BILL ANALYSIS                                                                                                                                                                                                    Ó




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          |SENATE RULES COMMITTEE            |                       AB 1399|
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                                   THIRD READING 


          Bill No:  AB 1399
          Author:   Baker (R), et al.
          Amended:  6/9/16 in Senate
          Vote:     21 

           SENATE GOVERNANCE & FIN. COMMITTEE:  7-0, 6/8/16
           AYES:  Hertzberg, Nguyen, Beall, Hernandez, Lara, Moorlach,  
            Pavley

           SENATE APPROPRIATIONS COMMITTEE:  6-0, 6/27/16
           AYES:  Bates, Beall, Hill, McGuire, Mendoza, Nielsen
           NO VOTE RECORDED:  Lara

           ASSEMBLY FLOOR:  78-0, 1/27/16 (Consent) - See last page for  
            vote

           SUBJECT:   Income taxes:  voluntary contributions:  California  
                     Domestic Violence Victims Fund


          SOURCE:    Author

          DIGEST:   This bill authorizes the addition of the California  
          Domestic Violence Victims Fund check-off to the personal income  
          tax return.    


          ANALYSIS:  


          Existing law:


          1)Allows taxpayers to contribute money to voluntary contribution  
            funds (VCFs) by checking a box on their state income tax  








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            returns.  California law requires contributions made through  
            so-called "check-offs" to be made from taxpayers' own  
            resources and not from their tax liability, as is possible on  
            federal tax returns.  


          2)Allows contribution amounts to be claimed as charitable  
            contributions on taxpayers' tax returns in the subsequent  
            year. 


          3)Requires that each VCF is individually added to the tax return  
            by legislation.  With a few exceptions, VCFs remain on the  
            return until they are repealed by a sunset date or fail to  
            generate a minimum contribution amount.  In general, the  
            minimum contribution amounts are adjusted annually for  
            inflation.  For most VCFs, the minimum contribution amount is  
            $250,000, beginning in the fund's second year.  The following  
            check-offs do not have a minimum contribution requirement:


             a)   California Firefighters' Memorial Foundation Fund,


             b)   California Peace Officer Memorial Foundation Fund, and 


             c)   California Seniors Special Fund.


          This bill:


          1)Adds the California Domestic Violence Victims 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 check-off for charitable fund contribution has been  
            removed, or as soon as space is available.  


          2)Requires the Fund to meet a minimum contribution threshold of  
            $250,000 in the second calendar year the Fund appears on the  








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            tax form, and the amount is indexed yearly for inflation.


          3)Provides that all money transferred to the Fund, upon  
            appropriation by the Legislature, be allocated as follows:


             a)   To the Franchise Tax Board (FTB) and the State  
               Controller for reimbursement of all costs incurred in  
               administering the VCF.


             b)   To the Office of Emergency Services (OES) for  
               distribution to domestic violence programs in California  
               that are in active status, exempt from federal income  
               taxation as an organization described in Section 501(c)(3)  
               of the Internal Revenue Code, and are active grant  
               recipients under the Comprehensive Statewide Domestic  
               Violence Program within OES.  


          4)Prohibits funds to be used for administrative costs by both  
            the grant recipients and OES.  


          5)Provides that the bill automatically sunsets on January 1 of  
            the fifth taxable year following the Fund's first appearance  
            on the personal income tax form.


          Background


          When a taxpayer contributes to VCFs, the FTB deposits the total  
          of all contributions, less an administrative fee, into the fund  
          created as part of the VCF's legislative authorization.  For  
          some VCFs, such as the Protect Our Coast and Ocean Fund,  
          taxpayers' contributions are allocated to a state agency for use  
          in a state administered grant program.  Other VCFs' authorizing  
          statutes direct administrative agencies to allocate donations to  
          a private organization.  For example, OES passes VCF funds to  
          the American Red Cross.  Other funds require the Controller to  








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          send the funds directly to private organizations without passing  
          through an administrative agency, such as the California Fire  
          Foundation.  The Controller and administrative agencies may  
          deduct administrations fees from the amount of donations each  
          VCF receives.  


          There are currently 19 check-offs listed on the tax return form.  
          The tax check-off program typically collects $4-5 million in  
          annual contributions for all VCFs.




          FISCAL EFFECT:   Appropriation:    No          Fiscal  
          Com.:YesLocal:   No


          According to the Senate Appropriations Committee:


           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.


           OES would incur minor and absorbable costs to administer the  
            program and provide grants.


           The Controller's Office and FTB and would be reimbursed for  
            related administrative costs.


          SUPPORT:   (Verified6/28/16)


          Alliance for Community Transformations
          California Partnership to End Domestic Violence
          Center for Community Solutions; Center for Domestic Peace
          Contra Costa County Board of Supervisors
          Contra Costa District Attorney's Office








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          Safe Alternatives to Violent Environments
          State Board of Equalization Member Fiona Ma


          OPPOSITION:   (Verified6/28/16)


          California Department of Finance 


          ARGUMENTS IN SUPPORT:     According to the author, "On just one  
          day in 2014, 5,784 victims and their children received services  
          at domestic violence programs throughout the state.  On that  
          same day 1, 2016 request for services went unmet, of which 55%  
          were for housing, largely due to lack of resources.  That means  
          1,216, individuals, children, and families, could not secure a  
          safe place to stay, or receive vital counseling or resources.   
          Emergency shelter, transitional housing, and nonresidential  
          services could not be provided because of a lack of resources.   
          Of those unmet needs, approximately 49% of programs report that  
          victims return to their abuser, 37% report that victims become  
          homeless, and 16% report that families end up living in their  
          car.  The cause for these unmet needs are reduced government  
          funding (37%) cuts from private funding (25%) lack of staff  
          (23%) and a reduction in individual donations (13%.).  By  
          providing additional opportunities for donations to domestic  
          violence programs in own communities, we can better provide a  
          safe haven for families."


          ARGUMENTS IN OPPOSITION:     Opponent argues that the bill is of  
          limited value and results in a loss to the General Fund.   
          Additionally, it is unclear why special preference should be  
          given to one organization over the countless others that are not  
          on the tax form.

          ASSEMBLY FLOOR:  78-0, 1/27/16
          AYES:  Achadjian, Alejo, Travis Allen, Baker, Bigelow, Bloom,  
            Bonilla, Bonta, Brough, Brown, Burke, Calderon, Campos, Chang,  
            Chau, Chávez, Chiu, Chu, Cooley, Cooper, Dababneh, Dahle,  
            Daly, Dodd, Eggman, Frazier, Beth Gaines, Gallagher, Cristina  
            Garcia, Eduardo Garcia, Gatto, Gipson, Gomez, Gonzalez,  








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            Gordon, Gray, Grove, Hadley, Harper, Roger Hernández, Holden,  
            Irwin, Jones, Jones-Sawyer, Kim, Lackey, Levine, Linder,  
            Lopez, Low, Maienschein, Mayes, McCarty, Medina, Melendez,  
            Mullin, Nazarian, Obernolte, O'Donnell, Olsen, Patterson,  
            Quirk, Rendon, Ridley-Thomas, Rodriguez, Salas, Santiago,  
            Steinorth, Mark Stone, Thurmond, Ting, Wagner, Waldron, Weber,  
            Wilk, Williams, Wood, Atkins
          NO VOTE RECORDED:  Mathis

          Prepared by:Myriam Bouaziz / GOV. & F. / (916) 651-4119
          6/29/16 15:56:04


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