BILL ANALYSIS Ó
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|SENATE RULES COMMITTEE | AB 515|
|Office of Senate Floor Analyses | |
|(916) 651-1520 Fax: (916) | |
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THIRD READING
Bill No: AB 515
Author: Eggman (D), et al.
Amended: 8/17/15 in Senate
Vote: 21
SENATE GOVERNANCE & FIN. COMMITTEE: 7-0, 7/1/15
AYES: Hertzberg, Nguyen, Beall, Hernandez, Lara, Moorlach,
Pavley
SENATE APPROPRIATIONS COMMITTEE: 7-0, 8/27/15
AYES: Lara, Bates, Beall, Hill, Leyva, Mendoza, Nielsen
ASSEMBLY FLOOR: 78-0, 6/1/15 - See last page for vote
SUBJECT: Income taxes: credits: food bank donations
SOURCE: Author
DIGEST: This bill expands the existing food donation tax credit
program, under the Personal Income Tax Law and Corporation Tax
Law, for contributions of qualified donation items to a food
bank.
ANALYSIS:
Existing law:
1)Allows various income tax credits, deductions, and sales and
use tax exemptions to provide incentives to compensate
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taxpayers that incur certain expenses, such as child adoption,
or to influence behavior, including business practices and
decisions, such as research and development credits.
2)Allows a 10% tax credit for the donation of fresh fruits or
fresh vegetables to food banks located in California.
3)Requires the Department of Finance to annually publish a list
of tax expenditures.
This bill:
1)Allows a 15% credit under the Personal Income Tax Law and
Corporation Tax Law for contributions of qualified donation
items to a food bank.
2)Defines qualified taxpayer as a 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)Lists the following items as qualified donation items under
this bill, as defined in the Food and Agriculture Code:
Fruits, nuts, or vegetables.
Meat food product.
Poultry.
Eggs.
Fish.
Rice and beans.
Fruit, nuts, and vegetables in canned, frozen, dried,
dehydrated, and 100 percent juice forms.
Any cheese, milk, yogurt, butter, and dehydrated milk.
Infant formula.
Vegetable oil and olive oil.
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Soup, pasta sauce, and salsa.
Bread and pasta.
Canned meats and canned seafood.
1)Provides that the allowed credit would be calculated, not
according to inventory costs, but rather as 15% of the
qualified value of the qualified donation items. 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 donation. If no wholesale sales of the
donated item have occurred in the calendar month of the
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.
2)Requires the donor to provide the food bank, the qualified
value, and information regarding where the donation items were
grown and processed. Upon receipt and acceptance of the
donations, the food bank will provide to the donor a
certificate with information, as specified.
3)Requires the Franchise Tax Board (FTB) to include in its
annual report the estimated value of the qualified donation
items, the origin of the qualified donation items, and the
month the donations were made.
4)Renames the State Emergency Food Assistance Program (SEFAP) as
the CalFood Program (CFP). Requires the CFP to provide food
and funding for the provision of emergency food to food banks
established pursuant to the federal Emergency Food Assistance
Program. Specifies that all monies received by the CFP, upon
appropriation by the Legislature, must be allocated to the
Department of Social Services (DSS) for allocation to the CFP.
5)Applies to taxable years beginning on or after January 1,
2016, and before January 1, 2021.
Comments
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1)Author's statement. According to the author, "California is
the leader agricultural producer in the U.S., yet many
Californians still suffer from hunger and poor nutrition. AB
515 will broaden the existing state tax credit offered to
agricultural producers for donations to qualified California
non-profits, such as food banks. It expands the list of
eligible products to include other fresh items and a limited
set of core shelf-stable items. It also moves the tax credit
to 20% of the donation items wholesale value, and extends the
sunset of this program to 2021."
2)Legitimate need. According to the California Association of
Food Banks (CAFB), California is ranked 19th for food
insecurity in the nation with a food insecurity rate of 16.2%,
translating into 6.1 million Californians with, on average,
one out of six people in California not knowing where their
next meal will come from. All the more troubling is that the
child food insecurity rate is 26.3%, meaning 2.4 million
children in California go to bed hungry each night. CAFB
represents 42 food banks throughout California that provide
food to soup kitchens and food pantries in schools, churches,
and community and senior centers. CAFB partners with over 100
California growers and packers and has distributed 140 million
pounds of food to people in need.
3)The right incentive? Each year, more and more interest groups
are seeking ways to increase funding through alternative means
such as tax check-offs and tax credits. Tax credits are
generally used to change or influence behavior for an intended
statewide impact.
