BILL ANALYSIS Ó
AB 485
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Date of Hearing: April 20, 2015
ASSEMBLY COMMITTEE ON REVENUE AND TAXATION
Philip Ting, Chair
AB 485
(Williams) - As Amended March 26, 2015
Majority vote. Fiscal committee.
SUBJECT: Personal income taxes: voluntary contributions:
Prevention of Animal Homelessness and Cruelty Fund
SUMMARY: Authorizes the addition of the Prevention of Animal
Homelessness and Cruelty Fund (Fund) checkoff to the personal
income tax (PIT) return upon the removal of another voluntary
contribution fund (VCF) from the return, or as soon as space is
available. Specifically, this bill:
1)Establishes the Fund in the State Treasury.
2)Provides that all money transferred to the Fund, upon
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appropriation by the Legislature, shall be allocated to the:
a) Franchise Tax Board (FTB) and the State Controller for
reimbursement of all costs incurred in administering the
VCF; and,
b) Department of Food and Agriculture for the distribution
of grants to a city or county animal control agency or
shelter that is current on its reporting requirements to
the State Department of Public Health, Veterinary Public
Health Section.
3)Provides that funds obtained by a municipality under a grant
from the Fund may be used to pay for the following:
a) Programs designed to prevent and eliminate cat and dog
homelessness;
b) Research that explores novel approaches to preventing
and eliminating pet homelessness; and,
c) Prevention, investigation, and prosecution of animal
cruelty and neglect.
4)Provides that distributed grants may be paid to outside
agencies that are under contract or in a demonstrated
partnership with the municipality to conduct these activities.
5)Requires the Department of Food and Agriculture to award
grants through a competitive, project-specific grant process
and to oversee the grant program.
6)Specifies that a grantee shall not use a grant award for
administrative expenses or for any purpose outside of
California.
7)Provides for the Fund provisions' automatic sunset on either
January 1 of the fifth taxable year following the Fund's first
appearance on the PIT return or January 1, 2022, whichever
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occurs first.
8)Requires the Fund to meet a minimum contribution threshold of
$250,000 indexed for inflation.
EXISTING LAW:
1)Allows taxpayers to contribute to one or more of 18 VCFs on
the 2014 PIT return.
2)Provides a specific sunset date for each VCF, except for the
California Seniors Special Fund and the State Parks Protection
Fund.
3)Requires each VCF to meet an annual minimum contribution
amount to remain in effect, except for the California
Firefighters' Memorial Fund, the California Peace Officer
Memorial Foundation Fund, and the California Seniors Special
Fund.
FISCAL EFFECT: The FTB estimates annual revenue losses of
roughly $8,000 beginning in Fiscal Year 2016-17 resulting from
itemized deductions.
COMMENTS:
1)The author has provided the following statement in support of
this bill:
The goal of the new fund proposed in AB 485 is to appeal to
a wider selection of contributors by expanding the use of
fund dollars to include animal cruelty prevention and
investigation. In the face of recent animal cruelty cases
here in Sacramento and the resounding public outcry, there
is increased confidence that adding cruelty funding and
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response to the voluntary check off will draw new donors.
2)Committee Staff Comments
a) So many causes, so little space : There are countless
worthy causes that would benefit from the inclusion of a
VCF on the state's income tax returns. At the same time,
space on the returns is limited. Thus, it could be argued
that the current system for adding VCFs to the form is
subjective and essentially rewards organizations that can
convince the Legislature to include their fund on the form.
b) Legislative history : AB 2291 (Mendoza), Chapter 328,
Statutes of 2008, authorized the addition of the Municipal
Shelter Spay-Neuter Fund to the PIT return. This VCF
appeared on the 2008 and 2009 tax returns in calendar years
2009 and 2010 respectively. This VCF received $210,029 in
2009 and $194,462 in 2010. In 2010, the VCF needed to meet
a minimum contribution threshold of $250,000 but failed to
do so; and, as a result, the VCF ceased to be operative.
In 2011, the Legislature once again authorized the addition
of an identically named Municipal Shelter Spay-Neuter Fund
checkoff [AB 564 (Smyth), Chapter 549, Statutes of 2011].
Once again, this VCF was designed to provide funds for
low-cost or free spay-neuter services associated with
municipal shelters in California. Unfortunately, however,
this VCF fared little better than its predecessor.
Specifically, the VCF received $244,701 in 2012, $217,883
in 2013, and only $217,549 in 2014. Thus, the VCF once
again fell off the return for failing to meet its minimum
contribution threshold.
c) VCF policy : This Committee's VCF policy provides that
"[A]ll proponents seeking authorization for a new or
reauthorized checkoff shall provide information justifying
their expectation that the checkoff will meet its minimum
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contribution requirement." In addition, this Committee's
VCF policy states that "[C]heckoffs that have failed to
meet their minimum contribution requirement will not be
extended or reauthorized."
Given that two separate municipal shelter VCFs failed to
meet their minimum contribution thresholds within the last
few years, it is an open question whether this Fund will
fare any better. To this end, Committee staff questions
the precedent of simply re-establishing past VCFs when they
fail to garner sufficient support to remain on the form.
The author, however, notes that the previous VCFs were
exclusively focused on animal overpopulation, while this
Fund additionally authorizes grant moneys to be spent on
the prevention, investigation, and prosecution of cruelty
to animals. The author's office believes that, "there is
increased confidence that adding cruelty funding and
response to the voluntary check off will draw new donors."
d) Technical considerations :
i) This bill provides that grant moneys shall be
distributed to city or county animal control agencies or
shelters (emphasis added). In the remainder of this
bill, however, the language refers exclusively to
"municipalities" (e.g., funds obtained by a
"municipality" may be used for certain specified
purposes). The term "municipality", in turn, could be
read to apply only to cities and not counties. If the
intention is to allow grant moneys to be distributed to
counties as well as cities, technical amendments should
be adopted to make this intention clear.
ii) The reference to "initial return" on page 2, line
16, should be replaced with "original return".
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iii) The FTB has also suggested a set of technical
amendments in its staff analysis of this bill.
REGISTERED SUPPORT / OPPOSITION:
Support
None on file
Opposition
None on file
Analysis Prepared by:M. David Ruff / REV. & TAX. / (916)
319-2098
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