BILL ANALYSIS �
SENATE GOVERNANCE & FINANCE COMMITTEE
Senator Lois Wolk, Chair
BILL NO: AB 971 HEARING: 6/29/11
AUTHOR: Monning FISCAL: Yes
VERSION: 4/25/11 TAX LEVY: No
CONSULTANT: Faulkner
CALIFORNIA SEA OTTER VOLUNTARY CONTRIBUTION FUND
Reenacts the California Sea Otter check-off for five years.
Background and Existing Law
Existing state law allows taxpayers to contribute money to
one or more of 15 voluntary contribution funds (VCFs) by
checking a box on their state income tax return.
California law requires contributions made through
check-offs to be made from taxpayers' own resources and not
from their tax liability, as is possible on federal tax
returns. Check-off amounts may be claimed as charitable
contributions on taxpayers' tax returns during the
subsequent year.
The Franchise Tax Board (FTB) designs tax returns to
provide for the designation of contributions to specified
funds either on the return itself or on a separate schedule
that must be attached to the return. With a few
exceptions, VCFs remain on the return until they are either
repealed or fail to meet their minimum contribution amount.
The minimum contribution amounts are adjusted annually
for inflation. For most VCFs, the minimum contribution
amount is $250,000 in the fund's second year. By September
1st of each year, the FTB must determine the minimum
contribution amount required for each fund to remain on the
form for the following calendar year and whether estimated
contributions to each fund will be less than the minimum
contribution amount for that calendar year. If the FTB
estimates that a fund will fail to meet the minimum
contribution amount, that fund is repealed effective for
taxable years beginning on or after January 1st of the
following calendar year.
The California Sea Otter Fund first appeared on the 2006
personal income tax return and was automatically repealed
AB 971 -- 4/25/11 -- Page 2
on January 1, 2011 pursuant to the original legislation (AB
2485, Jones, 2006). To date, the fund has raised over $1.3
million and additional contributions continue to be
received with 2010 returns.
Proposed Law
Assembly Bill 971 reenacts the California Sea Otter Fund
that was repealed on January 1, 2011. The check-off will
be repealed on January 1, 2016 or on January 1st of an
earlier year if the FTB estimates the fund will not meet
the annually specified minimum contribution amount. The
2011 minimum contribution amount is $260,890.
AB 971 requires money into the fund, upon appropriation by
the Legislature, be allocated to the Department of Fish and
Game for the purposes of establishing a sea otter fund and
to the California Coastal Conservancy for competitive
grants and contracts for research, projects, and programs
related to the Federal Sea Otter Recovery Plan or improving
the nearshore ocean ecosystem.
State Revenue Impact
The FTB estimates this bill will result in a revenue loss
of $15,000 each fiscal year the Fund is in place.
Comments
1. Purpose of the bill . The author states, "The
California Sea Otter Fund supports researchers and managers
in their efforts to study and protect the threatened
population of sea otters in California, which were
decimated by the early 1900s. Today, fewer than 3,000 sea
otters exist along the state's coastline - one-fifth of the
historic population - and we do not yet know why the
population is recovering so slowly. The California Sea
Otter Fund is a primary source of funding for sea otter
field research.
To date, the California Sea Otter Fund has supported the
AB 971 -- 4/25/11 -- Page 3
advancement of a long-term study to identify impacts to sea
otter health, including chemical and pathogen pollution
that is prominent off the developed areas of the California
coast. Findings from this study will help inform
government agencies, scientists, and other sea otter
supporters on how best to protect the sea otter and the
health of our coast."
2. Many worthy causes . Countless worthy causes may be
funded by tax check-offs. The current system remains
subjective and is limited to those organizations that can
convince the Legislature to include them on the form.
These check-offs give the state a role in collecting money
for charity. The Committee may wish to consider whether
the state should use the tax code to encourage
contributions to certain charitable organizations.
