Amended in Senate June 27, 2016

Amended in Assembly March 17, 2016

California Legislature—2015–16 Regular Session

Assembly BillNo. 1789


Introduced by Assembly Member Santiago

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(Coauthors: Assembly Members Chiu, Dodd, Cristina Garcia, Kim, Lackey, McCarty, and Olsen, )

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(Coauthor: Senator Block)

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February 4, 2016


An act to amendbegin delete Sectionend deletebegin insert Sections 18897 andend 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 organization 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 wouldbegin insert authorize the designated nonprofit organization to provide school supplies and health-related products to homeless children and homeless youth residing in or receiving services from specified living centers and wouldend insert extend the time period for the 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.

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

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

P2    1begin insert

begin insertSECTION 1.end insert  

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begin insertSection 18897 of the end insertbegin insertRevenue and Taxation Codeend insert
2
begin insert is amended to read:end insert

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
P3    1percent match, then the value of the in-kind materials contributing
2to a 100 percent match shall be verified by the donor donating the
3in-kind materials and cannot exceed the market value of the
4materials if sold at retail. The State Department of Social Services
5shall enter into a subvention services agreement with the nonprofit
6organization.

7(2) The State Department of Social Services’ first designation
8of a nonprofit organization shall be valid until January 1, 2017.
9On that date, and every three calendar years thereafter, while this
10section is operative and in effect, the State Department of Social
11Services shall designate the same or a different nonprofit
12organization pursuant to this section. The State Department of
13Social Services may revoke the designation if the nonprofit
14organization fails to comply with the provisions of this article. If
15a designation is revoked, the State Department of Social Services
16shall designate a new nonprofit organization within three calendar
17months or as soon as administratively feasible.

18(3) Funds shall be distributed by the State Department of Social
19Services only after evidence is presented to the State Department
20of Social Services that demonstrates that the local education
21agencies or domestic violence shelters have received the materials
22described in paragraph (1).

23(c) (1) Funds distributed to the nonprofit organization pursuant
24to this section shall be used only for costs incurred to procure,
25assemble, and ship school supplies and health-related products.
26Funds made available pursuant to this section shall not be used for
27administrative purposes, to reimburse costs associated with
28administering grants of school supplies and health-related products
29to local education agencies or domestic violence shelters, or for
30any purpose relating to the operation of the nonprofit organization.

31(2) The nonprofit organization may provide school supplies and
32health-related products to children living in domestic violence
33shelters.

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34
(3) The nonprofit organization may provide school supplies and
35health-related products to homeless children and homeless youth,
36as defined in Section 11139.3 of the Government Code, residing
37or receiving services from eligible basic living centers and
38transitional living centers eligible for assistance as specified in
39the Runaway and Homeless Youth Act (42 U.S.C. 5701, et. seq.),
40as that act read on January 1, 2015.

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P4    1(d) The State Department of Social Services shall verify that
2the designated nonprofit organization procured school supplies
3and health-related products and provided matching funds or in-kind
4materials as described in this section.

5

begin deleteSECTION 1.end delete
6
begin insertSEC. 2.end insert  

Section 18898 of the Revenue and Taxation Code is
7amended to read:

8

18898.  

(a) Except as otherwise provided in subdivision (b),
9this article shall remain in effect only until January 1, 2022, and
10is repealed as of December 1 of that year.

11(b) (1) By September 1 of the second calendar year and each
12subsequent calendar year that the School Supplies for Homeless
13Children Fund appears on the tax return, the Franchise Tax Board
14shall do all of the following:

15(A) Determine the minimum contribution amount required to
16be received during the next calendar year for the fund to appear
17on the tax return for the taxable year that includes that next calendar
18year.

19(B) Provide written notification to the State Department of
20Social Services of the amount determined in subparagraph (A).

21(C) Determine whether the amount of contributions estimated
22to be received during the calendar year will equal or exceed the
23minimum contribution amount determined by the Franchise Tax
24Board for the calendar year pursuant to subparagraph (A). The
25Franchise Tax Board shall estimate the amount of contributions
26to be received by using the actual amounts received and an estimate
27of the contributions that will be received by the end of that calendar
28year.

29(2) If the Franchise Tax Board determines that the amount of
30the contributions estimated to be received during a calendar year
31will not at least equal the minimum contribution amount for the
32calendar year, this article shall be inoperative with respect to
33taxable years beginning on or after January 1 of that calendar year
34and shall be repealed on December 1 of that year.

35(3) For purposes of this section, the minimum contribution
36amount for a calendar year means two hundred fifty thousand
37dollars ($250,000) for the second calendar year after the first
38appearance of the School Supplies for Homeless Children Fund
39on the personal income tax return or the adjusted minimum
40contribution amount adjusted pursuant to subdivision (c).

P5    1(c) For each calendar year, beginning with the third calendar
2year after the first appearance of the School Supplies for Homeless
3Children Fund on the personal income tax return, the Franchise
4Tax Board shall adjust, on or before September 1 of that calendar
5year, the minimum contribution amount specified in subdivision
6(b) as follows:

7(1) The minimum estimated contribution amount for the calendar
8year shall be an amount equal to the product of the minimum
9estimated contribution amount for the calendar year multiplied by
10the inflation factor adjustment as specified in subparagraph (A) of
11paragraph (2) of subdivision (h) of Section 17041, rounded off to
12the nearest dollar.

13(2) The inflation factor adjustment used for the calendar year
14shall be based on the figures for the percentage change in the
15California Consumer Price Index for all items received on or before
16August 1 of the calendar year pursuant to paragraph (1) of
17subdivision (h) of Section 17041.

18(d) Notwithstanding the repeal of this article, any contribution
19amounts designated pursuant to this article prior to its repeal shall
20continue to be transferred and disbursed in accordance with this
21article as in effect immediately prior to that repeal.



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