House of Representatives

HB 2670

clean elections; income tax return

Sponsors: Representatives May, Knaperek, Blendu, et al

 

DP

Committee on Ways & Means

X

Caucus and COW

 

Third Read

This bill as introduced contains a PROP 105 clause.

 

As Passed the House

 

HB 2670 will modify the clean elections $5 check-off so that it does not cost the state general fund an additional $5 for each check-off.

 

Current Status

HB 2670 passed the Ways and Means Committee unamended.

 

History

 

Currently, taxpayers that check the box called Clean Elections Fund Tax Reduction receive a $5 reduction in their tax liability and a $5 contribution is sent to the Clean Election Fund.  This results in a cost to the state general fund of $10 for each $5 contribution.  The reason is that the current law specifies that:

 

“A taxpayer who checks this box shall receive a five-dollar reduction in the amount of tax, and five dollars from the amount of taxes paid shall be transferred by the department of revenue to the fund.”

 

Of the $10 reduction to the general fund, the taxpayer receives a $5 tax reduction and the Clean Elections Fund receives a $5 donation.  Married filing joint returns may have two boxes checked, making the cost to the state $20.  Income tax revenues are shared with incorporated cities, so the reduction in revenues also affects these cities.

 

HB 2670 will remove the language that allows a $5 reduction but retains the $5 income tax contribution to the Clean Elections Fund.

 

Fiscal Impact: In FY 2001-2002, DOR reported that the Clean Elections check-off totaled $2.3 million (the transfer to the Clean Elections Fund).  Therefore, the total impact to the general fund was $4.6 million.  According to the Clean Elections web site, they expect this source of revenue to grow by approximately 25% in the next fiscal year.  Based on this information, the savings to the state general fund for FY 2002-2003 is approximately $2,875,000.

 

Provisions

·          Removes the provision that allows a $5 reduction in the amount of income tax owed when a taxpayer checks the Clean Elections Fund check-off box. 

 

·          Contains a Prop 105 clause that requires a three-fourths approval by the Legislature.

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·          45th Legislature                 

·          Second Regular Session      2          March 26, 2002

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