BILL ANALYSIS Ó
SB 1416
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Date of Hearing: August 3, 2016
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Lorena Gonzalez, Chair
SB 1416
(Stone) - As Amended June 15, 2016
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|Policy |Revenue and Taxation |Vote:|9 - 0 |
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Urgency: No State Mandated Local Program: NoReimbursable: No
SUMMARY:
This bill 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)Requires all money transferred to the Fund, upon appropriation
by the Legislature, to be allocated as follows:
a) To the Franchise Tax Board (FTB) and the State
Controller's Office (SCO) for reimbursement of all costs
incurred in administering the VCF;
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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
2)Requires the Fund to meet a standard minimum contribution
amount of $250,000 indexed for inflation in subsequent years.
3)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.
FISCAL EFFECT:
Minor ongoing GF revenue losses of approximately $8,000 per year
resulting from itemized taxpayer deductions.
COMMENTS:
1)The Salton Sea. The Salton Sea is California's largest lake
with an area of 365 square miles. 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
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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.
2)Purpose. According to the author, SB 1416 will complement the
ongoing work by the Salton Sea Task Force. This Task Force was
created in 2015 to implement the Salton Sea Management
Program, which aims to restore habitat areas and minimize air
pollution. The author notes that the money collected from this
VCF will help fund the restoration and maintenance of the
Salton Sea, and provide public awareness about the issues
facing the region.
3)Background on VCFs. Current state tax law allows taxpayers to
make contributions on their tax returns to a number of VCFs.
Like many other VCFs, SB 1416 would require the Fund to meet a
current minimum contribution amount to return on state tax
returns ($250,000, indexed to inflation after the second
year). Moreover, like other VCFs, SB 1416 would establish an
administrating agency: The money deposited into the Fund are
allocated to the Natural Resources Agency for distribution of
grants.
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4)New VCF Bills in 2016. Four Assembly bills were introduced in
2016 that would either extend existing VCFs or create new
ones. Those bills are all pending in the Senate Appropriations
Committee.
a) AB 1789 (Santiago) extends the voluntary contribution
for the School Supplies for Homeless Children Fund.
b) AB 2371 (Frazier) adds a voluntary contribution for the
Special Olympics Fund.
c) AB 2430 (Beth Gaines) adds a voluntary contribution for
the Type 1 Diabetes Research Fund.
d) AB 2497 (Wagner) repeals the voluntary contribution for
the California Senior Legislature Fund and replaces it with
a voluntary contribution for the California Senior Citizen
Advocacy Fund.
Moreover, SB 1476 (Committee on Governance and Finance), which
is currently pending on the Assembly Floor, establishes
general provisions for voluntary contribution funds.
Specifically, the bill establishes a seven year sunset,
requires 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 requires
administering agencies to post information online about the
use of the funds.
Analysis Prepared by:Luke Reidenbach / APPR. / (916)
SB 1416
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319-2081