenue and Taxation Code, to read:23778. An organization whose exemption was revoked under Section 23703 or 23777 may be reestablished as an exempt organization upon:(a) The filing or payment of both of the following:(1) A new application for exemption.(2) Any returns, statements, or payment of any amounts due under this part or Part 10.2 (commencing with Section 18401) that were not previously submitted or paid and that resulted in the revocation.(b) When revocation occurred under subdivision (c) of Section 23777, satisfactory proof that all of the following have occurred:(1) The organization has corrected its nonexempt activities.(2) That it will operate in an exempt manner in the future.(3) The payment of any tax for periods the organization was not qualified for exemption. |
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| 314 | 325 | | |
|---|
| 315 | 326 | | SEC. 6. Section 23778 is added to the Revenue and Taxation Code, to read: |
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| 316 | 327 | | |
|---|
| 317 | 328 | | ### SEC. 6. |
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| 318 | 329 | | |
|---|
| 319 | 330 | | 23778. An organization whose exemption was revoked under Section 23703 or 23777 may be reestablished as an exempt organization upon:(a) The filing or payment of both of the following:(1) A new application for exemption.(2) Any returns, statements, or payment of any amounts due under this part or Part 10.2 (commencing with Section 18401) that were not previously submitted or paid and that resulted in the revocation.(b) When revocation occurred under subdivision (c) of Section 23777, satisfactory proof that all of the following have occurred:(1) The organization has corrected its nonexempt activities.(2) That it will operate in an exempt manner in the future.(3) The payment of any tax for periods the organization was not qualified for exemption. |
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| 320 | 331 | | |
|---|
| 321 | 332 | | 23778. An organization whose exemption was revoked under Section 23703 or 23777 may be reestablished as an exempt organization upon:(a) The filing or payment of both of the following:(1) A new application for exemption.(2) Any returns, statements, or payment of any amounts due under this part or Part 10.2 (commencing with Section 18401) that were not previously submitted or paid and that resulted in the revocation.(b) When revocation occurred under subdivision (c) of Section 23777, satisfactory proof that all of the following have occurred:(1) The organization has corrected its nonexempt activities.(2) That it will operate in an exempt manner in the future.(3) The payment of any tax for periods the organization was not qualified for exemption. |
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| 322 | 333 | | |
|---|
| 323 | 334 | | 23778. An organization whose exemption was revoked under Section 23703 or 23777 may be reestablished as an exempt organization upon:(a) The filing or payment of both of the following:(1) A new application for exemption.(2) Any returns, statements, or payment of any amounts due under this part or Part 10.2 (commencing with Section 18401) that were not previously submitted or paid and that resulted in the revocation.(b) When revocation occurred under subdivision (c) of Section 23777, satisfactory proof that all of the following have occurred:(1) The organization has corrected its nonexempt activities.(2) That it will operate in an exempt manner in the future.(3) The payment of any tax for periods the organization was not qualified for exemption. |
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| 324 | 335 | | |
|---|
| 325 | 336 | | |
|---|
| 326 | 337 | | |
|---|
| 327 | 338 | | 23778. An organization whose exemption was revoked under Section 23703 or 23777 may be reestablished as an exempt organization upon: |
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| 328 | 339 | | |
|---|
| 329 | 340 | | (a) The filing or payment of both of the following: |
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| 330 | 341 | | |
|---|
| 331 | 342 | | (1) A new application for exemption. |
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| 332 | 343 | | |
|---|
| 333 | 344 | | (2) Any returns, statements, or payment of any amounts due under this part or Part 10.2 (commencing with Section 18401) that were not previously submitted or paid and that resulted in the revocation. |
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| 334 | 345 | | |
|---|
| 335 | 346 | | (b) When revocation occurred under subdivision (c) of Section 23777, satisfactory proof that all of the following have occurred: |
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| 336 | 347 | | |
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| 337 | 348 | | (1) The organization has corrected its nonexempt activities. |
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| 338 | 349 | | |
|---|
| 339 | 350 | | (2) That it will operate in an exempt manner in the future. |
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| 340 | 351 | | |
|---|
| 341 | 352 | | (3) The payment of any tax for periods the organization was not qualified for exemption. |
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| 342 | 353 | | |
