Existing law allows an individual taxpayer to contribute amounts in excess of his or her personal income tax liability for the support of specified funds and accounts, including among others, to the Endangered and Rare Fish, Wildlife, and Plant Species Conservation and Enhancement Account. Existing law authorizes contributions to be made to this account pursuant to these provisions until January 1, 2018, or until an earlier date if specified minimum contributions are not received. Existing law requires all moneys contributed to this account pursuant to these provisions to be allocated, upon appropriation by the Legislature, to the Franchise Tax Board and the Controller for the costs of collection and administration of the funds, and to the Department of Fish and Wildlife for specified purposes.

This bill would authorize contributions to be made to this account pursuant to these provisions until January 1, 2025, or until an earlier date if the Franchise Tax Board determines that the amount of contributions estimated to be received during a calendar year will not at least equal the minimum contribution amount of $250,000. The bill would instead require moneys contributed to this account pursuant to these provisions to be continuously appropriated and allocated for the above-specified purposes.

This bill would also allow an individual to designate on his or her tax return that a specified amount in excess of his or her tax liability be transferred to the Native California Wildlife Rehabilitation Voluntary Tax Contribution Fund, which would be created by this bill. The bill would require the Franchise Tax Board to revise the tax return form to include a space for the designation of contributions to the fund when another voluntary designation is removed from the form or there is space, whichever occurs first.

The bill would require money contributed to the fund to be continuously appropriated and allocated to the Franchise Tax Board and the Controller for reimbursement of costs, as provided, and to the Department of Fish and Wildlife to establish a competitive grant program for the purposes of the recovery and rehabilitation of injured, sick, or orphaned wildlife, and conservation education, as specified. The bill would authorize a maximum of 5% of the funds allocated to the Department of Fish and Wildlife to be used by the department to defray administrative expenses.

The bill would provide that these provisions would remain in effect only until January 1 of the 7th taxable year following the first appearance of the Native California Wildlife Rehabilitation Voluntary Tax Contribution Fund on the tax return, but would further provide for an earlier repeal if the Franchise Tax Board determines that the amount of contributions estimated to be received during a calendar year will not at least equal the minimum contribution amount of $250,000, in which case these provisions would be repealed on December 1 of that year.

Existing law allows an individual taxpayer to contribute amounts in excess of his or her personal income tax liability for the support of specified funds and accounts, including among others, to the Endangered and Rare Fish, Wildlife, and Plant Species Conservation and Enhancement Account. Existing law authorizes contributions to be made to this account pursuant to these provisions until January 1, 2018, or until an earlier date if specified minimum contributions are not received. Existing law requires all moneys contributed to this account pursuant to these provisions to be allocated, upon appropriation by the Legislature, to the Franchise Tax Board and the Controller for the costs of collection and administration of the funds, and to the Department of Fish and Wildlife for specified purposes.

This bill would authorize contributions to be made to this account pursuant to these provisions until January 1, 2025, or until an earlier date if the Franchise Tax Board determines that the amount of contributions estimated to be received during a calendar year will not at least equal the minimum contribution amount of $250,000. The bill would instead require moneys contributed to this account pursuant to these provisions to be continuously appropriated and allocated for the above-specified purposes.

This bill would also allow an individual to designate on his or her tax return that a specified amount in excess of his or her tax liability be transferred to the Native California Wildlife Rehabilitation Voluntary Tax Contribution Fund, which would be created by this bill. The bill would require the Franchise Tax Board to revise the tax return form to include a space for the designation of contributions to the fund when another voluntary designation is removed from the form or there is space, whichever occurs first.

The bill would require money contributed to the fund to be continuously appropriated and allocated to the Franchise Tax Board and the Controller for reimbursement of costs, as provided, and to the Department of Fish and Wildlife to establish a competitive grant program for the purposes of the recovery and rehabilitation of injured, sick, or orphaned wildlife, and conservation education, as specified. The bill would authorize a maximum of 5% of the funds allocated to the Department of Fish and Wildlife to be used by the department to defray administrative expenses.

The bill would provide that these provisions would remain in effect only until January 1 of the 7th taxable year following the first appearance of the Native California Wildlife Rehabilitation Voluntary Tax Contribution Fund on the tax return, but would further provide for an earlier repeal if the Franchise Tax Board determines that the amount of contributions estimated to be received during a calendar year will not at least equal the minimum contribution amount of $250,000, in which case these provisions would be repealed on December 1 of that year.

Existing law allows an individual taxpayer to contribute amounts in excess of his or her personal income tax liability for the support of specified funds. funds and accounts, including among others, to the Endangered and Rare Fish, Wildlife, and Plant Species Conservation and Enhancement Account. Existing law authorizes contributions to be made to this account pursuant to these provisions until January 1, 2018, or until an earlier date if specified minimum contributions are not received. Existing law requires all moneys contributed to this account pursuant to these provisions to be allocated, upon appropriation by the Legislature, to the Franchise Tax Board and the Controller for the costs of collection and administration of the funds, and to the Department of Fish and Wildlife for specified purposes.

This bill would also allow an individual to designate on his or her tax return that a specified amount in excess of his or her tax liability be transferred to the Native California Wildlife Rehabilitation Voluntary Tax Contribution Fund, which would be created by this bill. The bill would require the Franchise Tax Board to revise the tax return form to include a space for the designation of contributions to the fund when another voluntary designation is removed from the form or there is space, whichever occurs first.

The bill would require money contributed to the fund to be continuously appropriated and allocated to the Franchise Tax Board and the Controller for reimbursement of costs, as provided, and to the Department of Fish and Wildlife to establish a competitive grant program to award grants to nonprofit organizations for the operation of a wildlife rehabilitation facility permitted by the department. for the purposes of the recovery and rehabilitation of injured, sick, or orphaned wildlife, and conservation education, as specified. The bill would authorize certain percentages a maximum of 5% of the funds allocated to the Department of Fish and Wildlife to be used by the department for to defray administrative expenses and to encourage taxpayers to make contributions by voluntary checkoff on a tax return to the fund. expenses.

The bill would provide that these provisions would remain in effect only until January 1 of the 7th taxable year following the first appearance of the Native California Wildlife Rehabilitation Voluntary Tax Contribution Fund on the tax return, but would further provide for an earlier repeal if the Franchise Tax Board determines that the amount of contributions estimated to be received during a calendar year will not at least equal the minimum contribution amount of $250,000, in which case these provisions would be repealed on December 1 of that year.

Existing law allows an individual taxpayer to contribute amounts in excess of his or her personal income tax liability for the support of specified funds.

This bill would allow an individual to designate on his or her tax return that a specified amount in excess of his or her tax liability be transferred to the Native California Wildlife Rehabilitation Voluntary Tax Contribution Fund, which would be created by this bill. The bill would require the Franchise Tax Board to revise the tax return form to include a space for the designation of contributions to the fund when another voluntary designation is removed from the form or there is space, whichever occurs first.

This bill would require money contributed to the fund, upon appropriation by the Legislature, fund to be continuously appropriated and allocated to the Franchise Tax Board and the Controller for reimbursement of costs, as provided, and to the Department of Fish and Wildlife to establish a competitive grant program to award grants to nonprofit organizations for the operation of a wildlife rehabilitation facility permitted by the department. The bill would authorize certain percentages of the funds allocated to the Department of Fish and Wildlife to be used by the department for administrative expenses and to encourage taxpayers to make contributions by voluntary checkoff on a tax return to the fund.

The bill would provide that these provisions would remain in effect only until January 1 of the 5th 7th taxable year following the first appearance of the Native California Wildlife Rehabilitation Voluntary Tax Contribution Fund on the tax return, or January 1, 2024, whichever occurs first, return, but would further provide for an earlier repeal if the Franchise Tax Board determines that the amount of contributions estimated to be received during a calendar year will not at least equal the minimum contribution amount, as defined, for that calendar year, amount of $250,000, in which case these provisions would be repealed on December 1 of that year.

