SB 503: Personal income taxes: voluntary tax contribution funds.
- Session Year: 2017-2018
- House: Senate
- Latest Version Date: 2017-10-05
Existing law allows an individual, until January 1, 2018, to designate on his or her personal income tax return that a specified amount in excess of his or her tax liability be contributed to the Keep Arts in Schools Fund, which is subject to appropriation by the Legislature, to be allocated to the Franchise Tax Board, the Controller, and the Arts Council for purposes of carrying out its provisions. Existing law requires that the Keep Arts in Schools Fund equal or exceed a $250,000 minimum contribution amount, which is required to be adjusted for inflation.
Existing law allows an individual, until January 1, 2019, to designate on their personal income tax return that a specified amount in excess of their tax liability be contributed to the California Beach and Coastal Enhancement Account under a space on the tax return titled Protect Our Coast and Oceans Fund. Existing law makes these moneys subject to appropriation by the Legislature and requires the moneys to be allocated to the Franchise Tax Board, the Controller, and the California Coastal Commission to support eligible programs awarded grants under the selection criteria established by the California Coastal Commission for the Whale Tail Grants Program. Existing law requires that the Protect Our Coast and Oceans Fund equal or exceed a $250,000 minimum contribution amount, which is required to be and has been adjusted for inflation.
Under existing law, 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.
Existing law requires that when establishing or extending the operation of these voluntary tax contribution funds the words voluntary tax contribution be included in the name of the fund, that the administering agency comply with specified Internet Web site reporting requirements, that the fund provisions remain in effect only until January 1 of the 7th calendar year following the first appearance of the voluntary tax contribution on the personal income tax return, that the required calendar year minimum contribution amount for the fund to continue appearing on the return is $250,000, and that the contributions be continuously appropriated from the fund to the administering entity.
This bill would conform with those requirements by extending the operation of the provisions of the Keep Arts in Schools Fund to January 1, 2025, renaming the fund as the Keep Arts in Schools Voluntary Tax Contribution Fund, continuously appropriating the fund to the Franchise Tax Board, the Controller, and the Arts Council for purposes of carrying out these provisions, and requiring the Arts Council to comply with those Internet Web site reporting requirements. The bill would similarly conform with those requirements by extending the operation of the provisions of the Protect Our Coast and Oceans Fund to January 1, 2025, renaming the designation as the Protect Our Coast and Oceans Fund Voluntary Tax Contribution Fund, continuously appropriating those funds to the Franchise Tax Board, the Controller, and the California Coastal Commission for purposes of carrying out these provisions, and requiring the California Coastal Commission to comply with those Internet Web site reporting requirements. The bill would also require both funds described above to meet an unadjusted minimum contribution amount of $250,000, as specified. The bill would also delete various duplicative provisions covered by the aforementioned general administrative provisions. By continuously appropriating the funds described above, the bill would make an appropriation.
Existing law allows an individual, until January 1, 2018, to designate on his or her personal income tax return that a specified amount in excess of his or her tax liability be contributed to the Keep Arts in Schools Fund, which is subject to appropriation by the Legislature, to be allocated to the Franchise Tax Board, the Controller, and the Arts Council for purposes of carrying out its provisions. Existing law requires that the Keep Arts in Schools Fund equal or exceed a $250,000 minimum contribution amount, which is required to be adjusted for inflation.
Existing law allows an individual, until January 1, 2019, to designate on their personal income tax return that a specified amount in excess of their tax liability be contributed to the California Beach and Coastal Enhancement Account under a space on the tax return titled Protect Our Coast and Oceans Fund. Existing law makes these moneys subject to appropriation by the Legislature and requires the moneys to be allocated to the Franchise Tax Board, the Controller, and the California Coastal Commission to support eligible programs awarded grants under the selection criteria established by the California Coastal Commission for the Whale Tail Grants Program. Existing law requires that the Protect Our Coast and Oceans Fund equal or exceed a $250,000 minimum contribution amount, which is required to be and has been adjusted for inflation.
Under existing law, 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.
Existing law requires that when establishing or extending the operation of these voluntary tax contribution funds the words voluntary tax contribution be included in the name of the fund, that the administering agency comply with specified Internet Web site reporting requirements, that the fund provisions remain in effect only until January 1 of the 7th calendar year following the first appearance of the voluntary tax contribution on the personal income tax return, that the required calendar year minimum contribution amount for the fund to continue appearing on the return is $250,000, and that the contributions be continuously appropriated from the fund to the administering entity.
This bill would conform with those requirements by extending the operation of the provisions of the Keep Arts in Schools Fund to January 1, 2025, renaming the fund as the Keep Arts in Schools Voluntary Tax Contribution Fund, continuously appropriating the fund to the Franchise Tax Board, the Controller, and the Arts Council for purposes of carrying out these provisions, and requiring the Arts Council to comply with those Internet Web site reporting requirements. The bill would similarly conform with those requirements by extending the operation of the provisions of the Protect Our Coast and Oceans Fund to January 1, 2025, renaming the designation as the Protect Our Coast and Oceans Fund Voluntary Tax Contribution Fund, continuously appropriating those funds to the Franchise Tax Board, the Controller, and the California Coastal Commission for purposes of carrying out these provisions, and requiring the California Coastal Commission to comply with those Internet Web site reporting requirements. The bill would also require both funds described above to meet an unadjusted minimum contribution amount of $250,000, as specified. The bill would also delete various duplicative provisions covered by the aforementioned general administrative provisions. By continuously appropriating the funds described above, the bill would make an appropriation.
Existing law allows an individual, until January 1, 2018, to designate on his or her personal income tax return that a specified amount in excess of his or her tax liability be contributed to the Keep Arts in Schools Fund, which is subject to appropriation by the Legislature, to be allocated to the Franchise Tax Board, the Controller, and the Arts Council for purposes of carrying out its provisions. Existing law requires that the Keep Arts in Schools Fund equal or exceed a $250,000 minimum contribution amount, which is required to be adjusted for inflation.
Existing law allows an individual, until January 1, 2019, to designate on their personal income tax return that a specified amount in excess of their tax liability be contributed to the California Beach and Coastal Enhancement Account under a space on the tax return titled Protect Our Coast and Oceans Fund. Existing law makes these moneys subject to appropriation by the Legislature and requires the moneys to be allocated to the Franchise Tax Board, the Controller, and the California Coastal Commission to support eligible programs awarded grants under the selection criteria established by the California Coastal Commission for the Whale Tail Grants Program. Existing law requires that the Protect Our Coast and Oceans Fund equal or exceed a $250,000 minimum contribution amount, which is required to be and has been adjusted for inflation.
Under existing law, 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.
Existing law requires that when establishing or extending the operation of these voluntary tax contribution funds the words voluntary tax contribution be included in the name of the fund, that the administering agency comply with specified Internet Web site reporting requirements, that the fund provisions remain in effect only until January 1 of the 7th calendar year following the first appearance of the voluntary tax contribution on the personal income tax return, that the required calendar year minimum contribution amount for the fund to continue appearing on the return is $250,000, and that the contributions be continuously appropriated from the fund to the administering entity.
This bill would conform with those requirements by extending the operation of the provisions of the Keep Arts in Schools Fund to January 1, 2025, renaming the fund as the Keep Arts in Schools Voluntary Tax Contribution Fund, continuously appropriating the fund to the Franchise Tax Board, the Controller, and the Arts Council for purposes of carrying out these provisions, and requiring the Arts Council to comply with those Internet Web site reporting requirements. The bill would similarly conform with those requirements by extending the operation of the provisions of the Protect Our Coast and Oceans Fund to January 1, 2025, renaming the fund designation as the Protect Our Coast and Oceans Fund Voluntary Tax Contribution Fund, continuously appropriating those funds to the Franchise Tax Board, the Controller, and the California Coastal Commission for purposes of carrying out these provisions, and requiring the California Coastal Commission to comply with those Internet Web site reporting requirements. The bill would also require both funds described above to meet an unadjusted minimum contribution amount of $250,000, as specified. The bill would also delete various duplicative provisions covered by the aforementioned general administrative provisions. By continuously appropriating the funds described above, the bill would make an appropriation.
Existing law allows an individual, until January 1, 2018, to designate on his or her personal income tax return that a specified amount in excess of his or her tax liability be contributed to the Keep Arts in Schools Fund, which is subject to appropriation by the Legislature, to be allocated to the Franchise Tax Board, the Controller, and the Arts Council for purposes of carrying out its provisions. Existing law requires that the Keep Arts in Schools Fund equal or exceed a $250,000 minimum contribution amount, which is required to be adjusted for inflation.
Existing law allows an individual, until January 1, 2019, to designate on their personal income tax return that a specified amount in excess of their tax liability be contributed to the California Beach and Coastal Enhancement Account under a space on the tax return titled Protect Our Coast and Oceans Fund. Existing law makes these moneys subject to appropriation by the Legislature and requires the moneys to be allocated to the Franchise Tax Board, the Controller, and the California Coastal Commission to support eligible programs awarded grants under the selection criteria established by the California Coastal Commission for the Whale Tail Grants Program. Existing law requires that the Protect Our Coast and Oceans Fund equal or exceed a $250,000 minimum contribution amount, which is required to be and has been adjusted for inflation.
Under existing law, 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.
Existing law requires that when establishing or extending the operation of these voluntary tax contribution funds the words voluntary tax contribution be included in the name of the fund, that the administering agency comply with specified Internet Web site reporting requirements, that the fund provisions remain in effect only until January 1 of the 7th calendar year following the first appearance of the voluntary tax contribution on the personal income tax return, that the required calendar year minimum contribution amount for the fund to continue appearing on the return is $250,000, and that the contributions be continuously appropriated from the fund to the administering entity.
This bill would conform with those requirements by extending the operation of the provisions of the Keep Arts in Schools Fund to January 1, 2025, renaming the fund as the Keep Arts in Schools Voluntary Tax Contribution Fund, continuously appropriating the fund to the Franchise Tax Board, the Controller, and the Arts Council for purposes of carrying out these provisions, and requiring the Arts Council to comply with those Internet Web site reporting requirements. The bill would similarly conform with those requirements by extending the operation of the provisions of the Protect Our Coast and Oceans Fund to January 1, 2025, renaming the fund as the Protect Our Coast and Oceans Fund Voluntary Tax Contribution Fund, continuously appropriating those funds to the Franchise Tax Board, the Controller, and the California Coastal Commission for purposes of carrying out these provisions, and requiring the California Coastal Commission to comply with those Internet Web site reporting requirements. The bill would also require both funds described above to meet an unadjusted minimum contribution amount of $250,000, as specified. The bill would also delete various duplicative provisions covered by the aforementioned general administrative provisions. By continuously appropriating the funds described above above, the bill would make an appropriation.
Existing law allows an individual, until January 1, 2018, to designate on his or her personal income tax return that a specified amount in excess of his or her tax liability be contributed to the Keep Arts in Schools Fund, which is subject to appropriation by the Legislature, to be allocated to the Franchise Tax Board, the Controller, and the Arts Council for purposes of carrying out its provisions. Existing law requires that the Keep Arts in Schools Fund equal or exceed a $250,000 minimum contribution amount, which is required to be adjusted for inflation.
Existing law allows an individual, until January 1, 2019, to designate on their personal income tax return that a specified amount in excess of their tax liability be contributed to the California Beach and Coastal Enhancement Account under a space on the tax return titled Protect Our Coast and Oceans Fund. Existing law makes these moneys subject to appropriation by the Legislature and requires the moneys to be allocated to the Franchise Tax Board, the Controller, and the California Coastal Commission to support eligible programs awarded grants under the selection criteria established by the California Coastal Commission for the Whale Tail Grants Program. Existing law requires that the Protect Our Coast and Oceans Fund equal or exceed a $250,000 minimum contribution amount, which is required to be and has been adjusted for inflation.
Existing law requires that when establishing or extending the operation of these voluntary tax contribution funds the words voluntary tax contribution be included in the name of the fund, that the administering agency comply with specified Internet Web site reporting requirements, that the fund provisions remain in effect only until January 1 of the 7th calendar year following the first appearance of the voluntary tax contribution on the personal income tax return, that the required calendar year minimum contribution amount for the fund to continue appearing on the return is $250,000, and that the contributions be continuously appropriated from the fund to the administering entity.
This bill would conform with those requirements by extending the operation of the fund provisions of the Keep Arts in Schools Fund to January 1, 2025, renaming the fund as the Keep Arts in Schools Voluntary Tax Contribution Fund, continuously appropriating the fund to the Franchise Tax Board, the Controller, and the Arts Council for purposes of carrying out these provisions, and requiring the Arts Council to comply with those Internet Web site reporting requirements. The bill would similarly conform with those requirements by extending the operation of the provisions of the Protect Our Coast and Oceans Fund to January 1, 2025, renaming the fund as the Protect Our Coast and Oceans Fund Voluntary Tax Contribution Fund, continuously appropriating those funds to the Franchise Tax Board, the Controller, and the California Coastal Commission for purposes of carrying out these provisions, and requiring the California Coastal Commission to comply with those Internet Web site reporting requirements. The bill would also require the fund both funds described above to meet an unadjusted minimum contribution amount of $250,000, as specified. By continuously appropriating the fund, funds described above the bill would make an appropriation.
Existing law allows an individual, until January 1, 2018, to designate on his or her personal income tax return that a specified amount in excess of his or her tax liability be contributed to the Keep Arts in Schools Fund, which is subject to appropriation by the Legislature, to be allocated to the Franchise Tax Board, the Controller, and the Arts Council for purposes of carrying out its provisions. Existing law requires that the Keep Arts in Schools Fund equal or exceed a $250,000 minimum contribution amount, which is required to be adjusted for inflation.
Existing law requires that when establishing or extending the operation of these voluntary tax contribution funds the words voluntary tax contribution be included in the name of the fund, that the administering agency comply with specified Internet Web site reporting requirements, that the fund provisions remain in effect only until January 1 of the 7th calendar year following the first appearance of the voluntary tax contribution on the personal income tax return, that the required calendar year minimum contribution amount for the fund to continue appearing on the return is $250,000, and that the contributions be continuously appropriated from the fund to the administering entity.
This bill would conform with those requirements by extending the operation of the fund provisions to January 1, 2025, renaming the fund as the Keep Arts in Schools Voluntary Tax Contribution Fund, continuously appropriating the fund to the Franchise Tax Board, the Controller, and the Arts Council for purposes of carrying out these provisions, and requiring the Arts Council to comply with those Internet Web site reporting requirements. The bill would also require the fund to meet an unadjusted minimum contribution amount of $250,000, as specified. By continuously appropriating the fund, the bill would make an appropriation.
Existing law allows an individual, until January 1, 2018, to designate on his or her personal income tax return that a specified amount in excess of his or her tax liability be contributed to the Keep Arts in Schools Fund, which is subject to appropriation by the Legislature, to be allocated to the Franchise Tax Board, the Controller, and the Arts Council for purposes of carrying out its provisions. Existing law requires that the Keep Arts in Schools Fund equal or exceed a $250,000 minimum contribution amount, which is required to be adjusted for inflation.
Existing law requires that when establishing or extending the operation of these voluntary tax contribution funds the words voluntary tax contribution be included in the name of the fund, that the administering agency comply with specified Internet Web site reporting requirements, that the fund provisions remain in effect only until January 1 of the 7th calendar year following the first appearance of the voluntary tax contribution on the personal income tax return, that the required calendar year minimum contribution amount for the fund to continue appearing on the return is $250,000, and that the contributions be continuously appropriated from the fund to the administering entity.
This bill would conform with those requirements by extending the operation of the fund provisions to January 1, 2025, renaming the fund as the Keep Arts in Schools Voluntary Tax Contribution Fund, continuously appropriating the fund to the Franchise Tax Board, the Controller, and the Arts Council for purposes of carrying out these provisions, and requiring the Arts Council to comply with those Internet Web site reporting requirements. By continuously appropriating the fund, the bill would make an appropriation.
This bill would declare that it is to take effect immediately as an urgency statute.(1)Existing law authorizes an individual to contribute amounts in excess of his or her tax liability for the support of specified voluntary tax contribution funds. Existing law generally requires that these funds equal or exceed a minimum contribution amount, which is required to be adjusted for inflation, in order for the fund to remain on the return unless otherwise subject to statutory repeal.
This bill would make the minimum contribution amount requirement for the 2017 calendar year equal to $0 for any fund appearing on the return for the 2016 taxable year that has a minimum contribution amount requirement for the 2017 calendar year in order for the fund to continue to appear on the return for the 2017 taxable year.
Existing
(2)Existing law allows an individual, until January 1, 2018, to designate on his or her personal income tax return that a specified amount in excess of his or her tax liability be contributed to the Keep Arts in Schools Fund, which is subject to appropriation by the Legislature, to be allocated to the Franchise Tax Board, the Controller, and the Arts Council for purposes of carrying out its provisions. Existing law requires that the Keep Arts in Schools Fund equal or exceed a $250,000 minimum contribution amount, which is required to be adjusted for inflation.
Existing law requires that when establishing or extending the operation of these voluntary tax contribution funds the words voluntary tax contribution be included in the name of the fund, that the administering agency comply with specified Internet Web site reporting requirements, that the fund provisions remain in effect only until January 1 of the 7th calendar year following the first appearance of the voluntary tax contribution on the personal income tax return, that the required calendar year minimum contribution amount for the fund to continue appearing on the return is $250,000, and that the contributions be continuously appropriated from the fund to the administering entity.
This bill would conform with those requirements by extending the operation of the fund provisions to January 1, 2025, renaming the fund as the Keep Arts in Schools Voluntary Tax Contribution Fund, continuously appropriating the fund to the Franchise Tax Board, the Controller, and the Arts Council for purposes of carrying out these provisions, and requiring the Arts Council to comply with those Internet Web site reporting requirements. By continuously appropriating the fund, the bill would make an appropriation.
This bill would declare that it is to take effect immediately as an urgency statute.
Existing law allows an individual, until January 1, 2018, to designate on his or her personal income tax return that a specified amount in excess of his or her tax liability be contributed to the Keep Arts in Schools Fund, which is subject to appropriation by the Legislature, to be allocated to the Franchise Tax Board, the Controller, and the Arts Council for purposes of carrying out its provisions. Existing law requires that the Keep Arts in Schools Fund equal or exceed a $250,000 minimum contribution amount, which is required to be adjusted for inflation.
