BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                     AB 924


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          Date of Hearing:  May 13, 2015


                        ASSEMBLY COMMITTEE ON APPROPRIATIONS


                                 Jimmy Gomez, Chair


          AB  
          924 (Cooley) - As Amended April 29, 2015


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          |Policy       |Revenue and Taxation           |Vote:|7 - 0        |
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          Urgency:  No  State Mandated Local Program:  NoReimbursable:  No


          SUMMARY:


          This bill reauthorizes the addition of the State Children's  
          Trust Fund (Fund), and allows a taxpayer to make a voluntary  
          contribution to the Fund on the state personal income tax  
          return, beginning once an existing checkoff for charitable fund  
          contribution has been removed.  


          Funds raised would, upon appropriation by the Legislature, be  
          allocated to the Department of Social Services (DSS), up to 10%  
          of which may be used for public education about child abuse and  
          neglect prevention and early intervention, and the remainder of  
          which may be used for innovative child abuse and neglect  








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          prevention and intervention programs operated by nonprofit  
          organizations and public institutions of higher education.


          The bill requires the Fund to meet the minimum annual  
          contribution threshold of $250,000, indexed for inflation, and  
          would require the Fund's provisions to automatically sunset on  
          January 1 of the fifth taxable year following the Fund's first  
          appearance on the personal income tax return.


          FISCAL EFFECT:


          1)Minor and absorbable costs to the DSS to administer program  
            and grants, funded by up to 5% of the contributions to the  
            Fund; insignificant administrative costs to the Franchise Tax  
            Board (FTB), reimbursed from contributions to the Fund.





          2)Estimated GF revenue decreases of approximately $8,000 in each  
            year the voluntary contribution fund remains on the personal  
            income tax return.





          COMMENTS:


          1)Purpose.  According to the author, the State Children's Trust  
            Fund received between $305,00- and $760,000 annually over the  
            past 5 years from the voluntary checkoff program, representing  
            half of the revenue deposited in the Fund.  The author claims  
            the loss of this funding has resulted in fewer prevention  








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            programs that directly target child abuse and neglect.  AB 924  
            reinstates the State Children's Trust Fund as a donation  
            option on the tax form, restoring that source of potential  
            funding. 


          2)Worthy Cause, Modest Support.  With few exceptions, voluntary  
            contribution funds remain on the personal income tax return  
            until they are either repealed or fail to meet their minimum  
            contribution amount, typically $250,000, indexed for  
            inflation.  If FTB estimates a contribution fund is likely to  
            fail to meet the minimum contribution amount, that fund is  
            repealed effective January 1 of that calendar year.


            An identically-named voluntary contribution fund first  
            appeared on the 1983 personal income tax return.  By 2014, the  
            inflation-adjusted minimum contribution threshold was  
            $324,972, but the fund only received contributions of  
            approximately $303,000.  As a result, the fund was not  
            included on the 2014 personal income tax return (which is  
            filed in 2015) and discontinued.  Reauthorizing the Fund  
            effectively resets the minimum contribution to $250,000 in  
            contravention of the general policy for voluntary contribution  
            funds. 


          3)Spend Money to Make Money.  This bill allows DSS to spend up  
            to 10% of Fund moneys to encourage additional contributions to  
            the Fund, presumably to prevent the Fund from being removed  
            again for failing to meet its minimum contribution threshold.   
            With limited space for voluntary contribution funds and  
            increasing competition among charitable causes for inclusion,  
            this evolutionary mechanism may help funds better defend their  
            position on the Darwinian voluntary checkoff page of the  
            personal income tax return.  











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          Analysis Prepared by:Joel Tashjian / APPR. / (916)  
          319-2081