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| 343 | 354 | | SEC. 7. Section 5168 of the Vehicle Code is amended to read:5168. (a) The fees specified in Section 5157 shall be imposed for the issuance, renewal, or transfer of the Pet Lovers specialized license plates. Notwithstanding subdivision (c) of Section 5157, after deducting its administrative costs, the department shall deposit the revenue derived from the additional fees into the Pet Lovers Fund, which is hereby established in the Specialized License Plate Fund.(b) Upon appropriation by the Legislature, the moneys in the Pet Lovers Fund shall be allocated to the Department of Food and Agriculture. There shall not be an allocation to the Department of Food and Agriculture pursuant to subdivision (c) of Section 5157.(c) The Department of Food and Agriculture shall allocate those grant funds to eligible veterinary facilities that offer low-cost or no-cost animal sterilization services.(1) In administering the grants, the Department of Food and Agriculture may prioritize both of the following:(A) Eligible veterinary facilities located in or serving underserved communities or those that can demonstrate financial need.(B) Eligible veterinary facilities that have previously provided or currently provide low-cost or no-cost animal sterilization services.(2) For the purposes of this subdivision, eligible veterinary facilities mean those facilities that are all of the following:(A) Registered and in good standing with the Veterinary Medical Board, pursuant to Section 4853 of the Business and Professions Code.(B) Overseen by a responsible licensee manager licensed and in good standing with the Veterinary Medical Board, pursuant to Chapter 11 (commencing with Section 4800) of Division 2 of the Business and Professions Code.(C) (i) Operated by a city, county, city and county, an animal care or control agency, or a nonprofit meeting the requirements of Section 501(c)(3) of the federal Internal Revenue Code that is registered and in good standing with the Secretary of State.(ii) A city, county, or city and county animal control agency or nonprofit shelter holding a municipal contract that offers spay and neuter services for dogs and cats owned by individual members of the public is required to be current on its yearly rabies reporting requirements to the State Department of Public Health, Veterinary Public Health Section.(d) Annual administrative costs for the program shall not exceed 25 percent of the funds collected from the issuance of the Pet Lovers license plates, and may include funds for marketing and other promotional activities associated with encouraging application for, or renewal of, Pet Lovers license plates and collaboration expenses. The Department of Food and Agriculture may contract with an eligible nonprofit organization to perform the marketing and promotional activities authorized.(1) The eligible nonprofit organization selected by the Department of Food and Agriculture pursuant to this subdivision shall not use more than 5 percent of the moneys received pursuant to this section for administrative costs.(2) For the purposes of this subdivision, eligible nonprofit organization means a nonprofit entity that is all of the following:(A) Qualifies for tax exempt status under Section 501(c)(3) of the Internal Revenue Code and subdivision (b) of Section 23701 of the Revenue and Taxation Code.(B) Registered and in good standing with the Secretary of State.(C) Chaptered and headquartered in this state.(D) Has demonstrated experience in advertising, marketing, and promoting specialized license plates in existence prior to 2016 pursuant to this article.(e) The Department of Food and Agriculture shall determine eligibility requirements for the grants, establish the grant application process, and develop program specifics. The Department of Food and Agriculture shall collaborate with an eligible nonprofit organization, as defined in paragraph (2) of subdivision (d), to provide advice and consultation for the purposes of developing and implementing the grant program. The Department of Food and Agriculture shall administer and oversee the grant program. |
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| 344 | 355 | | |
|---|
| 345 | 356 | | SEC. 7. Section 5168 of the Vehicle Code is amended to read: |
|---|
| 346 | 357 | | |
|---|
| 347 | 358 | | ### SEC. 7. |
|---|
| 348 | 359 | | |
|---|
| 349 | 360 | | 5168. (a) The fees specified in Section 5157 shall be imposed for the issuance, renewal, or transfer of the Pet Lovers specialized license plates. Notwithstanding subdivision (c) of Section 5157, after deducting its administrative costs, the department shall deposit the revenue derived from the additional fees into the Pet Lovers Fund, which is hereby established in the Specialized License Plate Fund.(b) Upon appropriation by the Legislature, the moneys in the Pet Lovers Fund shall be allocated to the Department of Food and Agriculture. There shall not be an allocation to the Department of Food and Agriculture pursuant to subdivision (c) of Section 5157.(c) The Department of Food and Agriculture shall allocate those grant funds to eligible veterinary facilities that offer low-cost or no-cost animal sterilization services.(1) In administering the grants, the Department of Food and Agriculture may prioritize both of the following:(A) Eligible veterinary facilities located in or serving underserved communities or those that can demonstrate financial need.(B) Eligible veterinary facilities that have previously provided or currently provide low-cost or no-cost animal sterilization services.(2) For the purposes of this subdivision, eligible veterinary facilities mean those facilities that are all of the following:(A) Registered and in good standing with the Veterinary Medical Board, pursuant to Section 4853 of the Business and Professions Code.