BILL ANALYSIS Ó ----------------------------------------------------------------- |SENATE RULES COMMITTEE | AB 754| |Office of Senate Floor Analyses | | |1020 N Street, Suite 524 | | |(916) 651-1520 Fax: (916) | | |327-4478 | | ----------------------------------------------------------------- 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 CONTINUED AB 754 Page 2 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 With a few exceptions, VCFs remain on the return until they are repealed by a sunset date, or if they fail to meet a minimum contribution amount.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 CONTINUED AB 754 Page 3 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. | CONTINUED AB 754 Page 4 |(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 | CONTINUED AB 754 Page 5 | | |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. | CONTINUED AB 754 Page 6 | | | | --------------------------------------------------------------- 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 CONTINUED AB 754 Page 7 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 CONTINUED AB 754 Page 8 **** END **** CONTINUED