BILL ANALYSIS                                                                                                                                                                                                    

                                                                  SB 1076
                                                                  Page  1

          Date of Hearing:   August 4, 2010

                                Felipe Fuentes, Chair

                    SB 1076 (Price) - As Amended:  August 2, 2010 

          Policy Committee:                             Revenue and  
          Taxation     Vote:                            8-1

          Urgency:     No                   State Mandated Local Program:  
          No     Reimbursable:              


          This bill adds the Arts Council Fund checkoff to the personal  
          income tax (PIT) form upon the removal of another voluntary  
          contribution fund (VCF) from the form.  Specifically, the bill:

          1)Allocates contributions received by the fund to the Arts  
            Council, which would in turn allocate grants to individuals or  
            organizations administering arts programs.

          2)Sunsets in five years after becoming operative, or whenever  
            FTB estimates the annual contribution amount will be less than  
            $250,000, as adjusted for inflation.
           FISCAL EFFECT

          1)The contributions may be taken as an itemized deduction on  
            income tax returns. The Franchise Tax Board estimates that the  
            annual revenue losses from these deductions would be about  

          2)State administrative costs will be deducted from the  
            contribution proceeds.


          1)Purpose  . The bill is intended to supplement funding for the  
            California Arts Council, which has seen a major reduction in  
            its GF budget over the past decade.

           2)Background - voluntary contributions  . Taxpayers can make  
            voluntary contributions to any of 15 funds listed on the state  


                                                                  SB 1076
                                                                  Page  2

            personal income tax return. The contributions are in addition  
            to any tax liabilities otherwise owed. Thus, they do not  
            directly reduce state taxes otherwise available to support  
            state-funded programs in the year in which they are made.  
            However, the amounts are allowed as an itemized deduction for  
            charitable contributions on the subsequent year's income tax  
            return. These voluntary contributions support various  
            purposes, including cancer research, endangered species  
            preservation, and emergency food assistance. 

            Contributions to the VCFs have historically ranged from  
            $250,000 to $800,000 per year. All but one VCF (the California  
            Seniors Special Fund) have sunset dates, and most must meet a  
            minimum annual contribution to remain on the return.
          3)Background -  California Arts Council  .  This counsel, which is  
            comprised of 11 members, is charged with encouraging artistic  
            awareness, promoting the employment of artists, and assisting  
            independent local groups in developing their own art programs.  
             It is responsible for awarding prizes and direct grants to  
            individuals and organizations. The counsel currently receives  
            revenues from the special license plate program, the national  
            endowment for the arts, and the GF. Contributions from the GF  
            fund have fallen sharply over the past decade, dropping from  
            $30 million in 2000-01 to $1 million in 2009-10.

           4)Related legislation  . This is one of several bills before the  
            Legislature adding voluntary contributions to the personal  
            income tax return. Other measures include SB 516 (DeSaulnier)  
            and AB 2017 (Hall) related to contributions for youth  
            programs, AB 1088 (Fletcher) relating to the California  
            Veterans Homes Fund, and AB 1983 (Torrico) relating to the  
            Safely Surrendered Baby Fund.
           Analysis Prepared by  :    Brad Williams / APPR. / (916) 319-2081