BILL ANALYSIS Ó
SENATE COMMITTEE ON APPROPRIATIONS
Senator Ricardo Lara, Chair
2015 - 2016 Regular Session
AB 924 (Cooley) - Personal income tax: voluntary contributions:
State Children's Trust Fund.
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|Version: April 29, 2015 |Policy Vote: GOV. & F. 7 - 0 |
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|Urgency: No |Mandate: No |
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|Hearing Date: June 29, 2015 |Consultant: Robert Ingenito |
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This bill does not meet the criteria for referral to the
Suspense File.
Bill Summary: AB 924 would reauthorize the addition of the State
Children's Trust Fund check-off to the personal income tax
return.
Fiscal Impact:
The Franchise Tax Board (FTB) estimates that this bill
would result in an annual revenue loss of $8,000 (General
Fund) for every $250,000 contributed by itemizing
taxpayers.
The Department of Social Services (DSS) would incur
minor and absorbable costs to administer the program and
provide grants.
The State Controller's Office, DSS, and FTB and would be
reimbursed for related administrative costs.
Background: Current law allows taxpayers to contribute money to
AB 924 (Cooley) Page 1 of
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one or more of 18 voluntary contribution funds during the
process of filing their state income tax return (tax check-off).
These contributions are made from taxpayers' own resources, not
from their tax liability, as is the case with federal tax
returns. Check-off amounts are deductible as charitable
contributions on taxpayers' returns during the subsequent tax
year. With some exceptions, each voluntary contribution fund has
a sunset date and is required to meet a minimum contribution
amount of $250,000, adjusted annually for inflation.
The State Children's Trust Fund (Fund) first appeared on the
personal income tax return in 1983. By 2014, the
inflation-adjusted minimum contribution threshold was $324,972,
but that year the Fund only received contributions of about
$303,000. Consequently, it was omitted from personal income tax
return beginning taxable year 2014.
Proposed Law: This bill would reauthorize the addition of the
State Children's Trust Fund), and thereby permit a taxpayer to
make a voluntary contribution to the Fund on the state personal
income tax return, beginning (1) when an existing checkoff for a
charitable fund contribution has been removed, or (2) as soon as
space is available. The Fund would be required to meet the
minimum annual contribution threshold of $250,000, indexed for
inflation, and its provisions would automatically sunset on
January 1 of the fifth taxable year following the Fund's first
appearance on the personal income tax return.
Upon appropriation by the Legislature, funds raised would be
allocated to DSS, up to 10 percent 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 prevention and intervention
programs operated by nonprofit organizations and public
institutions of higher education.
Related Legislation: SB 164 (Simitian, Chapter 669, Statutes of
2011) extended the repeal date of the Fund's voluntary
contribution check-off from January 1, 2013, to January 1, 2018,
subject to meeting the annual minimum contribution requirement.
Staff Comments: FTB data indicate that roughly one-half of
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taxpayers who contribute to the Fund itemize their deductions.
The average tax rate for these taxpayers is about six percent,
which produces the $9,000 annual revenue loss. In 2012, about
89,000 out of 15 million taxpayers (or less than one percent)
utilized one or more of the 18 check-offs; aggregate
contributions totaled $4.8 million.
Reauthorizing the Fund would effectively reset its annual
minimum contribution to $250,000.
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