BILL NUMBER: AB 976	INTRODUCED
	BILL TEXT


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:

  SECTION 1.  Section 17239 is added to the Revenue and Taxation
Code, to read:
   17239.  (a) For each taxable year beginning on or after January 1,
2016, and before January 1, 2021, there shall be allowed as a
deduction an amount equal to the qualified costs paid or incurred
during the taxable year by a taxpayer for the adoption of a pet from
a qualified animal rescue organization.
   (b) For the purposes of this section, the following definitions
shall apply:
   (1) "Pet" means an animal adopted from a qualified animal rescue
organization that is not used by the taxpayer in a trade or business
or for the production of income.
   (2) "Qualified animal rescue organization" means a public animal
control agency or shelter, humane society shelter, or rescue group.
   (3) "Qualified costs" means amounts paid or incurred to a
qualified animal rescue organization to adopt a pet, not to exceed
one hundred dollars ($100).
   (4) "Rescue group" means an organization exempt from federal
income taxation as, an organization described in Section 501(c)(3) of
the Internal Revenue Code, whose primary purpose is the placement of
dogs, cats, or other animals that have been removed from a public
animal control agency or shelter, society for the prevention of
cruelty to animals shelter, or humane society, or that have been
surrendered or relinquished to the rescue group by the previous
owner.
   (c) The deduction allowed under this section for a taxable year
shall not exceed one hundred dollars ($100).
   (d) This section shall remain in effect only until December 1,
2021, and as of that date is repealed.
  SEC. 2.  Article 18 (commencing with Section 18887) is added to
Chapter 3 of Part 10.2 of Division 2 of the Revenue and Taxation
Code, to read:

