AB 1577, as introduced, 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 a food bank located in California.
This bill, under both laws, would 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, but not less than an amount that would otherwise be calculated and allowed under existing law. 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, would 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 17053.88 of the Revenue and Taxation
2Code is amended to read:
(a) In the case of a qualified taxpayerbegin delete whoend deletebegin insert thatend insert
4 donatesbegin delete fresh fruits or fresh vegetablesend delete to a food bankbegin insert end insertbegin insertany qualified
5donation items that are accepted by that food bankend insert located in
6California under Chapter 5 (commencing with Section 58501) of
7Part 1 of Division 21 of the Food and Agricultural Code, for taxable
8years beginning on or after
January 1, 2012, and before January
91,begin delete 2017,end deletebegin insert
2024,end insert there shall be allowed, without regard to the
10taxpayer’s method of accounting, as a credit against the “net tax”
11(as defined by Section 17039), an amount equal tobegin delete 10 percent of begin insert 20
12the cost that would otherwise be included in inventory costs under
13Section 263A of the Internal Revenue Code, or that would be
14required to be included in inventory costs under Section 263A of
15the Internal Revenue Code, but for the exception for farming
16businesses contained in Section 263A(d) of the Internal Revenue
17Code, with respect to those fresh fruits or fresh vegetables.end delete
P3 1percent of the qualified value of the qualified donation items, but
2in no event shall this amount be less than the amount that otherwise
3would have been calculated and allowed under this section as
4added by Chapter 503 of the Statutes of 2011.end insert
5(b) For purposes of thisbegin delete section, “qualified taxpayer” meansend delete
6begin insert section, the following definitions shall apply:end insert
7(1) “Qualified donation item” means fresh fruits or fresh
8vegetables and the following raw or processed agricultural
9products:
10(A) All of the following:
end insertbegin insert
11(i) “Fruits, nuts, or vegetables” as defined in Section 42510 of
12the Food and Agricultural Code.
13(ii) “Meat food product” as defined in Section 18665 of the
14Food and Agricultural Code.
15(iii) “Poultry” as defined in Section 18675 of the Food and
16Agricultural Code.
17(iv) “Eggs” as defined in Section 75027 of the Food and
18Agricultural Code.
19(v) “Fish” as defined in Section 58609 of the Food and
20Agricultural Code.
21(B) All of the following food as defined in Section 109935 of
22the Health and Safety Code:
23(i) Rice.
end insertbegin insert24(ii) Beans.
end insertbegin insert
25(iii) Fruit, nuts, and vegetables in canned, frozen, dried,
26dehydrated, and 100 percent juice forms.
27(iv) Cheese, milk (cow or goat), yogurt, butter, dehydrated milk,
28and infant formula from licensed sources.
29(v) Vegetable oil and olive oil.
end insertbegin insert
30(vi) Shelf stable ready-to-eat products, limited to soup, pasta
31sauce, ketchup, salsa, and salad dressings.
32(vii) Bread, pasta, or cereal.
end insertbegin insert33(viii) Canned meats and canned seafood.
end insert
34begin insert (2)end insertbegin insert end insertbegin insert“Qualified taxpayer” meansend insert the person responsible for
35planting a crop,
managing the crop,begin delete andend delete harvesting the crop from
36begin delete land.end deletebegin insert land, growing or raising a qualified donation item, or
37harvesting, packing, or processing a qualified donation item.end insert
38(3) “Qualified value” means either of the following:
end insertbegin insert
39(A) The qualified value shall be calculated by using the weighted
40average wholesale sale price based on the qualified taxpayer’s
P4 1total wholesale sales of the donated item sold within the calendar
2month of the qualified taxpayer’s donation.
3(B) If no wholesale sales of the donated item have occurred in
4the calendar month of the qualified taxpayer’s donation, the
5qualified value shall be equal to the nearest regional wholesale
6market price for the calendar month of the donation based upon
7the same grade products as published by the United States
8Department of Agriculture’s Agricultural Marketing Service, or
9its successor. This subparagraph does not apply if the United
10States Department of Agriculture’s Agricultural Marketing Service
11or its successor requires payment for use of their services.
