BILL ANALYSIS Ó
AB 971
Page 1
ASSEMBLY THIRD READING
AB 971 (Monning)
As Amended April 25, 2011
Majority vote
REVENUE & TAXATION 6-0 APPROPRIATIONS 17-0
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|Ayes:|Perea, Donnelly, Beall, |Ayes:|Fuentes, Harkey, |
| |Cedillo, Gordon, Nestande | |Blumenfield, Bradford, |
| | | |Charles Calderon, Campos, |
| | | |Davis, Donnelly, Gatto, |
| | | |Hall, Hill, Lara, |
| | | |Mitchell, Nielsen, Norby, |
| | | |Solorio, Wagner |
|-----+--------------------------+-----+--------------------------|
| | | | |
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SUMMARY : Reauthorizes the addition of the California Sea Otter
Fund (Fund) checkoff to the personal income tax (PIT) form
beginning with the 2011 return. Specifically, this bill :
1)Contains numerous legislative findings and declarations related
to sea otters and their importance to the marine ecosystem.
2)Establishes the Fund in the State Treasury.
3)Provides that all moneys transferred to the Fund, upon
appropriation by the Legislature, shall first be allocated to
the Franchise Tax Board (FTB) and the State Controller for
reimbursement of all costs incurred in administering the
checkoff. Remaining moneys shall be divided equally between:
a) The Department of Fish and Game (DFG) for the purposes of
establishing a sea otter fund to be used within DFG's index
coding system for increased investigation, prevention, and
enforcement actions; and,
b) The California Coastal Conservancy for competitive grants
and contracts to public agencies and nonprofit organizations
for research, science, protection, projects, or programs
related to the Federal Sea Otter Recovery Plan or improving
the nearshore ecosystem.
AB 971
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4)Provides for the checkoff provisions' automatic repeal on
January 1, 2016, or on January 1 of an earlier year, if FTB
estimates that the Fund will not meet the specified "minimum
contribution amount."
5)Sets the minimum contribution amount for the 2011 calendar year
at $260,890. For subsequent calendar years, the minimum
contribution amount will be adjusted for inflation.
6)Expresses the Legislature's intent that this bill's provisions
be treated as a continuation of the prior Fund checkoff
provisions, which sunset on January 1, 2011.
EXISTING LAW :
1)Allows taxpayers to designate on their PIT returns a
contribution to any of 15 voluntary contribution funds (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.
FISCAL EFFECT : The Franchise Tax Board staff estimates this bill
will cost the state about $20,000 per year. This estimate assumes
that the check-off is added in fiscal year 2012-13, and the
donations meet the average amount for the other tax check-offs and
that these donations are subsequently claimed as charitable
deductions by taxpayers.
COMMENTS : The author has provided the following statement in
support of this bill:
Given the recent information that the sea otter population
remains in trouble, it is important that we extend the tax
check-off option through AB 971 in order for taxpayers to be
able to voluntarily assist the state in helping to protect
them.
Proponents state, "The Fund is a critical source of support for
research aimed at the recovery of the threatened population of
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southern sea otters off the California coast. Today, fewer than
3,000 sea otters exist along the state's coastline - one-fifth of
the historic population - and we do not know why it is taking so
long for the population to recover."
Assembly Revenue and Taxation Committee Staff Notes:
1)So many causes, so little space: There are countless worthy
causes that would benefit from the inclusion of a 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 essentially
rewards organizations that can convince the Legislature to
include their fund on the form.
2)Legislative history: The original Fund first appeared on the
2006 PIT return. The original legislation provided for the Fund
provisions' automatic repeal on January 1 of the fifth taxable
year following the Fund's first appearance on the tax return.
As such, the original Fund provisions were repealed by their own
terms on January 1, 2011. The author has introduced this bill
to retain the Fund on returns for taxable years 2011 through
2015, provided the Fund continues to meet the annual minimum
contribution threshold indexed for inflation. Effectively, this
bill serves to extend the original Fund provisions' sunset date
by five years. As of the end of February 2011, the Fund has
already received valid contributions totaling $52,779. This
amount is higher than the end of February totals for any of the
prior calendar years.
Analysis Prepared by : M. David Ruff / REV. & TAX. / (916)
319-2098
FN: 0000940