Existing law allows an individual taxpayer to contribute amounts in excess of his or her personal income tax liability for the support of specified funds.

This bill would allow an individual to designate on his or her tax return that a specified amount in excess of his or her tax liability be transferred to the Native California Wildlife Rehabilitation Fund, which would be created by this bill. The bill would require the Franchise Tax Board to revise the tax return form to include a space for the designation of contributions to the fund when another voluntary designation is removed from the form or there is space, whichever occurs first.

This bill would require money contributed to the fund, upon appropriation by the Legislature, to be allocated to the Franchise Tax Board and the Controller for reimbursement of costs, as provided, and to the Department of Fish and Wildlife to establish a competitive grant program to award grants to nonprofit organizations for the recovery and rehabilitation of injured, sick, or orphaned wildlife and for conservation education. for the operation of a wildlife rehabilitation facility permitted by the department. The bill would authorize certain percentages of the funds allocated to the Department of Fish and Wildlife to be used by the department for administrative expenses and to encourage taxpayers to make contributions by voluntary checkoff on a tax return to the fund.

The bill would provide that these provisions would remain in effect only until January 1 of the 5th taxable year following the first appearance of the Native California Wildlife Rehabilitation Fund on the tax return, or January 1, 2024, whichever occurs first, but would further provide for an earlier repeal if the Franchise Tax Board determines that the amount of contributions estimated to be received during a calendar year will not at least equal the minimum contribution amount, as defined, for that calendar year, in which case these provisions would be repealed on December 1 of that year.

Existing law allows an individual taxpayer to contribute amounts in excess of his or her personal income tax liability for the support of specified funds.

This bill would allow an individual to designate on his or her tax return that a specified amount in excess of his or her tax liability be transferred to the Native California Wildlife Rehabilitation Fund, which would be created by this bill. The bill would require the Franchise Tax Board to revise the tax return form to include a space for the designation of contributions to the fund when another voluntary designation is removed from the form or there is space, whichever occurs first.

This bill would require money contributed to the fund, upon appropriation by the Legislature, to be allocated to the Franchise Tax Board and the Controller for reimbursement of costs, as provided, and to the Department of Fish and Wildlife to establish a competitive grant program to award grants to nonprofit organizations for the recovery and rehabilitation of injured, sick, or orphaned wildlife and for conservation education.

The bill would provide that these provisions would remain in effect only until January 1 of the 5th taxable year following the first appearance of the Native California Wildlife Rehabilitation Fund on the tax return, or January 1, 2024, whichever occurs first, but would further provide for an earlier repeal if the Franchise Tax Board determines that the amount of contributions estimated to be received during a calendar year will not at least equal the minimum contribution amount, as defined, for that calendar year, in which case these provisions would be repealed on December 1 of that year.

CONCURRENCE IN SENATE AMENDMENTS

CSA1 Bill Id:AB 1031

Author:(Waldron)

As Amended Ver:August 24, 2017

Majority vote

Original Committee Reference: REV. & TAX.

SUMMARY: Establishes the Native California Wildlife Rehabilitation Voluntary Tax Contribution Fund (Fund) to which taxpayers may contribute through a designation on the state personal income tax (PIT) return, and extends the sunset date of the Rare and Endangered Species Preservation Voluntary Tax Contribution Program (Program).

The Senate amendments

1. Recast provisions of the competitive grant program supported by the Fund and administered by the Department of Fish and Wildlife (DFW).
2. Delete a provision allowing DFW to use up to 5% of allocated funds for public outreach activities that encourage taxpayers to make contributions to the Fund.
3. Provide that contributions to the Fund will also be used to support conservation education.
4. Extend the sunset date of the Program to January 1, 2025 (from January 1, 2018) and make technical and conforming changes to the Program.

FISCAL EFFECT: According to the Senate Appropriations Committee:

1. The Franchise Tax Board (FTB) estimates that, beginning in 2018-19, this bill would result in an annual revenue loss of $8,000 (General Fund).
2. The State Controller's Office (SCO), FTB and DFW would be reimbursed for related administrative costs.

EXISTING LAW:

1. Allows taxpayers to designate on their PIT returns a contribution to any of the 19 voluntary contribution funds (VCFs) on the 2016 PIT return, including the Program.
2. Provides the following requirements for new or extended VCFs that take effect on or after January 2, 2017:
3. Requires the words "voluntary tax contribution" to be included as part of the name of the fund.
4. Requires the administering agency's Internet Web site to report the process for awarding money, the amount of money spent on administration, and an itemization of how program funds were awarded by the agency, including information regarding recipients of funds.
5. Provides, unless otherwise specified, for each VCF's automatic sunset on January 1 of the seventh calendar year following the VCF's first appearance on the PIT return.
6. Requires each VCF to meet a minimum contribution threshold of $250,000 in the second calendar year and each subsequent year to remain on the PIT return.
7. Requires contributions made to each VCF to be continuously appropriated to the administering agency to be spent, as specified.
8. Provides a specific sunset date for each VCF, except for the California Seniors Special Fund and the State Parks Protection Fund.
9. Provides that the minimum annual contribution amounts required to remain in effect do not apply to the California Seniors Special Fund, the California Firefighters' Memorial Fund, and the California Peace Officer Memorial Foundation Fund.
10. Authorizes DFW to approve and issue permits in the form of a Memorandum of Understanding only to wildlife rehabilitation facilities that meet wildlife care standards set forth by a manual published jointly by the International Wildlife Rehabilitation Council and the National Wildlife Rehabilitators Association, as specified. (California Code of Regulations, Title 14, Division 1, Subdivision 3, Chapter 3, Section 679.)

AS PASSED BY THE ASSEMBLY, this bill:

1. Established the Fund in the State Treasury, to which contributions will be used to support the recovery and rehabilitation of injured, sick, or orphaned wildlife.
2. Allowed a deduction for any contribution made to the Fund.
3. Required all money transferred to the Fund to be continuously appropriated and allocated as follows:
4. To the FTB and the SCO for reimbursement of all costs incurred in administering the Fund; and,
5. To the DFW for a competitive grant program that awards grants to nonprofit organizations for the operation of a wildlife rehabilitation facility permitted pursuant to California Code of Regulations, Title 14, Section 679. DFW may use up to 5% of allocated funds for public outreach activities that encourage taxpayers to make contributions, and up to 5% of allocated funds to defray administrative expenses associated with administering the Fund.
6. Provided for the Fund provisions' automatic sunset on January 1 of the seventh taxable year following the Fund's first appearance on the PIT return, or January 1, 2024, whichever occurs first.
7. Required the Fund to meet a minimum contribution threshold of $250,000 to remain on the PIT return.

COMMENTS:

1. So Many Causes, So Little Space: There are countless 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. Additionally, expanding the list of qualifying VCFs may have the unintended consequence of reducing the individual contributions that existing VCFs receive since they would have to compete against a broader group of worthy causes. This could make it more difficult for existing VCFs to meet the $250,000 minimum requirement and cause the VCF to fall off the tax return.
2. New VCF Requirements: The Senate Governance and Finance Committee held an oversight hearing in 2015 that reviewed the status of California's VCFs and found a framework was needed to improve the current VCF system. The Committee found that donated funds could take years to reach the intended recipient, or, worse yet, the money would end up in state coffers. The Legislature created California's VCF system in 1982 with a noble intention – to make it easier for Californians to donate to charitable causes. To date, VCFs have raised over $100 million for various charitable causes, including social services, public health, and environmental protection.