12(c) If the credit allowed by this section is claimed by the
13qualified taxpayer, any deduction otherwise allowed under this
14part for that amount of the cost paid or incurred by the qualified
15taxpayer that is eligible for the credit shall be reduced by the
16amount of the credit provided in subdivision (a).
17(d) The donor shall provide to thebegin delete nonprofit organizationend deletebegin insert food
18bankend insert thebegin delete estimatedend deletebegin insert
qualifiedend insert value of thebegin delete donated fresh fruits or begin insert donation itemsend insert and information regarding the
19fresh vegetablesend delete
20origin of where thebegin delete donated fruits or vegetables were grown, and begin insert donation items were grown, processed, or both grown and
21uponend delete
22processed. Uponend insert receiptbegin insert and acceptanceend insert of thebegin delete donated fresh fruits begin insert
donation items, the
23or fresh vegetables, the nonprofit organizationend delete
24food bankend insert shall provide a certificate to the donor. The certificate
25shall contain a statement signed and dated by a person authorized
26bybegin delete that organization that the product is donatedend deletebegin insert the food bank that
27the donation items are acceptedend insert under Chapter 5 (commencing
28with Section 58501) of Part 1 of Division 21 of the Food and
29Agricultural Code. The certificate shall also contain thebegin delete typeend deletebegin insert type,
30grade,end insert and quantity ofbegin delete productend deletebegin insert
itemsend insert donated, the name ofbegin insert theend insert
31 donor or donors, the name and address of thebegin delete donee nonprofit begin insert food bank,end insert and, as provided by the donor,
32organization,end deletebegin delete the begin insert end insertbegin insertthe origin of the donated items, and the qualified value
33estimated value of the donated fresh fruits or fresh vegetables and
34its origins.end delete
35of the donated items, as described in subdivision (a).end insert Upon the
36request of the Franchise Tax
Board, the qualified taxpayer shall
37provide a copy of the certification to the Franchise Tax Board.
38(e) In the case where the credit allowed by this section exceeds
39the “net tax,” the excess may be carried over to reduce the “net
P5 1tax” in the following year, and for the six succeeding years if
2necessary, until the credit has been exhausted.
3(f) Using the information available to the Franchise Tax Board
4from the certificates required under subdivision (d) and subdivision
5(d) of Section 23688, the Franchise Tax Board shall report to the
6Legislature on or before December 1, 2014, and each December
71 thereafter until the inoperative date specified inbegin insert end insertbegin insertparagraph (2)
8ofend insert
subdivision (g), regarding the utilization of the credit authorized
9by this section and Sectionbegin delete 23688.Theend deletebegin insert
23688. Theend insert Franchise Tax
10Board shall also include in the report the estimated value of the
11begin delete fresh fruits and fresh vegetables donated, the county in which the begin insert end insertbegin insertqualified donation items, the origin of the
12products originated,end delete
13qualified donation items,end insert and the month the donation was made.
14(g) (1) A reportbegin insert requiredend insert to be submitted pursuant to subdivision
15(f) shall be submitted in compliance with Section 9795 of the
16Government Code.
17(2) The requirement for submitting a report imposed under
18subdivision (f) is inoperative on January 1,begin delete 2016,end deletebegin insert
2023,end insert pursuant
19to Section 10231.5 of the Government Code.
