BILL ANALYSIS �
AB 971
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Date of Hearing: May 4, 2011
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Felipe Fuentes, Chair
AB 971 (Monning) - As Amended: April 25, 2011
Policy Committee: Revenue and
Taxation Vote: 6-0
Urgency: No State Mandated Local Program:
No Reimbursable:
SUMMARY
This bill reauthorizes the California Sea Otter Fund check-off
on the personal income tax form beginning with the 2011 return.
Specifically, this bill:
1)Establishes the California Sea Otter Fund in the State
Treasury and 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 check-off. Remaining moneys shall be
divided equally between:
a) The Department of Fish and Game for increased
investigation, prevention and enforcement actions.
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.
2)Provides for the automatic repeal of the check-off provisions
on January 1, 2016, or on January 1 of an earlier year, if FTB
estimates the Fund will not meet the specified minimum
contribution amount, which the bill sets for the 2011 calendar
year at $260,890. For subsequent calendar years, the minimum
contribution amount will be adjusted for inflation
FISCAL EFFECT
AB 971
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FTB staff estimates this bill will cost the state about $20,000
per year. This estimate assumes that the check-off is added in
the 2012-13 fiscal year, and the donations meet the average
amount for the other tax check-offs and that these donations are
subsequently claimed as charitable deductions by taxpayers.
Revenue losses would be similar in subsequent years, assuming
there is no significant change in the amount of donations.
COMMENTS
1)Purpose. The author states that since the sea otter
population remains in trouble, it is important to extend the
tax check-off option in order for taxpayers to voluntarily
assist the state in helping to protect them. Proponents argue
that 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. They also point out that
fewer than 3,000 sea otters exist along the state's coastline
- one-fifth of the historic population - and it is not known
why it is taking so long for the population to recover to
historic levels.
2)Voluntary Contribution Funds (VCFs) . California taxpayers can
make voluntary contributions to any of 15 funds listed on the
state personal income tax return. The contributions are in
addition to tax liabilities so they do not directly reduce the
amount of state taxes. As charitable contributions, the
taxpayer may deduct the amount of the check-off on the
subsequent year's income tax return. These voluntary
contributions support various purposes, including cancer
research, endangered species preservation and emergency food
assistance. Contributions have historically ranged from
$300,000 to $800,000 per year. Except for the California
Seniors Special Fund, all have sunset dates, and most must
meet a minimum annual contribution to remain on the return.
3)Second time around. The original California Sea Otter Fund
first appeared on the 2006 PIT return. Donations always met
or exceeded the minimum amount, but the original legislation
provided for automatic repeal on January 1, 2011. This
check-off remains on the 2010 return that taxpayers are
currently filing so no 2010 total exist, but as of the end of
March 2011, the donations totaled $165,000. This amount is
higher than the year to date totals for any of the prior
calendar years.
AB 971
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4)Related legislation: The following related bills address
personal income tax check-offs and have been introduced in the
current legislative session:
a) AB 233 (Hall) would authorize the addition of the
California YMCA Youth and Government Fund check-off to the
personal income tax form upon the removal of another
voluntary contribution fund (VCF) from the form.
b) AB 564 (Smyth) would, among other things, add the
Municipal Shelter Spay-Neuter Fund to the form.
c) AB 764 (Swanson) would add the Victim-Witness Assistance
Fund to the form.
d) SB 164 (Simitian) would extend the repeal dates of the
State Children's Trust Fund for the Prevention of Child
Abuse and the Rare and Endangered Species Preservation
Program to January 1, 2018.
Analysis Prepared by : Roger Dunstan / APPR. / (916) 319-2081