BILL ANALYSIS Ó
SENATE GOVERNANCE & FINANCE COMMITTEE
Senator Lois Wolk, Chair
BILL NO: SB 116 HEARING: 4/10/13
AUTHOR: Liu FISCAL: Yes
VERSION: 1/16/13 TAX LEVY: No
CONSULTANT: Miller
PERSONAL INCOME TAXES: CONTRIBUTIONS: EMERGENCY FOOD
ASSISTANCE PROGRAM.
Extends the Emergency Food for Families Check-Off from 2014
until 2019.
Background and Existing Law
Existing state law allows taxpayers to contribute money to
one or more of 18 voluntary contribution funds (VCFs or
check-offs) 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 in 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repealed or fail to meet their minimum contribution amount.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. The Emergency Food
for Families check off's minimum contribution amount for
the 2012 calendar year is $347,554. 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that fund is repealed effective for taxable years beginning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.
SB 116 -- 1/16/13 -- Page 2
Except for the California Senior Legislature (which is
fully funded by the check off and operates in concert with
the Legislature), the proceeds from the check-offs either
go to quasi-government organizations or to non-profits as a
competitive grant. The following list provides the current
information on all the check offs as well as how many
groups are eligible to receive the funds (some of the funds
have been repealed by their own terms).
------------------------------------------------------------
|Voluntary | 2012 | Contribution Allotment |
|Contribution Fund |Contribution| |
| | Totals | |
|---------------------+------------+-------------------------|
|ALS/Lou Gehrig's |$137,290 |As many as apply and |
|Disease Research | |receive grants that are |
|Fund | |provided for by the |
| | |monies contributed. |
|---------------------+------------+-------------------------|
|Alzheimer's |$466,485 |As many as contract or |
|Disease/Related | |receive grants provided |
|Disorders Fund | |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 Fire |
|Memorial Fund | |Foundation |
|---------------------+------------+-------------------------|
|CA Fund for Senior |$272,742 |1 Group: California |
SB 116 -- 1/16/13 -- Page 3
|Citizens | |Senior Legislature |
|---------------------+------------+-------------------------|
|CA Peace Officer |$136,172 |1 Group: California |
|Memorial Foundation | |Peace Officer Memorial |
|Fund | |Commission |
|---------------------+------------+-------------------------|
|CA Police Activities |$67,202 |The state CALPAL and |
|League (CALPAL) Fund | |county CALPAL chapters |
|---------------------+------------+-------------------------|
|CA Sea Otter Fund |$351,037 |Department of Fish and |
| | |Wildlife, and as many |
| | |that apply for grants |
| | |and contracts provided |
| | |for by 50% of the monies |
| | |contributed. |
|---------------------+------------+-------------------------|
|CA Seniors Special |$61,315 |The first $80K to the |
|Fund | |Area Agency on Aging |
| | |Advisory Council of |
| | |California and the rest |
| | |to as many area agencies |
| | |that the California |
| | |Department of Aging |
| | |allocates available |
| | |contributed monies to. |
|---------------------+------------+-------------------------|
|CA YMCA Youth and |Initial Tax |The first $300K to the |
|Government Fund |Return 2012 |CA YMCA Youth and |
| | |Government Program and |
| | |the rest of the monies |
| | |allocated in $10K annual |
| | |grants as follows: |
| | |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. Any |
| | |remaining funds will be |
| | |allocated to the CA YMCA |
| | |Youth and Government |
| | |Program. The Board of |
| | |Directors for the CA |
SB 116 -- 1/16/13 -- Page 4
| | |YMCA Youth and |
| | |Government Program 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 |1 group: Department of |
|Fund |Return 2012 |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 and |
|Human Trafficking | |prevention centers that |
|Fund | |apply and receive grants |
| | |provided from monies |
| | |contributed. |
|---------------------+------------+-------------------------|
|Emergency Food for |$551,515 |1 group: Department of |
|Families Fund | |social services for the |
| | |Emergency Food |
| | |Assistance Program. |
|---------------------+------------+-------------------------|
|Municipal Shelter |$244,701 |As many shelters as |
|Spay-Neuter Fund | |apply and receive grants |
| | |provided from the monies |
| | |contributed. |
|---------------------+------------+-------------------------|
