BILL ANALYSIS
SENATE REVENUE & TAXATION COMMITTEE
Senator Lois Wolk, Chair
AB 658 - Hayashi
Amended: March 4, 2010
Hearing: June 9, 2010 Fiscal: Yes
SUMMARY: Allows Taxpayers to Make Voluntary Contributions
to the California Police Activities Fund (CALPAL)
on their State Personal Income Tax Returns.
EXISTING LAW allows taxpayers to contribute money to
one or more of 15 voluntary contribution funds by checking
a box on their state income tax return. California law
requires contributions made through check-offs to be made
from taxpayers' own resources (not from their tax
liability, as is possible on federal tax returns).
Check-off amounts may be claimed as charitable
contributions on taxpayers' tax returns during the
subsequent year.
Allows the Franchise Tax Board (FTB) to design tax
returns to provide for the designation of contributions to
specified funds either on the return itself or on a
separate schedule that must be attached to the return.
THIS BILL creates the CALPAL check-off to the personal
income tax form upon the removal of another voluntary
contribution fund (VCF). Specifically, this bill:
Requires the State Controller to allocate the funds to
the state CALPAL (the statewide chapter of the nonprofit
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organization).
Requires the FTB to compile a report of the CALPAL
contributions received, by ZIP code, and distribute this
report to the state CALPAL and the chairs of the Senate and
Assembly Revenue and Taxation Committees.
Directs the state CALPAL--upon receipt of the FTB
information-to then allocate the funds to local chapters
in proportion to the voluntary contributions made in the
counties in which the local chapters reside. Provides that
a contribution made by a taxpayer in a ZIP code that does
not have a CALPAL chapter shall be allocated to the state
CALPAL to help establish CALPAL chapters in that ZIP code,
or to fund CALPAL activities and programs.
Provides that the state CALPAL may use up to 15
percent of the total funds to cover administrative costs of
this measure.
Sunsets in five years after becoming operative, or
whenever FTB estimates the annual contribution amount will
be less than $250,000, as adjusted for inflation.
FISCAL EFFECT:
According to the FTB, this tax check-off will result
in an annual revenue loss of approximately $15,000 per year
beginning in fiscal year (FY) 2011-12.
COMMENTS:
A. Purpose of the Bill
This bill is intended to provide an additional funding
source for CALPAL. The author states that the program plays
a vital role in building relationships between law
enforcement personnel and community residents, particularly
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at-risk youths.
B. Background
CALPAL is a non-profit organization founded over 35
years ago by police officers and provides educational and
recreational programs for youth ages 5-18. Over 300, 000
youth actively participate in CALPAL's 130 local chapters.
Local CALPAL chapters are community-based organizations
started and operated through the voluntary efforts of law
enforcement officers. CALPAL's mission is to effectively
connect local law enforcement officers with the communities
they serve.
The program connects local law enforcement officers,
paid staff, and volunteers with youth. CALPAL personnel
and volunteers serve as role models, coaches, tutors,
mentors, chaperones and program managers. CALPAL chapters
receive no state funding and rely exclusively on
contributions for funding.
C. Many Worthy Causes
Taxpayers can make voluntary contributions to any of
15 funds listed on the state personal income tax return.
The contributions are in addition to any tax liabilities
otherwise owed. Thus, they do not directly reduce state
taxes otherwise available to support state-funded programs
in the year in which they are made. However, the amounts
are allowed as an itemized deduction for charitable
contributions on the subsequent year's income tax return.
These voluntary contributions support various purposes,
including cancer research, endangered species preservation,
and emergency food assistance. Contributions to the VCFs
have historically ranged from $250,000 to $800,000 per
year. All but one VCF (the California Seniors Special Fund)
have sunset dates, and most-except for the California Peace
Officer Memorial Foundation Fund and the California
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Firefighters' Memorial Fund-must meet a minimum annual
contribution to remain on the return.
In the past, the Committee has expressed concern that
countless worthy causes may be funded by tax check-offs.
The Committee has stated that the current check-off system
forces them to choose between worthy charities and
non-profits for a spot on the tax return. The current
system remains subjective and is limited to those
organizations that can convince the Legislature to include
them on the form. Additionally, taxpayers may currently
contribute portions of their refunds to worthy
organizations. Taxpayers may also claim a deduction for
charitable contributions. The Committee may wish to
consider whether the state should use the tax code to
encourage contributions to certain charitable
organizations.
In addition to this bill, the following bills have
been introduced this year:
AB 1008 (Block) would create a VCF designation on
the personal income tax form for taxpayers to
contribute to the National Guard Education Assistance
Fund. This bill is waiting to be heard in the Senate
Revenue and Taxation Committee.
AB 1088 (Fletcher) would create a VCF designation on
the personal income tax return in order for taxpayers
to contribute to the Morale, Welfare, and Recreation
Fund for each of the veterans' homes, as provided.
This bill is also being heard June 9th in the Senate
Revenue and Taxation Committee.
AB 1983 (Torrico) would create a VCF designation on
the personal income tax return for taxpayers to
contribute to the Safely Surrender Babies Fund. This
bill is waiting to be heard in the Senate Revenue and
Taxation Committee.
AB 2017 (Hall) would create a VCF designation on the
personal income tax return for taxpayers to contribute
to the Young Men's Christian Association (YMCA) Youth
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and Government Fund. This bill is awaiting assignment
in the Senate Rules Committee.
SB 1076 (Price) would create a VCF designation on
the personal income tax return for taxpayers to
contribute to the Arts Council Fund. This bill has
been held in the Senate Appropriations Committee.
Support and Opposition
Support: Alameda County Deputy Sheriffs' Activities
League, Inc. (Sponsor), California Police Activities
League, Industry Sheriff's Youth Activities League,
Hollywood PAL, Rancho Cordova PAL, Antioch PAL, Los
Angeles Police Department, Visalia PAL, South Lake Tahoe
PAL, and various other local PALs and police departments
too numerous to list here.
Oppose: None on file.
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Consultant: Meg Svoboda