SB 1476 (Governance and Finance Committee), Chapter 597, Statutes of 2016, established best practices and reforms needed to ensure that taxpayers' voluntary contributions are being put toward charitable purposes in a transparent and timely fashion. SB 1476 required the words "voluntary tax contribution" to be included in the name of the any new fund, required that specified information be made public on the administering agency's Internet Web site, lengthened the current five-year sunset to seven years, set a minimum contribution amount of $250,000 (not adjusted for inflation), and provided for the continuous appropriation of funds. This bill follows the best practices established by SB 1476 in establishing the new Fund and extending the existing Program.

1. Wildlife Rehabilitation: This bill establishes a new VCF with contributions to the Fund used to support the recovery and rehabilitation of injured, sick, or orphaned wildlife, and conservation education, through grants to non-profit wildlife rehabilitation facilities administered by DFW. Wildlife rehabilitation facilities are sites where activities are undertaken to restore to a condition of good health, for the purpose of release to the wild, animals occurring naturally and not normally domesticated in this state.
2. Rare and Endangered Species Preservation: This bill also extends the sunset date of an existing VCF for seven more years, contributions to which are used to help protect and conserve California's many threatened and endangered species and the wild land they need to survive. The Program initially appeared on the state PIT return in 1983 and its sunset date has been extended several times. The Program received total annual contributions of $453,071 in 2015 and total annual contributions of $480,283 in 2016. Contributions made to the Program are first allocated to the FTB and SCO for reimbursement of all costs incurred in connection with administering the VCF. Second, funds are allocated to DFW to support programs for endangered and rare animals and native plant species, or species likely to be determined endangered or rare, with DFW authorized to use a portion funds for administrative and outreach purposes.

Analysis Prepared by: Irene Ho / REV. & TAX. / (916) 319-2098 FN: 0001841

 THIRD READING  

Bill No: AB 1031

Author:

:

Vote:

SENATE GOVERNANCE & FIN. COMMITTEE: 6-0, 6/14/17

AYES: McGuire, Nguyen, Beall, Hertzberg, Lara, Moorlach

NO VOTE RECORDED: Hernandez

SENATE NATURAL RES. & WATER COMMITTEE: 8-0, 6/27/17

AYES: Hertzberg, Stone, Allen, Atkins, Hueso, Jackson, Stern, Vidak

NO VOTE RECORDED: Monning

SENATE APPROPRIATIONS COMMITTEE: 7-0, 7/10/17

AYES: Lara, Bates, Beall, Bradford, Hill, Nielsen, Wiener

SENATE GOVERNANCE & FIN. COMMITTEE: 5-0, 8/31/17 (Pursuant to Senate Rule 29.10)

AYES: McGuire, Nguyen, Hertzberg, Lara, Moorlach

NO VOTE RECORDED: Beall, Hernandez

ASSEMBLY FLOOR: 69-0, 5/18/17 (Consent) - See last page for vote

SUBJECT:

SOURCE: San Diego Humane Society

DIGEST:

This bill establishes the Native California Wildlife Rehabilitation Voluntary Tax Contribution Fund (VCF) as an income tax checkoff on the personal income tax return to benefit nonprofit wildlife rehabilitation organizations, and extends the sunset data on an existing income tax checkoff that supports the Rare and Endangered Species Preservation Program administered by the Department of Fish and Wildlife.

ANALYSIS: Existing law authorizes an individual to contribute amounts in excess of his or her personal income tax liability for the support of specified VCFs. There are general administrative provisions applicable to these voluntary contributions, which, among other things, specify when a voluntary contribution is to be placed on the return, provide for the disbursement of contributions following repeal of the fund provisions, and require undesignated funds to be transferred to the General Fund.

This bill establishes the Native California Wildlife Rehabilitation Voluntary Tax Contribution Fund as an income tax checkoff on the personal income tax return to benefit nonprofit wildlife rehabilitation organizations, and extends the sunset data on an existing income tax checkoff that supports the Rare and Endangered Species Preservation Program administered by the Department of Fish and Wildlife.

FISCAL EFFECT: Appropriation: Fiscal Com.: Local:

According to the Senate Appropriations Committee, FTB estimates annual revenue loss of less than $8,000 per VCF (for a total annual loss of less than $16,000), beginning in 2018-19.

SUPPORT: (Verified 9/1/17)

San Diego Humane Society (source)

American Society for the Prevention of Cruelty to Animals

Animal Advocates

Animal Legal Defense Fund

Association for the Prevention of Cruelty to Animals

California Animal Control Directors Association

California Association of Zoos and Aquariums

California Council for Wildlife Rehabilitators

California Travel Association

Defenders of Wildlife

Eastern Sierra Wildlife Care

Fund for Animals Wildlife Center

Haven Wild Care

Humane Society of the United States

Injured & Orphaned Wildlife

International Bird Rescue

Napa Wildlife Rescue

Oakland Zoo

Project Coyote

Raptors Are The Solution

San Francisco SPCA

SeaWorld San Diego

Sonoma County Wildlife Rescue

Tehama Wild Care

Wildlife Rehabilitation and Release

Wild Neighbors Database Project

OPPOSITION: (Verified 9/1/17)

None received

ASSEMBLY FLOOR: 69-0, 5/18/17

AYES: Acosta, Travis Allen, Arambula, Baker, Berman, Bigelow, Bloom, Bocanegra, Bonta, Brough, Burke, Caballero, Cervantes, Chávez, Chen, Chiu, Choi, Chu, Cooley, Cooper, Cunningham, Dababneh, Dahle, Daly, Eggman, Flora, Fong, Gallagher, Cristina Garcia, Eduardo Garcia, Gomez, Gonzalez Fletcher, Gray, Grayson, Harper, Irwin, Jones-Sawyer, Kalra, Kiley, Lackey, Levine, Limón, Low, Maienschein, Mathis, Mayes, McCarty, Medina, Melendez, Muratsuchi, Nazarian, Obernolte, O'Donnell, Patterson, Quirk, Quirk-Silva, Reyes, Ridley-Thomas, Rodriguez, Rubio, Salas, Steinorth, Mark Stone, Thurmond, Ting, Voepel, Waldron, Weber, Wood

NO VOTE RECORDED: Aguiar-Curry, Calderon, Chau, Frazier, Friedman, Gipson, Gloria, Holden, Mullin, Santiago, Rendon

Prepared by:

9/1/17 14:14:02

**** END ****

SENATE COMMITTEE ON GOVERNANCE AND FINANCE

Senator Mike McGuire, Chair

2017 - 2018 Regular

PURSUANT TO SENATE RULE 29.10(B)

Personal income taxes: voluntary contributions: Native California Wildlife Rehabilitation Voluntary Tax Contribution Fund

Establishes an income tax checkoff on the personal income tax return to benefit nonprofit wildlife rehabilitation organizations, and extends the sunset data on an existing income tax checkoff that supports the Rare and Endangered Species Preservation Program administered by the Department of Fish and Wildlife.

Background

Existing state law allows taxpayers to contribute money to voluntary contribution funds (VCFs), by checking a box on their state income tax returns. California law requires contributions made through VCFs, or tax 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 in the subsequent year. There are currently 20 check-offs listed on the tax return form, which raise between four and five million dollars annually.

The Legislature adds each VCF by statute. When a taxpayer contributes to VCFs, the Franchise Tax Board (FTB) deposits the total of all contributions, less an administrative fee, into the fund created as part of the VCF’s legislative authorization. For some VCFs, taxpayers’ contributions are allocated to a state agency for use in a state administered grant program. Other VCFs’ authorizing statutes direct administrative agencies to allocate donations to a private organization. For example, the Office of Emergency Services passes VCF funds to the American Red Cross. Other funds require the State Controller to send the funds directly to private organizations without passing through an administrative agency, such as the California Fire Foundation. The Controller and administrative agencies may deduct administrations fees from the amount of donations each VCF receives.

