Bill Text: CA AB1529 | 2013-2014 | Regular Session | Enrolled

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Bill Title: Nonprofit corporations: abatement: dissolution: surrender.

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Vetoed) 2014-09-29 - Vetoed by Governor. [AB1529 Detail]

Download: California-2013-AB1529-Enrolled.html

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BILL NUMBER: AB 1529	ENROLLED
	BILL TEXT

	PASSED THE SENATE  AUGUST 19, 2014
	PASSED THE ASSEMBLY  AUGUST 20, 2014
	AMENDED IN SENATE  AUGUST 4, 2014
	AMENDED IN ASSEMBLY  MAY 1, 2014
	AMENDED IN ASSEMBLY  APRIL 7, 2014

INTRODUCED BY   Assembly Member John A. Pérez

                        JANUARY 17, 2014

   An act to amend Sections 2117, 6210, and 8210 of, and to add
Sections 5008.9, 6610.5, 8610.5, and 9680.5 to, the Corporations
Code, and to add Section 23156 to the Revenue and Taxation Code,
relating to nonprofit corporations.



	LEGISLATIVE COUNSEL'S DIGEST


   AB 1529, John A. Pérez. Nonprofit corporations: abatement:
dissolution: surrender.
   Existing law, the Nonprofit Corporation Law, among other things,
regulates the organization and operation of nonprofit public benefit
corporations, nonprofit mutual benefit corporations, and nonprofit
religious corporations.
   (1) Within a specified period of time after the filing of its
original articles of incorporation and biennially thereafter,
existing law requires nonprofit public benefit corporations,
nonprofit mutual benefit corporations, and nonprofit religious
corporations to file a statement, known as a Statement of
Information, with the Secretary of State containing specified
information including the street address of its principal office and
its mailing address. Within a specified period of time after filing
its original statement and designation and annually thereafter,
existing law, the General Corporation Law, requires every foreign
corporation, including foreign nonprofit corporations, as specified,
to file a statement, known as a Statement of Information, with the
Secretary of State containing specified information, including the
street address of its principal executive office and its mailing
address.
   This bill would authorize the Secretary of State to also obtain
address information from the Franchise Tax Board to use in providing
notices to a foreign corporation, including these foreign nonprofit
corporations.
   (2) Existing law authorizes the corporate powers, rights, and
privileges of a domestic taxpayer to be suspended, and the exercise
of the corporate powers, rights, and privileges of a foreign taxpayer
in this state to be forfeited, if certain tax liabilities are not
paid or a taxpayer fails to file a tax return. Existing law also
authorizes the corporate powers, rights, and privileges of a domestic
corporation exempt from income tax to be suspended and the exercise
of the corporate powers, rights, and privileges of a foreign
corporation in this state exempt from income tax to be forfeited if
the organization fails to file the annual information return or a
specified statement for organizations not required to file the
information return or pay a specified amount due. Existing law
requires notice prior to the suspension or forfeiture of a taxpayer's
corporate powers, rights, and privileges. Existing law requires the
Franchise Tax Board to transmit to the Secretary of State the names
of those taxpayers subject to these suspension or forfeiture
provisions and thereby makes the suspension or forfeiture effective.
Under existing law, the Secretary of State's certificate is prima
facie evidence of the suspension or forfeiture.
   Under existing law, a corporation that fails to file a Statement
of Information with the Secretary of State within a specified time
period and was certified for penalty is subject to suspension rather
than penalty. Existing law requires the Secretary of State to provide
a notice to the nonprofit corporation informing it that its
corporate powers, rights, and privileges will be suspended within a
specified time period if the Statement of Information is not filed.
If the nonprofit corporation does not file the Statement of
Information, existing law requires the Secretary of State to notify
the Franchise Tax Board and the nonprofit corporation of the
suspension and upon that notification the corporate powers, rights,
and privileges of the nonprofit corporation are suspended.
   This bill would make a nonprofit public benefit corporation, a
nonprofit mutual benefit corporation, a nonprofit religious
corporation, and a foreign nonprofit corporation, subject to
administrative dissolution or administrative surrender, as specified,
if the nonprofit corporation's corporate powers are, and have been,
suspended or forfeited by the Franchise Tax Board for a specified
period of time or if the nonprofit corporation has not filed a
Statement of Information with the Secretary of State for a specified
period of time. Prior to the administrative dissolution or
