BILL NUMBER: AB 233 AMENDED
BILL TEXT
AMENDED IN ASSEMBLY MAY 26, 2009
AMENDED IN ASSEMBLY MAY 4, 2009
AMENDED IN ASSEMBLY APRIL 13, 2009
INTRODUCED BY Assembly Member Smyth
(Coauthors: Assembly Members Adams, Bill Berryhill, Duvall,
Garrick, Jeffries, Nestande, Silva, and Solorio)
(Coauthors: Senators Maldonado and Strickland)
FEBRUARY 5, 2009
An act to amend Section 17076 of, and to add
Section 17239 to, and to add and repeal Article 18 (commencing
with Section 18891) of Chapter 3 of Part 10.2 of Division 2 of,
the Revenue and Taxation Code, relating to taxation , to
take effect immediately, tax levy .
LEGISLATIVE COUNSEL'S DIGEST
AB 233, as amended, Smyth. Personal income tax: deductions: pet
adoption costs. costs: voluntary
contributions.
The Personal Income Tax Law allows various deductions in computing
the income that is subject to the taxes imposed by that law.
This bill would allow for taxable years beginning on or after
January 1, 2010, and before January 1, 2015, a deduction under that
law for the qualified costs paid or incurred during the taxable year
by a taxpayer for the adoption of pets from a qualified animal rescue
organization, as defined.
This bill would take effect immediately as a tax levy.
Existing law relating to the administration of personal income
taxes authorizes individual taxpayers to contribute amounts in excess
of their tax liability for the support of specified funds or
accounts.
This bill would allow individual taxpayers to designate on their
tax returns, that a specified amount in excess of their tax liability
be transferred to the Pet Adoption Cost Deduction Fund, which would
be created by this bill. This bill would provide that all moneys
contributed to the fund, upon appropriation by the Legislature, be
allocated to the Franchise Tax Board and the Controller for
reimbursement of costs, as provided, to the Controller for
reimbursement of the General Fund for revenue losses from providing
the deduction for pet adoption costs, and to the Department of Food
and Agriculture for purposes relating to abandoned and impounded
animals.
This bill would provide that these voluntary contribution
provisions are repealed on either January 1 of the 5th taxable year
following the taxable year the fund first appears on the personal
income tax return or on January 1 of an earlier calendar year, if the
Franchise Tax Board estimates that the annual contribution amount
will be less than $250,000, or an adjusted amount, as specified, for
subsequent taxable years.
Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 17076 of the Revenue and Taxation Code is
amended to read:
17076. (a) Section 67 of the Internal Revenue Code, relating to
the 2-percent floor on miscellaneous itemized deductions, shall
apply, except as otherwise provided.
(b) A deduction allowable under this part that exceeds three
thousand dollars ($3,000) and is described in Section 17049, relating
to computation of tax where taxpayer restores a substantial amount
held under claim of right, may not be treated as a miscellaneous
itemized deduction under Section 67 of the Internal Revenue Code, as
applicable for purposes of this part.
(c) The deduction allowed by Section 17239, relating to pet
adoption costs, may not be treated as a miscellaneous itemized
deduction under Section 67(a) of the Internal Revenue Code.
SEC. 2. Section 17239 is added to the Revenue and Taxation Code,
to read:
17239. (a) For each taxable year beginning on or after January 1,
2010, and before January 1, 2015, there shall be allowed as a
deduction an amount equal to the qualified costs paid or incurred
during the taxable year by a taxpayer for the adoption of a pet from
a qualified animal rescue organization.
(b) For the purposes of this section, the following definitions
shall apply:
(1) "Pet" means an animal adopted from a qualified animal rescue
organization that is not used by the taxpayer in a trade or business
or for the production of income.
(2) "Qualified animal rescue organization" means a public animal
control agency or shelter, humane society shelter, or rescue group. A
rescue group as used in this section is a not-for-profit entity, as
defined in Section 501(c)(3) of the Internal Revenue Code, whose
primary purpose is the placement of dogs, cats, or other animals that
have been removed from a public animal control agency or shelter,
society for the prevention of cruelty to animals shelter, or humane
society, or that have been surrendered or relinquished to the entity
by the previous owner.
(3) "Qualified costs" means amounts paid or incurred to a
qualified animal rescue organization to adopt a pet, not to exceed
one hundred dollars ($100).
(c) The deduction allowed under this section for a taxable year
shall not exceed one hundred dollars ($100).
