BILL ANALYSIS Ó
SENATE COMMITTEE ON GOVERNANCE AND FINANCE
Senator Robert M. Hertzberg, Chair
2015 - 2016 Regular
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|Bill No: |SB 17 |Hearing |4/8/15 |
| | |Date: | |
|----------+---------------------------------+-----------+---------|
|Author: |Monning |Tax Levy: |No |
|----------+---------------------------------+-----------+---------|
|Version: |12/1/14 |Fiscal: |Yes |
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|Consultant|Bouaziz |
|: | |
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VOLUNTARY CONTRIBUTIONS: CALIFORNIA SEA OTTER FUND
Extends the sunset date of the "California Sea Otter Fund" to
January 1, 2021.
Background and Existing Law
Existing state law allows taxpayers to contribute money to
voluntary contribution funds (VCFs) by checking a box on their
state income tax returns. California law requires contributions
made through so-called "check-offs" to be made from taxpayers'
own resources and not from their tax liability, as is possible
on federal tax returns. Check-off amounts may be claimed as
charitable contributions on taxpayers' tax returns in the
subsequent year.
Each VCF is individually added to the tax return by legislation.
With a few exceptions, VCFs remain on the return until they are
repealed by a sunset date or fail to generate a minimum
contribution amount. In general, the minimum contribution
amounts are adjusted annually for inflation. For most VCFs, the
minimum contribution amount is $250,000, beginning in the fund's
second year. The following check-offs do not have a minimum
contribution requirement:
California Firefighters' Memorial Foundation Fund,
California Peace Officer Memorial Foundation Fund, and
SB 17 (Monning) 12/1/14 Page 2
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California Seniors Special Fund.
When a taxpayer contributes to VCFs, the Franchise Tax Board
(FTB) deposits the total of all contributions into the fund
created as part of the VCF's legislative authorization. For
some VCFs, such as the Protect Our Coast and Ocean Fund,
taxpayers' contributions are allocated to a state agency for use
in a state administered grant program. Other VCFs' authorizing
statutes direct administrative agencies to allocate donations to
a private organization. For example, the Office of Emergency
Services passes VCF funds to the American Red Cross. Other
funds require the State Controller to send the funds directly to
private organizations without passing through an administrative
agency, such as the California Fire Foundation. The FTB, the
Controller, and an administrative agency may deduct from the
amount of donations each VCFs receives for direct costs of
administering a fund.
There are currently 18 check-offs listed on the tax return form.
The tax check-off program typically collects $4-5 million in
annual contributions for all VCFs. The following table provides
information on the current tax check-offs.
------------------------------------------------------------
|Voluntary | 2014 | Contribution Allotment |
|Contribution Fund |Contribution| |
| | s | |
|---------------------+------------+-------------------------|
|Alzheimer's | $423,843 | As many as apply and |
|Disease/Related | | receive contracts or |
|Disorders Fund | | grants provided by the |
| | |monies contributed. |
|---------------------+------------+-------------------------|
|American Red Cross, | $222,294 | To the Office of |
|California Chapter | | Emergency Services for |
| | | distribution to the |
| | | American Red Cross. |
| | | |
|---------------------+------------+-------------------------|
|CA Breast Cancer | $381,678 | As many as apply and |
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|Research Fund | | receive grants provided |
| | | from the monies |
| | | contributed. |
|---------------------+------------+-------------------------|
|CA Cancer Research | $444,406 | As many as apply and |
|Fund | | receive grants provided |
| | | from the monies |
| | | contributed. |
|---------------------+------------+-------------------------|
|CA Firefighters' | $140,388 | California Fire |
|Memorial Fund | | Foundation. |
|---------------------+------------+-------------------------|
|CA Peace Officer | $127,249 | California Peace |
|Memorial Foundation | | Officer Memorial |
|Fund | | Commission. |
|---------------------+------------+-------------------------|
|CA Sea Otter Fund | $304,005 | Department of Fish and |
| | | Wildlife, and as many |
| | | as apply for grants and |
| | | contracts provided for |
| | | by 50% of |
| | | contributions. |
|---------------------+------------+-------------------------|
|CA Seniors Special | $60,337 | The first $80K to the |
|Fund | | Area Agency on Aging |
| | | Advisory Council of |
| | | California and the rest |
| | | to area agencies as |
| | | allocated by the |
| | | California Department |
| | | of Aging. |
|---------------------+------------+-------------------------|
|Child Victims of | $251,115 | As many counseling and |
|Human Trafficking | | prevention centers that |
|Fund | | apply and receive |
| | | grants provided from |
| | | monies contributed. |
|---------------------+------------+-------------------------|
|Emergency Food for | $452,667 | To the Department of |
|Families Fund | | Social Services for the |
| | | Emergency Food |
| | | Assistance Program. |
|---------------------+------------+-------------------------|
|Keep Arts in Schools | $256,421 | To the Arts Council for |