Existing law requires that when establishing or extending the operation of these voluntary tax contribution funds the words voluntary tax contribution be included in the name of the fund, that the administering agency comply with specified Internet Web site reporting requirements, that the fund provisions remain in effect only until January 1 of the 7th calendar year following the first appearance of the voluntary tax contribution on the personal income tax return, that the required calendar year minimum contribution amount for the fund to continue appearing on the return is $250,000, and that the contributions be continuously appropriated from the fund to the administering entity.
This bill would conform with those requirements by extending the operation of the fund provisions to January 1, 2025, renaming the fund as the Keep Arts in Schools Voluntary Tax Contribution Fund, continuously appropriating the fund to the Franchise Tax Board, the Controller, and the Arts Council for purposes of carrying out these provisions, and requiring the Arts Council to comply with those Internet Web site reporting requirements. By continuously appropriating the fund, the bill would make an appropriation.
The Personal Income Tax Law imposes taxes on the entire taxable income of California residents and on the taxable income of nonresidents derived from sources in California.This bill would make a nonsubstantive change to the provision that names that law.The Personal Income Tax Law imposes taxes on the entire taxable income of California residents and on the taxable income of nonresidents derived from sources in California.
This bill would make a nonsubstantive change to the provision that names that law.
(a)An individual may designate on the tax return, under the space titled Protect Our Coast and Oceans Voluntary Tax Contribution Fund, that a contribution in excess of tax liability, if any, be made to the California Beach and Coastal Enhancement Account established by paragraph (1) of subdivision (c) of Section 5067 of the Vehicle Code. That designation is to be used as a voluntary contribution on the tax return.
(b)A contribution shall be in full dollar amounts and may be made individually by each signatory on a joint return.
(c)A designation made under subdivision (a) shall be made for any taxable year on the original return for that taxable year, and once made shall be irrevocable. In the event that payments and credits reported on the return, together with any other credits associated with the individuals account, do not exceed the individuals tax liability, if any, the return shall be treated as though no designation had been made.
(d)The Franchise Tax Board shall revise the form of the return to include a space labeled the Protect Our Coast and Oceans Voluntary Tax Contribution Fund to allow for the designation permitted under subdivision (a). The form shall also include in the instructions information that the contribution may be in the amount of one dollar ($1) or more and that the contribution shall be used for grants and programs that preserve, protect, or enhance coastal resources and promote coastal and marine educational activities for underserved communities.
(e)A deduction shall be allowed under Article 6 (commencing with Section 17201) of Chapter 3 of Part 10 for any contribution made pursuant to subdivision (a).
SEC. 2.Section 18746 of the Revenue and Taxation Code is amended to read:18746.The Franchise Tax Board shall notify the Controller of both the amount of money paid by individuals in excess of their tax liability and the amount of refund money that individuals have designated pursuant to Section 18745 to be transferred to the California Beach and Coastal Enhancement Account. The Controller shall transfer from the Personal Income Tax Fund to the California Beach and Coastal Enhancement Account an amount not in excess of the sum of the amounts designated by individuals pursuant to Section 18745 for payment into that account.
SEC. 3.Section 18747 of the Revenue and Taxation Code is amended to read:18747.(a)Notwithstanding Section 13340 of the Government Code, all money designated under the Protect Our Coast and Oceans Voluntary Tax Contribution Fund space on a tax return and transferred to the California Beach and Coastal Enhancement Account pursuant to Section 18745 shall be continuously appropriated and allocated as follows:
(1)To the Franchise Tax Board and the Controller for reimbursement of all costs incurred by the Franchise Tax Board and the Controller in connection with their duties under this article.
(2)(A)To the California Coastal Commission to support eligible programs awarded grants under the selection criteria established by the California Coastal Commission for the Whale Tail Grants Program, and for direct program-related expenses.
(B)All moneys allocated pursuant to subparagraph (A) may be carried over from the year in which they were received.
(b)The California Coastal Commission shall comply with the Internet Web site reporting requirements described in Section 18873.
SEC. 4.Section 18748 of the Revenue and Taxation Code is amended to read:18748.(a)Except as otherwise provided in subdivision (b), this article shall remain in effect only until January 1, 2025, and is repealed as of December 1 of that year.
(b)(1)By September 1 of the 2018 calendar year and each subsequent calendar year that the Protect Our Coast and Oceans Voluntary Tax Contribution Fund appears on the tax return, the Franchise Tax Board shall determine whether the amount of contributions estimated to be received during the calendar year will equal or exceed the minimum contribution amount for the calendar year pursuant to paragraph (3). The Franchise Tax Board shall estimate the amount of contributions to be received by using the actual amounts received and an estimate of the contributions that will be received by the end of that calendar year.
(2)If the Franchise Tax Board determines that the amount of the contributions estimated to be received during a calendar year will not at least equal the minimum contribution amount for the calendar year, this article is inoperative with respect to taxable years beginning on or after January 1 of that calendar year, and shall be repealed on December 1 of that calendar year.
(3)For purposes of this section, the minimum contribution amount for a calendar year means two hundred fifty thousand dollars ($250,000).
SEC. 5.The heading of Article 19 (commencing with Section 18891) of Chapter 3 of Part 10.2 of Division 2 of the Revenue and Taxation Code is amended to read:19.Keep Arts in Schools Voluntary Tax Contribution FundSEC. 6.Section 18891 of the Revenue and Taxation Code is amended to read:18891.(a)An individual may designate on the tax return that a contribution in excess of tax liability, if any, be made to the Keep Arts in Schools Voluntary Tax Contribution Fund established by Section 18892. That designation is to be used as a voluntary contribution on the tax return.
(b)A contribution shall be in a full dollar amount and may be made individually by each signatory on a joint return.
(c)A designation made under subdivision (a) shall be made for any taxable year on the original return for that taxable year, and once made shall be irrevocable. If payments and credits reported on the return, together with any other credits associated with the individuals account do not exceed the individuals tax liability, if any, the return shall be treated as though a designation had not been made.
(d)The Franchise Tax Board shall revise the form of the return to include a space labeled the Keep Arts in Schools Voluntary Tax Contribution Fund to allow for the designation permitted under subdivision (a). The form shall also include in the instructions information that the contribution may be in the amount of one dollar ($1) or more and that the contribution shall be used by the Arts Council for the allocation of grants to individuals or organizations administering arts programs.
(e)A deduction shall be allowed under Article 6 (commencing with Section 17201) of Chapter 3 of Part 10 for any contribution made pursuant to subdivision (a).
SEC. 7.Section 18892 of the Revenue and Taxation Code is amended to read:18892.There is hereby established in the State Treasury the Keep Arts in Schools Voluntary Tax Contribution Fund to receive contributions made pursuant to Section 18891. The Franchise Tax Board shall notify the Controller of both the amount of money paid by taxpayers in excess of their tax liability and the amount of refund money that taxpayers have designated pursuant to Section 18891 to be transferred to the Keep Arts in Schools Voluntary Tax Contribution Fund. The Controller shall transfer from the Personal Income Tax Fund to the Keep Arts in Schools Voluntary Tax Contribution Fund an amount not in excess of the sum of the amounts designated by individuals pursuant to Section 18891 for payment into that fund.
SEC. 8.Section 18893 of the Revenue and Taxation Code is amended to read:18893.Notwithstanding Section 13340 of the Government Code, all money transferred to the Keep Arts in Schools Voluntary Tax Contribution Fund shall be continuously appropriated and allocated as follows:
(a)To the Franchise Tax Board and the Controller only for reimbursement of all costs incurred by the Franchise Tax Board and the Controller in connection with their duties under this article.
(b)(1)To the Arts Council, for allocation of grants to individuals or organizations administering arts programs for children in preschool through 12th grade pursuant to subdivision (o) of Section 8753 of the Government Code.
(2)Funds made available to the Arts Council shall not be used for any purpose other than to provide grants as prescribed by this subdivision. Funds made available pursuant to this subdivision shall not be used by the Arts Council for administrative purposes, to reimburse its costs associated with administering grants, to further its programs, or for any purpose relating to its own operations.
(3)The Arts Council shall comply with subdivision (b) of Section 18873.
SEC. 9.Section 18894 of the Revenue and Taxation Code is amended to read:18894.(a)Except as otherwise provided in subdivision (b), this article shall remain in effect only until January 1, 2025, and is repealed as of December 1 of that year.
(b)(1)By September 1 of the 2018 calendar year and each subsequent calendar year that the Keep Arts in Schools Voluntary Tax Contribution Fund appears on the tax return, the Franchise Tax Board shall determine whether the amount of contributions estimated to be received during the calendar year will equal or exceed the minimum contribution amount for the calendar year as described in paragraph (3). The Franchise Tax Board shall estimate the amount of contributions to be received by using the actual amounts received and an estimate of the contributions that will be received by the end of that calendar year.
(2)If the Franchise Tax Board determines that the amount of the contributions estimated to be received during a calendar year will not at least equal the minimum contribution amount for the calendar year, this article shall be inoperative with respect to taxable years beginning on or after January 1 of that calendar year, and shall be repealed on December 1 of that year.
(3)For purposes of this section, the minimum contribution amount for a calendar year means two hundred fifty thousand dollars ($250,000).
(a)An individual may designate on the tax return, under the space titled Protect Our Coast and Oceans Voluntary Tax Contribution Fund, that a contribution in excess of tax liability, if any, be made to the California Beach and Coastal Enhancement Account established by paragraph (1) of subdivision (c) of Section 5067 of the Vehicle Code. That designation is to be used as a voluntary contribution on the tax return.
(b)A contribution shall be in full dollar amounts and may be made individually by each signatory on a joint return.
(c)A designation made under subdivision (a) shall be made for any taxable year on the original return for that taxable year, and once made shall be irrevocable. In the event that payments and credits reported on the return, together with any other credits associated with the individuals account, do not exceed the individuals tax liability, if any, the return shall be treated as though no designation had been made.
(d)The Franchise Tax Board shall revise the form of the return to include a space labeled the Protect Our Coast and Oceans Voluntary Tax Contribution Fund to allow for the designation permitted under subdivision (a). The form shall also include in the instructions information that the contribution may be in the amount of one dollar ($1) or more and that the contribution shall be used for grants and programs that preserve, protect, or enhance coastal resources and promote coastal and marine educational activities for underserved communities.
(e)A deduction shall be allowed under Article 6 (commencing with Section 17201) of Chapter 3 of Part 10 for any contribution made pursuant to subdivision (a).
SEC. 2.Section 18746 of the Revenue and Taxation Code is amended to read:18746.The Franchise Tax Board shall notify the Controller of both the amount of money paid by individuals in excess of their tax liability and the amount of refund money that individuals have designated pursuant to Section 18745 to be transferred to the California Beach and Coastal Enhancement Account. The Controller shall transfer from the Personal Income Tax Fund to the California Beach and Coastal Enhancement Account an amount not in excess of the sum of the amounts designated by individuals pursuant to Section 18745 for payment into that account.
SEC. 3.Section 18747 of the Revenue and Taxation Code is amended to read:18747.(a)Notwithstanding Section 13340 of the Government Code, all money designated under the Protect Our Coast and Oceans Voluntary Tax Contribution Fund space on a tax return and transferred to the California Beach and Coastal Enhancement Account pursuant to Section 18745 shall be continuously appropriated and allocated as follows:
(1)To the Franchise Tax Board and the Controller for reimbursement of all costs incurred by the Franchise Tax Board and the Controller in connection with their duties under this article.
(2)(A)To the California Coastal Commission to support eligible programs awarded grants under the selection criteria established by the California Coastal Commission for the Whale Tail Grants Program, and for direct program-related expenses.
(B)All moneys allocated pursuant to subparagraph (A) may be carried over from the year in which they were received.
(b)The California Coastal Commission shall comply with the Internet Web site reporting requirements described in Section 18873.
SEC. 4.Section 18748 of the Revenue and Taxation Code is amended to read:18748.(a)Except as otherwise provided in subdivision (b), this article shall remain in effect only until January 1, 2025, and is repealed as of December 1 of that year.
(b)(1)By September 1 of the 2018 calendar year and each subsequent calendar year that the Protect Our Coast and Oceans Voluntary Tax Contribution Fund appears on the tax return, the Franchise Tax Board shall determine whether the amount of contributions estimated to be received during the calendar year will equal or exceed the minimum contribution amount for the calendar year pursuant to paragraph (3). The Franchise Tax Board shall estimate the amount of contributions to be received by using the actual amounts received and an estimate of the contributions that will be received by the end of that calendar year.
(2)If the Franchise Tax Board determines that the amount of the contributions estimated to be received during a calendar year will not at least equal the minimum contribution amount for the calendar year, this article is inoperative with respect to taxable years beginning on or after January 1 of that calendar year, and shall be repealed on December 1 of that calendar year.
(3)For purposes of this section, the minimum contribution amount for a calendar year means two hundred fifty thousand dollars ($250,000).
SEC. 5.The heading of Article 19 (commencing with Section 18891) of Chapter 3 of Part 10.2 of Division 2 of the Revenue and Taxation Code is amended to read:19.Keep Arts in Schools Voluntary Tax Contribution FundSEC. 6.Section 18891 of the Revenue and Taxation Code is amended to read:18891.(a)An individual may designate on the tax return that a contribution in excess of tax liability, if any, be made to the Keep Arts in Schools Voluntary Tax Contribution Fund established by Section 18892. That designation is to be used as a voluntary contribution on the tax return.
(b)A contribution shall be in a full dollar amount and may be made individually by each signatory on a joint return.
(c)A designation made under subdivision (a) shall be made for any taxable year on the original return for that taxable year, and once made shall be irrevocable. If payments and credits reported on the return, together with any other credits associated with the individuals account do not exceed the individuals tax liability, if any, the return shall be treated as though a designation had not been made.
(d)The Franchise Tax Board shall revise the form of the return to include a space labeled the Keep Arts in Schools Voluntary Tax Contribution Fund to allow for the designation permitted under subdivision (a). The form shall also include in the instructions information that the contribution may be in the amount of one dollar ($1) or more and that the contribution shall be used by the Arts Council for the allocation of grants to individuals or organizations administering arts programs.
(e)A deduction shall be allowed under Article 6 (commencing with Section 17201) of Chapter 3 of Part 10 for any contribution made pursuant to subdivision (a).
SEC. 7.Section 18892 of the Revenue and Taxation Code is amended to read:18892.There is hereby established in the State Treasury the Keep Arts in Schools Voluntary Tax Contribution Fund to receive contributions made pursuant to Section 18891. The Franchise Tax Board shall notify the Controller of both the amount of money paid by taxpayers in excess of their tax liability and the amount of refund money that taxpayers have designated pursuant to Section 18891 to be transferred to the Keep Arts in Schools Voluntary Tax Contribution Fund. The Controller shall transfer from the Personal Income Tax Fund to the Keep Arts in Schools Voluntary Tax Contribution Fund an amount not in excess of the sum of the amounts designated by individuals pursuant to Section 18891 for payment into that fund.
SEC. 8.Section 18893 of the Revenue and Taxation Code is amended to read:18893.Notwithstanding Section 13340 of the Government Code, all money transferred to the Keep Arts in Schools Voluntary Tax Contribution Fund shall be continuously appropriated and allocated as follows:
(a)To the Franchise Tax Board and the Controller only for reimbursement of all costs incurred by the Franchise Tax Board and the Controller in connection with their duties under this article.
(b)(1)To the Arts Council, for allocation of grants to individuals or organizations administering arts programs for children in preschool through 12th grade pursuant to subdivision (o) of Section 8753 of the Government Code.
(2)Funds made available to the Arts Council shall not be used for any purpose other than to provide grants as prescribed by this subdivision. Funds made available pursuant to this subdivision shall not be used by the Arts Council for administrative purposes, to reimburse its costs associated with administering grants, to further its programs, or for any purpose relating to its own operations.
(3)The Arts Council shall comply with subdivision (b) of Section 18873.
SEC. 9.Section 18894 of the Revenue and Taxation Code is amended to read:18894.(a)Except as otherwise provided in subdivision (b), this article shall remain in effect only until January 1, 2025, and is repealed as of December 1 of that year.
(b)(1)By September 1 of the 2018 calendar year and each subsequent calendar year that the Keep Arts in Schools Voluntary Tax Contribution Fund appears on the tax return, the Franchise Tax Board shall determine whether the amount of contributions estimated to be received during the calendar year will equal or exceed the minimum contribution amount for the calendar year as described in paragraph (3). The Franchise Tax Board shall estimate the amount of contributions to be received by using the actual amounts received and an estimate of the contributions that will be received by the end of that calendar year.
(2)If the Franchise Tax Board determines that the amount of the contributions estimated to be received during a calendar year will not at least equal the minimum contribution amount for the calendar year, this article shall be inoperative with respect to taxable years beginning on or after January 1 of that calendar year, and shall be repealed on December 1 of that year.
(3)For purposes of this section, the minimum contribution amount for a calendar year means two hundred fifty thousand dollars ($250,000).
(a)An individual may designate on the tax return, under the space titled Protect Our Coast and Oceans Voluntary Tax Contribution Fund, that a contribution in excess of tax liability, if any, be made to the California Beach and Coastal Enhancement Account established by paragraph (1) of subdivision (c) of Section 5067 of the Vehicle Code. That designation is to be used as a voluntary contribution on the tax return.
(b)A contribution shall be in full dollar amounts and may be made individually by each signatory on a joint return.
(c)A designation made under subdivision (a) shall be made for any taxable year on the original return for that taxable year, and once made shall be irrevocable. In the event that payments and credits reported on the return, together with any other credits associated with the individuals account, do not exceed the individuals tax liability, if any, the return shall be treated as though no designation had been made.
(d)The Franchise Tax Board shall revise the form of the return to include a space labeled the Protect Our Coast and Oceans Voluntary Tax Contribution Fund to allow for the designation permitted under subdivision (a). The form shall also include in the instructions information that the contribution may be in the amount of one dollar ($1) or more and that the contribution shall be used for grants and programs that preserve, protect, or enhance coastal resources and promote coastal and marine educational activities for underserved communities.
