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Summary of legislation recently signed into law

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We are exempt from these provisions for activities related to the investigation or collection of delinquent taxes or unpaid court orders or to fulfill any of its other statutory obligations (Stats. 2001, Ch.720)

SB 205 (McPherson) - For an individual found guilty of a felony for specified deceptive and fraudulent conduct relating to income or franchise taxes, this act replaces the indeterminate prison term in existing law with the more commonly used determinate prison term and specifies that imprisonment would be in a state prison (Stats. 2001, Ch. 854).

SB 263 (Johnson) - This act requires the Secretary of State to include in the registration instructions for limited liability partnerships and in the articles of organization instructions for limited liability companies' notification that the entities are obligated to pay an annual tax to the Franchise Tax Board (Stats. 2001, Ch. 425).

SB 324 (Ackerman) - This Franchise Tax Board sponsored act allows the Secretary of State to file an agreement of merger of two or more corporations without receipt of the Certificate of Satisfaction from us if the surviving corporation is a domestic corporation or a foreign (non-California-incorporated) corporation qualified to do business in this state. (Stats. 2001, Ch. 50)

SB 366 (Haynes) - Under this act, when taxpayer substantiates their innocent investor status, we are:
• Prohibited from seizing and selling (levying) the principal residence if the reason for the levy is the underpayment of tax as a result of an investment in an abusive tax shelter.

• Required to release the proceeds from the sale or other transaction related to the levying of a principal residence.

• Required to release any state tax lien, including liens that survive the bankruptcy of an innocent investor, if the reason for the lien is the underpayment of tax resulting from an investment in an abusive tax shelter.

• Required to return any proceeds from the sale of a principal residence that were received in satisfaction of a state tax lien or as a result of a levy, upon written notification from the innocent investor.
• In addition, this act allows taxpayers to take an action against us as a result of a denial of a return of the proceeds (Stats. 2001, Ch. 669).

SB 394 (Sher) - This act extends the expiration date of the California Internet Tax Freedom Act to either January 1, 2003, or January 1, 2004 (Stats. 2001, Ch. 343).

SB 409 (Vincent) - This act extends the sunset date of the Community Development Financial Institution Investments credit from January 1, 2002, to January 1, 2007. It also amends the credit to use the term "qualified investments" made by the taxpayer rather than "qualified deposits." This act defines "qualified investments" to mean a deposit or loan that does not earn interest, or an equity investment, or an equity-like debt instrument (Stats. 2001, Ch. 535).

SB 445 (Burton) - This act finds and declares that:
• The purpose of any tax proceeding between a taxpayer and us is the determination of the taxpayer's correct tax liability; and 
• We may inquire into, and shall allow the taxpayer every opportunity to present, all relevant information pertaining to the taxpayer's liability.
• This act also requires that any written public records distributed our staff or individual Board members prior to or during a Franchise Tax Board meeting must be disseminated in three ways before the Board takes any final action on that item: (1) to all persons requesting notice; (2) available on Internet; and (3) available for public inspection at the meeting (Stats. 2001, Ch. 470).

AB 1596 (Shelley) - This act allows limited liability partnerships to continue to engage in the practice of architecture until January 1, 2007 (Stats. 2001,Ch. 595).

AB 1370 (Wiggins) - This act increases the homeowners and renters assistance payments 45 percent. This act also returns the income levels eligible for assistance to the 2001 calendar year levels prior to the enactment of AB 426 (Stats. 2001, Ch. 156).

ABX 29 (Kehoe) - This act creates various programs to promote energy conservation and new energy systems. These programs include tax-exempt grants for making buildings more energy efficient. (Stats. 2001, Ch. 08)

SB 14 (Peace) - This act appropriates an additional $40 million for the Homeowners and Renters Assistance program. (Stats. 2001, Ch. 02)

SB 73 (Dunn) - This act increases from $50 million to $70 million the maximum aggregate allocation amount for the Low-Income Housing Tax Credit in 2001. Beginning in 2002, this act adjusts the cap annually for inflation (Stats. 2001, Ch. 668).

SB 147 (Bowen) - This act prohibits employers from monitoring their employees' electronic mail or other computer-generated records without informing them. (Stats. 2001, Ch. ??)

SB 168 (Bowen) - This act:
. Limits the use of social security numbers as personal identifying numbers. This provision does not apply to state agencies.
• Grants consumers the right both to verify and to authorize the issuance of their consumer credit report information. 

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November/December 2001

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