Existing law authorizes an individual to contribute amounts in excess of personal income tax liability for the support of specified funds, and sets forth administrative provisions applicable to voluntary contributions.

This bill, for taxable years beginning on or after January 1, 2024, would allow an individual to designate on their tax return that a specified amount in excess of the taxpayers personal income tax liability be transferred to the California K12 Climate Change Education Voluntary Tax Contribution Fund. The bill would continuously appropriate the fund to the Franchise Tax Board and the Controller for administrative costs, and to the Department of Resources Recycling and Recoverys Office of Environmental Justice, Tribal Relations, Education and Outreach to award grants to school districts, county offices of education, resource conservation districts, district and county office of education partnerships with higher education institutions, and community-based nongovernmental organizations focused on environmental and climate change education, as specified. The bill would repeal these provisions on December 1, 2031, or on December 1 of the year that the minimum contribution amount of $250,000 is not met, whichever is earlier, as specified. By continuously appropriating these funds, the bill would make an appropriation.

Existing law authorizes an individual to contribute amounts in excess of personal income tax liability for the support of specified funds, and sets forth administrative provisions applicable to voluntary contributions.

This bill, for taxable years beginning on or after January 1, 2024, would allow an individual to designate on their tax return that a specified amount in excess of the taxpayers personal income tax liability be transferred to the California Climate Literacy K12 Climate Change Education Voluntary Tax Contribution Fund. The bill would continuously appropriate the fund to the Franchise Tax Board and the Controller for administrative costs, and to the San Mateo County Office of Education for grants awarded to environmental education programs administered by local education agencies and county offices of education that promote environmental education and environmental literacy by providing teachers throughout the state with access to high-quality professional learning opportunities and education resources. To the extent the bill would impose additional duties on a county office of education, the bill would impose a state-mandated local program. Department of Resources Recycling and Recoverys Office of Environmental Justice, Tribal Relations, Education and Outreach to award grants to school districts, county offices of education, resource conservation districts, district and county office of education partnerships with higher education institutions, and community-based nongovernmental organizations focused on environmental and climate change education, as specified. The bill would repeal these provisions on December 1, 2031, or on December 1 of the year that the minimum contribution amount of $250,000 is not met, whichever is earlier, as specified. By continuously appropriating these funds, the bill would make an appropriation.

Existing law requires the Instructional Quality Commission to recommend, and the State Board of Education to adopt, curriculum frameworks, defined as outlines of the components of a given course of study designed to provide state direction to school districts in the provision of instructional programs, as provided.

Existing law authorizes an individual to contribute amounts in excess of their tax liability for the support of specified funds. Existing law also sets forth administrative provisions applicable to voluntary contributions.

This bill would state the intent of the Legislature to enact subsequent legislation that would create a voluntary tax contribution fund with the purpose of establishing the Climate Education and Mitigation-Adaptation Grant Program, a grant program focused on developing climate literacy education for pupils in transitional kindergarten, kindergarten, and grades 1 to 12, inclusive.

Date of Hearing: May 1, 2024

ASSEMBLY COMMITTEE ON APPROPRIATIONS

Buffy Wicks, Chair

ABPCA Bill Id:AB 3051

Author:(Muratsuchi) – As Amended Ver:April 22, 2024

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

SUMMARY:

This bill creates, for taxable years beginning on or after January 1, 2024, the California K-12 Climate Change Education Voluntary Tax Contribution Fund (Fund) program on the personal income tax (PIT) return.

Specifically, this bill:

1. Requires the Franchise Tax Board (FTB) to revise the PIT return form to add the Fund and allows a taxpayer to donate a tax-deductible portion of their PIT refund to the Fund.
2. Establishes the Fund in the State Treasury and requires FTB to notify the State Controller (SCO) of the amount of refund money designated by taxpayers for the Fund. The SCO must transfer this designated amount from the PIT Fund to the Fund.
3. Provides a continuous appropriation from the Fund, as follows:
4. To FTB and SCO for reimbursement of related administrative costs.
5. To the Department of Resources Recycling and Recovery’s (CalRecycle’s) Office of Environmental Justice, Tribal Relations, Education and Outreach (Office) to award grants to school districts, county offices of education, resource conservation districts, district and county office of education partnerships with higher education institutions, and community-based, non-governmental organizations focused on environmental and climate change education, such as zoos, aquaria, and nature centers. The Office must collaborate with Ten Strands and the California Environmental Education Foundation to award grants and report related information on the Office’s website. Grant recipients are prohibited from using more than 5% of awarded funds for administrative costs.
6. Establishes the Fund for seven taxable years following the Fund’s first appearance on the PIT return and requires FTB to estimate annually whether the Fund will receive the minimum contribution amount to remain on the PIT return in the next taxable year.

