BILL ANALYSIS
AB 1088
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Date of Hearing: January 11, 2010
ASSEMBLY COMMITTEE ON REVENUE AND TAXATION
Charles M. Calderon, Chair
AB 1088 (Fletcher) - As Amended: January 4, 2010
Majority vote. Fiscal committee.
SUBJECT : Personal income taxes: voluntary contributions:
California Veterans Fund
SUMMARY : Authorizes the addition of the California Veterans
Fund (Fund) checkoff to the personal income tax (PIT) form upon
the removal of another voluntary contribution fund (VCF) from
the form. Specifically, this bill :
1)Establishes the Fund in the State Treasury.
2)Provides that all moneys transferred to the Fund, upon
appropriation by the Legislature, shall be allocated as
follows:
a) To the Franchise Tax Board (FTB) and the State
Controller for reimbursement of costs incurred in
administering the checkoff; and,
b) To the California Department of Veterans Affairs (CDVA)
for allocation to the administrators of veterans' homes.
Specifically, moneys shall be distributed proportionally to
the Morale, Welfare, and Recreation Fund of each veterans'
home pursuant to Military and Veterans Code (MVC) Section
1047.
3)States that it is the Legislature's intent for this bill to
create an additional funding source for veterans' homes that
will supplement, and not supplant, other funding sources.
4)Provides for the Fund provisions' automatic repeal on either
January 1 of the fifth taxable year following the first
appearance of the Fund on the PIT return, or on January 1 of
an earlier year, if FTB estimates that the annual contribution
amount will be less than $250,000, or an adjusted amount for
subsequent years.
AB 1088
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5)Deletes the statutory provisions that authorized the Veterans'
Quality of Life Fund checkoff, which was also used to fund
veterans' homes.
6)Makes conforming amendments to the MVC.
EXISTING LAW :
1)Allows taxpayers to designate on their PIT returns a
contribution to any of 15 VCFs.
2)Provides a specific sunset date for each VCF, except the
California Seniors Special Fund.
3)Provides that each VCF must meet a minimum annual contribution
amount to remain in effect, except for the California Seniors
Special Fund, the California Firefighters' Memorial Fund, and
the California Peace Officer Memorial Foundation Fund.
FISCAL EFFECT : Assuming the Fund is added to the 2010 return,
FTB estimates revenue losses, resulting from contribution
deductions, to be roughly $15,000 per year.
COMMENTS :
1)The author states:
AB 1088 will establish a voluntary contribution fund to
finance programs and services at the California Veterans'
Homes via the Morale, Welfare, and Recreation Fund provided
by Section 1048 of the Military and Veterans Code.
The California Department of Veterans Affairs has a mission
"to provide the state's aged and/or disabled veterans with
rehabilitative, residential, and medical care and services
in a home-like environment at the California Veterans
Homes."
CDVA operates California Veterans Homes campuses in
Yountville, Barstow, and Chula Vista. Groundbreakings were
held in November for locations at Lancaster and Ventura.
Three more homes are planned for West Los Angeles, Fresno
and Redding.
Several activities and programs at the California Veterans
AB 1088
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Homes are financed through the Morale, Welfare and
Recreation Fund. State law provides for the Morale,
Welfare and Recreation Fund to accumulate proceeds from
prisoner-of-war license plate issuance revenue, funds
derived from golf course green fees and range ball fees,
donations to the fund, interest earned on invested funds,
funds derived from the estates of deceased members, and
money and property received by the home from estate assets
located outside the home, regardless of amount.
AB 1088 would also channel money from the California
Veterans Fund into the California Veterans Homes' Morale,
Welfare, and Recreation Fund.
With five new California Veterans Homes set to be built,
the Morale, Welfare, and Recreation Fund will have to be
split further and stretched to provide for a greater number
of veterans. The existing funding sources for the Morale,
Welfare, and Recreation Fund are not expected to grow
significantly.
Current fiscal constraints demand alternative methods to
augment and maintain funding for veterans. This measure
will enhance the Morale, Welfare and Recreation Fund,
without raising taxes, for the veterans who have given so
much of themselves for the security of others.
2)Committee Staff Comments:
a) The Veterans Home of California : As noted by CDVA, the
Veterans Home of California is first and foremost a place
where veterans come to live. Specifically, "It offers
complete medical and dental care amidst the amenities of a
small town atmosphere. Residents may participate in on- or
off-campus activities, civic affairs or attend veterans
service organization meetings. On campus, residents have
the option of participating in the Therapeutic Employment
Program or by helping other veterans through volunteer
service." CDVA currently operates campuses in Yountville
(Napa County), Barstow (San Bernardino County), Chula Vista
(San Diego County), Lancaster (Los Angeles County), and
Ventura (Ventura County). CDVA is also designing and
constructing three new homes in West Los Angeles (Los
Angeles County), Fresno (Fresno County), and Redding
(Shasta County).
AB 1088
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b) Legislative History : AB 357 (Horton), Chapter 143,
Statutes of 2005, authorized the addition of a virtually
identical VCF called the Veterans' Quality of Life Fund to
augment the amount of money available to the state's
veterans' homes. The Veterans' Quality of Life Fund
appeared on the 2005 and 2006 tax returns in calendar years
2006 and 2007, respectively. The prior fund received
$135,345 in 2006 and $168,146 in 2007. For tax years
beginning on or after January 1, 2007, the fund needed to
meet a minimum contribution threshold of $250,000 but
failed to do so, and as a result, the fund ceased to be
operative.
c) VCF Policy : This Committee's VCF policy provides that,
"All proponents seeking authorization for a new or
reauthorized checkoff shall provide information justifying
their expectation that the checkoff will meet its
contribution minimum." As of the date this Committee
analysis was prepared, no such information had been
provided. Indeed, while the Fund has been given a new
name, there is little reason to believe it will fare any
better than the ill-fated Veterans' Quality of Life Fund,
which failed to meet its voluntary contribution threshold.
Moreover, Committee staff question the precedent of simply
re-establishing failed VCFs with a new name.
d) Double-referral : This bill was double-referred with the
Assembly Committee on Veterans Affairs, where it will be
heard if passed out of this Committee.
e) Related Legislation : AB 658 (Hayashi) would authorize
the addition of the California Police Activities League
Fund to the PIT form. AB 658 is scheduled to be heard
today along with this bill.
f) Recommended Technical Amendment : Committee staff
recommend the following technical amendment to the bill:
i) On page 5, line 30, after "amounts received" insert:
"and an estimate of the contributions that will be
received".
REGISTERED SUPPORT / OPPOSITION :
AB 1088
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Support
None on file
Opposition
None on file
Analysis Prepared by : M. David Ruff / REV. & TAX. / (916)
319-2098