BILL ANALYSIS �
SENATE GOVERNANCE & FINANCE COMMITTEE
Senator Lois Wolk, Chair
BILL NO: AB 233 HEARING: 6/29/11
AUTHOR: Hall FISCAL: Yes
VERSION: 3/15/11 TAX LEVY: No
CONSULTANT: Faulkner
YMCA VOLUNTARY CONTRIBUTIONS
Creates the California YMCA Youth and Government Fund.
Background and Existing Law
Existing state law allows taxpayers to contribute money to
one or more of 15 voluntary contribution funds (VCFs) 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 and 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.
The Franchise Tax Board (FTB) designs 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. With a few
exceptions, VCFs remain on the return until they are either
repealed or fail to meet their minimum contribution amount.
The minimum contribution amounts are adjusted annually
for inflation. For most VCFs, the minimum contribution
amount is $250,000 in the fund's second year. By September
1st of each year, the FTB must determine the minimum
contribution amount required for each fund to remain on the
form for the following calendar year and whether estimated
contributions to each fund will be less than the minimum
contribution amount for that calendar year. If the FTB
estimates that a fund will fail to meet the minimum
contribution amount, that fund is repealed effective for
taxable years beginning on or after January 1st of the
following calendar year.
Proposed Law
AB 233 -- 3/15/11 -- Page 2
Assembly Bill 233 creates the California YMCA Youth and
Government Fund. The fund will be added to the personal
income tax form when another VCF is removed and remain on
the form until January 1st of the 5th taxable year
following its first appearance or on January 1st of an
earlier year if the FTB estimates the fund will not meet
the annually required minimum contribution amount. All
monies transferred to the fund are allocated to the FTB and
Controller for reimbursement of their costs and the balance
goes to the State Department of Education for distribution
to the California YMCA Youth and Government Program for its
ongoing activities on behalf of youth.
State Revenue Impact
The FTB estimates this bill will result in a revenue loss
of $15,000 each fiscal year the fund is in place.
Comments
1. Purpose of the bill. The author states, "The
California YMCA Youth & Government Program (YMCA Y&GP) is a
statewide youth educational program annually involving more
than 2200 high school students in a yearlong "hands on"
civic experience. Since its inception 63 years ago, the
program has successfully used a variety of activities to
encourage high school youth become involved, responsible
and respected citizens.
As part of the YMCA Y&GP, 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 Model Legislature
each February at the State Capitol.
Unfortunately, in recent years, costs to operate this
program and participant demand for financial assistance has
greatly increased making it difficult to maintain and
expand this important program for California youth.
AB 233 would allow state taxpayers to voluntarily
contribute to the California YMCA Youth & Government Fund
AB 233 -- 3/15/11 -- Page 3
through a tax check-off donation on their state tax return.
Donations would be used to help finance the YMCA Youth &
Government Program and its ongoing activities on behalf of
youth.
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. Rerun . This bill is similar to the author's bill, AB
2017, 2010. AB 2017 would have established the California
Youth Leadership Fund which would have provided equal
funding for the California YMCA Youth and Government
Program and the California Youth Legislature created by SB
516 (DeSaulnier, 2010). AB 2017 also provided grants to
the African-American Youth Leadership Program, the
Asian-Pacific Youth Leadership Project, and the
Chicano-Latino Youth Leadership Project if the amount of
monies received by the fund exceeded $250,000. AB 2017 and
SB 516 were contingent on one another's passage. Both
bills were vetoed by Governor Schwarzenegger.
In his veto message of AB 2017 (Hall, 2010), the Governor
stated, "This bill is contingent on the enactment of Senate
Bill 516, which I cannot support. I would ask that the
authors of these bills reconcile their efforts to support
greater youth involvement in public policy without creating
additional organizations when there are numerous
organizations and entities already dedicate to working with
youth from all backgrounds."
In his veto message of SB 516 (DeSaulnier, 2010), Governor
Schwarzenegger stated, "This bill is similar to a measure I
vetoed in 2008. I still encourage California youth to
engage in the public policy issues that directly impact
their lives such as education, employment, foster care,
homelessness, and more. However, as most parents and
adults can attest, I would also argue that youth do not
need statutory authorization to have their voices and
opinions heard. There are numerous organizations, entities
and communications in which youth can be engaged in our
legislative process."
3. The more we get together . In its original form, AB
AB 233 -- 3/15/11 -- Page 4
2017 sought to establish the California YMCA Youth and
Government Program supported by a newly created California
YMCA Youth and Government Fund for the purposes of funding
the activities of the California Youth and Government Model
Legislature and Court Program. The enrolled version of AB
2017 offered a funding compromise between Assembly Member
Hall and Senator DeSaulnier and supporters of their
respective bills.
In its reincarnated form, AB 233 provides funding for the
YMCA Youth and Government Program only. Opponents of AB
233 have stated that this bill provides for one specific
program rather than providing for students' individual
needs. Furthermore, this bill supports only one
organization. The Committee may wish to amend AB 233 so
that all organizations doing similar work can compete for
funding.
4. Where does the money go ? This bill gives broad
authority to the California YMCA Youth and Government
Program. AB 233 states the funds shall be used exclusively
for program-related expenses but does not cap an amount for
administrative expenses. The Committee may wish to amend
the bill to limit the amount of funds that can be used for
administrative costs or state that funds may only be used
as scholarships to youth for direct expenses of
participating in the Program.
