BILL ANALYSIS Ó
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|SENATE RULES COMMITTEE | SB 571|
|Office of Senate Floor Analyses | |
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UNFINISHED BUSINESS
Bill No: SB 571
Author: Liu (D), et al.
Amended: 8/22/13
Vote: 21
SENATE GOVERNANCE & FINANCE COMMITTEE : 6-1, 5/1/13
AYES: Wolk, Beall, DeSaulnier, Emmerson, Hernandez, Liu
NOES: Knight
SENATE APPROPRIATIONS COMMITTEE : 6-0, 5/20/13
AYES: De León, Walters, Gaines, Hill, Padilla, Steinberg
NO VOTE RECORDED: Lara
SENATE FLOOR : 35-2, 5/28/13
AYES: Beall, Berryhill, Block, Calderon, Cannella, Corbett,
Correa, De León, DeSaulnier, Emmerson, Evans, Fuller, Gaines,
Galgiani, Hancock, Hernandez, Hill, Hueso, Huff, Jackson,
Lara, Leno, Lieu, Liu, Nielsen, Padilla, Pavley, Price, Roth,
Torres, Walters, Wolk, Wright, Wyland, Yee
NOES: Anderson, Knight
NO VOTE RECORDED: Monning, Steinberg, Vacancy
ASSEMBLY FLOOR : 74-1, 9/3/13 - See last page for vote
SUBJECT : Income taxes: voluntary contributions: Keep Arts
in Schools
SOURCE : California Arts Council
DIGEST : This bill creates the Keep Arts in Schools Fund tax
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check-off on the personal income tax form.
Assembly Amendments change the author of the bill, add a
co-author, and make a technical change.
ANALYSIS : Existing state law allows taxpayers to contribute
money to one or more of 18 voluntary contribution funds (fund or
check-off) by checking a box on their state income tax return.
California law requires contributions made through check-offs to
be made from taxpayers' own 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 during the subsequent year.
This bill creates the Keep Arts in Schools Fund on the tax form
for the 2013 tax year filed on or after January 1, 2014. This
bill maintains all the existing requirements for the program
including the annual reporting by September 1st of each year to
determine eligibility for the following year, and the minimum
contribution requirements ($250,000 in the second year) adjusted
for inflation annually. This bill allows the Fund check-off to
remain on the tax return for five years unless a later enacted
statute deletes or extends the date.
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 either repealed or fail to meet their
minimum contribution amount. The minimum contribution amounts
are adjusted annually for inflation. For most check-offs, the
minimum contribution amount is $250,000 in the fund's second
year. By September 1st 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 whether estimated
contributions to each fund will be less than the minimum
contribution amount for that calendar year. If the FTB
estimates that a fund will fail to meet the minimum contribution
amount, that fund is repealed effective for taxable years
beginning on or after January 1st of the following calendar
year.
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The Arts Council Fund (SB 1076, Price, 2010), first appeared on
the 2010 return and last appeared on the 2011 return because the
FTB estimated that contributions to the Arts Council Fund would
fall below the required $250,000 minimum contribution amount for
the 2012 calendar year. By operation of law, the provision
creating the Arts Council Fund was repealed effective January 1,
2012, and this fund was removed from the 2012 income tax return.
Except for the California Senior Legislature (which is fully
funded by the check-off and operates in concert with the
Legislature), the proceeds from the check-offs either go to
quasi-government organizations or to non-profits as a
competitive grant.
The following list provides the current information on all the
check offs as well as how many groups are eligible to receive
the funds.
----------------------------------------------------------
|Voluntary | 2012 | Contribution Allotment |
|Contribution Fund |Contribution| |
| | Totals | |
| | | |
|-------------------+------------+-------------------------|
|ALS/Lou Gehrig's |$137,290 |As many as apply and |
|Disease Research | |receive grants that are |
|Fund | |provided for by the |
| | |monies contributed. |
| | | |
|-------------------+------------+-------------------------|
|Alzheimer's |$466,485 |As many as contract or |
|Disease/Related | |receive grants provided |
|Disorders Fund | |by the monies |
| | |contributed. |
| | | |
|-------------------+------------+-------------------------|
|Arts Council Fund |$165,647 |As many as apply and |
| | |receive grants provided |
| | |by the monies |
| | |contributed. |
| | | |
|-------------------+------------+-------------------------|
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|CA Breast Cancer |$440,771 |As many as apply and |
|Research Fund | |receive grants provided |
| | |from the monies |
| | |contributed. |
| | | |
|-------------------+------------+-------------------------|
|CA Cancer Research |$432,355 |As many as apply and |
|Fund | |receive grants provided |
| | |from the monies |
| | |contributed |
| | | |
|-------------------+------------+-------------------------|
|CA Firefighters' |$152,004 |1 Group: California Fire |
|Memorial Fund | |Foundation |
| | | |
|-------------------+------------+-------------------------|
|CA Fund for Senior |$272,742 |1 Group: California |
|Citizens | |Senior Legislature |
| | | |
|-------------------+------------+-------------------------|
|CA Peace Officer |$136,172 |1 Group: California |
|Memorial | |Peace Officer Memorial |
|Foundation Fund | |Commission |
| | | |
|-------------------+------------+-------------------------|
|CA Police |$67,202 |The state CALPAL and |
|Activities League | |county CALPAL chapters |
|(CALPAL) Fund | | |
| | | |
|-------------------+------------+-------------------------|
|CA Sea Otter Fund |$351,037 |Department of Fish and |
| | |Wildlife, and as many |
| | |that apply for grants |
| | |and contracts provided |
| | |for by 50% of the monies |
| | |contributed. |
| | | |
|-------------------+------------+-------------------------|
|CA Seniors Special |$61,315 |The first $80K to the |
|Fund | |Area Agency on Aging |