Last year, SB 1476 (Committee on Governance and Finance) established general provisions for all VCFs established or extended after January 2, 2017. Specifically, the bill:

• Set a minimum contribution amount of $250,000 beginning the second calendar year after the first appearance of the fund on the income tax return and eliminates the inflation adjustment in subsequent years.
• Lengthened the current standard five year sunset to seven years.
• Required the administering agency to post online the process for awarding money, the amount of money spent on administration, and an itemization of how program funds were awarded by the agency, including, but not limited to, information regarding recipients of funds.
• Provided that funds shall be continuously appropriated to the administering agency to be spent as prescribed in the bill that enacts the voluntary contribution.
• Required “voluntary tax contribution” in the name of the fund.

VCF minimum contribution amounts. With a few exceptions, VCFs remain on the return until they are repealed by a sunset date or fail to generate a minimum contribution amount. In general, the minimum contribution amount is $250,000, beginning in the fund’s second year, and is adjusted yearly for inflation thereafter. The following check-offs do not have a minimum contribution requirement:

• California Firefighters’ Memorial Foundation Fund,
• California Peace Officer Memorial Foundation Fund, and
• California Seniors Special Fund.

This bill is sponsored by the San Diego Humane Society which wants to establish a government-sourced funding mechanism to support wildlife rehabilitation organizations. Additionally, the Department of Fish and Wildlife (DFW) wants to extend to extend the sunset date on the existing VCF that funds the Rare and Endangered Species Preservation Program, which supports programs for endangered and rare animals and plants.

Proposed Law

First, Assembly Bill 1031 establishes Native California Wildlife Rehabilitation Voluntary Tax Contribution Fund in the State Treasury, allows a taxpayer to make a voluntary contribution to the Fund on the state personal income tax return, and allows a deduction for any contribution made to the Fund. Additionally, this bill provides that all money transferred to the Fund shall be continuously appropriated and allocated as follows:

• To the Franchise Tax Board (FTB) and the State Controller for reimbursement of administrative costs, and;
• The balance to the Department of Fish and Wildlife (DFW) for a competitive grant program that awards grants to nonprofit organizations for the operation of a wildlife rehabilitation facility permitted pursuant to California Code of Regulations, Title 14, Section 679. DFW may use up to 5% of allocated funds for public outreach activities that encourage taxpayers to make contributions, and up to 5% of allocated funds to defray administrative expenses associated with administering the Fund.

AB 1031 provides for the VCF’s automatic repeal after seven years on state income tax return or if the annual a contribution mount is less than $250,000 in the second calendar year or thereafter.

Second, AB 1031extends the sunset date on a separate, existing VCF, the Rare and Endangered Species Preservation Program administered by DFW by seven years, from January 1, 2018 to January 1, 2025.

State Revenue Impact

FTB estimates annual revenue loss of less than $8,000 per VCF (for a total annual loss of less than $16,000), beginning in 2018-19.

Comments

1. Purpose of the bill. According to the author, “California’s native wildlife needs the attention and care supplied by nonprofit rehabilitation organizations. Every day, these organizations rescue injured, sick or orphaned wildlife, provide them with needed medical treatment, care, protection and nourishment and if ready, release the rehabilitated animals back into the wild. Like all nonprofits, they need funding to continue to serve our state. AB 1031 will allow an individual to voluntarily contribute a specified amount of his or her tax return to the Native California Wildlife Rehabilitation Voluntary Tax Contribution Fund. Money contributed to the fund would be distributed through a competitive grant program for nonprofit organizations throughout our state whose mission it is to aid the recovery of injured, sick, and orphaned wildlife.”

2. Committee Referral Pursuant to Senate Rule 29.10(b). The Senate Governance and Finance Committee passed AB 1031 on June 14, 2017 by a 6-0 vote. At that time, AB 1031 included only the provision establishing the Native California Wildlife Rehabilitation Voluntary Tax Contribution Fund. On August 24, 2017, AB 1031 was amended on the Senate floor to include the sunset extension for the existing VCF supporting the Rare and Endangered Species Preservation Program, triggering the Senate Rule 29.10(b) referral back to this committee. The Rare and Endangered Species Preservation Program VCF supports DFW programs for endangered and rare animals and plants. In 2016, the most recent year for which data is available, this VCF generated $480,283 in taxpayer contributions, easily exceeding the minimum statutory contribution requirement of $250,000. At DFW’s request, the author agreed to amend AB 1031 to extend the VCF supporting the Rare and Endangered Species Preservation Program by seven years, until January 1, 2025,

3. FTB memo on tax form capacity for new VCFs. At the request of this committee, FTB issued a memo dated June 19, 2017 which states that the income tax forms have the following capacity for new VCFs:

• Form 540 – 5 more funds
• Form 540 2EZ – 5 more funds
• Form 540NR (Long Form) – 5 more funds
• Form 541NR (Short Form) – 6 more funds
• Form 541 – 6 more funds

Presently, there are 7 VCF bills active in the 2017-18 legislative session. Once the tax forms reach their capacity, FTB has the authority under existing law to implement a “queuing system” under which a new VCF cannot be added to the tax form until an existing VCF is dropped (AB 132, Chavez, 2003). Alternatively, FTB could simply add another page to the affected tax forms. FTB indicates that they have not yet determined what course of action they will take if the capacity of the tax forms is reached.

Assembly Actions

Assembly Revenue and Taxation 10-0

Assembly Appropriations 17-0

Assembly Floor 75-0

Support and Opposition

(verified 8/28/17)

Support: San Diego Humane Society (Sponsor); American Society for the Prevention of Cruelty to Animals; Animal Advocates; Animal Legal Defense Fund; Association for the Prevention of Cruelty to Animals; California Animal Control Directors Association; California Association of Zoos and Aquariums; California Council for Wildlife Rehabilitators; California Travel Association; Defenders of Wildlife; Eastern Sierra Wildlife Care; Fund for Animals Wildlife; Center; Eastern Sierra Wildlife Care; Haven Wild Care; Human Society of the United States

Injured & Orphaned Wildlife; International Bird Rescue; Napa Wildlife Rescue; Oakland Zoo; Project Coyote; Raptors Are The Solution; San Francisco SPCA; SeaWorld San Diego; Sonoma County Wildlife Rescue; Tehama Wild Care; The Fund for Animals Wildlife Center; Wildlife Rehabilitation and Release; Wild Neighbors Database Project

Opposition:

Unknown.

-- END --

 THIRD READING  

Bill No: AB 1031

Author:

:

Vote:

SENATE GOVERNANCE & FIN. COMMITTEE: 6-0, 6/14/17

AYES: McGuire, Nguyen, Beall, Hertzberg, Lara, Moorlach

NO VOTE RECORDED: Hernandez

SENATE NATURAL RES. & WATER COMMITTEE: 8-0, 6/27/17

AYES: Hertzberg, Stone, Allen, Atkins, Hueso, Jackson, Stern, Vidak

NO VOTE RECORDED: Monning

SENATE APPROPRIATIONS COMMITTEE: 7-0, 7/10/17

AYES: Lara, Bates, Beall, Bradford, Hill, Nielsen, Wiener

ASSEMBLY FLOOR: 69-0, 5/18/17 (Consent) - See last page for vote

SUBJECT:

SOURCE: San Diego Humane Society

DIGEST:

This bill establishes the Native California Wildlife Rehabilitation Voluntary Tax Contribution Fund as a voluntary contribution fund on the state personal income tax return to benefit nonprofit wildlife rehabilitation organizations.

ANALYSIS: Existing law authorizes an individual to contribute amounts in excess of his or her personal income tax liability for the support of specified funds. There are general administrative provisions applicable to these voluntary contributions, which, among other things, specify when a voluntary contribution is to be placed on the return, provide for the disbursement of contributions following repeal of the fund provisions, and require undesignated funds to be transferred to the General Fund.

