BILL ANALYSIS �
SENATE GOVERNANCE & FINANCE COMMITTEE
Senator Lois Wolk, Chair
BILL NO: AB 764 HEARING: 6/29/11
AUTHOR: Swanson FISCAL: Yes
VERSION: 5/27/11 TAX LEVY: No
CONSULTANT: Faulkner
CHILD VICTIMS OF HUMAN TRAFFICKING VOLUNTARY CHECK OFF
Creates the Child Victims of Human Trafficking check-off.
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repealed or fail to meet their minimum contribution amount.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contribution amount, that fund is repealed effective for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.
AB 764 -- 5/27/11 -- Page 2
Proposed Law
Assembly Bill 764 creates the Child Victims of Human
Trafficking Fund. The California Emergency Management
Agency will administer the fund monies granted to
community-based organizations that agree to serve minor
victims of human trafficking.
The fund will be added to the tax form when another VCF is
removed and shall remain on the form for five years unless
it is repealed earlier for failing to meet the minimum
contribution amount.
State Revenue Impact
The FTB estimates this bill will result in a revenue loss
of $20,000 each fiscal year the fund is in place.
Comments
1. Purpose of the bill . The author states, "Nearly
300,000 American children and youth are estimated to be at
risk of child sexual exploitation each year. There are
many organizations throughout the state that help to
provide support services to young men and woman who have
been victimized by sexual exploitation. This bill will
facilitate these important treatment services by providing
a funding mechanism to support organizations that serve
sexually exploited minors. AB 764 authorizes individual
taxpayers to contribute amounts in excess of their tax
liability to the Child Victims of Human Trafficking Fund to
be allocated to community-based organizations that serve
minor victims of human trafficking."
2. 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.
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.
3. 2011 check-offs . Following is a list of 2011
AB 764 -- 5/27/11 -- Page 3
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 | |
-------------------------------------------------------------
4. 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
AB 764 -- 5/27/11 -- Page 4
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 233 (Hall) creates a VCF designation on the personal
income tax form for taxpayers to contribute to the
California YMCA Youth and Government 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 971 (Monning) reestablishes the California Sea Otter
Fund. The Committee will hear the bill on July 29th.
5. Technical amendments . Currently, there is space on the
tax return for additional check-offs. However, as written,
if this bill is enacted the Child Victims of Human
Trafficking Fund would be added when another VCF is
removed. The Committee staff suggests the following
language be included in the bill to expedite the addition
AB 764 -- 5/27/11 -- Page 5
of the VCF to the tax return in the event this bill is
enacted:
On page 2, line 29, after "return" add "or as soon as
space is available".
Additionally, on page 3, line 23, strike "Victim-Witness
Assistance Fund" and replace it with "Child Victims of
Human Trafficking Fund".
Assembly Actions
Assembly Revenue and Taxation Committee: 9-0
Assembly Appropriations Committee:17-0
Assembly Floor: 74-2
Support and Opposition (6/23/11)
Support : County of Alameda (Sponsor); District Attorney of
Alameda County (Sponsor); American Federation of State,
County and Municipal Employees, AFL-CIO; California
Catholic Conference; California Police Chiefs Association;
Children's Advocacy Institute; Junior Leagues of California
State Public Affairs Committee; Kriss Worthington,
Councilmember, City of Berkeley, District 7.
Opposition : Unknown.