BILL NUMBER: AB 2036 CHAPTERED 09/18/02 CHAPTER 647 FILED WITH SECRETARY OF STATE SEPTEMBER 18, 2002 APPROVED BY GOVERNOR SEPTEMBER 17, 2002 PASSED THE ASSEMBLY AUGUST 30, 2002 PASSED THE SENATE AUGUST 29, 2002 AMENDED IN SENATE AUGUST 27, 2002 AMENDED IN SENATE AUGUST 5, 2002 AMENDED IN SENATE JUNE 19, 2002 AMENDED IN SENATE JUNE 11, 2002 AMENDED IN ASSEMBLY APRIL 30, 2002 AMENDED IN ASSEMBLY APRIL 15, 2002 INTRODUCED BY Assembly Member Liu FEBRUARY 15, 2002 An act to add and repeal Article 2 (commencing with Section 18711) of Chapter 3 of Part 10.2 of Division 2 of the Revenue and Taxation Code, and to amend Section 18969 of the Welfare and Institutions Code, relating to children, making an appropriation therefor. LEGISLATIVE COUNSEL'S DIGEST AB 2036, Liu. Taxpayer contributions: State Children's Trust Fund. Provisions relating to the administration of personal income taxes allowed individual taxpayers, until January 1, 2002, to contribute amounts in excess of their tax liability to the State Children's Trust Fund by way of a designation on their tax returns. The bill would reinstate those contribution provisions for taxable years beginning on or after January 1, 2002, and ending on or before January 1, 2008, unless a later enacted statute enacted before January 1, 2008, deletes or extends that date. This bill would also provide that the provisions would be repealed with respect to taxable years beginning on or after January 1 of the calendar year in which the Franchise Tax Board estimates by September 1 that the contributions made on returns filed in that calendar year will be less than a specified amount. This bill would, upon appropriation by the Legislature, provide for the specified allocation from the State Children's Trust Fund of the contribution amounts obtained pursuant to this bill. THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS: SECTION 1. Article 2 (commencing with Section 18711) is added to Chapter 3 of Part 10.2 of Division 2 of the Revenue and Taxation Code, to read: Article 2. State Children's Trust Fund 18711. (a) Any individual may designate on the tax return that a contribution in excess of the tax liability, if any, be made to the State Children's Trust Fund. (b) The contribution shall be in full dollar amounts and may be made individually by each signatory on the joint return. (c) A designation under subdivision (a) shall be made for any taxable year on the initial 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 taxpayer's account do not exceed the tax liability, if any, shown thereupon, 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 "State Children's Trust Fund for the Prevention of Child Abuse" to allow for the designation permitted under subdivision (a). (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). 18712. 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 18711 to be transferred to the State Children's Trust Fund as established by Section 18969 of the Welfare and Institutions Code. The Controller shall transfer from the Personal Income Tax Fund to the State Children's Trust Fund an amount not in excess of the sum of the amounts designated by individuals pursuant to Section 18861 for payment into that fund. 18713. All money transferred to the State Children's Trust Fund, upon appropriation by the Legislature, shall be allocated as follows: (a) To the Franchise Tax Board and the Controller for reimbursement of all cost incurred by the Franchise Tax Board and the Controller in connection with their duties under this article. (b) The State Department of Social Services for innovative child abuse and neglect prevention and intervention programs operated by private nonprofit organizations or public institutions of higher education with recognized expertise in fields related to child welfare and for evaluation, research, or dissemination of information concerning existing program models for the purpose of replication of successful models as specified in Article 5 (commencing with Section 18969) of Chapter 11 of Part 6 of Division 10 of the Welfare and Institutions Code. 18714. It is the intent of the Legislature that this article creates an additional source of funding for a specified purpose. The funds generated by this article shall not be used in place of funds from other sources that are available to the State Children's Trust Fund. 18715. This article applies to returns for taxable years beginning on or after January 1, 2002. 18716. (a) This article shall remain in effect only until January 1, 2008, and as of that date is repealed, unless a later enacted statute, which is enacted before January 1, 2008, deletes or extends that date. (b) If, any calendar year, the Franchise Tax Board estimates by September 1 that contributions described in this article made on returns filed in that calendar year will be less than two hundred fifty thousand dollars ($250,000) for taxable years beginning in 2002, or the adjusted amount specified in subdivision (c), as may be applicable, then this article is repealed with respect to taxable years beginning on or after January 1 of that calendar year. The Franchise Tax Board shall estimate the annual contribution amount by September 1 of each year using the actual amounts known to be contributed and an estimate of the remaining year's contributions. (c) For each calendar year, beginning with calendar year 2003, the Franchise Tax Board shall adjust, on or before September 1, of that calendar year, the minimum estimated contribution amount specified in subdivision (b) as follows: (1) The minimum estimated contribution amount for the calendar year shall be an amount equal to the product of the minimum estimated contribution amount for the prior September 1 multiplied by the inflation factor adjustment as specified in 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 received on or before August 1 of the calendar year pursuant to paragraph (1) of subdivision (h) of Section 17041. SEC. 2. Section 18969 of the Welfare and Institutions Code is amended to read: 18969. (a) There is hereby created in the State Treasury a fund which shall be known as the State Children's Trust Fund. The fund shall consist of funds received from a county pursuant to Section 18968, funds collected by the state and transferred to the fund pursuant to subdivision (b) of Section 103625 of the Health and Safety Code and Article 2 (commencing with Section 18711) of Chapter 3 of Part 10.2 of Division 2 of the Revenue and Taxation Code, grants, gifts, or bequests made to the state from private sources to be used for innovative and distinctive child abuse and neglect prevention and intervention projects and money appropriated to the fund for this purpose by the Legislature. The State Registrar may retain a percentage of the fees collected pursuant to Section 10605 of the Health and Safety Code, not to exceed 10 percent, in order to defray the costs of collection. (b) Notwithstanding Section 13340 of the Government Code, money in the State Children's Trust Fund, upon appropriation by the Legislature, shall be allocated to the State Department of Social Services for the purpose of funding child abuse and neglect prevention and intervention programs. The department may not supplant any federal, state, or county funds with any funds made available through the State Children's Trust Fund. (c) The department may establish positions as needed for the purpose of implementing and administering child abuse and neglect prevention and intervention programs that are funded by the State Children's Trust Fund. However, the department shall use no more than 5 percent of the funds appropriated pursuant to this section for administrative costs. (d) No children's trust fund money shall be used to supplant state General Fund money for any purpose. (e) It is the intent of the Legislature that the State Children's Trust Fund provide for all of the following: (1) The development of a public-private partnership by encouraging consistent outreach to the private foundation and corporate community. (2) Funds for large-scale dissemination of information that will promote public awareness regarding the nature and incidence of child abuse and the availability of services for intervention. These public awareness activities shall include, but not be limited to, the production of public service announcements, well designed posters, pamphlets, booklets, videos, and other media tools. (3) Research and demonstration projects that explore the nature and incidence and the development of long-term solutions to the problem of child abuse. (4) The development of a mechanism to provide ongoing public awareness through activities that will promote the charitable tax deduction for the trust fund and seek continued contributions. These activities may include convening a philanthropic roundtable, developing literature for use by the State Bar for dissemination, and whatever other activities are deemed necessary and appropriate to promote the trust fund.