BILL ANALYSIS Ó Senate Appropriations Committee Fiscal Summary Senator Christine Kehoe, Chair SB 164 (Simitian) Hearing Date: 05/26/2011 Amended: As Introduced Consultant: Mark McKenzie Policy Vote: G&F 6-1 _________________________________________________________________ ____ BILL SUMMARY: SB 164 would extend the repeal dates for the State Children's Trust Fund for the Prevention of Child Abuse and the Rare and Endangered Species Preservation Program voluntary contribution funds (VCFs) from January 1, 2013 to January 1, 2018. _________________________________________________________________ ____ Fiscal Impact (in thousands) Major Provisions 2011-12 2012-13 2013-14 Fund Taxpayer donations (revenue) Average annual revenues of $1,173 Special* from 2014-15 through 2018-19 Tax revenue loss Average annual revenue loss of $70General from 2014-15 through 2018-19 DSS administration Minor costs to administer child abuse General prevention funds DFG administration Minor costs to administer endangeredSpecial** species preservation funds FTB administration Minor annual administrative costs,General reimbursed from donations ____________ * Average annual donations of approximately $563,000 to the State Children's Trust Fund and approximately $610,000 to the Endangered and Rare Fish, Wildlife, and Plant Species Conservation and Enhancement Account. ** Fish and Game Preservation Fund _________________________________________________________________ ____ STAFF COMMENTS: SUSPENSE FILE. Currently, there are 15 VCFs, or "check-off" programs, on the personal income tax return which allow taxpayers to donate their own funds for various purposes. Generally, each tax check-off program has a specific sunset date and an initial minimum contribution amount of $250,000, adjusted annually for inflation, with specified exceptions. Donations to check-off programs are deductable as charitable contributions on taxpayers' income tax returns during the subsequent tax year. The State Children's Trust Fund for the Prevention of Child Abuse and the Rare and Endangered Species Program VCFs have both SB 164 (Simitian) Page 3 appeared on the state income tax form since 1984, and the minimum contribution amount for both funds for the 2011 tax year is $305,388. Funds donated to the State Children's Trust Fund are administered by the Department of Social Services (DSS), and funds donated to the Rare and Endangered Species Prevention Program are administered by the Department of Fish and Game (DFG). Both of these VCFs are set to expire on January 1, 2013. SB 164 would extend the sunset date for the State Children's Trust Fund and the Rare and Endangered Species Preservation Program VCFs until January 1, 2018. Recent data provided by the Franchise Tax Board (FTB) indicates that the State Children's Trust Fund has received annual contributions averaging $562,877 since 2003, while the Rare and Endangered Species Preservation Program has received annual contributions averaging $609,609 over the same period. Using an average marginal tax rate of 6 percent, the average annual revenue loss associated with taxpayer deductions of these amounts would be $70,350 from 2014-15 through 2018-19. FTB costs to administer the programs are minor and are reimbursed from donated amounts. DSS costs to distribute the funds for child abuse and neglect prevention and intervention programs are also minor. DFG costs to administer the distribution of endangered and rare species preservation funds are minor and may be covered by the contributions.