Amended in Assembly April 7, 2015

Amended in Assembly March 26, 2015

California Legislature—2015–16 Regular Session

Assembly Bill No. 515

Introduced by Assembly Member Eggman

February 23, 2015

An act to amend Sections 17053.88 and 23688 of the Revenue and Taxation Code, and to amend Section 18995 of, and to amend the heading of Chapter 14.5 (commencing with Section 18995) of Part 6 of Division 9 of, the Welfare and Institutions Code, relating to food banks.

LEGISLATIVE COUNSEL’S DIGEST

AB 515, as amended, Eggman. Income taxes: credits: food bank donations.

(1) The Personal Income Tax Law and the Corporation Tax Law allow various credits against the taxes imposed by those laws, including, for taxable years beginning on or after January 1, 2012, and before January 1, 2017, a credit for qualified taxpayers, defined as the person responsible for planting a crop, managing the crop, and harvesting the crop from the land, in an amount equal to 10% of the cost that would otherwise be included in, or required to be included in, inventory costs, as specified under federal law, with respect to the donation of fresh fruits or fresh vegetables to food banks located in California.

This bill would, under both laws, expand the credit to apply to the donation of qualified donation items, defined as raw or processed agricultural products. The bill would expand the definition of qualified taxpayer to also include the person responsible for growing or raising a qualified donation item, or harvesting, packing, or processing a qualified donation item. The bill would modify the credit amount to instead equal 20% of the qualified value, as defined, of the qualified donation items. The bill would extend the operation of the credit to taxable years before January 1, 2024. The bill would make various conforming changes and would also make a nonsubstantive change to the personal income tax provision.

(2) Existing law requires the State Department of Social Services to establish and administer the State Emergency Food Assistance Program (SEFAP), to provide food and funding for the provision of emergency food to food banks, as provided. Existing law creates the State Emergency Food Assistance Program Account and would, upon appropriation by the Legislature, allocate the moneys in the account to SEFAP and require that those moneys be used for the purchase, storage, and transportation of food grown or produced in California and for the department’s administrative costs.

This bill would rename the State Emergency Food Assistance Program (SEFAP) as the CalFood Program and would rename the State Emergency Food Assistance Program Account as the CalFood Account. The bill would make other conforming changes in this regard.

Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: no.

The people of the State of California do enact as follows:

SECTION 1.  

Section 17053.88 of the Revenue and Taxation
Code is amended to read:

17053.88.  

(a) In the case of a qualified taxpayer that donates
to a food bank any qualified donation items that are accepted by
that food bank located in California under Chapter 5 (commencing
with Section 58501) of Part 1 of Division 21 of the Food and
Agricultural Code, for taxable years beginning on or after January
1, 2012, and before January 1, 2024, there shall be allowed, without
regard to the taxpayer’s method of accounting, as a credit against
the “net tax” (as defined by Section 17039), an amount equal to
20 percent of the qualified value of the qualified donation items,
but in no event shall this amount be less than the amount that would
otherwise be available under this section as added by Chapter 503
of the Statutes of 2011.

(b) For purposes of this section, the following definitions shall
apply:

(1) “Qualified donation item” means fresh fruits or fresh
vegetables and the following raw or processed agricultural
products:

(A) All of the following:

(i) “Fruits, nuts, or vegetables” as defined in Section 42510 of
the Food and Agricultural Code.

(ii) “Meat food product” as defined in Section 18665 of the
Food and Agricultural Code.

(iii) “Poultry” as defined in Section 18675 of the Food and
Agricultural Code.

(iv) “Eggs” as defined in Section 75027 of the Food and
Agricultural Code.

(v) “Fish” as defined in Section 58609 of the Food and
Agricultural Code.

(B) All of the following food as defined in Section 109935 of
the Health and Safety Code:

(i) Rice.

(ii) Beans.

(iii) Fruit, nuts, and vegetables in canned, frozen, dried,
dehydrated, and 100 percent juice forms.

(iv)  begin delete Cheese, milk (cow or goat), end delete begin insert Any cheese, milk, end insert yogurt, butter,
begin insert and end insert dehydrated begin delete milk, and infant formula from licensed sources. end delete
begin insert milk meeting the requirements in Division 15 (commencing with
Section 32501) of the Food and Agricultural Code. end insert

begin insert

(v) Infant formula subject to Section 114094.5 of the Health
and Safety Code.

end insert begin delete

(v)

end delete

begin insert (vi) end insert  Vegetable oil and olive oil.

begin delete

(vi)

end delete

begin insert (vii) end insert  Shelf stable ready-to-eat products, limited to soup, pasta
sauce, ketchup, salsa, and salad dressings.

begin delete

(vii)

end delete

begin insert (viii) end insert  Bread, pasta, or cereal.

begin delete

(viii)

end delete

begin insert (ix) end insert  Canned meats and canned seafood.

