BILL ANALYSIS
AB 137
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Date of Hearing: March 3, 2003
ASSEMBLY COMMITTEE ON REVENUE AND TAXATION
Ed Chavez, Chair
AB 137 (Correa) - As Introduced: January 16, 2003
Majority vote. Fiscal Committee.
SUBJECT : Personal Income Tax: California Fund for Senior
Citizens Checkoff
SUMMARY : Deletes the sunset date on the California Fund for
Senior Citizens income tax checkoff and deletes the requirement
that the checkoff receive at least a specified, minimum level of
contributions annually in order to appear on the tax form 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 California Senior Legislature
and is intended to allow the California Fund for Senior
Citizens to remain on the income tax form indefinitely,
regardless of the amount of contributions it receives. This
bill is inconsistent with policies that have been adopted in
recent years by both policy and fiscal committees of the
Legislature with respect to requirements applied to income
tax checkoff bills (see Comment 3 below for more details).
2) Background . The California Fund for Senior Citizens
checkoff first appeared on the income tax form in 1983. From
AB 137
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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.
This bill violates this committee's income tax checkoff policy.
REGISTERED SUPPORT / OPPOSITION :
Support
AB 137
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California Senior Legislature (sponsor)
AARP, Lynwood
Agency on Aging, Imperial County
American Federation of State, County, and Municipal Employees,
AFL-CIO
California Retired Teachers Association
California Senior Legislature
California Seniors Coalition
Congress of California Seniors
Fair Aging In Retirement
Gray Panthers California
Los Angeles County Area Agency on Aging Advisory Council
Midway City Chamber of Commerce and Homeowners Association
Pine Hill Construction
Senior Citizens Advisory Council, Orange County
Shelter For The Homeless
Opposition
None on file
Analysis Prepared by : Eileen Roush / REV. & TAX. / (916)
319-2098