Amended in Assembly June 25, 2013

Amended in Senate May 14, 2013

Amended in Senate May 7, 2013

Senate BillNo. 571


Introduced by Senatorbegin delete Priceend deletebegin insert Liuend insert

February 22, 2013


An act to add and repeal Article 19 (commencing with Section 18891) of Chapter 3 of Part 10.2 of Division 2 of the Revenue and Taxation Code, relating to taxation.

LEGISLATIVE COUNSEL’S DIGEST

SB 571, as amended, begin deletePriceend delete begin insertLiuend insert. Income taxes: voluntary contributions: Keep Arts in Schools 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 Keep Arts in Schools 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 Arts Council for grants, as prescribed.

This bill would provide that these voluntary contribution provisions are 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on January 1 of the 5th taxable year following the taxable year the fund first appears on the tax return and repealed on December 1 of thatbegin delete taxableend delete year. The bill would further provide that these provisions are 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filed in that calendar year will be less than $250,000, or an adjusted amount for subsequent taxable years, and are repealed on December 1 of that calendar year.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:

P2    1

SECTION 1.  

Article 19 (commencing with Section 18891) is
2added to Chapter 3 of Part 10.2 of Division 2 of the Revenue and
3Taxation Code
, to read:

4 

5Article 19.  Keep Arts in Schools Fund
6

 

7

18891.  

(a) An individual may designate on the tax return that
8a contribution in excess of tax liability, if any, be made to the Keep
9Arts in Schools Fund established by Section 18892.

10(b) A contribution shall be in a full dollar amount and may be
11made individually by each signatory on a joint return.

12(c) A designation made under subdivision (a) shall be made for
13any taxable year on the original return for that taxable year, and
14once made shall be irrevocable. In the event that payments and
15credits reported on the return, together with any other credits
16associated with the taxpayer’s account do not exceed the taxpayer’s
17tax liability, if any, the return shall be treated as though no
18designation had been made. In the event that no designee is
19specified, the contribution shall, after reimbursement of the direct
20actual costs of the Franchise Tax Board for the collection and
21administration of funds under this article, be transferred to the
22General Fund.

23(d) If an individual designates a contribution to more than one
24account or fund listed on the tax return, and the amount available
25is insufficient to satisfy the total amount designated, the
26contribution shall be allocated among the designated accounts on
27a pro rata basis.

28(e) The Franchise Tax Board shall revise the form of the return
29to include a space labeled the “Keep Arts in Schools Fund” to
30allow for the designation permitted under subdivision (a). The
31form shall also include in the instructions information that the
32contribution may be in the amount of one dollar ($1) or more and
P3    1that the contribution shall be used by the Arts Council for the
2allocation of grants to individuals or organizations administering
3arts programs.

4(f) Notwithstanding any other provision, a voluntary contribution
5designation for the Keep Arts in Schools Fund shall not be added
6on the tax return until another voluntary contribution designation
7is removed.

8(g) A deduction shall be allowed under Article 6 (commencing
9with Section 17201) of Chapter 3 of Part 10 for any contribution
10made pursuant to subdivision (a).

11

18892.  

There is hereby established in the State Treasury the
12Keep Arts in Schools Fund to receive contributions made pursuant
13to Section 18891. The Franchise Tax Board shall notify the
14Controller of both the amount of money paid by taxpayers in excess
15of their tax liability and the amount of refund money that taxpayers
16have designated pursuant to Section 18891 to be transferred to the
17Keep Arts in Schools Fund. The Controller shall transfer from the
18Personal Income Tax Fund to the Keep Arts in Schools Fund an
19amount not in excess of the sum of the amounts designated by
20individuals pursuant to Section 18891 for payment into that fund.

21

18893.  

All money transferred to the Keep Arts in Schools Fund,
22upon appropriation by the Legislature, shall be allocated as follows:

23(a) To the Franchise Tax Board and the Controller only for
24reimbursement of all costs incurred by the Franchise Tax Board
25and the Controller in connection with their duties under this article.

26(b) (1) To the Arts Council, for allocation of grants to
27individuals or organizations administering arts programs for
28children in preschool through 12th grade pursuant to subdivision
29(o) of Section 8753 of the Government Code.

30(2) Funds made available to the Arts Council shall not be used
31for any purpose other than to provide grants as prescribed by this
32subdivision. Funds made available pursuant to this subdivision
33shall not be used by the Arts Council for administrative purposes,
34to reimburse its costs associated with administering grants, to
35further its programs, or for any purpose relating to its own
36operations.

37

18894.  

(a) Except as otherwise provided in subdivision (b),
38this article shall remain in effect only until January 1 of the fifth
39taxable year following the first appearance of the Keep Arts in
P4    1Schools Fund on the personal income tax return, and is repealed
2as of December 1 of thatbegin delete taxableend delete year.

3(b) (1) By September 1 of the second calendar year and each
4subsequent calendar year that the Keep Arts in Schools Fund
5appears on the tax return, the Franchise Tax Board shall do all of
6the following:

7(A) Determine the minimum contribution amount required to
8be received during the next calendar year for the fund to appear
9on the tax return for the taxable year that includes that next calendar
10year.

11(B) Determine whether the amount of contributions estimated
12to be received during the calendar year will equal or exceed the
13minimum contribution amount determined by the Franchise Tax
14Board for the calendar year pursuant to subparagraph (A). The
15Franchise Tax Board shall estimate the amount of contributions
16to be received by using the actual amounts received and an estimate
17of the contributions that will be received by the end of that calendar
18 year.

19(2) If the Franchise Tax Board determines that the amount of
20the contributions estimated to be received during a calendar year
21will not at least equal the minimum contribution amount for the
22calendar year, this articlebegin delete isend deletebegin insert shall beend insert inoperative with respect to
23taxable years beginning on or after January 1 of that calendar year,
24and shall be repealed on December 1 of thatbegin delete calendarend delete year.

25(3) For purposes of this section, the minimum contribution
26amount for a calendar year means two hundred fifty thousand
27dollars ($250,000) for the second calendar year after the first
28appearance of the Keep Arts in Schools Fund on the personal
29income tax return or thebegin delete adjustedend delete minimum contribution amount
30begin insert asend insert adjusted pursuant to subdivision (c).

31(c) For each calendar year, beginning with the third calendar
32year after the first appearance of the Keep Arts in Schools Fund
33on the personal income tax return, the Franchise Tax Board shall
34adjust, on or before September 1 of that calendar year, the
35minimum contribution amount specified in subdivision (b) as
36follows:

37(1) The minimumbegin delete estimatedend delete contribution amount for the calendar
38year shall be an amount equal to the product of the minimum
39begin deleteestimatedend delete contribution amount for thebegin insert priorend insert calendar year
40multiplied by the inflation factor adjustment as specified in
P5    1subparagraph (A) of paragraph (2) of subdivision (h) of Section
217041, rounded off to the nearest dollar.

3(2) The inflation factor adjustment used for the calendar year
4shall be based on the figures for the percentage change in the
5California Consumer Price Index for all items received on or before
6August 1 of the calendar year pursuant to paragraph (1) of
7subdivision (h) of Section 17041.

8(d) Notwithstanding the repeal of this article, any contribution
9amounts designated pursuant to this article prior to its repeal shall
10continue to be transferred and disbursed in accordance with this
11article as in effect immediately prior to that repeal.



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