BILL ANALYSIS Ó
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CONCURRENCE IN SENATE AMENDMENTS
AB
2371 (Frazier)
As Amended August 19, 2016
Majority vote
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|ASSEMBLY: | 75-0 |(May 19, 2016) |SENATE: | 38-0 |(August 23, |
| | | | | |2016) |
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Original Committee Reference: REV. & TAX.
SUMMARY: 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.
The Senate amendments:
1)Provide that the State Department of Social Services (DSS) is
responsible for overseeing disbursement of moneys from the
Fund, instead of the State Department of Developmental
Services (DDS).
2)Require the Special Olympics Northern California (SONC) and
the Special Olympics Southern California (SOSC) to annually
provide a report to DSS detailing the expenditure of moneys
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disbursed to each organization. The report shall include the
following:
a) Documentation that the moneys disbursed to each
organization were not used for administrative costs nor for
any purposes outside of California
b) Narrative description of the amount of moneys received
and how the moneys were spent.
EXISTING LAW:
1)Allows taxpayers to contribute to one or more of 19 VCFs on
the 2015 PIT return.
2)Provides a specific sunset date for each VCF, except for the
California Seniors Special Fund and the State Parks Protection
Fund.
3)Requires each VCF to meet an annual minimum contribution
amount to remain in effect, except for the California
Firefighters' Memorial Fund, the California Peace Officer
Memorial Foundation Fund, and the California Seniors Special
Fund.
AS PASSED BY THE ASSEMBLY, this bill:
1)Allows individuals to designate on their PIT return that a
contribution in excess of their tax liability, if any, be made
to the Fund in support of children and adults with
intellectual disabilities.
2)Establishes the Fund in the State Treasury.
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3)Provides that all money transferred to the Fund, upon
appropriation by the Legislature, shall be allocated to the:
a) Franchise Tax Board (FTB) and the State Controller for
reimbursement of all costs incurred in administering the
VCF; and,
b) DDS where the balance shall be disbursed proportionately
between the Special Olympics Northern California and
Special Olympics Southern California according to each
organization's jurisdiction based on the county of the
taxpayers contributing. DDS may use up to 3% of allocated
funds for administrative costs.
4)Prohibits the SONC and the SOSC from using money received from
the Fund for administrative costs.
5)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.
6)Requires the Fund to meet a minimum contribution threshold of
$250,000 indexed for inflation to remain on the PIT return.
FISCAL EFFECT: According to the Senate Appropriations
Committee, the 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.
State agencies responsible for administering the Fund would be
reimbursed for related administrative costs.
COMMENTS:
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1)So Many Causes, So Little Space: There are countless worthy
causes that would benefit from the inclusion of a VCF on the
state's income tax returns. At the same time, space on the
returns is limited. Thus, it could be argued that the current
system for adding VCFs to the form is subjective and
essentially rewards organizations that can convince the
Legislature to include their fund on the form.
2)Special Olympics Fund: SONC and SOSC are chapters of Special
Olympics, an organization founded by Eunice Kennedy Shriver in
1968 that provides year-round sports training and athletic
competition for children and adults with intellectual
disabilities. The Special Olympics' global reach expands to
4.4 million athletes.
According to the proponents of this bill, SONC and SOSC serve
59,000 athlete families, receive assistance from over 45,000
volunteers and 18,000 law enforcement volunteers, and benefit
from 36,000 current donors. This wide base of support,
coupled with a big social media push during tax season if the
voluntary contribution designation is enacted, would help the
Fund meet its minimum contribution requirement.
Analysis Prepared by:
Irene Ho / REV. & TAX. / (916) 319-2098 FN:
0004822