BILL ANALYSIS                                                                                                                                                                                                    Ó




                   Senate Appropriations Committee Fiscal Summary
                            Senator Kevin de León, Chair


          AB 511 (Pan) - Personal Income Taxes: Voluntary Contributions:  
          American Red Cross, California Chapter's Fund
          
          Amended: June 19, 2013          Policy Vote: G&F 7-0
          Urgency: No                     Mandate: No
          Hearing Date: August 12, 2013                           
          Consultant: Robert Ingenito     
          
          This bill does not meet the criteria for referral to the  
          Suspense File.


          Bill Summary: AB 511 would create the American Red Cross,  
          California Chapters Fund (Fund) and add it to the state personal  
          income tax return as a voluntary contribution fund. The Office  
          of Emergency Services (OES) would distribute the funds to the  
          American Red Cross, California Chapters for disaster relief in  
          California. 

          Fiscal Impact: The Franchise Tax Board (FTB) estimates that this  
          bill would result in an annual revenue loss of $10,000 (General  
          Fund) beginning in 2016-17. FTB, the State Controller's Office,  
          and the OES would be reimbursed for related administrative  
          costs.

          Background: Current law allows taxpayers to contribute money to  
          one or more of 18 voluntary contribution funds during the  
          process of filing their state income tax return (tax check-off).  
          These contributions are made from taxpayers' own resources, not  
          from their tax liability (as is possible on federal tax  
          returns).  Check-off amounts are deductible as charitable  
          contributions on taxpayers' returns during the subsequent tax  
          year. With several exceptions, each voluntary contribution fund  
          has a sunset date and is required to meet a minimum contribution  
          amount of $250,000, adjusted annually for inflation.

          By September 1st of each year, FTB must (1) calculate the  
          minimum contribution about required for each check-off fund to  
          remain on the fund for the following calendar year, and (2)  
          estimate whether contributions to each fund meet that amount. If  
          FTB estimates that a fund will fail to meet its minimum  
          requirement amount, that fund is removed beginning the following  








          AB 511 (Pan)
          Page 1


          calendar year. 

          Proposed Law: This bill would establish the American Red Cross,  
          California Chapters Fund, and allow taxpayers to donate their  
          own money through a designation on the state personal income tax  
          return. The funds would be allocated to OES for disbursement to  
          the American Red Cross, California Chapters for disaster relief  
          in California.
          
          Staff Comments: FTB data indicate that roughly 90,000 taxpayers  
          (less than one percent of the statewide total) made  
          contributions to the various tax check-off programs in 2012.