FISCAL EFFECT:

1. Annual General Fund (GF) revenue loss of approximately $5,000 beginning fiscal year 2025-26. FTB generally assumes $5,000 in GF revenue loss for every $250,000 in voluntary tax contribution fund (VCF) donations, as a taxpayer may deduct such charitable contributions in the next taxable year.
2. Annual GF costs of approximately $150,000 to CalRecycle for one additional position to develop and implement the grant program
3. Costs of an unknown, but likely minor and absorbable, amount to FTB and SCO to administer another VCF program.

According to the Legislative Analyst’s Office, the GF faces a structural deficit in the tens of billions of dollars over the next several fiscal years.

COMMENTS:

1. Purpose. According to the author:

The state will not be able to reach its ambitious climate action goals without a population that understands the severity of the climate crisis and is educated to do something about it. AB 3051 creates the [Fund] to further the state’s implementation and enhancement of teaching about climate change in California’s schools.

This bill is supported by a large coalition of environmental groups led by Ten Strands.

1. VCFs. Existing law allows a taxpayer to donate an amount in excess of their PIT liability to one or more VCFs listed on the PIT return. There were 18 VCFs listed on the 2023 return. Generally, a VCF remains on the PIT return until a statutory sunset date, but if FTB determines the VCF fails to meet a $250,000 minimum contribution amount, the VCF is statutorily repealed and FTB removes the VCF from the return.

This bill creates the Fund on the PIT return for seven taxable years to support climate change education. Donations would be appropriated to the Office to award grants that support initiatives focused on: (a) teacher professional learning, (b) California-focused, standards-based climate curriculum implementation, (c) collaborations with community-based nongovernmental organizations and higher education institutions, and (d) student-driven environmental stewardship projects in school districts and county offices of education. However, this VCF program generally differs from other established programs by requiring the state agency administering the grant program to collaborate with specific organizations to award the grants and allowing a grant recipient to use up to 5% of grant funds on administrative costs. Many other VCF programs explicitly prohibit using VCF moneys for administrative purposes.

1. Related Legislation. AB 1828 (Waldron) extends, by seven years, the sunset date of two VCFs on the PIT return established to support wildlife. AB 1828 is pending referral by the Senate Rules Committee.

AB 1983 (Maienschein) recreates the previously repealed Prevention of Animal Homelessness and Cruelty VCF on the PIT return. AB 1983 is pending referral by the Senate Rules Committee.

AB 2197 (Addis) extends, by seven years, the sunset date of the Protect Our Coast and Oceans VCF on the PIT return. AB 2197 is pending referral by the Senate Rules Committee.

AB 2689 (Bains) extends, by five years, the sunset date of the California Alzheimer’s Disease and Related Dementia Research VCF on the PIT return. AB 2689 is pending referral by the Senate Rules Committee.

Analysis Prepared by: Irene Ho / APPR. / (916) 319-2081

Date of Hearing: April 15, 2024

ASSEMBLY COMMITTEE ON REVENUE AND TAXATION

Jacqui Irwin, Chair

ABPCA Bill Id:AB 3051 (

Author:Muratsuchi) – As Amended Ver:April 8, 2024

Majority vote. Fiscal committee.

SUBJECT: Personal income taxes: voluntary contributions: California K–12 Climate Change Education Voluntary Tax Contribution Fund

SUMMARY: Authorizes the addition of the California K-12 Climate Change Education Voluntary Tax Contribution Fund (Fund) as a voluntary contribution fund (VCF) on the personal income tax (PIT) return. Specifically, this bill:

1. Establishes the Fund in the State Treasury.
2. Allows a deduction for any contribution made to the Fund.
3. Provides that all money transferred to the Fund shall be continuously appropriated and allocated to the:
   1. Franchise Tax Board (FTB) and the State Controller for reimbursement of all administrative costs incurred; and,
   2. Department of Resources Recycling and Recovery's Office of Environmental Justice, Tribal Relations, Education and Outreach (Office) to award grants to:
      1. School districts;
      2. County offices of education;
      3. Resource conservation districts;
      4. District and county office of education partnerships with higher education institutions; and,
      5. Community-based nongovernmental organizations focused on environmental and climate change education, including, but not limited to, zoos, aquaria, nature centers, outdoor science schools, and intermediary backbone organizations.
4. Requires the Office to collaborate with Ten Strands and the California Environmental Education Foundation in granting awards pursuant to this bill.
5. Requires grant applicants to:
   1. Describe how their initiative will be equitable and inclusive of low-income communities and communities of color and demonstrate how they support the areas of focus described in this bill; and,
   2. Submit a detailed action plan, measurable outcomes, timeline, budget, and a final report that includes documented evidence of completed tasks and expenditures.
6. Requires the Office to award the grant moneys and be responsible for overseeing the grant program.
7. Specifies that an environmental education program shall not use more than 10% of grant moneys awarded for its administrative costs.
8. Specifies that the Office shall not use more than 10% of the moneys in the Fund for its administrative costs.
9. Requires the Office, on or before January 1, 2026, and annually thereafter, to report on its internet website the process for awarding grants, the amount of money spent on administration, and an itemization of how program funds were awarded, including, but not limited to, the recipients of grants made with moneys from the Fund.
10. Provides that, except as otherwise specified, the Fund's statutory provisions shall remain in effect only until January 1, 2031, and shall be repealed on December 1, 2031.
11. Requires the Fund to meet a standard minimum contribution amount of $250,000 to remain in effect.

EXISTING LAW:

1. Allows taxpayers to contribute to one or more of 18 VCFs on the 2023 PIT return. (R&TC Section 18730 et seq.)
2. Requires each VCF to meet an annual minimum contribution amount to remain in effect, except for the California Firefighters' Memorial Voluntary Tax Contribution Fund, the California Peace Officer Memorial Foundation Voluntary Tax Contribution Fund, the California Senior Citizen Advocacy Voluntary Tax Contribution Fund, and the California Seniors Special Fund. (R&TC Sections 18801 et seq., 18805 et seq., 18730 et seq., and 18771 et seq.)
   
3. Provides a specific sunset date for each VCF, except for the California Seniors Special Fund and the State Parks Protection Fund. (R&TC Sections 18771 et seq. and 18900.1 et seq.)
4. Requires the statutory provisions establishing a VCF to remain in effect only until January 1 of the seventh calendar year following the VCF's first appearance on the PIT return. (R&TC Section 18873.)

FISCAL EFFECT: The FTB estimates that this bill would reduce General Fund revenues by $5,000 in both Fiscal Year (FY) 2025-26 and FY 2026-27.

COMMENTS:

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

The climate crisis is reaching epic proportions and California must do its part. The state will not be able to reach its ambitious climate action goals without a population that understands the severity of the climate crisis and is educated to do something about it. AB 3051 creates the California K-12 Climate Literacy Education Voluntary Tax Contribution Fund to further the state's implementation and enhancement of teaching about climate change in California's schools.

1. This bill is supported by Ten Strands, which notes the following:

Beginning in the 2024-25 school year, California schools will be required by AB 285 (Rivas) to provide climate change education to all students in grades 1-12 in science. To support this historic implementation of statewide climate education, our Coalition, led by Ten Strands and the California Environmental Education Foundation (CEEF), supports the creation of the California K-12 Climate Change Education Voluntary Tax Contribution Fund to create the state's first Climate Change Education Grant Program. The grant program will provide essential funding to train and empower teachers and students to develop climate literacy and engage with climate solutions and actions as an essential part of effective climate education. To promote climate literacy and youth preparedness for the future, we ask for your support of AB 3051.

1. Committee Staff Comments:
   1. So many causes, so little space: There are countless worthy causes that would benefit from the inclusion of a VCF on the state's income tax returns. At the same time, space on the returns is limited. Thus, it could be argued that the current system for adding VCFs to the form is subjective and essentially rewards organizations that can convince the Legislature to include their fund on the form.
   2. What would this bill do? This bill would authorize a new VCF on the PIT return to support climate change education. Specifically, the Office would award Fund moneys to specified entities to support initiatives focused on:
      1. Teacher professional learning;
      2. California-focused, standards-based climate curriculum implementation;
      3. Collaborations with community-based nongovernmental organizations and higher education institutions; and,
      4. Student-driven environmental stewardship projects in school districts and county offices of education.
   3. Administrative expenses: As noted above, this bill authorizes the Office to use up to 10% of Fund moneys for its administrative costs. This bill similarly specifies that an environmental education program shall not use more than 10% of grant moneys awarded for its own administrative costs. A review of other VCF programs, however, shows that many explicitly prohibit entities from using VCF moneys for administrative purposes. For example, the statutory provisions authorizing the California ALS Research Network Voluntary Tax Contribution Fund specifically prohibit the ALS Association's Golden West Chapter from using any moneys received for administrative purposes. (R&TC Section 18884(a)(2)(B).) Similar prohibitions can be found in the authorizing statutes for the following VCFs:
      1. The Keep Arts in Schools Voluntary Tax Contribution Fund (See R&TC Section 18893 providing that "[f]unds made available . . . 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.");
      2. The Emergency Food for Families Voluntary Tax Contribution Fund (See R&TC Section 18853 providing that "[f]unds shall be allocated for direct services provided by the Emergency Food Assistance Program and may not be used for the department's administrative costs."); and,
      3. The School Supplies for Homeless Children Voluntary Tax Contribution Fund (See R&TC Section 18897 providing that "[f]unds made available pursuant to this section shall not be used for administrative purposes, to reimburse costs associated with administering grants of school supplies and health-related products to local education agencies or domestic violence shelters, or for any purpose relating to the operation of the nonprofit organization.")