(d) (1) (A) The deduction under this section shall be allowed for
a taxable year only if claimed on a timely filed original return for
that taxable year received by the Franchise Tax Board on or before
the cut-off date established by the Franchise Tax Board for the
taxable year.
(B) For purposes of this paragraph, the cut-off date for a taxable
year shall be the last day of the calendar quarter within which the
Franchise Tax Board estimates it will have received timely filed
original returns for the taxable year claiming deductions under this
section that cumulatively total one million dollars ($1,000,000) for
that taxable year.
(2) The date a return is received shall be determined by the
Franchise Tax Board.
(3) (A) The determinations of the Franchise Tax Board with respect
to the cut-off date, the date a return is received, and whether a
return has been timely filed for purposes of this subdivision may not
be reviewed in any administrative or judicial proceeding.
(B) Any disallowance of a deduction claimed due to a determination
under this subdivision, including the application of the limitation
specified in paragraph (1), shall be treated as a mathematical error
appearing on the return. Any amount of tax resulting from such
disallowance may be assessed by the Franchise Tax Board in the same
manner as provided by Section 19051.
(4) The Franchise Tax Board shall periodically provide notice on
its Internet Web site with respect to the amount of deductions under
this section claimed on timely filed original returns received by the
Franchise Tax Board.
(e) The Franchise Tax Board may prescribe rules, guidelines, or
procedures necessary or appropriate to carry out the purposes of this
section.
(f) 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
determination, rule, notice, or guideline established or issued by
the Franchise Tax Board in implementing and administering the
reduction authorized by this section.
SEC. 3. Article 18 (commencing with Section 18891)
is added to Chapter 3 of Part 10.2 of Division 2 of the
Revenue and Taxation Code , to read:
Article 18. Pet Adoption Cost Deduction Fund
18891. (a) Any individual may designate on the tax return that a
contribution in excess of the tax liability, if any, be made to the
Pet Adoption Cost Deduction Fund, which is established by Section
18892.
(b) The contribution shall be in a full dollar amount and may be
made individually by each signatory on a joint return.
(c) A designation under subdivision (a) shall be made for any
taxable year on the original return for that taxable year, and once
made shall be irrevocable. In the event that any payment and credit
reported on the return, together with any other credit associated
with the individual's account, does not exceed the individual's tax
liability, the return shall be treated as though no designation has
been made.
(d) If an individual designates a contribution to more than one
account or fund listed on the tax return, and the amount available is
insufficient to satisfy the total amount designated, the
contribution shall be allocated among the designees on a pro rata
basis.
(e) The Franchise Tax Board shall revise the form of the return to
include a space labeled "Pet Adoption Cost Deduction Fund" to allow
for the designation permitted under subdivision (a). The form shall
include in the instructions information that the contribution may be
in the amount of one dollar ($1) or more and that the contribution
shall be used to reimburse the California State General Fund for the
reduction in receipts attributable to the Pet Adoption Fee Deduction
under Section 17239, with any contributions in excess of the
reduction in receipts used to provide grants to eligible municipal
shelters for the purpose of providing food and shelter to abandoned
and impounded animals.
(f) Notwithstanding any other provision, a voluntary contribution
designation for the Pet Adoption Cost Deduction Fund shall not be
added on the tax return until another voluntary contribution
designation is removed.
(g) A deduction shall be allowed under Article 6 (commencing with
Section 17201) of Chapter 3 of Part 10 for any contribution made
pursuant to subdivision (a).
18892. There is hereby established in the State Treasury the Pet
Adoption Cost Deduction Fund to receive contributions made pursuant
to Section 18891. The Franchise Tax Board shall notify the Controller
of the amount of money paid by taxpayers in excess of their tax
liability, the amount of refund money that taxpayers have designated
pursuant to Section 18891 to be transferred to the Pet Adoption Cost
Deduction Fund, and the amount of the reduction in receipts
attributable to the deduction authorized by Section 17239. The
Controller shall transfer from the Personal Income Tax Fund to the
Pet Adoption Cost Deduction Fund an amount not in excess of the sum
of the amounts designated by individuals pursuant to Section 18891
for payment into that fund, reduced by the amount of the reduction in
receipts attributable to the deduction authorized by Section 17239.
18893. (a) All money transferred to the Pet Adoption Fee
Deduction Fund shall, upon appropriation by the Legislature, be
allocated as follows:
(1) To the Franchise Tax Board and the Controller for
reimbursement of all costs incurred by the Franchise Tax Board and
the Controller in connection with their duties under this article.
(2) To the Controller for reimbursement of all losses incurred by
the General Fund in connection with providing tax deductions for pet
adoptions.
