California Legislature—2015–16 Regular Session

Assembly BillNo. 976


Introduced by Assembly Member Steinorth

February 26, 2015


An act to add and repeal Section 17239 of, and to add and repeal Article 18 (commencing with Section 18887) of Chapter 3 of Part 10.2 of Division 2 of, the Revenue and Taxation Code, relating to taxation.

LEGISLATIVE COUNSEL’S DIGEST

AB 976, as introduced, Steinorth. Personal income tax: deductions: pet adoption costs: voluntary contributions.

(1) The Personal Income Tax Law, in modified conformity with federal income tax laws, allows various deductions in computing the income that is subject to the taxes imposed by that law, including miscellaneous itemized deductions that are allowed only to the extent that the aggregate amount of those deductions exceed 2% of adjusted gross income.

This bill, for taxable years beginning on or after January 1, 2016, and before January 1, 2021, would allow a deduction, not to exceed $100, under that law for the qualified costs paid or incurred by a taxpayer for the adoption of a pet from a qualified animal rescue organization.

(2) Existing law authorizes an individual to contribute amounts in excess of his or her personal income tax liability for the support of specified funds.

This bill would allow an individual to designate on his or her tax return that a specified amount in excess of his or her tax liability be transferred to the Pet Adoption Cost Deduction Fund, which would be created by this bill. The bill would prohibit a voluntary contribution designation for the Pet Adoption Cost Deduction Fund from being added on the tax return until another voluntary contribution designation is removed.

The bill would require moneys in the Pet Adoption Cost Deduction Fund, upon appropriation by the Legislature, to be allocated to the Franchise Tax Board, to the Controller for reimbursement of losses in connection with providing personal income tax deductions for pet adoptions, as provided, and the balance to the Department of Food and Agriculture for the distribution of grants to eligible municipal shelters, as defined, for the purpose of providing food and shelter to abandoned and impounded animals, as specified.

The bill would provide that these provisions would remain in effect only until January 1 of the 5th taxable year following the first appearance of the Pet Adoption Cost Deduction Fund on the tax return, but would further provide for an earlier repeal if the Franchise Tax Board determines that the amount of contributions estimated to be received during a calendar year will not at least equal the minimum contribution amount, as defined, for that calendar year, in which case these provisions would be repealed on December 1 of that year.

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

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

P2    1

SECTION 1.  

Section 17239 is added to the Revenue and
2Taxation Code
, to read:

3

17239.  

(a) For each taxable year beginning on or after January
41, 2016, and before January 1, 2021, there shall be allowed as a
5deduction an amount equal to the qualified costs paid or incurred
6during the taxable year by a taxpayer for the adoption of a pet from
7a qualified animal rescue organization.

8(b) For the purposes of this section, the following definitions
9shall apply:

10(1) “Pet” means an animal adopted from a qualified animal
11rescue organization that is not used by the taxpayer in a trade or
12business or for the production of income.

13(2) “Qualified animal rescue organization” means a public
14animal control agency or shelter, humane society shelter, or rescue
15group.

P3    1(3) “Qualified costs” means amounts paid or incurred to a
2qualified animal rescue organization to adopt a pet, not to exceed
3one hundred dollars ($100).

4(4) “Rescue group” means an organization exempt from federal
5income taxation as, an organization described in Section 501(c)(3)
6of the Internal Revenue Code, whose primary purpose is the
7placement of dogs, cats, or other animals that have been removed
8from a public animal control agency or shelter, society for the
9prevention of cruelty to animals shelter, or humane society, or that
10have been surrendered or relinquished to the rescue group by the
11previous owner.

12(c) The deduction allowed under this section for a taxable year
13shall not exceed one hundred dollars ($100).

14(d) This section shall remain in effect only until December 1,
152021, and as of that date is repealed.

16

SEC. 2.  

Article 18 (commencing with Section 18887) is added
17to Chapter 3 of Part 10.2 of Division 2 of the Revenue and Taxation
18Code
, to read:

19 

20Article 18.  Pet Adoption Cost Deduction Fund
21

 

22

18887.  