(e)A deduction shall be allowed under Article 6 (commencing with Section 17201) of Chapter 3 of Part 10 for any contribution made pursuant to subdivision (a).
SEC. 2.Section 18746 of the Revenue and Taxation Code is amended to read:18746.There is in the State Treasury the Protect Our Coast and Oceans Voluntary Tax Contribution Fund to receive contributions made pursuant to Section 18745. The Franchise Tax Board shall notify the Controller of both the amount of money paid by individuals in excess of their tax liability and the amount of refund money that individuals have designated pursuant to Section 18745 to be transferred to the California Beach and Coastal Enhancement Account. The Controller shall transfer from the Personal Income Tax Fund to the California Beach and Coastal Enhancement Account an amount not in excess of the sum of the amounts designated by individuals pursuant to Section 18745 for payment into that account.
SEC. 3.Section 18747 of the Revenue and Taxation Code is amended to read:18747.(a)Notwithstanding Section 13340 of the Government Code, all money designated under the Protect Our Coast and Oceans Voluntary Tax Contribution Fund space on a tax return and transferred to the California Beach and Coastal Enhancement Account pursuant to Section 18745 shall be continuously appropriated and allocated as follows:
(1)To the Franchise Tax Board and the Controller for reimbursement of all costs incurred by the Franchise Tax Board and the Controller in connection with their duties under this article.
(2)(A)To the California Coastal Commission to support eligible programs awarded grants under the selection criteria established by the California Coastal Commission for the Whale Tail Grants Program, and for direct program-related expenses.
(B)All moneys allocated pursuant to subparagraph (A) may be carried over from the year in which they were received.
(b)The California Coastal Commission shall comply with the Internet Web site reporting requirements described in Section 18873.
SEC. 4.Section 18748 of the Revenue and Taxation Code is amended to read:18748.(a)Except as otherwise provided in subdivision (b), this article shall remain in effect only until January 1, 2025, and is repealed as of December 1 of that year.
(b)(1)By September 1 of the 2018 calendar year and each subsequent calendar year that the Protect Our Coast and Oceans Voluntary Tax Contribution Fund appears on the tax return, the Franchise Tax Board shall determine whether the amount of contributions estimated to be received during the calendar year will equal or exceed the minimum contribution amount for the calendar year pursuant to paragraph (3). The Franchise Tax Board shall estimate the amount of contributions to be received by using the actual amounts received and an estimate of the contributions that will be received by the end of that calendar year.
(2)If the Franchise Tax Board determines that the amount of the contributions estimated to be received during a calendar year will not at least equal the minimum contribution amount for the calendar year, this article is inoperative with respect to taxable years beginning on or after January 1 of that calendar year, and shall be repealed on December 1 of that calendar year.
(3)For purposes of this section, the minimum contribution amount for a calendar year means two hundred fifty thousand dollars ($250,000).
SEC. 5.The heading of Article 19 (commencing with Section 18891) of Chapter 3 of Part 10.2 of Division 2 of the Revenue and Taxation Code is amended to read:19.Keep Arts in Schools Voluntary Tax Contribution FundSEC. 6.Section 18891 of the Revenue and Taxation Code is amended to read:18891.(a)An individual may designate on the tax return that a contribution in excess of tax liability, if any, be made to the Keep Arts in Schools Voluntary Tax Contribution Fund established by Section 18892. That designation is to be used as a voluntary contribution on the tax return.
(b)A contribution shall be in a full dollar amount and may be made individually by each signatory on a joint return.
(c)A designation made under subdivision (a) shall be made for any taxable year on the original return for that taxable year, and once made shall be irrevocable. If payments and credits reported on the return, together with any other credits associated with the individuals account do not exceed the individuals tax liability, if any, the return shall be treated as though a designation had not been made.
(d)The Franchise Tax Board shall revise the form of the return to include a space labeled the Keep Arts in Schools Voluntary Tax Contribution Fund to allow for the designation permitted under subdivision (a). The form shall also include in the instructions information that the contribution may be in the amount of one dollar ($1) or more and that the contribution shall be used by the Arts Council for the allocation of grants to individuals or organizations administering arts programs.
(e)A deduction shall be allowed under Article 6 (commencing with Section 17201) of Chapter 3 of Part 10 for any contribution made pursuant to subdivision (a).
SEC. 7.Section 18892 of the Revenue and Taxation Code is amended to read:18892.There is hereby established in the State Treasury the Keep Arts in Schools Voluntary Tax Contribution Fund to receive contributions made pursuant to Section 18891. The Franchise Tax Board shall notify the Controller of both the amount of money paid by taxpayers in excess of their tax liability and the amount of refund money that taxpayers have designated pursuant to Section 18891 to be transferred to the Keep Arts in Schools Voluntary Tax Contribution Fund. The Controller shall transfer from the Personal Income Tax Fund to the Keep Arts in Schools Voluntary Tax Contribution Fund an amount not in excess of the sum of the amounts designated by individuals pursuant to Section 18891 for payment into that fund.
SEC. 8.Section 18893 of the Revenue and Taxation Code is amended to read:18893.Notwithstanding Section 13340 of the Government Code, all money transferred to the Keep Arts in Schools Voluntary Tax Contribution Fund shall be continuously appropriated and allocated as follows:
(a)To the Franchise Tax Board and the Controller only for reimbursement of all costs incurred by the Franchise Tax Board and the Controller in connection with their duties under this article.
(b)(1)To the Arts Council, for allocation of grants to individuals or organizations administering arts programs for children in preschool through 12th grade pursuant to subdivision (o) of Section 8753 of the Government Code.
(2)Funds made available to the Arts Council shall not be used for any purpose other than to provide grants as prescribed by this subdivision. Funds made available pursuant to this subdivision shall not be used by the Arts Council for administrative purposes, to reimburse its costs associated with administering grants, to further its programs, or for any purpose relating to its own operations.
(3)The Arts Council shall comply with subdivision (b) of Section 18873.
SEC. 9.Section 18894 of the Revenue and Taxation Code is amended to read:18894.(a)Except as otherwise provided in subdivision (b), this article shall remain in effect only until January 1, 2025, and is repealed as of December 1 of that year.
(b)(1)By September 1 of the 2018 calendar year and each subsequent calendar year that the Keep Arts in Schools Voluntary Tax Contribution Fund appears on the tax return, the Franchise Tax Board shall determine whether the amount of contributions estimated to be received during the calendar year will equal or exceed the minimum contribution amount for the calendar year as described in paragraph (3). The Franchise Tax Board shall estimate the amount of contributions to be received by using the actual amounts received and an estimate of the contributions that will be received by the end of that calendar year.
(2)If the Franchise Tax Board determines that the amount of the contributions estimated to be received during a calendar year will not at least equal the minimum contribution amount for the calendar year, this article shall be inoperative with respect to taxable years beginning on or after January 1 of that calendar year, and shall be repealed on December 1 of that year.
(3)For purposes of this section, the minimum contribution amount for a calendar year means two hundred fifty thousand dollars ($250,000).
(a)An individual may designate on the tax return, under the space titled Protect Our Coast and Oceans Voluntary Tax Contribution Fund, that a contribution in excess of tax liability, if any, be made to the California Beach and Coastal Enhancement Account established by paragraph (1) of subdivision (c) of Section 5067 of the Vehicle Code. That designation is to be used as a voluntary contribution on the tax return.
(b)A contribution shall be in full dollar amounts and may be made individually by each signatory on a joint return.
(c)A designation made under subdivision (a) shall be made for any taxable year on the original return for that taxable year, and once made shall be irrevocable. In the event that payments and credits reported on the return, together with any other credits associated with the individuals account, do not exceed the individuals tax liability, if any, the return shall be treated as though no designation had been made. In the event that no designee is specified, the contribution shall, after reimbursement of the direct actual costs of the Franchise Tax Board for the collection and administration of funds under this article, be transferred to the General Fund.
(d)If an individual designates a contribution to more than one account or fund listed on the tax return, and the amount available is insufficient to satisfy the total amount designated, the contribution shall be allocated among the designated accounts or funds on a pro rata basis.(e)(d)The Franchise Tax Board shall revise the form of the return to include a space labeled the Protect Our Coast and Oceans Voluntary Tax Contribution Fund to allow for the designation permitted under subdivision (a). The form shall also include in the instructions information that the contribution may be in the amount of one dollar ($1) or more and that the contribution shall be used for grants and programs that preserve, protect, or enhance coastal resources and promote coastal and marine educational activities for underserved communities.
(f)Notwithstanding any other law, a voluntary contribution designation for the Protect Our Coast and Oceans Voluntary Tax Contribution Fund shall not be added on the tax return until another voluntary contribution designation is removed or as soon as space is available.(g)(e)A deduction shall be allowed under Article 6 (commencing with Section 17201) of Chapter 3 of Part 10 for any contribution made pursuant to subdivision (a).
SEC. 2.Section 18746 of the Revenue and Taxation Code is amended to read:18746.There is in the State Treasury the Protect Our Coast and Oceans Voluntary Tax Contribution Fund to receive contributions made pursuant to Section 18745. The Franchise Tax Board shall notify the Controller of both the amount of money paid by individuals in excess of their tax liability and the amount of refund money that individuals have designated pursuant to Section 18745 to be transferred to the California Beach and Coastal Enhancement Account. The Controller shall transfer from the Personal Income Tax Fund to the California Beach and Coastal Enhancement Account an amount not in excess of the sum of the amounts designated by individuals pursuant to Section 18745 for payment into that account.
SEC. 3.Section 18747 of the Revenue and Taxation Code is amended to read:18747.(a)Notwithstanding Section 13340 of the Government Code, all money designated under the Protect Our Coast and Oceans Voluntary Tax Contribution Fund space on a tax return and transferred to the California Beach and Coastal Enhancement Account pursuant to Section 18745 shall be continuously appropriated and allocated as follows:
(1)To the Franchise Tax Board and the Controller for reimbursement of all costs incurred by the Franchise Tax Board and the Controller in connection with their duties under this article.
(2)(A)To the California Coastal Commission to support eligible programs awarded grants under the selection criteria established by the California Coastal Commission for the Whale Tail Grants Program, and for direct program-related expenses.
(B)All moneys allocated pursuant to subparagraph (A) may be carried over from the year in which they were received.
(b)The California Coastal Commission shall comply with the Internet Web site reporting requirements described in Section 18873.
SEC. 4.Section 18748 of the Revenue and Taxation Code is amended to read:18748.(a)Except as otherwise provided in subdivision (b), this article shall remain in effect only until January 1, 2025, and is repealed as of December 1 of that year.
(b)(1)By September 1 of the second 2018 calendar year and each subsequent calendar year that the Protect Our Coast and Oceans Voluntary Tax Contribution Fund appears on the tax return, the Franchise Tax Board shall determine whether the amount of contributions estimated to be received during the calendar year will equal or exceed the minimum contribution amount for the calendar year pursuant to paragraph (3). The Franchise Tax Board shall estimate the amount of contributions to be received by using the actual amounts received and an estimate of the contributions that will be received by the end of that calendar year.
(2)If the Franchise Tax Board determines that the amount of the contributions estimated to be received during a calendar year will not at least equal the minimum contribution amount for the calendar year, this article is inoperative with respect to taxable years beginning on or after January 1 of that calendar year, and shall be repealed on December 1 of that calendar year.
(3)For purposes of this section, the minimum contribution amount for a calendar year means two hundred fifty thousand dollars ($250,000).
(c)Notwithstanding the repeal of this article, any contribution amounts designated pursuant to this article prior to its repeal shall continue to be transferred and disbursed in accordance with this article as in effect immediately prior to that repeal.SEC. 5.The heading of Article 19 (commencing with Section 18891) of Chapter 3 of Part 10.2 of Division 2 of the Revenue and Taxation Code is amended to read:19.Keep Arts in Schools Voluntary Tax Contribution FundSEC. 6.Section 18891 of the Revenue and Taxation Code is amended to read:18891.(a)An individual may designate on the tax return that a contribution in excess of tax liability, if any, be made to the Keep Arts in Schools Voluntary Tax Contribution Fund established by Section 18892. That designation is to be used as a voluntary contribution on the tax return.
(b)A contribution shall be in a full dollar amount and may be made individually by each signatory on a joint return.
(c)A designation made under subdivision (a) shall be made for any taxable year on the original return for that taxable year, and once made shall be irrevocable. If payments and credits reported on the return, together with any other credits associated with the individuals account do not exceed the individuals tax liability, if any, the return shall be treated as though a designation had not been made.
(d)The Franchise Tax Board shall revise the form of the return to include a space labeled the Keep Arts in Schools Voluntary Tax Contribution Fund to allow for the designation permitted under subdivision (a). The form shall also include in the instructions information that the contribution may be in the amount of one dollar ($1) or more and that the contribution shall be used by the Arts Council for the allocation of grants to individuals or organizations administering arts programs.
(e)A deduction shall be allowed under Article 6 (commencing with Section 17201) of Chapter 3 of Part 10 for any contribution made pursuant to subdivision (a).
SEC. 7.Section 18892 of the Revenue and Taxation Code is amended to read:18892.There is hereby established in the State Treasury the Keep Arts in Schools Voluntary Tax Contribution Fund to receive contributions made pursuant to Section 18891. The Franchise Tax Board shall notify the Controller of both the amount of money paid by taxpayers in excess of their tax liability and the amount of refund money that taxpayers have designated pursuant to Section 18891 to be transferred to the Keep Arts in Schools Voluntary Tax Contribution Fund. The Controller shall transfer from the Personal Income Tax Fund to the Keep Arts in Schools Voluntary Tax Contribution Fund an amount not in excess of the sum of the amounts designated by individuals pursuant to Section 18891 for payment into that fund.
SEC. 8.Section 18893 of the Revenue and Taxation Code is amended to read:18893.Notwithstanding Section 13340 of the Government Code, all money transferred to the Keep Arts in Schools Voluntary Tax Contribution Fund shall be continuously appropriated and allocated as follows:
(a)To the Franchise Tax Board and the Controller only for reimbursement of all costs incurred by the Franchise Tax Board and the Controller in connection with their duties under this article.
(b)(1)To the Arts Council, for allocation of grants to individuals or organizations administering arts programs for children in preschool through 12th grade pursuant to subdivision (o) of Section 8753 of the Government Code.
(2)Funds made available to the Arts Council shall not be used for any purpose other than to provide grants as prescribed by this subdivision. Funds made available pursuant to this subdivision shall not be used by the Arts Council for administrative purposes, to reimburse its costs associated with administering grants, to further its programs, or for any purpose relating to its own operations.
(3)The Arts Council shall comply with subdivision (b) of Section 18873.
SEC. 9.Section 18894 of the Revenue and Taxation Code is amended to read:18894.(a)Except as otherwise provided in subdivision (b), this article shall remain in effect only until January 1, 2025, and is repealed as of December 1 of that year.
(b)(1)By September 1 of the 2018 calendar year 2018 and each subsequent calendar year that the Keep Arts in Schools Voluntary Tax Contribution Fund appears on the tax return, the Franchise Tax Board shall determine whether the amount of contributions estimated to be received during the calendar year will equal or exceed the minimum contribution amount for the calendar year as described in paragraph (3). The Franchise Tax Board shall estimate the amount of contributions to be received by using the actual amounts received and an estimate of the contributions that will be received by the end of that calendar year.
(2)If the Franchise Tax Board determines that the amount of the contributions estimated to be received during a calendar year will not at least equal the minimum contribution amount for the calendar year, this article shall be inoperative with respect to taxable years beginning on or after January 1 of that calendar year, and shall be repealed on December 1 of that year.
(3)For purposes of this section, the minimum contribution amount for a calendar year means two hundred fifty thousand dollars ($250,000).
(a)An individual may designate on the tax return, under the space titled Protect Our Coast and Oceans Voluntary Tax Contribution Fund, that a contribution in excess of tax liability, if any, be made to the California Beach and Coastal Enhancement Account established by paragraph (1) of subdivision (c) of Section 5067 of the Vehicle Code.
(b)A contribution shall be in full dollar amounts and may be made individually by each signatory on a joint return.
(c)A designation made under subdivision (a) shall be made for any taxable year on the original return for that taxable year, and once made shall be irrevocable. In the event that payments and credits reported on the return, together with any other credits associated with the individuals account, do not exceed the individuals tax liability, if any, the return shall be treated as though no designation had been made. In the event that no designee is specified, the contribution shall, after reimbursement of the direct actual costs of the Franchise Tax Board for the collection and administration of funds under this article, be transferred to the General Fund.
(d)If an individual designates a contribution to more than one account or fund listed on the tax return, and the amount available is insufficient to satisfy the total amount designated, the contribution shall be allocated among the designated accounts or funds on a pro rata basis.
(e)The Franchise Tax Board shall revise the form of the return to include a space labeled the Protect Our Coast and Oceans Voluntary Tax Contribution Fund to allow for the designation permitted under subdivision (a). The form shall also include in the instructions information that the contribution may be in the amount of one dollar ($1) or more and that the contribution shall be used for grants and programs that preserve, protect, or enhance coastal resources and promote coastal and marine educational activities for underserved communities.
(f)Notwithstanding any other law, a voluntary contribution designation for the Protect Our Coast and Oceans Voluntary Tax Contribution Fund shall not be added on the tax return until another voluntary contribution designation is removed or as soon as space is available.
(g)A deduction shall be allowed under Article 6 (commencing with Section 17201) of Chapter 3 of Part 10 for any contribution made pursuant to subdivision (a).
SEC. 2.Section 18746 of the Revenue and Taxation Code is amended to read:18746.There is in the State Treasury the Protect Our Coast and Oceans Voluntary Tax Contribution Fund to receive contributions made pursuant to Section 18745. The Franchise Tax Board shall notify the Controller of both the amount of money paid by individuals in excess of their tax liability and the amount of refund money that individuals have designated pursuant to Section 18745 to be transferred to the California Beach and Coastal Enhancement Account. The Controller shall transfer from the Personal Income Tax Fund to the California Beach and Coastal Enhancement Account an amount not in excess of the sum of the amounts designated by individuals pursuant to Section 18745 for payment into that account.
