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AB 691

Relating to: service award program. (FE)

2025-2026 Regular Session Introduced by Elijah Behnke and 5 co-sponsors

The bill creates nonrefundable California tax credits for pet adoption costs up to $250 and unreimbursed medical expenses up to $500 in the first year after adoption.

Failed to pass pursuant to Senate Joint Resolution 1
0
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Bill Summary · AB 691

AB 691 — Personal Income Tax Credits: Pet Adoption and Medical Expenses

Author: Wallis | Introduced: Feb 14, 2025
Status: From committee — Without further action pursuant to Joint Rule 62(a) (6/5/2025)

Purpose

AB 691 would create temporary California personal income tax credits to encourage adoption of companion animals from qualified rescue organizations and to offset early veterinary costs after adoption.

Key provisions

  • Adds Section 17052.27 to the Revenue and Taxation Code for taxable years beginning on or after Jan 1, 2025 and before Jan 1, 2030.
  • Allows a credit against "net tax" for:
    • Qualified pet adoption costs — up to $250 per taxpayer (adoption fee).
    • Qualified pet medical expenses — up to $500 per taxpayer for unreimbursed veterinary care in the first 12 months following adoption.
  • Credits are nonrefundable credits against net tax (the bill does not make them refundable).
  • Limits:
    • Adoption credit may be claimed only once in the life of a taxpayer.
    • Medical-expense credit may be claimed with respect to qualified medical expenses for only one qualified pet in the life of a taxpayer, and the medical credit for that pet cannot exceed $500 cumulatively.
    • For spouses filing a joint return, these lifetime restrictions apply to each spouse separately.
  • Definitions:
    • “Qualified animal rescue organization” — California-domiciled public animal control agency/shelter, humane society shelter, or nonprofit rescue group exempt under IRC §501(c)(3) primarily engaged in rescuing/placing animals.
    • “Qualified pet” — dog, cat, or other companion animal adopted from a qualified organization and not used in a trade or for production of income.
    • “Qualified pet medical expenses” — unreimbursed veterinary care (vaccinations, spay/neuter, necessary treatments) within 12 months after adoption.

Documentation and enforcement

  • Taxpayers must provide, in the form and manner prescribed by the Franchise Tax Board (FTB), documentation on request, including:
    • Adoption receipt/certification showing adoption date, pet description, and adoption fee.
    • Vet receipts/invoices for expenses in the first 12 months.
    • A declaration under penalty of perjury that the taxpayer has not previously claimed the applicable credit.
  • Because the bill requires a declaration under penalty of perjury, the digest notes it would expand the scope of perjury — characterized as creating a state-mandated local program.

Reporting, sunset, and other procedural details

  • Legislative findings: purpose is to encourage pet adoptions; performance indicators are (1) number of taxpayers claiming the credit and (2) total dollar value of credits allowed.
  • FTB must report to the Legislature by Dec 1, 2026 and annually thereafter on those indicators.
  • The section remains operative only until Dec 1, 2030, after which it is repealed.
  • The bill takes effect immediately as a tax levy under the California Constitution.

Fiscal and local-government considerations

  • The bill creates a state tax expenditure (reduced tax revenues) while including reporting requirements for evaluating goals and use.
  • The text asserts “No reimbursement is required…” under Article XIII B because applicable costs fall under changes to crimes/infractions; however, the bill’s declaration requirement (penalty of perjury) is identified as expanding exposure to perjury liability and thus could impose local responsibilities for enforcement.

Who is affected

  • Individual California taxpayers who adopt a companion animal from a qualifying in‑state rescue organization during the eligible period and who incur unreimbursed veterinary expenses in the first 12 months.
  • Franchise Tax Board (administration and reporting duties).
  • Potential minor administrative/enforcement effects for local agencies related to perjury enforcement.

Legislative status (selected actions)

  • Introduced Feb 14, 2025; referred and amended in Assembly Revenue & Taxation Committee.
  • Set for hearings, referred to suspense file; ultimately reported "From committee: Without further action pursuant to Joint Rule 62(a)" on June 5, 2025 (no further action taken).

Compiled from official sources — confirm details with the bill’s official record.

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