BILL ANALYSIS Ó
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|SENATE RULES COMMITTEE | AB 511|
|Office of Senate Floor Analyses | |
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|327-4478 | |
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THIRD READING
Bill No: AB 511
Author: Pan (D)
Amended: 6/19/13 in Senate
Vote: 21
SENATE GOVERNANCE & FINANCE COMMITTEE : 7-0, 6/26/13
AYES: Wolk, Knight, Beall, DeSaulnier, Emmerson, Hernandez, Liu
SENATE APPROPRIATIONS COMMITTEE : 5-0, 8/12/13
AYES: De León, Gaines, Hill, Lara, Steinberg
NO VOTE RECORDED: Walters, Padilla
ASSEMBLY FLOOR : 76-0, 4/25/13 (Consent) - See last page for
vote
SUBJECT : Income taxes: voluntary contributions: American
Red Cross,
California
SOURCE : California Chapters of the American Red Cross
DIGEST : This bill creates the "American Red Cross, California
Chapters Fund" and adds it to the state personal income tax
return as a voluntary contribution fund. The Office of
Emergency Services will distribute the funds to the American Red
Cross, California Chapters for disaster relief in California.
ANALYSIS : Existing law allows taxpayers to contribute to one
or more of 18 voluntary contribution funds, known as VCFs or
check-offs, by checking a box on their state income tax return.
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AB 511
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California law requires check-off contributions 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 in
the subsequent year.
This bill creates the "American Red Cross, California Chapters
Fund" check-off on the personal income tax form, when space is
available, to support disaster relief efforts in California.
This bill maintains all existing requirements for the program,
including the annual reporting by September 1st of each year to
determine eligibility for the following year, and the $250,000
minimum contribution requirements, beginning in the second year,
with annual adjustment for inflation and an automatic repeal
after five years.
Background
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the return until they are either repealed by a sunset date, or
if they fail to meet a minimum contribution amount. Minimum
contribution amounts are adjusted annually for inflation, with
specific exceptions. For most VCFs, the minimum contribution
amount is $250,000, beginning 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 estimate whether
contributions to each fund meet that amount. If the FTB
estimates that a fund will fail to meet its minimum contribution
amount, that fund is repealed for the following calendar year.
The following check-offs do not have a minimum contribution
requirement:
1.California Firefighters' Memorial Foundation Fund.
2.California Peace Officer Memorial Foundation Fund.
3.California Seniors Special Fund.
Proceeds from tax check-offs are dedicated to a range of
programs. The following list provides information on all the
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check-offs and how many groups are eligible to receive funding.
Some of the funds have been repealed under the terms of their
statutes.
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|Voluntary |2012 Contribution |Contribution |
|Contribution Fund |Totals |Allotment |
|--------------------+---------------------+---------------------|
|ALS/Lou Gehrig's |$137,290 |As many as apply and |
|Disease Research | |receive grants |
|Fund | |provided for by the |
| | |monies contributed. |
|--------------------+---------------------+---------------------|
|Alzheimer's |$466,485 | |
|Disease/Related | | |
|Disorders Fund | | |
|--------------------+---------------------+---------------------|
| |As many as contract | |
| |or receive grants | |
| |provided by the | |
| |monies contributed. | |
|--------------------+---------------------+---------------------|
|Arts Council Fund |$165,647 |As many as apply and |
| | |receive grants |
| | |provided by the |
| | |monies contributed. |
|--------------------+---------------------+---------------------|
|CA Breast Cancer |$440,771 |As many as apply and |
|Research Fund | |receive grants |
| | |provided from the |
| | |monies contributed. |
|--------------------+---------------------+---------------------|
|CA Cancer Research |$432,355 |As many as apply and |
|Fund | |receive grants |
| | |provided from the |
| | |monies contributed. |
|--------------------+---------------------+---------------------|
|CA Firefighters' |$152,004 |1 Group: California |
|Memorial Fund | |Fire Foundation. |
|--------------------+---------------------+---------------------|
|CA Fund for Senior |$272,742 |1 Group: California |
|Citizens | |Senior Legislature. |
|--------------------+---------------------+---------------------|
|CA Peace Officer |$136,172 |1 Group: California |
