BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                  AB 511
                                                                  Page  1

          CONCURRENCE IN SENATE AMENDMENTS
          AB 511 (Pan)
          As Amended  June 19, 2013
          Majority vote
           
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          |ASSEMBLY:  |76-0 |(April 25,      |SENATE: |39-0 |(August 26,    |
          |           |     |2013)           |        |     |2013)          |
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           Original Committee Reference:   REV. & TAX.

          SUMMARY  :  Establishes the American Red Cross, California  
          Chapters Fund (Fund) and allows taxpayers to contribute to the  
          Fund through a designation on the state personal income tax  
          (PIT) return.

           The Senate amendments  :

          1)Clarify that the Fund may be added to the PIT return as soon  
            as space is available on the return.

          2)Provide that all moneys allocated from the Fund may be carried  
            over from the year in which they were received. 

           EXISTING LAW  allows taxpayers to designate on their PIT returns  
          a contribution to any of 18 voluntary contribution funds (VCFs).

           AS PASSED BY THE ASSEMBLY  , this bill:

          1)Established the Fund in the State Treasury.

          2)Provided that all money transferred to the Fund, upon  
            appropriation by the Legislature, shall be allocated as  
            follows:

             a)   To the Franchise Tax Board (FTB) and the State  
               Controller for reimbursement of all costs incurred in  
               administering the Fund; and, 

             b)   To the Office of Emergency Services to disburse the  
               moneys to the American Red Cross, California Chapters, for  
               specified purposes.

          3)Provided for the Fund provisions' automatic repeal on either  








                                                                  AB 511
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            January 1 of the fifth taxable year following the Fund's first  
            appearance on the state PIT return or on January 1 of an  
            earlier year, if the FTB estimates that the annual  
            contribution amount will be less than $250,000, or an adjusted  
            amount for subsequent years.

           FISCAL EFFECT  :  The FTB staff estimates annual revenue losses of  
          roughly $10,000 resulting from itemized charitable deductions  
          beginning in fiscal year 2014-15.

           COMMENTS  :  There are countless worthy causes that would benefit  
          from the inclusion of a new VCF on the state's income tax  
          returns.  At the same time, space on the returns is limited.   
          Thus, it could be argued that the current system for adding and  
          retaining VCFs on the form is subjective and essentially rewards  
          causes whose proponents can convince the Legislature to include  
          their fund on the form.  


           Analysis Prepared by  :    M. David Ruff / REV. & TAX. / (916)  
          319-2098 


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