BILL ANALYSIS                                                                                                                                                                                                    



                                                                  AB 2291
                                                                  Page  1

          Date of Hearing:  April 14, 2008

                     ASSEMBLY COMMITTEE ON REVENUE AND TAXATION
                               Charles Calderon, Chair

                    AB 2291 (Mendoza) - As Amended:  April 8, 2008

          Majority vote.  Fiscal committee.

           SUBJECT  :  Taxpayer contributions:  Low Cost/Free Spay-Neuter  
          Fund

           SUMMARY  :  Authorizes the addition of the Low Cost/Free  
          Spay-Neuter Fund (Fund) checkoff to the personal income tax  
          (PIT) form upon the removal of another voluntary contribution  
          fund (VCF) from the form.  Specifically,  this bill :

          1)Provides for the establishment of the Fund in the State  
            Treasury.  

          2)Provides that all moneys transferred to the Fund, upon  
            appropriation by the Legislature, shall be allocated as  
            follows:

             a)   To the Franchise Tax Board (FTB) and the State  
               Controller for reimbursement of costs incurred in  
               administering the checkoff; and

             b)   To the appropriate state department as established by  
               the Department of Food and Agriculture for allocation to  
               municipal shelters for the purposes of providing low cost  
               or free spay-neuter services.  

          3)Defines "municipal shelter" as a city or county animal control  
            agency or shelter.  

          4)Provides for the VCF's automatic repeal on either January 1 of  
            the fifth taxable year following the taxable year the VCF  
            first appears on the PIT return or on January 1 of an earlier  
            year, if FTB estimates that the annual contribution amount  
            will be less than $250,000, or an adjusted amount for  
            subsequent taxable years.  

           EXISTING LAW  : 









                                                                  AB 2291
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          1)Allows taxpayers to designate on their PIT returns a  
            contribution to any of 11 VCFs. 

          2)Except for the California Seniors Special Fund, each VCF has a  
            specific sunset date.

          3)Except for the California Seniors Special Fund, the California  
            Firefighters' Memorial Fund, and the California Peace Officer  
            Foundation Memorial Fund, each VCF must meet a minimum annual  
            contribution amount to remain in effect.

          4)Except for the California Fund for Senior Citizens, each of  
            the VCF minimum contribution amounts is adjusted annually for  
            inflation.  

           FISCAL EFFECT  :  FTB estimates annual revenue losses, resulting  
          from contribution deductions, to be around $15,000 annually.  

           Proposition 98 Fiscal Effect  :  Minimal

           COMMENTS  :

          1)The author notes, "Each year almost 1 million healthy dogs and  
            cats are born in California.  Unfortunately many of these  
            animals find themselves on the streets without a home or  
            owner.  Eventually most are placed in animal shelters."  The  
            author goes on to note, "Education has been a large factor but  
            so has the cost.  Sterilization of cats ranges fro[m] $60 to  
            $150 while the costs for dogs range from $200 - $450.  For  
            lower income Californians this is a difficult expenditure."

          2)Supporters note that, "Because indiscriminate and accidental  
            dog and cat breeding leads to millions of unwanted and  
            abandoned animals each year in the United States, safe,  
            effective and permanent dog and cat birth control is  
            necessary."  

          3)Committee staff note:

             a)   This bill provides that Fund monies shall be allocated  
               to the "appropriate state department as established by the  
               Department of Food and Agriculture for allocation to  
               municipal shelters for the purposes of providing low cost  
               or free spay-neuter services."  This raises the following  
               questions:








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               i)     Why is the Department of Food and Agriculture tasked  
                 with identifying the appropriate state department to  
                 administer this program?  Would it not be better for the  
                 Legislature to designate the department that will be  
                 tasked with allocating funds?

               ii)    Will the "appropriate state department" be entitled  
                 to use Fund monies for costs associated with advertising  
                 and administering this program?  

               iii)   Who determines what constitutes "low-cost"  
                 spay-neuter services?  

             b)   There are at least four other bills in the legislative  
               process that would add new VCFs to the PIT return:

               i)     AB 1812 (Arambula) - Fire Safety Fund
                 Pending in Assembly Committee on Government Organization 

               ii)    AB 1935 (Fuller) - California Ovarian Cancer  
                 Research Fund
               Pending in Assembly Committee on Appropriations

               iii)   AB 2518 (Torrico) - Northern California Cancer  
                 Research Fund  
               Pending in Assembly Committee on Appropriations

               iv)    SB 1502 (Steinberg) - Amyotrophic Lateral Sclerosis  
                 (ALS) Fund
               Pending in Senate Revenue and Taxation Committee.

               FTB staff has indicated that there is enough space on the  
               existing tax forms to accommodate all of these VCFs, if  
               necessary.  

           REGISTERED SUPPORT / OPPOSITION  :   

           Support 
           
          American Society for the Prevention of Cruelty to Animals
          Atherton Acres
          California Outdoor Heritage Alliance
          Golden Gate Pembroke Welsh Corgi Fanciers, Inc.  
          San Lorenzo Dog Training Club, Inc. 








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          Working Riesenschnauzer Federation 
          2 individual

           Opposition 
           
          None on file 
           
          Analysis Prepared by  :  M. David Ruff / REV. & TAX. / (916)  
          319-2098