BILL ANALYSIS
SENATE REVENUE & TAXATION COMMITTEE
Senator Lois Wolk, Chair
SB 516 - DeSaulnier
Amended: April 14, 2009
Hearing: April 22, 2009 Fiscal: Yes
SUBJECT: Establishes the California Youth Legislature, the
California Fund for Youth, and a designation for
a voluntary contribution on the personal income
tax return to the California Fund for Youth.
EXISTING FEDERAL LAW provides a check off to direct $3
of a taxpayer's tax liability to the Presidential Campaign
Fund. Designation of the $3 amount does not affect a
taxpayer's tax liability or refund amount.
EXISTING STATE LAW allows taxpayers to make
contributions of their own funds (not tax liability) on
their personal income tax returns to any of the 15
voluntary contribution funds (VCF) listed on the 2008
return.
With the following exceptions, VCFs remain on the return
until they are either repealed or fail to meet their
minimum contribution amount:
Except for the California Seniors Special Fund,
which has no sunset date, each VCF has a specific
sunset date.
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Except for the California Seniors Special Fund, the
California Firefighters Memorial Fund, and the
California Peace Officer Memorial Foundation Fund,
each VCF must meet an initial minimum contribution
amount of $250,000.
Except for the California Fund for Senior Citizens,
each of the remaining VCF minimum contribution amounts
is adjusted annually for inflation which is based on
the percentage change in the California Consumer Price
Index.
The FTB is required to make the following two determinations
for each VCF by September 1
of each calendar year:
1. The minimum contribution amount required for the
VCF to remain on the return for the following
calendar year, and
2. Whether estimated contributions to the VCF will be
less than the minimum contribution amount for that
calendar year.
If FTB estimates that a VCF will fail to meet or
exceed the minimum contribution amount for a calendar year,
that VCF is repealed effective January 1 of that calendar
year.
Current state law provides that if the number of
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contingent voluntary contribution designation<1> that are
eligible to be added to the personal income tax return is
greater than the number of designations removed, then the
voluntary contribution designations will be queued and
added to the return in order of the date of enactment. In
other words, this method enables FTB to establish an order
for check-offs to appear of the form as others expire.
THIS BILL would establish the California Fund for
Youth and would allow taxpayers to designate their own
funds (not tax liability) for contribution to the fund on
their tax returns in full dollar amounts of $1 or more.
Each signatory on a joint return may make the contributions
individually. The designations for any taxable year must
be made on the initial return for the taxable year and,
once made, are irrevocable.
Upon enactment, this bill would require FTB to revise the
personal income tax return to include a designation space
for the fund. It would allow the voluntary contribution
designation to remain on the tax return until January 1,
2015, unless a later enacted statute deletes or extends
that date.
THIS BILL would specify that if payments and credits
reported on the return do not exceed the taxpayer's
liability, then the taxpayer's return would be treated as
if no designation has been made.
THIS BILL would establish the California Youth
Legislature. It would also require the Controller to
transfer money designated for this fund by taxpayers from
the Personal Income Tax Fund to the California Youth
Legislature.
------------------------
<1>1 A contingent voluntary contribution designation is a
voluntary contribution designation that contains specific
language stating that it may not be added to the return
until another voluntary contribution designation is removed
from the return.
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FISCAL EFFECT:
FTB staff indicates that there is currently no space
available on the personal income tax return for additional
voluntary contributions and that the return could increase
to three pages if this bill is enacted in its current form.
If the tax return increases to three pages, the associated
costs could exceed $2 million. FTB states that based on
the amount of contributions expected to be received by the
fund, that it would not be reimbursed in the short term.
COMMENTS
A. Purpose of the bill
According to the author, "SB 516 will create the
California Youth Legislature to examine and discuss policy
and fiscal issues affecting the interests, needs, and
conditions of the youth of California."
The bill will also create the State Treasury until
2015, the California Fund for Youth. The fund will receive
contributions from tax return designations to support the
sessions of the Youth Legislature.
B. So Many Worthy Causes
In the past, the Committee has expressed concern that
countless worthy causes may be funded by tax check-offs.
