BILL ANALYSIS
AB 563
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Date of Hearing: April 20, 2009
ASSEMBLY COMMITTEE ON REVENUE AND TAXATION
Charles M. Calderon, Chair
AB 563 (Cook) - As Amended: April 2, 2009
Majority vote. Fiscal committee.
SUBJECT : Personal income taxes: contributions: California
Military Family Relief Fund
SUMMARY : Provides that all California Military Family Relief
Fund (Fund) moneys currently allocated to the Military
Department for the establishment of financial aid grants, shall
instead be allocated, for the same purposes, to the California
National Guard (Guard) for distribution to a nonprofit
organization that the Guard selects (Selected Nonprofit).
Specifically, this bill :
1)Provides that the Selected Nonprofit, instead of the Military
Department, shall establish grant eligibility criteria.
2)Provides that the awarding of Fund grants shall be governed by
a Memorandum for Record, instead of a Memorandum of Agreement
(MOA). Specifically, the governing MOA, developed by a
working group comprised of representatives from at least three
reserve components, shall be replaced by a Memorandum for
Record developed by a working group comprised of officers
and/or members of the Selected Nonprofit.
3)Deletes the requirement that all organizations participating
in the grant program must be signatories of the MOA and,
instead, provides that the Memorandum for Record must be
signed by a representative with authority to bind the Selected
Nonprofit.
4)Makes other technical and non-substantive amendments to the
Fund statute.
EXISTING LAW :
1)Allows taxpayers to designate on their personal income tax
returns a contribution to any of 15 voluntary contribution
funds, including this Fund.
AB 563
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2)Provides that all moneys transferred to this Fund, upon
appropriation by the Legislature, shall be allocated as
follows:
a) To the Franchise Tax Board and the State Controller for
reimbursement of all costs incurred in administering the
checkoff; and,
b) To the Military Department for the establishment of
financial aid grants to reserve members of the Armed Forces
who are California residents called to active duty.
3)Provides that the Military Department shall establish
eligibility criteria for the grants.
4)Defines the Military Department to include:
a) The office of the Adjutant General;
b) The Guard;
c) The State Military Reserve;
d) The California Cadet Corps; and,
e) The Naval Militia.
5)Specifies that it is the Legislature's intent that every
qualified reserve member, regardless of branch, in need of
emergency assistance, be able to receive a grant.
6)Provides that, to ensure the objective administration of
grants, the awarding of Fund grants shall be governed by a
MOA, developed by a working group comprised of representatives
from at least three reserve components, which describes the
procedures and requirements for participation in the grant
program.
7)Requires all organizations participating in the grant program
be signatories of the MOA.
FISCAL EFFECT : Committee staff does not anticipate that this
bill will impact General Fund revenues.
AB 563
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Proposition 98 Fiscal Effect : None.
COMMENTS :
1)The author states, "I was proud to author AB 3016 in 2008, a
bill that expanded eligibility for our California Military
Family Relief Fund, to allow applicants from all branches of
the military. However, given the complexity of the issue, I
have since learned that our language needs a few simple fixes
in order to allow legal participation by service men and women
in branches other than the California National Guard. In
short, this is largely a technical bill, but is essential [to]
moving this program forward, so that we may help qualified
applicants."
2)Committee Staff Comments :
a) Last year, the author carried AB 3016, Chapter 645,
Statutes of 2008, to expand Fund grant eligibility to
reserve members of the United States Armed Forces. Prior
to AB 3016's passage, grants were restricted to members of
the Guard. The author states this bill is needed to
resolve concerns that the grant program, as currently set
up, may unintentionally violate the Department of Defense's
Joint Ethics Regulations. Specifically, there is concern
that a grant provided to a non-Guard reserve member might
be construed as a "gift" between two branches of the
military in violation of the Joint Ethics Regulations. The
author states:
Without AB 563, branches of the military would be forced
to pursue a waiver to [the Joint Ethics Regulations],
which would have to go through Congress. Unfortunately,
waivers to the [Joint Ethics Regulations] are rare and
would take, at a minimum 2-to-3 years. Such a delay
would prevent the [Fund] from assisting families in need
of immediate assistance, as a result of the ongoing war
efforts overseas.
b) As noted above, this bill provides that Fund moneys
shall be allocated to the Guard (instead of the Military
Department) for distribution to a "nonprofit organization"
the Guard selects. This raises two issues:
i) If the Guard is included within the Military
AB 563
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Department, it is unclear why Fund moneys should be
allocated to the Guard instead of the Military
Department; and,
ii) Does the author wish to provide any guidance
regarding the type of "nonprofit organization" the Guard
selects [i.e., an organization described in Internal
Revenue Code Section 501(c)(3)]?
c) The author and his staff are currently in discussions
with the Military Department to ensure that this bill
adequately addresses the concerns of all parties. Thus,
the author notes that additional, unspecified amendments
may be necessary in the future.
REGISTERED SUPPORT / OPPOSITION :
Support
None on file
Opposition
None on file
Analysis Prepared by : M. David Ruff / REV. & TAX. / (916)
319-2098