BILL ANALYSIS Ó
SENATE GOVERNANCE & FINANCE COMMITTEE
Senator Lois Wolk, Chair
BILL NO: SB 803 HEARING: April 27,
2011
AUTHOR: DeSaulnier FISCAL: Yes
VERSION: 3/22/11 TAX LEVY: No
CONSULTANT: Faulkner
VOLUNTARY CONTRIBUTION FUNDS: YOUTH LEADERSHIP PROJECT
Creates the California Youth Leadership Project and
check-off.
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repealed or fail to meet the minimum contribution amount.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that fund is repealed effective for taxable years beginning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
SB 803 -- 03/22/11 -- Page 2
Senate Bill 803 establishes the California Youth Leadership
Project under the Joint Committee on Rules for the purpose
of supporting and promoting youth civic engagement. It
also creates the California Youth Leadership Project
Committee (Committee) chaired by the chair of the Joint
Committee on Rules and composed of specified appointed
members. This bill authorizes the Committee to accept
gifts and grants from any source to help perform its
functions. The Committee determines, based on funding,
when the activities of the California Youth Leadership
Project cease.
SB 803 also creates a new VCF, the California Youth
Leadership Fund, to receive contributions for the support
of the California Youth Leadership Project. This bill also
provides for the repeal of the fund on January 1 of the 5th
taxable year following the first appearance of the fund on
the return or earlier if the FTB estimates that the annual
contribution amount will not be met.
The fund will be added to the tax return when another VCF
is removed.
State Revenue Impact
The FTB estimates this bill will result in a revenue loss
of $20,000 each fiscal year the California Youth Leadership
Fund is in on the tax return.
Comments
1. Purpose of the bill. The author states, "SB 803
establishes the California Youth Leadership Project to
support and promote youth civic engagement by awarding
scholarships to youth. These scholarships will support
opportunities through which disconnected and disadvantaged
youth can discuss and develop their legislative priorities
and advocate throughout the legislative session for the
passage of key policy changes to improve the quality of
life for California's youth.
Young people need five key developmental resources in order
to become productive citizens: caring adults, safe places,
a healthy start, an effective education, and opportunities
to help others. Furthermore, young people who receive more
SB 803 -- 03/22/11 -- Page 3
of these developmental resources fare better than young
people who receive fewer, and those young people are more
likely to avoid violence, contribute to their communities,
and achieve high grades in school.
Many states and local governments have made a commitment to
help youth mature into successful adults. The California
Youth Leadership Project will be a guiding framework to
improve coordination and effectiveness of youth programs,
and to include youth in the policy and decision making
process. Nationally, youth commissions are being developed
and implemented in at least 20 states.
SB 803 will also create the California Youth Leadership
Fund to receive contributions from tax return designations
to support the California Youth Leadership Project.
Donations will support children who will likely be
associated with the California YMCA Youth & Government
Program, as well as various non-profit civic youth
organizations including the African American Youth
Leadership Program, the Asian Pacific Youth Leadership
Project, and the Chicano Latino Leadership Project.
These organizations advocate for the needs of youth and
give their unique insight on the issues they face in their
day-to-day lives covering areas such as education,
employment, access to state and local government services,
foster care, child welfare, poverty, crisis prevention,
substance abuse prevention, juvenile justice, homelessness,
safety, technology, LGBTQ rights and social justice, and
mental health".
Proponents of SB 803 have stated that, unlike other
scholarship programs, this bill offers scholarships to meet
students' needs versus one specific program or format.
Furthermore, this bill does not support one organization
over another.
2. Is the third time a charm? This bill is similar to the
author's bill, SB 516, from the prior legislative session.
SB 516 would have established the California Youth
Legislature supported by the California Youth Leadership
Fund created by AB 2017 (Hall, 2010). However, both bills
were vetoed by the Governor.
In his veto message of SB 516 (DeSaulnier, 2010), Governor
Schwarzenegger stated, "This bill is similar to a measure I
SB 803 -- 03/22/11 -- Page 4
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." AB 2252 (DeSaulnier, 2008) was also
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."