20(h) This section shallbegin delete remain in effect only untilend deletebegin insert be repealed onend insert
21 December 1,begin delete 2017, and as of that date is repealed.end deletebegin insert 2024.end insert
Section 23688 of the Revenue and Taxation Code is
23amended to read:
(a) In the case of a qualified taxpayerbegin delete whoend deletebegin insert thatend insert donates
25begin delete fresh fruits or fresh vegetablesend delete to a food bankbegin insert any qualified
26donation items that are accepted by that food bankend insert located in
27California under Chapter 5 (commencing with Section 58501) of
28Part 1 of Division 21 of the Food and Agricultural Code, for taxable
29years beginning on or after January 1, 2012, and before January
301,begin delete 2017,end deletebegin insert
2024,end insert there shall be allowed, without regard to the
31taxpayer’s method of accounting, as a credit against the “tax” (as
32defined by Section 23036), an amount equal tobegin delete 10 percent of the
33cost that would otherwise be included in inventory costs under
34Section 263A of the Internal Revenue Code, or that would be
35required to be included in inventory costs under Section 263A of
36the Internal Revenue Code, but for the exception for farming
37businesses contained in Section 263A(d) of the Internal Revenue
38Code, with respect to those
fresh fruits or fresh vegetables.end delete
39percent of the qualified value of the qualified donation items, but
40in no event shall this amount be less than the amount that otherwise
P6 1would have been calculated and allowed under this section as
2added by Chapter 503 of the Statutes of 2011.end insert
3(b) For purposes of this section,begin delete “qualified taxpayer”end deletebegin insert the
4following definitions shall apply:end insert
5(1) “Qualified donation item” means fresh fruits
or fresh
6vegetables and the following raw or processed agricultural
7products:
8(A) All of the following:
end insertbegin insert
9(i) “Fruits, nuts, or vegetables” as defined in Section 42510 of
10the Food and Agricultural Code.
11(ii) “Meat food product” as defined in Section 18665 of the
12 Food and Agricultural Code.
13(iii) “Poultry” as defined in Section 18675 of the Food and
14Agricultural Code.
15(iv) “Eggs” as defined in Section 75027 of the Food and
16Agricultural Code.
17(v) “Fish” as defined in Section 58609 of the Food and
18Agricultural Code.
19(B) All of the following food as defined in Section
109935 of
20the Health and Safety Code:
21(i) Rice.
end insertbegin insert22(ii) Beans.
end insertbegin insert
23(iii) Fruit, nuts, and vegetables in canned, frozen, dried,
24dehydrated, and 100 percent juice forms.
25(iv) Cheese, milk (cow or goat), yogurt, butter, dehydrated milk,
26and infant formula from licensed sources.
27(v) Vegetable oil and olive oil.
end insertbegin insert
28(vi) Shelf stable ready-to-eat products, limited to soup, pasta
29sauce, ketchup, salsa, and salad dressings.
30(vii) Bread, pasta, or cereal.
end insertbegin insert31(viii) Canned meats and canned seafood.
end insert
32begin insert(2)end insertbegin insert end insertbegin insert“Qualified taxpayer” end insertmeans the person responsible for
33planting a crop, managing the crop,begin delete andend delete harvesting the crop from
34begin delete land.end deletebegin insert land, growing or raising a qualified donation item, or
35harvesting, packing, or processing a qualified donation item.end insert
36(3) “Qualified value” means either of the following:
end insertbegin insert
37(A) The qualified value shall be calculated by
using the weighted
38average wholesale sale price based on the qualified taxpayer’s
39total wholesale sales of the donated item sold within the calendar
40month of the qualified taxpayer’s donation.
P7 1(B) If no wholesale sales of the donated item have occurred in
2the calendar month of the qualified taxpayer’s donation, the
3qualified value shall be equal to the nearest regional wholesale
4market price for the calendar month of the donation based upon
5the same grade products as published by the United States
6Department of Agriculture’s Agricultural Marketing Service, or
7its successor. This subparagraph does not apply if the United
8States Department of Agriculture’s Agricultural Marketing Service
9or its successor requires payment for use of their services.
10(c) If the credit allowed by this section is claimed by the
11qualified taxpayer, any deduction otherwise allowed
under this
12part for that amount of the cost paid or incurred by the qualified
13taxpayer that is eligible for the credit shall be reduced by the
14amount of the credit provided in subdivision (a).
15(d) The donor shall provide to thebegin delete nonprofit organizationend deletebegin insert
food
16bankend insert thebegin delete estimatedend deletebegin insert qualifiedend insert value of thebegin delete donated fresh fruits or begin insert donation itemsend insert and information regarding the
17fresh vegetablesend delete
18origin of where thebegin delete donated fruits or vegetablesend deletebegin insert donation itemsend insert
19 were grown,begin delete and uponend deletebegin insert
processed, or both grown and processed.
