BILL ANALYSIS �
AB 971
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Date of Hearing: April 11, 2011
ASSEMBLY COMMITTEE ON REVENUE AND TAXATION
Henry T. Perea, Chair
AB 971 (Monning) - As Amended: April 4, 2011
Majority vote. Fiscal committee.
SUBJECT : Personal income tax: voluntary contributions:
California Sea Otter Fund
SUMMARY : Reauthorizes the addition of the California Sea Otter
Fund (Fund) checkoff to the personal income tax (PIT) form
beginning with the 2011 return. Specifically, this bill :
1)Contains numerous legislative findings and declarations
related to sea otters and their importance to the marine
ecosystem.
2)Establishes the Fund in the State Treasury.
3)Provides that all moneys transferred to the Fund, upon
appropriation by the Legislature, shall first be allocated to
the Franchise Tax Board (FTB) and the State Controller for
reimbursement of all costs incurred in administering the
checkoff. Remaining moneys shall be divided equally between:
a) The Department of Fish and Game for the purposes of
establishing a sea otter fund to be used within the
department's index coding system for increased
investigation, prevention, and enforcement actions; and,
b) The California Coastal Conservancy for competitive
grants and contracts to public agencies and nonprofit
organizations for research, science, protection, projects,
or programs related to the Federal Sea Otter Recovery Plan
or improving the nearshore ecosystem.
4)Provides for the checkoff provisions' automatic repeal on
January 1, 2016, or on January 1 of an earlier year, if FTB
estimates that the Fund will not meet the specified "minimum
contribution amount."
5)Sets the minimum contribution amount for the 2011 calendar
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year at $260,890. For subsequent calendar years, the minimum
contribution amount will be adjusted for inflation.
6)Expresses the Legislature's intent that this bill's provisions
be treated as a continuation of the prior Fund checkoff
provisions, which sunset on January 1, 2011.
EXISTING LAW :
1)Allows taxpayers to designate on their PIT returns a
contribution to any of 15 voluntary contribution funds (VCFs).
2)Provides a specific sunset date for each VCF, except for the
California Seniors Special Fund.
3)Provides that each VCF must meet a minimum annual 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 revenue losses, resulting from
contribution deductions, to be around $15,000 annually.
COMMENTS :
1)The author has provided the following statement in support of
this bill:
Given the recent information that the sea otter population
remains in trouble, it is important that we extend the tax
check-off option through AB 971 in order for taxpayers to
be able to voluntarily assist the state in helping to
protect them.
2)Proponents state, "The Fund is a critical source of support
for research aimed at the recovery of the threatened
population of southern sea otters off the California coast.
Today, fewer than 3,000 sea otters exist along the state's
coastline - one-fifth of the historic population - and we do
not know why it is taking so long for the population to
recover."
3)Committee Staff Notes:
a) So many causes, so little space : There are countless
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worthy causes that would benefit from the inclusion of a
VCF on the state's income tax returns. At the same time,
space on the returns is limited. Thus, it could be argued
that the current system for adding VCFs to the form is
subjective and essentially rewards organizations that can
convince the Legislature to include their fund on the form.
b) Legislative history : The original Fund first appeared
on the 2006 PIT return. The original legislation provided
for the Fund provisions' automatic repeal on January 1 of
the fifth taxable year following the Fund's first
appearance on the tax return. As such, the original Fund
provisions were repealed by their own terms on January 1,
2011. The author has introduced this bill to retain the
Fund on returns for taxable years 2011 through 2015,
provided the Fund continues to meet the annual minimum
contribution threshold indexed for inflation. Effectively,
this bill serves to extend the original Fund provisions'
sunset date by five years. As of the end of February 2011,
the Fund has already received valid contributions totaling
$52,779. This amount is higher than the end of February
totals for any of the prior calendar years.
c) Related legislation : The following related bills have
been introduced in the current Legislative Session:
i) AB 233 (Hall) would add the California YMCA Youth
and Government Fund to the form;
ii) AB 564 (Smyth) reauthorizes the addition of the
Municipal Shelter Spay-Neuter Fund checkoff to the form;
and,
iii) AB 764 (Swanson) would add the Victim-Witness
Assistance Fund to the form.
d) Proposed technical amendments : Committee staff suggests
the following technical amendments to the bill:
i) On page 2, line 3, replace "with" with "within";
ii) On page 5, line 20, insert a period after "Section
18754.1";
iii) On page 5, line 25, replace "initial" with
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"original";
iv) On page 5, line 29, delete "that";
v) On page 6, line 37, replace "near-shore" with
"nearshore"; and,
vi) On page 7, line 3, delete "in" and insert "pursuant
to".
REGISTERED SUPPORT / OPPOSITION :
Support
Defenders of Wildlife (co-sponsor)
Monterey Bay Aquarium (co-sponsor)
California Coastkeeper Alliance
Paw PAC
Robert H. Down Elementary School, Fifth Grade Class
1 individual
Opposition
None on file
Analysis Prepared by : M. David Ruff / REV. & TAX. / (916)
319-2098