BILL ANALYSIS Ó
SENATE COMMITTEE ON APPROPRIATIONS
Senator Ricardo Lara, Chair
2015 - 2016 Regular Session
AB 485 (Williams) - Personal income taxes: voluntary
contributions: Prevention of Animal Homelessness and Cruelty
Fund.
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|Version: June 19, 2015 |Policy Vote: GOV. & F. 7 - 0 |
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|Urgency: No |Mandate: No |
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|Hearing Date: August 17, 2015 |Consultant: Robert Ingenito |
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This bill meets the criteria for referral to the Suspense File.
Bill
Summary: AB 485 would authorize the addition of the Prevention
of Animal Homelessness and Cruelty Fund (Fund) check-off to the
personal income tax return.
Fiscal
Impact:
The Franchise Tax Board (FTB) estimates that this bill would
result in an annual General Fund revenue loss of about $8,000.
The State Controller's Office (SCO) and FTB and would be
reimbursed from the Fund for related administrative costs.
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The California Department of Food and Agriculture (CDFA) would
incur first-year General Fund costs of $66,000, and ongoing
annual costs of $125,000. The specific timing of these
expenses would depend on when the check-off were to appear on
the tax form.
Background: Current law allows taxpayers to contribute money to one or
more of 18 voluntary contribution funds during the process of
filing their state income tax return (tax check-off). These
contributions are made from taxpayers' own resources, not from
their tax liability, as is the case with federal tax returns.
Check-off amounts are deductible as charitable contributions on
taxpayers' returns during the subsequent tax year. With some
exceptions, each voluntary contribution fund has a sunset date
and is required to meet a minimum contribution amount of
$250,000, adjusted annually for inflation.
Proposed Law:
This bill would (1) add the Prevention of Animal Homelessness
and Cruelty Fund (Fund), and (2) allow a taxpayer to make a
voluntary contribution to the Fund on the state personal income
tax return, beginning once an existing check-off for charitable
fund contribution has been removed, or as soon as space is
available. The bill would require the Fund to meet a minimum
contribution threshold of $250,000, indexed yearly for
inflation. All money transferred to the Fund, upon appropriation
by the Legislature, would be allocated as follows:
To FTB and SCO for reimbursement of administrative
costs.
The first $250,000 would be distributed by CDFA to a
city, county, or city and county animal control agency or
for the sole purpose of supporting spay and neuter
activities to prevent and eliminate cat and dog
homelessness.
Any amount collected over $250,000 would be distributed
by CDFA to be used by programs designed to prevent and
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eliminate cat and dog homelessness or programs for the
prevention, investigation, and prosecution of animal
cruelty and neglect.
The bill would automatically sunset on January 1 of the fifth
taxable year following the Fund's first appearance on the
personal income tax form, or January 1, 2022, whichever occurs
first.
Staff
Comments: FTB data indicate that roughly one-half of taxpayers
who contribute to the Fund itemize their deductions. The average
tax rate for these taxpayers is about six percent, which
produces the $9,000 annual revenue loss. In 2012, about 89,000
out of 15 million taxpayers (or less than one percent) utilized
one or more of the 18 check-offs; aggregate contributions
totaled $4.8 million.
A similar tax checkoff, the Municipal Shelter Spay-Neuter Fund,
appeared on the 2008 and 2009 tax returns. This fund received
$210,029 in 2009 and $194,462 in 2010. Because the fund failed
to meet the minimum contribution threshold in 2010, FTB removed
the fund from the income tax return form.
CDFA's costs would result from the bill's workload requirements
that kick in once the Fund contributions exceed $250,000. These
costs would not occur until threshold is exceeded; thus, until
the Fund reaches $250,000, the bill would not have a fiscal
impact to CDFA. At that time, however, the Department would be
required to establish a new competitive grant program, evaluate
grant applications and distribute grant funds to eligible
municipal shelters. The workload to implement the competitive
grant program would be dependent on the number of grants and the
overall size of the program. CDFA estimates it would require one
position and basic operating expenses at a total annual cost of
$125,000.
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