AB 485
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CONCURRENCE IN SENATE AMENDMENTS
AB 485 (Williams)
As Amended September 4, 2015
Majority vote
ASSEMBLY:
77-0
(May 7, 2015)
SENATE:
39-0
(September 9, 2015)
Original Committee Reference: REV. & TAX.
SUMMARY: Authorizes the addition of the Prevention of Animal Homelessness and Cruelty
Fund (Fund) checkoff to the personal income tax (PIT) return upon the removal of another
voluntary contribution fund (VCF) from the return, or as soon as space is available.
The Senate amendments:
1) Modify the distribution of Fund moneys. Specifically, the Department of Food and
Agriculture is directed to allocate moneys as follows:
a) Up to 5% shall be used for the development of a mechanism to provide ongoing public
awareness through activities that will promote the charitable tax deduction for the Fund
and seek continued contributions, as specified;
b) Up to $250,000 shall be distributed to a city, county, or city and county animal control
agency or shelter that is current on its reporting requirements to the State Department of
Public Health, Veterinary Public Health Section for the sole purpose of supporting spay
and neuter activities by that entity to prevent and eliminate cat and dog homelessness;
and,
c) The remaining moneys, if any, shall be used by programs designed to prevent and
eliminate cat and dog homelessness or programs for the prevention, investigation, and
prosecution of animal cruelty and neglect. The grants are to be distributed to a city,
county, or city and county animal control agency or shelter that is current on its reporting
requirements, a society for the prevention of cruelty to animals affiliate, or a humane
society affiliate. A society for the prevention of cruelty to animals affiliate or a humane
society affiliate shall be a California corporation, duly incorporated in the state of
California, in active status, as described on the business search page of the Secretary of
State's Internet Web site, and exempt from federal income taxation as an organization
described in Internal Revenue Code Section 501(c)(3).
2) Specify that the Department of Food and Agriculture may consult with the State Department
of Public Health to develop the grant process and the oversight of the grant program.
3) Provide that no Fund money shall be used to supplant state General Fund money for any
purpose.
EXISTING LAW:
1) Allows taxpayers to contribute to one or more of 18 VCFs on the 2014 PIT return.
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2) Provides a specific sunset date for each VCF, except for the California Seniors Special Fund
and the State Parks Protection Fund.
3) Requires each VCF to meet an annual minimum contribution amount to remain in effect,
except for the California Firefighters' Memorial Fund, the California Peace Officer Memorial
Foundation Fund, and the California Seniors Special Fund.
AS PASSED BY THE ASSEMBLY, this bill:
1) Established the Fund in the State Treasury.
2) Provided that all money transferred to the Fund, upon appropriation by the Legislature, shall
be allocated to the:
a) Franchise Tax Board (FTB) and the State Controller for reimbursement of all costs
incurred in administering the VCF; and,
b) Department of Food and Agriculture for the distribution of grants to a city or county
animal control agency or shelter that is current on its reporting requirements to the State
Department of Public Health, Veterinary Public Health Section.
3) Provided that funds obtained by a municipality under a grant from the Fund may be used to
pay for the following:
a) Programs designed to prevent and eliminate cat and dog homelessness;
b) Research that explores novel approaches to preventing and eliminating pet homelessness;
and,
c) Prevention, investigation, and prosecution of animal cruelty and neglect.
4) Provided that distributed grants may be paid to outside agencies that are under contract or in
a demonstrated partnership with the municipality to conduct these activities.
5) Required the Department of Food and Agriculture to award grants through a competitive,
project-specific grant process and to oversee the grant program.
6) Specified that a grantee shall not use a grant award for administrative expenses or for any
purpose outside of California.
7) Provided for the Fund provisions' automatic sunset on either January 1 of the fifth taxable
year following the Fund's first appearance on the PIT return or January 1, 2022, whichever
occurs first.
8) Required the Fund to meet a minimum contribution threshold of $250,000 indexed for
inflation.
FISCAL EFFECT: According to the Senate Appropriations Committee:
1) The FTB estimates that this bill would result in an annual General Fund revenue loss of about
$8,000.
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2) The State Controller's Office and FTB would be reimbursed from the Fund for related
administrative costs.
3) The California Department of Food and Agriculture would incur first-year General Fund
costs of $66,000, and ongoing annual costs of $125,000. The specific timing of these
expenses would depend on when the check-off were to appear on the tax form.
COMMENTS:
1) The author has provided the following statement in support of this bill:
The goal of the new fund proposed in AB 485 is to appeal to a wider selection of
contributors by expanding the use of fund dollars to include animal cruelty prevention
and investigation. In the face of recent animal cruelty cases here in Sacramento and the
resounding public outcry, there is increased confidence that adding cruelty funding and
response to the voluntary check off will draw new donors.
2) Committee Staff Comments
a) 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.
b) Legislative history: AB 2291 (Mendoza), Chapter 328, Statutes of 2008, authorized the
addition of the Municipal Shelter Spay-Neuter Fund to the PIT return. This VCF
appeared on the 2008 and 2009 tax returns in calendar years 2009 and 2010 respectively.
This VCF received $210,029 in 2009 and $194,462 in 2010. In 2010, the VCF needed to
meet a minimum contribution threshold of $250,000 but failed to do so; and, as a result,
the VCF ceased to be operative.
In 2011, the Legislature once again authorized the addition of an identically named
Municipal Shelter Spay-Neuter Fund checkoff [AB 564 (Smyth), Chapter 549, Statutes of
2011]. Once again, this VCF was designed to provide funds for low-cost or free spayneuter services associated with municipal shelters in California. Unfortunately, however,
this VCF fared little better than its predecessor. Specifically, the VCF received $244,701
in 2012, $217,883 in 2013, and only $217,549 in 2014. Thus, the VCF once again fell
off the return for failing to meet its minimum contribution threshold.
c) VCF policy: The Committee on Revenue and Taxation's VCF policy provides that "[A]ll
proponents seeking authorization for a new or reauthorized checkoff shall provide
information justifying their expectation that the checkoff will meet its minimum
contribution requirement." In addition, the Committee's VCF policy states that
"[C]heckoffs that have failed to meet their minimum contribution requirement will not be
extended or reauthorized."
Given that two separate municipal shelter VCFs failed to meet their minimum
contribution thresholds within the last few years, it is an open question whether this Fund
will fare any better. To this end, Committee staff questions the precedent of simply re-
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establishing past VCFs when they fail to garner sufficient support to remain on the form.
The author, however, notes that the previous VCFs were exclusively focused on animal
overpopulation, while this Fund additionally authorizes grant moneys to be spent on the
prevention, investigation, and prosecution of cruelty to animals. The author's office
believes that, "there is increased confidence that adding cruelty funding and response to
the voluntary check off will draw new donors."
Analysis Prepared by: M. David Ruff / REV. & TAX. / (916) 319-2098
FN: 0002230