BILL ANALYSIS Ó
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Date of Hearing: June 20, 2016
ASSEMBLY COMMITTEE ON REVENUE AND TAXATION
Sebastian Ridley-Thomas, Chair
SB
1416 (Stone) - As Amended June 15, 2016
Majority vote. Fiscal committee.
SENATE VOTE: 37-0
SUBJECT: Voluntary contribution: Revive the Salton Sea Fund
SUMMARY: Authorizes the addition of the Revive the Salton Sea
Fund (Fund) as a voluntary contribution fund (VCF) on the
personal income tax (PIT) return. Specifically, this bill:
1)Establishes the new Fund in the State Treasury.
2)Allows a deduction for any contribution made to the Fund.
3)Provides that all money transferred to the Fund, upon
appropriation by the Legislature, shall be allocated as
follows:
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a) To the Franchise Tax Board (FTB) and the Controller for
reimbursement of all costs incurred in administering the
VCF;
b) To the Natural Resources Agency for distribution of
competitive grants to provide funds or supplement funding
of state, county and local agencies, nonprofit
organizations, and projects identified as necessary for the
restoration and maintenance of the Salton Sea, including
projects identified by the Salton Sea Authority; and,
c) Up to 5% of the funds to the Natural Resources Agency
for 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. These activities may include convening a
philanthropic roundtable, developing literature for use by
city, county, or local agencies and programs, and whatever
other activities are deemed necessary and appropriate to
promote the Fund.
4)Provides that specified Fund moneys shall not be used for
administrative costs.
5)Provides that money in the Fund shall not be used to supplant
state General Fund money for any purpose.
6)Requires the Fund to meet a standard minimum contribution
amount of $250,000 indexed for inflation in subsequent years.
7)Provides that the Fund's statutory provisions shall remain
operative only until January 1 of the fifth taxable year
following the Fund's first appearance on the PIT return.
EXISTING LAW:
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1)Allows taxpayers to contribute to one or more of 19 VCFs on
the 2015 PIT return.
2)Provides a specific sunset date for each VCF, except for the
California Seniors Special Fund and the State Parks Protection
Fund.
3)Requires each VCF to meet an annual minimum contribution
amount to remain in effect, except for the California Seniors
Special Fund, the California Firefighters' Memorial Fund, and
the California Peace Officer Memorial Foundation Fund.
FISCAL EFFECT: The FTB estimates that this bill would reduce
General Fund revenues by $8,000 beginning in fiscal year
2017-18.
COMMENTS:
1)The author has provided the following statement in support of
this bill:
One of the most critical issues facing residents of
Southern California and the 28th Senate District is the
restoration of the Salton Sea. In May of 2015, Governor
Brown created the Salton Sea Task Force to begin the
important work of implementing the Salton Sea management
plan, and create short and long term goals [to] protect the
regional air quality and the natural resources at the Sea.
SB 1416 is designed to complement the on-going work of the
Task Force by creating the Revive the Salton Sea Fund,
which would be a tax check-off [fund] found on one's State
Income Tax Form. The money collected from the check-off
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would be used to help fund the restoration and maintenance
of the Salton Sea, and provide public awareness.
2)Committee staff comments:
a) The Salton Sea : The Salton Sea, situated in Riverside
and Imperial Counties, is California's largest lake with an
area of 365 square miles. For thousands of years, the
Colorado River washed sediment and flood waters into the
Gulf of California, eventually creating a large sea known
as Lake Cahuilla where the Salton Sea is now. Lake
Cahuilla, in turn, flooded, receded, and evaporated many
times throughout its history. The Salton Sea formed in
1904 when the Colorado River flooded into the dry Salton
Trough. The Salton Sea has no outlet, causing minerals
flowing into the lake to become concentrated. As a result,
the Salton Sea's water is roughly 1.5 times saltier than
ocean water.
In compliance with a legal settlement on water known as the
Quantitative Settlement Agreement, nearly a third of the
inflow to the Salton Sea will bypass the region due to
transfer of Colorado River water from regional agriculture
to urban use in San Diego, beginning in 2017. There is
considerable concern that this will result in the exposure
of the lake's dusty shoreline causing a decrease in air
quality. In addition, there is concern that the remaining
lake will see an acceleration of salinity, causing a
potential collapse of the lake's ecosystem. Currently, the
lake is home to North America's largest population of
migratory waterfowl outside the Everglades.
b) What would this bill do ? This bill would establish the
Fund as a new VCF on the PIT return. Moneys in the Fund
would be allocated to the Natural Resources Agency for
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distribution of competitive grants to state, county and
local agencies, nonprofit organizations, and projects
identified as necessary for the restoration and maintenance
of the Salton Sea.
c) So many causes, so little space : There are countless
worthy causes that would benefit from the inclusion of a
new VCF on the state's income tax returns. At the same
time, space on the return is limited. Thus, it could be
argued that the current system for adding VCFs to the form
is subjective and essentially rewards causes that can
convince the Legislature to include their fund on the form.
REGISTERED SUPPORT / OPPOSITION:
Support
None on file
Opposition
None on file
Analysis Prepared by:M. David Ruff / REV. & TAX. / (916)
319-2098
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