BILL ANALYSIS
SENATE REVENUE & TAXATION COMMITTEE
Senator Lois Wolk, Chair
AB 2017 -Hall
Amended: June 16, 2010
Hearing: June 23, 2010 Fiscal: Yes
SUMMARY: This Bill Would Allow Taxpayers to Make Voluntary
Contributions to the California YMCA Youth and
Government 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 funds either on the return itself or on a
separate schedule that must be attached to the return.
THIS BILL creates the California YMCA Youth and
Government Fund checkoff to the personal income tax form
upon the removal of another voluntary contribution fund
(VCF). Specifically, this bill:
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Establishes the California YMCA Youth and Government Fund
in the State Treasury and provides that all moneys
transferred to the Fund, upon appropriation by the
Legislature, shall be allocated as follows:
a) To the FTB and the State Controller for
reimbursement of costs incurred in administering the
checkoff;
b) To provide an annual grant of $20,000 each to the
African American Youth Leadership Program, the Asian
Pacific Youth Leadership Project, and the Chicano
Latino Youth Leadership Project and allows additional
non-profit civic youth organizations to apply for a
grant of up to $10,000 each. Provides that these
grants shall be administered by the YMCA Youth and
Government Board of Directors, who shall develop
criteria for awarding the grants and caps the amount
the total amount of grants at $40,000 per year.
c) To the California YMCA Youth and Government Program
(Program) for its ongoing activities on behalf of
youth. Specifically, the moneys shall be used to fund
the California Youth and Government Model Legislature
and Court Program and shall be spent under the purview
of the YMCA Youth and Government board members in a
manner consistent with the organization's bylaws.
Provides that, to be eligible to participate in the
Program, youths must be 14 to 18 years of age and currently
enrolled in a California high school or participating in a
nonpublic, home-based educational program or a general
equivalency degree program.
Provides that each member of the Legislature may
appoint one youth member from his/her district to
participate in the Program. In making their appointments,
legislators shall take into consideration that the members
of the Program represent the racial, ethnic, socioeconomic,
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cultural, physical, and educational diversity of
California. Particular emphasis should be placed on
reaching out to at-risk or disadvantaged youth to serve as
members of the Program, as their participation will provide
insight into many of the issues that youth face in their
day-to-day lives.
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 Bill
The author provides the following statement:
The [Program] is a statewide youth educational program
involving more than 2200 high school students in a
six-month "hands on" civic experience. Since its
inception 62 years ago, the [Program] has successfully
used a variety of activities to build, encourage, and
strengthen those life assets and character traits that
will help high school youth become involved,
responsible and respected citizens.
The [Program] teaches the values of democracy by
creating citizen leaders from a diverse cross-section
of the State's high school population and provides
them with the opportunity to experience state
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government first hand. The [Program] helps youth
learn how to solve community problems through the
democratic process and develops within the youth an
attitude of self-help and self-confidence for their
personal futures.
As part of the [Program], regional student delegations
discuss public policy issues facing the state as well
as ways to implement their solutions through the
legislative and judicial processes. Teen delegates
draft legislation, prepare issue briefs, select
governmental positions to role-play, attend statewide
training and election conferences and run for various
offices and leadership positions. The [Program]
concludes with a five day Model Legislature and Court
each February at the State Capitol.
Unfortunately, in recent years, costs to operate the
[Program] and participant demand for financial
assistance have greatly increased while donations to
this important program have declined.
AB 2017 would allow state taxpayers to voluntarily
contribute to the [Program] through a tax check-off
donation on their state tax return.
Consistent with current efforts to support the
California Senior Legislature, this measure will allow
California taxpayers to empower young people through a
proven and successful program that motivates and
inspires youth to become active citizens in our state.
B.Competition between Checkoffs
This bill is similar to SB 516 (DeSaulnier),
introduced in 2009, and currently pending in the Assembly
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Revenue and Taxation Committee. SB 516 establishes a
California Youth Legislature funded by a new VCF and is
supported by numerous organizations including the
California Coalition for Youth (CCY). SB 516 requires the
California Youth Legislature to examine and discuss issues
affecting California's youth and formally advise the
Legislature and the Governor on specific policy matters.
The California State Alliance of YMCAs (YMCA)
opposes SB 516, arguing that the California Youth
Legislature is duplicative of the long standing program the
YMCA oversees. The June 16th amendments to AB 2017 attempt
to offer a funding compromise to the CCY by allowing
non-profit civic youth organizations, such as the CCY, to
apply for a grant of up to $10,000.
The CCY is still opposed to AB 2017, stating its
main concern that if both measures move forward,
California taxpayers will be confused if both VCFs appear
on the state's personal income tax form and "having both
checkoffs on the form could potentially divert resources
between the programs as both will need to receive the same
minimum amount of 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, this 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 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 the Senate Revenue and
Taxation Committee June 9th and is awaiting action in
the Senate Appropriations Committee.
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 this
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 1983 (Torrico) would create a VCF designation on
the personal income tax return for taxpayers to
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contribute to the Safely Surrender Babies Fund. This
bill is also being heard June 23rd in this 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: California Collaboration for Youth,
California State Alliance of YMCAs; Safe Cities Foundation
Oppose: California Coalition for Youth
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Consultant: Meg Svoboda