BILL ANALYSIS                                                                                                                                                                                                    


            Senator Gilbert Cedillo, Chair

                                             AB 205 - Goldberg

                                Amended: As Proposed To Be Amended


            Hearing: July 9, 2003                      Fiscal: Yes

            SUBJECT:  Changes the tax filing allowances for domestic  

            EXISTING LAW 

             Existing federal and state tax laws  provide guidelines for  
            determining a taxpayer's filing status when filing an  
            income tax return.  For example, federal law states a  
            husband and wife can file a joint income tax return even  
            though one of the spouses has no gross income or  
            deductions, except in certain cases.

            Generally, under state law an individual must use the same  
            filing status for their California income tax return that  
            was used on their federal income tax return filed for the  
            same taxable year.  

            Under federal and state income tax law, spouses who file a  
            joint tax return are each responsible for the accuracy of  
            the return and for the full tax liability for that tax  
            year.  These obligations apply regardless of which spouse  
            earns the income.  The concept of obligating each spouse  
            separately for all of the tax liability reflected on the  
            joint return is called joint and several liability.  Under  
            certain circumstances individuals who file joint returns  
            may be eligible for relief from joint and several  

            Existing state and federal laws provide various tax credits  
            designed to provide tax relief for taxpayers who incur  


                                                         AB 205-Goldberg

            certain expenses (e.g., child adoption) or to influence  
            behavior, including business practices and decisions.

            The terms taxpayer, individual, person, husband, and wife,  
            and the determination of marital status are defined within  
            the state income tax law.  In addition, the term domestic  
            partner is defined by reference to Family Code Section 297,  
            which states that California recognizes a domestic  
            partnership as being established when specified  
            requirements are met.  

             State tax law  provides that the taxpayer's domestic partner  
            be treated as the spouse of the taxpayer for purposes of  
            determining various tax benefits relating to medical  
            expenses, such as:
                   medical expenses deductible as an itemized  
                   medical expenses deductible as an adjustment to  
                 gross income for self-employed individual health  

                   an exclusion from gross income for  
                 employer-provided accident and health insurance,

                   an exclusion from gross income for medical expense  
                 reimbursement if the expense was not previously  
                 deducted, and 

                   long-term health care insurance deductible as a  
                 medical expense.

            State law, under the Family Code, defines marriage as a  
            personal relation that arises out of a civil contract  
            between a man and a woman.  All real or personal property,  
            wherever situated, that is acquired by a married person  
            during the marriage while living in California is  
            considered community property.

            THIS BILL 

            This bill would allow domestic partners to file personal  
            income tax returns as either 1) married filing joint, or 2)  


                                                         AB 205-Goldberg

            married filing separate. 

            In addition, this bill would make changes to various  
            California laws regarding domestic partners, including the  
            creation of community property rights.  This subject matter  
            was discussed in the Senate Judiciary Committee and is not  
            addressed in this analysis-this analysis is limited to the  
            tax implications.

            FISCAL EFFECT: 

            According to the FTB:

            |                       Revenue Impact                       |
            |                                                            |
            |           Beginning on or After January 1, 2005            |
            |                                                            |
            |                        ($ Millions)                        |
            |                                                            |
            | Fiscal Year |    2004-05    |   2005-06    |    2006-07    |
            |             |               |              |               |
            |Revenue Loss |     -1.0      |     -5.0     |-7.5           |
            |             |               |              |               |

            Note:  It is assumed for the second full fiscal year  
            (2006-07) that there would be a significant increase in  
            impact due to the incentive effect of potentially large tax  
            savings for those households not currently registered.

            This analysis does not consider the possible changes in  
            employment, personal income, or gross state product that  
            could result from this measure.



                                                         AB 205-Goldberg


            A.   Author's Amendments

            The author plans to take technical amendments suggested by  
            FTB to clarify specific tax related terms and to clarify  
            that domestic partners cannot file income taxes as "head of  

            B.   Purpose of the bill

            The author notes the following purposes of the bill:

            This bill will provide more equity to registered domestic  
            partners.  It does not provide complete equality because  
            heterosexual couples are institutionally and legally  
            recognized by marriage while gay and lesbian couples are  
            not and will not under this bill.  Registered domestic  
            partners are currently afforded approximately fifteen  
            rights under law, while married couples are provided  
            hundreds of rights and responsibilities.  

