BILL ANALYSIS Ó
SENATE GOVERNANCE & FINANCE COMMITTEE
Senator Lois Wolk, Chair
BILL NO: AB 233 HEARING: 7/6/11
AUTHOR: Hall FISCAL: Yes
VERSION: 6/29/11 TAX LEVY: No
CONSULTANT: Faulkner
YMCA VOLUNTARY CONTRIBUTIONS
Creates the California YMCA Youth and Government Fund.
Background and Existing Law
Existing state law allows taxpayers to contribute money to
one or more of 15 voluntary contribution funds (VCFs) by
checking a box on their state income tax return.
California law requires contributions made through
check-offs to be made from taxpayers' own resources and not
from their tax liability, as is possible on federal tax
returns. Check-off amounts may be claimed as charitable
contributions on taxpayers' tax returns during the
subsequent year.
The Franchise Tax Board (FTB) designs tax returns to
provide for the designation of contributions to specified
funds either on the return itself or on a separate schedule
that must be attached to the return. With a few
exceptions, VCFs remain on the return until they are either
repealed or fail to meet their minimum contribution amount.
The minimum contribution amounts are adjusted annually for
inflation. For most VCFs, the minimum contribution amount
is $250,000 in the fund's second year. By September 1st of
each year, the FTB must determine the minimum contribution
amount required for each fund to remain on the form for the
following calendar year and whether estimated contributions
to each fund will be less than the minimum contribution
amount for that calendar year. If the FTB estimates that a
fund will fail to meet the minimum contribution amount,
that fund is repealed effective for taxable years beginning
on or after January 1st of the following calendar year.
Proposed Law
AB 233 -- 6/29/11 -- Page 2
Assembly Bill 233 creates the California YMCA Youth and
Government Fund. The fund will be added to the personal
income tax form when another VCF is removed and remain on
the form until January 1st of the 5th taxable year
following its first appearance or on January 1st of an
earlier year if the FTB estimates the fund will not meet
the annually required minimum contribution amount. All
monies transferred to the fund are allocated to the FTB and
Controller for reimbursement of their costs and the balance
goes to the State Department of Education for distribution
to the California YMCA Youth and Government Program (YMCA
Y&GP) for its ongoing activities on behalf of youth.
AB 233 stipulates that if the fund collects less than
$300,000 in donations, all available monies are distributed
to the YMCA Y&GP. If donations exceed $300,000, the
balance of the fund is distributed to provide annual grants
of $10,000 each to the African American Leaders for
Tomorrow Project, the Asian Pacific Youth Leadership
Project, and the Chicano Latino Youth Leadership Project.
The YMCA Y&GP Board of Directors may award additional
non-profit civic youth organizations a grant of up to
$10,000 each in order to operate civic education and mock
legislative programs. All remaining funds are distributed
to the YMCA Y&GP.
State Revenue Impact
The FTB estimates this bill will result in a revenue loss
of $15,000 each fiscal year the fund is in place.
Comments
1. Purpose of the bill . The author states, "The
California YMCA Youth & Government Program is a statewide
youth educational program annually involving more than 2200
high school students in a yearlong "hands on" civic
experience. Since its inception 63 years ago, the program
has successfully used a variety of activities to encourage
high school youth become involved, responsible and
respected citizens. As part of the YMCA Y&GP, regional
student delegations discuss public policy issues facing the
state as well as ways to implement their solutions through
the legislative and judicial processes. Teen delegates
AB 233 -- 6/29/11 -- Page 3
draft legislation, prepare issue briefs, select
governmental positions to role-play, attend statewide
training and election conferences and run for various
offices and leadership positions. The program concludes
with a Model Legislature each February at the State
Capitol.
Unfortunately, in recent years, costs to operate this
program and participant demand for financial assistance has
greatly increased making it difficult to maintain and
expand this important program for California youth. AB 233
would allow state taxpayers to voluntarily contribute to
the California YMCA Youth & Government Fund through a tax
check-off donation on their state tax return. Donations
would be used to help finance the YMCA Youth & Government
Program and its ongoing activities on behalf of youth.
Consistent with current efforts to support the California
Senior Legislature, this measure will allow California
taxpayers to empower young people through an important
program that motivates and inspires youth to become active
citizens in our state".
2. Suggested amendments . In order to mitigate concerns
about a single non-profit entity receiving these funds (See
Comments 4 and 5), Committee Staff recommends amending the
bill to "establish the youth leadership fund" require the
State Department of Education develop criteria, evaluate
applications, and award grants to the California YMCA Youth
and Government Program, the African American Leaders for
Tomorrow Project, the Asian Pacific Youth Leadership
Project, and the Chicano Latino Youth Leadership Project
commiserate with their needs. The State Department of
Education may award additional grants to nonprofit civic
youth organizations grants to operate civic education and
mock legislative programs provided funding is available.
