California Legislature—2015–16 Regular Session

Assembly BillNo. 1789


Introduced by Assembly Member Santiago

February 4, 2016


An act to amend Sections 18897 and 18898 of the Revenue and Taxation Code, relating to taxation.

LEGISLATIVE COUNSEL’S DIGEST

AB 1789, as introduced, Santiago. Personal income taxes: voluntary contributions: School Supplies for Homeless Children Fund.

Existing law authorizes an individual to contribute amounts in excess of his or her personal income tax liability for the support of specified funds, including the School Supplies for Homeless Children Fund. Existing law requires the moneys deposited in the School Supplies for Homeless Children Fund, upon appropriation by the Legislature, to be allocated to the State Department of Social Services for distribution to a designated nonprofit organization, whose designation is valid until January 1, 2017, for the sole purpose of assisting pupils in California pursuant to the federal McKinney-Vento Homeless Assistance Act, as provided. Existing law provides that this voluntary contribution remain in effect only until January 1 of the 5th taxable year in which the fund appears on the tax return or when the amount of contributions by taxpayers does not meet the minimum contribution amount, whichever occurs first.

This bill would extend the time period for the validity of a nonprofit’s designation until January 1, 2021, and would remove the provision that would automatically remove the School Supplies for Homeless Children Fund from the tax return after 5 taxable years, thus allowing the fund to remain on the personal income tax return until contributions do not meet the minimum contribution amount.

Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: no.

The people of the State of California do enact as follows:

P2    1

SECTION 1.  

Section 18897 of the Revenue and Taxation Code
2 is amended to read:

3

18897.  

All moneys transferred to the School Supplies for
4Homeless Children Fund, upon appropriation by the Legislature,
5shall be allocated as follows:

6(a) To the Franchise Tax Board, the State Department of Social
7Services, and the Controller for reimbursement of all costs incurred
8by the Franchise Tax Board, the Controller, and the State
9Department of Social Services in connection with their duties under
10this article.

11(b) To the State Department of Social Services as follows:

12(1) For the 2014-15 fiscal year, the Controller shall transfer the
13funds appropriated to the State Department of Education for this
14purpose from Budget Items 6110-001-8075 and 6110-101-8075
15to the State Department of Social Services. Funds transferred may
16be used for state operations or local assistance expenditures and
17for distribution to a nonprofit organization exempt from federal
18income tax as an organization described in Section 501(c)(3) of
19the Internal Revenue Code for the sole purpose of assisting pupils
20in California on a statewide basis pursuant to the federal
21McKinney-Vento Homeless Assistance Act (42 U.S.C. Sec. 11301
22et seq.) by providing school supplies and health-related products
23to partnering local education agencies for distribution to homeless
24children, as defined by the federal McKinney-Vento Homeless
25Assistance Act (42 U.S.C. Sec. 11434a). The nonprofit organization
26shall provide a minimum 100 percent match for all funds received
27from the School Supplies for Homeless Children Fund. If the
28nonprofit organization provides in-kind materials towards the 100
29percent match, then the value of the in-kind materials contributing
30to a 100 percent match shall be verified by the donor donating the
31in-kind materials and cannot exceed the market value of the
32materials if sold at retail. The State Department of Social Services
P3    1shall enter into a subvention services agreement with the nonprofit
2organization.

3(2) The State Department of Social Services’ first designation
4of a nonprofit organization shall be valid until January 1,begin delete 2017.end delete
5begin insert 2021.end insert On that date, and every three calendar years thereafter, while
6this section is operative and in effect, the State Department of
7Social Services shall designate the same or a different nonprofit
8organization pursuant to this section. The State Department of
9Social Services may revoke the designation if the nonprofit
10organization fails to comply with the provisions of this article. If
11a designation is revoked, the State Department of Social Services
12shall designate a new nonprofit organization within three calendar
13months or as soon as administratively feasible.

14(3) Funds shall be distributed by the State Department of Social
15Services only after evidence is presented to the State Department
16of Social Services that demonstrates that the local education
17agencies or domestic violence shelters have received the materials
18described in paragraph (1).