This bill establishes the Native California Wildlife Rehabilitation Voluntary Tax Contribution Fund as a voluntary contribution fund on the state personal income tax return to benefit nonprofit wildlife rehabilitation organizations and allows a deduction for any contribution made to the fund.

FISCAL EFFECT: Appropriation: Fiscal Com.: Local:

According to the Senate Appropriations Committee:

• The Franchise Tax Board (FTB) estimates that, beginning in 2018-19, this bill will result in an annual revenue loss of $8,000 (General Fund).
• The State Controller’s Office, FTB and the Department of Fish and Wildlife would be reimbursed for related administrative costs.

SUPPORT: (Verified 7/12/17)

San Diego Humane Society (source)

American Society for the Prevention of Cruelty to Animals

Animal Advocates

Animal Legal Defense Fund

Association for the Prevention of Cruelty to Animals

California Animal Control Directors Association

California Association of Zoos and Aquariums

California Council for Wildlife Rehabilitators

California Travel Association

Defenders of Wildlife

Eastern Sierra Wildlife Care

Fund for Animals Wildlife Center

Haven Wild Care

Human Society of the United States

Injured & Orphaned Wildlife

International Bird Rescue

Napa Wildlife Rescue

Oakland Zoo

Project Coyote

Raptors Are the Solution

San Francisco SPCA

SeaWorld San Diego

Sonoma County Wildlife Rescue

Tehama Wild Care

Wildlife Rehabilitation and Release

Wild Neighbors Database Project

OPPOSITION: (Verified 7/12/17)

None received

ASSEMBLY FLOOR: 69-0, 5/18/17

AYES: Acosta, Travis Allen, Arambula, Baker, Berman, Bigelow, Bloom, Bocanegra, Bonta, Brough, Burke, Caballero, Cervantes, Chávez, Chen, Chiu, Choi, Chu, Cooley, Cooper, Cunningham, Dababneh, Dahle, Daly, Eggman, Flora, Fong, Gallagher, Cristina Garcia, Eduardo Garcia, Gomez, Gonzalez Fletcher, Gray, Grayson, Harper, Irwin, Jones-Sawyer, Kalra, Kiley, Lackey, Levine, Limón, Low, Maienschein, Mathis, Mayes, McCarty, Medina, Melendez, Muratsuchi, Nazarian, Obernolte, O'Donnell, Patterson, Quirk, Quirk-Silva, Reyes, Ridley-Thomas, Rodriguez, Rubio, Salas, Steinorth, Mark Stone, Thurmond, Ting, Voepel, Waldron, Weber, Wood

NO VOTE RECORDED: Aguiar-Curry, Calderon, Chau, Frazier, Friedman, Gipson, Gloria, Holden, Mullin, Santiago, Rendon

Prepared by:

7/12/17 15:29:39

**** END ****

SENATE COMMITTEE ON APPROPRIATIONS

Senator Ricardo Lara, Chair

2017 - 2018 Regular Session

AB 1031 (Waldron) - Personal income taxes: voluntary contributions: Native California Wildlife Rehabilitation Voluntary Tax Contribution Fund

This bill does not meet the criteria for referral to the Suspense File.

Bill Summary:

AB 1031 would establish an income tax checkoff on the personal income tax (PIT) return to benefit nonprofit wildlife rehabilitation organizations.

Fiscal Impact:

• The Franchise Tax Board (FTB) estimates that, beginning in 2018-19, this bill would result in an annual revenue loss of $8,000 (General Fund).
• The State Controller’s Office (SCO), FTB and the Department of Fish and Wildlife (DFW) would be reimbursed for related administrative costs.

Current law allows taxpayers to contribute money to one or more of 20 voluntary contribution funds (VCF) during the process of filing their state income tax return. These contributions are made from taxpayers' own resources, not from their tax liability, as is the case with federal tax returns. Check-off amounts are deductible as charitable contributions on taxpayers' returns during the subsequent tax year. With some exceptions, each VCF (1) has a sunset date, and (2) is required to meet a minimum contribution amount of $250,000, adjusted annually for inflation.

When a taxpayer contributes to a VCF, FTB deposits the total of all contributions, less an administrative fee, into the fund created as part of its legislative authorization. For some VCFs, taxpayers’ contributions are allocated to a state agency for use in a state-administered grant program. Other VCFs’ authorizing statutes direct administrative agencies to allocate donations to a private organization, such as the American Red Cross. Still other VCFs require SCO to send the funds directly to private organizations, such as the California Fire Foundation, without passing through an administrative agency. Like FTB, SCO, and administrative agencies may deduct administration fees from the amount of donations each VCF receives.

In 2016, SB 1476 (Committee on Governance and Finance) established general provisions for all VCFs established or extended after January 2, 2017. Specifically, the bill: (1) set a minimum contribution amount of $250,000 beginning the second calendar year after the fund’s first appearance on the income tax return, with no inflation adjustment in subsequent years, (2) increased the current standard five-year sunset to seven years, (3) required administering agencies to post online the process for awarding money, the amount of money spent on administration, and an itemization of how program funds were awarded, including, but not limited to, information regarding recipients of funds, (4) provided that funds shall be continuously appropriated to the administering agency to be spent as prescribed in the bill that enacts the voluntary contribution, and (5) required “voluntary tax contribution” in the name of the fund.

Taxpayer contributions to VCFs have fallen significantly thus far in 2017. Between January and April this year, taxpayers have contributed $1.7 million to VCFs compared to $3.4 million for the same period in 2016. Consequently, some or possibly all legislatively-authorized VCFs will likely not appear on the return for the 2017 tax year absent legislative action because contribution amounts won’t meet their statutory minimums. FTB attributes the decline to changes made to Intuit’s TurboTax product, which this year included the choice to donate to VCFs as part of a “landing table” that includes questions about more specific issues such as tax credits. In previous years, TurboTax had included the option for taxpayers to donate to VCFs as part of its general interview questions. Intuit indicates that they have already remedied the issue for 2016 returns, which will apply to future tax years. However, because most returns have already been filed, legislative action is necessary to ensure that no VCF will be removed as a result of this year’s decreases. SB 503 (currently pending in the Assembly) would reset the minimum contribution amount to $0 for the 2016 tax year, thereby ensuring that each VCF on the 2016 tax return will appear on the 2017 return.

Proposed Law:

This bill (1) would establish the Native California Wildlife Rehabilitation Voluntary Tax Contribution (Fund) in the State Treasury, allowing a taxpayer to make a voluntary contribution to the Fund on the state PIT return, and (2) allow a deduction for any contribution made to the Fund. Additionally, this bill provides that all money transferred to the Fund shall be continuously appropriated and allocated as follows:

• To FTB and SCO for reimbursement of administrative costs.
• The balance to DFW for a competitive grant program that awards grants to nonprofit organizations for the operation of a wildlife rehabilitation facility permitted pursuant to California Code of Regulations, Title 14, Section 679. DFW may use up to 5 percent of allocated funds for public outreach activities that encourage taxpayers to make contributions, and up to 5 percent of allocated funds for administration.

The bill provides for the VCF’s automatic repeal after seven years on state PIT returns or if the annual a contribution amount is less than $250,000 in the second calendar year or thereafter.

Related Legislation:

SB 1476 (Committee on Governance and Finance, Chapter 597, Statutes of 2016) added general requirements applicable to VCFs added or extended on or after January 2, 2017.

Staff Comments:

This bill would establish a government-sourced funding mechanism to support wildlife rehabilitation organizations. FTB notes that approximately 56 percent of taxpayers who contributed itemized their deductions. Assuming an average tax rate of six percent, FTB estimates the annual revenue loss would be $8,000.

Contributions related to the extension of the fund will be in made 2018 when the 2017 return is filed. The deduction for such contributions would be claimed on the 2018 return filed by April 15, 2019; consequently, revenue impact from the bill would not begin until 2018-19.

