BILL ANALYSIS Ó
AB 1789
Page A
CONCURRENCE IN SENATE AMENDMENTS
AB
1789 (Santiago)
As Amended August 9, 2016
Majority vote
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|ASSEMBLY: |76-0 |(May 19, 2016) |SENATE: |38-0 |(August 15, |
| | | | | |2016) |
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Original Committee Reference: REV. & TAX.
SUMMARY: Extends the sunset date for the School Supplies for
Homeless Children Fund (Fund).
The Senate amendments:
1)Add coauthors.
2)Authorize the designated nonprofit organization receiving Fund
moneys to provide school supplies and health-related products
to homeless children and homeless youth, as defined in
Government Code Section 11139.3, residing in or receiving
services from eligible basic living centers and transitional
AB 1789
Page B
living centers eligible for assistance as specified in the
Runaway and Homeless Youth Act (42 U.S.C. 5701 et seq.), as
that act read on January 1, 2015.
3)Make conforming changes to the provisions requiring the
submission of evidence to the California Department of Social
Services (CDSS) prior to the distribution of Fund moneys.
EXISTING LAW:
1)Allows taxpayers to contribute to one or more of 19 voluntary
contribution funds (VCFs) on the 2015 personal income tax
(PIT) return.
2)Authorizes the Fund as a VCF on the PIT return.
3)Provides that all money transferred to the Fund, upon
appropriation by the Legislature, shall be allocated as
follows:
a) To the Franchise Tax Board (FTB), the CDSS, and the
State Controller for reimbursement of all Fund-related
administrative costs; and,
b) To the CDSS. Funds transferred may be used for state
operations or local assistance expenditures and for
distribution to a nonprofit organization exempt from
federal income tax under Internal Revenue Code Section
501(c)(3) for the sole purpose of assisting California
pupils on a statewide basis under the federal
McKinney-Vento Homeless Assistance Act by providing school
supplies and health-related products to partnering local
education agencies for distribution to homeless children,
as defined.
AB 1789
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4)Requires the nonprofit organization to provide a minimum 100%
match for all funds received from the Fund. If the nonprofit
organization provides in-kind materials towards the 100%
match, then the value of the in-kind materials shall be
verified by the donor donating the in-kind materials and
cannot exceed the market value of the materials if sold at
retail.
5)Requires the CDSS to enter into a subvention services
agreement<1> with the nonprofit organization.
6)Provides that the CDSS' first designation of a nonprofit
organization shall be valid until January 1, 2017. On that
date, and every three calendar years thereafter, the CDSS
shall designate the same or a different nonprofit
organization.
7)Authorizes the CDSS to revoke the designation should the
nonprofit organization fail to comply with its specified
responsibilities. If a designation is revoked, the CDSS shall
designate a new nonprofit organization within three calendar
months or as soon as administratively feasible.
8)Provides that funds shall be distributed by the CDSS only
after evidence is presented to the CDSS demonstrating that the
local education agencies or domestic violence shelters have
received the materials.
9)Requires the CDSS to verify that the designated nonprofit
organization procured school supplies and health-related
products and provided matching funds or in-kind materials, as
specified.
---------------------------
<1>
Committee staff is informed that this is the term used by the
CDSS to describe a contract.
AB 1789
Page D
10)Provides that funds distributed to the nonprofit organization
shall only be used for costs incurred to procure, assemble,
and ship school supplies and health-related products.
11)Provides that funds shall not be used:
a) For administrative purposes;
b) To reimburse costs associated with administering grants
of school supplies and health-related products to local
education agencies or domestic violence shelters; or,
c) For any purpose relating to the operation of the
nonprofit organization.
12)Authorizes the nonprofit organization to provide school
supplies and health-related products to children living in
domestic violence shelters.
13)Provides that the Fund's statutory authorization shall remain
in effect only until January 1 of the fifth taxable year
following the Fund's first appearance on the PIT return.
AS PASSED BY THE ASSEMBLY, this bill:
1)Provided that the Fund's statutory provisions shall remain in
effect until January 1, 2022, and shall be repealed on
December 1 of that year.
2)Allowed the Fund to remain on the PIT return through the 2021
taxable year, provided the Fund continues to meet its annual
minimum contribution amount.
AB 1789
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FISCAL EFFECT: According to the Senate Appropriations
Committee, the FTB estimates that this bill would result in
annual revenue losses of $10,000 in fiscal year 2017-18, and
$15,000 thereafter (General Fund).
The State Controller's Office, CDSS, and the FTB would be
reimbursed for related administrative costs.
COMMENTS:
1)The author has provided the following statement in support of
this bill:
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.
2)This bill is sponsored by K to College, which notes the
following:
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K to College is a nonprofit public benefit corporation that
operates the largest charitable school and dental supply
program in California. Our mission is to ensure that every
child identified as homeless or low-income in public
schools, and adults working towards self-sufficiency have
the basic materials they need to achieve. From the fall of
2010-2015, we have donated $20,500,000 of materials to more
than 350,000 low-income children throughout California.
Our organization's success stems from our innovative
business model, which mirrors the systems food banks use to
centralize resources, leverage the dollar and distribute
through partnering organizations. In this instance this
includes more than 300 county offices of education, school
districts and domestic violence shelters throughout
California. This enables us to distribute materials at
approximately one-third of their regular cost.
3)Revenue and Taxation Committee comments:
a) California's homeless children: According to the
author, during the 2013-14 academic year, 297,617 children
enrolled in local education agencies in California were
identified as homeless under the federal definition. The
author's office notes, "Currently, this population is
greater in California than in any other state in the nation
and averages out to one homeless student in every
classroom."
In addition to the many other challenges they face, homeless
children often lack basic school supplies such as backpacks,
binders, and pens and pencils. These children also often lack
basic toiletries and supplies essential to good oral health.
b) The Fund: The Fund was originally authorized by SB 1571
(DeSaulnier), Chapter 459, Statutes of 2012, to help
provide essential school supplies to homeless children. To
date, the Fund has established a successful record of
AB 1789
Page G
generating taxpayer contributions. Specifically, the Fund
received $337,949 in valid contributions in 2014, and
$398,900 in 2015.
c) K to College: K to College notes that it is a
nonprofit, public benefit corporation that operates the
largest charitable school and dental supply program in
California. K to College's mission is to ensure that every
child attends school with the basic materials required to
succeed. K to College's business model begins with raising
funds from government agencies, corporations, foundations,
and individuals. By purchasing bulk materials factory
direct, K to College is then able to drive down costs.
Pursuant to legislation K to College successfully
sponsored, inmates within the California prison system are
engaged, as part of their rehabilitation, to assemble
purchased supplies into kits. Finally, K to College
partners directly with school districts to ensure that
materials reach students in need.
Analysis Prepared by:
M. David Ruff / REV. & TAX. / (916) 319-2098
FN: 0004086