3. 2011 check-offs . Following is a list of 2011
check-offs and contribution amounts received in 2010:
-------------------------------------------------------------
|Alzheimer's Disease/Related |$426,417 |
|Disorders Fund | |
|------------------------------+------------------------------|
|Arts Council Fund |Initial Tax Return 2010 |
|------------------------------+------------------------------|
|CA Breast Cancer Research |$519,728 |
|Fund | |
|------------------------------+------------------------------|
|CA Cancer Research Fund |$275,587 |
|------------------------------+------------------------------|
|CA Firefighters' Memorial |$207,455 |
|Fund | |
|------------------------------+------------------------------|
|CA Fund for Senior Citizens |$296,144 |
|------------------------------+------------------------------|
|CA Peace Officer Memorial |$135,250 |
|Foundation Fund | |
|------------------------------+------------------------------|
|CA Police Activities League |Initial Tax Return 2010 |
|(CALPAL) Fund | |
|------------------------------+------------------------------|
|CA Sea Otter Fund |$263,543 |
|------------------------------+------------------------------|
|CA Seniors Special Fund |$59,192 |
|------------------------------+------------------------------|
AB 971 -- 4/25/11 -- Page 4
|CA Veterans Homes Fund |Initial Tax Return 2010 |
|------------------------------+------------------------------|
|Emergency Food for Families |$487,333 |
|Fund | |
|------------------------------+------------------------------|
|Rare & Endangered Species |$578,215 |
|Preservation Program | |
|------------------------------+------------------------------|
|Safely Surrendered Baby Fund |Initial Tax Return 2010 |
|------------------------------+------------------------------|
|State Children's Trust for |$448,081 |
|the Prevention of Child Abuse | |
-------------------------------------------------------------
4. Can we all get along ? There are currently eight VCF
bills making their way through the Legislature. With an
estimated cost of $16,000 per bill to go through the
legislative process, combining future VCF proposals into an
omnibus VCF bill could prove time and cost effective.
In addition to this bill, the following bills have been
introduced this year:
SB 164 (Simitian) extends the repeal dates of both the
State Children's Trust Fund for the Prevention of Child
Abuse and the Rare and Endangered Species Preservation
Program from January 1, 2013 to January 1, 2018. The
Assembly Revenue and Taxation Committee will hear the bill
on June 27th.
SB 583 (Vargas) reestablishes the ALS/Lou Gehrig's Disease
Research Fund. The bill is in the Assembly Appropriations
Committee.
SB 803 (DeSaulnier) creates a VCF designation on the
personal income tax form for taxpayers to contribute to
California Youth Leadership Project. The bill remains in
the Senate Appropriations Committee.
SBX1 3 (LaMalfa) creates a VCF designation on the personal
income tax form, the Help Our State Fund, for taxpayers to
contribute to the General Fund. The Committee will hear
the bill on July 29th.
AB 233 (Hall) creates a VCF designation on the personal
income tax form for taxpayers to contribute to the
AB 971 -- 4/25/11 -- Page 5
California YMCA Youth and Government Fund. The Committee
will hear the bill on July 29th.
AB 564 (Smyth) reestablishes the Municipal Shelter
Spay-Neuter Fund and encourages all persons who prepare
state income tax returns to inform their clients in writing
that they may contribute to any voluntary contribution
check-off on the return. The Committee will hear the bill
on July 29th.
AB 764 (Swanson) creates a VCF designation on the personal
income tax form for taxpayers to contribute to the Child
Victims of Human Trafficking Fund. The Committee will hear
the bill on July 29th.
Assembly Actions
Assembly Revenue and Taxation Committee 6-0
Assembly Appropriations Committee:17-0
Assembly Floor 72-3
Support and Opposition (6/23/11)
Support : Defenders of Wildlife (Co-sponsor); Monterey Bay
Aquarium (Co-sponsor); Aquarium of the Pacific; Cal Coast;
California Coastkeeper Alliance; Environmental Defense
Fund; Friends of the Sea Otter; Heal the Bay; NRDC; Oceana;
Paw PAC; Planning and Conservation League; Robert Down
Elementary School Fifth Graders in Pacific Grove,
California; Save Our Shores; Seventh Generation Advisors;
Sierra Club California; Temple Beth El Second Graders in
Aptos, California; The Otter Project;
WILDCOAST/COASTASALVAJE; two individuals.
Opposition : Unknown.