-- END --

SENATE COMMITTEE ON NATURAL RESOURCES AND WATER

Senator Robert Hertzberg, Chair

2017 - 2018 Regular

Bill No: AB 1031 Hearing Date: June 27, 2017

Subject: Personal income taxes: voluntary contributions: Native California Wildlife Rehabilitation Voluntary Tax Contribution Fund

BACKGROUND AND EXISTING LAW

1. Wildlife care facilities in California are licensed pursuant to provisions of the California Fish and Game Code and regulations of the California Fish and Game Commission.
2. Wildlife care and rehabilitation is generally provided by nonprofits who often depend on volunteers. No public funding is provided. An exception is the Oiled Wildlife Care Network established at the University of California, Davis, veterinary medical school which is funded from a portion of the interest generated from the California Oil Spill Response Trust Fund and which responds to wildlife in need of rescue from coastal oil spills.
3. SB 1476 (Senate Committee on Government and Finance), Chapter 597, Statutes of 2016, established various administrative guidelines to improve the consistency for all future or renewed voluntary tax contributions (called “voluntary contribution funds, or VCF) which allow taxpayers to check a box on their state tax returns to make a contribution. SB 1476 set a minimum annual contribution amount of $250,000 (not adjusted for inflation) for a fund to be viable, lengthened the current five-year sunset to seven years, provided for the continuous appropriation of funds, and required that certain information about VCFs and their expenditures be made public.

PROPOSED LAW

This bill:

1. Establishes the Native California Wildlife Rehabilitation Voluntary Tax Contribution (Fund) in the State Treasury, allows a taxpayer to make a voluntary contribution to the Fund on the state personal income tax return, and allows a deduction for any contribution made to the Fund. Adds the Native California Wildlife Rehabilitation Fund, a new VCF, to the personal income tax (PIT) return.
2. Requires that all money transferred to the VCF shall be continuously appropriated to the Franchise Tax Board (FTB) and the State Controller for reimbursement of administrative costs, and that remaining money be transferred to the Department of Fish and Wildlife (DFW) to distribute funds to eligible organizations.
3. Provides for the VCF’s automatic repeal after seven years on state PIT returns or if the annual contribution amount is less than $250,000 in the second calendar year or thereafter.
4. Provides that all money transferred to the Fund shall be continuously appropriated and allocated as follows:
   1. To the Franchise Tax Board (FTB) and the State Controller for reimbursement of administrative costs, and;
   2. The balance to the Department of Fish and Wildlife (DFW) for a competitive grant program that awards grants to nonprofit organizations for the operation of a wildlife rehabilitation facility permitted pursuant to California Code of Regulations, Title 14, Section 679. DFW may use up to 5% of allocated funds for public outreach activities that encourage taxpayers to make contributions, and up to 5% of allocated funds to defray administrative expenses associated with administering the Fund.

ARGUMENTS IN SUPPORT

According to the author, “California’s native wildlife needs the attention and care supplied by nonprofit rehabilitation organizations. Every day, these organizations rescue injured, sick or orphaned wildlife, provide them with needed medical treatment, care, protection and nourishment and if ready, release the rehabilitated animals back into the wild. Like all nonprofits, they need funding to continue to serve our state. AB 1031 will allow an individual to voluntarily contribute a specified amount of his or her tax return to the Native California Wildlife Rehabilitation Voluntary Tax Contribution Fund. Money contributed to the fund would be distributed through a competitive grant program for nonprofit organizations throughout our state whose mission it is to aid the recovery of injured, sick, and orphaned wildlife.”

The bill is sponsored by the San Diego Humane Society and supported by several animal rescue and animal welfare nonprofits.

ARGUMENTS IN OPPOSITION

None received.

SUPPORT

San Diego Humane Society (Sponsor)

American Society for the Prevention of Cruelty to Animals

Animal Advocates

Animal Legal Defense Fund

Association for the Prevention of Cruelty to Animals

California Animal Control Directors Association

California Association of Zoos and Aquariums

California Council for Wildlife Rehabilitators

California Travel Association

Defenders of Wildlife

Eastern Sierra Wildlife Care

Fund for Animals Wildlife Center

Eastern Sierra Wildlife Care

Haven Wild Care

Humane Society of the United States

Humane Society Veterinary Medical Association

Injured & Orphaned Wildlife

International Bird Rescue

Napa Wildlife Rescue

Oakland Zoo

Project Coyote

Raptors Are the Solution

San Francisco SPCA

SeaWorld San Diego

Sonoma County Wildlife Rescue

Tehama Wild Care

The Fund for Animals Wildlife Center

Wildlife Rehabilitation and Release

Wild Neighbors Database Project

Tri County Wildlife Care

OPPOSITION

None Received

-- END --

SENATE COMMITTEE ON GOVERNANCE AND FINANCE

Senator Mike McGuire, Chair

2017 - 2018 Regular

Personal income taxes: voluntary contributions: Native California Wildlife Rehabilitation Voluntary Tax Contribution Fund

Establishes an income tax checkoff on the personal income tax (PIT) return to benefit nonprofit wildlife rehabilitation organizations.

Background

Existing state law allows taxpayers to contribute money to voluntary contribution funds (VCFs), by checking a box on their state income tax returns. California law requires contributions made through VCFs, or tax 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 in the subsequent year. There are currently 20 check-offs listed on the tax return form, which raise between four and five million dollars annually.

The Legislature adds each VCF by statute. When a taxpayer contributes to VCFs, the Franchise Tax Board (FTB) deposits the total of all contributions, less an administrative fee, into the fund created as part of the VCF’s legislative authorization. For some VCFs, taxpayers’ contributions are allocated to a state agency for use in a state administered grant program. Other VCFs’ authorizing statutes direct administrative agencies to allocate donations to a private organization. For example, the Office of Emergency Services passes VCF funds to the American Red Cross. Other funds require the State Controller to send the funds directly to private organizations without passing through an administrative agency, such as the California Fire Foundation. The Controller and administrative agencies may deduct administrations fees from the amount of donations each VCF receives.

Last year, SB 1476 (Committee on Governance and Finance) established general provisions for all VCFs established or extended after January 2, 2017. Specifically, the bill:

• Set a minimum contribution amount of $250,000 beginning the second calendar year after the first appearance of the fund on the income tax return and eliminates the inflation adjustment in subsequent years.
• Lengthened the current standard five year sunset to seven years.
• Required the administering agency to post online the process for awarding money, the amount of money spent on administration, and an itemization of how program funds were awarded by the agency, including, but not limited to, information regarding recipients of funds.
• Provided that funds shall be continuously appropriated to the administering agency to be spent as prescribed in the bill that enacts the voluntary contribution.
• Required “voluntary tax contribution” in the name of the fund.

VCF minimum contribution amounts. With a few exceptions, VCFs remain on the return until they are repealed by a sunset date or fail to generate a minimum contribution amount. In general, the minimum contribution amount is $250,000, beginning in the fund’s second year, and is adjusted yearly for inflation thereafter. The following check-offs do not have a minimum contribution requirement:

• California Firefighters’ Memorial Foundation Fund,
• California Peace Officer Memorial Foundation Fund, and
• California Seniors Special Fund.

Taxpayer contributions to VCFs have fallen significantly thus far in 2017; declines of this scale do not have a precedent. Between January and April this year, taxpayers have contributed only $1.74 million to VCFs compared to $3.37 million for the same period in 2016. As a result, some or possibly all legislatively-authorized VCF will likely not appear on the return for the 2017 tax year absent legislative action because contribution amounts won’t meet their statutory minimums. FTB attributes the decline to changes made to Intuit’s TurboTax product, which this year included the choice to donate to VCFs as part of a “landing table” that includes questions about more specific issues such as tax credits, whereas in previous years TurboTax had included the option for taxpayers to donate to VCFs as part of its general interview questions. Intuit indicates that they have already remedied the issue for 2016 returns, which will apply to future tax years. However, because most returns have already been filed, legislative action is necessary to ensure that no VCF will be removed as a result of this year’s decreased. SB 503 (passed by this committee on 5/17/17 and pending in the Assembly) would reset the minimum contribution amount to $0 for the 2016 tax year, thereby ensuring that each VCF on the 2016 tax return will appear on the 2017 return.

