SB1526 Lamalfa

This bill will increase the tax exempt threshold for small nonprofit corporations from 25K to 50K and is long overdue. With the rapid rise in the cost of utilities and repairs a $25,000 threshold is dated and quickly eroding condominium projects from qualification. Do not let this bill die in committee insist they pass it even if it means a compromise on the amount of increase.
The SB1526 LaMalfa bill appeared to being doing well but then on May 7, it was placed on the APPR suspense file. Contact the senators on the appropriations committee below and you local Senator. If you don't know who your local Senator is, then use this link with your zip code to find their contact information. http://www.leginfo.ca.gov/yourleg.html

Below are the Appropriations Committee members. Plan on emailing and urging them to support the bill through to a floor vote.

Welcome to the Senate Standing Committee on Appropriations Website
Appropriations Committee meets every Monday at 11:00 A.M. in Room 4203.

JURISDICTION: Bills that are subject to Joint Rule 10.5 and are not referred to the Budget and Fiscal Review Committee. Not passing this bill is equivalent to a vote to revoke tax exempt status from small HOAs.

Members

Senator Christine Kehoe (Chair) Contact Info http://dist39.casen.govoffice.com/index.asp?Type=B_BASIC&SEC=%7BEA11366C-AD46-4DFC-A4E2-5062C6CD2373%7D

Senator Mimi Walters (Vice Chair) http://cssrc.us/web/33/contact_me.aspx
Senator Elaine Alquist http://dist13.casen.govoffice.com/index.asp?Type=B_BASIC&SEC={D2482A1F-F8A6-40D7-A9D6-BB3A1028CC28}
Senator Bob Dutton http://cssrc.us/web/31/contact_us.aspx
Senator Ted W. Lieu http://sd28.senate.ca.gov/contact
Senator Curren Price http://sd26.senate.ca.gov/contact-us
Senator Darrell Steinberg http://sd06.senate.ca.gov/contact

Addresses & Staff

Staff Director: Bob Franzoia
Consultants: Marie Liu, Brendan McCarthy, Mark McKenzie, Jolie Onodera, Maureen Ortiz and Jacqueline Wong-Hernandez
Assistants: Jennifer Douglas and Lydia McKim
Phone: (916) 651-4101
Room: 2206

Thanks for including the bill. As stated, it is an amendment to current California tax law that increases the gross receipt threshold from 25K to 50K. The intent was to follow the Federal statute that did the same in 2010. The sponsors to the bill are veterans groups however this increase will benefit many Californian HOAs (CIDs). When this bill passes tax exempt HOAs that have a gross receipt under $50k will enjoy the benefits of a legal corporation without paying the California minimum $800 a year tax. Some of the benefits of being a legal corporation are:
-Personal asset protection from liability suits against the HOA
-SBA loans to augment shortfalls in FEMA earthquake emergency funding
-Protection of the officers
-Authority to create leans and legally manage HOA CC&Rs and bylaws.

1 out of 8 HOAs are suspended by the SOS or the FTB. Qualifying HOAs under the existing law, can retroactively revive their corporation by filing with the SOS and FTB and enjoy these and other benefits as a tax exempt organization. Both the SOS and FTB have posting on their sites that explain what forms to use and the process of revival. It would be advisable to contact a CPA that specialized in HOA revival. When this law passes HOAs will have the extra gross reciept threshold to maintain their buildings and still remain a tax exempt corporation for years to come. If it does not pass then HOAs that do not meet the current threshold will have to pay the mimimum 800 tax. As cost in utilities and repairs rise more and more qualified HOAs will lose their tax expemt status.