BILL ANALYSIS
AB 132
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Date of Hearing: March 3, 2003
ASSEMBLY COMMITTEE ON REVENUE AND TAXATION
Ed Chavez, Chair
AB 132 (Chavez) - As Introduced: January 16, 2003
Majority vote. Fiscal Committee.
SUBJECT : Personal Income Tax: California Fund for Senior
Citizens Checkoff
SUMMARY : Extends the sunset date on the California Fund for
Senior Citizens income tax checkoff to January 1, 2010, provided
the fund receives at least a specified, minimum level of
contributions annually. Specifically, this bill :
1)Extends the sunset date on the California Fund for Senior
Citizens checkoff from January 1, 2005 to January 1, 2010.
2)Retains the requirement that the fund receive at least a
minimum amount in annual checkoff contributions in order to
appear on the income tax form in the subsequent year. This
minimum amount equaled $250,000 in 2001 and is indexed for
inflation in subsequent years.
EXISTING LAW allows taxpayers to contribute money to one or more
of 11 voluntary contribution funds by checking a box on their
state income tax return. California law requires contributions
made through checkoffs to be made from taxpayers' own resources
(not from their tax liability, as is possible on federal tax
returns). Checkoff amounts may be claimed as charitable
contributions on taxpayers' tax returns during the subsequent
year.
FISCAL EFFECT : The Franchise Tax Board (FTB) estimates that
extending this checkoff will result in annual revenue losses of
approximately $16,000 per year beginning in the 2006-07 fiscal
year.
COMMENTS :
1) This bill is sponsored by the author and is intended to
allow the California Fund for Senior Citizens to remain on
the income tax form beyond the 2004 tax year. This income
AB 132
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tax checkoff fund provides the sole source of funding for the
California Senior Legislature, and this bill's author would
like to provide that organization with the assurance that
their funding will continue beyond 2004.
2) Background . The California Fund for Senior Citizens
checkoff first appeared on the income tax form in 1983. From
1983 through 1999, the checkoff was not directly subject to
minimum contribution requirements; instead, the law specified
that minimum contribution requirements would be imposed if
the sunset date of the checkoff were eliminated.
In 1999, AB 1697 (Alquist), Chapter 228, Statutes of 1999,
extended the checkoff's sunset date to January 1, 2004.
However, in response to concerns of FTB, both legislative tax
policy committees, and both legislative fiscal committees,
that California's 540-Series tax forms were in danger of
expanding to three pages because of a proliferation of income
tax checkoffs, Assemblymember Alquist agreed to impose
minimum contribution requirements on the California Fund for
Senior Citizens checkoff. Under the provisions of AB 1697,
this checkoff was required to receive at least $250,000 in
contributions on the 2001 tax form and an equivalent amount
($250,000 indexed for inflation) in subsequent years.
The indexed amount is expected to equal approximately $262,000
in the 2002 tax year.
3) As noted immediately above, concerns arose in the late 1990s
that California was in danger of expanding to a three-page
tax form in order to accommodate a proliferation of income
tax checkoffs. Annually since 2000, this committee has
adopted an income tax checkoff policy to address these
concerns. Components of the checkoff policy include
requirements that all checkoff bills include sunset dates,
$250,000 minimum contribution requirements that are indexed
for inflation, language intended to ensure that any new
checkoff is not added to the tax form until an existing
checkoff is removed (so-called queuing language), and a
requirement that proponents of each new checkoff provide
evidence justifying why they believe their checkoff will meet
the minimum contribution requirements. The policy also
explicitly states that existing checkoffs which fail to
receive their minimum level of contributions will not have
their sunset dates extended.
AB 132
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This bill is consistent with this committee's income tax
checkoff policy.
REGISTERED SUPPORT / OPPOSITION :
Support
None on file
Opposition
None on file
Analysis Prepared by : Eileen Roush / REV. & TAX. / (916)
319-2098