BILL ANALYSIS                                                                                                                                                                                                    Ó



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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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          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)  








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          319-2081