(B) Overseen by a responsible licensee manager licensed and in good standing with the Veterinary Medical Board, pursuant to Chapter 11 (commencing with Section 4800) of Division 2 of the Business and Professions Code.(C) (i) Operated by a city, county, city and county, an animal care or control agency, or a nonprofit meeting the requirements of Section 501(c)(3) of the federal Internal Revenue Code that is registered and in good standing with the Secretary of State.(ii) A city, county, or city and county animal control agency or nonprofit shelter holding a municipal contract that offers spay and neuter services for dogs and cats owned by individual members of the public is required to be current on its yearly rabies reporting requirements to the State Department of Public Health, Veterinary Public Health Section.(d) Annual administrative costs for the program shall not exceed 25 percent of the funds collected from the issuance of the Pet Lovers license plates, and may include funds for marketing and other promotional activities associated with encouraging application for, or renewal of, Pet Lovers license plates and collaboration expenses. The Department of Food and Agriculture may contract with an eligible nonprofit organization to perform the marketing and promotional activities authorized.(1) The eligible nonprofit organization selected by the Department of Food and Agriculture pursuant to this subdivision shall not use more than 5 percent of the moneys received pursuant to this section for administrative costs.(2) For the purposes of this subdivision, eligible nonprofit organization means a nonprofit entity that is all of the following:(A) Qualifies for tax exempt status under Section 501(c)(3) of the Internal Revenue Code and subdivision (b) of Section 23701 of the Revenue and Taxation Code.(B) Registered and in good standing with the Secretary of State.(C) Chaptered and headquartered in this state.(D) Has demonstrated experience in advertising, marketing, and promoting specialized license plates in existence prior to 2016 pursuant to this article.(e) The Department of Food and Agriculture shall determine eligibility requirements for the grants, establish the grant application process, and develop program specifics. The Department of Food and Agriculture shall collaborate with an eligible nonprofit organization, as defined in paragraph (2) of subdivision (d), to provide advice and consultation for the purposes of developing and implementing the grant program. The Department of Food and Agriculture shall administer and oversee the grant program. |
|---|
| 350 | 361 | | |
|---|
| 351 | 362 | | 5168. (a) The fees specified in Section 5157 shall be imposed for the issuance, renewal, or transfer of the Pet Lovers specialized license plates. Notwithstanding subdivision (c) of Section 5157, after deducting its administrative costs, the department shall deposit the revenue derived from the additional fees into the Pet Lovers Fund, which is hereby established in the Specialized License Plate Fund.(b) Upon appropriation by the Legislature, the moneys in the Pet Lovers Fund shall be allocated to the Department of Food and Agriculture. There shall not be an allocation to the Department of Food and Agriculture pursuant to subdivision (c) of Section 5157.(c) The Department of Food and Agriculture shall allocate those grant funds to eligible veterinary facilities that offer low-cost or no-cost animal sterilization services.(1) In administering the grants, the Department of Food and Agriculture may prioritize both of the following:(A) Eligible veterinary facilities located in or serving underserved communities or those that can demonstrate financial need.(B) Eligible veterinary facilities that have previously provided or currently provide low-cost or no-cost animal sterilization services.(2) For the purposes of this subdivision, eligible veterinary facilities mean those facilities that are all of the following:(A) Registered and in good standing with the Veterinary Medical Board, pursuant to Section 4853 of the Business and Professions Code.(B) Overseen by a responsible licensee manager licensed and in good standing with the Veterinary Medical Board, pursuant to Chapter 11 (commencing with Section 4800) of Division 2 of the Business and Professions Code.(C) (i) Operated by a city, county, city and county, an animal care or control agency, or a nonprofit meeting the requirements of Section 501(c)(3) of the federal Internal Revenue Code that is registered and in good standing with the Secretary of State.(ii) A city, county, or city and county animal control agency or nonprofit shelter holding a municipal contract that offers spay and neuter services for dogs and cats owned by individual members of the public is required to be current on its yearly rabies reporting requirements to the State Department of Public Health, Veterinary Public Health Section.(d) Annual administrative costs for the program shall not exceed 25 percent of the funds collected from the issuance of the Pet Lovers license plates, and may include funds for marketing and other promotional activities associated with encouraging application for, or renewal of, Pet Lovers license plates and collaboration expenses. The Department of Food and Agriculture may contract with an eligible nonprofit organization to perform the marketing and promotional activities authorized.(1) The eligible nonprofit organization selected by the Department of Food and Agriculture pursuant to this subdivision shall not use more than 5 percent of the moneys received pursuant to this section for administrative costs.