4)Section 41 shall not apply. On September 29, 2014, Governor
Brown signed SB 1335 (Leno, Chapter 845, Statutes of 2014),
which added R&TC Section 41. SB 1335 recognized that the
Legislature should apply the same level of review used for
government spending programs to tax preference programs,
including tax credits. Thus, Section 41 requires any bill
introduced on or after January 1, 2015, that allows a new
income tax credit to contain specific goals, purposes, and
objectives that the tax credit will achieve. In addition,
Section 41 requires detailed performance indicators for the
Legislature to use when measuring whether the tax credit meets
the goals, purposes, and objectives. This bill provides that
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R&TC Section 41 shall not apply to this credit.
FISCAL EFFECT: Appropriation: No Fiscal
Com.:YesLocal: No
According to the Senate Appropriations Committee:
1)The FTB estimates that this bill will result in a General Fund
revenue loss of $400,000 in 2015-16, $1.0 million in 2016-17,
and $1.4 million in 2017-18.
2)FTB would incur minor costs to administer changes to systems
and procedures.
3)Costs to the DSS would be unchanged. DSS costs are reimbursed
with federal funds received under the program.
SUPPORT: (Verified 8/27/15)
Alameda County Community Food Bank
California Association of Food Banks
California Bean Shippers Association
California Catholic Conference, Inc.
California Cattlemen's Association
California Citrus Mutual
California Farm Bureau Federation
California Food Policy Advocates
California Fresh Fruit Association
California Head Start Association
California Hunger Action Coalition
California League of Food Processors
Californians Against Waste
Center for Human Services
Community Action Agency of Butte County
Community Action Partnership of Kern County
Community Action Partnership of Orange County
Community Food and Justice Coalition
Community Food Bank of Fresno
County of Tulare
Deardorff Family Farms
East Valley Business Legislative Advocacy Council
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Emergency Food Bank of Stockton
Feeding America - Riverside/San Bernardino Counties
Feeding America San Diego
FIND Food Bank, Riverside
Food Access Coalition - Orange County
Food Bank Coalition of San Luis Obispo County
Food Bank of Contra Costa & Solano Counties
Food Bank of El Dorado County
Food Bank of Santa Barbara County
Food for People, Inc., Humboldt
Food Share, Inc., Ventura
FoodLink for Tulare County
Fowler Packing
Hunger Advocacy Network
Imperial Valley Food Bank
Interfaith Council of Amador
Jewish Family Service of Los Angeles
Los Angeles Regional Food Bank
Lundberg Family Farms
Marin Organic
Mazon - A Jewish Response to Hunger
Natural Resources Defense Council
Prima Frutta Packing, Inc.
Prima Noce Packing
Redwood Empire Food Bank
Resource Connection Food Bank, Calaveras
Roots of Change
Sacramento Food Bank & Family Services
San Diego Food System Alliance
San Diego Hunger Coalition
San Luis Obispo County Food System Coalition
Second Harvest Food Bank - San Joaquin & Stanislaus Counties
Second Harvest Food Bank - San Jose & San Carlos
Second Harvest Food Bank - Santa Cruz County
Second Harvest Food Bank of Orange County
SF-Marin Food Bank
Sierra Orchards
SoCal Harvest, Long Beach
St. Anthony's Foundation, San Francisco
The Jacobs & Cushman San Diego Food Bank
Van Groningen & Sons, Inc.
Western Center on Law and Poverty
Western Growers Association
Western United Dairymen
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Yolo Food Bank
OPPOSITION: (Verified8/27/15)
California Department of Finance
ARGUMENTS IN SUPPORT: The supporters of this bill argue that
this bill will increase access to healthy foods for low income
Californians. Further, this bill will help to reduce food
insecurity in this state.
ARGUMENTS IN OPPOSITION: The opponent of this bill argues
that this bill will reduce General Fund revenues and find that
valuing items at wholesale value is problematic.
ASSEMBLY FLOOR: 78-0, 6/1/15
AYES: Achadjian, Alejo, Travis Allen, Baker, Bigelow, Bloom,
Bonilla, Bonta, Brough, Brown, Burke, Calderon, Campos, Chang,
Chau, Chávez, Chiu, Chu, Cooley, Cooper, Dababneh, Dahle,
Daly, Dodd, Eggman, Frazier, Beth Gaines, Gallagher, Cristina
Garcia, Eduardo Garcia, Gatto, Gipson, Gomez, Gonzalez,
Gordon, Gray, Grove, Hadley, Harper, Roger Hernández, Holden,
Irwin, Jones, Jones-Sawyer, Kim, Lackey, Levine, Linder,
Lopez, Low, Maienschein, Mathis, Mayes, McCarty, Medina,
Melendez, Mullin, Nazarian, O'Donnell, Olsen, Patterson,
Perea, Quirk, Rendon, Ridley-Thomas, Rodriguez, Salas,
Santiago, Steinorth, Mark Stone, Thurmond, Ting, Wagner,
Waldron, Weber, Wilk, Williams, Atkins
NO VOTE RECORDED: Obernolte, Wood
Prepared by:Myriam Bouaziz / GOV. & F. / (916) 651-4119
8/31/15 12:47:58
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