BILL ANALYSIS Ó
AB 976
Page 1
Date of Hearing: May 27, 2015
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Jimmy Gomez, Chair
AB
976 (Steinorth) - As Amended May 7, 2015
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|Policy |Revenue and Taxation |Vote:|7 - 2 |
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Urgency: No State Mandated Local Program: NoReimbursable: No
SUMMARY:
This bill allows, for tax years beginning on or after January 1,
2016, and before January 1, 2021, a deduction, not to exceed
$100, from personal income tax for costs incurred adopting
either (i) a pet over the age of 4, or (ii) a cat from a public
animal control agency or shelter, humane society shelter, or
rescue group.
FISCAL EFFECT:
Estimated annual GF revenue decrease of approximately $100,000.
AB 976
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COMMENTS:
1)Purpose. According to the author, local animal shelters in
California serve approximately 800,000 pets a year, and many
suffer from overcrowding. The author contends the easiest way
to alleviate overcrowding pressure is to increase adoption
rates, and this bill is intended to be a modest investment
toward that goal. The author believes discounted prices for
adoption have been effective in increasing adoption rates, so
by inference, a tax incentive ought to have a similarly
positive effect.
Supporters, led by the Humane Society, believe a tax deduction
sends an effective message about the importance of compassion
for homeless pets, arguing even a small increase in the number
of pet adoptions will demonstrate the investment value of the
deduction.
2)Modest incentive. This bill is intended to encourage the
adoption of pets from qualified animal rescue organizations
with a maximum deduction of $100, and only for those taxpayers
who itemize their deductions. Even at the top marginal income
tax rate of 12.3%, the deduction results in a total tax
savings of less than $13, and for most families, the tax
savings would be less than $10. In opposition, the California
Tax Reform Association argues promoting animal adoption
through a tax deduction is poor public policy, arguing pet
adoption is properly motivated through compassion and not
financial incentives.
3)More actual adoptions? Tax incentives are usually intended to
incentivize socially beneficial behavior that would not occur
without the incentive. While pet adoption is certainly a
AB 976
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laudable goal, for the vast majority of taxpayers, the maximum
incentive will be less than $10. The Committee may wish to
consider whether that is a sufficient incentive to encourage
anyone who would not otherwise have considered adopting a
rescued animal to do so, and if so, whether that incentive
created justifies the cost to the state.
Analysis Prepared by:Joel Tashjian / APPR. / (916)
319-2081