|Rare & Endangered |$558,681 |1 group: Department of |
|Species Preservation | |Fish and Wildlife |
|Program | |endangered conservation |
| | |programs. |
|---------------------+------------+-------------------------|
|Safely Surrendered |$158,645 |1 group: Department of |
|Baby Fund | |Social Services for |
SB 116 -- 1/16/13 -- Page 5
| | |Safely Surrender Baby |
| | |Law awareness programs. |
|---------------------+------------+-------------------------|
|School Supplies for |Initial Tax |As many as apply and |
|Homeless Children |Return 2012 |receive grants that are |
|Fund | |provided for by the |
| | |monies contributed. |
|---------------------+------------+-------------------------|
|State Children's |$376,243 |1 group: Department of |
|Trust for the | |Social Services for |
|Prevention of Child | |prevention and |
|Abuse | |intervention programs. |
|---------------------+------------+-------------------------|
|State Parks |Initial Tax |As many as purchase a |
|Protection |Return 2012 |parks pass that are |
|Fund/Parks Pass | |provided for by the |
|Purchase | |monies contributed. |
------------------------------------------------------------
Proposed Law
Senate Bill 116 extends the Emergency Food Assistance
Program check off on the tax form from January 1, 2014, the
current expiration date, until January 1, 2019. The bill
maintains all the existing requirements for the program
including the annual reporting by September 1st of each
year and the minimum contribution requirements adjusted for
inflation.
State Revenue Impact
The FTB estimates that this bill will result in about
$10,000 in lost revenue annually.
Comments
1. Purpose of the bill . According to the author's office,
"SB 116 extends the sunset date for the Emergency Food for
Families "check-off" fund to 2019. It allows Californians
to continue fighting hunger through contributing to the
Emergency Food for Families Fund on state income tax
SB 116 -- 1/16/13 -- Page 6
returns. These funds provide for local banks to purchase
healthy food for low income families." The Emergency Food
for Families check off has consistently had one of the two
highest contribution amounts with over $500,000 annually.
2. Is there a better way ? Committee analyses previously
expressed concern over adding a page to the tax form to
accommodate the check-offs. Since that time, the tax form
has grown by a page so every tax check off proposed last
year was included in the booklet for the 2012 tax year (see
chart above). With the proliferation of these bills, the
Committee may further wish to consider a different tax
check-off system all together. For example, any group that
would like the opportunity for check off proceeds and any
group currently on the form could apply to the FTB and be
listed in the pages of the FTB tax booklet with an
associated number. The tax form could include 10 lines for
taxpayers to indicate the number from the form and then
those groups would receive the funds. For example, if the
Emergency Food for Families was number 1234 in the booklet,
the taxpayer would indicate that he or she wanted $10 to go
to "1234" on the form. This way, the Legislature would no
longer have to choose groups for the form and all
non-profits and quasi-government organizations would be
similarly situated for a tax check off.
3. Charity & Government . Countless worthy causes may be
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.
These check-offs give the state a role in collecting money
for charity in addition to the role the tax system plays in
allowing deductions for charitable contributions. The
Committee may wish to consider whether the state should use
the tax code to encourage contributions to certain
charitable organizations.
4. Technical amendments . The author will take amendments
in committee to maintain administrative continuity over the
entire life of the check-off. On page 1, line, the date
should be changed to 2014.
Support and Opposition (4/4/13)
Support : California Association of Food Banks (Sponsor);
SB 116 -- 1/16/13 -- Page 7
CalComUI; Western Center on Law & Poverty; San Diego Hunger
Coalition; Alameda County Community Food Bank; The Jacobs &
Cushman San Diego Food Bank; California Food Policy
Advocates; Public Counsel; Second Harvest Food Bank; Food
for People, Inc.; Hunger Advocacy Network; Jewish Family
Services of San Diego; Junior Leagues of California; Food
Bank of Yolo County; San Francisco and Marin Food Bank;
Feeding America San Diego; Los Angeles Regional Food Bank;
Orange County Food Bank.
Opposition : None received.