administrative surrender of the nonprofit corporation, the bill would
require either the Franchise Tax Board or the Secretary of State to
provide notice to the nonprofit corporation of the pending
administrative dissolution or administrative surrender. The bill
would also require the Secretary of State to provide notice of the
pending administrative dissolution or administrative surrender on its
Internet Web site, as specified. The bill would authorize a
nonprofit corporation to provide the Franchise Tax Board or the
Secretary of State with a written objection to the administrative
dissolution or administrative surrender. If there is no written
objection or the written objection fails, the bill would require the
nonprofit corporation to be administratively dissolved or
administratively surrendered and would provide that the certificate
of the Secretary of State is prima facie evidence of the
administrative dissolution or administrative surrender. Upon
administrative dissolution or administrative surrender, the bill
would abate the nonprofit corporation's liabilities for qualified
taxes, interest, and penalties, as provided.
   (3) Existing law, the Nonprofit Corporation Law, authorizes a
nonprofit public benefit corporation, nonprofit mutual benefit
corporation, and nonprofit religious corporation to elect voluntarily
to wind up and dissolve by either approval of a majority of all
members or approval of the board and approval of the members. Under
existing law, the General Corporation Law, when a corporation has not
issued shares, a majority of the directors, or, if no directors have
been named in the articles or have been elected, the incorporator or
a majority of the incorporators, are authorized to sign and verify a
specified certificate of dissolution. Existing law requires the
certificate to be filed with the Secretary of State and requires the
Secretary of State to notify the Franchise Tax Board of the
dissolution. Existing law provides that, upon the filing of the
certificate, a corporation is dissolved and its powers, rights, and
privileges cease.
   This bill would enact provisions similar to those General
Corporation Law provisions and make them applicable to nonprofit
public benefit corporations, nonprofit mutual benefit corporations,
and nonprofit religious corporations. The bill would additionally
provide that liability to creditors, if any, is not discharged, the
liability of the directors of the dissolved nonprofit corporation is
not discharged, and the dissolution of a nonprofit corporation does
not diminish or adversely affect the ability of the Attorney General
to enforce specified liabilities.
   (4) Existing law requires every corporation doing business within
the limits of this state and not expressly exempted from taxation to
annually pay to the state, for the privilege of exercising its
corporate franchises within this state, a tax according to or
measured by its net income, as specified. Under existing law, every
corporation, except as specified, is subject to the minimum franchise
tax until the effective date of dissolution or withdrawal or, if
later, the date the corporation ceases to do business within the
limits of this state. Upon certification by the Secretary of State
that a nonprofit public benefit corporation or a nonprofit mutual
benefit corporation has failed to file the required Statement of
Information, existing law requires the Franchise Tax Board to assess
a specified penalty.
   This bill would require the Franchise Tax Board to abate, upon
written request by a qualified corporation, as defined, unpaid
qualified taxes, interest, and penalties, as defined, for the taxable
years in which the nonprofit corporation certifies, under penalty of
perjury, that it was not doing business, as defined. The bill would
make this abatement conditioned on the dissolution of the qualified
corporation within a specified period of time of filing the request
for abatement. The bill would require the Franchise Tax Board to
prescribe rules and regulations to carry out these abatement
provisions and would exempt these rules and regulations from the
Administrative Procedure Act.
   (5) Existing state constitutional law prohibits the Legislature
from making any gift, or authorizing the making of any gift, of any
public money or thing of value to any individual, municipal, or other
corporation.
   This bill would make certain legislative findings and declarations
that abatement of a nonprofit corporation's liabilities for
specified taxes, penalties, and interest serves a statewide public
purpose, as provided.
   (6) By expanding the crime of perjury, the bill would impose a
state-mandated local program.
   The California Constitution requires the state to reimburse local
agencies and school districts for certain costs mandated by the
state. Statutory provisions establish procedures for making that
reimbursement.
   This bill would provide that no reimbursement is required by this
act for a specified reason.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

