BILL ANALYSIS                                                                                                                                                                                                    

                                          


            SENATE REVENUE & TAXATION COMMITTEE

            Senator Lois Wolk, Chair

                                                      SB 1076 - Price

                                                Amended: March 22, 2010

                                                                       

            Hearing: April 24, 2010                         Fiscal: Yes




            SUMMARY: Allows taxpayers to make voluntary contributions  
                      to the California Arts Council on their state  
                      personal income tax returns.

            

                 EXISTING LAW allows taxpayers to contribute money to  
            one or more of 15 voluntary contribution funds by checking  
            a box on their state income tax return. California law  
            requires contributions made through check-offs to be made  
            from taxpayers' own resources (not from their tax  
            liability, as is possible on federal tax returns).  
            Check-off amounts may be claimed as charitable  
            contributions on taxpayers' tax returns during the  
            subsequent year. 

                 Allows the FTB to design tax returns to provide for  
            the designation of contributions to specified funds either  
            on the return itself or on a separate schedule that must be  
            attached to the return.

                 THIS BILL creates a check-off designation on the state  
            personal income tax return for taxpayers to voluntarily  
            contribute to the California Arts Council (CAC). 

                 Establishes the Arts Council Fund in the State  
            Treasury and allows the CAC to receive the moneys deposited  
            into this fund and use these moneys only for allocation of  
            grants to individuals or organizations administering arts  








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            programs.

                 Requires that the check off meet the minimum  
            contribution requirement of $250,000.


            FISCAL EFFECT: 

                 According to the FTB, extending this check-off will  
            result in annual revenue losses of approximately $15,000  
            per year beginning in the 2011-12 fiscal years. 


            COMMENTS

            A.   Purpose of the Bill

                 According to the author's office, this bill would  
            assist the CAC in offsetting the 80% reduction to the CAC's  
            budget since 2001-2002. The reduction in the CAC's budget  
            has resulted in reduced arts education programming and less  
            funding for arts programs both in rural and underserved  
            urban areas. 

                 By creating a check-off designation on the personal  
            income tax return for taxpayers to voluntarily contribute  
            to the CAC, this bill creates a dedicated source of funding  
            for arts programs throughout the state. 
            
            B.    Background

                 The CAC was established in 1975. The mission of the  
            CAC is to promote the arts in California. The CAC consists  
            of 11 members, 9 appointed by the Governor (subject to  
            Senate confirmation) and 1 each by the President pro  
            Tempore of the Senate and the Speaker of the Assembly. 


                 The Governor's Budget proposes $5.7 million for the  
            CAC in 2010-1l approximately 5% less funding than in the  
            current year. Funding sources consist of about one-third  
            each from the General Fund, the Graphic Design License  
            Plate Account (GDLPA), and federal funds.  While the amount  
            of federal funds budgeted for 2010-11 have decreased over  








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            the current year, the General Fund and GDLPA budgeted  
            funding portions for 2010-11 have increased slightly over  
            the current year.  

            

            C.  Many worthy causes

                 In the past, the Committee has expressed concern that  
            countless worthy causes may be funded by tax check-offs.   
            The Committee has stated that the current check-off system  
            forces them to choose between worthy charities and  
            non-profits for a spot on the tax return.  The current  
            system remains subjective and is limited to those  
            organizations that can convince the Legislature to include  
            them on the form.  Additionally, taxpayers may currently  
            contribute portions of their refunds to worthy  
            organizations.  Taxpayers may also claim a deduction for  
            charitable contributions.  The Committee may wish to  
            consider whether the state should use the tax code to  
            encourage contributions to certain charitable  
            organizations.

                 In addition to this bill, the following bills have  
            been introduced this year: 

                  AB 1049 (Torrico, 2009/2010) would create a VCF  
                 designation on the personal income tax return for  
                 taxpayers to contribute to the Safely Surrender Babies  
                 Fund. This bill has been referred to the Assembly  
                 Revenue and Taxation Committee.
                  AB 1088 (Fletcher, 2009/2010) would create a VCF  
                 designation on the personal income tax return in order  
                 for taxpayers to contribute to the Morale, Welfare,  
                 and Recreation Fund for each of the veterans' homes,  
                 as provided. This bill is currently set for hearing in  
                 the Assembly Veterans Affairs Committee.

                 The following related bills were chaptered in 2009: 

                  AB 292 (Yamada, Stats. 2009, Ch. 232) extended the  
                 expiration date of the Alzheimer's Disease and Related  
                 Disorders Research Fund from January 1, 2010, to  
                 January 1, 2015.








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                  AB 563 (Cook, Stats. 2009, Ch. 451) made changes to  
                 the California Military Family Relief Fund related to  
                 the allocation of the funds and revised the minimum  
                 contribution amount required to remain on the personal  
                 income tax return. 



                  SB 91 (Correa, Stats. 2009, Ch. 29) extends the  
                 expiration date of the California Fund for Senior  
                 Citizens from January 1, 2010, to January 1, 2015.

                 Contributions to voluntary funds in 2008 and 2009 were  
            as follows:

                 -------------------------------------------- 
                |      Voluntary Contribution   |   2008     |
                |Fund                           |Contribution|
                |                               |     s      |
                |-------------------------------+------------|
                |Alzheimer's Disease/Related    | $505,510   |
                |Disorders Fund                 |            |
                |-------------------------------+------------|
                |California Breast Cancer       | $596,729   |
                |Research Fund                  |            |
                |-------------------------------+------------|
                |California Firefighters'       | $250,060   |
                |Memorial Fund                  |            |
                |-------------------------------+------------|
                |California Fund for Senior     | $288,695   |
                |Citizens                       |            |
                |-------------------------------+------------|
                |California Military Family     | $306,750   |
                |Relief Fund                    |            |
                |-------------------------------+------------|
                |California Peace Officer       | $184,261   |
                |Memorial Foundation Fund       |            |
                |-------------------------------+------------|
                |California Sea Otter Fund      | $294,966   |
                |-------------------------------+------------|
                |Emergency Food for Families    | $438,582   |
                |Fund                           |            |
                |-------------------------------+------------|
                |Rare and Endangered Species    | $580,823   |








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                |Preservation Fund              |            |
                |-------------------------------+------------|
                |State Children's Trust for the |$528,609    |
                |Prevention of Child Abuse      |            |
                 -------------------------------------------- 


                 ------------------------------- 
                |     Newly Added as of January |
                |2009                           |
                |-------------------------------|
                |ALS/Lou Gehrig's Disease       |
                |Research Fund                  |
                |-------------------------------|
                |California Cancer Center       |
                |Research Fund                  |
                |-------------------------------|
                |California Ovarian Cancer      |
                |Research Fund                  |
                |-------------------------------|
                |California Seniors Special     |
                |Fund                           |
                |-------------------------------|
                |Municipal Shelter Spay and     |
                |Neuter Fund                    |
                |                               |
                |                               |
                 ------------------------------- 



            Support and Opposition

                 Support:California Alliance for Arts Education

                        California Arts Council
                        P.S. Arts
                        Arts Orange County
                        Gay Men's Chorus of Los Angeles
                 Oppose:None registered 

                 

            ---------------------------------








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            Consultant: Meg Svoboda