(2) For the purposes of this subdivision, eligible nonprofit organization means a nonprofit entity that is all of the following:(A) Qualifies for tax exempt status under Section 501(c)(3) of the Internal Revenue Code and subdivision (b) of Section 23701 of the Revenue and Taxation Code.(B) Registered and in good standing with the Secretary of State.(C) Chaptered and headquartered in this state.(D) Has demonstrated experience in advertising, marketing, and promoting specialized license plates in existence prior to 2016 pursuant to this article.(e) The Department of Food and Agriculture shall determine eligibility requirements for the grants, establish the grant application process, and develop program specifics. The Department of Food and Agriculture shall collaborate with an eligible nonprofit organization, as defined in paragraph (2) of subdivision (d), to provide advice and consultation for the purposes of developing and implementing the grant program. The Department of Food and Agriculture shall administer and oversee the grant program. |
|---|
| 352 | 363 | | |
|---|
| 353 | 364 | | 5168. (a) The fees specified in Section 5157 shall be imposed for the issuance, renewal, or transfer of the Pet Lovers specialized license plates. Notwithstanding subdivision (c) of Section 5157, after deducting its administrative costs, the department shall deposit the revenue derived from the additional fees into the Pet Lovers Fund, which is hereby established in the Specialized License Plate Fund.(b) Upon appropriation by the Legislature, the moneys in the Pet Lovers Fund shall be allocated to the Department of Food and Agriculture. There shall not be an allocation to the Department of Food and Agriculture pursuant to subdivision (c) of Section 5157.(c) The Department of Food and Agriculture shall allocate those grant funds to eligible veterinary facilities that offer low-cost or no-cost animal sterilization services.(1) In administering the grants, the Department of Food and Agriculture may prioritize both of the following:(A) Eligible veterinary facilities located in or serving underserved communities or those that can demonstrate financial need.(B) Eligible veterinary facilities that have previously provided or currently provide low-cost or no-cost animal sterilization services.(2) For the purposes of this subdivision, eligible veterinary facilities mean those facilities that are all of the following:(A) Registered and in good standing with the Veterinary Medical Board, pursuant to Section 4853 of the Business and Professions Code.(B) Overseen by a responsible licensee manager licensed and in good standing with the Veterinary Medical Board, pursuant to Chapter 11 (commencing with Section 4800) of Division 2 of the Business and Professions Code.(C) (i) Operated by a city, county, city and county, an animal care or control agency, or a nonprofit meeting the requirements of Section 501(c)(3) of the federal Internal Revenue Code that is registered and in good standing with the Secretary of State.(ii) A city, county, or city and county animal control agency or nonprofit shelter holding a municipal contract that offers spay and neuter services for dogs and cats owned by individual members of the public is required to be current on its yearly rabies reporting requirements to the State Department of Public Health, Veterinary Public Health Section.(d) Annual administrative costs for the program shall not exceed 25 percent of the funds collected from the issuance of the Pet Lovers license plates, and may include funds for marketing and other promotional activities associated with encouraging application for, or renewal of, Pet Lovers license plates and collaboration expenses. The Department of Food and Agriculture may contract with an eligible nonprofit organization to perform the marketing and promotional activities authorized.(1) The eligible nonprofit organization selected by the Department of Food and Agriculture pursuant to this subdivision shall not use more than 5 percent of the moneys received pursuant to this section for administrative costs.(2) For the purposes of this subdivision, eligible nonprofit organization means a nonprofit entity that is all of the following:(A) Qualifies for tax exempt status under Section 501(c)(3) of the Internal Revenue Code and subdivision (b) of Section 23701 of the Revenue and Taxation Code.(B) Registered and in good standing with the Secretary of State.(C) Chaptered and headquartered in this state.(D) Has demonstrated experience in advertising, marketing, and promoting specialized license plates in existence prior to 2016 pursuant to this article.(e) The Department of Food and Agriculture shall determine eligibility requirements for the grants, establish the grant application process, and develop program specifics. The Department of Food and Agriculture shall collaborate with an eligible nonprofit organization, as defined in paragraph (2) of subdivision (d), to provide advice and consultation for the purposes of developing and implementing the grant program. The Department of Food and Agriculture shall administer and oversee the grant program. |
|---|
| 354 | 365 | | |
|---|
| 355 | 366 | | |
|---|
| 356 | 367 | | |
|---|
| 357 | 368 | | 5168. (a) The fees specified in Section 5157 shall be imposed for the issuance, renewal, or transfer of the Pet Lovers specialized license plates. Notwithstanding subdivision (c) of Section 5157, after deducting its administrative costs, the department shall deposit the revenue derived from the additional fees into the Pet Lovers Fund, which is hereby established in the Specialized License Plate Fund. |