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|Memorial Foundation | |Peace Officer |
|Fund | |Memorial Commission. |
|--------------------+---------------------+---------------------|
|CA Police |$67,202 |The state CALPAL and |
|Activities League | |county CALPAL |
|(CALPAL) Fund | |chapters. |
|--------------------+---------------------+---------------------|
|CA Sea Otter Fund |$351,037 |Department of Fish |
| | |and Wildlife, and as |
| | |many as apply for |
| | |grants and contracts |
| | |provided for by 50% |
| | |of contributions. |
|--------------------+---------------------+---------------------|
|CA Seniors Special |$61,315 |The first $80K to |
|Fund | |the Area Agency on |
| | |Aging Advisory |
| | |Council of |
| | |California and the |
| | |rest to area |
| | |agencies as |
| | |allocated by the |
| | |California |
| | |Department of Aging. |
|--------------------+---------------------+---------------------|
|CA YMCA Youth and |Initial Tax Return |The first $300K to |
|Government Fund |2012 |the CA YMCA Youth |
| | |and Government |
| | |Program. The rest |
| | |is allocated in $10K |
| | |annual grants to |
| | |the: African |
| | |American Leaders for |
| | |Tomorrow Program, |
| | |Asian Pacific Youth |
| | |Leadership Project, |
| | |Chicano Latino Youth |
| | |Leadership Project. |
| | |The money is to be |
| | |used to support |
| | |program |
| | |participation. |
| | |Remaining funds |
| | |allocated to the CA |
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| | |YMCA Youth and |
| | |Government Program, |
| | |whose board may |
| | |award additional |
| | |$10K annual grants |
| | |to additional |
| | |nonprofit civic |
| | |youth organizations. |
| | |The funds |
| | |distributed to the |
| | |CA YMCA Youth and |
| | |Government Program |
| | |are to be used for |
| | |program-related |
| | |expenses. |
|--------------------+---------------------+---------------------|
|CA Youth Leadership |Initial Tax Return |1 group: Department |
|Fund |2012 |of Education to |
| | |provide for the CA |
| | |Youth Leadership |
| | |Project. |
|--------------------+---------------------+---------------------|
|CA Veterans Homes |$210,078 |The number of |
|Fund | |established |
| | |veteran's homes (7). |
|--------------------+---------------------+---------------------|
|Child Victims of |$35,317 |As many counseling |
|Human Trafficking | |and prevention |
|Fund | |centers that apply |
| | |and receive grants |
| | |provided from monies |
| | |contributed. |
|--------------------+---------------------+---------------------|
|Emergency Food for |$551,515 |1 group: Department |
|Families Fund | |of Social Services |
| | |for the Emergency |
| | |Food Assistance |
| | |Program. |
|--------------------+---------------------+---------------------|
|Municipal Shelter |$244,701 |As many as apply and |
|Spay-Neuter Fund | |receive grants |
| | |provided from the |
| | |monies contributed. |
|--------------------+---------------------+---------------------|
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|Rare & Endangered |$558,681 |1 group: Department |
|Species | |of Fish and Wildlife |
|Preservation | |endangered |
|Program | |conservation |
| | |programs. |
|--------------------+---------------------+---------------------|
|Safely Surrendered |$158,645 |1 group: Department |
|Baby Fund | |of Social Services |
| | |for Safely Surrender |
| | |Baby Law awareness |
| | |programs. |
|--------------------+---------------------+---------------------|
|School Supplies for |Initial Tax Return |As many as apply and |
|Homeless Children |2012 |receive grants |
|Fund | |provided for by the |
| | |monies contributed. |
|--------------------+---------------------+---------------------|
|State Children's |$376,243 |1 group: Department |
|Trust for the | |of Social Services |
|Prevention of Child | |for prevention and |
|Abuse | |intervention |
| | |programs. |
|--------------------+---------------------+---------------------|
|State Parks |Initial Tax Return |As many as purchase |
|Protection |2012 |a parks pass that |
|Fund/Parks Pass | |can be provided from |
|Purchase | |the monies |
| | |contributed. |
| | | |
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This bill establishes a tax check-off program, consistent with
existing tax check-off programs, to support the disaster related
work of the American Red Cross in California. The American Red
Cross is consistently the non-governmental organization on the
scene for state and locally declared disasters, as well as
smaller incidents experienced by individual families and
households, such as home fires. Establishing a tax check-off
program in support of the disaster-related work of the American
Red Cross will facilitate increased charitable giving for these
essential services.