(2) “Qualified taxpayer” means the person responsible for
planting a crop, managing the crop, harvesting the crop from land,
growing or raising a qualified donation item, or harvesting,
packing, or processing a qualified donation item.

(3) “Qualified value” means either of the following:

(A) The qualified value shall be calculated by using the weighted
average wholesale sale price based on the qualified taxpayer’s
total wholesale sales of the donated item sold within the calendar
month of the qualified taxpayer’s donation.

(B) If no wholesale sales of the donated item have occurred in
the calendar month of the qualified taxpayer’s donation, the
qualified value shall be equal to the nearest regional wholesale
market price for the calendar month of the donation based upon
the same grade products as published by the United States
Department of Agriculture’s Agricultural Marketing Service, or
its successor. begin delete This subparagraph does not apply if the United States
Department of Agriculture’s Agricultural Marketing Service or its
successor requires payment for use of their services. end delete

(c) If the credit allowed by this section is claimed by the
qualified taxpayer, any deduction otherwise allowed under this
part for that amount of the cost paid or incurred by the qualified
taxpayer that is eligible for the credit shall be reduced by the
amount of the credit provided in subdivision (a).

(d) The donor shall provide to the food bank the qualified value
of the donation items and information regarding the origin of where
the donation items were grown, processed, or both grown and
processed. Upon receipt and acceptance of the donation items, the
food bank shall provide a certificate to the donor. The certificate
shall contain a statement signed and dated by a person authorized
by the food bank that the donation items are accepted under
Chapter 5 (commencing with Section 58501) of Part 1 of Division
21 of the Food and Agricultural Code. The certificate shall also
contain the type, grade, and quantity of items donated, the name
of the donor or donors, the name and address of the food bank,
and, as provided by the donor, the origin of the donated items, and
the qualified value of the donated items, as described in subdivision
(a). Upon the request of the Franchise Tax Board, the qualified
taxpayer shall provide a copy of the certification to the Franchise
Tax Board.

(e) In the case where the credit allowed by this section exceeds
the “net tax,” the excess may be carried over to reduce the “net
tax” in the following year, and for the six succeeding years if
necessary, until the credit has been exhausted.

(f) Using the information available to the Franchise Tax Board
from the certificates required under subdivision (d) and subdivision
(d) of Section 23688, the Franchise Tax Board shall report to the
Legislature on or before December 1, 2014, and each December
1 thereafter until the inoperative date specified in paragraph (2)
of subdivision (g), regarding the utilization of the credit authorized
by this section and Section 23688. The Franchise Tax Board shall
also include in the report the estimated value of the qualified
donation items, the origin of the qualified donation items, and the
month the donation was made.

(g) (1) A report required to be submitted pursuant to subdivision
(f) shall be submitted in compliance with Section 9795 of the
Government Code.

(2) The requirement for submitting a report imposed under
subdivision (f) is inoperative on January 1, 2023, pursuant to
Section 10231.5 of the Government Code.

(h) This section shall remain in effect only until December 1,
2024, and as of that date is repealed.

SEC. 2.  

Section 23688 of the Revenue and Taxation Code is
amended to read:

23688.  

(a) In the case of a qualified taxpayer that donates to
a food bank any qualified donation items that are accepted by that
food bank located in California under Chapter 5 (commencing
with Section 58501) of Part 1 of Division 21 of the Food and
Agricultural Code, for taxable years beginning on or after January
1, 2012, and before January 1, 2024, there shall be allowed, without
regard to the taxpayer’s method of accounting, as a credit against
the “tax” (as defined by Section 23036), an amount equal to 20
percent of the qualified value of the qualified donation items, but
in no event shall this amount be less than the amount that would
otherwise be available under this section as added by Chapter 503
of the Statutes of 2011.

(b) For purposes of this section, the following definitions shall
apply:

(1) “Qualified donation item” means fresh fruits or fresh
vegetables and the following raw or processed agricultural
products:

(A) All of the following:

(i) “Fruits, nuts, or vegetables” as defined in Section 42510 of
the Food and Agricultural Code.

(ii) “Meat food product” as defined in Section 18665 of the
Food and Agricultural Code.

(iii) “Poultry” as defined in Section 18675 of the Food and
Agricultural Code.

(iv) “Eggs” as defined in Section 75027 of the Food and
Agricultural Code.

(v) “Fish” as defined in Section 58609 of the Food and
Agricultural Code.

(B) All of the following food as defined in Section 109935 of
the Health and Safety Code:

(i) Rice.

(ii) Beans.

(iii) Fruit, nuts, and vegetables in canned, frozen, dried,
dehydrated, and 100 percent juice forms.