  SECTION 1.  The Legislature finds and declares all of the
following:
   (a) There are more than 144,000 nonprofit corporations in
California that provide a variety of programs and services in areas
as diverse as education, recreation, health care, legal, job
training, and housing to millions of Californians. These
organizations, depending on their formation status, are required to
register with the office of the Secretary of State, the Franchise Tax
Board, and the office of the Attorney General.
   (b) Every year, hundreds of nonprofit corporations seek
administrative changes to expand their mission or alter their tax
status, and, in some cases, to even go out of existence. This
dissolution process, which involves the winding down of the nonprofit
corporation's affairs, is very cumbersome and protracted.
   (c) In order to more effectively analyze and monitor the status,
finances, and activities of a nonprofit corporation, it is in the
public's interest to establish a streamlined process to efficiently
dissolve a nonprofit corporation. The act of dissolving the nonprofit
corporation and abating unpaid taxes, interest, and penalties serves
a statewide public purpose by ensuring that nonprofit corporations
that have been suspended or forfeited tax exempt status are no longer
able to do business in the state, which will relieve the citizens of
California from unknowingly donating to a nonprofit corporation that
is not complying with the laws of the state, and do not constitute a
gift of public funds within the meaning of Section 6 of Article XVI
of the California Constitution.
  SEC. 2.  Section 2117 of the Corporations Code is amended to read:
   2117.  (a) Every foreign corporation (other than a foreign
association) qualified to transact intrastate business shall file,
within 90 days after the filing of its original statement and
designation of foreign corporation and annually thereafter during the
applicable filing period, on a form prescribed by the Secretary of
State, a statement containing the following:
   (1) The name of the corporation as registered in California and
the California Secretary of State's file number.
   (2) The names and complete business or residence addresses of its
chief executive officer, secretary, and chief financial officer.
   (3) The street address of its principal executive office.
   (4) The mailing address of the corporation, if different from the
street address of its principal executive office.
   (5) The street address of its principal business office in this
state, if any.
   (6) If the corporation chooses to receive renewal notices and any
other notifications from the Secretary of State by email instead of
by United States mail, the corporation shall include a valid email
address for the corporation or for the corporation's designee to
receive those notices.
   (7) A statement of the general type of business that constitutes
the principal business activity of the corporation (for example,
manufacturer of aircraft; wholesale liquor distributor; or retail
department store).
   (b) The statement required by subdivision (a) shall also
designate, as the agent of the corporation for the purpose of service
of process, a natural person residing in this state or a corporation
that has complied with Section 1505 and whose capacity to act as the
agent has not terminated. If a natural person is designated, the
statement shall set forth the person's complete business or residence
street address. If a corporate agent is designated, no address for
it shall be set forth.
   (c) The statement required by subdivision (a) shall be available
and open to the public for inspection. The Secretary of State shall
provide access to all information contained in the statement by means
of an online database.
   (d) In addition to any other fees required, a foreign corporation
shall pay a five-dollar ($5) disclosure fee upon filing the statement
required by subdivision (a). One-half of the fee shall,
notwithstanding Section 12176 of the Government Code, be deposited
into the Business Programs Modernization Fund established in
subdivision (k) of Section 1502, and one-half shall be deposited into
the Victims of Corporate Fraud Compensation Fund established in
Section 2280.
   (e) Whenever any of the information required by subdivision (a) is
changed, the corporation may file a current statement containing all
the information required by subdivisions (a) and (b). In order to
change its agent for service of process or the address of the agent,
the corporation shall file a current statement containing all the
information required by subdivisions (a) and (b). Whenever any
statement is filed pursuant to this section, it supersedes any
previously filed statement and the statement in the filing pursuant
to Section 2105.
   (f) Subdivisions (c), (d), (f), and (g) of Section 1502 apply to
statements filed pursuant to this section, except that "articles"
shall mean the filing pursuant to Section 2105, and "corporation"
shall mean a foreign corporation.
   (g) The Secretary of State may obtain address information from the
Franchise Tax Board to use in providing notices to a foreign
corporation.
  SEC. 3.  Section 5008.9 is added to the Corporations Code, to read:

   5008.9.  (a) A nonprofit corporation described in Section 5059,
5060, 5061, or 9912 that has incorporated under the laws of this
state, or a foreign nonprofit corporation, as described in Chapter 21
(commencing with Section 2100) of Division 1, that has qualified to
transact intrastate business, shall be subject to administrative
dissolution or administrative surrender in accordance with this
section if, as of January 1, 2015, or later, at least one of the
following applies:
   (1) The nonprofit corporation's corporate powers are, and have
been, suspended or forfeited by the Franchise Tax Board for a period
of not less than 48 continuous months.
   (2) The nonprofit corporation has not filed a Statement of
Information with the Secretary of State, as provided by Section 2117,
6210, 8210, or 9660, for a period of not less than 48 continuous
months.
   (b) Prior to the administrative dissolution or administrative
surrender of the nonprofit corporation, the nonprofit corporation
shall be notified of the pending administrative dissolution or
administrative surrender as follows:
   (1) The Franchise Tax Board shall mail written notice to the last
known address of a nonprofit corporation meeting the requirement
described in paragraph (1) of subdivision (a).
   (2) The Secretary of State shall provide a notice to the last
known address of a nonprofit corporation meeting the requirement
described in paragraph (2) of subdivision (a).
   (3) If the nonprofit corporation does not have a valid address in
the records of the Franchise Tax Board or the Secretary of State, the
notice provided in subdivision (d) shall be deemed sufficient notice
prior to administrative dissolution or administrative surrender.
   (c) The Franchise Tax Board shall transmit to the Secretary of
State the names of nonprofit corporations subject to the
administrative dissolution or administrative surrender provisions of
this section.
   (d) The Secretary of State shall provide 60 calendar days' notice
of the pending administrative dissolution or administrative surrender
on its Internet Web site by listing the corporation name, the
Secretary of State's file number, and California corporation number,
as applicable, for the nonprofit corporation.
   (e) (1) A nonprofit corporation may provide the Franchise Tax
Board or the Secretary of State with a written objection to the
administrative dissolution or administrative surrender.
   (2) The Franchise Tax Board and the Secretary of State shall
notify each other if a written objection has been received.
   (f) If no written objection to the administrative dissolution or
administrative surrender is received by the Secretary of State or the
Franchise Tax Board during the 60-day period described in
subdivision (d), the nonprofit corporation shall be administratively
dissolved or administratively surrendered in accordance with this
section. The certificate of the Secretary of State shall be prima
facie evidence of the administrative dissolution or administrative
surrender.
   (g) (1) If the written objection of a nonprofit corporation to the
administrative dissolution or administrative surrender has been
received by the Franchise Tax Board or the Secretary of State before
the expiration of the 60-day period described in subdivision (d),
that nonprofit corporation shall have an additional 90 days from the
date the written objection is received by the Franchise Tax Board or
the Secretary of State to pay or otherwise satisfy all accrued taxes,
penalties, and interest and to file a current Statement of
Information with the Secretary of State.
   (2) (A) If the conditions in paragraph (1) are satisfied, the
administrative dissolution or administrative surrender shall be
canceled.
   (B) If the conditions in paragraph (1) are not satisfied, the
nonprofit corporation shall be administratively dissolved or
administratively surrendered in accordance with this section as of
the date that is 90 days after the receipt of the written objection.
   (3) The Franchise Tax Board or the Secretary of State may extend
the 90-day period in paragraph (1), but for no more than one period
of 90 days.
   (h) Upon administrative dissolution or administrative surrender in
accordance with this section, the nonprofit corporation's
liabilities for qualified taxes, interest, and penalties as defined
in Section 23156 of the Revenue and Taxation Code, if any, shall be
abated. Any actions taken by the Franchise Tax Board to collect that
abated liability shall be released, withdrawn, or otherwise
terminated by the Franchise Tax Board, and no subsequent