3. The more we get together. Assembly Member Hall
introduced legislation similar to last year's bill. AB 233
creates the California YMCA Youth and Government Fund.
This year, the enactment of SB 803 is not contingent on the
enactment of AB 233. Like last year, these two bills have
much in common. Does the income tax form need two
competing funds or should there be only one fund? The
Committee may want to encourage the authors to work through
their differences and combine their efforts to create one
effective VCF.
4. The Legislature can act alone. Typically, monies
received through VCFs are allocated to non-profits or state
agencies for administrative purposes, including oversight
of expenditures. It is highly unusual for the Legislature
to take on the responsibilities SB 803 requires.
Additionally, the Legislature, at its discretion, could
establish a program like the California Youth Leadership
Project without legislation. The Committee members may
wish to consider whether a bill is necessary to establish
such a committee in the Legislature or if it should be left
to the Senate and Assembly Rules Committees to decide
instead.
5. Many worthy causes. In the recent past, the Committee
has expressed concern that countless worthy causes may be
SB 803 -- 03/22/11 -- Page 5
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. The
Committee may wish to consider whether the state should use
the tax code to encourage contributions to certain
charitable organizations. In short, should the state have
a role in collecting money for charity?
6. 2011 check-offs. Following is a list of 2011
check-offs and contribution amounts received in 2010:
-------------------------------------------------------------
|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 |
SB 803 -- 03/22/11 -- Page 6
|------------------------------+------------------------------|
|State Children's Trust for |$448,081 |
|the Prevention of Child Abuse | |
-------------------------------------------------------------
7. Can we all get along? There are currently seven
VCF-related 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.
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
was placed on suspense file in Senate Appropriations on
April 11th.
SB 583 (Vargas) creates a VCF designation on the personal
income tax form for taxpayers to contribute to the ALS/Lou
Gehrig's Disease Research Fund. The bill is scheduled to
be heard in Committee on April 27th.
AB 152 (Fuentes) requires that contributions received under
the Emergency Food for Families Fund are used for the
purchase, storage, and transportation of food grown and
produced in California. The bill was amended on March 15th
and language relating to the Fund was struck.
AB 233 (Hall) creates a VCF designation on the personal
income tax form for taxpayers to contribute to the
California YMCA Youth and Government Fund. The bill was
referred to the Assembly Appropriations' suspense file on
April 6th.
AB 564 (Smyth) creates a VCF designation on the personal
income tax form for taxpayers to contribute to the
Municipal Shelter Spay-Neuter Fund. The bill passed the
Assembly Revenue and Taxation Committee on April 4th (9-0)
as amended. The amendments included striking the
requirement that a tax preparer inform the taxpayer of
existing voluntary contribution funds. The bill was
SB 803 -- 03/22/11 -- Page 7
re-referred to Assembly Appropriations on April 7th.
AB 764 (Swanson) creates a VCF designation on the personal
income tax form for taxpayers to contribute to the
Victim-Witness Assistance Fund for community-based
organization that serve minor victims of human trafficking.
The bill passed the Assembly Revenue and Taxation
Committee (9-0), as amended, on April 4th and was
re-referred to Assembly Appropriations.
AB 971 (Monning) extends the repeal date of the California
Sea Otter Fund by five years. The bill was amended and
re-referred to the Revenue and Taxation Committee on April
5th.
8. Technical amendments. Currently, there is space on the
tax return for additional check-offs. However, as written,
if this bill is enacted the California Youth Leadership
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 17, delete "not".
On page 3, line 18, replace "until" with "when".
On page 3, line 19, after "removed" add "or as soon as
space is available on the tax return".
9. Double referral. Should this bill get out of this
Committee, it has been double referred to the Senate
Committee on Rules for consideration.
Support and Opposition (4/21/11)
Support : Los Angeles Unified School District; California
Coalition for Youth.
Opposition : Unknown.