            This bill will expand rights, responsibilities, duties and  
            obligations to registered domestic partners and their  
            families.  While marriage is the only way we will provide  
            full equality, Proposition 22 prohibits us from pursuing a  
            marriage bill at this time.  There is no reason not to  
            expand the number of rights and responsibilities.  These  
            legal protections and responsibilities guide couples  
            through nearly every complex legal situation faced by  
            families, such as death, custody disputes, illness,  
            childbirth and adoption. These laws regulate such diverse  
            areas as:

             ?  Financial support during and after the relationship,  
               and community property ownership protections 
             ?  Protection from threats and crimes against the families  
               of public officials

             ?  Child custody, visitation, and duties of financial  
               support of children

             ?  Anatomical gifts, consent to autopsy and disposition of  


                                                         AB 205-Goldberg

               remains, and burial in family cemeteries

             ?  Bereavement leave, family care and medical leave,  
               coverage of partners under medical, dental, life, and  
               disability insurance, pension rights, and death benefits  
               for surviving partners of firefighters and police  

             ?  Mutual responsibility for debts to third parties

             ?  Obligations to make disclosures regarding family  
               relationships and to take other steps to avoid nepotism,  
               conflicts of interest and self-dealing

             ?  Housing protections, including access to family student  
               housing, senior citizen housing, and rent control  

             ?  Government-regulated benefits, including workers  
               compensation, public assistance, transfer of licenses  
               upon death, and the ability to apply for absentee  
               ballots for a partner

             ?  Communication privileges, including the right not to be  
               forced to testify against a partner

             ?  Legal claims dependent upon family status, including  
               claims for victim's compensation

            There is simply no good reason to deny additional rights  
            and duties. Granting these rights and responsibilities will  
            further the State's interest in promoting stable and  
            lasting family relationships, and will protect family  
            members from the economic and social consequences of  
            abandonment, separation, the death of loved ones, and other  
            life crises.  It will also protect couples, the children  
            they are raising, third parties, and the State from  
            numerous harms and costs.
            B.   Proposition 22: California's Defense of Marriage Act  

            In 2000, California joined a number of other states in  
            enacting a "mini-DOMA" when voters passed Proposition 22,  


                                                         AB 205-Goldberg

            the California Defense of Marriage Act. Proposition 22  
            stated "Only marriage between a man and a woman is valid or  
            recognized in California." Passage of the initiative means  
            that if a same-sex couple, legally married in another  
            state, moves to California, their valid marriage will not  
            be recognized in California.  Opponents to this measure  
            note that it violates Proposition 22 and state that "AB 205  
            is an in-your-face bill, letting the voters know that  
            politicians do not value the input of constituents."  The  
            opponents of the measure further note that tax filing  
            privileges should specifically be provided to married  
            couples made up of a man and woman only.  The Committee on  
            Moral Concerns argues that "California voters decided  
            against gay and lesbian marriages  [and therefore]  
            equalizing domestic partnerships violates the will of the  
            people." On this same point, the Campaign for California  
            Families states that the "people of California have spoken  
            loud and clear that they want marriage protected. In March  
            2000, more than 61 percent of the voters voted to protect  
            marriage rights for only a man and a woman."  The  
            California Catholic Conference states that this bill "is a  
            veiled attempt to change the definition of marriage in our  

            Support and Opposition


            AIDS Legal Referral Panel
            AIDS Project Los Angeles
            Alianza Network Services (Tustin)
            All Saints Church, Pasadena
            American Association of University Women
            American Civil Liberties Union 
            American Federation of State, County, and Municipal  
            Anti-Defamation League 
            Asian Law Caucus
            Attorney General Bill Lockyer
            Bay Area Lawyers for Individual Freedom
            Being Alive Los Angeles, Inc.


