BILL ANALYSIS Ó SENATE COMMITTEE ON APPROPRIATIONS Senator Ricardo Lara, Chair 2015 - 2016 Regular Session SB 1416 (Stone) - Voluntary contribution: Revive the Salton Sea Fund ----------------------------------------------------------------- | | | | | | ----------------------------------------------------------------- |--------------------------------+--------------------------------| | | | |Version: April 27, 2016 |Policy Vote: GOV. & F. 7 - 0 | | | | |--------------------------------+--------------------------------| | | | |Urgency: No |Mandate: No | | | | |--------------------------------+--------------------------------| | | | |Hearing Date: May 9, 2016 |Consultant: Robert Ingenito | | | | ----------------------------------------------------------------- This bill does not meet the criteria for referral to the Suspense File. Bill Summary: AB 1416 would authorize the addition of the Revive the Salton Sea Fund check-off to the personal income tax return. Fiscal Impact: The Franchise Tax Board (FTB) estimates that this bill would result in an annual revenue loss of $8,000 (General Fund) for every $250,000 contributed by itemizing taxpayers. The Natural Resources Agency would incur minor and absorbable costs to administer the program and provide grants. SB 1416 (Stone) Page 1 of ? The State Controller's Office and FTB and would be reimbursed for related administrative costs. Background: Current law allows taxpayers to contribute money to one or more of 19 voluntary contribution funds during the process of filing their state income tax return (tax check-off). These contributions are made from taxpayers' own resources, not from their tax liability, as is the case with federal tax returns. Check-off amounts are deductible as charitable contributions on taxpayers' returns during the subsequent tax year. With some exceptions, each voluntary contribution fund has a sunset date and is required to meet a minimum contribution amount of $250,000, adjusted annually for inflation. Proposed Law: This bill would create the Revive the Salton Sea Fund (Fund), and allow a taxpayer to make a voluntary contribution to the Fund on the state personal income tax return. The bill would provide that all money transferred to the Fund, upon appropriation by the Legislature, be allocated as follows: (1) To FTB and the State Controller for reimbursement of all costs incurred in administering the check-off, (2) to the Natural Resources Agency, for the distribution of grants, as provided, and (3) up to five percent for the development of a mechanism to provide ongoing public awareness through activities that will promote the charitable tax deduction for the Fund and seek continued contributions, as specified. Like most other check-offs, the Fund would be required to meet a minimum contribution amount of $250,000, adjusted annually for inflation. It would not appear on the tax return until another voluntary contribution designation is removed, or space is available, and would sunset five years later. Related Legislation: SB 1476 (Committee on Governance and Finance) would establish general provisions for voluntary contribution funds. Specifically, the bill would (1) establish a seven-year sunset, (2) require a minimum contribution amount of $250,000 beginning in the fund's second year, and each year thereafter, requires funds to be continuously appropriated, and (3) require administering agencies to post information online about the use of the funds. SB 1476 is currently at the Assembly Desk awaiting committee referral. Staff Comments: FTB data indicate that in 2012, 89,335 out of 15 SB 1416 (Stone) Page 2 of ? million taxpayers contributed a total of $4.8 million via tax check-offs. -- END --