SEC. 3.Section 18747 of the Revenue and Taxation Code is amended to read:18747.All (a)Notwithstanding Section 13340 of the Government Code, all money designated under the Protect Our Coast and Oceans Voluntary Tax Contribution Fund space on a tax return and transferred to the California Beach and Coastal Enhancement Account, Account pursuant to Section 18745, upon appropriation by the Legislature, 18745 shall be continuously appropriated and allocated as follows:
(a)(1)To the Franchise Tax Board and the Controller for reimbursement of all costs incurred by the Franchise Tax Board and the Controller in connection with their duties under this article.
(b)(1)(2)(A)To the California Coastal Commission to support eligible programs awarded grants under the selection criteria established by the California Coastal Commission for the Whale Tail Grants Program, and for direct program-related expenses.
(2)(B)All moneys allocated pursuant to paragraph (1) subparagraph (A) may be carried over from the year in which they were received.
(b)The California Coastal Commission shall comply with the Internet Web site reporting requirements described in Section 18873.
SEC. 4.Section 18748 of the Revenue and Taxation Code is amended to read:18748.(a)Except as otherwise provided in subdivision (b), this article shall remain in effect only until January 1 of the fifth taxable year following the first appearance of the Protect Our Coast and Oceans Fund on the personal income tax return, 1, 2025, and is repealed as of December 1 of that year.
(b)(1)By September 1 of the second calendar year and each subsequent calendar year that the Protect Our Coast and Oceans Voluntary Tax Contribution Fund appears on the tax return, the Franchise Tax Board shall do all of the following:
(A)Determine the minimum contribution amount required to be received during the next calendar year for the account to appear on the tax return for the taxable year that includes that next calendar year and provide written notification to the California Coastal Commission of the amount determined.(B)Determine determine whether the amount of contributions estimated to be received during the calendar year will equal or exceed the minimum contribution amount determined by the Franchise Tax Board for the calendar year pursuant to subparagraph (A). paragraph (3). The Franchise Tax Board shall estimate the amount of contributions to be received by using the actual amounts received and an estimate of the contributions that will be received by the end of that calendar year.
(2)If the Franchise Tax Board determines that the amount of the contributions estimated to be received during a calendar year will not at least equal the minimum contribution amount for the calendar year, this article is inoperative with respect to taxable years beginning on or after January 1 of that calendar year, and shall be repealed on December 1 of that calendar year.
(3)For purposes of this section, the minimum contribution amount for a calendar year means two hundred fifty thousand dollars ($250,000) for the second calendar year after the first appearance of the Protect Our Coast and Oceans Fund on the personal income tax return or the minimum contribution amount as adjusted pursuant to subdivision (c). ($250,000).
(c)For each calendar year, beginning with the third calendar year after the first appearance of the Protect Our Coast and Oceans Fund on the personal income tax return, the Franchise Tax Board shall adjust, on or before September 1 of that calendar year, the minimum contribution amount specified in subdivision (b) as follows:(1)The minimum contribution amount for the calendar year shall be an amount equal to the product of the minimum contribution amount for the prior calendar year multiplied by the inflation factor adjustment as specified in subparagraph (A) of paragraph (2) of subdivision (h) of Section 17041, rounded off to the nearest dollar.(2)The inflation factor adjustment used for the calendar year shall be based on the figures for the percentage change in the California Consumer Price Index for all items received on or before August 1 of the calendar year pursuant to paragraph (1) of subdivision (h) of Section 17041.(d)(c)Notwithstanding the repeal of this article, any contribution amounts designated pursuant to this article prior to its repeal shall continue to be transferred and disbursed in accordance with this article as in effect immediately prior to that repeal.
SECTION 1.SEC. 5.The heading of Article 19 (commencing with Section 18891) of Chapter 3 of Part 10.2 of Division 2 of the Revenue and Taxation Code is amended to read:19.Keep Arts in Schools Voluntary Tax Contribution FundSEC. 2.SEC. 6.Section 18891 of the Revenue and Taxation Code is amended to read:18891.(a)An individual may designate on the tax return that a contribution in excess of tax liability, if any, be made to the Keep Arts in Schools Voluntary Tax Contribution Fund established by Section 18892. That designation is to be used as a voluntary contribution on the tax return.
(b)A contribution shall be in a full dollar amount and may be made individually by each signatory on a joint return.
(c)A designation made under subdivision (a) shall be made for any taxable year on the original return for that taxable year, and once made shall be irrevocable. If payments and credits reported on the return, together with any other credits associated with the individuals account do not exceed the individuals tax liability, if any, the return shall be treated as though a designation had not been made.
(d)The Franchise Tax Board shall revise the form of the return to include a space labeled the Keep Arts in Schools Voluntary Tax Contribution Fund to allow for the designation permitted under subdivision (a). The form shall also include in the instructions information that the contribution may be in the amount of one dollar ($1) or more and that the contribution shall be used by the Arts Council for the allocation of grants to individuals or organizations administering arts programs.
(e)A deduction shall be allowed under Article 6 (commencing with Section 17201) of Chapter 3 of Part 10 for any contribution made pursuant to subdivision (a).
SEC. 3.SEC. 7.Section 18892 of the Revenue and Taxation Code is amended to read:18892.There is hereby established in the State Treasury the Keep Arts in Schools Voluntary Tax Contribution Fund to receive contributions made pursuant to Section 18891. The Franchise Tax Board shall notify the Controller of both the amount of money paid by taxpayers in excess of their tax liability and the amount of refund money that taxpayers have designated pursuant to Section 18891 to be transferred to the Keep Arts in Schools Voluntary Tax Contribution Fund. The Controller shall transfer from the Personal Income Tax Fund to the Keep Arts in Schools Voluntary Tax Contribution Fund an amount not in excess of the sum of the amounts designated by individuals pursuant to Section 18891 for payment into that fund.
SEC. 4.SEC. 8.Section 18893 of the Revenue and Taxation Code is amended to read:18893.Notwithstanding Section 13340 of the Government Code, all money transferred to the Keep Arts in Schools Voluntary Tax Contribution Fund shall be continuously appropriated and allocated as follows:
(a)To the Franchise Tax Board and the Controller only for reimbursement of all costs incurred by the Franchise Tax Board and the Controller in connection with their duties under this article.
(b)(1)To the Arts Council, for allocation of grants to individuals or organizations administering arts programs for children in preschool through 12th grade pursuant to subdivision (o) of Section 8753 of the Government Code.
(2)Funds made available to the Arts Council shall not be used for any purpose other than to provide grants as prescribed by this subdivision. Funds made available pursuant to this subdivision shall not be used by the Arts Council for administrative purposes, to reimburse its costs associated with administering grants, to further its programs, or for any purpose relating to its own operations.
(3)The Arts Council shall comply with subdivision (b) of Section 18873.
SEC. 5.SEC. 9.Section 18894 of the Revenue and Taxation Code is amended to read:18894.(a)Except as otherwise provided in subdivision (b), this article shall remain in effect only until January 1, 2025, and is repealed as of December 1 of that year.
(b)(1)By September 1 of the calendar year 2018 and each subsequent calendar year that the Keep Arts in Schools Voluntary Tax Contribution Fund appears on the tax return, the Franchise Tax Board shall
determine whether the amount of contributions estimated to be received during the calendar year will equal or exceed the minimum contribution amount for the calendar year as described in paragraph (3). The Franchise Tax Board shall estimate the amount of contributions to be received by using the actual amounts received and an estimate of the contributions that will be received by the end of that calendar year.
(2)If the Franchise Tax Board determines that the amount of the contributions estimated to be received during a calendar year will not at least equal the minimum contribution amount for the calendar year, this article shall be inoperative with respect to taxable years beginning on or after January 1 of that calendar year, and shall be repealed on December 1 of that year.
(3)For purposes of this section, the minimum contribution amount for a calendar year means two hundred fifty thousand dollars ($250,000).
(a)An individual may designate on the tax return that a contribution in excess of tax liability, if any, be made to the Keep Arts in Schools Voluntary Tax Contribution Fund established by Section 18892. That designation is to be used as a voluntary contribution on the tax return.
(b)A contribution shall be in a full dollar amount and may be made individually by each signatory on a joint return.
(c)A designation made under subdivision (a) shall be made for any taxable year on the original return for that taxable year, and once made shall be irrevocable. If payments and credits reported on the return, together with any other credits associated with the taxpayers individuals account do not exceed the taxpayers individuals tax liability, if any, the return shall be treated as though a designation had not been made.
(d)The Franchise Tax Board shall revise the form of the return to include a space labeled the Keep Arts in Schools Voluntary Tax Contribution Fund to allow for the designation permitted under subdivision (a). The form shall also include in the instructions information that the contribution may be in the amount of one dollar ($1) or more and that the contribution shall be used by the Arts Council for the allocation of grants to individuals or organizations administering arts programs.
(e)Notwithstanding any other provision, a voluntary contribution designation for the Keep Arts in Schools Voluntary Tax Contribution Fund shall not be added on the tax return until another voluntary contribution designation is removed.(f)(e)A deduction shall be allowed under Article 6 (commencing with Section 17201) of Chapter 3 of Part 10 for any contribution made pursuant to subdivision (a).
SEC. 3.Section 18892 of the Revenue and Taxation Code is amended to read:18892.There is hereby established in the State Treasury the Keep Arts in Schools Voluntary Tax Contribution Fund to receive contributions made pursuant to Section 18891. The Franchise Tax Board shall notify the Controller of both the amount of money paid by taxpayers in excess of their tax liability and the amount of refund money that taxpayers have designated pursuant to Section 18891 to be transferred to the Keep Arts in Schools Voluntary Tax Contribution Fund. The Controller shall transfer from the Personal Income Tax Fund to the Keep Arts in Schools Voluntary Tax Contribution Fund an amount not in excess of the sum of the amounts designated by individuals pursuant to Section 18891 for payment into that fund.
SEC. 4.Section 18893 of the Revenue and Taxation Code is amended to read:18893.Notwithstanding Section 13340 of the Government Code, all money transferred to the Keep Arts in Schools Voluntary Tax Contribution Fund shall be continuously appropriated and allocated as follows:
(a)To the Franchise Tax Board and the Controller only for reimbursement of all costs incurred by the Franchise Tax Board and the Controller in connection with their duties under this article.
(b)(1)To the Arts Council, for allocation of grants to individuals or organizations administering arts programs for children in preschool through 12th grade pursuant to subdivision (o) of Section 8753 of the Government Code.
(2)Funds made available to the Arts Council shall not be used for any purpose other than to provide grants as prescribed by this subdivision. Funds made available pursuant to this subdivision shall not be used by the Arts Council for administrative purposes, to reimburse its costs associated with administering grants, to further its programs, or for any purpose relating to its own operations.
(3)The Arts Council shall comply with subdivision (b) of Section 18873.
SEC. 5.Section 18894 of the Revenue and Taxation Code is amended to read:18894.(a)Except as otherwise provided in subdivision (b), this article shall remain in effect only until January 1, 2025, and is repealed as of December 1 of that year.
(b)(1)By September 1 of the second calendar year 2018 and each subsequent calendar year that the Keep Arts in Schools Voluntary Tax Contribution Fund appears on the tax return, the Franchise Tax Board shall do all of the following:
(A)Determine the minimum contribution amount required to be received during the next calendar year for the fund to appear on the tax return for the taxable year that includes that next calendar year.(B)Determinedetermine whether the amount of contributions estimated to be received during the calendar year will equal or exceed the minimum contribution amount determined by the Franchise Tax Board for the calendar year pursuant to subparagraph (A). as described in paragraph (3). The Franchise Tax Board shall estimate the amount of contributions to be received by using the actual amounts received and an estimate of the contributions that will be received by the end of that calendar year.
(2)If the Franchise Tax Board determines that the amount of the contributions estimated to be received during a calendar year will not at least equal the minimum contribution amount for the calendar year, this article shall be inoperative with respect to taxable years beginning on or after January 1 of that calendar year, and shall be repealed on December 1 of that year.
(3)For purposes of this section, the minimum contribution amount for a calendar year means two hundred fifty thousand dollars ($250,000) for the second calendar year after the first appearance of the Keep Arts in Schools Voluntary Tax Contribution Fund on the personal income tax return or the minimum contribution amount as adjusted pursuant to subdivision (c). ($250,000).
(c)For each calendar year, beginning with the third calendar year after the first appearance of the Keep Arts in Schools Voluntary Tax Contribution Fund on the personal income tax return, the Franchise Tax Board shall adjust, on or before September 1 of that calendar year, the minimum contribution amount specified in subdivision (b) as follows:(1)The minimum contribution amount for the calendar year shall be an amount equal to the product of the minimum contribution amount for the prior calendar year multiplied by the inflation factor adjustment as specified in subparagraph (A) of paragraph (2) of subdivision (h) of Section 17041, rounded off to the nearest dollar.(2)The inflation factor adjustment used for the calendar year shall be based on the figures for the percentage change in the California Consumer Price Index for all items received on or before August 1 of the calendar year pursuant to paragraph (1) of subdivision (h) of Section 17041.(a)An individual may designate on the tax return that a contribution in excess of tax liability, if any, be made to the Keep Arts in Schools Voluntary Tax Contribution Fund established by Section 18892.
(b)A contribution shall be in a full dollar amount and may be made individually by each signatory on a joint return.
(c)A designation made under subdivision (a) shall be made for any taxable year on the original return for that taxable year, and once made shall be irrevocable. If payments and credits reported on the return, together with any other credits associated with the taxpayers account do not exceed the taxpayers tax liability, if any, the return shall be treated as though a designation had not been made.
(d)The Franchise Tax Board shall revise the form of the return to include a space labeled the Keep Arts in Schools Voluntary Tax Contribution Fund to allow for the designation permitted under subdivision (a). The form shall also include in the instructions information that the contribution may be in the amount of one dollar ($1) or more and that the contribution shall be used by the Arts Council for the allocation of grants to individuals or organizations administering arts programs.
(e)Notwithstanding any other provision, a voluntary contribution designation for the Keep Arts in Schools Voluntary Tax Contribution Fund shall not be added on the tax return until another voluntary contribution designation is removed.
(f)A deduction shall be allowed under Article 6 (commencing with Section 17201) of Chapter 3 of Part 10 for any contribution made pursuant to subdivision (a).
SEC. 4.SEC. 3.Section 18892 of the Revenue and Taxation Code is amended to read:18892.There is hereby established in the State Treasury the Keep Arts in Schools Voluntary Tax Contribution Fund to receive contributions made pursuant to Section 18891. The Franchise Tax Board shall notify the Controller of both the amount of money paid by taxpayers in excess of their tax liability and the amount of refund money that taxpayers have designated pursuant to Section 18891 to be transferred to the Keep Arts in Schools Voluntary Tax Contribution Fund. The Controller shall transfer from the Personal Income Tax Fund to the Keep Arts in Schools Voluntary Tax Contribution Fund an amount not in excess of the sum of the amounts designated by individuals pursuant to Section 18891 for payment into that fund.
SEC. 5.SEC. 4.Section 18893 of the Revenue and Taxation Code is amended to read:18893.Notwithstanding Section 13340 of the Government Code, all money transferred to the Keep Arts in Schools Voluntary Tax Contribution Fund shall be continuously appropriated and allocated as follows:
(a)To the Franchise Tax Board and the Controller only for reimbursement of all costs incurred by the Franchise Tax Board and the Controller in connection with their duties under this article.
(b)(1)To the Arts Council, for allocation of grants to individuals or organizations administering arts programs for children in preschool through 12th grade pursuant to subdivision (o) of Section 8753 of the Government Code.
(2)Funds made available to the Arts Council shall not be used for any purpose other than to provide grants as prescribed by this subdivision. Funds made available pursuant to this subdivision shall not be used by the Arts Council for administrative purposes, to reimburse its costs associated with administering grants, to further its programs, or for any purpose relating to its own operations.
(3)The Arts Council shall comply with subdivision (b) of Section 18873.
SEC. 6.SEC. 5.Section 18894 of the Revenue and Taxation Code is amended to read:18894.(a)Except as otherwise provided in subdivision (b), this article shall remain in effect only until January 1, 2025, and is repealed as of December 1 of that year.
(b)(1)By September 1 of the second calendar year and each subsequent calendar year that the Keep Arts in Schools Voluntary Tax Contribution Fund appears on the tax return, the Franchise Tax Board shall do all of the following:
(A)Determine the minimum contribution amount required to be received during the next calendar year for the fund to appear on the tax return for the taxable year that includes that next calendar year.
(B)Determine whether the amount of contributions estimated to be received during the calendar year will equal or exceed the minimum contribution amount determined by the Franchise Tax Board for the calendar year pursuant to subparagraph (A). The Franchise Tax Board shall estimate the amount of contributions to be received by using the actual amounts received and an estimate of the contributions that will be received by the end of that calendar year.
(2)If the Franchise Tax Board determines that the amount of the contributions estimated to be received during a calendar year will not at least equal the minimum contribution amount for the calendar year, this article shall be inoperative with respect to taxable years beginning on or after January 1 of that calendar year, and shall be repealed on December 1 of that year.
(3)For purposes of this section, the minimum contribution amount for a calendar year means two hundred fifty thousand dollars ($250,000) for the second calendar year after the first appearance of the Keep Arts in Schools Voluntary Tax Contribution Fund on the personal income tax return or the minimum contribution amount as adjusted pursuant to subdivision (c).
(c)For each calendar year, beginning with the third calendar year after the first appearance of the Keep Arts in Schools Voluntary Tax Contribution Fund on the personal income tax return, the Franchise Tax Board shall adjust, on or before September 1 of that calendar year, the minimum contribution amount specified in subdivision (b) as follows:
(1)The minimum contribution amount for the calendar year shall be an amount equal to the product of the minimum contribution amount for the prior calendar year multiplied by the inflation factor adjustment as specified in subparagraph (A) of paragraph (2) of subdivision (h) of Section 17041, rounded off to the nearest dollar.
(2)The inflation factor adjustment used for the calendar year shall be based on the figures for the percentage change in the California Consumer Price Index for all items received on or before August 1 of the calendar year pursuant to paragraph (1) of subdivision (h) of Section 17041.
