BILL ANALYSIS �
AB 233
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Date of Hearing: April 6, 2011
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Felipe Fuentes, Chair
AB 233 (Hall) - As Amended: March 15, 2011
Policy Committee: Revenue and
Taxation Vote: 9-0
Urgency: No State Mandated Local Program:
No Reimbursable: No
SUMMARY
Authorizes the addition of the California YMCA Youth and
Government Fund check-off to the personal income tax form upon
the removal of another voluntary contribution fund (VCF) from
the form. Specifically, this bill:
1)Establishes the California YMCA Youth and Government Fund in
the State Treasury.
2)Provides that all moneys transferred to the fund, upon
appropriation by the Legislature, be allocated as follows:
a) To the Franchise Tax Board (FTB) and the State
Controller for reimbursement of all costs incurred in
administering the check-off.
b) To the Department of Education for distribution to the
California YMCA Youth and Government Program, for its
ongoing activities on behalf of youth. Requires that these
funds be used exclusively for program-related expenses.
3)Provides that the bill's provisions are repealed on January 1
of the fifth taxable year following the first appearance of
the check-off for the California YMCA Youth and Government
Fund on the personal income tax return. However, the
check-off will be removed on January 1 of an earlier year, if
FTB estimates that the annual contribution amount will be less
than $250,000, adjusted for inflation as specified.
FISCAL EFFECT
AB 233
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Franchise Tax Board staff estimates that this bill will cost the
state about $15,000 per year if the check-off is added in the
2012-13 fiscal year, and there is $250,000 in net new donations
which are subsequently claimed as charitable deductions by
taxpayers. This amount is the minimum needed to stay on the
personal income tax return. If donations meet or exceed that
amount, the check-off will stay on the form and the revenue
losses would be similar in 2013-14 and in any subsequent years
the check-off is on the form. The revenue loss could be greater
if donations exceed the minimum level.
AB 233
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COMMENTS
1)Rationale for the bill. AB 233 would help state taxpayers
contribute to help finance the YMCA Youth & Government
Program, which is a statewide youth educational program that
annually involves more than 2200 high school students in a
year-long civic experience. The author argues that,
consistent with current efforts to support the California
Senior Legislature, this measure will allow California
taxpayers to empower young people through an important program
that motivates and inspires youth to become active citizens in
our state.
2)Voluntary Contribution Funds (VCFs) . California taxpayers can
make voluntary contributions to any of 15 funds listed on the
state personal income tax return. The contributions are in
addition to tax liabilities so they do not directly reduce the
amount of state taxes. As charitable contributions, the
taxpayer may deduct the amount of the check-off 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 have historically ranged from
$300,000 to $800,000 per year. Except for the California
Seniors Special Fund, all have sunset dates, and most must
meet a minimum annual contribution to remain on the return.
2)Related legislation: The following related bills address
personal income tax check-offs and have been introduced in the
current legislative session:
a) AB 564 (Smyth) would, among other things, add the
Municipal Shelter Spay-Neuter Fund to the form.
b) AB 764 (Swanson) would add the Victim-Witness Assistance
Fund to the form.
c) AB 971 (Monning) would extend the current repeal date
for the current California Sea Otter Fund.
d) SB 164 (Simitian) would extend the repeal dates of the
State Children's Trust Fund for the Prevention of Child
Abuse and the Rare and Endangered Species Preservation
Program to January 1, 2018.
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3)Prior legislation: Last year, the author introduced an almost
identical check-off bill, AB 2017, to support the ongoing
activities of the California YMCA Youth and Government
Program. The California State Alliance of YMCAs, sponsors of
AB 2017, opposed SB 516 (DeSaulnier), which would have
established a California Youth Legislature, funded by a new
VCF, to examine and discuss issues affecting California's
youth and advise the Legislature and Governor on specific
matters. The authors reached a compromise, where SB 516 was
amended to delete the separate check-off and AB 2017 was
amended to divide moneys evenly between the YMCA program and
the California Youth Legislature. Both bills then passed the
Legislature, and both were vetoed by Governor Schwarzenegger.
In his veto messages, the Governor argued against statutory
creation of new organizations.
Analysis Prepared by : Roger Dunstan / APPR. / (916) 319-2081