BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                  AB 1765
                                                                  Page  1

          CONCURRENCE IN SENATE AMENDMENTS
          AB 1765 (Jones-Sawyer)
          As Amended  August 14, 2014
          Majority vote
           
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          |ASSEMBLY:  |74-0 |(April 24,      |SENATE: |33-0 |(August 19,    |
          |           |     |2014)           |        |     |2014)          |
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           Original Committee Reference:    REV. & TAX.  

           SUMMARY  :  Authorizes the addition of a Habitat for Humanity Fund  
          (Fund) checkoff to the personal income tax (PIT) return upon the  
          removal of another voluntary contribution fund (VCF) from the  
          return.  

           The Senate amendments  :

          1)Provide that if a contribution is specified, but a designee is  
            not specified, the contribution shall be transferred to the  
            General Fund (GF) after reimbursement of the direct actual  
            costs of the Franchise Tax Board (FTB) for the collection and  
            administration of funds.

          2)Specify that the Department of Housing and Community  
            Development (HCD) shall be responsible for overseeing the  
            VCF's grant program.

          3)Modify this bill's sunset provisions to provide that, except  
            as otherwise specified,  the VCF provisions shall remain in  
            effect only until January 1 of the fifth taxable year  
            following the Fund's first appearance on the PIT return, or  
            January 1, 2021, whichever occurs first.

          4)Provides that HCD shall be reimbursed for its administrative  
            costs.

          5)Make technical corrections. 

          6)Add coauthors.  

           EXISTING LAW  :

          1)Allows taxpayers to contribute to one or more of 20 VCFs on  








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            the 2013 PIT return.

          2)Provides a specific sunset date for each VCF, except for the  
            California Seniors Special Fund and the State Parks Protection  
            Fund.

          3)Requires each VCF to meet an annual minimum contribution  
            amount to remain in effect, except for the California  
            Firefighters' Memorial Fund, the California Peace Officer  
            Memorial Foundation Fund, and the California Seniors Special  
            Fund.

           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 to the:

             a)   FTB and the State Controller for reimbursement of all  
               costs incurred in administering the VCF; and, 

             b)   HCD for grant distribution to Habitat for Humanity  
               affiliates in California that are in active status, as  
               specified, and that are exempt from federal income taxation  
               under Internal Revenue Code Section 501(c)(3).  These  
               grants shall be awarded through a competitive,  
               project-specific grant process.  Moreover, affiliates shall  
               be precluded from using grant awards for administrative  
               expenses or for any purposes outside California.  

          3)Provided for the Fund provisions' automatic sunset on either  
            January 1 of the fifth taxable year following the Fund's first  
            appearance on the 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  :  According to the Senate Appropriations  
          Committee, pursuant to Senate Rule 28.8, negligible state costs.

           COMMENTS  :  The author has provided the following statement in  
          support of this bill:

               With bond funding exhausted and redevelopment funds  








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               eliminated, California is facing virtually no state  
               investment in affordable housing.  At the same time,  
               Habitat for Humanity, a faith-based nonprofit  
               organization dedicated to building affordable homes  
               for families with limited incomes, has built,  
               rehabilitated, repaired or improved more than  
               [800,000] houses worldwide, providing simple, decent  
               and affordable shelter for more than [4] million  
               people.  However, redevelopment's [dissolution] in  
               2011 greatly impacted Habitat's ability to fulfill its  
               mission.  Allowing individuals to donate via their  
               income tax [?] return can raise hundreds of thousands  
               of dollars for Habitat for Humanity.  This money will  
               be used for the sole purpose of building affordable  
               housing throughout California.  In Louisiana, the only  
               other state that has a voluntary income tax check off,  
               the affordable housing fund raises an average of $5  
               million annually.  

          Assembly Revenue and Taxation Committee comments:

          Habitat for Humanity:  According to its Web site, Habitat for  
          Humanity is a nonprofit, ecumenical Christian ministry "founded  
          on the conviction that every man, woman and child should have a  
          decent, safe and affordable place to live."  The organization  
          has more than 1,500 local affiliates in the United States and  
          more than 70 national organizations around the world.  Habitat  
          for Humanity estimates that it has helped to build or repair  
          more than 800,000 houses worldwide.  

          Habitat for Humanity affiliates:  As noted above, this bill  
          directs HCD to distribute Fund moneys through grants to active  
          Habitat for Humanity affiliates in California.  Affiliates, in  
          turn, are community-level Habitat for Humanity offices that  
          serve a specific area in partnership with and on behalf of  
          Habitat for Humanity International.  Each affiliate coordinates  
          all aspects of home building in a local area, from fundraising  
          and building site selection, to house construction and mortgage  
          servicing.  Affiliates operate within the framework of a  
          "Habitat Affiliate Covenant" but remain independently run,  
          nonprofit organizations.  All affiliates are asked to tithe a  
          percentage of their contributions to fund house-building work in  
          other nations.    

          So many causes, so little space:  There are countless worthy  








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          causes that would benefit from the inclusion of a new VCF on the  
          state's PIT return.  At the same time, space on the return is  
          limited.  Thus, it could be argued that the current system for  
          adding VCFs to the return is inherently subjective and  
          essentially rewards causes that are able to convince the  
          Legislature to include their fund on the return. 


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


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