SEC. 7.This act is an urgency statute necessary for the immediate preservation of the public peace, health, or safety within the meaning of Article IV of the California Constitution and shall go into immediate effect. The facts constituting the necessity are:In order to allow for the immediate preservation of voluntary contribution funds collected on the personal income tax return, which provide critical resources to various charitable health and safety causes benefiting the public, that are losing critical sources of revenue due to issues with tax software and as a result are at risk of being repealed for not meeting the required minimum contribution amount, and to make necessary changes to the provisions governing the Keep Arts in Schools Voluntary Tax Contribution Fund as soon as possible, it is necessary for this act to take effect immediately.(a)Notwithstanding any other law, for any voluntary tax contribution fund authorized under this chapter and appearing on the return for the 2016 taxable year that has a minimum contribution amount requirement for the 2017 calendar year, in order to continue to appear on the return for the 2017 taxable year, the following shall apply:
(1)The minimum contribution amount requirement for the 2017 calendar year is equal to zero dollars ($0).
(2)The minimum contribution amount to be received during the 2018 calendar year for a fund to appear on the tax return for the 2018 taxable year shall be the amount previously determined by September 1, 2016, for the 2017 calendar year.
(b)This section shall not apply to a voluntary contribution that is otherwise subject to repeal without regard to satisfying a minimum contribution amount requirement.
SECTION 1.SEC. 2.The heading of Article 19 (commencing with Section 18891) of Chapter 3 of Part 10.2 of Division 2 of the Revenue and Taxation Code is amended to read:19.Keep Arts in Schools Voluntary Tax Contribution FundSEC. 2.SEC. 3.Section 18891 of the Revenue and Taxation Code is amended to read:18891.(a)An individual may designate on the tax return that a contribution in excess of tax liability, if any, be made to the Keep Arts in Schools Voluntary Tax Contribution Fund established by Section 18892.
(b)A contribution shall be in a full dollar amount and may be made individually by each signatory on a joint return.
(c)A designation made under subdivision (a) shall be made for any taxable year on the original return for that taxable year, and once made shall be irrevocable. If payments and credits reported on the return, together with any other credits associated with the taxpayers account do not exceed the taxpayers tax liability, if any, the return shall be treated as though a designation had not been made.
(d)The Franchise Tax Board shall revise the form of the return to include a space labeled the Keep Arts in Schools Voluntary Tax Contribution Fund to allow for the designation permitted under subdivision (a). The form shall also include in the instructions information that the contribution may be in the amount of one dollar ($1) or more and that the contribution shall be used by the Arts Council for the allocation of grants to individuals or organizations administering arts programs.
(e)Notwithstanding any other provision, a voluntary contribution designation for the Keep Arts in Schools Voluntary Tax Contribution Fund shall not be added on the tax return until another voluntary contribution designation is removed.
(f)A deduction shall be allowed under Article 6 (commencing with Section 17201) of Chapter 3 of Part 10 for any contribution made pursuant to subdivision (a).
SEC. 3.SEC. 4.Section 18892 of the Revenue and Taxation Code is amended to read:18892.There is hereby established in the State Treasury the Keep Arts in Schools Voluntary Tax Contribution Fund to receive contributions made pursuant to Section 18891. The Franchise Tax Board shall notify the Controller of both the amount of money paid by taxpayers in excess of their tax liability and the amount of refund money that taxpayers have designated pursuant to Section 18891 to be transferred to the Keep Arts in Schools Voluntary Tax Contribution Fund. The Controller shall transfer from the Personal Income Tax Fund to the Keep Arts in Schools Voluntary Tax Contribution Fund an amount not in excess of the sum of the amounts designated by individuals pursuant to Section 18891 for payment into that fund.
SEC. 4.SEC. 5.Section 18893 of the Revenue and Taxation Code is amended to read:18893.Notwithstanding Section 13340 of the Government Code, all money transferred to the Keep Arts in Schools Voluntary Tax Contribution Fund shall be continuously appropriated and allocated as follows:
(a)To the Franchise Tax Board and the Controller only for reimbursement of all costs incurred by the Franchise Tax Board and the Controller in connection with their duties under this article.
(b)(1)To the Arts Council, for allocation of grants to individuals or organizations administering arts programs for children in preschool through 12th grade pursuant to subdivision (o) of Section 8753 of the Government Code.
(2)Funds made available to the Arts Council shall not be used for any purpose other than to provide grants as prescribed by this subdivision. Funds made available pursuant to this subdivision shall not be used by the Arts Council for administrative purposes, to reimburse its costs associated with administering grants, to further its programs, or for any purpose relating to its own operations.
(3)The Arts Council shall comply with subdivision (b) of Section 18873.
SEC. 5.SEC. 6.Section 18894 of the Revenue and Taxation Code is amended to read:18894.(a)Except as otherwise provided in subdivision (b), this article shall remain in effect only until January 1, 2025, and is repealed as of December 1 of that year.
(b)(1)By September 1 of the second calendar year and each subsequent calendar year that the Keep Arts in Schools Voluntary Tax Contribution Fund appears on the tax return, the Franchise Tax Board shall do all of the following:
(A)Determine the minimum contribution amount required to be received during the next calendar year for the fund to appear on the tax return for the taxable year that includes that next calendar year.
(B)Determine whether the amount of contributions estimated to be received during the calendar year will equal or exceed the minimum contribution amount determined by the Franchise Tax Board for the calendar year pursuant to subparagraph (A). The Franchise Tax Board shall estimate the amount of contributions to be received by using the actual amounts received and an estimate of the contributions that will be received by the end of that calendar year.
(2)If the Franchise Tax Board determines that the amount of the contributions estimated to be received during a calendar year will not at least equal the minimum contribution amount for the calendar year, this article shall be inoperative with respect to taxable years beginning on or after January 1 of that calendar year, and shall be repealed on December 1 of that year.
(3)For purposes of this section, the minimum contribution amount for a calendar year means two hundred fifty thousand dollars ($250,000) for the second calendar year after the first appearance of the Keep Arts in Schools Voluntary Tax Contribution Fund on the personal income tax return or the minimum contribution amount as adjusted pursuant to subdivision (c).
(c)For each calendar year, beginning with the third calendar year after the first appearance of the Keep Arts in Schools Voluntary Tax Contribution Fund on the personal income tax return, the Franchise Tax Board shall adjust, on or before September 1 of that calendar year, the minimum contribution amount specified in subdivision (b) as follows:
(1)The minimum contribution amount for the calendar year shall be an amount equal to the product of the minimum contribution amount for the prior calendar year multiplied by the inflation factor adjustment as specified in subparagraph (A) of paragraph (2) of subdivision (h) of Section 17041, rounded off to the nearest dollar.
(2)The inflation factor adjustment used for the calendar year shall be based on the figures for the percentage change in the California Consumer Price Index for all items received on or before August 1 of the calendar year pursuant to paragraph (1) of subdivision (h) of Section 17041.
SEC. 7.This act is an urgency statute necessary for the immediate preservation of the public peace, health, or safety within the meaning of Article IV of the California Constitution and shall go into immediate effect. The facts constituting the necessity are:
In order to allow for the immediate preservation of voluntary contribution funds collected on the personal income tax return, which provide critical resources to various charitable health and safety causes benefiting the public, that are losing critical sources of revenue due to issues with tax software and as a result are at risk of being repealed for not meeting the required minimum contribution amount, and to make necessary changes to the provisions governing the Keep Arts in Schools Voluntary Tax Contribution Fund as soon as possible, it is necessary for this act to take effect immediately.
(a)An individual may designate on the tax return that a contribution in excess of tax liability, if any, be made to the Keep Arts in Schools Voluntary Tax Contribution Fund established by Section 18892.
(b)A contribution shall be in a full dollar amount and may be made individually by each signatory on a joint return.
(c)A designation made under subdivision (a) shall be made for any taxable year on the original return for that taxable year, and once made shall be irrevocable. If payments and credits reported on the return, together with any other credits associated with the taxpayers account do not exceed the taxpayers tax liability, if any, the return shall be treated as though a designation had not been made. If a designee is not specified, the contribution shall, after reimbursement of the direct actual costs of the Franchise Tax Board for the collection and administration of funds under this article, be transferred to the General Fund.
(d)If an individual designates a contribution to more than one account or fund listed on the tax return, and the amount available is insufficient to satisfy the total amount designated, the contribution shall be allocated among the designated accounts on a pro rata basis.(e)(d)The Franchise Tax Board shall revise the form of the return to include a space labeled the Keep Arts in Schools Voluntary Tax Contribution Fund to allow for the designation permitted under subdivision (a). The form shall also include in the instructions information that the contribution may be in the amount of one dollar ($1) or more and that the contribution shall be used by the Arts Council for the allocation of grants to individuals or organizations administering arts programs.
(f)(e)Notwithstanding any other provision, a voluntary contribution designation for the Keep Arts in Schools Voluntary Tax Contribution Fund shall not be added on the tax return until another voluntary contribution designation is removed.
(g)(f)A deduction shall be allowed under Article 6 (commencing with Section 17201) of Chapter 3 of Part 10 for any contribution made pursuant to subdivision (a).
SEC. 3.Section 18892 of the Revenue and Taxation Code is amended to read:18892.There is hereby established in the State Treasury the Keep Arts in Schools Voluntary Tax Contribution Fund to receive contributions made pursuant to Section 18891. The Franchise Tax Board shall notify the Controller of both the amount of money paid by taxpayers in excess of their tax liability and the amount of refund money that taxpayers have designated pursuant to Section 18891 to be transferred to the Keep Arts in Schools Voluntary Tax Contribution Fund. The Controller shall transfer from the Personal Income Tax Fund to the Keep Arts in Schools Voluntary Tax Contribution Fund an amount not in excess of the sum of the amounts designated by individuals pursuant to Section 18891 for payment into that fund.
SEC. 4.Section 18893 of the Revenue and Taxation Code is amended to read:18893.All Notwithstanding Section 13340 of the Government Code, all money transferred to the Keep Arts in Schools Fund, upon appropriation by the Legislature, Voluntary Tax Contribution Fund shall be continuously appropriated and allocated as follows:
(a)To the Franchise Tax Board and the Controller only for reimbursement of all costs incurred by the Franchise Tax Board and the Controller in connection with their duties under this article.
(b)(1)To the Arts Council, for allocation of grants to individuals or organizations administering arts programs for children in preschool through 12th grade pursuant to subdivision (o) of Section 8753 of the Government Code.
(2)Funds made available to the Arts Council shall not be used for any purpose other than to provide grants as prescribed by this subdivision. Funds made available pursuant to this subdivision shall not be used by the Arts Council for administrative purposes, to reimburse its costs associated with administering grants, to further its programs, or for any purpose relating to its own operations.
(3)The Arts Council shall comply with subdivision (b) of Section 18873.
SEC. 5.Section 18894 of the Revenue and Taxation Code is amended to read:18894.(a)Except as otherwise provided in subdivision (b), this article shall remain in effect only until January 1 of the fifth taxable year following the first appearance of the Keep Arts in Schools Fund on the personal income tax return, 1, 2025, and is repealed as of December 1 of that year.
(b)(1)By September 1 of the second calendar year and each subsequent calendar year that the Keep Arts in Schools Voluntary Tax Contribution Fund appears on the tax return, the Franchise Tax Board shall do all of the following:
(A)Determine the minimum contribution amount required to be received during the next calendar year for the fund to appear on the tax return for the taxable year that includes that next calendar year.
(B)Determine whether the amount of contributions estimated to be received during the calendar year will equal or exceed the minimum contribution amount determined by the Franchise Tax Board for the calendar year pursuant to subparagraph (A). The Franchise Tax Board shall estimate the amount of contributions to be received by using the actual amounts received and an estimate of the contributions that will be received by the end of that calendar year.
(2)If the Franchise Tax Board determines that the amount of the contributions estimated to be received during a calendar year will not at least equal the minimum contribution amount for the calendar year, this article shall be inoperative with respect to taxable years beginning on or after January 1 of that calendar year, and shall be repealed on December 1 of that year.
(3)For purposes of this section, the minimum contribution amount for a calendar year means two hundred fifty thousand dollars ($250,000) for the second calendar year after the first appearance of the Keep Arts in Schools Voluntary Tax Contribution Fund on the personal income tax return or the minimum contribution amount as adjusted pursuant to subdivision (c).
(c)For each calendar year, beginning with the third calendar year after the first appearance of the Keep Arts in Schools Voluntary Tax Contribution Fund on the personal income tax return, the Franchise Tax Board shall adjust, on or before September 1 of that calendar year, the minimum contribution amount specified in subdivision (b) as follows:
(1)The minimum contribution amount for the calendar year shall be an amount equal to the product of the minimum contribution amount for the prior calendar year multiplied by the inflation factor adjustment as specified in subparagraph (A) of paragraph (2) of subdivision (h) of Section 17041, rounded off to the nearest dollar.
(2)The inflation factor adjustment used for the calendar year shall be based on the figures for the percentage change in the California Consumer Price Index for all items received on or before August 1 of the calendar year pursuant to paragraph (1) of subdivision (h) of Section 17041.
(d)Notwithstanding the repeal of this article, any contribution amounts designated pursuant to this article prior to its repeal shall continue to be transferred and disbursed in accordance with this article as in effect immediately prior to that repeal.SECTION 1.Section 17001 of the Revenue and Taxation Code is amended to read:17001.This part shall be known, and may be cited, as the Personal Income Tax Law.This part is known shall be known, and may be cited cited, as the Personal Income Tax Law.
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Date
|
Status
|
|---|---|
| Oct 5, 2017 | Chaptered by Secretary of State. Chapter 519, Statutes of 2017. |
| Oct 5, 2017 | Approved by the Governor. |
| Sep 22, 2017 | Enrolled and presented to the Governor at 3 p.m. |
| Sep 15, 2017 | Assembly amendments concurred in. (Ayes 38. Noes 0.) Ordered to engrossing and enrolling. |
| Sep 15, 2017 | In Senate. Concurrence in Assembly amendments pending. |
| Sep 14, 2017 | Read third time. Passed. Ordered to the Senate. |
| Sep 5, 2017 | Read third time and amended. |
| Aug 28, 2017 | Read second time. Ordered to third reading. |
| Aug 24, 2017 | Read second time and amended. Ordered to second reading. |
| Aug 23, 2017 | From committee: Do pass as amended. (Ayes 15. Noes 0.) (August 23). |
| Jul 20, 2017 | From committee with author's amendments. Read second time and amended. Re-referred to Com. on APPR. |
| Jul 17, 2017 | Read second time and amended. Re-referred to Com. on APPR. |
| Jul 13, 2017 | From committee: Do pass as amended and re-refer to Com. on APPR. with recommendation: To consent calendar. (Ayes 10. Noes 0.) (July 10). |
| Jul 5, 2017 | From committee: Do pass and re-refer to Com. on REV. & TAX. (Ayes 7. Noes 0.) (July 5). Re-referred to Com. on REV. & TAX. |
| Jun 29, 2017 | From committee with author's amendments. Read second time and amended. Re-referred to Com. on A.,E.,S.,T., & I.M. |
| Jun 12, 2017 | Referred to Coms. on A.,E.,S.,T., & I.M. and REV. & TAX. |
| May 31, 2017 | In Assembly. Read first time. Held at Desk. |
| May 30, 2017 | Read third time. Urgency clause adopted. Passed. (Ayes 40. Noes 0. Page 1254.) Ordered to the Assembly. |
| May 17, 2017 | From committee: That the measure be returned to the Senate Floor for consideration. (Ayes 7. Noes 0. Page 1099.) (May 17). |
| May 16, 2017 | Set for hearing May 17. |
| May 11, 2017 | Re-referred to Com. on RLS. pursuant to Senate Rule 29.10(b). |
| May 10, 2017 | Read second time. Ordered to third reading. |
| May 9, 2017 | Read third time and amended. |
| May 2, 2017 | Read second time. Ordered to third reading. |
| May 1, 2017 | From committee: Do pass. (Ayes 7. Noes 0. Page 913.) (May 1). |
| Apr 21, 2017 | Set for hearing May 1. |
| Apr 19, 2017 | From committee: Do pass and re-refer to Com. on APPR. (Ayes 7. Noes 0. Page 745.) (April 19). Re-referred to Com. on APPR. |
| Apr 5, 2017 | Set for hearing April 19. |
| Mar 29, 2017 | Re-referred to Com. on GOV. & F. |
| Mar 20, 2017 | From committee with author's amendments. Read second time and amended. Re-referred to Com. on RLS. |
| Mar 2, 2017 | Referred to Com. on RLS. |
| Feb 17, 2017 | From printer. May be acted upon on or after March 19. |
| Feb 16, 2017 | Introduced. Read first time. To Com. on RLS. for assignment. To print. |
|
Date
|
Description
|
Location
|
Votes
|
|
|---|---|---|---|---|
| Sep 15, 2017 | Unfinished Business SB503 Newman et al. Concurrence | Senate Floor |
Passed |
|
| Sep 14, 2017 | SB 503 Newman Senate Third Reading By MURATSUCHI | Assembly Floor |
Passed |
|
| Aug 23, 2017 | Do pass as amended. | Assembly Standing Committee on Appropriations |
Passed |
|
| Jul 10, 2017 | Do pass as amended, and be re-referred to the Committee on [Appropriations] with recommendation: To Consent Calendar | Assembly Standing Committee on Revenue and Taxation |
Passed |
|
| Jul 5, 2017 | Do pass and be re-referred to the Committee on [Revenue and Taxation] | Assembly Standing Committee on Arts, Entertainment, Sports, Tourism, and Internet Media |
Passed |
|
| May 30, 2017 | Senate 3rd Reading SB503 Newman et al. Urgency Clause | Senate Floor |
Passed |
|
| May 17, 2017 | That the measure be returned to Senate Floor for consideration. Ordered to third reading. | Senate Standing Committee on Governance and Finance |
Passed |
|
| May 1, 2017 | Do pass | Senate Standing Committee on Appropriations |
Passed |
|
| Apr 19, 2017 | Do pass, but first be re-referred to the Committee on [Appropriations] | Senate Standing Committee on Governance and Finance |
Passed |
This list shows positions taken on this bill by organizations on the date displayed, which is linked to the original source.
