BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                    AB 2371


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          Date of Hearing:  May 11, 2016


                        ASSEMBLY COMMITTEE ON APPROPRIATIONS


                               Lorena Gonzalez, Chair


          AB  
          2371 (Frazier) - As Amended March 18, 2016


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          |Policy       |Revenue and Taxation           |Vote:|9 - 0        |
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          Urgency:  No  State Mandated Local Program:  NoReimbursable:  No


          SUMMARY:


          This bill requires the addition of the Special Olympics Fund  
          (Fund) checkoff to the personal income tax (PIT) return upon the  
          removal of another voluntary contribution fund (VCF) from the  
          return, or as soon as space is available.  Specifically, this  
          bill:  


          1)Requires that all money transferred to the Fund, upon  
            appropriation by the Legislature, will be allocated as  
            follows: 










                                                                    AB 2371


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             a)   Franchise Tax Board (FTB) and the State Controller for  
               reimbursement of all cost incurred in administering the  
               VCF; and,


             b)   Special Olympics Northern California (SONC) and Special  
               Olympics Southern California (SOSC).  The funds will be  
               divided proportionately according to each organization's  
               jurisdiction based on the county of the taxpayers  
               contributing, for the purpose of supporting children and  
               adults with intellectual disabilities.


          2)Provides for the Fund provisions' automatic sunset on January  
            1 of the fifth taxable year following the Fund's first  
            appearance on the PIT return.


          3)Requires the Fund to meet a minimum contribution threshold of  
            $250,000 indexed for inflation to remain on the PIT return.


          FISCAL EFFECT:


          1)Minor and absorbable costs to administrate the fund. 


          2)Minor ongoing GF revenue losses of up to $15,000 per year  
            resulting from itemized taxpayer deductions. 


          COMMENTS:


          1)Purpose. According to the author, AB 2371 will allow  
            individuals to make voluntary contributions to the Special  
            Olympics Fund, which will help provide athletic opportunities  
            to children and adults with intellectual disabilities and  








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            instilling the confidence they need to succeed in life.


          2)Background and purpose. Current state tax law allows taxpayers  
            to make contributions on their tax returns to a number of  
            VCFs. Like many other VCFs, AB 2371 would require the Fund to  
            meet a current minimum contribution amount to return on state  
            tax returns ($250,000, indexed to inflation after the second  
            year). Unlike other VCFs, AB 2371 would not establish an  
            administering agency to oversee allocation of funds.  


          3)Special Olympics. The author notes that the California Special  
            Olympics divided into two chapters in 1995, SONC and SOSC.   
            What started originally as a small grassroots organization has  
            since become a powerful voice for athletes with intellectual  
            disabilities.  SONC and SOSC have provided athletic  
            opportunities to over 40,000 athletes throughout the state.


          4)New VCF Bills in 2016.  Four Assembly bills were introduced in  
            2016 that would either extend existing VCFs or create new  
            ones. In addition to AB 2497, those bills are:  


             a)   AB 1789 (Santiago), also on today's Committee agenda,  
               extends the voluntary contribution for the School Supplies  
               for Homeless Children Fund.  



             b)   AB 2430 (Beth Gaines), also on today's Committee agenda,  
               adds a voluntary contribution for the Type 1 Diabetes  
               Research Fund.


             c)   AB 2497 (Wagner), also on today's Committee agenda,  
               repeals the voluntary contribution for the California  
               Senior Legislature Fund and replaces it with a voluntary  








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               contribution for the California Senior Citizen Advocacy  
               Fund.  


          1)Amendments.  Staff suggests amending the bill to assign an  
            administrating agency, whose administrative costs are capped  
            as a percentage of the Fund, to distribute the funds to the  
            different chapters of the Special Olympics. Typically, new  
            VCFs are given an administrative agency with issue are  
            expertise to oversee fund distribution. 





          Analysis Prepared by:Luke Reidenbach / APPR. / (916)  
          319-2081