(iv)  begin delete Cheese, milk (cow or goat), end delete begin insert Any cheese, milk, end insert yogurt, butter,
begin insert and end insert dehydrated begin delete milk, and infant formula from licensed sources. end delete
begin insert milk meeting the requirements in Division 15 (commencing with
Section 32501) of the Food and Agricultural Code. end insert

begin insert

(v) Infant formula subject to Section 114094.5 of the Health
and Safety Code.

end insert begin delete

(v)

end delete

begin insert (vi) end insert  Vegetable oil and olive oil.

begin delete

(vi)

end delete

begin insert (vii) end insert  Shelf stable ready-to-eat products, limited to soup, pasta
sauce, ketchup, salsa, and salad dressings.

begin delete

(vii)

end delete

begin insert (viii) end insert  Bread, pasta, or cereal.

begin delete

(viii)

end delete

begin insert (ix) end insert  Canned meats and canned seafood.

(2) “Qualified taxpayer” means the person responsible for
planting a crop, managing the crop, harvesting the crop from land,
growing or raising a qualified donation item, or harvesting,
packing, or processing a qualified donation item.

(3) “Qualified value” means either of the following:

(A) The qualified value shall be calculated by using the weighted
average wholesale sale price based on the qualified taxpayer’s
total wholesale sales of the donated item sold within the calendar
month of the qualified taxpayer’s donation.

(B) If no wholesale sales of the donated item have occurred in
the calendar month of the qualified taxpayer’s donation, the
qualified value shall be equal to the nearest regional wholesale
market price for the calendar month of the donation based upon
the same grade products as published by the United States
Department of Agriculture’s Agricultural Marketing Service, or
its successor. begin delete This subparagraph does not apply if the United States
Department of Agriculture’s Agricultural Marketing Service or its
successor requires payment for use of their services. end delete

(c) If the credit allowed by this section is claimed by the
qualified taxpayer, any deduction otherwise allowed under this
part for that amount of the cost paid or incurred by the qualified
taxpayer that is eligible for the credit shall be reduced by the
amount of the credit provided in subdivision (a).

(d) The donor shall provide to the food bank the qualified value
of the donation items and information regarding the origin of where
the donation items were grown, processed, or both grown and
processed. Upon receipt and acceptance of the donation items, the
food bank shall provide a certificate to the donor. The certificate
shall contain a statement signed and dated by a person authorized
by the food bank that the donation items are accepted under
Chapter 5 (commencing with Section 58501) of Part 1 of Division
21 of the Food and Agricultural Code. The certificate shall also
contain the type, grade, and quantity of items donated, the name
of the donor or donors, the name and address of the food bank,
and, as provided by the donor, the origin of the donated items, and
the qualified value of the donated items, as described in subdivision
(a). Upon the request of the Franchise Tax Board, the qualified
taxpayer shall provide a copy of the certification to the Franchise
Tax Board.

(e) In the case where the credit allowed by this section exceeds
the “tax,” the excess may be carried over to reduce the “tax” in
the following year, and for the six succeeding years if necessary,
until the credit has been exhausted.

(f) This section shall remain in effect only until December 1,
2024, and as of that date is repealed.

SEC. 3.  

The heading of Chapter 14.5 (commencing with
Section 18995) of Part 6 of Division 9 of the Welfare and
Institutions Code is amended to read:

 

Chapter  14.5. The CalFood Program

 

SEC. 4.  

Section 18995 of the Welfare and Institutions Code is
amended to read:

18995.  

(a) On and after January 1, 2016, the State Emergency
Food Assistance Program (SEFAP), administered by the State
Department of Social Services, shall be renamed as the “CalFood
Program.” The CalFood Program shall provide food and funding
for the provision of emergency food to food banks established
pursuant to the federal Emergency Food Assistance Program (7
C.F.R. Parts 250 and 251) whose ongoing primary function is to
facilitate the distribution of food to low-income households.

(b) The CalFood Account is hereby established in the
Emergency Food Assistance Program Fund established pursuant
to Section 18852 of the Revenue and Taxation Code, and may
receive federal funds and voluntary donations or contributions.

(c) Notwithstanding Section 18853 of the Revenue and Taxation
Code, the following shall apply:

(1) All moneys received by the CalFood Account shall, upon
appropriation by the Legislature, be allocated to the State
Department of Social Services for allocation to the CalFood
Program and, with the exception of those contributions made
pursuant to Section 18851 of the Revenue and Taxation Code and
funds received through Parts 250 and 251 of Title 7 of the Code
of Federal Regulations, shall be used for the purchase, storage,
and transportation of food grown or produced in California. Storage
and transportation expenditures shall not exceed 10 percent of the
CalFood Program fund’s annual budget.

(2) Notwithstanding paragraph (1), funds received by the
CalFood Account shall, upon appropriation by the Legislature, be
allocated to the State Department of Social Services for allocation
to the CalFood Program as described in paragraph (1), and shall,
in part, be used to pay for the department’s administrative costs
associated with the administration of the CalFood Program.