BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                            



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          |SENATE RULES COMMITTEE            |                        AB 754|
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                                    THIRD READING


          Bill No:  AB 754
          Author:   Muratsuchi (D)
          Amended:  5/20/13 in Assembly
          Vote:     21

           
           SENATE GOVERNANCE & FINANCE COMMITTEE  :  7-0, 6/26/13
          AYES:  Wolk, Knight, Beall, DeSaulnier, Emmerson, Hernandez, Liu
           
          SENATE APPROPRIATIONS COMMITTEE  :  4-0, 8/12/13
          AYES:  De León, Gaines, Hill, Steinberg
          NO VOTE RECORDED:  Walters, Lara, Padilla
           
          ASSEMBLY FLOOR  :  70-2, 5/23/13 - See last page for vote


            SUBJECT  :    Income taxes:  voluntary contributions:  California  
                      Beach and Coastal Enhancement Account

           SOURCE  :     Author


           DIGEST  :    This bill creates the Protect Our Coast and Oceans  
          Fund (Fund) check-off on the personal income tax form, when  
          space is available.  Contributions would support eligible  
          programs that receive grant funding through the California  
          Coastal Commission Whale Tail Grants Program (Program) and  
          related expenses.  

           ANALYSIS  :    Existing law allows taxpayers to contribute to one  
          or more of 18 voluntary contribution funds, VCFs or check-offs,  
          by checking a box on their state income tax return.  California  
          law requires contributions to be made from taxpayers' own  
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          resources and not from their tax liability, as is possible on  
          federal tax returns.  Check-off amounts may be claimed as  
          charitable contributions on taxpayers' tax returns in the  
          subsequent year.

          This bill creates the Fund check-off on the personal income tax  
          form, when space is available.  Contributions would support  
          eligible programs that receive grant funding through the Program  
          and related expenses.   This bill maintains all existing  
          requirements for the Program, including the annual reporting by  
          September 1 of each year to determine eligibility for the  
          following year, and the $250,000 minimum contribution  
          requirements, beginning in the second year, with annual  
          adjustment for inflation and an automatic repeal after five  
          years.

           Background 
           
          The Franchise Tax Board (FTB) designs tax returns to provide for  
          the designation of contributions to specified funds either on  
          the return itself or on a separate schedule that must be  
          attached to the return.  With a few exceptions, VCFs remain on  
          the return until they are repealed by a sunset date, or if they  
          fail to meet a minimum contribution amount.  Minimum  
          contribution amounts are adjusted annually for inflation, with  
          specific exceptions.  For most VCFs, the minimum contribution  
          amount is $250,000, beginning in the fund's second year.  

          By September 1 of each year, the FTB must determine the minimum  
          contribution amount required for each fund to remain on the form  
          for the following calendar year and estimate whether  
          contributions to each fund meet that amount.  If the FTB  
          estimates that a fund will fail to meet its minimum contribution  
          amount, that fund is repealed for the following calendar year. 

          The following check-offs do not have a minimum contribution  
          requirement:

             California Firefighters' Memorial Foundation Fund;
             California Peace Officer Memorial Foundation Fund, and
             California Seniors Special Fund.

          Proceeds from tax check-offs are dedicated to a range of  
          programs.  The following list provides information on all the  

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          check-offs and how many groups are eligible to receive funding.   
          Some of the funds have been repealed under the terms of their  
          statutes.


           --------------------------------------------------------------- 
          |       VCF        |     2012      |   Contribution Allotment   |
          |                  | Contribution  |                            |
          |                  |    Totals     |                            |
          |------------------+---------------+----------------------------|
          |ALS/Lou Gehrig's  |   $137,290    |As many as apply and        |
          |Disease Research  |               |receive grants provided for |
          |Fund              |               |by the monies contributed.  |
          |------------------+---------------+----------------------------|
          |Alzheimer's       |   $466,485    |As many as contract or      |
          |Disease/Related   |               |receive grants provided by  |
          |Disorders Fund    |               |the monies contributed.     |
          |------------------+---------------+----------------------------|
          |Arts Council Fund |   $165,647    |As many as apply and        |
          |                  |               |receive grants provided by  |
          |                  |               |the monies contributed.     |
          |------------------+---------------+----------------------------|
          |CA Breast Cancer  |   $440,771    |As many as apply and        |
          |Research Fund     |               |receive grants provided     |
          |                  |               |from the monies             |
          |                  |               |contributed.                |
          |------------------+---------------+----------------------------|
          |CA Cancer         |   $432,355    |As many as apply and        |
          |Research Fund     |               |receive grants provided     |
          |                  |               |from the monies             |
          |                  |               |contributed.                |
          |------------------+---------------+----------------------------|
          |CA Firefighters'  |   $152,004    |1 Group: California Fire    |
          |Memorial Fund     |               |Foundation.                 |
          |------------------+---------------+----------------------------|
          |CA Fund for       |   $272,742    |1 Group: California Senior  |
          |Senior Citizens   |               |Legislature.                |
          |------------------+---------------+----------------------------|
          |CA Peace Officer  |   $136,172    |1 Group: California Peace   |
          |Memorial          |               |Officer Memorial            |
          |Foundation Fund   |               |Commission.                 |
          |------------------+---------------+----------------------------|
          |CA Police         |    $67,202    |The state CALPAL and county |
          |Activities League |               |CALPAL chapters.            |

