BILL ANALYSIS
SENATE REVENUE & TAXATION COMMITTEE
Senator Lois Wolk, Chair
AB 1983 - Torrico
Amended: May 4, 2010
Hearing: June 23, 2010 Fiscal: Yes
SUMMARY: Allows Taxpayers to Make Voluntary
Contributions to the Safely Surrendered Baby Fund
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 voluntary contribution funds either on the return
itself or on a separate schedule that must be attached to
the return.
THIS BILL creates the Safely Surrendered Baby 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:
Establishes the Fund in the State Treasury and
provides that all money transferred to the Fund, upon
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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 State Department of Social Services (DSS)
for programs to increase public awareness and outreach
regarding the Safely Surrendered Baby Law, including
public service announcements in English and Spanish,
safe-surrender hotlines, a DSS Internet Website with a
comprehensive list of safe-surrender sites, education,
and training for communities and schools.
Provides that DSS shall not be required to spend any
funds, other than those allocated from the Fund, for
Fund-related activities.
Provides for the Fund provisions' automatic repeal on
either January 1 of the fifth taxable year following the
taxable year the VCF first appears 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.
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
The author provides the following statement:
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AB 1983 is needed to provide an ongoing Fund for the
protection of the innocent lives of babies. According
to the State Auditor's report released in 2008, over
400 babies have been found to be abandoned illegally
in California. The purpose of this bill is to fund
outreach and to expand awareness on the Safely
Surrendered Baby Law.
B. Background
The Safely Surrendered Baby (SSB) Law was implemented
on January 1, 2001, in response to the increasing number of
abandoned baby deaths in California, as reported by media
accounts. The law is intended to spare the life of an
infant by encouraging parents or persons with lawful
custody to safely surrender an infant at a "safe surrender
site" within 72 hours of the child's birth rather than
abandoning them in an unsafe location. In October 2005,
Governor Schwarzenegger signed legislation extending the
SSB Law permanently, effective January 1, 2006.
In April 2008, the California State Auditor issued a
report highlighting a number of issues related to the
program, including a lack of state involvement, and
instances of violations and misclassifications of
information by local safe surrender sites.
C. Many Worthy Causes
Taxpayers can make voluntary contributions to any of
15 funds listed on the state PIT 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
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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
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.
Furthermore, AB 1983 is nearly identical to last
year's AB 1049 (Torrico). In 2009, AB 1049 passed both
houses of the Legislature but was vetoed by Governor
Schwarzenegger. The veto message stated that "after careful
and deliberative consideration, I do not believe it is
necessary to sign this bill at this time."
In addition to AB 1983, the following bills have been
introduced this year:
AB 658 (Hayashi) would create a VCF designation on
the personal income tax return in order for taxpayers
to contribute to the California Police Activities Fund
(CALPAL). This bill passed this committee June 9th and
is waiting to be heard in the Senate Appropriations
committee.
AB 1008 (Block) would create a VCF designation on
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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 23rd in this
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
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.
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Support and Opposition
Support: The American Congress of Obstetricians and
Gynecologists, California Catholic Conference, County
Welfare Directors Associations of California, Planned
Parenthood Affiliates of California
Oppose: None on file.
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Consultant: Meg Svoboda