The San Diego Humane Society wants to establish a government-sourced funding mechanism to support wildlife rehabilitation organizations.

Proposed Law

Assembly Bill 1031 establishes Native California Wildlife Rehabilitation Voluntary Tax Contribution (Fund) in the State Treasury, allows a taxpayer to make a voluntary contribution to the Fund on the state personal income tax return, and allows a deduction for any contribution made to the Fund. Additionally, this bill provides that all money transferred to the Fund shall be continuously appropriated and allocated as follows:

• To the Franchise Tax Board (FTB) and the State Controller for reimbursement of administrative costs, and;
• The balance to the Department of Fish and Wildlife (DFW) for a competitive grant program that awards grants to nonprofit organizations for the operation of a wildlife rehabilitation facility permitted pursuant to California Code of Regulations, Title 14, Section 679. DFW may use up to 5% of allocated funds for public outreach activities that encourage taxpayers to make contributions, and up to 5% of allocated funds to defray administrative expenses associated with administering the Fund.

AB 1031 provides for the VCF’s automatic repeal after seven years on state PIT returns or if the annual a contribution mount is less than $250,000 in the second calendar year or thereafter.

State Revenue Impact

FTB estimates annual revenue loss of less than $8,000, beginning in 2018-19.

Comments

1. Purpose of the bill. According to the author, “California’s native wildlife needs the attention and care supplied by nonprofit rehabilitation organizations. Every day, these organizations rescue injured, sick or orphaned wildlife, provide them with needed medical treatment, care, protection and nourishment and if ready, release the rehabilitated animals back into the wild. Like all nonprofits, they need funding to continue to serve our state. AB 1031 will allow an individual to voluntarily contribute a specified amount of his or her tax return to the Native California Wildlife Rehabilitation Voluntary Tax Contribution Fund. Money contributed to the fund would be distributed through a competitive grant program for nonprofit organizations throughout our state whose mission it is to aid the recovery of injured, sick, and orphaned wildlife.”

2. Bills, bills, bills. Currently, tax check-offs must be added by the Legislature. In 2008, 11 VCFs appeared on the personal income tax return. Today, the return contains 20. With legislation introduced every year to add new VCFs, there is little reason to expect this number to stop growing. It is estimated that FTB can only handle 7 or 8 more check-offs before FTB has to create a separate tax schedule.

Assembly Actions

Assembly Revenue and Taxation 10-0

Assembly Appropriations 17-0

Assembly Floor 75-0

Support and Opposition

(6/8/17)

Support: San Diego Humane Society (Sponsor); American Society for the Prevention of Cruelty to Animals; Animal Advocates; Animal Legal Defense Fund; Association for the Prevention of Cruelty to Animals; California Animal Control Directors Association; California Association of Zoos and Aquariums; California Council for Wildlife Rehabilitators; California Travel Association; Defenders of Wildlife; Eastern Sierra Wildlife Care; Fund for Animals Wildlife; Center; Eastern Sierra Wildlife Care; Haven Wild Care; Human Society of the United States

Injured & Orphaned Wildlife; International Bird Rescue; Napa Wildlife Rescue; Oakland Zoo; Project Coyote; Raptors Are The Solution; San Francisco SPCA; SeaWorld San Diego; Sonoma County Wildlife Rescue; Tehama Wild Care; The Fund for Animals Wildlife Center; Wildlife Rehabilitation and Release; Wild Neighbors Database Project

Oppostion: Unknown.

-- END --

Date of Hearing: May 10, 2017

ASSEMBLY COMMITTEE ON APPROPRIATIONS

Lorena Gonzalez Fletcher, Chair

ABPCA Bill Id:AB 1031

Author:(Waldron) – As Amended Ver:April 4, 2017

Urgency: No State Mandated Local Program: No Reimbursable: No

SUMMARY:

This bill adds the Native California Wildlife Rehabilitation Fund, a voluntary contribution fund (VCF), to the personal income tax (PIT) return. Specifically, this bill:

1. Requires that all money transferred to the VCF shall be continuously appropriated to the Franchise Tax Board (FTB) and the State Controller for reimbursement of administrative costs, and that remaining money be transferred to the Department of Fish and Wildlife (DFW) to distribute funds to eligible organizations.
2. Provides for the VCF’s automatic repeal after seven years on state PIT returns or if the annual a contribution mount is less than $250,000 in the second calendar year or thereafter.

FISCAL EFFECT:

1. Minor ongoing GF revenue losses of up to $8,000 per year resulting from itemized taxpayer deductions.
2. Modest administrative costs for the FTB, State Controller, and DFW for administering the VCF.

COMMENTS:

1. Background and Purpose. According to the author, AB 1031 will help support nonprofit organizations throughout California that aid in the recovery of injured, sick, and orphaned wildlife. Supporters note that while local governments are required to fund animal care and control activities for domestic animals, there is no similar requirement regarding wild specifies.
2. Recent changes to VCF policy. The proliferation of VCFs and the lack of consistency around their design and implementation resulted in SB 1476 (Senate Committee on Government and Finance), Chapter 597, Statutes of 2016, which established various administrative guidelines for all future or renewed VCFs. SB 1476 set a minimum contribution amount of $250,000 (not adjusted for inflation), lengthened the current five-year sunset to seven years, provided for the continuous appropriation of funds, and required that specified information be made public. AB 1031 complies with SB 1476’s new VCF guidelines.
3. Related legislation. AB 280 (Low), which establishes the Rape Kit Back Log Voluntary Tax Contribution Fund, AB 846 (Cooley), which establishes the California YMCA Youth and Government Voluntary Tax Contribution Fund, and AB 519 (Levine), which establishes the California Senior Citizen Advocacy Fund, will be heard today in this committee.

Analysis Prepared by: Luke Reidenbach / APPR. / (916) 319-2081

Date of Hearing: March 27, 2017

ASSEMBLY COMMITTEE ON REVENUE AND TAXATION

Sebastian Ridley-Thomas, Chair

ABPCA Bill Id:AB 1031 (

Author:Waldron) – As Amended Ver:March 20, 2017

Majority vote. Fiscal committee.

SUBJECT: Personal income taxes: voluntary contributions: Native California Wildlife Rehabilitation Fund

SUMMARY: Establishes the Native California Wildlife Rehabilitation Fund (Fund) and allows taxpayers to contribute their own funds to the Fund through a designation on the state personal income tax (PIT) return. Specifically, this bill:

1. Establishes the Fund in the State Treasury, to which contributions will be used to support the recovery and rehabilitation of injured, sick, or orphaned wildlife.
2. Allows a deduction for any contribution made to the Fund.
3. Requires all money transferred to the Fund, upon appropriation, to be allocated as follows:
4. To the Franchise Tax Board (FTB) and the Controller for reimbursement of all costs incurred in administering the Fund; and,
5. To the Department of Fish and Wildlife (DFW) for a competitive grant program that awards grants to nonprofit organizations for the operation of a wildlife rehabilitation facility permitted pursuant to California Code of Regulations, Title 14, Section 679. DFW may use up to 5% of allocated funds for public outreach activities that encourage taxpayers to make contributions, and up to 5% of allocated funds to defray administrative expenses associated with administering the Fund.
6. Provides for the Fund provisions' automatic sunset on January 1 of the fifth taxable year following the Fund's first appearance on the PIT return, or January 1, 2024, whichever occurs first.
7. Requires the Fund to meet a minimum contribution threshold of $250,000 indexed for inflation to remain on the PIT return.