(a) An individual may designate on the tax return that
23a contribution in excess of the tax liability, if any, be made to the
24Pet Adoption Cost Deduction Fund established by Section 18888.
25That designation is to be used as a voluntary contribution on the
26tax return.

27(b) The contributions shall be in a full dollar amount and may
28be made individually by each signatory on a joint return.

29(c) A designation under subdivision (a) shall be made for a
30taxable year on the original return for that taxable year, and once
31made shall be irrevocable. If payments and credits reported on the
32return, together with any other credits associated with the
33individual’s account, do not exceed the individual’s liability, if
34any, the return shall be treated as though no designation has been
35made. If a contribution is not specified, but a designee is not
36specified, the contribution shall be transferred to the General Fund
37after reimbursement of the direct actual costs of the Franchise Tax
38Board for the collection and administration of funds under this
39article.

P4    1(d) If an individual designates a contribution to more than one
2account or fund listed on the tax return, and the amount available
3is insufficient to satisfy the total amount designated, the
4contribution shall be allocated among the designees on a pro rata
5basis.

6(e) The Franchise Tax Board shall revise the form of the return
7to include a space labeled “Pet Adoption Cost Deduction Fund”
8to allow for the designation permitted under subdivision (a). The
9form shall also include in the instructions information that the
10 contribution may be in the amount of one dollar ($1) or more and
11that the contribution shall be used to reimburse the California State
12General Fund for the reduction in receipts attributable to the Pet
13Adoption Fee Deduction allowed pursuant to Section 17239, with
14any contributions in excess of the reduction in receipts used to
15provide grants to eligible municipal shelters for the purpose of
16providing food and shelter to abandoned and impounded animals,
17as described in Section 18889.

18(f) Notwithstanding any other law, a voluntary contribution
19designation for the Pet Adoption Cost Deduction Fund shall not
20be added on the tax return until another voluntary contribution
21designation is removed.

22(g) A deduction shall be allowed under Article 6 (commencing
23with Section 17201) of Chapter 3 of Part 10 for any contribution
24made pursuant to subdivision (a).

25

18888.  

There is hereby established in the State Treasury the
26Pet Adoption Cost Deduction Fund to receive contributions made
27pursuant to Section 18887. The Franchise Tax Board shall notify
28the Controller of both the amount of money paid by taxpayers in
29excess of their tax liability and the amount of refund money that
30taxpayers have designated pursuant to Section 18887 to be
31transferred to the Pet Adoption Cost Deduction Fund. The
32Controller shall transfer from the Personal Income Tax Fund to
33the Pet Adoption Cost Deduction Fund an amount not in excess
34of the sum of the amounts designated by individuals pursuant to
35Section 18887 for payment into that fund.

36

18889.  

All moneys transferred to the Pet Adoption Cost
37Deduction Fund, upon appropriation by the Legislature, shall be
38allocated as follows:

P5    1(a) To the Franchise Tax Board and the Controller for
2reimbursement of all costs incurred by the Franchise Tax Board
3and the Controller in connection with their duties under this article.

4(b) To the Controller for reimbursement of all losses incurred
5by the General Fund in connection with providing tax deductions
6for pet adoptions pursuant to Section 17239.

7(c) (1) To the Department of Food and Agriculture for
8distribution of grants to eligible municipal shelters for the purpose
9of providing food and shelter to abandoned and impounded
10animals. The department may use up to 5 percent of the money
11allocated to municipal shelters for administrative costs incurred
12in connection with the Pet Adoption Fee Deduction Fund.

13(2) For the purposes of this article, “eligible municipal shelter”
14means a city or county animal control agency or shelter that is
15current on its reporting requirements to the State Department of
16Public Health, Veterinary Public Health Section. The State
17Department of Public Health shall, upon the written request of the
18Department of Food and Agriculture, make available information
19regarding whether a city or county animal control agency or shelter
20is current on its reporting requirements pursuant to this paragraph.

21(3) The Department of Food and Agriculture shall do all of the
22following with respect to the distribution of grants:

23(A) Accept applications for grants from eligible municipal
24shelters.