|---|
| 358 | 369 | | |
|---|
| 359 | 370 | | (b) Upon appropriation by the Legislature, the moneys in the Pet Lovers Fund shall be allocated to the Department of Food and Agriculture. There shall not be an allocation to the Department of Food and Agriculture pursuant to subdivision (c) of Section 5157. |
|---|
| 360 | 371 | | |
|---|
| 361 | 372 | | (c) The Department of Food and Agriculture shall allocate those grant funds to eligible veterinary facilities that offer low-cost or no-cost animal sterilization services. |
|---|
| 362 | 373 | | |
|---|
| 363 | 374 | | (1) In administering the grants, the Department of Food and Agriculture may prioritize both of the following: |
|---|
| 364 | 375 | | |
|---|
| 365 | 376 | | (A) Eligible veterinary facilities located in or serving underserved communities or those that can demonstrate financial need. |
|---|
| 366 | 377 | | |
|---|
| 367 | 378 | | (B) Eligible veterinary facilities that have previously provided or currently provide low-cost or no-cost animal sterilization services. |
|---|
| 368 | 379 | | |
|---|
| 369 | 380 | | (2) For the purposes of this subdivision, eligible veterinary facilities mean those facilities that are all of the following: |
|---|
| 370 | 381 | | |
|---|
| 371 | 382 | | (A) Registered and in good standing with the Veterinary Medical Board, pursuant to Section 4853 of the Business and Professions Code. |
|---|
| 372 | 383 | | |
|---|
| 373 | 384 | | (B) Overseen by a responsible licensee manager licensed and in good standing with the Veterinary Medical Board, pursuant to Chapter 11 (commencing with Section 4800) of Division 2 of the Business and Professions Code. |
|---|
| 374 | 385 | | |
|---|
| 375 | 386 | | (C) (i) Operated by a city, county, city and county, an animal care or control agency, or a nonprofit meeting the requirements of Section 501(c)(3) of the federal Internal Revenue Code that is registered and in good standing with the Secretary of State. |
|---|
| 376 | 387 | | |
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| 377 | 388 | | (ii) A city, county, or city and county animal control agency or nonprofit shelter holding a municipal contract that offers spay and neuter services for dogs and cats owned by individual members of the public is required to be current on its yearly rabies reporting requirements to the State Department of Public Health, Veterinary Public Health Section. |
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| 378 | 389 | | |
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| 379 | 390 | | (d) Annual administrative costs for the program shall not exceed 25 percent of the funds collected from the issuance of the Pet Lovers license plates, and may include funds for marketing and other promotional activities associated with encouraging application for, or renewal of, Pet Lovers license plates and collaboration expenses. The Department of Food and Agriculture may contract with an eligible nonprofit organization to perform the marketing and promotional activities authorized. |
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| 380 | 391 | | |
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| 381 | 392 | | (1) The eligible nonprofit organization selected by the Department of Food and Agriculture pursuant to this subdivision shall not use more than 5 percent of the moneys received pursuant to this section for administrative costs. |
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| 382 | 393 | | |
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| 383 | 394 | | (2) For the purposes of this subdivision, eligible nonprofit organization means a nonprofit entity that is all of the following: |
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| 384 | 395 | | |
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| 385 | 396 | | (A) Qualifies for tax exempt status under Section 501(c)(3) of the Internal Revenue Code and subdivision (b) of Section 23701 of the Revenue and Taxation Code. |
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| 386 | 397 | | |
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| 387 | 398 | | (B) Registered and in good standing with the Secretary of State. |
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| 388 | 399 | | |
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| 389 | 400 | | (C) Chaptered and headquartered in this state. |
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| 390 | 401 | | |
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| 391 | 402 | | (D) Has demonstrated experience in advertising, marketing, and promoting specialized license plates in existence prior to 2016 pursuant to this article. |
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| 392 | 403 | | |
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| 393 | 404 | | (e) The Department of Food and Agriculture shall determine eligibility requirements for the grants, establish the grant application process, and develop program specifics. The Department of Food and Agriculture shall collaborate with an eligible nonprofit organization, as defined in paragraph (2) of subdivision (d), to provide advice and consultation for the purposes of developing and implementing the grant program. The Department of Food and Agriculture shall administer and oversee the grant program. |
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