EXISTING LAW:

1. Allows taxpayers to designate on their PIT returns a contribution to any of the 19 voluntary contribution funds (VCFs) on the 2016 PIT return.
2. Provides the following requirements for new or extended VCFs that take effect on or after January 2, 2017:
3. Requires the words "voluntary tax contribution" to be included as part of the name of the fund.
4. Requires the administering agency's Internet Web site to report the process for awarding money, the amount of money spent on administration, and an itemization of how program funds were awarded by the agency, including information regarding recipients of funds.
5. Provides, unless otherwise specified, for each VCF's automatic sunset on January 1 of the seventh calendar year following the VCF's first appearance on the PIT return.
6. Requires each VCF to meet a minimum contribution threshold of $250,000 in the second calendar year and each subsequent year to remain on the PIT return.
7. Requires contributions made to each VCF to be continuously appropriated to the administering agency to be spent, as specified.
8. Provides a specific sunset date for each VCF, except for the California Seniors Special Fund and the State Parks Protection Fund.
9. Provides that the minimum annual contribution amounts required to remain in effect do not apply to the California Seniors Special Fund, the California Firefighters' Memorial Fund, and the California Peace Officer Memorial Foundation Fund.
10. Authorizes DFW to approve and issue permits in the form of a Memorandum of Understanding only to wildlife rehabilitation facilities that meet wildlife care standards set forth by a manual published jointly by the International Wildlife Rehabilitation Council and the National Wildlife Rehabilitators Association, as specified. (California Code of Regulations, Title 14, Division 1, Subdivision 3, Chapter 3, Section 679.)

FISCAL EFFECT: The FTB estimates General Fund revenue losses of $8,000 in fiscal year (FY) 2018-19 and $8,000 in FY 2019-20.

COMMENTS:

1. The author has provided the following statement in support of this bill:

California's native wildlife needs the attention and care supplied by nonprofit rehabilitation organizations. Every day, these organizations rescue injured, sick or orphaned wildlife, provide them with needed medical treatment, care, protection and nourishment and if ready, release the rehabilitated animals back into the wild. Like all nonprofits, they need funding to continue to serve our state. AB 1031 will allow an individual to voluntarily contribute a specified amount of his or her tax return to the Native California Wildlife Rehabilitation Fund. Money contributed to the fund would be distributed through a competitive grant program for nonprofit organizations throughout our state whose mission it is to aid the recovery of injured, sick, and orphaned wildlife.

1. The sponsor of this bill, the San Diego Humane Society, states:

While local governments have long been required by the state to fund animal care and control activities related to dogs, cats and other domestic species, there is no similar mandate with a provision for the care of wild species. As such, fully 100 percent of the efforts of wildlife rehabilitation are funded by private donors and much of the work is done by committed volunteers.

The proposed new voluntary contribution fund that AB 1031 would create would not only generate hundreds of thousands of dollars per year to support this life-saving conservation work that benefits native California wildlife, but would raise awareness of those efforts and likely lead to increased philanthropic support from Californians.

1. Committee Staff Comments:
2. New VCF Requirements: On December 9, 2015, the Senate Governance and Finance Committee held an oversight hearing, "California's Tax Check-off Program: Room for Improvement?" The hearing reviewed the status of California's tax check-off funds and found a framework was needed to improve the current tax check-off system. The Committee found that donated funds could take years to reach the intended recipient, or, worse yet, the money would end up in state coffers. The Legislature created California's tax check-off system in 1982 with a noble intention – to make it easier for Californians to donate to charitable causes. To date, tax check-offs have raised over $102 million for various charitable causes, including social services, public health, and environmental protection.

SB 1476 (Senate Committee on Governance and Finance), Chapter 597, Statutes of 2016, established best practices and reforms needed to ensure that taxpayers' voluntary contributions are being put toward charitable purposes in a transparent and timely fashion. SB 1476 required the words "voluntary tax contribution" to be included in the name of the any new fund, required that specified information be made public on the administering agency's Internet Web site, lengthened the current five-year sunset to seven years, set a minimum contribution amount of $250,000 (not adjusted for inflation), and provided for the continuous appropriation of funds.

This bill does not include many of the best practices established by SB 1476. The words "voluntary tax contribution" are not in the name of the Fund and there is no provision that DFW make specified information available online. Additionally, this bill contains an effective sunset date of five years, requires the minimum contribution amount to be adjusted for inflation, and does not provide for the continuous appropriation of funds. The Committee may wish to consider whether this bill should be updated according to the reforms set forth by SB 1476.

1. So Many Causes, So Little Space: There are countless 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. Additionally, expanding the list of qualifying VCFs may have the unintended consequence of reducing the individual contributions that existing VCFs receive since they would have to compete against a broader group of worthy causes. This could make it more difficult for existing VCFs to meet the $250,000 minimum requirement and cause the VCF to fall off the tax return.
2. Wildlife Rehabilitation: This bill specifies that contributions to the Fund will be used to support the recovery and rehabilitation of injured, sick, or orphaned wildlife through grants to non-profit wildlife rehabilitation facilities administered by DFW. Wildlife rehabilitation facilities are sites where activities are undertaken to restore to a condition of good health, for the purpose of release to the wild, animals occurring naturally and not normally domesticated in this state. This bill caps the percentage of funds that DFW may use for administration and outreach, but does not further specify how voluntary contributions should be utilized by grant recipients. Most of the other VCFs in operation today limit or prohibit grant recipients from spending funds on administrative functions. The Committee may wish to consider whether grants from the Fund should be restricted for direct programming to ensure the taxpayer's contribution is utilized as it is likely intended.
3. Related Legislation:
4. AB 280 (Low) establishes the Rape Kit Back Log Voluntary Tax Contribution Fund. AB 280 is pending hearing by the Committee on Appropriations.
5. AB 846 (Cooley) establishes the California YMCA Youth and Government Voluntary Tax Contribution Fund. AB 846 is scheduled to be heard by this Committee today.
6. AB 519 (Levine) establishes the California Senior Citizen Advocacy Fund. AB 519 is scheduled to be heard by this Committee today.
7. SB 61 (Hertzberg) extends the sunset date of the Emergency Food Assistance Program Fund and renames it the Emergency Food for Families Voluntary Tax Contribution Fund. SB 61 is pending hearing by the Senate Committee on Governance and Finance.
8. SB 440 (Hertzberg) extends the sunset dates of the California Breast Cancer Research Fund and the California Cancer Research Fund, and adds the words "voluntary tax contribution" to the name of each respective fund. SB 440 is pending hearing by the Senate Committee on Governance and Finance.
9. SB 503 (Newman) extends the sunset date of the Keep Arts in Schools Fund and adds the words "voluntary tax contribution" to the name of the fund. SB 503 is awaiting referral by the Senate Rules Committee.

REGISTERED SUPPORT / OPPOSITION:

Support

San Diego Humane Society (Sponsor)

American Society for the Prevention of Cruelty to Animals

Animal Advocates

Animal Legal Defense Fund

California Animal Control Directors Association

California Council for Wildlife Rehabilitators

Defenders of Wildlife

Eastern Sierra Wildlife Care

Fund for Animals Wildlife Center

Haven Wild Care

Human Society of the United States

Injured & Orphaned Wildlife

International Bird Rescue

Napa Wildlife Rescue

Raptors Are The Solution

San Francisco SPCA

Sonoma County Wildlife Rescue

The Fund for Animals Wildlife Center

Wildlife Rehabilitation and Release

Wild Neighbors Database Project

Opposition

None on file

Analysis Prepared by: Irene Ho / REV. & TAX. / (916) 319-2098