BILL ANALYSIS                                                                                                                                                                                                    Ó



          SENATE COMMITTEE ON APPROPRIATIONS
                             Senator Ricardo Lara, Chair
                            2015 - 2016  Regular  Session

          AB 1789 (Santiago) - Personal income taxes:  voluntary  
          contributions:  School Supplies for Homeless Children Fund
          
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          |Version: June 27, 2016          |Policy Vote: GOV. & F. 6 - 0    |
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          |Urgency: No                     |Mandate: No                     |
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          |Hearing Date: August 1, 2016    |Consultant: Robert Ingenito     |
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          This bill does not meet the criteria for referral to the  
          Suspense File.


          


          Bill  
          Summary: AB 1789 would extend the sunset date for the School  
          Supplies for Homeless Children Fund tax check-off on the  
          personal income tax return.    


          Fiscal  
          Impact: 
                 The Franchise Tax Board (FTB) estimates that the bill  
               would result in annual revenue losses of $10,000 in  
               2017-18, and $15,000 thereafter (General Fund). 

                 The State Controller's Office (SCO), the Department of  
               Social Services (DSS), and FTB and would be reimbursed for  
               related administrative costs.








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          Background: Current law allows taxpayers to contribute money to one or more  
          of 19 voluntary contribution funds during the process of filing  
          their state income tax return (VCF). These contributions are  
          made from taxpayers' own resources, not from their tax  
          liability, as is the case with federal tax returns. Check-off  
          amounts are deductible as charitable contributions on taxpayers'  
          returns during the subsequent tax year. With some exceptions,  
          each voluntary contribution fund has a sunset date and is  
          required to meet a minimum contribution amount of $250,000,  
          adjusted annually for inflation. 

          The School Supplies for Homeless Children Fund first appeared on  
          the 2012 return. It was originally authorized by SB 1571  
          (DeSaulnier) in 2012 to help provide school supplies to homeless  
          children.  The indexed minimum contribution amount the Fund must  
          receive to remain on the 2016 return is $258,822, which was  
          easily cleared, as it received $398,900 in contributions during  
          taxable year 2015.


          Proposed Law:  
          This bill would extend the sunset for the School Supplies for  
          Homeless Children Fund to January 1, 2022.    


          Related  
          Legislation: SB 1476 (Committee on Governance and Finance) would  
          establish general provisions for voluntary contribution funds.  
          Specifically, the bill would (1) establish a seven-year sunset,  
          (2) require a minimum contribution amount of $250,000 beginning  
          in the fund's second year, and each year thereafter, requires  
          funds to be continuously appropriated, and (3) require  
          administering agencies to post information online about the use  
          of the funds.  SB 1476 is currently awaiting action by the full  
          Assembly. 


          Staff  
          Comments: FTB data indicate that in 2012, 89,335 out of 15  
          million taxpayers contributed a total of $4.8 million via tax  
          check-offs. The tax check-off program typically collects $4-5  
          million in annual contributions for all VCFs.








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