3. Sensitive questions . Irrespective of the merits the
author attributes to the YMCA Y&GP, the bill raises a
sensitive issue for some regarding the appropriateness of
codifying a program sponsored by a religious-based
organization and using publicly-funded tax returns to
facilitate contributions. The author cites a Legislative
Counsel opinion that specifically states that this bill
does not violate the separation of church and state while
the opponents question directing funds directly to the
AB 233 -- 6/29/11 -- Page 4
religious based YMCA.
4. Rerun . This bill is similar to the author's bill, AB
2017, 2010. AB 2017 would have established the California
Youth Leadership Fund which would have provided equal
funding for the California YMCA Youth and Government
Program and the California Youth Legislature created by SB
516 (DeSaulnier, 2010). AB 2017 also provided grants to
the African-American Youth Leadership Program, the
Asian-Pacific Youth Leadership Project, and the
Chicano-Latino Youth Leadership Project if the amount of
monies received by the fund exceeded $250,000. AB 2017 and
SB 516 were contingent on one another's passage. Both
bills were vetoed by Governor Schwarzenegger.
In his veto message of AB 2017 (Hall, 2010), the Governor
stated, "This bill is contingent on the enactment of Senate
Bill 516, which I cannot support. I would ask that the
authors of these bills reconcile their efforts to support
greater youth involvement in public policy without creating
additional organizations when there are numerous
organizations and entities already dedicate to working with
youth from all backgrounds."
In his veto message of SB 516 (DeSaulnier, 2010), Governor
Schwarzenegger stated, "This bill is similar to a measure I
vetoed in 2008. I still encourage California youth to
engage in the public policy issues that directly impact
their lives such as education, employment, foster care,
homelessness, and more. However, as most parents and
adults can attest, I would also argue that youth do not
need statutory authorization to have their voices and
opinions heard. There are numerous organizations, entities
and communications in which youth can be engaged in our
legislative process."
5. The more we get together . In its original form, AB
2017 sought to establish the California YMCA Youth and
Government Program supported by a newly created California
YMCA Youth and Government Fund for the purposes of funding
the activities of the California Youth and Government Model
Legislature and Court Program. The enrolled version of AB
2017 offered a funding compromise between Assembly Member
Hall and Senator DeSaulnier and supporters of their
respective bills.
AB 233 -- 6/29/11 -- Page 5
As amended July 29th, AB 233 provides funding for the YMCA
Youth and Government Program, the African American Leaders
for Tomorrow Project, the Asian Pacific Youth Leadership
Project, and the Chicano Latino Youth Leadership Project.
Opponents of AB 233 have stated that this bill focuses on
one specific program rather than providing for students'
individual needs. Furthermore, this bill is geared towards
one organization. The Committee may wish to amend AB 233
so that these and other organizations doing similar work
can compete for funding.
6. Where does the money go ? This bill gives broad
authority to the California YMCA Youth and Government Board
of Directors. They are tasked with developing criteria,
evaluating applications, and awarding and administering
grants to eligible organizations. The Committee may wish
to amend AB 233 so that the State Board of Education has
these responsibilities.
AB 233 states that funds will be used to support program
participation by underserved students and for direct
program-related expenses. The Committee may wish to amend
the bill to further ensure funds are not used for
administrative costs or state that funds may only be used
as scholarships to youth for direct expenses of
participating in these programs.
Senator DeSaulnier introduced legislation similar to his
bill from last session as well. SB 803 creates the
California Youth Leadership Project supported by the
California Youth Leadership Fund. This year, the enactment
of AB 233 is not contingent on the enactment of SB 803.
7. Many worthy causes . Countless worthy causes may be
funded by tax check-offs. The current system remains
subjective and is limited to those organizations that can
convince the Legislature to include them on the form.
These check-offs give the state a role in collecting money
for charity. The Committee may wish to consider whether
the state should use the tax code to encourage
contributions to certain charitable organizations.
