BILL ANALYSIS
SENATE COMMITTEE ON VETERANS AFFAIRS
JEFF DENHAM, CHAIRMAN
Bill No: AB 1088
Author: Fletcher
Version: February 27, 2009
Hearing Date: April 13, 2010
Fiscal: Yes
Consultant: Donald E. Wilson
SUBJECT OF BILL
Taxpayer contributions: California Veterans' Quality of
Life Fund.
PROPOSED LAW
1.Allows for the renewal and changes the name of the
Veterans' Quality of Life Fund, a voluntary tax refund
contribution designation on state tax forms, to the
California Veterans' Home Fund.
2.Requires another voluntary tax contribution (VCF)
designation be removed from the tax return form before
this designation can be added.
3.Intent language stating money raised is to be in addition
to not "supplant," existing money.
4.Sets $250,000 as the minimum annual contribution
threshold beginning the second year after it appears on
the tax form.
5.Adjusts the minimum annual contribution threshold by
indexing inflation to the Consumer Price Index (CPI) as
stated on or before August 1 of the calendar year.
6.Has a five-year sunset date after the first year the
Veterans' Quality of Life Fund appears on the tax form.
EXISTING LAW AND BACKGROUND
1.California opened its first veterans' home in Yountville
in 1884 when land was donated to the state for the
purpose of taking care of civil war veterans.
2.The Morale, Recreation, and Welfare fund was established
to provide activities at the home for its resident
veterans.
3.Under existing law regulating the administration of the
Personal Income Tax Law, individual taxpayers are allowed
to contribute amounts in excess of their tax liability
for the support of specified funds or accounts,
including, among others, the Veterans' Quality of Life
Fund.
4.Existing law requires the expenditure of all moneys
contributed to the fund, upon appropriation by the
Legislature, for administrative costs and for
distribution into the Morale, Welfare, and Recreation
Fund for each of the veterans' homes.
5.Existing law sets a minimum dollar threshold that a
check-off fund must raise in order to remain on tax
return forms.
6.According to the Assembly Revenue and Taxation Committee
-
"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."
COMMENT
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1.Within the next few years an entire eight-home system
will be completed. All homes will eventually need to
have a Morale, Recreation, and Welfare Fund.
2. The state can fill the Morale fund from the general
fund, which is unlikely in these economic times.
Allowing people to donate the money directly from their
tax returns relieves the need to find the money in an
appropriation through the legislative process.
3.Any administrative costs associated with the tax check
off will be covered by donations to the account - not the
state treasury.
4.According to the Franchise Tax Board, since the donations
are tax deductible and not a tax credit a significant
amount of money ($250,000) can be donated to the quality
of life fund with an impact of only $15,000 to the
state's general fund.
5.Prior votes-
a) Assembly Floor 71-0
b) Assembly Appropriations 17-0
c) Assembly Veterans' Affairs 8-0
d) Assembly Revenue & Taxation 5-0
SUPPORT
American Legion, Department of California
AMVETS, Department of California
California Association of County Veterans Service Officers
Vietnam Veterans of America, California State Council
OPPOSE
None received
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