BILL NUMBER: AB 357 CHAPTERED 08/30/05 CHAPTER 143 FILED WITH SECRETARY OF STATE AUGUST 30, 2005 APPROVED BY GOVERNOR AUGUST 30, 2005 PASSED THE SENATE AUGUST 18, 2005 PASSED THE ASSEMBLY MAY 19, 2005 INTRODUCED BY Assembly Member Shirley Horton (Principal coauthor: Senator Chesbro) FEBRUARY 11, 2005 An act to amend Section 1048 of, and to add Section 1051 to, the Military and Veterans Code, and to add and repeal Article 11.5 (commencing with Section 18825) of Chapter 3 of Part 10.2 of Division 2 of the Revenue and Taxation Code, relating to veterans. LEGISLATIVE COUNSEL'S DIGEST AB 357, Shirley Horton Taxpayer contributions: Veterans' Quality of Life Fund. (1) Provisions relating to the administration of personal income taxes allow individual taxpayers to contribute amounts in excess of their tax liability for the support of specified funds. This bill would allow taxpayers to designate on their tax returns that a specified amount in excess of their tax liability be transferred to the Veterans' Quality of Life Fund, which would be created by this bill. However, the bill would provide that a voluntary contribution designation for this fund may not be added on the tax return until another voluntary contribution designation is removed from that return. This bill would provide for the expenditure of all moneys contributed to the fund pursuant to these provisions, upon appropriation by the Legislature, for administrative costs and for distribution into the Morale, Welfare, and Recreation Fund for each of the veterans' homes, as provided. This bill would also provide that these voluntary contribution provisions are repealed on January 1 of the 5th taxable year following the taxable year the fund first appears on the tax return. This bill would also repeal these provisions for 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 $250,000, and an adjusted amount for subsequent taxable years. (2) Existing law requires the administrator of the veterans' homes to provide an annual report for all moneys deposited into the Morale, Welfare, and Recreation Fund and all expenditures from that fund. The report must be submitted to the Secretary of the Department of Veterans Affairs, the fiscal committees of the Assembly and the Senate, the committees of each house having jurisdiction over veterans affairs, and to the Veterans' Home Allied Council for each home. This bill would require the report for the Chula Vista Veterans Home to be submitted to the Chula Vista Veterans Home Support Foundation until the Veterans' Home Allied Council for the Chula Vista Veterans Home is established. THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS: SECTION 1. Section 1048 of the Military and Veterans Code is amended to read: 1048. (a) The Morale, Welfare, and Recreation Fund shall include proceeds from the Veterans' Quality of Life Fund, operations of the Veterans' Home Exchange, revenue derived from the issuance of prisoner-of-war special license plates pursuant to Section 5101.5 of the Vehicle Code, all funds derived from golf course green fees and range ball fees, all donations to the fund, interest earned on invested funds, funds derived from the estates of deceased members, and any other moneys or property described in this chapter, including, but not limited to, moneys and properties received by the home from estate assets located outside the home, regardless of amount. (b) The administrator shall prepare an itemized report that is organized by category and accounts for all funds deposited into the Morale, Welfare, and Recreation Fund and transmitted to the Controller under Section 1047 during the previous fiscal year and shall submit the report on or before August 20 of each year to all of the following: (1) The secretary. (2) The fiscal committees of the Assembly and the Senate. (3) The committees of the Assembly and the Senate that have subject matter jurisdiction over veterans' affairs. (4) The Veterans' Home Allied Council. SEC. 2. Section 1051 is added to the Military and Veterans Code, to read: 1051. There is hereby established in the State Treasury the Veterans' Quality of Life Fund to receive those amounts transferred to the fund pursuant to Section 18826 of the Revenue and Taxation Code. SEC. 3. Article 11.5 (commencing with Section 18825) is added to Chapter 3 of Part 10.2 of Division 2 of the Revenue and Taxation Code, to read: Article 11.5. Veterans' Quality of Life Fund 18825. (a) An individual may designate on the tax return that a contribution in excess of the tax liability, if any, be made to the Veterans' Quality of Life Fund established by Section 1051 of the Military and Veterans Code. That designation is to be used as a voluntary contribution on the tax return. (b) The contributions shall be in full dollar amounts and may be made individually by each signatory on a joint return. (c) A designation shall be made for any taxable year on the initial return for that