Positions by individuals are not included.
|
Organization
|
Position
|
Date
|
|---|---|---|
| Alzheimer's Association | * Support | May 17, 2017 |
| California Alliance For Arts Education | ** Support | Jun 30, 2017 |
| California Arts Advocates | ** Support | May 17, 2017 |
| California Arts Advocates, California Arts Council. | ** Support | Apr 17, 2017 |
| California Arts Council | ** Support | Jul 7, 2017 |
| California Arts Council; California Arts Advocates | ** Support | Sep 15, 2017 |
| California Association Of Food Banks | ** Support | Jun 30, 2017 |
| California Coastal Commission | ** Support | Sep 15, 2017 |
| California Commission on Aging | ** Support | Jun 30, 2017 |
| California Professional Firefighters | ** Support | Jun 30, 2017 |
| Defenders Of Wildlife | * Support | May 17, 2017 |
| Humane Society Of The United States, The | * Support | May 17, 2017 |
| Monterey Bay Aquarium | * Support | May 17, 2017 |
| Unknown. | ** Against | May 15, 2017 |
Office of Senate Floor Analyses (916) 651-1520 Fax: (916) 327-4478 | SB |
UNFINISHED BUSINESS
Bill No: SB 503
:
SENATE GOVERNANCE & FIN. COMMITTEE: 7-0, 4/19/17
AYES: McGuire, Nguyen, Beall, Hernandez, Hertzberg, Lara, Moorlach
SENATE APPROPRIATIONS COMMITTEE: 7-0, 5/1/17
AYES: Lara, Bates, Beall, Bradford, Hill, Nielsen, Wiener
SENATE GOVERNANCE & FIN. COMMITTEE: 7-0, 5/17/17
AYES: McGuire, Nguyen, Beall, Hernandez, Hertzberg, Lara, Moorlach
SENATE FLOOR: 40-0, 5/30/17
AYES: Allen, Anderson, Atkins, Bates, Beall, Berryhill, Bradford, Cannella, De León, Dodd, Fuller, Gaines, Galgiani, Glazer, Hernandez, Hertzberg, Hill, Hueso, Jackson, Lara, Leyva, McGuire, Mendoza, Mitchell, Monning, Moorlach, Morrell, Newman, Nguyen, Nielsen, Pan, Portantino, Roth, Skinner, Stern, Stone, Vidak, Wieckowski, Wiener, Wilk
ASSEMBLY FLOOR: 78-0, 9/14/17 - See last page for vote
DIGEST:
This bill renames and extends the sunset date, until January 1, 2025, for both the Keep Arts in Schools Voluntary Tax Contribution Fund (VCF) and the Protect Our Coasts and Oceans VCF, and makes conforming changes.
Assembly Amendments add the provisions pertaining to the Protect Our Coasts and Oceans VCF; add a continuous appropriation for both VCFs; establish the minimum contribution requirement for both VCFs at $250,000, not indexed for inflation; and delete the urgency clause.
Existing law:
- Allows an individual to contribute money to VCFs by checking a box on their state income tax returns. Contributions made through VCFs are made from taxpayers’ own resources and not from their tax liability. There are currently 20 check-offs listed on the tax return form.
- Allows an individual, until January 1, 2018, to designate on his or her personal income tax return that a specified amount in excess of his or her tax liability be contributed to the Keep Arts in Schools Fund, which is subject to appropriation by the Legislature, to be allocated to the Franchise Tax Board, the Controller, and the Arts Council for purposes of carrying out its provisions. Existing law requires that the Keep Arts in Schools Fund equal or exceed a $250,000 minimum contribution amount, which is required to be adjusted for inflation.
- Allows an individual, until January 1, 2019, to designate on their personal income tax return that a specified amount in excess of their tax liability be contributed to the California Beach and Coastal Enhancement Account under a space on the tax return titled “Protect Our Coast and Oceans Fund.” Existing law makes these moneys subject to appropriation by the Legislature and requires the moneys to be allocated to the Franchise Tax Board, the Controller, and the California Coastal Commission to support eligible programs awarded grants under the selection criteria established by the California Coastal Commission for the Whale Tail Grants Program. Existing law requires that the Protect Our Coast and Oceans Fund equal or exceed a $250,000 minimum contribution amount, which is required to be and has been adjusted for inflation.
- Requires that when establishing or extending the operation of these voluntary tax contribution funds the words “voluntary tax contribution” be included in the name of the fund, that the administering agency comply with specified Internet Web site reporting requirements, that the fund provisions remain in effect only until January 1 of the 7th calendar year following the first appearance of the voluntary tax contribution on the personal income tax return, that the required calendar year minimum contribution amount for the fund to continue appearing on the return is $250,000, and that the contributions be continuously appropriated from the fund to the administering entity.
This bill:
- Renames the specified funds the Keep Arts in Schools Voluntary Tax Contribution Fund and the Protect Our Coasts and Oceans Voluntary Tax Contribution Fund and extends the sunset date for each fund until January 1, 2025, subject to the $250,000 minimum contribution requirement, not indexed for inflation.
- Appropriates, continuously, the moneys in the Keep Arts in Schools Voluntary Tax Contribution Fund and the Protect Our Coast and Oceans Voluntary Tax Contribution Fund, as specified, and makes conforming changes.
FISCAL EFFECT: Appropriation: Fiscal Com.: Local:
According to the Assembly Committee on Appropriations, there are minor ongoing GF revenue losses in the tens of thousands of dollars a year resulting from itemized taxpayer deductions beginning in 2018-19.
California Arts Council; California Arts Advocates
California Coastal Commission
OPPOSITION: (Verified 9/14/17)
None received
ASSEMBLY FLOOR: 78-0, 9/14/17
AYES: Acosta, Aguiar-Curry, Travis Allen, Arambula, Baker, Berman, Bigelow, Bloom, Bocanegra, Bonta, Brough, Burke, Caballero, Calderon, Cervantes, Chau, Chávez, Chen, Chiu, Choi, Chu, Cooley, Cooper, Cunningham, Dababneh, Dahle, Daly, Eggman, Flora, Fong, Frazier, Friedman, Gallagher, Cristina Garcia, Eduardo Garcia, Gipson, Gloria, Gonzalez Fletcher, Gray, Grayson, Harper, Holden, Irwin, Jones-Sawyer, Kalra, Kiley, Lackey, Levine, Limón, Low, Maienschein, Mathis, Mayes, McCarty, Medina, Melendez, Mullin, Muratsuchi, Nazarian, Obernolte, O'Donnell, Patterson, Quirk, Quirk-Silva, Reyes, Ridley-Thomas, Rodriguez, Rubio, Salas, Santiago, Steinorth, Mark Stone, Thurmond, Ting, Waldron, Weber, Wood, Rendon
NO VOTE RECORDED: Voepel
9/15/17 8:55:25
**** END ****
SENATE THIRD READING
STR Bill Id:SB 503
Author:(Newman and Portantino)
As Amended Ver:September 5, 2017
Majority vote
SENATE VOTE: 40-0
Committee | Votes | Ayes | Noes |
Arts | 7-0 | Chu, Waldron, Acosta, Chiu, Friedman, Medina, Nazarian | |
Revenue & Taxation | 10-0 | Ridley-Thomas, Brough, Travis Allen, Bocanegra, Burke, Chen, Dababneh, Gipson, Mullin, Quirk | |
Appropriations | 15-0 | Gonzalez Fletcher, Bigelow, Bocanegra, Bonta, Brough, Calderon, Chau, Eggman, Fong, Friedman, Gallagher, Gray, Jones-Sawyer, Obernolte, Reyes |
SUMMARY: This bill would rename and extend, until January 1, 2025, the Keep Arts in Schools Voluntary Tax Contribution Fund (VCF) and the Protect Our Coasts and Oceans VCF. Specifically, this bill:
- Renames the Keep Arts in Schools Fund to the Keep Arts in Schools VCF and the Protect Our Coasts and Oceans Fund to Protect Our Coasts and Oceans VCF, and extends them until January 1, 2025.
- Provides that moneys donated by taxpayers are continuously appropriated to the California Arts Council for specified purposes, instead of appropriated by the Legislature.
- Makes conforming changes.
FISCAL EFFECT:
According to the Assembly Committee on Appropriations, there are minor ongoing GF revenue losses in the tens of thousands of dollars a year resulting from itemized taxpayer deductions beginning in 2018-19.
COMMENTS:
According to the Senate Revenue and Taxation Committee, existing state law allows taxpayers to contribute money to 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. 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.
According to the author, "the Keep Arts in Schools Voluntary Tax Contribution Fund was established in 2010 to help increase access to arts education, by allowing individuals to voluntarily contribute money by simply checking a box on their state income tax returns which can then be claimed as a charitable contribution. Those received donations supplement the annual budget of the California Arts Council (CAC), which provides funding for programs that increase access to arts education for our communities, non-profit organizations, veterans, children and schools throughout the State of California."
Currently, the Keep Arts in Schools Fund VCF has met the statutory minimum to stay on the tax form by raising $256,421 in 2014, $263,880 in 2015, and $270,138 in 2016. FTB transfers these funds to the California Arts Council, which funds grants to individuals or organizations administering arts programs for children in preschool through 12th grade. However, the VCF will sunset after this year, and therefore will not be included on the 2017 form, unless the Legislature extends it. In addition, last year, SB 1476 (Committee on Governance and Finance) of the current legislative session, established general provisions for all VCFs established or extended after January 2, 2017.
Recent amendments adopted in the Assembly Appropriations Committee and the Assembly Floor make technical and conforming amendments to the new Protect Our Coasts and Oceans VCF.
This bill would extend the sunset to 2025 and make conforming changes to comply with SB 1476.
Please see the policy committee analysis for a full discussion of the measure.
Analysis Prepared by: Dana Mitchell / A.,E.,S.,T., & I.M. / (916) 319-3450 FN: 0001572
SENATE THIRD READING
STR Bill Id:SB 503
Author:(Newman and Portantino)
As Amended Ver:August 24, 2017
Majority vote
SENATE VOTE: 40-0
Committee | Votes | Ayes | Noes |
Arts | 7-0 | Chu, Waldron, Acosta, Chiu, Friedman, Medina, Nazarian | |
Revenue & Taxation | 10-0 | Ridley-Thomas, Brough, Travis Allen, Bocanegra, Burke, Chen, Dababneh, Gipson, Mullin, Quirk | |
Appropriations | 15-0 | Gonzalez Fletcher, Bigelow, Bocanegra, Bonta, Brough, Calderon, Chau, Eggman, Fong, Friedman, Gallagher, Gray, Jones-Sawyer, Obernolte, Reyes |
|
SUMMARY: This bill would rename and extend, until January 1, 2025, the Keep Arts in Schools Voluntary Tax Contribution Fund (VCF) and the Protect Our Coasts and Oceans VCF. Specifically, this bill:
- Renames the Keep Arts in Schools Fund to the Keep Arts in Schools VCF and the Protect Our Coasts and Oceans Fund to Protect Our Coasts and Oceans VCF, and extends them until January 1, 2025.
- Provides that moneys donated by taxpayers are continuously appropriated to the California Arts Council for specified purposes, instead of appropriated by the Legislature.
- Makes conforming changes.
FISCAL EFFECT:
According to the Assembly Appropriations Committee, there are minor ongoing General Fund revenue losses in the tens of thousands of dollars a year resulting from itemized taxpayer deductions beginning in 2018-19.
COMMENTS:
According to the Senate Revenue and Taxation Committee, existing state law allows taxpayers to contribute money to 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. 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.
According to the author, "the Keep Arts in Schools Voluntary Tax Contribution Fund was established in 2010 to help increase access to arts education, by allowing individuals to voluntarily contribute money by simply checking a box on their state income tax returns which can then be claimed as a charitable contribution. Those received donations supplement the annual budget of the California Arts Council (CAC), which provides funding for programs that increase access to arts education for our communities, non-profit organizations, veterans, children and schools throughout the State of California."
Currently, the Keep Arts in Schools Fund VCF has met the statutory minimum to stay on the tax form by raising $256,421 in 2014, $263,880 in 2015, and $270,138 in 2016. FTB transfers these funds to the California Arts Council, which funds grants to individuals or organizations administering arts programs for children in preschool through 12th grade. However, the VCF will sunset after this year, and therefore will not be included on the 2017 form, unless the Legislature extends it. In addition, last year, SB 1476 (Governance and Finance Committee), Chapter 597, Statutes of 2016, established general provisions for all VCFs established or extended after January 2, 2017.
Recent amendments from the Assembly Appropriations Committee make technical and conforming amendments to the new Protect Our Coasts and Oceans VCF.
This bill would extend the sunset to 2025 and make conforming changes to comply with SB 1476.
Please see the policy committee analysis for a full discussion of the measure.
Analysis Prepared by: Dana Mitchell / A.,E.,S.,T., & I.M. / (916) 319-3450 FN: 0001409
Date of Hearing: August 23, 2017
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Lorena Gonzalez Fletcher, Chair
SBPCA Bill Id:SB 503
Author:(Newman) – As Amended Ver:July 20, 2017
Policy Committee: | Arts, Entertainment, Sports, Tourism, and Internet Media | Vote: | 7 - 0 |
Revenue and Taxation | 10 - 0 |
Urgency: No State Mandated Local Program: No Reimbursable: No
SUMMARY:
This bill recasts and extends the Keep Arts in Schools Voluntary Tax Contribution Fund (VCF) and the Protect Our Coasts and Oceans VCF. Specifically, this bill:
- Requires that all money transferred to both VCFs be continuously appropriated to the Franchise Tax Board (FTB) and the Senate Controller for reimbursement of administrative costs, and that remaining money be transferred to relevant agencies for purpose of carrying out the intended purpose of the VCFs.
- Requests the California Arts Council (CAC) to comply with reporting requirements regarding the awarding of money from the Keep Arts in School VCF and requires the California Coastal Commission (CCC) to comply with reporting requirements regarding the awarding of money from the Protect our Coasts and Oceans VCF.
- Repeals the two VCFs on January 1, 2025, or if annual contribution amounts are less than $250,000.
FISCAL EFFECT:
Minor ongoing GF revenue losses in the tens of thousands of dollars a year resulting from itemized taxpayer deductions beginning in 2018-19.
COMMENTS:
- 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. SB 503 complies with SB 1476’s new VCF guidelines.
- Related legislation in 2017. AB 846 (Cooley), Chapter 142, Statutes of 2017, established the California YMCA Youth and Government Voluntary Tax Contribution Fund. AB 280 (Low), which establishes the Rape Kit Back Log Voluntary Tax Contribution Fund, and AB 519 (Levine), which establishes the California Senior Citizen Advocacy Fund, are pending on the Senate floor. Moreover, SB 61 (Hertzberg), which recasts and extends the Emergency Food for Families Fund, and SB 440 (Hertzberg), which extends the California Breast Cancer Research Fund and the California Cancer Research Fund, are currently pending on the Assembly Floor.
- Committee amendments. Recent amendments to SB 503 added an additional VCF extension (Protect our Coasts and Oceans VCF) in addition to the Keep Arts in Schools VCF. While the provisions in this additional VCF extension broadly comply with SB 1476’s new VCF guidelines, there are a number of drafting and language inconsistences between the Protect Our Coast and Oceans VCF and the Keep Arts in School VCF, the latter of which has already been vetted by two policy committees. As such, the Committee recommends the following technical and conforming amendments to the new Protect Our Coasts and Oceans VCF provisions:
On Page 3, Line 8, add "That designation is to be used as a voluntary contribution on the tax return."
On Page 3, Line 17, strike " In the event that no designee is” and strike Lines 18 through 26.
On Page 6, strike Lines 25 through 28.
Analysis Prepared by: Luke Reidenbach / APPR. / (916) 319-2081
Date of Hearing: July 10, 2017
ASSEMBLY COMMITTEE ON REVENUE AND TAXATION
Sebastian Ridley-Thomas, Chair
SBPCA Bill Id:SB 503
Author:(Newman) – As Amended Ver:June 29, 2017
Majority vote. Fiscal committee.
SENATE VOTE: 40-0
SUBJECT: Personal income taxes: Keep Arts in Schools Voluntary Tax Contribution Fund
SUMMARY: Renames the existing Keep Arts in Schools Fund on the state personal income tax (PIT) return the Keep Arts in Schools Voluntary Tax Contribution Fund (Fund), extends the sunset date of the Fund to January 1, 2025, and makes other operational changes to the Fund. Specifically, this bill:
- Adds the words "Voluntary Tax Contribution" to the name of the existing Keep Arts in Schools Fund (contributions to which support the California Arts Council (CAC)).
- Requires all money transferred to the Fund to be continuously appropriated (instead of allocated upon appropriation of the Legislature), as specified.
- Requires the CAC to comply with Internet Web site reporting requirements describing the process for awarding money from the Fund, the amount of money spent on administration, and an itemization of how funds were awarded, including, but not limited to, information regarding recipients of funds.
- Extends the sunset date of the Fund to January 1, 2025 (from January 1, 2018).
- Deletes duplicative language regarding the designation and allocation of voluntary tax contributions generally.
EXISTING LAW:
- Allows taxpayers to designate on their state PIT returns a contribution to any of the 19 voluntary contribution funds (VCFs) on the 2016 PIT return, including the Fund.
- Establishes the Fund, with all received contributions allocated, upon appropriation by the Legislature, as follows:
- To the Franchise Tax Board (FTB) and State Controller for reimbursement of all costs incurred in connection with administering the VCF; and,
- To the CAC for allocation of grants to individuals or organizations administering arts programs for children in preschool through 12th grade, as specified. Funds made available to the CAC shall not be used for administrative purposes, to reimburse the CAC's costs associated with administering grants, to further the CAC's programs, or for any purposes relating to the CAC's own operations.
- Provides the following requirements for new or extended VCFs that take effect on or after January 2, 2017:
- Requires the words "voluntary tax contribution" to be included as part of the name of the fund.
- 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.
- 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.
- 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.
- Requires contributions made to each VCF to be continuously appropriated to the administering agency to be spent, as specified.
- Provides a specific sunset date for each VCF, except for the California Seniors Special Fund and the State Parks Protection Fund. The Fund has a sunset date of January 1, 2018.
- 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. The Fund must meet a minimum contribution threshold of $250,000 indexed for inflation to remain on the PIT return.
FISCAL EFFECT: The FTB estimates General Fund revenue losses of $9,000 for fiscal year (FY) 2018-19 and $9,000 for FY 2019-20.
