BILL ANALYSIS
SENATE REVENUE & TAXATION COMMITTEE
Senator Michael J. Machado, Chair
AB 2485 - Jones
Amended: June 19, 2006
Hearing: June 28, 2006 Fiscal: Yes
SUBJECT: Establishes a voluntary income tax contribution
for the California Sea Otter Fund.
EXISTING LAW: Federal law provides a tax form
check-off to direct $3 of a taxpayer's liability to the
Presidential Election Fund. The taxpayer does not affect
his or her tax liability or refund
State law allows individual taxpayers to contribute
money in excess of their tax liability to the 13 voluntary
contribution funds listed on the state income tax return.
The Legislature has added each fund designation, and the
FTB lists them on the return if space accommodates. The
2005 tax return listed 14 funds.
Currently, an income tax check-off must be removed
before another one can be inserted. Check-offs must meet
the minimum threshold of $250,000 per year adjusted for
inflation to stay on the forms, except the California
Seniors Special Fund, California Firefighters Memorial
Fund, and California Peace Officers Memorial Fund. FTB
calculates the minimum threshold by September 1st of each
year. If the fund does not meet the threshold, FTB removes
it and inserts the check-off most recently enacted by the
Legislature.
Existing law also requires:
Contributions must be made in full dollar
amounts, and can be made by each signatory to a
joint tax return.
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Voluntary designations are irrevocable.
If payments and credits on the return do
not exceed the taxpayer's liability, the state
treats the tax return as though designation was
made.
If a taxpayer fails to specify a
designated fund, the contribution reverts to the
General Fund after FTB recovers actual costs for
collecting and administering contributions.
If a taxpayer designated more than one
fund, and the amount available exceeds the total
amount designated, the contribution is allocated
among the designees on a pro rata basis.
Generally, each fund must reimburse FTB and the
Controller for the costs of collecting and transferring
contributions.
The following funds appeared on the 2005 tax return:
1. The California Fund for Senior Citizens
2. Rare and Endangered Species Preservation
Fund
3. State Children's Trust Fund for the
Prevention of Child Abuse
4. Alzheimer's Disease/Related Disorders
Fund
5. California Senior's Special Fund
6. California Breast Cancer Research Fund
7. California Firefighters Memorial Fund
8. Emergency Food Assistance Program Fund
9. California Peace Officer Memorial
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Foundation Fund
10. California Military Family Relief Fund
11. California Prostate Cancer Research Fund
12. California Sexual Violence Victims Fund*
13. Veterans Quality of Life Fund*
14. California Colorectal Cancer Prevention
Fund*
(* - Added by the Legislature in 2005)
Currently, only the California Prostate Cancer
Research Fund is not meeting its statutorily required
$250,000 threshold, having collected only $188,025 in 2004.
THIS BILL creates the California Sea Otter Fund, and
allows taxpayers to use a voluntary tax check-off to
designate their own funds, not tax liability, to the fund.
The Sea Otter Fund check-off is subject to the same rules
and requirements as other funds and check-offs, including
the $250,000 annual threshold necessary to appear on the
tax form. FTB shall include the California Sea Otter Fund
on the tax return when another voluntary contribution is
deleted. The fund may continue for five years after it
first appears on the tax form.
The California Sea Otter Fund is allocated as follows:
First, to FTB and the Controller to
reimburse all its costs to administer the
check-off.
50% to the Department of Fish and Game
to establish a fund to be used within the
Department's index coding system for increased
investigation, prevention, and enforcement
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actions to decrease sea otter mortality, provide
research programs, education programs, and
related assistance with sea otter recovery.
50% to the California Coastal
Conservancy for research and programs related to
sea otters, including reducing sea otter
mortality, and pathogens and treatment
technologies as they pertain to sea otter
mortality.
The bill also requires any cat litter offered for sale
in the state to include a statement that
"Encouraging cats to use indoor litter
boxes or properly disposing of cat feces, is
beneficial to overall water quality. Please do
not flush cat litter in toilets or dispose of it
outdoors in gutters and storm drains."
A general statement that encourages the
disposal of cat feces in trash and discourages
flushing cat feces in toilets and drains.
