BILL ANALYSIS Ó SENATE COMMITTEE ON APPROPRIATIONS Senator Ricardo Lara, Chair 2015 - 2016 Regular Session AB 1399 (Baker) - Income taxes: voluntary contributions: California Domestic Violence Victims Fund ----------------------------------------------------------------- | | | | | | ----------------------------------------------------------------- |--------------------------------+--------------------------------| | | | |Version: June 9, 2016 |Policy Vote: GOV. & F. 7 - 0 | | | | |--------------------------------+--------------------------------| | | | |Urgency: No |Mandate: No | | | | |--------------------------------+--------------------------------| | | | |Hearing Date: June 27, 2016 |Consultant: Robert Ingenito | | | | ----------------------------------------------------------------- This bill does not meet the criteria for referral to the Suspense File. Bill Summary: AB 1399 would authorize the addition of the California Domestic Violence Victims Fund check-off to the personal income tax return. Fiscal Impact: The Franchise Tax Board (FTB) estimates that, beginning in 2017- 18, this bill would result in an annual revenue loss of $8,000 (General Fund) for every $250,000 contributed by itemizing taxpayers. The Office of Emergency Services (OES) would incur minor and absorbable costs to administer the program and provide grants. AB 1399 (Baker) Page 1 of ? The State Controller's Office (SCO) and FTB and would be reimbursed for related administrative costs. Background: Current law allows taxpayers to contribute money to one or more of 19 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. Proposed Law: This bill would add the California Domestic Violence Victims Fund (Fund), and allow a taxpayer to make a voluntary contribution to the Fund on the state personal income tax return, beginning once an existing check-off for charitable fund contribution has been removed, or as soon as space is available. The bill would require the Fund to meet a minimum contribution threshold of $250,000 in the second calendar year the Fund appears on the tax form, and the amount is indexed yearly for inflation. Additionally, the bill would provide that all money transferred to the Fund, upon appropriation by the Legislature, be allocated as follows: (1) to FTB and SCO for reimbursement of all costs incurred in administering the Fund, and (2) to OES for distribution to domestic violence programs in California, as specified. The bill would prohibit funds to be used for administrative costs by both grant recipients and OES. It would automatically sunset on January 1 of the fifth taxable year following the Fund's first appearance on the personal income tax form. AB 1399 (Baker) Page 2 of ? Related Legislation: SB 1476 (Committee on Governance and Finance) would establish general provisions for voluntary contribution funds. Specifically, the bill would (1) establish a seven-year sunset, (2) require a minimum contribution amount of $250,000 beginning in the fund's second year, and each year thereafter, requires funds to be continuously appropriated, and (3) require administering agencies to post information online about the use of the funds. SB 1476 is currently awaiting action by the full Assembly. Staff Comments: FTB data indicate that in 2012, 89,335 out of 15 million taxpayers contributed a total of $4.8 million via tax check-offs. -- END --