BILL ANALYSIS Ó
AB 2497
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Date of Hearing: April 11, 2016
ASSEMBLY COMMITTEE ON REVENUE AND TAXATION
Sebastian Ridley-Thomas, Chair
AB 2497
(Wagner) - As Amended March 15, 2016
Majority vote. Fiscal committee.
SUBJECT: Voluntary contributions: California Senior
Legislature Fund: California Senior Citizen Advocacy Fund
SUMMARY: Authorizes the addition of the California Senior
Citizen Advocacy Fund (Fund) as a voluntary contribution fund
(VCF) on the personal income tax (PIT) return for taxable years
beginning on or after January 1, 2016. Specifically, this bill:
1)Repeals the statutory authorization for the existing
California Senior Legislature Fund, which supports the work of
the California Senior Legislature.
2)Establishes the new Fund in the State Treasury.
3)Provides that the Fund is the successor fund of the California
Senior Legislature Fund. Specifically, all assets,
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liabilities, revenues, and expenditures of the California
Senior Legislature Fund shall be transferred to, and become
part of, the Fund, as provided.
4)Allows a deduction for any contribution made to the Fund.
5)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 Controller for
reimbursement of all costs incurred in administering the
VCF; and,
b) California Senior Legislature, for its ongoing
activities on behalf of older persons.
6)Provides that the funds allocated to the California Senior
Legislature shall be spent pursuant to the purview of the
Joint Rules Committee of the California Senior Legislature in
a manner consistent with the bylaws of the California Senior
Legislature, established through a majority vote of the
California Senior Legislature.
7)Provides that the Fund's statutory provisions shall remain in
effect only for taxable years beginning before January 1,
2021.
8)Requires the Fund to meet a standard minimum contribution
requirement of $250,000 in its second year. Thereafter, the
minimum contribution amount will be indexed for inflation.
EXISTING LAW:
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1)Allows taxpayers to contribute to one or more of 19 VCFs on
the 2015 PIT return.
2)Authorizes the California Senior Legislature Fund as a VCF on
the PIT return.
COMMITTEE RULES:
1)Require that VCF bills comply with this Committee's VCF
(Income Tax Checkoff) Policy (VCF Policy). This Committee's
VCF Policy, in turn, requires all existing VCFs for which
reauthorization is sought "to comply with an
inflation-adjusted $250,000 minimum contribution requirement."
2)Provide that existing VCFs "that have failed to meet their
minimum contribution requirement will not be extended or
reauthorized."
FISCAL EFFECT: The FTB's fiscal estimate for this bill is
currently pending. Based on prior VCF bills, Committee staff
estimates that this bill will result in minor General Fund
losses of up to $15,000 per year resulting from itemized
taxpayer deductions.
COMMENTS:
1)The author has provided the following statement in support of
this bill:
AB 2497 would re-name the contribution fund from the
California Senior Legislature Fund to the "California
Senior Citizen Advocacy Fund" to more accurately portray
the mission of the organization, and to remove the stigma
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of being associated with the State Legislature. This name
change would provide for retention on the Franchise Tax
Board's Form 540, and thus allow the marketing and
promotional efforts to continue to be pursued. Renaming
the California Senior Legislature Fund is the simplest
method to prevent removal from the Franchise Tax Board's
Form 540, and allows the California Senior Legislature to
rebuild their primary source of funding.
2)Proponents of this bill note the following:
For 35 years, the CSL has successfully advocated for
California Seniors, and because of their actions, millions
of seniors are living better lives. CSL has helped
California's seniors have a voice in the Legislature for
over three decades. However, as of January 2017, the CSL
will be removed from the tax check-off and lose the primary
source of funding to sustain the organization.
The 4.3 million individuals age 65 and over is expected to
nearly triple to 12.4 million by 2060. With these numbers,
it is imperative that the CSL continue to inform the
Legislature of key issues affecting our State's growing
senior population. To date, the volunteer members have had
over 200 senior proposals chaptered into legislation.
3)Committee Staff Comments
a) The California Senior Legislature : Currently, the
ongoing work of the California Senior Legislature is
supported by contributions to the existing California
Senior Legislature Fund. Before the enactment of SB 997
(Morrell), Chapter 248, Statutes of 2014, the California
Senior Legislature was supported by another VCF called the
"California Fund for Senior Citizens" (see discussion
below). The California Senior Legislature notes that since
1981 it has labored to identify, develop, and support
legislative proposals that protect and enhance the quality
of life of California's seniors.