The bill makes depositing into state waters any
substance or material deleterious to mammals unlawful. The
bill penalizes taking a marine mammal or fully protected
species by establishing a fine of not more than $25,000,
one year in county jail, or both. The bill also makes
legislative findings and declarations regarding reducing
sea otter mortality, that several types of nonpoint source
pollution are harmful to sea otters, that scientific
studies point to links between cat feces, the pathogen
T-gondii, and sea otter mortality, and that efforts to
reduce the flushing of cat liter and cat feces are steps
toward better water quality in the sea otters' natural
habitat. .
FISCAL EFFECT:
According to FTB, there would be a revenue loss of
$15,000 in 2009-10.
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COMMENTS:
A. Purpose of the bill
According to the Author: "AB 2485 takes steps to stop
the numbers of sea otters along California's Central Coast
from a continued decline. The bill increases fines and
penalties for the illegal taking of sea otters, creates a
research program focused on reducing sea otter mortality,
established a tax check-off benefiting sea otter research
and protection, and increases efforts to lower the level of
T-Gondii entering the sea otter habitat."
A Coalition of Environmental Organizations adds: "The
southern sea otter, which prior to the fur trade numbered
between 15,000 to 17,000 otters in California, with a range
throughout California's coastal waters, faces a myriad of
obstacles to recovery. Unfortunately, while the otter has
rebounded from a low of 50-300 animals in the late 1930s,
to a population averaging 2,500 over the last couple of
years, the rate of sea otter recovery has slowed
considerably and, in the last seven of ten years, the sea
otter population has failed to increase. Oil spills,
interaction with fisheries gear, habitat degradation, and
food resource limitation remain threats to sea otter
conservation. Of particular concern to sea otter
researchers is the percentage of sea otters dying from
pollution related illness."
B. Cute Will Get You Everywhere
Most people will acknowledge that sea otters are very
cute and adorable. However, is cuteness enough to justify
a tax check-off? The Legislature authorized 13 of 14 tax
check-offs for certain public servants and memorials (peace
officers memorial, fire fighters memorial, military family
assistance, veterans quality of life), special populations
who need help (Seniors Special Fund, Fund for Senior
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Citizens, sexual violence victims, emergency food
assistance, child abuse prevention), and diseases that
affect human beings (Alzheimer's disease, breast cancer,
prostate cancer, colorectal cancer). The only check-off
that does not fit into one of the previous categories is
for rare and endangered species, which does not include sea
otters because they are not listed as an endangered species
in California.
The rare and endangered species check off is currently
the second most popular, having collected $624,264 in 2004,
just behind the $636,319 collected for breast cancer
research. Arguably, given that the number of individuals
who contribute remains fairly constant, at 110,000 or
slightly under 1% of taxpayers, establishing a sea otter
fund could divert voluntary contributions from species that
are less interminably cute but whose survival faces a more
dire threat. While supporters argue that otter populations
serve as a bellwether for human health, and that the
feeding habits of otters have a top-down effect on the
marine ecosystem, should the Legislature authorize a tax
check-off that doesn't really fit with other tax
check-offs, and could negatively affect the state's second
most popular? Instead of seeking a tax check-off,
supporters should justify the causal link between otter
mortality and human in front of organizations that grant
funds for such research instead of the Legislature. The
Committee may wish to consider deleting the tax check-off
and the California Sea Otter Fund.
C. Many Worthy Causes
In the past, the Committee have expressed concern that
countless worthy causes could be funded by tax check-offs.
The Committee has stated that the current check-off system
forces them to choose between worthy charities and
non-profits for a spot on the tax return. The current
system remains subjective and is limited to those
organizations who can convince the Legislature to include
them on the form. Additionally, taxpayers may currently
contribute portions of their refunds to worthy
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organizations. Taxpayers may also claim a deduction for
charitable contributions. The Committee may wish to
consider whether the state should use the tax code to
encourage contributions to certain charitable
organizations.
Support and Opposition
Support:Monterey Bay Aquarium, Defenders of Wildlife,
Natural Resourced Defense Council, The Otter Project,
Friends of the Sea Otter, Environment California, The Ocean
Conservancy, California Federation for Animal Legislation,
Animal Switchboard, Paw Pac, California Fish and Game
Wardens' Association, The Nature Conservancy, California
League of Conservation Voters, Sierra Club California, 10
members of Congress, 3 individuals.
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Consultant: Colin Grinnell