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|Fund | | grants to organizations |
| | | providing parts |
| | | programs in schools. |
|---------------------+------------+-------------------------|
|Protect Our Coast | $241,040 | To the California |
|and Oceans Fund | | Coastal Commission to |
| | | provide grants to |
| | | organizations in |
| | | support of coastal |
| | | resource programs and |
| | | related educational |
| | | activities. |
|---------------------+------------+-------------------------|
|Rare & Endangered | $451,177 | Department of Fish and |
|Species Preservation | | Wildlife endangered |
|Program | | conservation programs. |
|---------------------+------------+-------------------------|
|School Supplies for | $337,949 | As many as apply and |
|Homeless Children | | receive grants provided |
|Fund | | for by the monies |
| | | contributed. |
|---------------------+------------+-------------------------|
|State Parks | $335,922 | As many as purchase a |
|Protection | | parks pass that can be |
|Fund/Parks Pass | | provided from the |
|Purchase | | monies contributed. |
|---------------------+------------+-------------------------|
|CA Senior |Initial Tax | To conduct the sessions |
|Legislature Fund | Return | of the California |
| | 2014 |Senior Legislature. |
|---------------------+------------+-------------------------|
|CA Sexual Violence |Initial Tax | As many as apply and |
|Victim Services Fund | Return | receive grants provided |
| | 2014 | from the monies |
| | |contributed. |
|---------------------+------------+-------------------------|
|Habitat For Humanity |Initial Tax | To build affordable |
|Fund | Return |housing in California. |
| | 2014 | |
------------------------------------------------------------
The California Sea Otter Fund check-off was initially
established in 2006 (AB 2485, Jones and Laird). The California
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Sea Otter Fund first appeared on the 2007 return, and is subject
to a minimum contribution amount that is adjusted annually for
inflation. In 2011 the Fund's repeal date was extended from
January 1, 2011, to January 1, 2016, (AB 971, Monning). This
bill seeks to extend the repeal date once more.
Proposed Law
Senate Bill 17 extends, from January 1, 2016 to January 1, 2021,
the repeal date for the California Sea Otter Fund tax check-off
on the income tax form.
State Revenue Impact
FTB estimates revenue losses of $9,000 in (FY) 2016-17, $9,000
in 2017-18, and $9,000 in 2018-19. The estimate assumes that
the fund will meet the minimum contribution amount each year.
Comments
1. Purpose of the bill. The California Sea Otter Fund supports
researchers and managers in their efforts to study and protect
the threatened population of sea otters in California, which
were decimated by the early 1900's. Today, fewer than 3,000 sea
otters exist along the state's coastline. To date, the Fund has
supported the advancement of a long-term study to identify
impacts to sea otter health, including chemical and pathogen
pollution that is prominent off the developed areas of the
California Coast. This bill will continue to provide crucial
funding to help scientists examine and understand causes of sea
otter mortality, identify key factors limiting population growth
and recovery, and work cooperatively and collaboratively with
stakeholders to help mitigate and prevent environmental
degradation and pollution of the near-shore marine ecosystem.
2. Is there a better way? The current tax check-off program
generates a relatively small share of statewide contributions to
charitable causes. In 2008, Californians donated more than $17
billion to charities. However, less than 1% of Californians use
the tax check-off program to make donations to charitable
organizations. FTB reports that in 2012, 89,335 out of 15
million taxpayers contributed a total of $4.8 million to 18
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check-offs. Last year SB 1207 (Wolk) attempted to address this
issue and help grow charitable giving by establishing the
California Voluntary Contribution Program to promote charitable
giving and collect donations. This would have allowed many more
charities to participate in the program, would have screened
potential participants before adding them onto the form, and
eliminated the need for each organization to go through the
Legislative process. Under SB 1207, charities would instead
apply to the office of California Volunteers for placement on
the income tax form. SB 1207 (Wolk) was held on suspense in
Assembly Appropriations.
3. Bills, bills, bills. Currently, tax check-offs must be
added by the Legislature. In 2008, 11 VCFs appeared on the
personal income tax return. Today, the return contains 18.
With legislation introduced every year to add new VCFs, there is
little reason to expect this number to stop growing. The
growing number results in significant costs to the Franchise Tax
Board (FTB). It is estimated that FTB can only handle 12-15
more check-offs before it has to redesign its information
technology system, at a cost of $800,000 to $1 million.
Support and
Opposition (4/2/15)
Support : California Insurance Commissioner Dave Jones;
Defenders of Wildlife; EarthEcho International; Friends of the
Sea Otter; The Humane Society; Monterey Bay Aquarium; National
Wildlife Federation, California; Natural Resources Defense
Council; Oceana; Oceana Conservancy; WiLDCOAST.
Opposition : Unknown.
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