BILL ANALYSIS Ó
SB 571
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Date of Hearing: June 24, 2013
ASSEMBLY COMMITTEE ON REVENUE AND TAXATION
Raul Bocanegra, Chair
SB 571 (Price) - As Amended: May 14, 2013
SENATE VOTE : 35-2
SUBJECT : Income taxes: voluntary contributions: Keep Arts in
Schools Fund
SUMMARY : Authorizes the addition of the Keep Arts in Schools
Fund (Fund) checkoff to the personal income tax (PIT) form upon
the removal of another voluntary contribution fund (VCF) from
the form. Specifically, this bill :
1)Provides that all money transferred to the Fund, upon
appropriation by the Legislature, shall be allocated to the:
a) Franchise Tax Board (FTB) and the State Controller for
reimbursement of all costs incurred administering the Fund;
and,
b) Arts Council, for allocation of grants to individuals or
organizations administering arts programs for children in
preschool through 12th grade pursuant to Government Code
(GC) Section 8753(o).
2)Specifies that the Fund provisions shall remain in effect only
until January 1 of the fifth taxable year following the Fund's
first appearance on the PIT return. However, if the FTB
determines that the amount of contributions estimated to be
received during a calendar year will not meet a minimum
contribution threshold, the provisions shall be inoperative
with respect to taxable years beginning on or after January 1
of that calendar year.
EXISTING LAW :
1)Allows taxpayers to contribute to one or more of the 18 VCFs
on the PIT return.
2)Provides a specific sunset date for each VCF, except for the
California Seniors Special Fund and the State Parks Protection
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Fund.
3)Requires each VCF to meet an annual minimum contribution
amount to remain in effect, except for the California Seniors
Special Fund, the California Firefighters' Memorial Fund, and
the California Peace Officer Memorial Foundation Fund.
4)Provides for an Arts Council composed of 11 members. Among
other things, the Arts Council is authorized, under GC Section
8753(o), to award prizes or direct grants to individuals or
organizations in accordance with applicable regulations.
FISCAL EFFECT : The FTB estimates that this bill would result in
annual General Fund revenue losses of $10,000 beginning in
fiscal year 2014-15.
COMMENTS :
1)The author has provided the following statement in support of
this bill:
SB 571 is necessary to allow California taxpayers an
opportunity to voluntarily contribute funds to a state
program that promotes and finances art education programs
in our public schools and communities throughout the state.
2)Proponents of this measure state:
The California Arts Council would administer the resources
collected in this fund to help ensure that every student
has access to the benefits of quality arts education. We
strongly support the mission and commitment of the Arts
Council and are working closely with them to build a broad
base of support for arts education. We support this
legislation as an additional means of increasing the
outreach efforts of the Arts Council.
3)Committee Staff Comments:
a) What does this bill do? : This bill authorizes the
addition of the Fund to the PIT return to support Arts
Council grants to arts programs for children. Provided
sufficient space is available, the Fund would first appear
on the 2013 PIT return filed on or after January 1, 2014.
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b) The Arts Council : As noted above, state law provides
for an Arts Council of 11 members. The Arts Council is
charged with encouraging artistic awareness, promoting the
employment of artists, and assisting independent local
groups in developing their own art programs. The Arts
Council is also tasked with awarding prizes and direct
grants to individuals and organizations.
c) Legislative history : SB 1076 (Price), Chapter 319,
Statutes of 2010, first authorized the addition of an "Arts
Council Fund" to the PIT return. As with the current
legislative proposal, moneys from this VCF were allocated
for grants to individuals and organizations administering
arts programs under GC Section 8753(o). The Arts Council
Fund first appeared on the 2010 PIT return and last
appeared on the 2011 return because the FTB determined that
contributions would fall below the required $250,000
minimum contribution amount for the 2012 calendar year.
Specifically, in 2012, the Arts Council Fund received valid
contributions totaling only $165,647, or $84,353 less than
the $250,000 minimum contribution threshold.
d) A second bite at the apple : This bill simply
reauthorizes a VCF that was previously removed from the PIT
return for lack of public support. While proponents may
argue that this Fund is likely to fare better with a new
name and in an improved economic climate, the Committee may
wish to consider the questionable precedent of simply
re-adding VCFs to the PIT return after they have failed to
garner sufficient financial support in the past.
e) So many causes, so little space : There are countless
worthy causes that would benefit from the inclusion of a
new VCF on the state's income tax returns. At the same
time, space on the return is limited. Thus, it could be
argued that the current system for adding VCFs to the form
is subjective and essentially rewards causes that can
convince the Legislature to include their fund on the form.
REGISTERED SUPPORT / OPPOSITION :
Support
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American Federation of State, County and Municipal Employees,
AFL-CIO
California Alliance for Arts Education
Opposition
None on file
Analysis Prepared by : M. David Ruff / REV. & TAX. / (916)
319-2098