BILL ANALYSIS �
SB 116
Page 1
Date of Hearing: June 10, 2013
ASSEMBLY COMMITTEE ON REVENUE AND TAXATION
Raul Bocanegra, Chair
SB 116 (Liu) - As Amended: April 16, 2013
Majority vote. Fiscal committee.
SENATE VOTE : 34-0
SUBJECT : Personal income taxes: contributions: Emergency Food
Assistance Program
SUMMARY : Eliminates the sunset date and the minimum
contribution requirement for the Emergency Food for Families
Fund (Fund). Specifically, this bill :
1)Deletes the Fund's sunset date, thereby allowing the Fund to
remain indefinitely as a voluntary contribution fund (VCF) on
the state's personal income tax (PIT) return.
2)Eliminates the Fund's minimum contribution requirements,
thereby allowing the Fund to remain on the PIT return
irrespective of annual contributions received.
EXISTING LAW :
1)Allows taxpayers to contribute to one or more of the 18 VCFs
on the 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 Seniors
Special Fund, the California Firefighters' Memorial Fund, and
the California Peace Officer Memorial Foundation Fund.
4)Provides that all money transferred to the Fund, upon
legislative appropriation, shall be allocated to the:
a) Franchise Tax Board (FTB) and the State Controller for
reimbursement of all costs incurred administering the Fund;
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and,
b) State Department of Social Services for allocation to
the Emergency Food Assistance Program (Program).
5)Provides that the Fund's statutory provisions shall
automatically sunset on January 1, 2014, absent an extension.
6)Requires the Fund to meet a minimum contribution amount, which
is adjusted annually for inflation based on the percentage
change in the California Consumer Price Index. The Fund's
minimum contribution amount for 2013 is $354,158.
COMMITTEE RULES provide that "[e]xisting checkoffs for which
reauthorization is sought shall have sunset dates and be
required to comply with an inflation-adjusted $250,000 minimum
contribution requirement."
FISCAL EFFECT : The FTB estimates that this bill would reduce
General Fund revenues by $10,000 in fiscal year (FY) 2015-16,
and by the same amount in FY 2016-17.
COMMENTS :
1)The author has provided the following statement in support of
this bill:
SB 116 removes the sunset and minimum contribution
requirements for the Emergency Food for Families
"check-off" fund from statute, extending it indefinitely.
It allows Californians to continue fighting hunger by
contributing to the fund with a check-off on their state
income tax returns.
2)Proponents of this bill note the following:
Food banks across the state have seen an unprecedented
increase in requests for assistance since 2008, and the
food lines are not getting any shorter. The first line of
defense against hunger is CalFresh (formerly known as food
stamps), but unfortunately California has the worst
participation rate in the country, which places a greater
burden on food banks already struggling to keep up with the
need.
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Food banks and charitable agencies play an increasingly
important role in fighting hunger in the current context of
very high food hardship, low CalFresh participation, and
recent cuts to safety net programs at the state and federal
level. Unfortunately, California provides no public
funding for this emergency food network. In tight budget
times, the Emergency Food for Families Fund represents an
easy way for the state to encourage private contributions
to help food banks keep up with growing requests for
assistance.
3)The Department of Finance opposes this bill in its current
amended form.
4)Committee Staff Comments:
a) Fund background : Fund moneys are allocated to the State
Department of Social Services to support the Program. The
Program, in turn, provides United States Department of
Agriculture commodities to a network of food banks for
distribution to eligible individuals and households. The
California Association of Food Banks notes that in 2012,
over $550,000 in Fund contributions enabled food banks to
provide over 1.6 million pounds of food - or roughly 1.3
million meals - for people in need.
The Fund first appeared on the 1998 PIT return. Since
2008, the Fund has received the following total annual
contributions:
-----------------------------------------------------------
| 2008 | 2009 | 2010 | 2011 | 2012 |
|-----------+-----------+-----------+-----------+-----------|
| $438,582 | $592,733 | $487,333 | $598,157 |$551,515 |
-----------------------------------------------------------
b) A questionable precedent : As originally introduced,
this bill simply extended the Fund's sunset date from
January 1, 2014, to January 1, 2019. On April 16, 2013,
this bill was amended to instead delete the Fund's sunset
date outright, along with the Fund's minimum contribution
requirement, thereby bringing this Fund out of conformity
with the vast majority of VCFs on the PIT return.
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Indeed, this Committee's own rules require that all
reauthorized VCFs include both a sunset date and an
inflation-adjusted minimum contribution requirement. This
policy was originally adopted in response to the
proliferation of VCF legislation, and in recognition of the
fact that space on the PIT return is limited. Were this
Committee to make an exception for this Fund, it would open
the door to the supporters of every other VCF advocating
for an elimination of minimum contribution amounts and
sunset dates.
c) Amendments agreed to by author : To address the concerns
outlined above, and those raised by the Department of
Finance, the author has agreed to take amendments in this
Committee to revert this bill to its original form, with
one additional purely technical amendment. With these
amendments, this bill will allow the Fund to remain on PIT
returns through the 2018 taxable year, provided the minimum
contribution amount is met.
REGISTERED SUPPORT / OPPOSITION :
Support
California Association of Food Banks (sponsor)
Alameda County Community Food Bank
American Federation of State, County and Municipal Employees,
AFL-CIO
California Catholic Conference, Inc.
California Food Policy Advocates
County Welfare Directors Association of California
Feeding America San Diego
Food Bank of Yolo County
Food for People, Inc.
Hunger Advocacy Network
Jacobs & Cushman San Diego Food Bank
Los Angeles Regional Food Bank
Marin Food Bank
San Diego Hunger Coalition
San Francisco Food Bank
Opposition
Department of Finance
SB 116
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Analysis Prepared by : M. David Ruff / REV. & TAX. / (916)
319-2098