Amended in Assembly March 18, 2013

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 amended, Pan. Income taxes: voluntary contributions: American Red Cross begin insert , California Chapters end insert 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 begin insert , California Chapters end insert 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 begin insert , California Chapters end insert for begin delete disaster relief end delete begin insert planning for the implementation of programs to assist in disaster preparedness and response throughout the state and for the cost of administering those programs end insert , as prescribed. begin insert This bill also would require a plan for the use of these contributions to be submitted to the Office of Emergency Services, as provided. end insert

This bill would provide that these voluntary contribution provisions are inoperative and repealed on the earlier of the following: inoperative on January 1 of the 5th taxable year following the taxable year the fund first appears on the tax return and repealed on December 1 of that taxable year or inoperative for taxable years beginning on or after January 1 of the calendar year in which the Franchise Tax Board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filed in that calendar year will be less than $250,000, or an adjusted amount for subsequent taxable years, and are repealed on December 1 of that calendar year.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 begin insert , California Chapters end insert 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 begin insert , California Chapters end insert 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 begin insert , California
Chapters end insert 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 begin delete to fund disaster relief. end delete begin insert Chapters of California
for planning for the implementation of programs to assist in
disaster preparedness and response throughout the state and for
the cost of administering those programs. The American Red Cross
Capital Region Chapter, on behalf of the American Red Cross
Chapters of California, shall submit to the Office of Emergency
Services within 60 days of receiving the taxpayer check off funds
from the Controller, a plan for the use of the contributions received
under the act. end insert

(f) Notwithstanding any other provision, a voluntary contribution
designation for the American Red Cross begin insert , California Chapters end insert 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 begin insert , California Chapters end insert 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 begin insert , California
Chapters end insert Fund. The Controller shall transfer from the Personal
Income Tax Fund to the American Red Cross begin insert , California Chapters end insert
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 begin insert ,
California Chapters end insert 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 begin insert , California Chapters end insert , for the
begin delete purpose of funding disaster relief. end delete begin insert purposes set forth in Section
18830. end insert

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 begin insert , California Chapters end insert 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 begin insert , California
Chapters end insert 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 begin insert , California Chapters end insert 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 begin insert ,
California Chapters end insert 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.