25(B) Process and approve, or reject all applications on a
26first-come-first-served basis, in the following manner:

27(i) Eligible municipal shelters processing fewer than 5,000 dogs
28and cats each year shall receive up to seven thousand five hundred
29dollars ($7,500), if funds are available.

30(ii) Eligible municipal shelters processing between 5,000 and
3125,000 dogs and cats each year shall receive up to fifteen thousand
32dollars ($15,000), if funds are available.

33(iii) Eligible municipal shelters processing more than 25,000
34dogs and cats shall receive up to twenty-two thousand five hundred
35dollars ($22,500), if funds are available.

36(C) Make applications available to eligible municipal shelters
37on the first day of the second calendar year after the Pet Adoption
38Fee Deduction Fund first appears on the tax return.

39(d) In order to be eligible for grants authorized by this article,
40eligible municipal shelters shall file an application with the
P6    1Department of Food and Agriculture, in the form and manner as
2specified by the Department of Food and Agriculture.

3(e) Any grants distributed under this article create an additional
4funding source for food and shelter services and programs for
5eligible municipal shelters and shall be used to supplement, not
6supplant, other funding sources for these services and programs.

7

18890.  

(a) Except as otherwise provided in subdivision (b),
8this article shall remain in effect only until January 1 of the fifth
9taxable year following the first appearance of the Pet Adoption
10Cost Deduction Fund on the personal income tax return, and is
11repealed as of December 1 of that year.

12(b) (1) By September 1 of the second calendar year and each
13subsequent calendar year that the Pet Adoption Cost Deduction
14Fund appears on the tax return, the Franchise Tax Board shall do
15all of the following:

16(A) Determine the minimum contribution amount required to
17be received during the next calendar year for the fund to appear
18on the tax return for the taxable year that includes that next calendar
19year.

20(B) Provide written notification to the Department of Food and
21Agriculture of the amount determined in subparagraph (A).

22(C) Determine whether the amount of contributions estimated
23to be received during the calendar year will equal or exceed the
24minimum contribution amount determined by the Franchise Tax
25Board for the calendar year pursuant to subparagraph (A). The
26Franchise Tax Board shall estimate the amount of contributions
27to be received by using the actual amounts received and an estimate
28of the contributions that will be received by the end of that calendar
29year.

30(2) If the Franchise Tax Board determines that the amount of
31the contributions estimated to be received during a calendar year
32will not at least equal the minimum contribution amount for the
33calendar year, this article shall be inoperative with respect to
34taxable years beginning on or after January 1 of that calendar year
35and shall be repealed on December 1 of that year.

36(3) For purposes of this section, the minimum contribution
37amount for a calendar year means two hundred fifty thousand
38dollars ($250,000) for the second calendar year after the first
39appearance of the Pet Adoption Cost Deduction Fund on the
P7    1personal income tax return or the minimum contribution amount
2as adjusted pursuant to subdivision (c).

3(c) For each calendar year, beginning with the third calendar
4year after the first appearance of the Pet Adoption Cost Deduction
5Fund on the personal income tax return, the Franchise Tax Board
6shall adjust, on or before September 1 of that calendar year, the
7minimum contribution amount specified in subdivision (b) as
8follows:

9(1) The minimum contribution amount for the calendar year
10shall be an amount equal to the product of the minimum
11contribution amount for the prior calendar year multiplied by the
12inflation factor adjustment as specified in subparagraph (A) of
13paragraph (2) of subdivision (h) of Section 17041, rounded off to
14the nearest dollar.

15(2) The inflation factor adjustment used for the calendar year
16shall be based on the figures for the percentage change in the
17California Consumer Price Index for all items received on or before
18August 1 of the calendar year pursuant to paragraph (1) of
19subdivision (h) of Section 17041.

20(d) Notwithstanding the repeal of this article, any contribution
21amounts designated pursuant to this article prior to its repeal shall
22continue to be transferred and disbursed in accordance with this
23article as in effect immediately prior to that repeal.



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