BILL ANALYSIS Ó
AB 564
Page 1
CONCURRENCE IN SENATE AMENDMENTS
AB 564 (Smyth and Galgiani)
As Amended June 30, 2011
Majority vote
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|ASSEMBLY: |74-2 |(May 31, 2011) |SENATE: |31-4 |(August 29, |
| | | | | |2011) |
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Original Committee Reference: REV. & TAX.
SUMMARY : Reauthorizes the addition of the Municipal Shelter
Spay-Neuter Fund (Fund) checkoff to the personal income tax
(PIT) form upon the removal of another voluntary contribution
fund (VCF) from the form.
The Senate amendments :
1)Allow municipalities to use grant funds to pay specified
outside agencies for spay and neuter services.
2)Add coauthors.
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 for 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.
AS PASSED BY THE ASSEMBLY , this bill:
1)Established the Fund in the State Treasury.
2)Provided that all moneys transferred to the Fund, upon
appropriation by the Legislature, shall be allocated as
follows:
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a) To the Franchise Tax Board (FTB) and the State
Controller for reimbursement of all costs incurred in
administering the checkoff; and,
b) To the California Department of Food and Agriculture
(CDFA) for distribution of grants to "eligible municipal
shelters."
3)Defined an "eligible municipal shelter" as a city or county
animal control agency or shelter that is current on its
reporting requirements to the State Department of Public
Health (DPH), Veterinary Public Health Section, and offers
spay and neuter services for dogs and cats owned by individual
members of the public.
4)Provided that grants shall be made available to provide spay
and neuter services and programs for dogs and cats.
5)Provided that no grant shall be made, and no grant funds shall
be used, to spay or neuter any animal impounded by an eligible
municipal shelter.
6)Provided that CDFA shall do all of the following:
a) Accept grant applications from eligible municipal
shelters;
b) Process and approve, or reject all applications on a
first-come-first-served basis, in the following manner:
i) Eligible municipal shelters processing fewer than
5,000 dogs and cats each year shall receive up to $7,500;
ii) Eligible municipal shelters processing between 5,000
and 25,000 dogs and cats each year shall receive up to
$15,000; and,
iii) Eligible municipal shelters processing more than
25,000 dogs and cats shall receive up to $22,500.
c) Make applications available to eligible municipal
shelters on the first day of the second calendar year after
the Fund first appears on the form.
7)Provided that any grants distributed create an additional
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funding source for spay and neuter services for eligible
municipal shelters and shall be used to supplement, not
supplant, other funding sources.
8)Required DPH, upon the written request of CDFA, to make
available information regarding whether a city or county
animal control agency or shelter is current on its reporting
requirements.
9)Provided for the VCF's automatic repeal on either January 1st
of the fifth taxable year following the VCF's first appearance
on the PIT return or on January 1st of an earlier year, if FTB
estimates that the annual contribution amount will be less
than $250,000, or an adjusted amount for subsequent taxable
years.
10)Encouraged income tax preparers to inform taxpayers of all
existing VCFs to which contributions may be made.
FISCAL EFFECT : The FTB estimates revenue losses, resulting from
contribution deductions, to be around $20,000 annually.
COMMENTS : The author has provided the following statement in
support of this bill:
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.
Assembly Revenue and Taxation Committee Staff Comments:
1)So many causes, so little space: There are countless worthy
causes that would benefit from the inclusion of a new VCF on
the state's income tax returns. At the same time, space on
the returns is limited. Thus, it could be argued that the
current system for adding VCFs to the form is subjective and
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essentially rewards organizations that can convince the
Legislature to include their fund on the form.
2)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. In 2010, the
VCF needed to meet a minimum contribution threshold of
$250,000 but failed to do so, and as a result, the VCF ceased
to be operative.
3)VCF policy: The Assembly Revenue and Taxation Committee's VCF
policy provides that, "All proponents seeking authorization
for a new or reauthorized checkoff shall provide information
justifying their expectation that the checkoff will meet its
contribution minimum." Given that an identically named VCF
failed to meet its minimum contribution threshold only a few
years ago, it is an open question whether this Fund will fare
any better. The Humane Society, which is sponsoring this
bill, states that "We are committed to helping promote the
fund to taxpayers to help ensure future thresholds are met."
Nevertheless, Committee staff questions the precedent of
simply re-establishing past VCFs when they fail to garner
sufficient support to remain on the form.
Analysis Prepared by : M. David Ruff / REV. & TAX. / (916)
319-2098
FN: 0001808