19(c) (1) Funds distributed to the nonprofit organization pursuant
20to this section shall be used only for costs incurred to procure,
21assemble, and ship school supplies and health-related products.
22Funds made available pursuant to this section shall not be used for
23administrative purposes, to reimburse costs associated with
24administering grants of school supplies and health-related products
25to local education agencies or domestic violence shelters, or for
26any purpose relating to the operation of the nonprofit organization.

27(2) The nonprofit organization may provide school supplies and
28health-related products to children living in domestic violence
29shelters.

30(d) The State Department of Social Services shall verify that
31the designated nonprofit organization procured school supplies
32and health-related products and provided matching funds or in-kind
33materials as described in this section.

34

SEC. 2.  

Section 18898 of the Revenue and Taxation Code is
35amended to read:

begin delete
36

18898.  

(a) Except as otherwise provided in subdivision (b),
37this article shall remain in effect only until January 1 of the fifth
38taxable year following the first appearance of the School Supplies
39for Homeless Children Fund on the personal income tax return,
40and is repealed as of December 1 of that year.

P4    1(b)

end delete
2begin insert

begin insert18898.end insert  

end insert

begin insert(a)end insert (1) By September 1 of the second calendar year
3and each subsequent calendar year that the School Supplies for
4Homeless Children Fund appears on the tax return, the Franchise
5Tax Board shall do all of the following:

6(A) Determine the minimum contribution amount required to
7be received during the next calendar year for the fund to appear
8on the tax return for the taxable year that includes that next calendar
9year.

10(B) Provide written notification to the State Department of
11Social Services of the amount determined in subparagraph (A).

12(C) Determine whether the amount of contributions estimated
13to be received during the calendar year will equal or exceed the
14minimum contribution amount determined by the Franchise Tax
15Board for the calendar year pursuant to subparagraph (A). The
16Franchise Tax Board shall estimate the amount of contributions
17to be received by using the actual amounts received and an estimate
18of the contributions that will be received by the end of that calendar
19year.

20(2) If the Franchise Tax Board determines that the amount of
21the contributions estimated to be received during a calendar year
22will not at least equal the minimum contribution amount for the
23calendar year, this article shall be inoperative with respect to
24taxable years beginning on or after January 1 of that calendar year
25and shall be repealed on December 1 of that year.

26(3) For purposes of this section, the minimum contribution
27amount for a calendar year means two hundred fifty thousand
28dollars ($250,000) for the second calendar year after the first
29appearance of the School Supplies for Homeless Children Fund
30on the personal income tax return or the adjusted minimum
31contribution amount adjusted pursuant to subdivisionbegin delete (c).end deletebegin insert (b).end insert

begin delete

32(c)

end delete

33begin insert(b)end insert For each calendar year, beginning with the third calendar
34year after the first appearance of the School Supplies for Homeless
35Children Fund on the personal income tax return, the Franchise
36Tax Board shall adjust, on or before September 1 of that calendar
37year, the minimum contribution amount specified in subdivision
38begin delete (b)end deletebegin insert (a)end insert as follows:

39(1) The minimum estimated contribution amount for the calendar
40year shall be an amount equal to the product of the minimum
P5    1estimated contribution amount for the calendar year multiplied by
2the inflation factor adjustment as specified in subparagraph (A) of
3paragraph (2) of subdivision (h) of Section 17041, rounded off to
4the nearest dollar.

5(2) The inflation factor adjustment used for the calendar year
6shall be based on the figures for the percentage change in the
7California Consumer Price Index for all items received on or before
8August 1 of the calendar year pursuant to paragraph (1) of
9subdivision (h) of Section 17041.

begin delete

10(d)

end delete

11begin insert(c)end insert Notwithstanding the repeal of this article, any contribution
12amounts designated pursuant to this article prior to its repeal shall
13continue to be transferred and disbursed in accordance with this
14article as in effect immediately prior to that repeal.



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