BILL ANALYSIS �
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|SENATE RULES COMMITTEE | SB 3X1|
|Office of Senate Floor Analyses | |
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THIRD READING
Bill No: SB 3X1
Author: La Malfa (R), et al.
Amended: 7/5/11
Vote: 21
SENATE GOVERNANCE & FINANCE COMMITTEE : 6-0, 6/29/11
AYES: Wolk, Huff, DeSaulnier, Fuller, Hernandez, La Malfa
NO VOTE RECORDED: Hancock, Kehoe, Liu
SENATE APPROPRIATIONS COMMITTEE : 5-2, 8/15/11
AYES: Walters, Alquist, Emmerson, Lieu, Pavley
NOES: Kehoe, Price
NO VOTE RECORDED: Runner, Steinberg
SUBJECT : Personal and corporation taxes
SOURCE : Author
DIGEST : This bill establishes the Help Our State Fund as
a voluntary contribution fund that benefits the General
Fund on the personal income tax form until January 1, 2016.
ANALYSIS : Existing state law allows taxpayers to
contribute money to one or more of 15 voluntary
contribution funds (VCFs) by checking a box on their
personal 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. If a taxpayer does
not designate to a specific fund, the contribution is
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transferred to the General Fund. This option is not
delineated on the tax form.
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repealed or fail to meet the minimum contribution amount.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that fund is repealed effective for taxable years beginning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.
This bill creates the Help Our State Fund for taxpayers to
contribute to the General Fund. The tax form instructions
will state that contributions will be used to support the
state government's general operations including education,
public safety, and other important programs. The Fund will
be added to the tax form for taxable years beginning on or
after January 1, 2011, and repealed January 1, 2016.
Background
Since the inception of VCFs in 1982, over 13 million
taxpayers have contributed $95.1 million to a variety of
charities but never one dedicated to the state's general
operations. Like a traditional VCF, contributions to the
Help Our State Fund must be in full dollar amounts and may
be made individually by each signatory on a joint return.
Contributions must be made on the original return and once
made, are irrevocable. The contribution amount is
deductible the following year and the fund sunsets in five
years.
Unlike a traditional VCF, the Help Our State Fund does not
require the creation of a separate treasury fund to hold
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the designated contributions. Instead, contributions are
directly deposited into the General Fund with no
reimbursement to the FTB or State Controller. The Fund
does not require contingency language before it appears on
the return and it does not require a minimum contribution
amount to remain on the form.
The following is a list of 2011 check-offs and contribution
amounts received in 2010:
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|Alzheimer's Disease/Related Disorders |$426,417 |
|Fund | |
|------------------------------------------+------------------|
|Arts Council Fund |Initial Tax |
| |Return 2010 |
|------------------------------------------+------------------|
|California Breast Cancer Research Fund |$519,728 |
|------------------------------------------+------------------|
|California Cancer Research Fund |$275,587 |
|------------------------------------------+------------------|
|California Firefighters' Memorial Fund |$207,455 |
|------------------------------------------+------------------|
|California Fund for Senior Citizens |$296,144 |
|------------------------------------------+------------------|
|California Peace Officer Memorial |$135,250 |
|Foundation Fund | |
|------------------------------------------+------------------|
|California Police Activities League |Initial Tax |
|(CALPAL) Fund |Return 2010 |
|------------------------------------------+------------------|
|California Sea Otter Fund |$263,543 |
|------------------------------------------+------------------|
|California Seniors Special Fund |$59,192 |
|------------------------------------------+------------------|
|California Veterans Homes Fund |Initial Tax |
| |Return 2010 |
|------------------------------------------+------------------|
|Emergency Food for Families Fund |$487,333 |
|------------------------------------------+------------------|
|Rare and Endangered Species Preservation |$578,215 |
|Program | |
|------------------------------------------+------------------|
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|Safely Surrendered Baby Fund |Initial Tax |
| |Return 2010 |
|------------------------------------------+------------------|
|State Children's Trust for the Prevention |$448,081 |
|of Child Abuse | |
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Comments
The author states, " California currently allows taxpayers
to voluntarily contribute money to various funds supporting
issues ranging from sea otter restoration to child abuse
prevention. However, California's income tax forms fail to
provide any clear means for citizens to contribute in
support of the state government's general operations,
including education, public safety and other important
programs. This bill rectifies this problem by creating a
clear means for Californians to voluntarily support state
government above any amount that they may be required to
pay. This is a simple, common sense measure that will give
those Californians who wish to pay increased taxes any easy
means to do so and will only result in increased revenue to
the state's General Fund."
Related legislation . 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.
SB 583 (Vargas) reestablishes the ALS/Lou Gehrig's Disease
Research Fund.
SB 803 (DeSaulnier) creates a VCF designation on the
personal income tax form for taxpayers to contribute to
California Youth Leadership Project.
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.
AB 564 (Smyth) reestablishes the Municipal Shelter
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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.
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.
AB 971 (Monning) reestablishes the California Sea Otter
Fund.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: No
According to the Senate Appropriations Committee:
Fiscal Impact (in thousands)
Major Provisions 2011-12 2012-13
2013-14 Fund
Net revenue impact minor revenue gains
General
FTB minor administrative costs to update
forms General
AGB:mw 8/16/11 Senate Floor Analyses
SUPPORT/OPPOSITION: NONE RECEIVED
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