BILL ANALYSIS Ó
AB 1577
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CONCURRENCE IN SENATE AMENDMENTS
AB
1577 (Eggman)
As Amended August 10, 2016
Majority vote
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|ASSEMBLY: |80-0 |(June 1, 2016) |SENATE: | 39-0 |(August 22, |
| | | | | |2016) |
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Original Committee Reference: REV. & TAX.
SUMMARY: Renames the State Emergency Food Assistance Program
(SEFAP) as the CalFood Program and the SEFAP Account as the
CalFood Account.
The Senate amendments:
1)Strike provisions that would have expanded the existing tax
credit program under the Personal Income Tax (PIT) Law and
Corporation Tax (CT) Law for contributions of qualified
donation items to a food bank and extended the program until
January 1, 2022.
2)Add chaptering out language with AB 1747 (Weber) of the
current legislative session.
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EXISTING LAW:
1)Requires the State Department of Social Services (DSS) to
establish and administer the SEFAP to provide food and funding
for the provision of emergency food to food banks.
2)Establishes the SEFAP Account from which money is allocated,
upon appropriation by the Legislature, to DSS for allocation
to the SEFAP to be used for the purchase, storage, and
transportation of food grown or produced in California.
AS PASSED BY THE ASSEMBLY, this bill:
1)Broadened the definition of a "qualified taxpayer" to include
persons responsible for growing or raising a qualified
donation item, or harvesting, packing, or processing a
qualified donation item.
2)Expanded the definition of "qualified donation item" (QDI) to
include, in addition to fresh fruits and vegetables, the
following raw agricultural products and processed foods, as
specified:
a) "Fruit, nuts or vegetables" as defined in Food and
Agricultural Code (F&AC) Section 42510;
b) "Meat food product" as defined in F&AC Section 18665;
c) "Poultry" as defined in F&AC Section 18675;
d) "Eggs" as defined in F&AC Section 75027;
e) "Fish" as defined in F&AC Section 58609; and,
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f) All of the following food items as defined in Health and
Safety Code (H&SC) Section 109935:
i) Rice;
ii) Beans;
iii) Fruit, nuts, and vegetables in canned, frozen,
dried, dehydrated, and 100% juice forms;
iv) Any cheese, milk, yogurt, butter, or
dehydrated milk meeting the requirements in Division
15 (commencing with Section 32501) of the F∾
v) Vegetable oil and olive oil;
vi) Soup, pasta sauce, and salsa;
vii) Infant formula subject to H&SC Section
114094.5;
viii) Bread and pasta; and,
ix) Canned meats and canned seafood.
3)Provided that the allowed credit would be calculated, not
according to inventory costs, but rather as 10% of the
qualified value of the QDI.
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4)Defined "qualified value" as either of the following:
a) The weighted average wholesale sale price based on the
qualified taxpayer's total like grade wholesale sales of
the donated item sold within the calendar month of the
qualified taxpayer's donation; or,
b) 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. This qualified value may be used only if no
wholesale sales of the donated item have occurred in the
calendar month of the qualified taxpayer's donation.
5)Provided that the credit amount may not be less than what
would otherwise be available as per existing law - AB 152
(Fuentes), Chapter 503, of the Statutes of 2011.
6)Required the donor to provide the food bank the qualified
value and information regarding where the donation items were
grown and/or processed.
7)Provided that, upon receipt and acceptance of the donations,
the food bank is required to sign and provide to the donor a
certificate, which shall include certain information, as
specified, including the acceptance, grade, origin and
qualified value of the donated items.
8)Required the Franchise Tax Board to include in its annual
report to the Legislature, among other things, the estimated
value and the origin of the QDIs.
9)Required a qualified taxpayer to claim the credit only on a
timely filed original return.
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10) Extended the tax credit program until January 1, 2022,
and repealed it on December 1, 2022.
11) Renamed the SEFAP as the CalFood Program, effective on
or after January 1, 2017.
12) Specified the goals, purpose and objective of this tax
credit program as well as the performance indicators, data
collection requirements and baseline measurements, as required
by Revenue and Taxation Code Section 41.
FISCAL EFFECT: According to the Senate Appropriations
Committee, pursuant to Senate Rule 77.2, negligible state costs.
COMMENTS:
1)Food Banks and Food Insecurity. According to the California
Association of Food Banks' (CAFB) Web site, California has a
food insecurity rate of 13.5%, translating into 5.2 million
Californians, or on average one out of seven people in
California, not knowing from where their next meal will
come. All the more troubling is that the child food
insecurity rate is 25.1%, meaning that 2.3 million children,
or more than one in four children in California, may go to
bed hungry each night.
In 2011, a state tax credit program was enacted into law to
allow a qualified taxpayer, under both the PIT and CT laws,
a tax credit in an amount equal to 10% of the inventory
costs of the fresh fruits or fresh vegetables donated to
food banks located in California. (AB 152 (Fuentes),
Chapter 503, Statutes of 2011.) AB 152 also created a
direct grant program, SEFAP, to provide food and funding to
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food banks. According to the CAFB, each $1 million
appropriated to the SEFAP would enable California food banks
to offer roughly five million meals to individuals.
Furthermore, SEFAP funds must be used to purchase and
distribute foods grown or produced in California, benefiting
California's agricultural sector.
2)Purpose of This Bill. As originally approved by the Assembly,
this bill revised and extended the state tax credit program
for taxpayers donating fresh fruits and vegetables to food
banks. However, these provisions were incorporated into the
enacted fiscal year 2016-17 California State Budget. As such,
this bill was amended to delete its tax provisions, with only
the provisions of this bill that rename the SEFAP program
remaining.
According to the author, it is necessary to rename the SEFAP
to prevent confusion with the California Food Assistance
Program (CFAP), which sound identical when pronounced as
acronyms. Renaming the SEFAP as the CalFood Program would
better align it with the standard naming convention for other
California programs, such as CalWORKS and CalFresh, while
further conveying the intent of the program.
Analysis Prepared by:
Oksana Jaffe, Irene Ho / REV. & TAX. / (916)
319-2098 FN: 0004087
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enter text.
AB 1577
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