Amended in Assembly March 17, 2016

California Legislature—2015–16 Regular Session

Assembly Bill No. 1789

Introduced by Assembly Member Santiago

February 4, 2016

An act to amend begin delete Sections 18897 and end delete begin insert Section end insert 18898 of the Revenue and Taxation Code, relating to taxation.

LEGISLATIVE COUNSEL’S DIGEST

AB 1789, as amended, 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 begin delete organization, whose designation is valid until January 1, 2017, end delete begin insert organization end insert 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 begin delete 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. end delete begin insert School Supplies for Homeless Children Fund to appear on the tax return to January 1, 2022, or when the amount of contributions by taxpayers does not meet the minimum contribution amount, whichever occurs first. end insert

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

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

begin insert

begin insert SECTION 1. end insert   

end insert

begin insert Section 18898 of the end insert begin insert Revenue and Taxation Code end insert
begin insert is amended to read: end insert

18898.  

(a) Except as otherwise provided in subdivision (b),
this article shall remain in effect only until begin delete January 1 of the fifth
taxable year following the first appearance of the School Supplies
for Homeless Children Fund on the personal income tax return, end delete
begin insert January 1, 2022, end insert and is repealed as of December 1 of that year.

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

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

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

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

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

(3) For purposes of this section, the minimum contribution
amount for a calendar year means two hundred fifty thousand
dollars ($250,000) for the second calendar year after the first
appearance of the School Supplies for Homeless Children Fund
on the personal income tax return or the adjusted minimum
contribution amount adjusted pursuant to subdivision (c).

(c) For each calendar year, beginning with the third calendar
year after the first appearance of the School Supplies for Homeless
Children Fund on the personal income tax return, the Franchise
Tax Board shall adjust, on or before September 1 of that calendar
year, the minimum contribution amount specified in subdivision
(b) as follows:

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

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

(d) Notwithstanding the repeal of this article, any contribution
amounts designated pursuant to this article prior to its repeal shall
continue to be transferred and disbursed in accordance with this
article as in effect immediately prior to that repeal.

begin delete

SECTION 1.  

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

18897.  

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

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

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

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

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

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

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

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

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

SEC. 2.  

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

18898.  

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

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

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

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

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

(3) For purposes of this section, the minimum contribution
amount for a calendar year means two hundred fifty thousand
dollars ($250,000) for the second calendar year after the first
appearance of the School Supplies for Homeless Children Fund
on the personal income tax return or the adjusted minimum
contribution amount adjusted pursuant to subdivision (b).

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

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

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

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

end delete