taxable year and once made is irrevocable. If payments and credits reported on the return, together with any other credits associated with the taxpayer's account, do not exceed the taxpayer's liability, the return shall be treated as though no designation has been made. If no designee is specified, the contribution shall be transferred to the General Fund after reimbursement of the direct actual costs of the Franchise Tax Board for the collection and administration of funds under this article. (d) If an individual designates a contribution to more than one account or fund listed on the tax return, and the amount available is insufficient to satisfy the total amount designated, the contribution shall be allocated among the designees on a pro rata basis. (e) The Franchise Tax Board shall revise the form of the return to include a space labeled the "Veterans' Quality of Life Fund" to allow for the designation permitted. The form shall also include in the instructions information that the contribution may be in the amount of one dollar ($1) or more and that the contribution shall be used for veterans' homes operations. (f) Notwithstanding any other provision of law, a voluntary contribution designation for the Veterans' Quality of Life Fund may not be added on the tax return until another voluntary contribution designation is removed. (g) 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). 18826. The contributions made pursuant to Section 18825 shall be transferred for deposit in the Veterans' Quality of Life Fund established by Section 1051 of the Military and Veterans Code. 18827. 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 18825 to be transferred to the Veterans' Quality of Life Fund established by Section 1051 of the Military and Veterans Code. The Controller shall transfer from the Personal Income Tax Fund to the Veterans' Quality of Life Fund an amount not in excess of the sum of the amounts designated by individuals pursuant to Section 18825 for payment into that fund. 18828. All moneys transferred to the Veterans' Quality of Life Fund, upon appropriation by the Legislature, shall be allocated as follows: (a) To the Franchise Tax Board and the Controller for reimbursement of all costs incurred by the Franchise Tax Board and the Controller in connection with their duties under this article. (b) To the Department of Veterans Affairs for allocation to the administrators of veterans' homes. Moneys allocated pursuant to this subdivision shall be distributed proportionally to the Morale, Welfare, and Recreation Fund of each veterans home pursuant to Section 1047 of the Military and Veterans Code. (c) Appropriations from the General Fund for the funding of those purposes described in subdivision (b) may not be reduced for the purpose of, or to have the effect of, requiring increased expenditures from the Veterans' Quality of Life Fund for those described purposes. 18829. It is the intent of the Legislature that this article create an additional funding source for veterans' homes and shall be used to supplement, not supplant, other funding sources for veterans' homes. 18830. (a) This article shall remain in effect only until January 1 of the fifth taxable year following the first appearance of the Veterans' Quality of Life Fund on the tax return, and as of that date is repealed, unless a later enacted statute, that is enacted before the applicable date, deletes or extends that date. (b) If, in the second calendar year after the first taxable year the Veterans' Quality of Life Fund appears on the tax return, 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), or the adjusted amount specified in subdivision (c) for subsequent taxable years, 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 contribution. (c) For each calendar year, beginning with the third calendar year that the Veterans' Quality of Life Fund appears on the tax return, 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. (d) Notwithstanding the repeal of this article, any contribution amounts designated pursuant to this article prior to its repeal shall continue to be transferred and disbursed in accordance with this article as in effect immediately prior to that repeal. SEC. 4. Notwithstanding subdivision (b) of Section 1048 of the Military and Veterans Code, the report required to be submitted to the Veterans' Home Allied Council pursuant to paragraph (4) of subdivision (b) of Section 1048 of the Military and Veterans Code for the Chula Vista Veterans Home shall instead be submitted to the Chula Vista Veterans Home Support Foundation until the establishment of a Veterans' Home Allied Council for the Chula Vista Veterans Home. After the establishment of the Veterans' Home Allied Council for the Chula Vista Veterans Home, the report required by paragraph (4) of subdivision (b) of Section 1048 of the Military and Veterans Code shall be submitted to that Veterans' Home Allied Council.