BILL ANALYSIS Ó
SENATE COMMITTEE ON APPROPRIATIONS
Senator Ricardo Lara, Chair
2015 - 2016 Regular Session
AB 2371 (Frazier) - Voluntary contributions: Special Olympics
Fund
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|Version: May 12, 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 2371 would add the Special Olympics Fund check-off
to the personal income tax return.
Fiscal
Impact:
The Franchise Tax Board (FTB) estimates that, beginning
in 2017- 18, this bill would result in an annual revenue
loss of $8,000 (General Fund) for every $250,000
contributed by itemizing taxpayers.
The State Controller's Office (SCO) and FTB and would be
reimbursed for related administrative costs. Reimbursement
to the Department of Developmental Services would be
limited to three percent of moneys allocated to it.
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Background: Current law allows taxpayers to contribute money to one or more
of 19 voluntary contribution funds (VCFs) during the process of
filing their state income tax return. 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.
When a taxpayer contributes to VCFs, FTB deposits the total of
all contributions, less an administrative fee, into the fund
created as part of the VCF's legislative authorization. For
some VCFs, such as the Protect Our Coast and Ocean Fund,
taxpayers' contributions are allocated to a state agency for use
in a state administered grant program. The authorizing statutes
of other VCFs direct administrative agencies to allocate
donations to a private organization. For example, the Office of
Emergency Services passes VCF funds to the American Red Cross.
Other VCFs require the State Controller to send the funds
directly to private organizations without passing through an
administrative agency, such as the California Fire Foundation.
SCO and administrative agencies may deduct administration fees
from the amount of donations each VCF receives.
Proposed Law:
This bill would add the Special Olympics Fund (Fund) check-off,
and allow a taxpayer to make a voluntary contribution to the
Fund on the state personal income tax return, beginning once an
existing check-off for charitable fund contribution has been
removed, or as soon as space is available. The bill would
require the Fund to meet a minimum contribution threshold of
$250,000 in the second calendar year it appears on the tax form;
that amount would be indexed yearly for inflation.
Additionally, the bill would provide that all money transferred
to the Fund, upon appropriation by the Legislature, be allocated
as follows: (1) to FTB and the State Controller for
reimbursement of all costs incurred in administering the VCF,
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and (2) to the State Department of Developmental Services (DDS),
where the balance would be disbursed between the Special
Olympics Northern California and Special Olympics Southern
California based on the amount of donations provided by
taxpayers in each organization's jurisdiction, as specified, for
the purpose of supporting children and adults with intellectual
disabilities.
The bill would prohibit funds to be used for administrative
costs by the Special Olympics Northern California and the
Special Olympics Southern California, and would limit DSS to
three percent of the moneys allocated to it for administrative
costs. The VCF would automatically sunset on January 1 of the
fifth taxable year following the Fund's first appearance on the
personal income tax form.
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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