(3) (A) To the Department of Food and Agriculture for distribution
of grants to eligible municipal shelters for the purpose of
providing food and shelter to abandoned and impounded animals. The
department may use up to 5 percent of the money allocated to
municipal shelters for administrative costs incurred in connection
with the Pet Adoption Fee Deduction Fund.
(B) For the purposes of this article, "eligible municipal shelter"
means a city or county animal control agency or shelter that is
current on its reporting requirements to the State Department of
Public Health, Veterinary Public Health Section. The State Department
of Public Health shall, upon the written request of the Department
of Food and Agriculture, make available information regarding whether
a city or county animal control agency or shelter is current on its
reporting requirements pursuant to this subparagraph.
(b) The Department of Food and Agriculture shall do all of the
following with respect to the distribution of grants:
(1) Accept applications for grants from eligible municipal
shelters.
(2) Process and approve, or reject all applications on a
first-come-first-served basis, in the following manner:
(A) Eligible municipal shelters processing fewer than 5,000 dogs
and cats each year shall receive up to seven thousand five hundred
dollars ($7,500), if funds are available.
(B) Eligible municipal shelters processing between 5,000 and
25,000 dogs and cats each year shall receive up to fifteen thousand
dollars ($15,000), if funds are available.
(C) Eligible municipal shelters processing more than 25,000 dogs
and cats shall receive up to twenty-two thousand five hundred dollars
($22,500), if funds are available.
(3) Make applications available to eligible municipal shelters on
the first day of the second calendar year after the Pet Adoption Fee
Deduction Fund first appears on the tax return.
(c) In order to be eligible for grants authorized by this article,
eligible municipal shelters shall file an application with the
Department of Food and Agriculture, in the form and manner as
specified by the Department of Food and Agriculture.
(d) Any grants distributed under this article create an additional
funding source for food and shelter services and programs for
eligible municipal shelters and shall be used to supplement, not
supplant, other funding sources for these services and programs.
18894. (a) This article shall remain in effect only until January
1 of the fifth taxable year following the first appearance of the
Pet Adoption Cost Deduction Fund on the tax return, and as of that
date is repealed, unless a later enacted statute, that is enacted
before the applicable date, deletes or extends that date.
(b) (1) By September 1 of the second calendar year, and by
September 1 of each subsequent calendar year that the Pet Adoption
Cost Deduction Fund appears on a tax return, the Franchise Tax Board
shall do all of the following:
(A) Determine the minimum contribution amount required to be
received during the next calendar year for the fund to appear on the
tax return for the taxable year that includes that next calendar
year.
(B) Provide written notification to the Department of Food and
Agriculture of the amount determined in subparagraph (A).
(C) Determine whether the amount of contributions estimated to be
received during the calendar year will equal or exceed the minimum
contribution amount determined by the Franchise Tax Board for the
calendar year pursuant to subparagraph (A). The Franchise Tax Board
shall estimate the amount of contributions to be received by using
the actual amounts received and an estimate of the contributions that
will be received by the end of that calendar year.
(2) If the Franchise Tax Board determines that the amount of
contributions estimated to be received during a calendar year will
not at least equal the minimum contribution amount for the calendar
year, this article is repealed with respect to taxable years
beginning on or after January 1 of that calendar year.
(3) For purposes of this section, the minimum contribution amount
for a calendar year means two hundred fifty thousand dollars
($250,000) for the second calendar year after the first appearance of
the Pet Adoption Cost Deduction Fund on the personal income tax
return or the adjusted minimum contribution amount adjusted pursuant
to subdivision (c).
(c) For each calendar year, beginning with the third calendar year
that the Pet Adoption Cost Deduction Fund appears on the tax return,
the Franchise Tax Board shall adjust, on or before September 1 of
that calendar year, the minimum estimated contribution amount
specified in subdivision (b) as follows:
(1) The minimum estimated contribution amount for the calendar
year shall be an amount equal to the product of the minimum
contribution amount for the prior September 1 multiplied by the
inflation factor adjustment as specified in paragraph (2) of
subdivision (h) of Section 17041, rounded off to the nearest dollar.
(2) The inflation factor adjustment used for the calendar year
shall be based on the figures for the percentage change in the
California Consumer Price Index received on or before August 1 of the
calendar year pursuant to paragraph (1) of subdivision (h) of
Section 17041.
SEC. 3. This act provides for a tax levy within
the meaning of Article IV of the Constitution and shall go into
immediate effect.