Amended in Senate August 9, 2016

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

(Coauthors: Assembly Members Chiu, Dodd, Cristina Garcia, Kim, Lackey, McCarty, andbegin delete Olsen, end deletebegin insert Olsenend insert)

begin delete

(Coauthor: Senator Block)

end delete
begin insert

(Coauthors: Senators Beall, Block, Hertzberg, and Liu)

end insert

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 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 would 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 would 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    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
P3    1from the School Supplies for Homeless Children Fund. If the
2nonprofit organization provides in-kind materials towards the 100
3percent match, then the value of the in-kind materials contributing
4to a 100 percent match shall be verified by the donor donating the
5in-kind materials and cannot exceed the market value of the
6materials if sold at retail. The State Department of Social Services
7shall enter into a subvention services agreement with the nonprofit
8organization.

9(2) The State Department of Social Services’ first designation
10of a nonprofit organization shall be valid until January 1, 2017.
11On that date, and every three calendar years thereafter, while this
12section is operative and in effect, the State Department of Social
13Services shall designate the same or a different nonprofit
14organization pursuant to this section. The State Department of
15Social Services may revoke the designation if the nonprofit
16organization fails to comply with the provisions of this article. If
17a designation is revoked, the State Department of Social Services
18shall designate a new nonprofit organization within three calendar
19months or as soon as administratively feasible.

20(3) Funds shall be distributed by the State Department of Social
21Services only after evidence is presented to the State Department
22of Social Services that demonstrates that the local education
23begin delete agencies or domestic violence sheltersend deletebegin insert agencies, domestic violence
24shelters, or eligible basic living centers and transitional living
25centers, as specified in paragraph (3) of subdivision (c),end insert
have
26received the materials described in paragraph (1).

27(c) (1) Funds distributed to the nonprofit organization pursuant
28to this section shall be used only for costs incurred to procure,
29assemble, and ship school supplies and health-related products.
30Funds made available pursuant to this section shall not be used for
31administrative purposes, to reimburse costs associated with
32administering grants of school supplies and health-related products
33to local education agencies or domestic violence shelters, or for
34any purpose relating to the operation of the nonprofit organization.

35(2) The nonprofit organization may provide school supplies and
36health-related products to children living in domestic violence
37shelters.

38(3) The nonprofit organization may provide school supplies and
39health-related products to homeless children and homeless youth,
40as defined in Section 11139.3 of the Government Code, residing
P4    1begin insert inend insert or receiving services from eligible basic living centers and
2transitional living centers eligible for assistance as specified in the
3Runaway and Homeless Youth Act (42 U.S.C.begin delete 5701, et.end deletebegin insert 5701end insertbegin insert etend insert
4 seq.), as that act read on January 1, 2015.

5(d) The State Department of Social Services shall verify that
6the designated nonprofit organization procured school supplies
7and health-related products and provided matching funds or in-kind
8materials as described in this section.

9

SEC. 2.  

Section 18898 of the Revenue and Taxation Code is
10amended to read:

11

18898.  

(a) Except as otherwise provided in subdivision (b),
12this article shall remain in effect only until January 1, 2022, and
13is repealed as of December 1 of that year.

14(b) (1) By September 1 of the second calendar year and each
15subsequent calendar year that the School Supplies for Homeless
16Children Fund appears on the tax return, the Franchise Tax Board
17shall do all of the following:

18(A) Determine the minimum contribution amount required to
19be received during the next calendar year for the fund to appear
20on the tax return for the taxable year that includes that next calendar
21year.

22(B) Provide written notification to the State Department of
23Social Services of the amount determined in subparagraph (A).

24(C) Determine whether the amount of contributions estimated
25to be received during the calendar year will equal or exceed the
26minimum contribution amount determined by the Franchise Tax
27Board for the calendar year pursuant to subparagraph (A). The
28Franchise Tax Board shall estimate the amount of contributions
29to be received by using the actual amounts received and an estimate
30of the contributions that will be received by the end of that calendar
31year.

32(2) If the Franchise Tax Board determines that the amount of
33the contributions estimated to be received during a calendar year
34will not at least equal the minimum contribution amount for the
35calendar year, this article shall be inoperative with respect to
36taxable years beginning on or after January 1 of that calendar year
37and shall be repealed on December 1 of that year.

38(3) For purposes of this section, the minimum contribution
39amount for a calendar year means two hundred fifty thousand
40dollars ($250,000) for the second calendar year after the first
P5    1appearance of the School Supplies for Homeless Children Fund
2on the personal income tax return or the adjusted minimum
3contribution amount adjusted pursuant to subdivision (c).

4(c) For each calendar year, beginning with the third calendar
5year after the first appearance of the School Supplies for Homeless
6Children Fund on the personal income tax return, the Franchise
7Tax Board shall adjust, on or before September 1 of that calendar
8year, the minimum contribution amount specified in subdivision
9(b) as follows:

10(1) The minimum estimated contribution amount for the calendar
11year shall be an amount equal to the product of the minimum
12estimated contribution amount for the calendar year multiplied by
13the inflation factor adjustment as specified in subparagraph (A) of
14paragraph (2) of subdivision (h) of Section 17041, rounded off to
15the nearest dollar.

16(2) The inflation factor adjustment used for the calendar year
17shall be based on the figures for the percentage change in the
18California Consumer Price Index for all items received on or before
19August 1 of the calendar year pursuant to paragraph (1) of
20subdivision (h) of Section 17041.

21(d) Notwithstanding the repeal of this article, any contribution
22amounts designated pursuant to this article prior to its repeal shall
23continue to be transferred and disbursed in accordance with this
24article as in effect immediately prior to that repeal.



O

    96