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SB-503 Personal income taxes: voluntary contributions: minimum contributions: Keep Arts in Schools Voluntary Tax Contribution Fund.(2017-2018)

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Date Published: 05/09/2017 09:00 PM
SB503:v97#DOCUMENT

Amended  IN  Senate  May 09, 2017
Amended  IN  Senate  March 20, 2017

CALIFORNIA LEGISLATURE— 2017–2018 REGULAR SESSION

Senate Bill No. 503


Introduced by Senators Newman and Portantino

February 16, 2017


An act to amend Sections 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, and to add Section 18874.1 to, the Revenue and Taxation Code, relating to taxation, and making an appropriation therefor. therefor, and declaring the urgency thereof, to take effect immediately.


LEGISLATIVE COUNSEL'S DIGEST


SB 503, as amended, Newman. Personal income taxes: voluntary contributions: minimum contributions: Keep Arts in Schools Voluntary Tax Contribution Fund.
(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.
Vote: MAJORITY2/3   Appropriation: YES   Fiscal Committee: YES   Local Program: NO  

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


SECTION 1.

 Section 18874.1 is added to the Revenue and Taxation Code, to read:

18874.1.
 (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:
Article  19. Keep Arts in Schools Voluntary Tax Contribution Fund

SEC. 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 taxpayer’s account do not exceed the taxpayer’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) 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.