BILL ANALYSIS
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|SENATE RULES COMMITTEE | SB 41|
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THIRD READING
Bill No: SB 41
Author: Battin (R), et al
Amended: As introduced
Vote: 21
WITHOUT REFERENCE TO COMMITTEE OR FILE
SUBJECT : Corporation tax law: firefighter assistance
SOURCE : Author
DIGEST : This bill enacts the California Fallen
Firefighters Assistance Tax Clarification Act of 2006.
Specifically, it provides that payments made by an exempt
organization (Central County United Way in Hemet) on or
after 10/26/06 and before 6/1/96, to any family member of a
firefighter who died as a result of the October 2006
Esperanza Incident fire in southern California will be
treated as payments made in furtherance of the charitable
purpose of that organization.
ANALYSIS :
Background
On October 26, 2006, a fire in Esperanza erupted which
claimed the lives of five firefighters of the U.S. Forest
Service. The fire destroyed 34 homes and caused nearly $10
million in damage. After the death of these firefighters,
5,000 persons contributed approximately $1.3 million to
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help the families. It was later found that the disbursal
of the money by the Central County United Way in Hemet
could have violated federal tax laws and the United Way
could have risked its tax exempt status.
The Internal Revenue Service allows money to be given to
the five families for documented needs (i.e., mortgage
payment, etc.). When the fund had approximately $500,000,
the United Way found its size would exceed any documented
need.
In December of 2006, Congress passed legislation authored
by Congressmembers Mary Bono, Jerry Lewis and Ken Calvert
and Senators Dianne Feinstein and Barbara Boxer, providing
a one-time only exemption. Congress passed similar
legislation after the September 11, 2001 terrorist attacks.
Separately, the Wildland Firefighter Foundation also
raised funds and could qualify for the proposed exemption.
The California tax code mirrors federal tax laws which
generally prohibit tax-exempt charitable organizations from
disbursing money to benefit individuals. In order to
ensure the Central County United Way does not endanger
their tax exempt non-profit status, the state code must
also be amended to enable the United Way to disburse the
money that has been raised for the families of the five
fallen Esperanza firefighters.
Raymond Lee Oyler of Beaumont was arrested for starting the
fire and is awaiting trial on multiple charges, including
five counts of first-degree murder.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: No
SUPPORT : (Verified 1/17/06)
California Professional Firefighters
ARGUMENTS IN SUPPORT : The California Professional
Firefighters, state, in support, that this bill will
"?.ultimately enable surviving family members of those
firefighters who fell in the line of duty while battling
the Esperanza fire to receive specified charitable
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contribution."
DLW:cm 1/17/07 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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