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 ----------------------------------------------------------------- | | | | | | ----------------------------------------------------------------- |--------------------------------+--------------------------------| | | | |Version: June 27, 2016 |Policy Vote: GOV. & F. 6 - 0 | | | | |--------------------------------+--------------------------------| | | | |Urgency: No |Mandate: No | | | | |--------------------------------+--------------------------------| | | | |Hearing Date: August 1, 2016 |Consultant: Robert Ingenito | | | | ----------------------------------------------------------------- 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. AB 1789 (Santiago) Page 1 of ? 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. AB 1789 (Santiago) Page 2 of ? -- END --