COMMENTS:
- The author has provided the following statement in support of this bill:
In times of budgetary constraints for California's schools, Arts programs are typically among the first curriculum-based subjects to lose their funding or even be eliminated completely. Currently, despite the fact that Arts education has been proven to be a key factor in helping California's next generation of leaders succeed, fewer than 40% of California's students participate in Arts education courses. Peer-reviewed studies have shown that Arts education increases academic achievement, social engagement, school attendance, graduation rates, and college and workforce readiness.
The Keep Arts in Schools Voluntary Tax Contribution Fund was established in 2010 to help increase access to arts education, by allowing individuals to voluntarily contribute money by simply checking a box on their state income tax returns which can then be claimed as a charitable contribution. Those received donations supplement the annual budget of the California Arts Council (CAC), which provides funding for programs that increase access to arts education for our communities, non-profit organizations, veterans, children and schools throughout the State of California.
SB 503 will extend the Keep Arts in Schools Voluntary Tax Contribution Fund for seven years until January 1, 2025. This bill will allow the CAC to continue to receive annual donations through the voluntary contribution fund which helps support vital arts education programs across the state that currently serve approximately 70,000 students annually.
- The CAC states the following in support of this bill:
The California Arts Council is confident it can meet the minimum threshold of $250,000 due to the up rise in the economy and its selection of the name Keep Arts in Schools Voluntary Tax Contribution Fund, a title clearly giving the public an understanding of the use of their contributions. These two factors will make voluntary contributions to the Arts Council immediately appealing to the public.
- Committee Staff Comments:
- VCF Background – Keep Arts in Schools: The Fund initially appeared on the 2013 state PIT return, with the 2017 tax return currently set to be its last year on the tax return absent an extension of its sunset date. The Fund required $258,568 in minimum contributions to remain on the most recent tax return, and received total annual contributions of $263,880 in 2015 and total annual contributions of $270,138 in 2016. Contributions made to the Fund are first allocated to the FTB and State Controller for reimbursement of all costs incurred in connection with administering the VCF. Second, funds are allocated to the CAC for allocation of grants to individuals or organizations administering arts programs for children in preschool through 12th grade, as specified. Funds must be directly used to provide grants and shall not be used by the CAC for administrative purposes, to reimburse the CAC's costs of administering grants, to further the CAC's programs, or for any purposes relating to the CAC's own operations.
The Fund was preceded by the Arts Council Fund that similarly funded grants for arts programs administered by the CAC. The Arts Council Fund first appeared on the 2010 return and last appeared on the 2011 return because it failed to meet the minimum contribution amount for the 2012 calendar year. Although this Committee's VCF Policy states that "[c]heckoffs that have failed to meet their minimum contribution requirement will not be extended or reauthorized," a policy originally adopted in response to the proliferation of VCF legislation and in recognition of the fact that space on the PIT return is limited, the Legislature returned the Fund in its reconstituted form on the 2013 return (SB 571 (Liu), Chapter 430, Statutes of 2013). Since then, however, the Fund has met its annual minimum contribution threshold.
- So Many Causes, So Little Space: There are countless worthy causes that would benefit from the inclusion of a VCF on the state's PIT return. At the same time, space on the PIT return is limited. Thus, it could be argued that the current system for adding or extending VCFs on the form is subjective and essentially rewards organizations that can convince the Legislature to promote 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 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 them to fall off the tax return.
- 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 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 (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, which modifies an existing VCF, follows most of the best practices established by SB 1476. The words "voluntary tax contribution" are added to the renamed Fund, the CAC is required to make specified information available online regarding allocation of money from the Fund, language is added providing for continuous appropriation from the Fund, and a seven year sunset date extension is provided. However, this bill leaves the existing indexed minimum contribution requirements for the Fund in place instead of establishing a lower static threshold of $250,000. The Committee may wish to consider whether this bill should be updated to maintain conformity with all the reforms set forth by SB 1476.
- Technical Amendments: To provide uniformity with other existing VCFs, Committee staff recommends the following technical amendments:
- On Page 3, Line 27, add "That designation is to be used as a voluntary contribution on the tax return."
- On Page 3, Line 34, strike "taxpayer's" and insert "individual's" in both instances.
- On Page 4, Line 5 to Line 8, strike "(e) Notwithstanding any other provision, a voluntary contribution designation for the Keep Arts in Schools Voluntary Tax Contribution Fund shall not be added on the tax return until another voluntary contribution designation is removed."
- On Page 4, Line 9, strike "(f)" and insert "(e)".
- Double Referral: This bill was double-referred to the Committee on Arts, Entertainment, Sports, Tourism, and Internet Media, which passed this bill on July 5, 2017, with a vote of 7-0.
- Related Legislation:
- AB 280 (Low) establishes the Rape Kit Back Log Voluntary Tax Contribution Fund. AB 280 is pending hearing by the Senate Committee on Appropriations.
- AB 846 (Cooley) establishes the California YMCA Youth and Government Voluntary Tax Contribution Fund. AB 846 is pending action on the Senate Floor.
- AB 519 (Levine) establishes the California Senior Citizen Advocacy Fund. AB 519 is pending hearing by the Senate Committee on Appropriations.
- AB 1031 (Waldron) establishes the Native California Wildlife Rehabilitation Voluntary Tax Contribution Fund. AB 1031 is pending hearing by the Senate Committee on Appropriations.
- SB 61 (Hertzberg) extends the sunset date of the Emergency Food for Families Fund, adds the words "voluntary tax contribution" to the name of the fund, and makes other operative changes. SB 61 is pending hearing by the Committee on Appropriations.
- SB 440 (Hertzberg) extends the sunset dates of the California Breast Cancer Research Fund and the California Cancer Research Fund, adds the words "voluntary tax contribution" to the name of each respective fund, and makes other operative changes. SB 440 is pending hearing by the Committee on Appropriations.
REGISTERED SUPPORT / OPPOSITION:
Support
California Arts Council
Opposition
None on file
Analysis Prepared by: Irene Ho / REV. & TAX. / (916) 319-2098
Date of Hearing: July 5, 2017
ASSEMBLY COMMITTEE ON ARTS, ENTERTAINMENT, SPORTS, TOURISM, AND INTERNET MEDIA
Kansen Chu, Chair
SBPCA Bill Id:SB 503
Author:(Newman) – As Amended Ver:June 29, 2017
SENATE VOTE: 40-0
SUBJECT: Personal income taxes: Keep Arts in Schools Voluntary Tax Contribution Fund.
SUMMARY: This bill would rename and extend, until January 1, 2025, the Keep Arts in Schools Voluntary Tax Contribution Fund. Specifically, this bill:
- Renames the Keep Arts in Schools Fund to the Keep Arts in Schools Voluntary Tax Contribution Fund, and extends it until January 1, 2025.
- Provides that moneys donated by taxpayers are continuously appropriated to the California Arts Council for specified purposes, instead of appropriated by the Legislature.
- Makes conforming changes.
EXISTING 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 so-called “check-offs” to be made from taxpayers’ own resources and not from their tax liability, as is possible on federal tax returns.
- Allows contribution amounts to be claimed as charitable contributions on taxpayers’ tax returns in the subsequent year.
- Requires that each VCF is individually added to the tax return by legislation. 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 amounts are adjusted annually for inflation. For most VCFs, the minimum contribution amount is $250,000, beginning in the fund’s second year. 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.
- Establishes the Keep Arts in Schools Fund as a VCF on the income tax form, administered by the University of California. The VCF has met the minimum contribution amounts for each year it’s been on the tax form, but will sunset on January 1, 2018.
FISCAL EFFECT: According to the Senate Appropriations Committee analysis:
- The Franchise Tax Board (FTB) estimates that, beginning in 2018-19, this bill would result in an annual revenue loss of $9,000 (General Fund).
- The State Controller’s Office (SCO) and FTB and would be reimbursed for related administrative costs.
COMMENTS:
- Background: Recent updates to the law governing VCFs require conforming changes. According to the Senate Committee on Revenue and Taxation analysis, existing state law allows taxpayers to contribute money to 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, that 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.
- 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.
2) Author's statement and support for the Keep Arts in Schools Fund. According to the author, “In times of budgetary constraints for California’s schools, Arts programs are typically among the first curriculum-based subjects to lose their funding or even be eliminated completely. Currently, despite the fact that Arts education has been proven to be a key factor in helping California’s next generation of leaders succeed, fewer than 40% of California’s students participate in Arts education courses. Peer-reviewed studies have shown that Arts education increases academic achievement, social engagement, school attendance, graduation rates, and college and workforce readiness. The Keep Arts in Schools Voluntary Tax Contribution Fund was established in 2010 to help increase access to arts education, by allowing individuals to voluntarily contribute money by simply checking a box on their state income tax returns which can then be claimed as a charitable contribution. Those received donations supplement the annual budget of the California Arts Council (CAC), which provides funding for programs that increase access to arts education for our communities, non-profit organizations, veterans, children and schools throughout the State of California."
Currently, the Keep Arts In Schools Fund VCF has met the statutory minimum to stay on the tax form by raising $256,421 in 2014, $263,880 in 2015, and $270,138 in 2016. FTB transfers these funds to the California Arts Council, which funds grants to individuals or organizations administering arts programs for children in preschool through 12th grade. However, the VCF will sunset after this year, and therefore will not be included on the 2017 form, unless the Legislature extends it. The California Arts Council wants to extend the Keep Arts in Schools VCF as it is, "the only voluntary contribution fund backing the arts and creativity throughout California."
3) Recent amendments remove language no longer needed to protect underfunded VCFs. The prior version of this bill contained provisions which were intended to address issues created by a drop off in VCF contributions attributed to implementation of a popular online tax filing program. The author believes that the issue has been addressed in the budget process, and therefore legislative action and the urgency provision are no longer needed.
In support of the earlier language the author had stated, "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. The Franchise Tax Board (FTB) attributes the decline to changes made to an online tax filing program 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 they had included the option for taxpayers to donate to VCFs as part of its general interview questions. The vendor 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 contributions." As stated above, the author believes that the issue has been addressed in the budget process.
4) Prior Legislation:
- SB 1476 (Committee on Revenue and Finance), Chapter 597, Statutes of 2016, established and revised general requirements for all new or extended voluntary tax contribution funds (VCFs) as discussed in Comment 1 above.
- SB 1207 (Wolk), of the 2013-14 Legislative Session, would have modified the current voluntary contribution designation process by establishing the California Voluntary Contributions Program administered by the Office of California Volunteers and requiring charitable organizations to meet certain standards before they could participate in the program. SB 1207 was held on the Assembly Appropriations Committee's Suspense File.
- SB 571 (Liu), Chapter 430, Statutes of 2013, established the Keep Arts in Schools Fund VCF. The VCF first appeared on the 2013 tax form.
- SB 1076 (Price), Chapter 319, Statutes of 2010, established the Arts Council Fund (predecessor to the Keep Arts in Schools Fund) that appeared on the 2010 and 2011 returns as a voluntary contribution designation.
REGISTERED SUPPORT / OPPOSITION:
Support
California Alliance for Arts Education
California Arts Council
California Association of Food Banks (prior version)
California Commission on Aging (prior version)
California Professional Firefighters (prior version)
Opposition
There is no opposition on file.
Analysis Prepared by: Dana Mitchell / A.,E.,S.,T., & I.M. / (916) 319-3450
Office of Senate Floor Analyses (916) 651-1520 Fax: (916) 327-4478 | SB |
THIRD READING
Bill No: SB 503
:
SENATE GOVERNANCE & FIN. COMMITTEE: 7-0, 4/19/17
AYES: McGuire, Nguyen, Beall, Hernandez, Hertzberg, Lara, Moorlach
SENATE APPROPRIATIONS COMMITTEE: 7-0, 5/1/17
AYES: Lara, Bates, Beall, Bradford, Hill, Nielsen, Wiener
SENATE GOVERNANCE & FIN. COMMITTEE: 7-0, 5/17/17 (Pursuant to Senate Rule 29.10)
AYES: McGuire, Nguyen, Beall, Hernandez, Hertzberg, Lara, Moorlach
DIGEST:
This bill renames and extends, until January 1, 2025, the Keep Arts in Schools Voluntary Tax Contribution Fund; and sets at zero the minimum contribution amount in 2017 for voluntary contribution funds (VCFs) appearing on the return for the 2016 tax year.
Existing law:
- Allows taxpayers to contribute money to VCFs by checking a box on their state income tax returns. California law requires contributions made through so-called “check-offs” to be made from taxpayers’ own resources and not from their tax liability, as is possible on federal tax returns.
- Allows contribution amounts to be claimed as charitable contributions on taxpayers’ tax returns in the subsequent year.
- Requires that each VCF is individually added to the tax return by legislation. 22 VCFs appeared on the 2016 return. With three exceptions, VCFs remain on the return until they are repealed by a sunset date or fail to generate a minimum contribution amount, which are usually adjusted annually for inflation. For most VCFs, the minimum contribution amount is $250,000, beginning in the fund’s second year. When a VCF doesn’t meet its minimum contribution amount, FTB removes it from the tax return in the following taxable year. 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.
- Establishes the Keep Arts in Schools Fund as a VCF on the income tax form, administered by the University of California. The VCF has met the minimum contribution amounts for each year it’s been on the tax form, but will sunset on January 1, 2018.
This bill:
- Sets at zero the minimum contribution amount in 2017 for any VCF appearing on the return for the 2016 year that is subject to a minimum contribution amount, notwithstanding any other law.
- Provides that the minimum contribution amount that would have applied to any VCF in 2017 but for the bill shall instead be the minimum contribution amount in the 2018 year.
- Renames the Keep Arts in Schools Fund to the Keep Arts in Schools Voluntary Tax Contribution Fund, and extends it until January 1, 2025.
- Provides that moneys donated by taxpayers are continuously appropriated to the California Arts Council for specified purposes, instead of appropriated by the Legislature.
- Makes conforming changes.
Background
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. The Franchise Tax Board (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 contributions.
FISCAL EFFECT: Appropriation: Fiscal Com.: Local:
According to the Senate Appropriations Committee:
- The FTB estimates that, beginning in 2018-19, this bill will result in an annual revenue loss of $9,000 (General Fund).
- The State Controller’s Office and FTB would be reimbursed for related administrative costs.
California Arts Advocates
California Arts Council
California Association of Food Banks
California Coastal Commission
OPPOSITION: (Verified 5/17/17)
None received
ARGUMENTS IN SUPPORT: According to the author, “In times of budgetary constraints for California’s schools, Arts programs are typically among the first curriculum-based subjects to lose their funding or even be eliminated completely. Currently, despite the fact that Arts education has been proven to be a key factor in helping California’s next generation of leaders succeed, fewer than 40% of California’s students participate in Arts education courses. Peer-reviewed studies have shown that Arts education increases academic achievement, social engagement, school attendance, graduation rates, and college and workforce readiness. The Keep Arts in Schools Voluntary Tax Contribution Fund was established in 2010 to help increase access to arts education, by allowing individuals to voluntarily contribute money by simply checking a box on their state income tax returns which can then be claimed as a charitable contribution. Those received donations supplement the annual budget of the California Arts Council (CAC), which provides funding for programs that increase access to arts education for our communities, non-profit organizations, veterans, children and schools throughout the State of California. This bill will allow the CAC to continue to receive annual donations through the voluntary contribution fund which helps support vital arts education programs across the state that currently serve approximately 70,000 students annually. Additionally, many voluntary contribution funds may not meet their statutory minimum contribution amounts because contributions have sharply decreased due to changes in a popular tax preparation software program, which has since been corrected. When I became aware of the issue, I amended SB 503 to make sure that taxpayers continue to have the option to donate to these funds. The important causes funded by these funds are critical, and removing them from the tax return would add insult to injury. SB 503 addresses this issue by ensuring that each VCFs appearing on the 2016 form will also have their place on the 2017 return.”
5/17/17 15:55:49
**** END ****
SENATE COMMITTEE ON GOVERNANCE AND FINANCE
Senator Mike McGuire, Chair
2017 - 2018 Regular
PURSUANT TO SENATE RULE 29.10(b)
Bill No: | SB 503 | Hearing Date: | 5/17/17 |
Author: | Newman | Tax Levy: | No |
Version: | 5/9/17 Amended | Fiscal: | Yes |
Consultant: | Grinnell | ||
Personal income taxes: voluntary contributions: minimum contributions: Keep Arts in Schools Voluntary Tax Contribution Fund
Renames the Keep Arts in Schools Fund as the Keep Arts in Schools Voluntary Contribution Fund, and extends it until January 1, 2025; sets at zero the minimum contribution amount in 2017 for voluntary contribution funds appearing on the return for the 2016 tax year.
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.
Keep Arts in Schools Fund. Currently, the Keep Arts in Schools Fund VCF has met the statutory minimum to stay on the tax form by raising $256,421 in 2014, $263,880 in 2015, and $270,138 in 2016. FTB transfers these funds to the California Arts Council, which funds grants to individuals or organizations administering arts programs for children in preschool through 12th grade. However, the VCF will sunset after this year, and therefore will not be included on the 2017 form, unless the Legislature extends it. The California Arts Council wants to extend the Keep Arts in Schools VCF.
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 year, all VCFs have seen a sharp decline in contributions, resulting in fewer funds flowing to the organizations receiving VCF funding, and also jeopardizing the status for any VCF appearing on the return 2017 taxable year because many won’t meet their minimum contribution amounts. FTB states that the decline was due to a change in Intuit’s TurboTax product that changed the way VCFs were presented to taxpayers. The author wants to reset the minimum contribution amount to zero for the 2016, thereby ensuring each VCF on the 2016 return will appear on the 2017 return.
Proposed Law
Senate Bill 503 renames the Keep Arts in Schools Fund as the Keep Arts in Schools Voluntary Contribution Fund, and extends it until January 1, 2025. The bill provides that donated funds are continuously appropriated to the Arts Council, not appropriated by the Legislature. The measure also makes conforming changes.
SB 503 also sets at zero the minimum contribution amount for any VCF appearing on the return for the 2016 tax year, thereby ensuring that FTB won’t remove them from the return for the 2017 tax year. The measure sets the minimum contribution amount for 2018 at the same amount that would have applied in 2017 but for this measure. The measure contains an urgency clause providing that its provisions take effect immediately.