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            Billy DeFrank LGBT Community Center (San Jose)
            California Capital Political Action Committee (Sacramento)
            California Commission on the Status of Women
            California Conference of Local AIDS Directors
            California Faculty Association
            California Independent Public Employees Legislative Council
            California Labor Federation, AFL-CIO
            California National Organization for Women
            California Nurses Association
            California School Employees Association
            California State Employees Association
            California State Teachers' Retirement System
            California STD Controllers Association
            California Teachers Association
            California Women's Agenda
            CalPERS (support if amended)
            Central American Resource Center
            Chinese for Affirmative Action
            City and County of San Francisco
            City Council Member Dave Jones (Sacramento)
            City Council Member Jeffrey Prang (West Hollywood)
            City of Los Angeles
            City of West Hollywood
            Claremont United Church of Christ, Congregational
            Coalition California Welfare Rights Organizations, Inc.
            Coalition LA
            Conference of Delegates of California Bar Associations
            Congregational Church of Belmont
            Congregation Kol Ami (West Hollywood)
            Congregation Sha'ar Zahav (San Francisco)
            Consumer Attorneys of California
            Eleanor Roosevelt Democratic Club of Orange County
            Elections Committee of the County of Orange
            Equality California
            Equal Rights Advocates (San Francisco)
            Family Builders by Adoption
            First Congregational Church, UCC (Pasadena)
            First Congregational Church of Long Beach
            First Congregational United Church of Christ (San  
            First Presbyterian Church (Baldwin Park)
            First Presbyterian Church (Palo Alto)
            Gay & Lesbian Community Services Center of Orange County
            Gray Panthers


                                                         AB 205-Goldberg

            Holy Redeemer Lutheran Church (San Jose)
            Human Rights Campaign
            Human Rights Watch
            Human Rights/Fair Housing Commission (Sacramento)
            Irvine United Congregational Church 
            Japanese American Citizens League
            La Mesa Community Church (Santa Barbara)
            Lambda Legal Defense and Education Fund, Inc.
            Lawyers' Committee for Civil Rights of the SF Bay Area
            Legal Aid Society - Employment Law Center
            Legal Services for Children, Inc.
            Lieutenant Governor Cruz Bustamante
            Little Brown Church of Sunol
            Los Angeles Gay & Lesbian Center
            Love Sees No Borders (Sunnyvale)
            Lutheran Church of the Master (West Los Angeles)
            Metropolitan Community Church Los Angeles
            Metropolitan Community Church in the Valley (North  
            Metropolitan Community Church of the Coachella Valley
            Metropolitan Community Church of San Francisco 
            Mexican American Legal Defense and Educational Fund 
            Mira Vista United Church of Christ (El Cerrito)
            National Association of Social Workers
            National Conference for Community and Justice (Santa  
            National Conference for Lesbian Rights
            National Gay and Lesbian Task Force
            National Latina/Lesbian, Gay, Bisexual & Transgender  
            National Organization for Women (San Fernando Valley -  
            Northeast LA Chapter)
            Niles Congregational Church
            Northminster Presbyterian Church of El Cerrito
            Older Women's League of California
            Our Family Coalition (San Francisco)
            Out & Equal Workplace Advocates
            Pacific Pride Foundation
            Parkside Community Church (Sacramento)
            People for the American Way
            Pioneer Congregational Church (Sacramento)
            PFLAG-San Francisco
            PFLAG-San Jose/Peninsula Chapter
            PFLAG-Ventura County


                                                         AB 205-Goldberg

            Planned Parenthood Affiliates of California
            Redwoods Presbyterian Church (Larkspur)
            San Diego Democratic Club
            San Francisco City Attorney Dennis Herrera
            Santa Barbara County Democratic Central Committee
            Secretary of State Kevin Shelley
            Southern CA HIV Advocacy Coalition
            Southern CA Nevada Conference United Church of Christ
            St. Paul Lutheran Church (Oakland)
            Stonewall Democratic Club of Los Angeles
            Stonewall Democratic Club of Greater Sacramento
            Tenderloin Housing Clinic (San Francisco)
            The Center of San Diego County 
            The Lambda Letters Project
            The Sexual Orientation Bias Committee of the LA County Bar  
            The Tom Homann Law Association (San Diego)
            Transgender Law Center
            Trinity Lutheran Church (Alameda)
            United Church of Christ, San Francisco
            University Lutheran Chapel (Berkeley)
            Wesley United Methodist Church (Fresno)
            West Hollywood Democratic Club
            West Hollywood Presbyterian Church
            Zuna Institute
            900 Individuals
            California Catholic Conference
            California Federation of Republican Women
            Campaign for California Families
            Committee on Moral Concerns
            Eagle Forum of California
            1 Individual


            Consultant: Gayle Miller
            07/07/:3 16:44