administrative or civil action shall be taken or brought to collect
all or part of that amount. Any amounts erroneously received by the
Franchise Tax Board in contravention of this section may be credited
and refunded in accordance with Article 1 (commencing with Section
19301) of Chapter 6 of Part 10.2 of the Revenue and Taxation Code.
   (i) If the nonprofit corporation is administratively dissolved or
administratively surrendered under this section, the liability to
creditors, if any, is not discharged. The liability of the directors
of, or other persons related to, the administratively dissolved or
administratively surrendered nonprofit corporation is not discharged.
The administrative dissolution or administrative surrender of a
nonprofit corporation pursuant to this section shall not diminish or
adversely affect the ability of the Attorney General to enforce
liabilities as otherwise provided by law.
  SEC. 4.  Section 6210 of the Corporations Code is amended to read:
   6210.  (a) Every corporation shall, within 90 days after the
filing of its original articles and biennially thereafter during the
applicable filing period, file, on a form prescribed by the Secretary
of State, a statement containing: (1) the name of the corporation
and the Secretary of State's file number; (2) the names and complete
business or residence addresses of its chief executive officer,
secretary, and chief financial officer; (3) the street address of its
principal office in this state, if any; (4) the mailing address of
the corporation, if different from the street address of its
principal executive office or if the corporation has no principal
office address in this state; and (5) if the corporation chooses to
receive renewal notices and any other notifications from the
Secretary of State by email instead of by United States mail, a valid
email address for the corporation or for the corporation's designee
to receive those notices.
   (b) The statement required by subdivision (a) shall also
designate, as the agent of the corporation for the purpose of service
of process, a natural person residing in this state or any domestic
or foreign or foreign business corporation that has complied with
Section 1505 and whose capacity to act as an agent has not
terminated. If a natural person is designated, the statement shall
set forth the person's complete business or residence street address.
If a corporate agent is designated, no address for it shall be set
forth.
   (c) For the purposes of this section, the applicable filing period
for a corporation shall be the calendar month during which its
original articles were filed and the immediately preceding five
calendar months. The Secretary of State shall provide a notice to
each corporation to comply with this section approximately three
months prior to the close of the applicable filing period. The notice
shall state the due date for compliance and shall be sent to the
last address of the corporation according to the records of the
Secretary of State or to the last email address according to the
records of the Secretary of State if the corporation has elected to
receive notices from the Secretary of State by email. Neither the
failure of the Secretary of State to send the notice nor the failure
of the corporation to receive it is an excuse for failure to comply
with this section.
   (d) Whenever any of the information required by subdivision (a) is
changed, the corporation may file a current statement containing all
the information required by subdivisions (a) and (b). In order to
change its agent for service of process or the address of the agent,
the corporation must file a current statement containing all the
information required by subdivisions (a) and (b). Whenever any
statement is filed pursuant to this section, it supersedes any
previously filed statement and the statement in the articles as to
the agent for service of process and the address of the agent.
   (e) The Secretary of State may obtain address information from the
Franchise Tax Board to use in providing notices to a corporation.
   (f) The Secretary of State may destroy or otherwise dispose of any
statement filed pursuant to this section after it has been
superseded by the filing of a new statement.
   (g) This section shall not be construed to place any person
dealing with the corporation on notice of, or under any duty to
inquire about, the existence or content of a statement filed pursuant
to this section.
  SEC. 5.  Section 6610.5 is added to the Corporations Code, to read:

   6610.5.  (a) Notwithstanding any other provision of this division,
when a corporation has not issued any memberships, a majority of the
directors, or, if no directors have been named in the articles or
have been elected, the incorporator or a majority of the
incorporators, may sign and verify a certificate of dissolution
stating all of the following:
   (1) That the certificate of dissolution is being filed within 24
months from the date the articles of incorporation were filed.
   (2) That the corporation does not have any debts or other
liabilities, except as provided in paragraph (3) and subdivision (d).

   (3) That the tax liability will be satisfied on a taxes-paid basis
or that a person or corporation or other business entity assumes the
tax liability, if any, of the dissolving corporation and is
responsible for additional corporate taxes, if any, that are assessed
and that become due after the date of the assumption of the tax
liability.
   (4) That a final franchise tax return, as described by Section
23332 of the Revenue and Taxation Code, has been or will be filed
with the Franchise Tax Board as required under Part 10.2 (commencing
with Section 18401) of Division 2 of the Revenue and Taxation Code.
   (5) That the corporation was created in error.
   (6) That the known assets of the corporation remaining after
payment of, or adequately providing for, known debts and liabilities
have been distributed as required by law or that the corporation
acquired no known assets, as the case may be.
   (7) That a majority of the directors, or, if no directors have
been named in the articles or have been elected, the incorporator or
a majority of the incorporators authorized the dissolution and
elected to dissolve the corporation.
   (8) That the corporation has not issued any memberships, and if
the corporation has received payments for memberships, those payments
have been returned to those making the payments.
   (9) That the corporation is dissolved.
   (b) A certificate of dissolution signed and verified pursuant to
subdivision (a) shall be filed with the Secretary of State. The
Secretary of State shall notify the Franchise Tax Board of the
dissolution.
   (c) Upon filing a certificate of dissolution pursuant to
subdivision (b), a corporation shall be dissolved and its powers,
rights, and privileges shall cease.
   (d) Notwithstanding the dissolution of a corporation pursuant to
this section, its liability to creditors, if any, is not discharged.
The liability of the directors of, or other persons related to, the
dissolved corporation is not discharged. The dissolution of a
corporation pursuant to this section shall not diminish or adversely
affect the ability of the Attorney General to enforce liabilities as
otherwise provided by law.
  SEC. 6.  Section 8210 of the Corporations Code is amended to read:
   8210.  (a) Every corporation shall, within 90 days after the
filing of its original articles and biennially thereafter during the
applicable filing period, file, on a form prescribed by the Secretary
of State, a statement containing: (1) the name of the corporation
and the Secretary of State's file number; (2) the names and complete
business or residence addresses of its chief executive officer,
secretary, and chief financial officer; (3) the street address of its
principal office in this state, if any; (4) the mailing address of
the corporation, if different from the street address of its
principal executive office or if the corporation has no principal
office address in this state; and (5) if the corporation chooses to
receive renewal notices and any other notifications from the
Secretary of State by email instead of by United States mail, a valid
email address for the corporation or for the corporation's designee
to receive those notices.
   (b) The statement required by subdivision (a) shall also
designate, as the agent of the corporation for the purpose of service
of process, a natural person residing in this state or any domestic
or foreign or foreign business corporation that has complied with
Section 1505 and whose capacity to act as an agent has not
terminated. If a natural person is designated, the statement shall
set forth the person's complete business or residence street address.
If a corporate agent is designated, no address for it shall be set
forth.
   (c) For the purposes of this section, the applicable filing period
for a corporation shall be the calendar month during which its
original articles were filed and the immediately preceding five
calendar months. The Secretary of State shall provide a notice to
each corporation to comply with this section approximately three
months prior to the close of the applicable filing period. The notice
shall state the due date for compliance and shall be sent to the
last address of the corporation according to the records of the
Secretary of State or to the last email address according to the
records of the Secretary of State if the corporation has elected to
receive notices from the Secretary of State by email. Neither the
failure of the Secretary of State to send the notice nor the failure
of the corporation to receive it is an excuse for failure to comply
with this section.
   (d) Whenever any of the information required by subdivision (a) is
changed, the corporation may file a current statement containing all
the information required by subdivisions (a) and (b). In order to
change its agent for service of process or the address of the agent,
the corporation must file a current statement containing all the
information required by subdivisions (a) and (b). Whenever any
statement is filed pursuant to this section, it supersedes any
previously filed statement and the statement in the articles as to
the agent for service of process and the address of the agent.
   (e) The Secretary of State may obtain address information from the
Franchise Tax Board to use in providing notices to a corporation.
   (f) The Secretary of State may destroy or otherwise dispose of any
statement filed pursuant to this section after it has been
superseded by the filing of a new statement.
   (g) This section shall not be construed to place any person
dealing with the corporation on notice of, or under any duty to
inquire about, the existence or content of a statement filed pursuant
to this section.
  SEC. 7.  Section 8610.5 is added to the Corporations Code, to read:

   8610.5.  (a) Notwithstanding any other provision of this division,
when a corporation has not issued any memberships, a majority of the
directors, or, if no directors have been named in the articles or
have been elected, the incorporator or a majority of the
incorporators, may sign and verify a certificate of dissolution
stating the following:
   (1) That the certificate of dissolution is being filed within 24
months from the date the articles of incorporation were filed.
   (2) That the corporation does not have any debts or other
liabilities, except as provided in paragraph (3) and subdivision (d).

   (3) That the tax liability will be satisfied on a taxes-paid
basis, or that a person or corporation or other business entity
assumes the tax liability, if any, of the dissolving corporation and
is responsible for additional corporate taxes, if any, that are
assessed and that become due after the date of the assumption of the
tax liability.
   (4) That a final franchise tax return, as described by Section
23332 of the Revenue and Taxation Code, has been or will be filed
with the Franchise Tax Board as required under Part 10.2 (commencing
with Section 18401) of Division 2 of the Revenue and Taxation Code.
   (5) That the corporation was created in error.
   (6) That the known assets of the corporation remaining after
payment of, or adequately providing for, known debts and liabilities
have been distributed as required by law or that the corporation
acquired no known assets, as the case may be.
   (7) That a majority of the directors, or, if no directors have
been named in the articles or have been elected, the incorporator or
a majority of the incorporators authorized the dissolution and
elected to dissolve the corporation.
   (8) That the corporation has not issued any memberships, and if
the corporation has received payments for memberships, those payments
have been returned to those making the payments.
   (9) That the corporation is dissolved.
   (b) A certificate of dissolution signed and verified pursuant to
subdivision (a) shall be filed with the Secretary of State. The
Secretary of State shall notify the Franchise Tax Board of the
dissolution.
   (c) Upon filing a certificate of dissolution pursuant to
subdivision (b), a corporation shall be dissolved and its powers,
rights, and privileges shall cease.
   (d) Notwithstanding the administrative dissolution of a
corporation pursuant to this section, its liability to creditors, if
any, is not discharged. The liability of the directors of, or other
persons related to, the administratively dissolved corporation is not
discharged. The dissolution of a corporation pursuant to this
section shall not diminish or adversely affect the ability of the
Attorney General to enforce liabilities as otherwise provided by law.

  SEC. 8.  Section 9680.5 is added to the Corporations Code, to read:

   9680.5.  (a) Notwithstanding any other provision of this division,
when a corporation has not issued any memberships, a majority of the
directors, or, if no directors have been named in the articles or
been elected, the incorporator or a majority of the incorporators,
may sign and verify a certificate of dissolution stating the
following:
   (1) That the certificate of dissolution is being filed within 24
months from the date the articles of incorporation were filed.
   (2) That the corporation does not have any debts or other
liabilities, except as provided in paragraph (3) and subdivision (d).

