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SB-503 Personal income taxes: voluntary tax contribution funds.(2017-2018)

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Date Published: 10/05/2017 09:00 PM
SB503:v90#DOCUMENT

Senate Bill No. 503
CHAPTER 519

An act to amend Sections 18745, 18746, 18747, 18748, 18891, 18892, 18893, and 18894 of, and to amend 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, relating to taxation, and making an appropriation therefor.

[ Approved by Governor  October 05, 2017. Filed with Secretary of State  October 05, 2017. ]

LEGISLATIVE COUNSEL'S DIGEST


SB 503, Newman. Personal income taxes: voluntary tax contribution funds.
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.
Vote: MAJORITY   Appropriation: YES   Fiscal Committee: YES   Local Program: NO  

The people of the State of California do enact as follows:


SECTION 1.

 Section 18745 of the Revenue and Taxation Code is amended to read:

18745.
 (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 individual’s account, do not exceed the individual’s 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:
Article  19. Keep Arts in Schools Voluntary Tax Contribution Fund

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 individual’s account do not exceed the individual’s 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).