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          |(CALPAL) Fund     |               |                            |
          |------------------+---------------+----------------------------|
          |CA Sea Otter Fund |   $351,037    |Department of Fish and      |
          |                  |               |Wildlife, and as many as    |
          |                  |               |apply for grants and        |
          |                  |               |contracts provided for by   |
          |                  |               |50% of contributions.       |
          |------------------+---------------+----------------------------|
          |CA Seniors        |    $61,315    |The first $80K to the Area  |
          |Special Fund      |               |Agency on Aging Advisory    |
          |                  |               |Council of California and   |
          |                  |               |the rest to area agencies   |
          |                  |               |as allocated by the         |
          |                  |               |California Department of    |
          |                  |               |Aging.                      |
          |------------------+---------------+----------------------------|
          |CA YMCA Youth and |  Initial Tax  |The first $300K to the CA   |
          |Government Fund   |  Return 2012  |YMCA Youth and Government   |
          |                  |               |Program.  The rest is       |
          |                  |               |allocated in $10K annual    |
          |                  |               |grants to the: African      |
          |                  |               |American Leaders for        |
          |                  |               |Tomorrow Program, Asian     |
          |                  |               |Pacific Youth Leadership    |
          |                  |               |Project, Chicano Latino     |
          |                  |               |Youth Leadership Project.   |
          |                  |               |The money is to be used to  |
          |                  |               |support program             |
          |                  |               |participation.  Remaining   |
          |                  |               |funds allocated to the CA   |
          |                  |               |YMCA Youth and Government   |
          |                  |               |Program, whose board may    |
          |                  |               |award additional $10K       |
          |                  |               |annual grants to additional |
          |                  |               |nonprofit civic youth       |
          |                  |               |organizations. The funds    |
          |                  |               |distributed to the CA YMCA  |
          |                  |               |Youth and Government        |
          |                  |               |Program are to be used for  |
          |                  |               |program-related expenses.   |
          |------------------+---------------+----------------------------|
          |CA Youth          |  Initial Tax  |1 group: Department of      |
          |Leadership Fund   |  Return 2012  |Education to provide for    |
          |                  |               |the CA Youth Leadership     |

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          |                  |               |Project.                    |
          |------------------+---------------+----------------------------|
          |CA Veterans Homes |   $210,078    |The number of established   |
          |Fund              |               |veteran's homes (7).        |
          |------------------+---------------+----------------------------|
          |Child Victims of  |    $35,317    |As many counseling and      |
          |Human Trafficking |               |prevention centers that     |
          |Fund              |               |apply and receive grants    |
          |                  |               |provided from monies        |
          |                  |               |contributed.                |
          |------------------+---------------+----------------------------|
          |Emergency Food    |   $551,515    |1 group: Department of      |
          |for Families Fund |               |Social Services for the     |
          |                  |               |Emergency Food Assistance   |
          |                  |               |Program.                    |
          |------------------+---------------+----------------------------|
          |Municipal Shelter |   $244,701    |As many as apply and        |
          |Spay-Neuter Fund  |               |receive grants provided     |
          |                  |               |from the monies             |
          |                  |               |contributed.                |
          |------------------+---------------+----------------------------|
          |Rare & Endangered |   $558,681    |1 group: Department of Fish |
          |Species           |               |and Wildlife endangered     |
          |Preservation      |               |conservation programs.      |
          |Program           |               |                            |
          |------------------+---------------+----------------------------|
          |Safely            |   $158,645    |1 group: Department of      |
          |Surrendered Baby  |               |Social Services for Safely  |
          |Fund              |               |Surrender Baby Law          |
          |                  |               |awareness programs.         |
          |------------------+---------------+----------------------------|
          |School Supplies   |  Initial Tax  |As many as apply and        |
          |for Homeless      |  Return 2012  |receive grants provided for |
          |Children Fund     |               |by the monies contributed.  |
          |------------------+---------------+----------------------------|
          |State Children's  |   $376,243    |1 group: Department of      |
          |Trust for the     |               |Social Services for         |
          |Prevention of     |               |prevention and intervention |
          |Child Abuse       |               |programs.                   |
          |------------------+---------------+----------------------------|
          |State Parks       |  Initial Tax  |As many as purchase a parks |
          |Protection        |  Return 2012  |pass that can be provided   |
          |Fund/Parks Pass   |               |from the monies             |
          |Purchase          |               |contributed.                |