Related Legislation
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AB 511 is not the only bill dealing with tax check-offs this
legislative session:
Assembly Bill 247 (Wagner) extends the repeal date from 2015 to
2020 for the "California Fund for Senior Citizens" tax check-off
on the tax form.
Assembly Bill 394 (Yamada) extends the repeal date from 2015 to
2020 for the "California Alzheimer's Disease and Related
Disorders Research Fund" tax check-off on the tax form.
Assembly Bill 754 (Muratsuchi) creates the "Protect Our Coast
and Oceans Fund" check-off on the tax form.
Assembly Bill 1286 (Skinner) temporarily suspends the annual
inflation adjustment for minimum contribution levels for the
"California Breast Cancer Research Fund" check-off on the tax
form.
Senate Bill 116 (Liu) extends the repeal date from 2014 to 2019
for the "Emergency Food Assistance Program" check off on the tax
form.
Senate Bill 571 (Price) creates the "Art for Kids Fund"
check-off on the tax form.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: No
According to the Senate Appropriations Committee, the FTB
estimates that this bill will result in an annual revenue loss
of $10,000 (General Fund) beginning in 2016-17. The FTB, the
State Controller's Office, and the OES would be reimbursed for
related administrative costs.
SUPPORT : (Verified 8/14/13)
California Chapters of the American Red Cross (source)
California Association of Nonprofits
California Fire Chiefs Association
OPPOSITION : (Verified 8/14/13)
Department of Finance
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ARGUMENTS IN SUPPORT : According to the author's office, AB
511 recognizes that the American Red Cross is typically the
Non-Governmental Organization first on the scene of a declared
disaster providing relief and immediate assistance to victims.
The American Red Cross is also usually the last to leave in the
aftermath, as the organization and its volunteers strive to
assist the families and businesses ravaged by the disaster.
Californians unfortunately experience wild fires, earthquakes,
flooding and other natural disasters on a too-frequent basis.
However, home fires are the biggest disaster threat to people in
this state. The ARC responded to 2, 728 local disaster
incidents in California during 2012. A total of 6,342
California families received disaster assistance following local
disasters in 2012. California is fortunate to have 32 Chapters
within our state; in 2012, we had a total of 27,602
California-based volunteers and 872 California-based employees.
States such as New Jersey, Colorado, Idaho and Louisiana have
each enacted laws in recent years encouraging voluntary
contributions for the American Red Cross on their respective
income tax forms.
ARGUMENTS IN OPPOSITION : The Department of Finance argues
that "This bill is of limited value as there is nothing
currently preventing California taxpayers from contributing
directly to this cause if they so choose. It is not clear that
a special preference should be given to the organizations
receiving the grant supported by this tax check-off, as compared
to other organizations also dedicated to providing disaster
relief in California. This bill could result in a $10,000
annual General Fund revenue loss beginning in 2014-15."
ASSEMBLY FLOOR : 76-0, 4/25/13
AYES: Achadjian, Alejo, Allen, Ammiano, Atkins, Bigelow, Bloom,
Blumenfield, Bocanegra, Bonilla, Bonta, Bradford, Brown,
Buchanan, Ian Calderon, Campos, Chau, Chávez, Chesbro, Conway,
Dahle, Daly, Dickinson, Donnelly, Eggman, Fong, Fox, Frazier,
Beth Gaines, Garcia, Gatto, Gomez, Gordon, Gorell, Gray,
Grove, Hagman, Hall, Harkey, Roger Hernández, Holden, Jones,
Jones-Sawyer, Levine, Linder, Logue, Maienschein, Mansoor,
Medina, Melendez, Mitchell, Morrell, Mullin, Muratsuchi,
Nestande, Olsen, Pan, Patterson, Perea, V. Manuel Pérez,
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Quirk, Quirk-Silva, Rendon, Salas, Skinner, Stone, Ting,
Torres, Wagner, Waldron, Weber, Wieckowski, Wilk, Williams,
Yamada, John A. Pérez
NO VOTE RECORDED: Cooley, Lowenthal, Nazarian, Vacancy
AB:ej 8/14/13 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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