8. 2010 check-offs . Following is a list of 2010
check-offs and contribution amounts received in calendar
year 2010 with 2009 tax returns:
-------------------------------------------------------------
AB 233 -- 6/29/11 -- Page 6
|Alzheimer's Disease/Related |$426,417 |
|Disorders Fund | |
|------------------------------+------------------------------|
|Arts Council Fund |Initial Tax Return 2010 |
|------------------------------+------------------------------|
|CA Breast Cancer Research |$519,728 |
|Fund | |
|------------------------------+------------------------------|
|CA Cancer Research Fund |$275,587 |
|------------------------------+------------------------------|
|CA Firefighters' Memorial |$207,455 |
|Fund | |
|------------------------------+------------------------------|
|CA Fund for Senior Citizens |$296,144 |
|------------------------------+------------------------------|
|CA Peace Officer Memorial |$135,250 |
|Foundation Fund | |
|------------------------------+------------------------------|
|CA Police Activities League |Initial Tax Return 2010 |
|(CALPAL) Fund | |
|------------------------------+------------------------------|
|CA Sea Otter Fund |$263,543 |
|------------------------------+------------------------------|
|CA Seniors Special Fund |$59,192 |
|------------------------------+------------------------------|
|CA Veterans Homes Fund |Initial Tax Return 2010 |
|------------------------------+------------------------------|
|Emergency Food for Families |$487,333 |
|Fund | |
|------------------------------+------------------------------|
|Rare & Endangered Species |$578,215 |
|Preservation Program | |
|------------------------------+------------------------------|
|Safely Surrendered Baby Fund |Initial Tax Return 2010 |
|------------------------------+------------------------------|
|State Children's Trust for |$448,081 |
|the Prevention of Child Abuse | |
-------------------------------------------------------------
9. Can we all get along ? There are currently eight VCF
bills making their way through the Legislature. With an
estimated cost of $16,000 per bill to go through the
legislative process, combining future VCF-proposals into an
omnibus VCF bill could prove time and cost effective. If
every pending bill were to be enacted this year, there
would be 20 VCFs on the tax return. The FTB indicates that
AB 233 -- 6/29/11 -- Page 7
each of these check offs would be on the 2011 tax form.
In addition to this bill, the following bills have been
introduced this year:
SB 164 (Simitian) extends the repeal dates of both the
State Children's Trust Fund for the Prevention of Child
Abuse and the Rare and Endangered Species Preservation
Program from January 1, 2013 to January 1, 2018. The bill
is in the Assembly Appropriations Committee.
SB 583 (Vargas) reestablishes the ALS/Lou Gehrig's Disease
Research Fund. The bill is in the Assembly Appropriations
Committee. The bill is in the Assembly Appropriations
Committee.
SB 803 (DeSaulnier) creates a VCF designation on the
personal income tax form for taxpayers to contribute to
California Youth Leadership Project. The bill remains in
the Senate Appropriations Committee.
SBX1 3 (LaMalfa) creates a VCF designation on the personal
income tax form, the Help Our State Fund, for taxpayers to
contribute to the General Fund. The bill passed this
Committee, with technical amendments, on July 29th, 6-0,
and was referred to the Senate Appropriations Committee.
AB 564 (Smyth) reestablishes the Municipal Shelter
Spay-Neuter Fund and encourages all persons who prepare
state income tax returns to inform their clients in writing
that they may contribute to any voluntary contribution
check-off on the return. The bill passed this Committee,
with amendments, on July 29th, 8-1, and was referred to the
Senate Appropriations Committee.
AB 764 (Swanson) creates a VCF designation on the personal
income tax form for taxpayers to contribute to the Child
Victims of Human Trafficking Fund. The bill passed this
Committee, with technical amendments, on July 29th, 9-0,
and was referred to the Senate Appropriations Committee.
AB 971 (Monning) reestablishes the California Sea Otter
Fund. The bill passed this Committee on July 29th, 8-1,
and was referred to the Senate Appropriations Committee.
10. Technical amendment . Currently, there is space on the
AB 233 -- 6/29/11 -- Page 8
tax return for additional check-offs. However, as written,
if this bill is enacted the California YMCA Youth and
Government Fund would be added when another VCF is removed.
The Committee staff suggests the following amendments to
expedite the addition of the VCF to the tax return in the
event the bill is enacted:
On page 3, line 7, delete "not".
On page 3, line 7, replace "until" with "when".
On page 3, line 8, after "removed" add "or as soon as
space is available".
Assembly Actions
Assembly Revenue and Taxation Committee: 9-0
Assembly Appropriations Committee:17-0
Assembly Floor: 78-1
Support and Opposition (6/30/11)
Support : American Federation of State, County and
Municipal Employees, AFL-CIO; California State Alliance of
YMCAs; California YMCA Youth & Government; Channel Islands
YMCA; Corona Norco Family YMCA; Envision Schools; Magdalena
Ecke Family YMCA; Miller Family YMCA; Montecito Family
YMCA; Santa Monica Family YMCA; Simi Valley Family YMCA;
South Valley YMCA Family Delegation; YMCA of Burbank
California; YMCA of Orange County; YMCA of Superior
California; fifteen members of the Magdalena Ecke Family
YMCA Youth and Government Delegation; thirty-two
individuals.
Opposition : California Coalition for Youth.