State Revenue Impact
According to FTB, SB 503 results in revenue losses of $9,000 in 2018-19 and 2019-20.
Comments
1. Purpose of the bill. According to the author, “In times of budgetary constraints for California’s schools, Arts programs are typically among the first curriculum-based subjects to lose their funding or even be eliminated completely. Currently, despite the fact that Arts education has been proven to be a key factor in helping California’s next generation of leaders succeed, fewer than 40% of California’s students participate in Arts education courses. Peer-reviewed studies have shown that Arts education increases academic achievement, social engagement, school attendance, graduation rates, and college and workforce readiness. The Keep Arts in Schools Voluntary Tax Contribution Fund was established in 2010 to help increase access to arts education, by allowing individuals to voluntarily contribute money by simply checking a box on their state income tax returns which can then be claimed as a charitable contribution. Those received donations supplement the annual budget of the California Arts Council (CAC), which provides funding for programs that increase access to arts education for our communities, non-profit organizations, veterans, children and schools throughout the State of California. This bill will allow the CAC to continue to receive annual donations through the voluntary contribution fund which helps support vital arts education programs across the state that currently serve approximately 70,000 students annually. Additionally, many voluntary contribution funds may not meet their statutory minimum contribution amounts because contributions have sharply decreased due to changes in a popular tax preparation software program, which has since been corrected. When I became aware of the issue, I amended SB 503 to make sure that taxpayers continue to have the option to donate to these funds. The important causes funded by these funds are critical, and removing them from the tax return would add insult to injury. SB 503 addresses this issue by ensuring that each VCFs appearing on the 2016 form will also have their place on the 2017 return.”
2. SB 1476. In December of 2015, this Committee held an oversight hearing which identified best practices and reforms needed to ensure that taxpayers’ voluntary contributions are being put toward charitable purposes in a transparent and timely fashion. As a result, the Legislature enacted SB 1476 (Committee on Governance and Finance), which applied the following changes:
- Before January 1, 2017, the tax check-off process starts with the Legislature enacting legislation. Next, a taxpayer contributes to an established tax check-off on the income tax form. The donation is collected by FTB and distributed to the State Controller by June 15th each year. Contributions made after June are not distributed to the State Controller’s Office until the following year. The State Controller then distributes the funds according to the enacting statute, which generally requires an appropriation by the Legislature in the Budget Act. Next, the administering agency generally must submit a budget change proposal (BCP) to the Department of Finance. Once the Department of Finance approves the BCP and submits it as part of the Budget, the Legislature then considers the request as part of the Budget, and generally appropriates the funds in the Budget Act. After the Governor signs the Budget, only then can the Controller transfer the donated funds to the administering agency, which can take years.
- When a tax check-off is repealed, or fails to meet the minimum contribution limit, the check-off fund is removed from the income tax form. After four years of inactivity the tax check-off fund is abolished, and unused funds revert to the General Fund at the direction of the Department of Finance. Before the Department of Finance abolishes a tax check-off fund, the Department sends a letter to the Joint Legislative Budget Committee listing all funds slated to be abolished. At that time, the Joint Legislative Budget Committee can object to the check-off fund’s abolishment. However, the letter from the Department of Finance does not specify the type of fund being abolished; the letter only lists names of funds. Thus, it is unclear from the face of the letter if an abolished fund is a privately-funded taxpayer check-off fund or a government fund.
- After the passage of SB 1476, all check-offs going into effect on or after January 1, 2018 will ensure timely distribution of tax check-off funds by eliminating the current requirement for the Legislature to appropriate funds. Elimination of requiring an appropriation by the Legislature for each tax check-off will result in funds arriving to the administering agency much earlier than under the current process. The bill also protects tax check-off funds from reverting to the General Fund by requiring tax check-off funds to include “voluntary contribution fund” in their names so that the Legislature, Department of Finance, and the Joint Legislative Budget Committee are aware when a tax check-off fund is slated for abolishment and reversion to the General Fund. Lastly, the bill includes reporting requirements by the administering agency, which serves as a safeguard against eliminating the appropriation by the Legislature requirement. Instead of the intended use of the funds only being available to the Department of Finance in a BCP, the agency must post online the use of the funds. The bill also extended the standard sunset from 5 to 7 years and permanently set the annual minimum contribution amount to $250,000 beginning the second calendar year after the first appearance of the fund on the income tax return.
SB 503 conforms to the general provisions for all VCFs set forth in SB 1476.
3. Is there a better way? The current tax check-off program generates a relatively small share of statewide contributions to charitable causes. In 2008, Californians donated more than $17 billion to charities. However, less than 1% of Californians use the tax check-off program to make donations to charitable organizations. FTB reports that in 2012, 89,335 out of 15 million taxpayers contributed a total of $4.8 million. In 2014, SB 1207 (Wolk) attempted to address this issue and help grow charitable giving by establishing the California Voluntary Contribution Program to promote charitable giving and collect donations. This bill would have allowed taxpayers to contribute to the many other worthy causes not currently on the return, would have screened potential participants before adding them onto the form, and eliminated the need for each organization to obtain legislative approval, instead applying to the office of California Volunteers for placement on the income tax form. However, SB 1207 (Wolk) was held on suspense in Assembly Appropriations.
4. 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.
5. Minimum contribution amounts. 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 contributions.
6. 29.10(b). As a result of floor amendments of 5/9/17 setting the minimum contribution amount for VCFs to zero, the Rules Committee referred SB 503 to the Committee under Senate Rule 29.10(b). The Rule provides that the Committee has three options: (1) hold the bill, (2) return the bill to the Floor for consideration, or (3) rerefer the bill to fiscal committee pursuant to Senate Rule 10.5.
7. Urgency. As an urgency statute, SB 503 must be approved by 2/3 vote of each house of the Legislature. Regular legislation takes effect on the January 1 following its passage, but urgency bills take effect as soon as they're passed, signed, and chaptered.
Support and Opposition
(5/15/17)
Support: California Arts Advocates, California Arts Council, California Association of Food Banks.
Opposition: Unknown.
-- END --
Office of Senate Floor Analyses (916) 651-1520 Fax: (916) 327-4478 | SB |
THIRD READING
Bill No: SB 503
:
SENATE GOVERNANCE & FIN. COMMITTEE: 7-0, 4/19/17
AYES: McGuire, Nguyen, Beall, Hernandez, Hertzberg, Lara, Moorlach
SENATE APPROPRIATIONS COMMITTEE: 7-0, 5/1/17
AYES: Lara, Bates, Beall, Bradford, Hill, Nielsen, Wiener
DIGEST: This bill renames and extends until January 1, 2025, the Keep Arts in Schools Voluntary Tax Contribution Fund.
Existing 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 so-called “check-offs” to be made from taxpayers’ own resources and not from their tax liability, as is possible on federal tax returns.
- Allows contribution amounts to be claimed as charitable contributions on taxpayers’ tax returns in the subsequent year.
- Requires that each VCF is individually added to the tax return by legislation. 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 amounts are adjusted annually for inflation. For most VCFs, the minimum contribution amount is $250,000, beginning in the fund’s second year. 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.
- Establishes the Keep Arts in Schools Fund as a VCF on the income tax form, administered by the University of California. The VCF has met the minimum contribution amounts for each year it’s been on the tax form, but will sunset on January 1, 2018.
This bill:
- Renames the Keep Arts in Schools Fund to the Keep Arts in Schools Voluntary Tax Contribution Fund, and extends it until January 1, 2025.
- Provides that moneys donated by taxpayers are continuously appropriated to its specified purposes, instead of appropriated by the Legislature.
- Makes conforming changes.
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 would result in an annual revenue loss of $9,000 (General Fund).
- The State Controller’s Office and FTB would be reimbursed for related administrative costs.
California Arts Advocates
California Arts Council
None received
ARGUMENTS IN SUPPORT: According to the author, “In times of budgetary constraints for California’s schools, Arts programs are typically among the first curriculum-based subjects to lose their funding or even be eliminated completely. Currently, despite the fact that Arts education has been proven to be a key factor in helping California’s next generation of leaders succeed, fewer than 40% of California’s students participate in Arts education courses. Peer-reviewed studies have shown that Arts education increases academic achievement, social engagement, school attendance, graduation rates, and college and workforce readiness. The Keep Arts in Schools Voluntary Tax Contribution Fund was established in 2010 to help increase access to arts education, by allowing individuals to voluntarily contribute money by simply checking a box on their state income tax returns which can then be claimed as a charitable contribution. Those received donations supplement the annual budget of the California Arts Council (CAC), which provides funding for programs that increase access to arts education for our communities, non-profit organizations, veterans, children and schools throughout the State of California. Under its enabling legislation, the Keep Arts in Schools Fund is due to expire on January 1, 2018. If allowed to sunset, this would eliminate this critical source of funding for additional revenue for the California arts council. SB 503 will extend the Keep Arts in Schools Voluntary Tax Contribution Fund for seven years until January 1, 2025. This bill will allow the CAC to continue to receive annual donations through the voluntary contribution fund which helps support vital arts education programs across the state that currently serve approximately 70,000 students annually.”
5/3/17 15:02:32
**** END ****
SENATE COMMITTEE ON
Senator Ricardo Lara, Chair
2017 - 2018 Regular Session
SB 503 (Newman) - Personal income taxes: Keep Arts in Schools Voluntary Tax Contribution Fund
Version: | Policy Vote: |
Urgency: | Mandate: |
Hearing Date: | Consultant: |
This bill does not meet the criteria for referral to the Suspense File.
Bill Summary:
SB 503 would (1) rename the Keep Arts in Schools Fund as the Keep Arts in Schools Voluntary Contribution Fund, and (2) extend the sunset until January 1, 2025.
Fiscal Impact:
- The Franchise Tax Board (FTB) estimates that, beginning in 2018-19, this bill would result in an annual revenue loss of $9,000 (General Fund).
- The State Controller’s Office (SCO) and FTB and would be reimbursed for related administrative costs.
Background:
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.
Currently, the Keep Arts in Schools Fund VCF has met the statutory minimum to stay on the tax form by raising $256,421 in 2014, $263,880 in 2015, and $270,138 in 2016. FTB transfers these funds to the California Arts Council, which funds grants to individuals or organizations administering arts programs for children in preschool through 12th grade. However, the VCF will not be included on the 2017 tax form, unless the Legislature extends the current sunset.
Proposed Law:
This bill would (1) rename the Keep Arts in Schools Fund as the Keep Arts in Schools Voluntary Contribution Fund, and (2) extend its sunset until January 1, 2025. The bill provides that donated funds would be continuously appropriated to the Arts Council, not appropriated by the Legislature.
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.
- SB 571 (Liu, Chapter 430, Statutes of 2013) established the Keep Arts in Schools Fund VCF. The VCF first appeared on the 2013 tax form.
Staff Comments:
FTB notes that California taxpayers contributed $270,000 to the Keep Arts in Schools Fund in 2016, and 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 $9,000. The minimum contribution amount for the Keep Arts in Schools Voluntary Tax Contribution Fund for 2017 is $258,568.
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.
FTB data indicate that in 2012, 89,335 out of 15 million taxpayers contributed a total of $4.8 million via tax check-offs. The tax check-off program typically collects $4-5 million in annual contributions for all 20 VCFs.
-- END --
SENATE COMMITTEE ON GOVERNANCE AND FINANCE
Senator Mike McGuire, Chair
2017 - 2018 Regular
Bill No: | SB 503 | Hearing Date: | 4/19/17 |
Author: | Newman | Tax Levy: | No |
Version: | 3/20/17 | Fiscal: | Yes |
Consultant: | Grinnell | ||
Personal income taxes: Keep Arts in Schools Voluntary Tax Contribution Fund
Renames the Keep Arts in Schools Fund as the Keep Arts in Schools Voluntary Contribution Fund, and extends it until January 1, 2025.
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. 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.
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.
Currently, the Keep Arts in Schools Fund VCF has met the statutory minimum to stay on the tax form by raising $256,421 in 2014, $263,880 in 2015, and $270,138 in 2016. FTB transfers these funds to the California Arts Council, which funds grants to individuals or organizations administering arts programs for children in preschool through 12th grade. However, the VCF will sunset after this year, and therefore will not be included on the 2017 form, unless the Legislature extends it. The California Arts Council wants to extend the Keep Arts in Schools VCF.
Proposed Law
Senate Bill 503 renames the Keep Arts in Schools Fund as the Keep Arts in Schools Voluntary Contribution Fund, and extends it until January 1, 2025. The bill provides that donated funds are continuously appropriated to the Arts Council, not appropriated by the Legislature. The measure also makes conforming changes.
State Revenue Impact
According to FTB, SB 503 results in revenue losses of $9,000 in 2018-19 and 2019-20.
Comments
1. Purpose of the bill. According to the author, “In times of budgetary constraints for California’s schools, Arts programs are typically among the first curriculum-based subjects to lose their funding or even be eliminated completely. Currently, despite the fact that Arts education has been proven to be a key factor in helping California’s next generation of leaders succeed, fewer than 40% of California’s students participate in Arts education courses. Peer-reviewed studies have shown that Arts education increases academic achievement, social engagement, school attendance, graduation rates, and college and workforce readiness. The Keep Arts in Schools Voluntary Tax Contribution Fund was established in 2010 to help increase access to arts education, by allowing individuals to voluntarily contribute money by simply checking a box on their state income tax returns which can then be claimed as a charitable contribution. Those received donations supplement the annual budget of the California Arts Council (CAC), which provides funding for programs that increase access to arts education for our communities, non-profit organizations, veterans, children and schools throughout the State of California. Under its enabling legislation, the Keep Arts in Schools Fund is due to expire on January 1, 2018. If allowed to sunset, this would eliminate this critical source of funding for additional revenue for the California arts council. SB 503 will extend the Keep Arts in Schools Voluntary Tax Contribution Fund for seven years until January 1, 2025. This bill will allow the CAC to continue to receive annual donations through the voluntary contribution fund which helps support vital arts education programs across the state that currently serve approximately 70,000 students annually.”
2. SB 1476. In December of 2015, this Committee held an oversight hearing which identified best practices and reforms needed to ensure that taxpayers’ voluntary contributions are being put toward charitable purposes in a transparent and timely fashion. As a result, the Legislature enacted SB 1476 (Committee on Governance and Finance), which applied the following changes:
- Before January 1, 2017, the tax check-off process starts with the Legislature enacting legislation. Next, a taxpayer contributes to an established tax check-off on the income tax form. The donation is collected by FTB and distributed to the State Controller by June 15th each year. Contributions made after June are not distributed to the State Controller’s Office until the following year. The State Controller then distributes the funds according to the enacting statute, which generally requires an appropriation by the Legislature in the Budget Act. Next, the administering agency generally must submit a budget change proposal (BCP) to the Department of Finance. Once the Department of Finance approves the BCP and submits it as part of the Budget, the Legislature then considers the request as part of the Budget, and generally appropriates the funds in the Budget Act. After the Governor signs the Budget, only then can the Controller transfer the donated funds to the administering agency, which can take years.
- When a tax check-off is repealed, or fails to meet the minimum contribution limit, the check-off fund is removed from the income tax form. After four years of inactivity the tax check-off fund is abolished, and unused funds revert to the General Fund at the direction of the Department of Finance. Before the Department of Finance abolishes a tax check-off fund, the Department sends a letter to the Joint Legislative Budget Committee listing all funds slated to be abolished. At that time, the Joint Legislative Budget Committee can object to the check-off fund’s abolishment. However, the letter from the Department of Finance does not specify the type of fund being abolished; the letter only lists names of funds. Thus, it is unclear from the face of the letter if an abolished fund is a privately-funded taxpayer check-off fund or a government fund.
- After the passage of SB 1476 (Committee on Governance and Finance, 2016), all check-offs going into effect on or after January 1, 2018 will ensure timely distribution of tax check-off funds by eliminating the current requirement for the Legislature to appropriate funds. Elimination of requiring an appropriation by the Legislature for each tax check-off will result in funds arriving to the administering agency much earlier than under the current process. The bill also protects tax check-off funds from reverting to the General Fund by requiring tax check-off funds to include “voluntary contribution fund” in their names so that the Legislature, Department of Finance, and the Joint Legislative Budget Committee are aware when a tax check-off fund is slated for abolishment and reversion to the General Fund. Lastly, the bill includes reporting requirements by the administering agency, which serves as a safeguard against eliminating the appropriation by the Legislature requirement. Instead of the intended use of the funds only being available to the Department of Finance in a BCP, the agency must post online the use of the funds. The bill also extended the standard sunset from 5 to 7 years and permanently set the annual minimum contribution amount to $250,000 beginning the second calendar year after the first appearance of the fund on the income tax return.
SB 503 conforms to the general provisions for all VCFs set forth in SB 1476 (Committee on Governance and Finance, 2016).
3. Is there a better way? The current tax check-off program generates a relatively small share of statewide contributions to charitable causes. In 2008, Californians donated more than $17 billion to charities. However, less than 1% of Californians use the tax check-off program to make donations to charitable organizations. FTB reports that in 2012, 89,335 out of 15 million taxpayers contributed a total of $4.8 million. In 2014, SB 1207 (Wolk) attempted to address this issue and help grow charitable giving by establishing the California Voluntary Contribution Program to promote charitable giving and collect donations. This bill would have allowed taxpayers to contribute to the many other worthy causes not currently on the return, would have screened potential participants before adding them onto the form, and eliminated the need for each organization to obtain legislative approval, instead applying to the office of California Volunteers for placement on the income tax form. However, SB 1207 (Wolk) was held on suspense in Assembly Appropriations.
4. 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.
Support and Opposition
(4/14/17)
Support: California Arts Advocates, California Arts Council.
Opposition: Unknown.
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Discussed in Hearing
2MIN
Senate Floor
1MIN
Assembly Floor
40SEC
Assembly Floor
1MIN
Assembly Standing Committee on Appropriations
16MIN
Assembly Standing Committee on Arts, Entertainment, Sports, Tourism, and Internet Media
1MIN
Senate Floor
8MIN
Senate Standing Committee on Governance and Finance
2MIN
Senate Standing Committee on Appropriations
Bill Co-Author(s):