   (3) That the tax liability will be satisfied on a taxes-paid basis
or that a person or corporation or other business entity assumes the
tax liability, if any, of the dissolving corporation and is
responsible for additional corporate taxes, if any, that are assessed
and that become due after the date of the assumption of the tax
liability.
   (4) That a final franchise tax return, as described by Section
23332 of the Revenue and Taxation Code, has been or will be filed
with the Franchise Tax Board as required under Part 10.2 (commencing
with Section 18401) of Division 2 of the Revenue and Taxation Code.
   (5) That the corporation was created in error.
   (6) That the known assets of the corporation remaining after
payment of, or adequately providing for, known debts and liabilities
have been distributed as required by law or that the corporation
acquired no known assets, as the case may be.
   (7) That a majority of the directors, or, if no directors have
been named in the articles or been elected, the incorporator or a
majority of the incorporators authorized the dissolution and elected
to dissolve the corporation.
   (8) That the corporation has not issued any memberships, and if
the corporation has received payments for memberships, those payments
have been returned to those making the payments.
   (9) That the corporation is dissolved.
   (b) A certificate of dissolution signed and verified pursuant to
subdivision (a) shall be filed with the Secretary of State. The
Secretary of State shall notify the Franchise Tax Board of the
dissolution.
   (c) Upon filing a certificate of dissolution pursuant to
subdivision (b), a corporation shall be dissolved and its powers,
rights, and privileges shall cease.
   (d) Notwithstanding the dissolution of a nonprofit corporation
pursuant to this section, its liability to creditors, if any, is not
discharged. The liability of the directors of, or other persons
related to, the dissolved corporation is not discharged. The
dissolution of a nonprofit corporation pursuant to this section shall
not diminish or adversely affect the ability of the Attorney General
to enforce liabilities as otherwise provided by law.
  SEC. 9.  Section 23156 is added to the Revenue and Taxation Code,
to read:
   23156.  (a) The Franchise Tax Board shall abate, upon written
request by a qualified corporation, as defined in this section,
unpaid qualified taxes, interest, and penalties for the taxable years
in which the nonprofit corporation certifies, under penalty of
perjury, that it was not doing business,
             within the meaning of subdivision (a) of Section 23101.
   (b) For purposes of this section:
   (1) "Qualified corporation" means a nonprofit corporation
identified in Section 5059, 5060, 5061, or 9912 of the Corporations
Code that is incorporated under the laws of this state or a foreign
nonprofit corporation, as described in Chapter 21 (commencing with
Section 2100) of Division 1 of the Corporations Code that has
qualified to transact intrastate business in this state and that
satisfies any of the following conditions:
   (A) Was operating and previously obtained tax-exempt status with
the Franchise Tax Board, but had its tax-exempt status revoked under
Section 23777.
   (B) Was operating and previously obtained tax-exempt status with
the Internal Revenue Service, but had its tax-exempt status revoked
under subsection (j) of Section 6033 of the Internal Revenue Code.
   (C) Never was doing business, within the meaning of subdivision
(a) of Section 23101, in this state at any time after the time of its
incorporation in this state.
   (2) "Qualified taxes, interest, and penalties" means tax imposed
under Section 23153 and associated interest and penalties, and any
penalties imposed under Section 19141. "Qualified taxes, interest,
and penalties" does not include tax imposed under Section 23731, or
associated interest or penalties.
   (c) The qualified corporation must establish that it has ceased
all business operations at the time of filing the request for
abatement under this section.
   (d) The abatement of unpaid qualified tax, interest, and penalties
is conditioned on the dissolution of the qualified corporation
within 12 months from the date of filing the request for abatement
under this section.
   If the qualified corporation is not dissolved within 12 months
from the date of filing the request for abatement or restarts
business operations at any time after requesting abatement under this
section, the abatement of qualified tax, interest, and penalties
under this section shall be canceled and the qualified taxes,
interest, and penalties subject to that abatement shall be treated as
if the abatement never occurred.
   (e) The Franchise Tax Board shall prescribe any rules and
regulations that may be necessary or appropriate to implement this
section. Chapter 3.5 (commencing with Section 11340) of Part 1 of
Division 3 of Title 2 of the Government Code shall not apply to any
standard, criterion, procedure, determination, rule, notice, or
guideline established or issued by the Franchise Tax Board pursuant
to this section.
  SEC. 10.  No reimbursement is required by this act pursuant to
Section 6 of Article XIII B of the California Constitution because
the only costs that may be incurred by a local agency or school
district will be incurred because this act creates a new crime or
infraction, eliminates a crime or infraction, or changes the penalty
for a crime or infraction, within the meaning of Section 17556 of the
Government Code, or changes the definition of a crime within the
meaning of Section 6 of Article XIII B of the California
Constitution.