20Uponend insert receiptbegin insert and acceptanceend insert of thebegin delete donated fresh fruits or fresh begin insert donation items, the food
21vegetables, the nonprofit organizationend delete
22bankend insert
shall provide a certificate to the donor. The certificate shall
23contain a statement signed and dated by a person authorized by
24begin delete that organization that the product is donatedend deletebegin insert the food bank that the
25donation items are acceptedend insert under Chapter 5 (commencing with
26Section 58501) of Part 1 of Division 21 of the Food and
27Agricultural Code. The certificate shall also contain thebegin delete typeend deletebegin insert type,
28grade,end insert and quantity ofbegin delete productend deletebegin insert itemsend insert donated, the
name ofbegin insert
theend insert
29
donor or donors, the name and address of thebegin delete donee nonprofit begin insert food bank,end insert and, as provided by the donor,
30organization,end deletebegin delete the begin insert the origin of the donated items, and the qualified value
31estimated value of the donated fresh fruits or fresh vegetables and
32its origins.end delete
33of the donated items, as described in subdivision (a).end insert Upon the
34request of the Franchise Tax Board, the qualified taxpayer shall
35provide a copy of the certification to the Franchise Tax Board.
36(e) In the case where the credit allowed by this section exceeds
37the “tax,” the excess may be carried over
to reduce the “tax” in
38the following year, and for the six succeeding years if necessary,
39until the credit has been exhausted.
P8 1(f) This section shallbegin delete remain in effect only untilend deletebegin insert be repealed onend insert
2 December 1,begin delete 2017, and as of that date is repealed.end deletebegin insert 2024.end insert
The heading of Chapter 14.5 (commencing with
4Section 18995) of Part 6 of Division 9 of the Welfare and
5Institutions Code is amended to read:
6
Section 18995 of the Welfare and Institutions Code is
11amended to read:
(a) On and after January 1,begin delete 2012, the State Department begin insert 2017,end insert the State
13of Social Services shall establish and administerend delete
14Emergency Food Assistance Programbegin delete (SEFAP).end deletebegin insert (SEFAP),
15administered by the State Department of Social Services, shall be
16renamed as the “CalFood Program.”end insert Thebegin delete SEFAPend deletebegin insert
CalFood
17Programend insert shall provide food and funding for the provision of
18emergency food to food banks established pursuant to the federal
19Emergency Food Assistance Program (7 C.F.R. Parts 250 and 251)
20whose ongoing primary function is to facilitate the distribution of
21food to low-income households.
22(b) Thebegin delete State Emergency Food Assistance Programend deletebegin insert CalFoodend insert
23 Account is hereby established in the Emergency Food Assistance
24Program Fund established pursuant to Section 18852 of the
25Revenue and Taxation Code, and may receive federal funds and
26voluntary donations or contributions.
27(c) Notwithstanding Section 18853 of the Revenue and Taxation
28Code, the following shall
apply:
29(1) All moneys received by thebegin delete State Emergency Food begin insert CalFoodend insert Account shall, upon appropriation
30Assistance Programend delete
31by the Legislature, be allocated to the State Department of Social
32Services for allocation to thebegin delete SEFAPend deletebegin insert CalFood Programend insert and, with
33the exception of those contributions made pursuant to Section
3418851 of the Revenue and Taxation Code and funds received
35through Parts 250 and 251 of Title 7 of the Code of Federal
36Regulations, shall be used for the purchase, storage, and
37transportation of food grown or produced in California. Storage
38and transportation
expenditures shall not exceed 10 percent of the
39begin delete SEFAPend deletebegin insert CalFood Programend insert fund’s annual budget.
P9 1(2) Notwithstanding paragraph (1), funds received by thebegin delete State begin insert CalFoodend insert Account shall,
2Emergency Food Assistance Programend delete
3upon appropriation by the Legislature, be allocated to the State
4Department of Social Services for allocation to thebegin delete SEFAPend delete
5begin insert CalFood Programend insert as described in paragraph (1),
and shall, in part,
6be used to pay for the department’s administrative costs associated
7with the administration of thebegin delete SEFAP.end deletebegin insert CalFood Program.end insert
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