BILL ANALYSIS                                                                                                                                                                                                    




                   Senate Appropriations Committee Fiscal Summary
                           Senator Christine Kehoe, Chair

                                           347 (Bass)
          
          Hearing Date:  02/12/2010           Amended: 01/27/2010
          Consultant: Mark McKenzie       Policy Vote: Rev/Tax 5-0
          _________________________________________________________________ 
          ____
          BILL SUMMARY:   AB 347 would allow taxpayers to claim specified  
          charitable contributions made for the relief of victims of the  
          recent earthquake in Haiti as a deduction on 2009 tax returns,  
          in conformity with federal income tax law.
          _________________________________________________________________ 
          ____
                            Fiscal Impact (in thousands)

           Major Provisions         2009-10      2010-11       2011-12     Fund
           
          Acceleration of deductions        $80         ($80)     General
          (Cash flow impact)
          _________________________________________________________________ 
          ____

          STAFF COMMENTS: This bill meets the criteria for referral to the  
          Suspense File.
          
          Current law generally allows taxpayers to deduct charitable  
          contributions to qualified organizations from taxable income  
          when computing tax liability.  These deductions are claimed in  
          the tax year during which the contribution was made.  Existing  
          federal law (Public Law 111-126), which was enacted on January  
          22, 2010, allows individual and corporate taxpayers that make a  
          contribution to Haiti earthquake relief efforts after January  
          11, 2010 and before March 1, 2010 to treat the contribution as  
          if it was made during 2009.

          AB 347 would conform to federal tax law by allowing a taxpayer  
          who makes a cash contribution after January 11, 2010 and before  
          March 1, 2010 for relief of Haiti's earthquake victims to claim  
          a deduction for that contribution on the state tax return as if  
          it were made in the 2009 tax year.  This provision would sunset  
          on December 1, 2011.

          The Franchise Tax Board estimates that this bill would result in  
          a General Fund revenue loss of approximately $80,000 in 2009-10  










          and a revenue gain of $80,000 in 2010-11 as a result of  
          taxpayers claiming the charitable contribution deduction on  
          their 2009 tax returns rather than in the 2010 tax year.  The  
          fiscal impact of the acceleration of tax deductions represents a  
          cash flow shift of the revenue losses from 2010-11 to the  
          current fiscal year.

          Staff notes that SB 50 (Campbell), Chapter 5 of 2005, enacted  
          similar provisions for charitable contributions to Indian Ocean  
          tsunami relief efforts.