California Legislature—2013–14 Regular Session

Assembly Bill No. 511

Introduced by Assembly Member Pan

February 20, 2013

An act to add and repeal Article 12 (commencing with Section 18830) of Chapter 3 of Part 10.2 of Division 2 of the Revenue and Taxation Code, relating to taxation.

LEGISLATIVE COUNSEL’S DIGEST

AB 511, as introduced, Pan. Income taxes: voluntary contributions: American Red Cross Fund.

The Personal Income Tax Law authorizes taxpayers to contribute amounts in excess of their tax liability for the support of specified funds.

This bill would authorize taxpayers to designate on their tax returns that a specified amount in excess of their tax liability be transferred to the American Red Cross Fund, which is created by this bill. This bill would require that all moneys 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 and to the American Red Cross for disaster relief, as prescribed.

This bill would provide that these voluntary contribution provisions are inoperative and repealed on the earlier of the following: inoperative on January 1 of the 5th taxable year following the taxable year the fund first appears on the tax return and repealed on December 1 of that taxable year or inoperative for taxable years beginning on or after January 1 of the calendar year in which the Franchise Tax Board estimates by September 1 that the contributions made on returns filed in that calendar year will be less than $250,000, or an adjusted amount for subsequent taxable years, and are repealed on December 1 of that calendar year.

Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: no.

The people of the State of California do enact as follows:

SECTION 1.  

Article 12 (commencing with Section 18830) is
added to Chapter 3 of Part 10.2 of Division 2 of the Revenue and
Taxation Code, to read:

 

Article 12.  American Red Cross Fund

 

18830.  

(a) An individual may designate on the tax return that
a contribution in excess of tax liability, if any, be made to the
American Red Cross Fund established by Section 18831.

(b) A contribution shall be in a full dollar amount and may be
made individually by each signatory on a joint return.

(c) A designation made under subdivision (a) shall be made for
any taxable year on the original return for that taxable year, and
once made shall be irrevocable. In the event that payments and
credits reported on the return, together with any other credits
associated with the taxpayer’s account do not exceed the taxpayer’s
tax liability, if any, the return shall be treated as though no
designation had been made. In the event that no designee is
specified, the contribution shall, after reimbursement of the direct
actual costs of the Franchise Tax Board for the collection and
administration of funds under this article, be transferred to the
General Fund.

(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 designated accounts on
a pro rata basis.

(e) The Franchise Tax Board shall revise the form of the return
to include a space labeled the “American Red Cross Fund” to allow
for the designation permitted under subdivision (a). 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 by the American Red Cross to fund
disaster relief.

(f) Notwithstanding any other provision, a voluntary contribution
designation for the American Red Cross Fund shall not be added
on the tax return until another voluntary contribution designation
is removed.

(g) 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).

18831.  

There is hereby established in the State Treasury the
American Red Cross Fund to receive contributions made pursuant
to Section 18830. 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 18830 to be transferred to the
American Red Cross Fund. The Controller shall transfer from the
Personal Income Tax Fund to the American Red Cross Fund an
amount not in excess of the sum of the amounts designated by
individuals pursuant to Section 18830 for payment into that fund.

18832.  

All money transferred to the American Red Cross Fund,
upon appropriation by the Legislature, shall be allocated as follows:

(a) To the Franchise Tax Board and the Controller only for
reimbursement of all costs incurred by the Franchise Tax Board
and the Controller in connection with their duties under this article.

(b) To the American Red Cross, for the purpose of funding
disaster relief.

18833.  

(a) Except as otherwise provided in paragraph (2) of
subdivision (b), this article shall remain in effect only until January
1 of the fifth taxable year following the first appearance of the
American Red Cross Fund on the personal income tax return, and
is repealed as of December 1 of that taxable year.

(b) (1) By September 1 of the second calendar year and each
subsequent calendar year that the American Red Cross 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) 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 inoperative with respect to taxable
years beginning on or after January 1 of that calendar year, and
shall be repealed on December 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 American Red Cross 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 American Red Cross Fund
on the personal income tax return, the Franchise Tax Board shall
adjust, on or before September 1 of that calendar year, the
minimum 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 calendar year multiplied by
the inflation factor adjustment as specified in subparagraph (A) of
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 for all items 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.