BILL ANALYSIS Ó
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THIRD READING
Bill No: AJR 19
Author: Hall (D)
Amended: 8/21/12 in Assembly
Vote: 21
ASSEMBLY FLOOR : 76-0, 8/22/12 - See last page for vote
SUBJECT : Federal taxation
SOURCE : Author
DIGEST : This resolution urges the United States Congress
to permanently extend and expand the federal charitable tax
deduction for contributions of food inventory by
non-corporate taxpayers.
ANALYSIS : Existing federal law:
1.Allows a tax deduction for charitable contributions,
subject to certain limitations such as the type of
taxpayer, the property contributed, and the donee
organization. The amount of any deduction generally
equals the fair market value of the contributed property
on the date of the contribution.
2.Allows an enhanced tax deduction for charitable
contributions of food inventory by "C" corporations, as
specified.
3.Limits the application of the enhanced deduction to food
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AJR 19
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that qualifies as "apparently wholesome food," i.e., food
intended for human consumption that meets all quality and
labeling standards imposed by federal, state, and local
laws and regulations, as provided.
Existing state law:
1.Allows a deduction for ordinary and necessary expenses of
a trade or business.
2.Conforms generally, as of January 1, 2009, to the federal
rules relating to charitable contributions, but
specifically does not conform to the enhanced deduction
for a contribution of food inventory.
3.Provides a tax credit, for taxable years beginning on or
after January 1, 2012, and before January 1, 2017, to
California growers for the costs of fresh fruits or
vegetables donated to California food banks. The tax
credit amount equals to 10% of the costs that would
otherwise be included in inventory costs, as specified,
with respect to the donation of fresh fruits or fresh
vegetables to food banks located in California.
This resolution:
1.States all of the following:
A. The most recent food insecurity data released by
the U.S. Department of Agriculture in 2011 shows that
nearly 49 million people are at risk of hunger today,
while billions of pounds of food are wasted each year.
B. Since 1976, the U.S. Congress has permitted a
federal food donation tax deduction to corporate
taxpayers that donate food products to charities in
need across the country.
C. The tax deduction, which encouraged the donations
of excess food to charity, was temporarily expanded to
taxpayers that were non-C corporations, such as small
businesses and farmers in 2005, with two-year
extensions granted in 2006, 2008, and 2010.
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D. The enhanced deduction that was available to non-C
corporations expired at the end of 2011 and is
currently up for permanent reauthorization in HR 3729
and S 166.
E. Permanent reauthorization of the deduction is
needed to maximize the potential donation opportunity.
1.Resolves that the Legislature respectfully urges the U.S.
Congress to enact HR 3729 or S 166 to permanently extend
and expand the federal charitable tax deduction for
contributions of food inventory.
Comments
According to the Assembly third reading analysis, the
author states that, "Since 2006, the demand for food
assistance at food banks across the country has increased
by 46 percent. According to 2011 data by the United States
Department of Agriculture, approximately 49 million
Americans are at risk of hunger. In Los Angeles County
alone, 17% of residents or over 1.7 million people struggle
with food insecurity. Due to the continued economic crisis,
more families are expected to become dependent upon food
banks and other food assistance programs to provide for
themselves and their families.
"Since 1986, the federal government has provided
organizations a food donation tax deduction to encourage
donations to food banks and other hunger relief programs.
This deduction expired in 2011. Last year, the US House of
Representatives introduced HR 3729 to make the tax
deduction permanent in order to incentivize continued food
donations to needy families.
"Failure to approve HR 3729 law this year could put
millions of Americans at risk of hunger and food insecurity
at a time when demand for food assistance is reaching
all-time highs.
"Assembly Joint Resolution No. 19 calls on Congress to
extend the Charitable Food Donation Deduction and pass the
proposed House Bill HR 3729 to make the tax deduction
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permanent.
"Extending the Charitable Food Donation Deduction would
give organizations an important incentive to donate surplus
food to the needy."
FISCAL EFFECT : Fiscal Com.: No
ASSEMBLY FLOOR : 76-0, 8/22/12
AYES: Achadjian, Alejo, Allen, Ammiano, Atkins, Beall,
Bill Berryhill, Block, Blumenfield, Bonilla, Bradford,
Brownley, Buchanan, Butler, Campos, Carter, Cedillo,
Chesbro, Conway, Cook, Davis, Dickinson, Eng, Feuer,
Fletcher, Fong, Fuentes, Furutani, Beth Gaines, Galgiani,
Garrick, Gatto, Gordon, Gorell, Grove, Hagman, Halderman,
Hall, Harkey, Hayashi, Hill, Huber, Hueso, Huffman,
Jeffries, Jones, Knight, Lara, Logue, Bonnie Lowenthal,
Ma, Mansoor, Mendoza, Miller, Mitchell, Monning, Morrell,
Nestande, Nielsen, Olsen, Pan, Perea, V. Manuel Pérez,
Portantino, Silva, Skinner, Smyth, Solorio, Swanson,
Torres, Valadao, Wagner, Wieckowski, Williams, Yamada,
John A. Pérez
NO VOTE RECORDED: Charles Calderon, Donnelly, Roger
Hernández, Norby
AGB:n 8/27/12 Senate Floor Analyses
SUPPORT/OPPOSITION: NONE RECEIVED
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