BILL NUMBER: AB 564	ENROLLED
	BILL TEXT

	PASSED THE SENATE  AUGUST 29, 2011
	PASSED THE ASSEMBLY  AUGUST 31, 2011
	AMENDED IN SENATE  JUNE 30, 2011
	AMENDED IN ASSEMBLY  APRIL 6, 2011

INTRODUCED BY   Assembly Members Smyth and Galgiani
   (Coauthors: Assembly Members Blumenfield, Garrick, and Solorio)
   (Coauthor: Senator Harman)

                        FEBRUARY 16, 2011

   An act to add and repeal Article 5.7 (commencing with Section
18755) of Chapter 3 of Part 10.2 of Division 2 of the Revenue and
Taxation Code, relating to taxation.


	LEGISLATIVE COUNSEL'S DIGEST


   AB 564, Smyth. Income taxes: voluntary contributions: Municipal
Shelter Spay-Neuter Fund.
   Existing income tax laws allow individual taxpayers to contribute
amounts in excess of their tax liability for the support of specified
funds.
   This bill would allow a taxpayer to designate on a tax return that
a specified amount in excess of his or her tax liability be
transferred to the Municipal Shelter Spay-Neuter Fund, which would be
created by this bill. However, the bill would provide that a
voluntary contribution designation for this fund may not be added on
the tax return until another voluntary contribution designation is
removed from the return.
   This bill would provide that all money contributed to the fund
pursuant to these provisions, upon appropriation by the Legislature,
be allocated to the Franchise Tax Board and the Controller for
reimbursement of costs, as provided, and to the Department of Food
and Agriculture for distribution of grants to eligible municipal
shelters on a first-come-first-served basis, as specified, for the
purposes of providing low cost or free spay-neuter services and for
administrative costs. This bill would require eligible municipal
shelters, as defined, in order to receive a grant, to file an
application with the Department of Food and Agriculture, as
specified.
   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provisions are repealed on either January 1 of the 5th taxable year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 for subsequent
taxable years.
   This bill would make legislative findings and declarations
regarding the importance of informing taxpayers that they may make
voluntary contributions to certain funds or programs on state income
tax returns, and would state the intent of the Legislature to
encourage all persons who prepare state income tax returns to inform
their clients in writing, prior to the completion of any state income
tax return, that they may make a contribution to any voluntary
contribution checkoff on the state income tax return.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

  SECTION 1.  The Legislature finds and declares that it is important
to inform taxpayers that they may make voluntary contributions to
certain funds or programs, as provided on the state income tax
return. The Legislature further finds and declares that many
taxpayers remain unaware of the voluntary contribution checkoffs on
the state income tax return. Therefore, it is the intent of the
Legislature to encourage all persons who prepare state income tax
returns, including tax preparers, to inform their clients in writing,
prior to the completion of any state income tax return, that they
may make a contribution to any voluntary contribution checkoff on the
state income tax return if they so choose.
  SEC. 2.  Article 5.7 (commencing with Section 18755) is added to
Chapter 3 of Part 10.2 of Division 2 of the Revenue and Taxation
Code, to read:

      Article 5.7.  Municipal Shelter Spay-Neuter Fund


   18755.  (a) An individual may designate on the tax return that a
contribution in excess of the tax liability, if any, be made to the
Municipal Shelter Spay-Neuter Fund established by Section 18755.1.
That designation is to be used as a voluntary contribution on the tax
return.
   (b) The contributions shall be in full dollar amounts and may be
made individually by each signatory on a joint return.
   (c) A designation shall be made for any taxable year on the
initial return for that taxable year and once made is irrevocable. If
payments and credits reported on the return, together with any other
credits associated with the taxpayer's account, do not exceed the
taxpayer's 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) When another voluntary contribution designation is removed
from the tax return, or as soon as space is available, the Franchise
Tax Board shall revise the form of the return to include a space
labeled the "Municipal Shelter Spay-Neuter Fund" to allow for the
designation permitted. The form shall also 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
provide low cost or free spay-neuter services associated with a
municipal shelter in California.
   (f) 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).
   18755.1.  There is hereby established in the State Treasury the
Municipal Shelter Spay-Neuter Fund to receive contributions made
pursuant to Section 18755. The Franchise Tax Board shall notify the
Controller of both the amount of money paid by taxpayers in excess of
their tax liability and the amount of refund money that taxpayers
have designated pursuant to Section 18755 to be transferred to the
Municipal Shelter Spay-Neuter Fund. The Controller shall transfer
from the Personal Income Tax Fund to the Municipal Shelter
Spay-Neuter Fund an amount not in excess of the sum of the amounts
designated by individuals pursuant to Section 18755 for payment into
that fund.
   18755.2.  (a) All money transferred to the Municipal Shelter
Spay-Neuter Fund, upon appropriation by the Legislature, shall 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) (A) To the Department of Food and Agriculture for distribution
of grants to eligible municipal shelters for the purposes of
providing low cost or free spay-neuter services. The department may
use up to 5 percent of the money allocated to municipal shelters for
administrative costs incurred in connection with the Municipal
Shelter Spay-Neuter 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, and offers spay and
neuter services for dogs and cats owned by individual members of the
public. 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) (1) Grants distributed pursuant to this article shall be made
available for the purposes of providing spay and neuter services and
programs for dogs and cats owned by individual members of the public.

   (2) A grant shall not be made, and grant funds shall not be used,
to spay or neuter any animal that is impounded by an eligible
municipal shelter. If the Department of Food and Agriculture
determines that an eligible municipal shelter has misused its grant
funds, that shelter shall no longer be eligible for grants
distributed pursuant to this article.
   (c) 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 Municipal Shelter
Spay-Neuter Fund first appears on the tax return.
   (d) 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.
   (e) Any grants distributed under this article create an additional
funding source for spay and neuter services and programs for
eligible municipal shelters and shall be used to supplement, not
supplant, other funding sources for these services and programs.
   (f) Funds obtained by a municipality under a grant from the
Municipal Shelter Spay-Neuter Fund may be used to pay for free or
low-cost spay and neuter services provided to the municipality by
outside agencies that are under contract or in a demonstrated
partnership with that municipality.
   18755.3.  (a) Except as otherwise provided in subdivision (b),
this article shall remain in effect only until January 1 of the fifth
taxable year following the first appearance of the Municipal Shelter
Spay-Neuter 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 Municipal
Shelter Spay-Neuter Fund appears on the 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 the
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 Municipal Shelter Spay-Neuter 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
after the first appearance of the Municipal Shelter Spay-Neuter Fund
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 estimated
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.
   (d) Notwithstanding the repeal of this article, any contribution
amounts designated pursuant to this article prior to its repeal shall
continue to be transferred and disbursed in accordance with this
article as in effect immediately prior to that repeal.