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b) The California Senior Legislature's first VCF : The
California Senior Legislature was originally supported by
the California Fund for Senior Citizens which, the FTB
notes, first appeared on the 1983 PIT return. From 2010 to
2013, the California Fund for Senior Citizens received the
following contribution amounts:
-------------------------------------------------------
| 2010 | 2011 | 2012 | 2013 |
| | | | |
| | | | |
|-------------+-------------+-------------+-------------|
| $296,144 | $308,763 | $272,742 |$234,247 |
| | | | |
| | | | |
-------------------------------------------------------
The California Fund for Senior Citizens' minimum
contribution amount was set at $250,000 and, unlike most
other VCF thresholds, was not annually adjusted for
inflation. While the California Fund for Senior Citizens
received only $234,247 in valid contributions in 2013, the
VCF was still placed on the 2013 PIT return. This is
because, by September 1, 2013, the FTB estimated
(incorrectly, it turns out) that the California Fund for
Senior Citizens would meet its minimum contribution amount
for the year.
c) What happened in 2014 ? In 2014, contributions to the
California Fund for Senior Citizens lagged slightly behind
contributions in the prior year. The California Senior
Legislature grew understandably concerned that the
California Fund for Senior Citizens would not meet its
minimum contribution amount in 2014, thereby jeopardizing
the VCF's place on the 2014 PIT return.
Thus, the California Senior Legislature advocated for the
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enactment of SB 997 (Morrell), which sunset the California
Fund for Senior Citizens and effectively replaced it with a
newly named VCF - the California Senior Legislature Fund.
SB 997 (Morrell) was designed to serve two main purposes.
First, it ensured that a VCF supporting the work of the
California Senior Legislature was included on the 2014 PIT
return, thus allowing the California Senior Legislature to
continue its work. In exchange for this temporary reprieve
from a minimum contribution requirement, the California
Senior Legislature agreed to index the new California
Senior Legislature Fund's minimum contribution requirement
for inflation in subsequent years. Second, SB 997
(Morrell) included the California Senior Legislature's name
in the newly enacted VCF to make promotion of the fund
easier and to avoid taxpayer confusion with the California
Seniors Special Fund.
d) Best laid plans : Unfortunately, the newly named
California Senior Legislature Fund has not generated
significant support since its creation. In 2015, the fund
generated only $60,137 in valid contributions. Moreover,
the fund has only generated $8,693 through February of this
year. The California Senior Legislature speculates that
this dramatic drop in historic contribution levels is
associated with the addition of the word "Legislature" in
the fund's name. Thus, they are advocating for this bill,
which would sunset the California Senior Legislature Fund
and add a third VCF to the form highlighting the California
Senior Legislature's advocacy work.
e) A potentially questionable precedent : As noted above,
this Committee's VCF Policy requires all existing VCFs for
which reauthorization is sought "to comply with an
inflation-adjusted $250,000 minimum contribution
requirement." The VCF Policy also provides that existing
VCFs "that have failed to meet their minimum contribution
requirement will not be extended or reauthorized." The
Committee's VCF Policy was originally adopted in response
to the proliferation of VCF legislation and in recognition
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of the fact that space on the PIT return is limited.
Proponents of this bill might argue that the California
Senior Legislature should once again be given special
dispensation given their vital work advancing the interests
of senior Californians. Critics, however, might contend
that it is unfair to give this one organization special
treatment in light of the many other VCFs whose public
support has diminished in recent years. There are no fewer
than 30 VCFs that have been eliminated from the return in
recent years, mainly for failing to meet their minimum
contribution amount. The following is only a
representative sample:
i) The ALS/Lou Gehrig's Disease Research Fund received
only $131,655 in 2013 and, as a result, was eliminated
from the return;
ii) The Municipal Shelter Spay-Neuter Fund received only
$217,883 in 2013 and, as a result, was eliminated from
the return;
iii) The Arts Council Fund received only $165,647 in 2012
and, as a result, was eliminated from the return;
iv) The California Police Activities League Fund
received only $67,202 in 2012 and, as a result, was
eliminated from the return;
v) The California Veterans Homes Fund received only
$210,078 in 2012 and, as a result, was eliminated from
the return;
vi) The Safely Surrendered Baby Fund received only
$158,645 in 2012 and, as a result, was eliminated from
the return;
vii) The California Military Family Relief Fund received
only $202,010 in 2010 and, as a result, was eliminated
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from the return; and,
viii) The California Ovarian Cancer Research Fund received
only $121,427 in 2010 and, as a result, was eliminated
from the return.
f) Suggested technical amendments : Committee staff
suggests adoption of the following technical amendments:
i) On page 4, in line 14, strike "initial" and insert
"original"; and,
ii) On page 6, in line 20, strike "California Senior
Legislature Fund" and insert "California Senior Citizen
Advocacy Fund".
REGISTERED SUPPORT / OPPOSITION:
Support
12 individuals
Opposition
None on file
Analysis Prepared by:M. David Ruff / REV. & TAX. / (916)
319-2098
AB 2497
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