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          |                  |               |                            |
           --------------------------------------------------------------- 

           Related Legislation
           
          AB 247 (Wagner) extends the repeal date from 2015 to 2020 for  
          the California Fund for Senior Citizens tax check-off on the tax  
          form.

          AB 394 (Yamada) extends the repeal date of the California  
          Alzheimer's Disease and Related Disorders Research Fund tax  
          check-off on the tax form from 2015 to 2020.

          AB 511 (Pan) creates the American Red Cross, California Chapters  
          Fund check-off on the tax form. 

          AB 1286 (Skinner) temporarily suspends the annual inflation  
          adjustment for minimum contribution levels for the California  
          Breast Cancer Research Fund check-off on the tax form. 

          SB 116 (Liu) extends the repeal date from 2014 to 2019 for the  
          Emergency Food Assistance Program check-off on the tax form.  

          SB 571 (Price) creates the Art for Kids Fund check-off on the  
          tax form.  

           FISCAL EFFECT  :    Appropriation:  No   Fiscal Com.:  Yes    
          Local:  No

          According to the Senate Appropriations Committee, the FTB  
          estimates that this bill will result in an annual revenue loss  
          of $10,000 (General Fund) beginning in 2016-17.  FTB, the State  
          Controller's Office, and California Coastal Commission would be  
          reimbursed for related administrative costs.

           SUPPORT  :   (Verified  8/14/13)

          Boys & Girls Clubs of Greater Oxnard and Port Hueneme
          Conservation Corps
          Monterey Bay Aquarium

           OPPOSITION  :    (Verified  8/14/13)

          Department of Finance

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           ARGUMENTS IN SUPPORT  :    According to the author's office, the  
          California Coastal Commission's Whale Tail License Plate was  
          established as a mechanism through which the public can  
          contribute funds to coastal and marine education programs in  
          California.  A portion of the funds are distributed pursuant to  
          the Vehicles Code 5067 to the Coastal Commission for public  
          education programs, one of which is the Whale Tail Competitive  
          Grant Program. This bill allows taxpayers to make a contribution  
          toward coastal conservation when filing their state income tax  
          return.  Funds received would be deposited in the California  
          Beach and Coastal Enhancement Account for dispersal and would  
          ultimately go to the Program.

           ARGUMENTS IN OPPOSITION  :    The Department of Finance states,  
          "This bill is of limited value as there is nothing currently  
          preventing California taxpayers from contributing directly to  
          this cause if they so choose.  It is not clear that a special  
          preference should be given to the grants and programs supported  
          by this tax check-off, as compared to other organizations also  
          dedicated to preserving and enhancing California's coastal  
          resources.  This bill could result in a $10,000 annual General  
          Fund revenue loss beginning in 2014-15."

           ASSEMBLY FLOOR  :  70-2, 5/23/13
          AYES:  Achadjian, Alejo, Allen, Ammiano, Atkins, Bloom,  
            Blumenfield, Bocanegra, Bonilla, Bonta, Bradford, Brown,  
            Buchanan, Ian Calderon, Campos, Chau, Chesbro, Conway, Cooley,  
            Dahle, Daly, Dickinson, Eggman, Fong, Fox, Frazier, Beth  
            Gaines, Garcia, Gatto, Gomez, Gordon, Gorell, Gray, Hagman,  
            Hall, Harkey, Roger Hernández, Jones-Sawyer, Levine, Linder,  
            Logue, Lowenthal, Maienschein, Mansoor, Medina, Melendez,  
            Mitchell, Morrell, Mullin, Muratsuchi, Nazarian, Nestande,  
            Olsen, Pan, Perea, V. Manuel Pérez, Quirk, Quirk-Silva,  
            Rendon, Salas, Skinner, Stone, Ting, Wagner, Weber,  
            Wieckowski, Wilk, Williams, Yamada, John A. Pérez
          NOES: Chávez, Donnelly
          NO VOTE RECORDED:  Bigelow, Grove, Holden, Jones, Patterson,  
            Waldron, Vacancy, Vacancy


          AB:k  8/14/13   Senate Floor Analyses 

                           SUPPORT/OPPOSITION:  SEE ABOVE

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