      Article 18.  Pet Adoption Cost Deduction Fund


   18887.  (a) An individual may designate on the tax return that a
contribution in excess of the tax liability, if any, be made to the
Pet Adoption Cost Deduction Fund established by Section 18888. That
designation is to be used as a voluntary contribution on the tax
return.
   (b) The contributions shall be in a full dollar amount and may be
made individually by each signatory on a joint return.
   (c) A designation under subdivision (a) shall be made for a
taxable year on the original return for that taxable year, and once
made shall be irrevocable. If payments and credits reported on the
return, together with any other credits associated with the
individual's account, do not exceed the individual's liability, if
any, the return shall be treated as though no designation has been
made. If a contribution is not specified, but a designee is not
specified, the contribution shall be transferred to the General Fund
after reimbursement of the direct actual costs of the Franchise Tax
Board for the collection and administration of funds under this
article.
   (d) If an individual designates a contribution to more than one
account or fund listed on the tax return, and the amount available is
insufficient to satisfy the total amount designated, the
contribution shall be allocated among the designees on a pro rata
basis.
   (e) The Franchise Tax Board shall revise the form of the return to
include a space labeled "Pet Adoption Cost Deduction Fund" to allow
for the designation permitted under subdivision (a). The form shall
also include in the instructions information that the contribution
may be in the amount of one dollar ($1) or more and that the
contribution shall be used to reimburse the California State General
Fund for the reduction in receipts attributable to the Pet Adoption
Fee Deduction allowed pursuant to Section 17239, with any
contributions in excess of the reduction in receipts used to provide
grants to eligible municipal shelters for the purpose of providing
food and shelter to abandoned and impounded animals, as described in
Section 18889.
   (f) Notwithstanding any other law, a voluntary contribution
designation for the Pet Adoption Cost Deduction Fund shall not be
added on the tax return until another voluntary contribution
designation is removed.
   (g) A deduction shall be allowed under Article 6 (commencing with
Section 17201) of Chapter 3 of Part 10 for any contribution made
pursuant to subdivision (a).
   18888.  There is hereby established in the State Treasury the Pet
Adoption Cost Deduction Fund to receive contributions made pursuant
to Section 18887. The Franchise Tax Board shall notify the Controller
of both the amount of money paid by taxpayers in excess of their tax
liability and the amount of refund money that taxpayers have
designated pursuant to Section 18887 to be transferred to the Pet
Adoption Cost Deduction Fund. The Controller shall transfer from the
Personal Income Tax Fund to the Pet Adoption Cost Deduction Fund an
amount not in excess of the sum of the amounts designated by
individuals pursuant to Section 18887 for payment into that fund.
   18889.  All moneys transferred to the Pet Adoption Cost Deduction
Fund, upon appropriation by the Legislature, shall be allocated as
follows:
   (a) To the Franchise Tax Board and the Controller for
reimbursement of all costs incurred by the Franchise Tax Board and
the Controller in connection with their duties under this article.
   (b) To the Controller for reimbursement of all losses incurred by
the General Fund in connection with providing tax deductions for pet
adoptions pursuant to Section 17239.
   (c) (1) To the Department of Food and Agriculture for distribution
of grants to eligible municipal shelters for the purpose of
providing food and shelter to abandoned and impounded animals. The
department may use up to 5 percent of the money allocated to
municipal shelters for administrative costs incurred in connection
with the Pet Adoption Fee Deduction Fund.
   (2) For the purposes of this article, "eligible municipal shelter"
means 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. The State Department
of Public Health shall, upon the written request of the Department
of Food and Agriculture, make available information regarding whether
a city or county animal control agency or shelter is current on its
reporting requirements pursuant to this paragraph.
   (3) The Department of Food and Agriculture shall do all of the
following with respect to the distribution of grants:
   (A) Accept applications for grants from eligible municipal
shelters.
   (B) Process and approve, or reject all applications on a
first-come-first-served basis, in the following manner:
   (i) Eligible municipal shelters processing fewer than 5,000 dogs
and cats each year shall receive up to seven thousand five hundred
dollars ($7,500), if funds are available.
   (ii) Eligible municipal shelters processing between 5,000 and
25,000 dogs and cats each year shall receive up to fifteen thousand
dollars ($15,000), if funds are available.
   (iii) Eligible municipal shelters processing more than 25,000 dogs
and cats shall receive up to twenty-two thousand five hundred
dollars ($22,500), if funds are available.
   (C) Make applications available to eligible municipal shelters on
the first day of the second calendar year after the Pet Adoption Fee
Deduction Fund first appears on the tax return.
   (d) In order to be eligible for grants authorized by this article,
eligible municipal shelters shall file an application with the
Department of Food and Agriculture, in the form and manner as
specified by the Department of Food and Agriculture.
   (e) Any grants distributed under this article create an additional
funding source for food and shelter services and programs for
eligible municipal shelters and shall be used to supplement, not
supplant, other funding sources for these services and programs.
   18890.  (a) Except as otherwise provided in subdivision (b), this
article shall remain in effect only until January 1 of the fifth
taxable year following the first appearance of the Pet Adoption Cost
Deduction Fund on the personal income tax return, and is repealed as
of December 1 of that year.
   (b) (1) By September 1 of the second calendar year and each
subsequent calendar year that the Pet Adoption Cost Deduction Fund
appears on the tax return, the Franchise Tax Board shall do all of
the following:
   (A) Determine the minimum contribution amount required to be
received during the next calendar year for the fund to appear on the
tax return for the taxable year that includes that next calendar
year.
   (B) Provide written notification to the Department of Food and
Agriculture of the amount determined in subparagraph (A).
   (C) Determine whether the amount of contributions estimated to be
received during the calendar year will equal or exceed the minimum
contribution amount determined by the Franchise Tax Board for the
calendar year pursuant to subparagraph (A). The Franchise Tax Board
shall estimate the amount of contributions to be received by using
the actual amounts received and an estimate of the contributions that
will be received by the end of that calendar year.
   (2) If the Franchise Tax Board determines that the amount of the
contributions estimated to be received during a calendar year will
not at least equal the minimum contribution amount for the calendar
year, this article shall be inoperative with respect to taxable years
beginning on or after January 1 of that calendar year and shall be
repealed on December 1 of that year.
   (3) For purposes of this section, the minimum contribution amount
for a calendar year means two hundred fifty thousand dollars
($250,000) for the second calendar year after the first appearance of
the Pet Adoption Cost Deduction Fund on the personal income tax
return or the minimum contribution amount as adjusted pursuant to
subdivision (c).
   (c) For each calendar year, beginning with the third calendar year
after the first appearance of the Pet Adoption Cost Deduction Fund
on the personal income tax return, the Franchise Tax Board shall
adjust, on or before September 1 of that calendar year, the minimum
contribution amount specified in subdivision (b) as follows:
   (1) The minimum contribution amount for the calendar year shall be
an amount equal to the product of the minimum contribution amount
for the prior calendar year multiplied by the inflation factor
adjustment as specified in subparagraph (A) of paragraph (2) of
subdivision (h) of Section 17041, rounded off to the nearest dollar.
   (2) The inflation factor adjustment used for the calendar year
shall be based on the figures for the percentage change in the
California Consumer Price Index for all items received on or before
August 1 of the calendar year pursuant to paragraph (1) of
subdivision (h) of Section 17041.
   (d) Notwithstanding the repeal of this article, any contribution
amounts designated pursuant to this article prior to its repeal shall
continue to be transferred and disbursed in accordance with this
article as in effect immediately prior to that repeal.