| | |Advisory Council of |
| | |California and the rest |
| | |to as many area agencies |
| | |that the California |
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| | |Department of Aging |
| | |allocates available |
| | |contributed monies to. |
| | | |
|-------------------+------------+-------------------------|
|CA YMCA Youth and |Initial Tax |The first $300K to the |
|Government Fund |Return 2012 |CA YMCA Youth and |
| | |Government Program and |
| | |the rest of the monies |
| | |allocated in $10K annual |
| | |grants as follows: |
| | |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. Any |
| | |remaining funds will be |
| | |allocated to the CA YMCA |
| | |Youth and Government |
| | |Program. The Board of |
| | |Directors for the CA |
| | |YMCA Youth and |
| | |Government Program 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 |
| | |Project. |
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| | | |
|-------------------+------------+-------------------------|
|CA Veterans Homes |$210,078 |The number of |
|Fund | |established 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 for |$551,515 |1 group: Department of |
|Families Fund | |social services for the |
| | |Emergency Food |
| | |Assistance Program. |
| | | |
|-------------------+------------+-------------------------|
|Municipal Shelter |$244,701 |As many shelters as |
|Spay-Neuter Fund | |apply and receive grants |
| | |provided from the monies |
| | |contributed. |
| | | |
|-------------------+------------+-------------------------|
|Rare & Endangered |$558,681 |1 group: Department of |
|Species | |Fish and Wildlife |
|Preservation | |endangered conservation |
|Program | |programs. |
| | | |
|-------------------+------------+-------------------------|
|Safely Surrendered |$158,645 |1 group: Department of |
|Baby Fund | |Social Services for |
| | |Safely Surrender Baby |
| | |Law awareness programs. |
| | | |
|-------------------+------------+-------------------------|
|School Supplies |Initial Tax |As many as apply and |
|for Homeless |Return 2012 |receive grants that are |
|Children Fund | |provided for by the |
| | |monies contributed. |
| | | |
|-------------------+------------+-------------------------|
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|State Children's |$376,243 |1 group: Department of |
|Trust for the | |Social Services for |
|Prevention of | |prevention and |
|Child Abuse | |intervention programs. |
| | | |
|-------------------+------------+-------------------------|
|State Parks |Initial Tax |As many as purchase a |
|Protection |Return 2012 |parks pass that are |
|Fund/Parks Pass | |provided for by the |
|Purchase | |monies contributed. |
| | | |
| | | |
----------------------------------------------------------
Comments
The author's office states that this bill 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.
Unfortunately, the California Arts Council (CAC) was added to
the tax form at a time the state was still experiencing an
economic recession and when overall charitable giving was
significantly down. Given these major obstacles, the CAC did
exceedingly well for a new "check off" on the income tax form.
Other challenges the organization experienced included: (1)
unfamiliarity by many tax payers with "Arts Council Fund" and
the CAC; (2) leadership changes; and (3) competition from better
known groups, all very worthy, some of whom have established
themselves on the tax form for many years.
The CAC compared contribution trends for the other designated
organizations listed on the income tax form during its second
and most critical year. Their research showed that many of the
other organizations saw a decrease in their "check off"
contributions as well. In other words, taxpayers were still
feeling squeezed by the economy and pulled back on their
philanthropic contributions. The fund will be renamed for
improved marketability.
This bill enables the CAC to raise additional funds so that they
can, in turn, support more of our constituents, communities,
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non-profit organizations, and most importantly, kids and schools
throughout the state.
Although Visual and Performing Arts are embodied in California's
Education code in a comprehensive way, schools are struggling
financially and arts programs are among the first
curriculum-based subjects to lose funding. Funding generated
pursuant to this bill will help to bring equity into classrooms
around the state by funding programs such as Teaching Artists
and arts education programs in districts where they are most
needed.
The highly acclaimed Poetry Out Loud program is another example
of a CAC program that inspires and engages students."
Related Legislation
SB 116 (Liu) extends the Emergency Food for Families fund
indefinitely with no sunset. This fund is one of the two most
successful funds 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 results in an annual revenue loss of
$10,000 (General Fund) beginning in 2014-15. FTB indicates that
this bill will not significantly impact its own costs.
SUPPORT : (Verified 9/3/13)
California Arts Council (source)
California Alliance for Arts Education
ASSEMBLY FLOOR : 74-1, 9/3/13
AYES: Achadjian, Alejo, Allen, Ammiano, Atkins, Bigelow, Bloom,
Bocanegra, Bonilla, Bonta, Bradford, Brown, Buchanan, Ian
Calderon, Campos, Chau, Chávez, Chesbro, Conway, Cooley, Daly,
Dickinson, Donnelly, Eggman, Fong, Fox, Frazier, Beth Gaines,
Garcia, Gatto, Gomez, Gonzalez, Gorell, Gray, Grove, Hagman,
Harkey, Roger Hernández, Holden, Jones-Sawyer, Levine, Linder,
Logue, Lowenthal, Maienschein, Mansoor, Medina, Melendez,
Mitchell, Morrell, Mullin, Muratsuchi, Nazarian, Nestande,
Olsen, Pan, Patterson, Perea, V. Manuel Pérez, Quirk,
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Quirk-Silva, Rendon, Salas, Skinner, Stone, Ting, Wagner,
Waldron, Weber, Wieckowski, Wilk, Williams, Yamada, John A.
Pérez
NOES: Jones
NO VOTE RECORDED: Dahle, Gordon, Hall, Vacancy, Vacancy
AB:d:n 9/3/13 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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