BILL ANALYSIS Ó
AB 485
Page 1
CONCURRENCE IN SENATE AMENDMENTS
AB
485 (Williams)
As Amended September 4, 2015
Majority vote
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|ASSEMBLY: | 77-0 |(May 7, 2015) |SENATE: | 39-0 |(September 9, |
| | | | | |2015) |
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Original Committee Reference: REV. & TAX.
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.
The Senate amendments:
1)Modify the distribution of Fund moneys. Specifically, the
Department of Food and Agriculture is directed to allocate
moneys as follows:
a) Up to 5% shall be used for the development of a
mechanism to provide ongoing public awareness through
activities that will promote the charitable tax deduction
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for the Fund and seek continued contributions, as
specified;
b) Up to $250,000 shall be distributed to a city, county,
or city and county animal control agency or shelter that is
current on its reporting requirements to the State
Department of Public Health, Veterinary Public Health
Section for the sole purpose of supporting spay and neuter
activities by that entity to prevent and eliminate cat and
dog homelessness; and,
c) The remaining moneys, if any, shall be used by programs
designed to prevent and eliminate cat and dog homelessness
or programs for the prevention, investigation, and
prosecution of animal cruelty and neglect. The grants are
to be distributed to a city, county, or city and county
animal control agency or shelter that is current on its
reporting requirements, a society for the prevention of
cruelty to animals affiliate, or a humane society
affiliate. A society for the prevention of cruelty to
animals affiliate or a humane society affiliate shall be a
California corporation, duly incorporated in the state of
California, in active status, as described on the business
search page of the Secretary of State's Internet Web site,
and exempt from federal income taxation as an organization
described in Internal Revenue Code Section 501(c)(3).
2)Specify that the Department of Food and Agriculture may
consult with the State Department of Public Health to develop
the grant process and the oversight of the grant program.
3)Provide that no Fund money shall be used to supplant state
General Fund money for any purpose.
EXISTING LAW:
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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.
AS PASSED BY THE ASSEMBLY, this bill:
1)Established the Fund in the State Treasury.
2)Provided 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 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)Provided 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.
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4)Provided 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)Required the Department of Food and Agriculture to award
grants through a competitive, project-specific grant process
and to oversee the grant program.
6)Specified that a grantee shall not use a grant award for
administrative expenses or for any purpose outside of
California.
7)Provided 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
occurs first.
8)Required the Fund to meet a minimum contribution threshold of
$250,000 indexed for inflation.
FISCAL EFFECT: According to the Senate Appropriations
Committee:
1)The FTB estimates that this bill would result in an annual
General Fund revenue loss of about $8,000.
2)The State Controller's Office and FTB would be reimbursed from
the Fund for related administrative costs.
3)The California Department of Food and Agriculture 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.
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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
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
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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: The Committee on Revenue and Taxation'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 contribution requirement."
In addition, the 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."
Analysis Prepared by:
M. David Ruff / REV. & TAX. / (916) 319-2098
FN:
0002230
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