Those few VCFs that do authorize the use of fund moneys for administrative purposes appear to cap the percentage much lower. For example, the University of California is only authorized to use up to 5% of the money allocated to it for administering and promoting the California Breast Cancer Research Voluntary Tax Contribution Fund. (R&TC Section 18795.) Given this, the author and Committee may wish to consider the precedent of allowing both the administering entity and grant recipients to use such a significant portion of Fund revenues for administrative purposes.

• 1. Leveling the field: In an effort to promote a fair playing field, the Legislature enacted a series of requirements for new and extended VCFs. Specifically, R&TC Section 18873 was added by SB 1476 (Committee on Governance and Finance), Chapter 597, Statutes of 2016, to bring a degree of uniformity and improvement to the disparate VCF statutes. Among other things, Section 18873 provides the following parameters:
     1. The words "voluntary tax contribution" shall be included as part of the name of the fund;
     2. The website of the fund's administering agency shall report the process for awarding money, the amount of money spent on administration, and an itemization of how program funds were awarded, as specified;
     3. The minimum contribution amount that must be received for the fund to continue appearing on the tax return is $250,000, without subsequent inflation adjustments; and,
     4. The statutory provisions establishing a VCF shall remain in effect only until January 1 of the seventh calendar year following the VCF's first appearance on the return.

This bill's new VCF, in turn, complies with each of these best practices.

REGISTERED SUPPORT / OPPOSITION:

Support

350 Humboldt

7^th Generation Advisors

Acorn Group

Acterra: Action for a Healthy Planet

Agua Hedionda Lagoon Foundation

Art and Wilderness Institute

Association for Environmental Education

Cabrillo Unified School District

California Environmental Education Foundation

California Green Business Network

Camp Chrysalis

Camp Ocean Pines

Campaign for Environmental Literacy

Center for Ecoliteracy

Children's Environmental Literacy Foundation

Community Action for a Sustainable Alameda

CSC Oakland Zoo

Dorris Dann Kids Campus

Edible Schoolyard Project

Escondido Creek Conservancy

Extinction Rebellion San Francisco Bay Area

Farm Discovery at Live Earth

Follow Your Bliss, LLC

Friends of the Los Angeles River

Generation:NOW!

Golden View Elementary School

Grades of Green

Green Schools National Network, Inc.

Initiative for Climate Leadership and Resilience

Inland Northern Science Project

Lively Financial Coaching

Living Classroom

Monterey Bay Aquarium

Monterey Bay Center for Environmental Literacy

One Cool Earth

O'Neill Sea Odyssey

Pacific Grove Museum of Natural History

Point Reyes National Seashore Association

Regeneracion – Pajaro Valley Climate Action

Roots to Branches Education

Sacramento Splash

Salama Heritage Ecovillage (SHE) Africa Ltd

San Joaquin County Office of Education

San Mateo County Office of Education

Santa Clara Valley Audubon Society

Santa Cruz County Democratic Party

Santa Cruz County Office of Education

Santa Cruz Museum of Natural History

Save the Whales

Sea Studios Foundation

SEI

Sembrando Lab

State Education and Environment Roundtable

Sustainable Environment Institute of the LACCD

Sustainable Systems Research Foundation

Ten Strands

Turn for Turn LLC, Earth Matters Game

Watershed Project

Watsonville High School Environmental Academy

Watsonville High School SAVE Club

Web of Life Field School

WildCare

Wildlands Conservancy

Wonder Valley Outdoor Education Center

US Green Building Council California

210 individuals

Opposition

None on file

Analysis Prepared by: M. David Ruff / REV. & TAX. / (916) 319-2098