BILL ANALYSIS
AB 1088
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Date of Hearing: January 12, 2010
ASSEMBLY COMMITTEE ON VETERANS AFFAIRS
Mary Salas, Chair
AB 1088 (Fletcher) - As Amended: January 11, 2010
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.
5)Deletes the statutory provisions that authorized the Veterans'
Quality of Life Fund checkoff, which was also used to fund
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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 : The Assembly Committee on Revenue and Taxations
states, 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
Homes are financed through the Morale, Welfare and
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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).
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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 : The Assembly Revenue and Taxation
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 Assembly Revenue
and Taxation Committee staff questions the precedent of
simply re-establishing failed VCFs with a new name.
While acknowledging the validity of the concerns raised by
the Assembly Revenue and Taxation Committee, this committee
has seen instances where a moral change led to increase
production. As an example, in 2005, Texas enacted H.B.
2604, which reorganized all the veteran focused programs
under one entity and named it the "Texas Veterans
Commission." Under this bill, the Texas Veterans
Commission became the central administering entity for all
veteran related programs. According to the USDOL, the
hiring success rate for veterans in Texas increased from
57% in 2006 to 85% in 2008. Per conversations with the
Texas Veterans Commission, nothing changed at the employee
level but their moral was higher on the re-organization.
d) Recent Amendments : At the request of the Assembly
Revenue and Taxation Committee the following amendment have
been taken as authors amendments in Assembly Veterans
Affairs Committee:
i) Add on page 5, line 30 following the phrase "after
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amounts received," we insert "and an estimate of the
contributions that will be received;"
ii) Add for clarification purposes "homes" into the fund
name so that it's now the California Veterans Homes Fund;
iii) Add coauthors Connie Conway, Marty Block, and Brian
Nestande.
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.
REGISTERED SUPPORT / OPPOSITION :
Support
American Legion, Department of California
AMVETS, Department of California
Chula Vista Veterans Home Support Foundation
Sacramento Veteran's Affiliated Council
San Diego Veterans Advisory Council
Vietnam Veterans of America, California State Council
Vietnam Veterans of America, Chapter 500 Sacramento
Opposition
None on file