Additionally, AB 233 provides no direction related to
public policy. Unlike other efforts associated with youth
government and leadership, this bill does not focus on
underserved youth. The Committee may wish to amend the
bill so that the monies received are directed to
underserved youth and serve a specific public policy
purpose.
Senator DeSaulnier introduced legislation similar to his
bill from last session as well. SB 803 creates the
California Youth Leadership Project supported by the
California Youth Leadership Fund. This year, the enactment
of AB 233 is not contingent on the enactment of SB 803.
5. Many worthy causes . Countless worthy causes may be
funded by tax check-offs. The current system remains
subjective and is limited to those organizations that can
convince the Legislature to include them on the form.
AB 233 -- 3/15/11 -- Page 5
These check-offs give the state a role in collecting money
for charity. The Committee may wish to consider whether
the state should use the tax code to encourage
contributions to certain charitable organizations.
6. 2011 check-offs . Following is a list of 2011
check-offs and contribution amounts received in 2010:
-------------------------------------------------------------
|Alzheimer's Disease/Related |$426,417 |
|Disorders Fund | |
|------------------------------+------------------------------|
|Arts Council Fund |Initial Tax Return 2010 |
|------------------------------+------------------------------|
|CA Breast Cancer Research |$519,728 |
|Fund | |
|------------------------------+------------------------------|
|CA Cancer Research Fund |$275,587 |
|------------------------------+------------------------------|
|CA Firefighters' Memorial |$207,455 |
|Fund | |
|------------------------------+------------------------------|
|CA Fund for Senior Citizens |$296,144 |
|------------------------------+------------------------------|
|CA Peace Officer Memorial |$135,250 |
|Foundation Fund | |
|------------------------------+------------------------------|
|CA Police Activities League |Initial Tax Return 2010 |
|(CALPAL) Fund | |
|------------------------------+------------------------------|
|CA Sea Otter Fund |$263,543 |
|------------------------------+------------------------------|
|CA Seniors Special Fund |$59,192 |
|------------------------------+------------------------------|
|CA Veterans Homes Fund |Initial Tax Return 2010 |
|------------------------------+------------------------------|
|Emergency Food for Families |$487,333 |
|Fund | |
|------------------------------+------------------------------|
|Rare & Endangered Species |$578,215 |
|Preservation Program | |
|------------------------------+------------------------------|
|Safely Surrendered Baby Fund |Initial Tax Return 2010 |
|------------------------------+------------------------------|
|State Children's Trust for |$448,081 |
|the Prevention of Child Abuse | |
AB 233 -- 3/15/11 -- Page 6
-------------------------------------------------------------
7. Can we all get along ? There are currently eight VCF
bills making their way through the Legislature. With an
estimated cost of $16,000 per bill to go through the
legislative process, combining future VCF-proposals into an
omnibus VCF bill could prove time and cost effective.
In addition to this bill, the following bills have been
introduced this year:
SB 164 (Simitian) extends the repeal dates of both the
State Children's Trust Fund for the Prevention of Child
Abuse and the Rare and Endangered Species Preservation
Program from January 1, 2013 to January 1, 2018. The
Assembly Revenue and Taxation Committee will hear the bill
on June 27th.
SB 583 (Vargas) reestablishes the ALS/Lou Gehrig's Disease
Research Fund. The bill is in the Assembly Appropriations
Committee.
SB 803 (DeSaulnier) creates a VCF designation on the
personal income tax form for taxpayers to contribute to
California Youth Leadership Project. The bill remains in
the Senate Appropriations Committee.
SBX1 3 (LaMalfa) creates a VCF designation on the personal
income tax form, the Help Our State Fund, for taxpayers to
contribute to the General Fund. The Committee will hear
the bill on July 29th.
AB 564 (Smyth) reestablishes the Municipal Shelter
Spay-Neuter Fund and encourages all persons who prepare
state income tax returns to inform their clients in writing
that they may contribute to any voluntary contribution
check-off on the return. The Committee will hear the bill
on July 29th.
AB 764 (Swanson) creates a VCF designation on the personal
income tax form for taxpayers to contribute to the Child
Victims of Human Trafficking Fund. The Committee will hear
the bill on July 29th.
AB 971 (Monning) reestablishes the California Sea Otter
Fund. The Committee will hear the bill on July 29th.
AB 233 -- 3/15/11 -- Page 7
8. Technical amendment . Currently, there is space on the
tax return for additional check-offs. However, as written,
if this bill is enacted the California YMCA Youth and
Government Fund would be added when another VCF is removed.
The Committee staff suggests the following amendments to
expedite the addition of the VCF to the tax return in the
event the bill is enacted:
On page 3, line 7, delete "not".
On page 3, line 7, replace "until" with "when".
On page 3, line 8, after "removed" add "or as soon as
space is available".
Assembly Actions
Assembly Revenue and Taxation Committee: 9-0
Assembly Appropriations Committee:17-0
Assembly Floor: 78-1
Support and Opposition (6/23/11)
Support : American Federation of State, County and
Municipal Employees, AFL-CIO; Channel Islands YMCA;
Envision Schools; Magdalena Ecke Family YMCA; Miller Family
YMCA; Santa Monica Family YMCA; Simi Valley Family YMCA;
YMCA of Burbank California; YMCA of Superior California;
fifteen members of the Magdalena Ecke Family YMCA Youth and
Government Delegation; five individuals.
ADDITIONS/individuals listed
Opposition : California Coalition for Youth.