BILL ANALYSIS Ó ----------------------------------------------------------------- |SENATE RULES COMMITTEE | AB 1789| |Office of Senate Floor Analyses | | |(916) 651-1520 Fax: (916) | | |327-4478 | | ----------------------------------------------------------------- THIRD READING Bill No: AB 1789 Author: Santiago (D), et al. Amended: 6/27/16 in Senate Vote: 21 SENATE GOVERNANCE & FIN. COMMITTEE: 6-0, 6/15/16 AYES: Hertzberg, Nguyen, Beall, Hernandez, Lara, Moorlach NO VOTE RECORDED: Pavley SENATE APPROPRIATIONS COMMITTEE: 7-0, 8/1/16 AYES: Lara, Bates, Beall, Hill, McGuire, Mendoza, Nielsen ASSEMBLY FLOOR: 76-0, 5/19/16 (Consent) - See last page for vote SUBJECT: Personal income taxes: voluntary contributions: School Supplies for Homeless Children Fund SOURCE: Author DIGEST: This bill extends the sunset date for the School Supplies for Homeless Children Fund tax check-off on the personal income tax return. ANALYSIS: Existing law: AB 1789 Page 2 1)Allows taxpayers to contribute money to voluntary contribution funds (VCFs) by checking a box on their state income tax returns. California law requires contributions made through so-called "check-offs" to be made from taxpayers' own resources and not from their tax liability, as is possible on federal tax returns. 2)Allows contribution amounts to be claimed as charitable contributions on taxpayers' tax returns in the subsequent year. 3)Requires that each VCF is individually added to the tax return by legislation. With a few exceptions, VCFs remain on the return until they are repealed by a sunset date or fail to generate a minimum contribution amount. In general, the minimum contribution amounts are adjusted annually for inflation. For most VCFs, the minimum contribution amount is $250,000, beginning in the fund's second year. The following check-offs do not have a minimum contribution requirement: a) California Firefighters' Memorial Foundation Fund, b) California Peace Officer Memorial Foundation Fund, and c) California Seniors Special Fund. AB 1789 Page 3 This bill: 1)Extends the sunset for the School Supplies for Homeless Children Fund to January 1, 2022. 2)Expands eligible individuals who may receive school supplies. Background The School Supplies for Homeless Children Fund was originally authorized by SB 1571 (DeSaulnier, Chapter 459, Statutes of 2012) in 2012 to help provide essential school supplies to homeless children. To date, the Fund has established a successful record of generating taxpayer contributions. Specifically, the Fund received $337,949 in valid contributions in 2014, and $398,900 in 2015. FISCAL EFFECT: Appropriation: No Fiscal Com.:YesLocal: No According to the Senate Appropriations Committee: 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, the Department of Social Services, and FTB and would be reimbursed for related administrative costs. AB 1789 Page 4 SUPPORT: (Verified8/3/16) California Catholic Conference, Inc. California State PTA California Teachers Association Common Sense Kids Action Give Something Back Office Supplies K to College League of California Cities OPPOSITION: (Verified8/3/16) California Department of Finance ARGUMENTS IN SUPPORT: According to the author, "Homelessness is prevalent in urban and rural areas of California. The Los Angeles School District has the highest number of homeless students (14,323) and Sacramento ranks among the top six districts in overall number of homeless students and as a county has more homeless students than any other in Northern California. A significant barrier to success homeless students face is access to basic materials such as school supplies, hygienic and dental products and other basic necessities. Lack of basic material needs accompanied with low self-esteem lead to absenteeism and truancy, which prevents homeless students from obtaining the education that is their best opportunity to escape poverty. The School Supplies for Homeless Children Fund addresses the basic necessities these children need to succeed." ARGUMENTS IN OPPOSITION: Opponent argues that the bill is of limited value and results in a loss to the General Fund. Additionally, it is unclear why special preference should be given to one organization over the countless others that are not on the tax form. ASSEMBLY FLOOR: 76-0, 5/19/16 AYES: Achadjian, Alejo, Travis Allen, Arambula, Atkins, Baker, Bigelow, Bloom, Bonilla, Bonta, Brough, Brown, Burke, AB 1789 Page 5 Calderon, Campos, Chau, Chávez, Chiu, Chu, Cooley, Cooper, Dababneh, Dahle, Daly, Dodd, Eggman, Frazier, Beth Gaines, Gallagher, Cristina Garcia, Eduardo Garcia, Gatto, Gipson, Gomez, Gonzalez, Gordon, Gray, Grove, Hadley, Harper, Roger Hernández, Holden, Irwin, Jones, Jones-Sawyer, Kim, Lackey, Levine, Linder, Lopez, Low, Maienschein, Mayes, Medina, Melendez, Mullin, Nazarian, Obernolte, O'Donnell, Olsen, Patterson, Quirk, Ridley-Thomas, Rodriguez, Salas, Santiago, Steinorth, Mark Stone, Thurmond, Ting, Wagner, Waldron, Weber, Wilk, Wood, Rendon NO VOTE RECORDED: Chang, Mathis, McCarty, Williams Prepared by:Myriam Bouaziz / GOV. & F. / (916) 651-4119 8/3/16 18:13:29 **** END ****