BILL ANALYSIS Ó
AB 564
Page 1
Date of Hearing: May 4, 2011
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Felipe Fuentes, Chair
AB 564 (Smyth) - As Amended: April 6, 2011
Policy Committee: Revenue and
Taxation Vote: 9-0
Urgency: No State Mandated Local Program:
No Reimbursable: No
SUMMARY
This bill reauthorizes the addition of the Municipal Shelter
Spay-Neuter Fund check-off to the personal income tax form upon
the removal of another voluntary contribution fund (VCF) from
the form. Specifically, this bill:
1)Establishes the Municipal Shelter Spay-Neuter Fund in the
State Treasury and provides that all moneys 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 all costs incurred in
administering the check-off.
b) To the California Department of Food and Agriculture
(CDFA) for distribution of grants to eligible municipal
shelters, which are defined as a city or county animal
control agency or shelter that is current on its reporting
requirements to the State Department of Public Health and
offers spay and neuter services for dogs and cats owned by
the public.
2)Provides that CDFA shall accept, process and approve grant
applications from eligible municipal shelters and award the
grants in amounts as specified and make them subject to
specified conditions including that grants be used to
supplement, not supplant, other funding sources.
3)Requires the repeal of the check-off on either January 1 of
the fifth year following the VCF's first appearance on the
AB 564
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return or on January 1 of an earlier year, if FTB estimates
that the annual contribution amount will not meet the amount
necessary to stay on the form. The required amount will be
$250,000, or an amount adjusted for inflation in subsequent
taxable years.
FISCAL EFFECT
FTB estimates this bill will cost the state about $20,000 per
year. The FTB estimate assumes the check-off is added in the
2012-13 fiscal year, the donations meet the average amount for
the other tax check-offs, and these donations are subsequently
claimed as charitable deductions by taxpayers. Revenue losses
would be similar in subsequent years, assuming there is no
significant change in the amount of donations
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COMMENTS
1)Purpose. The author states that voluntary spay and neuter
programs hosted by shelters throughout the state are crucial
to limiting the number of unwanted and abandoned pets.
Sheltering pets is a huge financial burden to local
governments, costing them an estimated quarter of a billion
dollars every year. Unfortunately, shelters struggle to
financially meet current needs. By placing the Municipal
Shelter Spay-Neuter Fund on tax forms, Californians will be
given an opportunity to support the needs of shelters by
making voluntary contributions to this new fund. The Humane
Society of the United States, the bill's sponsor, notes the
economic downturn caused this check-off to fall short of the
required $250,000 minimum contribution requirement in its
second year.
2)Voluntary Contribution Funds (VCFs) . California taxpayers can
make voluntary contributions to any of 15 funds listed on the
state personal income tax return. The contributions are in
addition to tax liabilities so they do not directly reduce the
amount of state taxes. As charitable contributions, the
taxpayer may deduct the amount of the check-off 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 have historically ranged from
$300,000 to $800,000 per year. Except for the California
Seniors Special Fund, all have sunset dates, and most must
meet a minimum annual contribution to remain on the return.
3)Legislative History : AB 2291 (Mendoza), Chapter 328, Statutes
of 2008, authorized the addition of an identical VCF with the
same name. This VCF appeared on the 2008 and 2009 tax returns
in calendar years 2009 and 2010 respectively. The prior VCF
received $210,029 in 2009 and $194,462 in 2010. As a result
of the VCF failing to meet a minimum contribution threshold of
$250,000, FTB removed it from the return.
2)Related legislation: The following related bills address
personal income tax check-offs and have been introduced in the
current legislative session:
a) AB 233 (Hall) would authorize the addition of the
California YMCA Youth and Government Fund check-off to the
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personal income tax form upon the removal of another
voluntary contribution fund (VCF) from the form.
b) AB 764 (Swanson) would add the Victim-Witness Assistance
Fund to the form.
c) AB 971 (Monning) would extend the current repeal date
for the current California Sea Otter Fund.
d) SB 164 (Simitian) would extend the repeal dates of the
State Children's Trust Fund for the Prevention of Child
Abuse and the Rare and Endangered Species Preservation
Program to January 1, 2018.
Analysis Prepared by : Roger Dunstan / APPR. / (916) 319-2081