BILL ANALYSIS
SB 1076
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Date of Hearing: June 28, 2010
ASSEMBLY COMMITTEE ON REVENUE AND TAXATION
Anthony J. Portantino, Chair
SB 1076 (Price) - As Amended: March 22, 2010
Majority vote. Fiscal committee.
SENATE VOTE : 22-7
SUBJECT : Personal income taxes: voluntary contributions: Arts
Council
SUMMARY : Authorizes the addition of the Arts Council 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)Establishes the Fund in the State Treasury.
2)Provides that all money 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 Arts Council, for allocation of grants to
individuals or organizations administering arts programs
under Government Code Section 8753(o).
3)Provides that funds made available to the Arts Council shall
not be used for any purpose other than to provide grants as
prescribed by this bill. Specifically, funds shall not be
used for administrative purposes, or for any purpose relating
to the Art Council's own operations.
4)Provides for the Fund provisions' automatic repeal on either
January 1 of the fifth taxable year following the first
appearance of the Fund 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 years.
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EXISTING LAW :
1)Allows taxpayers to designate on their PIT returns a
contribution to any of 15 VCFs.
2)Provides a specific sunset date for each VCF, except the
California Seniors Special Fund.
3)Provides that each VCF must meet a minimum annual contribution
amount to remain in effect, except for the California Seniors
Special Fund, the California Firefighters' Memorial Fund, and
the California Peace Officer Memorial Foundation Fund.
4)Provides for an Arts Council composed of 11 members.
FISCAL EFFECT : FTB staff estimates annual revenue losses,
beginning in fiscal year 2011-12, of roughly $15,000 resulting
from itemized deductions.
COMMENTS :
1)The author states, "SB 1076 would assist the California Arts
Council to offset the 80% reduction to its budget over the
last 8 years (citations omitted), which has resulted in
reduced arts education programming and less funding for arts
programs in rural and underserved urban areas."
2)Proponents state:
Since 2003, California has ranked last among all the states
in per capita investment in the arts - allocating just
three cents per person from the General Fund, when the
national average is one dollar. SB 1076 would assist the
California Arts Council to offset the 81% reduction to its
budget over the last 8 years - cuts which have resulted in
reduced arts education programming and less funding for
arts programs in rural and underserved urban areas.
3)Committee Staff Comments :
a) The Arts Council : As noted above, state law provides
for an Arts Council of 11 members. The Arts Council is
charged with encouraging artistic awareness, promoting the
employment of artists, and assisting independent local
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groups in developing their own art programs. The Arts
Council is also tasked with awarding prizes and direct
grants to individuals and organizations.
b) Letting Taxpayers Know Where Their Money is Going : This
bill contains standard language requiring the instructions
for the state's PIT returns to include information
regarding the Fund. Specifically, this bill requires the
instructions to contain language informing taxpayers that
Fund contributions will be "used to fund the Arts Council."
While this is true, the actual language of this bill
provides that Fund moneys shall be used exclusively to
allocate grants. The author may wish to amend the bill so
that the PIT instructions clearly inform taxpayers how
their contributions will be used.
c) Related Bills in the Current Legislative Session :
i) SB 516 (DeSaulnier) authorizes the addition of the
California Fund for Youth checkoff to the PIT form upon
the removal of another VCF from the form. SB 516 is
scheduled to be heard in this Committee along with this
bill.
ii) AB 1088 (Fletcher) authorizes the addition of the
California Veterans Homes Fund checkoff to the PIT form
upon the removal of another VCF from the form. AB 1088
was heard in the Senate Committee on Revenue and Taxation
on June 23, 2010 and passed out of that Committee on a
vote of 3-2.
iii) AB 1777 (Portantino) transfers 20% of the state's
General Fund sales and use tax revenues (at the 4.75%
rate) derived from specified taxpayers into a special
fund for use by the Arts Council in awarding grants. AB
1777 was held by the Assembly Appropriations Committee.
iv) AB 1983 (Torrico) authorizes the addition of the
Safely Surrendered Baby Fund checkoff to the PIT form
upon the removal of another VCF from the form. AB 1983
was heard in the Senate Committee on Revenue and Taxation
on June 23, 2010 and passed out of that Committee on a
3-2 vote.
v) AB 2017 (Hall) authorizes the addition of the
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California YMCA Youth and Government Fund checkoff to the
PIT form upon the removal of another VCF from the form.
AB 2017 is currently pending in the Senate Rules
Committee.
d) Suggested Technical Amendments :
i) On page 2, line 5, after "Council" insert "Fund";
ii) On page 2, delete lines 9 and 10 and insert "Council
Fund established by Section 18892.";
iii) On page 2, line 14, replace "initial" with
"original";
iv) On page 2, line 17, insert "taxpayer's" before "tax
liability";
v) On page 2, line 18, delete "shown thereupon,";
vi) On page 2, line 25, after "account" insert "or fund
listed on the tax return,";
vii) On page 2, line 29, after "Council" insert "Fund";
viii) On page 3, line 2, after "Council" insert "Fund";
ix) On page 4, line 11, replace "contribution" with
"contributions"; and,
x) On page 4, line 33, insert "estimated" before
"contribution".
REGISTERED SUPPORT / OPPOSITION :
Support
California Alliance for Arts Education
California Arts Advocates
California Association of Museums
Opposition
None on file
SB 1076
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Analysis Prepared by : M. David Ruff / REV. & TAX. / (916)
319-2098