The Committee has stated that the current check-off system
forces them to choose between worthy charities and
non-profits for a spot on the tax return. The current
system remains subjective and is limited to those
organizations that can convince the Legislature to include
them on the form. Additionally, taxpayers may currently
contribute portions of their refunds to worthy
organizations. Taxpayers may also claim a deduction for
charitable contributions. The Committee may wish to
consider whether the state should use the tax code to
encourage contributions to certain charitable
organizations.
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In addition to this bill, the following bills have
been introduced this year:
AB 292 (Yamada, 2009/2010) would extend the expiration
date of the Alzheimer's Disease and Related Disorders
Research Fund from January 1, 2010, to January 1, 2015.
This bill is currently set for hearing in the Assembly
Revenue and Taxation Committee.
AB 1049 (Torrico, 2009/2010) would create a VCF
designation on the personal income tax return for taxpayers
to contribute to the Safely Surrender Babies Fund. This
bill has been referred to the Assembly Revenue and Taxation
Committee.
AB 1088 (Fletcher, 2009/2010) would create a VCF
designation on the personal income tax return in order for
taxpayers to contribute to the Morale, Welfare, and
Recreation Fund for each of the veterans' homes, as
provided. This bill is currently set for hearing in the
Assembly Veterans Affairs Committee.
SB 91 (Correa, 2009/2010) would extend the expiration
date of the California Fund for Senior Citizens from
January 1, 2010, to January 1, 2015. This bill is currently
set for hearing in the Senate Revenue and Taxation
Committee.
C. 2008 Check-Offs
Contributions to voluntary funds in 2008 were as
follows:
--------------------------------------------
| Voluntary Contribution | 2008 |
|Fund |Contribution|
| | s |
|-------------------------------+------------|
|Alzheimer's Disease/Related | $505,510 |
|Disorders Fund | |
|-------------------------------+------------|
|California Breast Cancer | $596,729 |
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|Research Fund | |
|-------------------------------+------------|
|California Firefighters' | $250,060 |
|Memorial Fund | |
|-------------------------------+------------|
|California Fund for Senior | $288,695 |
|Citizens | |
|-------------------------------+------------|
|California Military Family | $306,750 |
|Relief Fund | |
|-------------------------------+------------|
|California Peace Officer | $184,261 |
|Memorial Foundation Fund | |
|-------------------------------+------------|
|California Sea Otter Fund | $294,966 |
|-------------------------------+------------|
|Emergency Food for Families | $438,582 |
|Fund | |
|-------------------------------+------------|
|Rare and Endangered Species | $580,823 |
|Preservation Fund | |
|-------------------------------+------------|
|State Children's Trust for the |$528,609 |
|Prevention of Child Abuse | |
--------------------------------------------
-------------------------------
| Newly Added as of January |
|2009 |
|-------------------------------|
|ALS/Lou Gehrig's Disease |
|Research Fund |
|-------------------------------|
|California Cancer Center |
|Research Fund |
|-------------------------------|
|California Ovarian Cancer |
|Research Fund |
|-------------------------------|
|California Seniors Special |
|Fund |
|-------------------------------|
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|Municipal Shelter Spay and |
|Neuter Fund |
| |
| |
-------------------------------
D. Suggested amendments
It is staff's recommendation that the author add
contingency language into the bill in order to make the
bill equitable to those that currently are in the queue
and/or those bills which are still going through the
legislative process.
Staff further recommends that the bill be amended to
specify an annual minimum contribution amount as this is
the only way to periodically review the fund.
Additionally, the author may want to consider taking
the following technical amendments:
First: On page 2, line 1, after "SECTION 1." insert:
"Section 18731 of the Revenue and Taxation Code, as amended
by Section 1 of Stats. 1996, Ch. 960, is repealed."
Second:On page 3, line 30, strikeout "SEC. 2" and insert:
"SEC. 3."
Support and Opposition
Support: California Association of Student Councils
Los Angeles Unified School District
California Youth Empowerment Network
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Consultant: Marisa Lanchester
April 17, 2009