Amended in Assembly March 18, 2016

California Legislature—2015–16 Regular Session

Assembly Bill No. 2371

Introduced by Assembly Member Frazier

February 18, 2016

An act to begin delete amend Section 18871 end delete begin insert add and repeal Article 2 (commencing with Section 18706) of Chapter 3 of Part 10.2 of Division 2 end insert of the Revenue and Taxation Code, relating to taxation.

LEGISLATIVE COUNSEL’S DIGEST

AB 2371, as amended, Frazier. Voluntary begin delete contributions. end delete begin insert contributions: Special Olympics Fund. end insert

begin insert

Under existing law, taxpayers are allowed to contribute amounts in excess of their personal income tax liability for the support of various funds. Existing law also contains administrative provisions that are generally applicable to voluntary contributions.

end insert begin insert

This bill would allow a taxpayer to designate an amount in excess of personal income tax liability to be deposited to the Special Olympics Fund, which the bill would create. The bill would require moneys transferred to the Special Olympics Fund, upon appropriation by the Legislature, to be allocated to the Franchise Tax Board and the Controller, as provided, and to the Special Olympics Northern California and the Special Olympics Southern California for the purpose of funding activities of the Special Olympics, as provided.

end insert begin delete

Existing law authorizes an individual to designate on his or her personal income tax return that a specified amount in excess of his or her tax liability be transferred to various funds, and provides requirements relating to the placement of the funds on the tax return form and the effect of these provisions that govern the voluntary contributions.

end delete begin delete

This bill would make nonsubstantive changes to this provision.

end delete

Vote: majority. Appropriation: no. Fiscal committee:  begin delete no end delete begin insert yes end insert . State-mandated local program: no.

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

begin insert

begin insert SECTION 1. end insert   

end insert

begin insert Article 2 (commencing with Section 18706) is
added to Chapter 3 of Part 10.2 of Division 2 of the end insert begin insert Revenue and
Taxation Code end insert begin insert , to read: end insert

begin insert

 

Article begin insert 2. end insert   Special Olympics Fund

 

begin insert 18706. end insert   

(a) Any individual may designate on the tax return that
a contribution in excess of the tax liability, if any, be made to the
Special Olympics Fund established by Section 18707 to be used
by the Special Olympics Northern California and the Special
Olympics Southern California.

(b) The contribution shall be in full dollar amounts and may be
made individually by each signatory on the joint return.

(c) A designation under subdivision (a) shall be made for any
taxable year on the initial 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 tax liability,
the return shall be treated as though no designation has been
made.

(d) (1) The Franchise Tax Board shall revise the form of the
return to include a space labeled “Special Olympics 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 conduct the activities of the
Special Olympics Northern California and the Special Olympics
Southern California.

(2) Notwithstanding paragraph (1), a voluntary contribution
designation for the Special Olympics Fund shall not be added on
the tax return until another voluntary contribution designation is
removed or space is available, whichever occurs first.

(e) 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).

begin insert 18707. end insert   

There is hereby established in the State Treasury the
Special Olympics Fund to receive contributions made pursuant to
Section 18706. 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 18706 to be transferred to the
Special Olympics Fund. The Controller shall transfer from the
Personal Income Tax Fund to the Special Olympics Fund an
amount not in excess of the sum of the amounts designated by
individuals pursuant to Section 18706 for payment into that fund.

begin insert 18708. end insert   

All moneys transferred to the Special Olympics Fund
pursuant to Section 18707, 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) The balance shall be divided between the Special Olympics
Northern California and Special Olympics Southern California
based on the amount of donations provided by taxpayers in each
organization’s jurisdiction based on the county of the taxpayer
contributing, for the purpose of supporting children and adults
with intellectual disabilities.

begin insert 18709. end insert   

(a) Except as otherwise provided in paragraph (2) of
subdivision (b), this article shall remain in effect only until January
1 of the fifth taxable year following the first appearance of the
Special Olympics 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 Special Olympics Fund appears
on the tax return, the Franchise Tax Board shall do both 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) 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 Special Olympics 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 Special Olympics 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 estimated contribution amount for the calendar
year shall be an amount equal to the product of the minimum
estimated contribution amount for the 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.

end insert

begin delete

SECTION 1.  

Section 18871 of the Revenue and Taxation Code
is amended to read:

18871.  

In implementing this chapter, all of the following
requirements shall apply:

(a) Unless otherwise specifically required by law, each voluntary
contribution fund or account established by this chapter shall be
included on the forms of the return through the taxable year
immediately preceding the year of repeal of the article establishing
that voluntary contribution fund or account.

(b) Notwithstanding the repeal of an article of this chapter, the
voluntary contribution fund or account specified in that article
shall continue in effect until December 31 of the year of the repeal
of that article, and any contribution designated pursuant to that
article on a timely filed initial return for the taxable year
immediately preceding the date of repeal shall be transferred and
disbursed, and all costs incurred by the Franchise Tax Board and
Controller in connection with the transfer and disbursement of
these contribution amounts shall continue to be paid, in accordance
with that article as it read immediately prior to its repeal.

(c) Unless otherwise specifically required by law, a contribution
made to any voluntary contribution fund or account established
by this chapter shall be subject to the following provisions:

(1) In the event that a designee is not specified, the contribution
shall, after reimbursement of the direct actual costs of the Franchise
Tax Board for the collection and administration of contributions
made under this article, be transferred to the General Fund.

(2) In the event 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.

(d) (1) If the number of contingent voluntary contribution
designations that are eligible to be added to the tax return for a
taxable year is greater than the number of voluntary contribution
designations removed, those contingent voluntary contribution
designations that are eligible to be added to the tax return shall be
added to the tax return in the order of the date of enactment, with
the voluntary contribution designation with the earliest date of
enactment to be added first.

(2) For purposes of this subdivision:

(A) A contingent voluntary contribution designation means a
voluntary contribution designation authorized under this chapter
that may not be added to the tax return until another voluntary
contribution designation is removed from the tax form.

(B) The date of enactment of a contingent voluntary contribution
designation authorized under this chapter shall be the date the act
authorizing the contingent voluntary contribution designation was
filed with the Secretary of State. In the event that more than one
act authorizing a contingent voluntary contribution designation is
filed with the Secretary of State on the same date, the act with the
lowest chapter number will be conclusively presumed to have been
filed with the Secretary of State before any other act authorizing
a contingent voluntary contribution designation with a higher
number.

(e) Notwithstanding subdivision (d), or the contingency language
of an act prohibiting the addition of a contingent voluntary
contribution designation until another voluntary contribution
designation is removed, the Franchise Tax Board may add one or
more voluntary contribution designations if the board determines
that space is available on the tax return to accommodate the
additional voluntary contribution designation.

end delete