BILL ANALYSIS
SENATE REVENUE & TAXATION COMMITTEE
Senator Lois Wolk, Chair
AB 2017 -Hall
Amended: June 28, 2010
Hearing: July 1, 2010 Fiscal: Yes
SUMMARY: This Bill Would Allow Taxpayers to Make Voluntary
Contributions to the California Youth Leadership
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 Youth Leadership Fund
checkoff to the personal income tax form upon the removal
of another voluntary contribution fund (VCF). Specifically,
this bill:
Establishes the California Youth Leadership Fund (Fund)
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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) Provides an annual grant of $15,000 each to the
African American Youth Leadership Program, the Asian
Pacific Youth Leadership Project, and the Chicano
Latino Youth Leadership Project;
c) Provides that the balance of the Fund be equally
distributed between the California YMCA Youth and
Government Program and the Joint Committee on Rules to
support the California Youth Legislature.
Provides that this measure shall become operative
only if SB 516 of the 2009-10 regular session is chaptered
and becomes operative.
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:
AB 2017 would allow state taxpayers to voluntarily
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contribute to the California Youth Leadership Fund
through a tax check-off donation on their state tax
return. Donations would be used to help finance the YMCA
Youth & Government Program, the California Youth
Legislature, the African American Youth Leadership
Program, the Asian Pacific Youth Leadership Project and
the Chicano Latino Youth Leadership Project.
Consistent with current efforts to support the California
Senior Legislature, this measure will allow California
taxpayers to empower young people through important
programs that motivate and inspire youth to become active
citizens in our state.
B.The Tale Of Two Check-offs
This bill is similar to SB 516 (DeSaulnier)-which
was introduced in 2009 and passed the Assembly Revenue
and Taxation Committee June 28, 2010, once a funding
compromise was reached with AB 2017. 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 to formally
advise the Legislature and the Governor on specific
policy matters.
Previously, the California State Alliance of YMCAs
(YMCA) opposed SB 516, arguing that the California Youth
Legislature is duplicative of the long standing program
the YMCA oversees. The June 25th amendments to AB 2017
attempt to offer a funding compromise to the CCY by
allowing each non-profit civic youth organization a
$15,000 grant, and splitting the balance of the Fund
between the YMCA Youth and Government Program and the
California Youth Legislature.
C.Many Worthy Causes
Taxpayers can make voluntary contributions to any of
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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
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
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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 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 passed this committee June 23rd and is
awaiting action in the Senate Appropriations
Committee.
AB 1983 (Torrico) would create a VCF designation on
the personal income tax return for taxpayers to
contribute to the Safely Surrender Babies Fund. This
bill passed this committee June 23rd and is awaiting
action in the Senate Appropriations 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 passed
this committee April 14th and is awaiting action in
the Assembly Revenue and Taxation Committee.
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Support and Opposition
Support: California Collaboration for Youth,
California State Alliance of YMCAs; Safe Cities Foundation,
YMCA San Luis Obispo, Omega Psi Phi Fraternity, Inc.,
Channel Islands YMCA, California YMCA Youth and Government,
Berkeley-Albany YMCA, YMCA of San Francisco, Anaheim Family
YMCA, Asian Pacific Islander Legislative Caucus, California
Legislative Black Caucus Chicano-Latino Youth Leadership
Project, Inc., Simi Valley Family YMCA, Shasta Family YMCA,
YMCA of Superior California, Southeast Ventura County YMCA,
YMCA of Greater Long Beach, YMCA of Greater Whittier,
Oppose: California Coalition for Youth
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Consultant: Meg Svoboda