BILL ANALYSIS �
SB 164
Page 1
Date of Hearing: June 27, 2011
ASSEMBLY COMMITTEE ON REVENUE AND TAXATION
Henry T. Perea, Chair
SB 164 (Simitian) - As Introduced: February 2, 2011
Majority vote. Fiscal committee.
SENATE VOTE : 33-4
SUBJECT : Personal income tax: voluntary contributions: State
Children's Trust Fund: Rare and Endangered Species Preservation
Program: extension
SUMMARY : Extends, from January 1, 2013 to January 1, 2018, the
sunset date for two voluntary contribution funds (VCFs)
currently on the personal income tax (PIT) return.
Specifically, this bill extends the VCF provisions for both the
State Children's Trust Fund and the Rare and Endangered Species
Preservation Program.
EXISTING LAW :
1)Allows taxpayers to contribute to one or more of 15 VCFs on
the PIT return.
2)Provides a specific sunset date for each VCF, except for the
California Seniors Special Fund.
3)Requires each VCF to meet a minimum annual contribution amount
to remain in effect, except for the California Seniors Special
Fund, the California Firefighters' Memorial Fund, and the
California Peace Officer Memorial Foundation Fund.
4)Provides that all money transferred to the State Children's
Trust Fund, upon appropriation by the Legislature, shall be
allocated to the:
a) Franchise Tax Board (FTB) and the State Controller for
reimbursement of all costs incurred in administering the
checkoff; and,
b) State Department of Social Services for, among other
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things, innovative child abuse and neglect prevention and
intervention programs operated by private nonprofit
organizations or public institutions of higher education.
5)Provides that all money transferred to the Rare and Endangered
Species Preservation Program, upon appropriation by the
Legislature, shall be allocated to the:
a) FTB and the State Controller for reimbursement of all
costs incurred in administering the checkoff; and,
b) State Department of Fish and Game for the purposes
specified in Fish and Game Code Section 1771.
6)Provides for the automatic repeal, on January 1, 2013, of the
VCF provisions for both the State Children's Trust Fund and
the Rare and Endangered Species Preservation Program.
FISCAL EFFECT : The FTB estimates revenue losses, resulting from
contribution deductions, to be around $40,000 annually beginning
in fiscal year 2014-15.
COMMENTS :
1)The author has provided the following statement in support of
this bill:
The Personal Income Tax Law authorizes individual taxpayers
to designate on their personal income tax (PIT) form
contribution amounts in excess of their tax liability for
the support of 15 voluntary contribution funds. Two of
these funds, the State Children's Trust Fund for the
Prevention of Child Abuse and the Rare and Endangered
Species Preservation Program, are set to sunset on January
1, 2013. This bill would extend the sunset date to January
1, 2018.
Both the Children's Trust Fund and the Preservation Program
have enjoyed significant success as VCFs. Each of these
funds first appeared on the PIT form in 1983. The
Franchise Tax Board reports that in calendar year 2010, the
Children's Trust Fund received $448,081 in contributions,
while the Preservation Program received $578,215.
Contributions to the Children's Trust Fund are allocated to
the Department of Social Services for innovative child
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abuse and neglect prevention and intervention programs.
Contributions to the Preservation Program are allocated to
the Department of Fish and Game for various programs for
endangered and rare animals and plants.
SB 164 would allow these two important programs to continue
to receive much needed funds through voluntary
contributions on PIT returns until January 1, 2018.
2)Proponents state:
The Children's Trust Fund has proven to be successful in
receiving voluntary tax contributions. These contributions
have been allocated to the Department of Social Services to
serve California's most vulnerable children . . . . As the
State is facing another year of unprecedented budget
deficit, and future years of uncertainty, programs that
serve our most vulnerable children need the most help.
Voluntary tax contributions do their part to help, and
therefore these important programs should be extended.
3)Committee Staff Comments:
a) So many causes, so little space : There are countless
worthy causes that would benefit from the inclusion of a
VCF on the state's income tax returns. At the same time,
space on the returns is limited. Thus, it could be argued
that the current system for adding VCFs to the form is
subjective and essentially rewards organizations that can
convince the Legislature to include their fund on the form.
b) A history of success : With few exceptions, VCFs remain
on the return until they are either repealed or fail to
meet their minimum contribution amount. The following
chart shows the monies received in recent years for the
State Children's Trust Fund and the Rare and Endangered
Species Preservation Program:
2010 2009
2008 2007
--------------------------------------------------
|Children's|$448,081 |$528,298 |$528,609|$499,827 |
| Trust | | | | |
|Fund | | | | |
|----------+---------+---------+--------+----------|
SB 164
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|Endangered|$578,215 |$648,868 |$580,823|$572,043 |
| Species | | | | |
|Fund | | | | |
--------------------------------------------------
c) Related legislation : The following related bills have
been introduced in the current Legislative Session:
i) AB 233 (Hall) would add the California YMCA Youth
and Government Fund to the form. AB 233 is currently
pending in the Senate Governance and Finance Committee.
ii) AB 564 (Smyth) would reauthorize the addition of the
Municipal Shelter Spay-Neuter Fund to the form. AB 564
is currently pending in the Senate Governance and Finance
Committee.
iii) AB 764 (Swanson) would add the Child Victims of
Human Trafficking Fund to the form. AB 764 is currently
pending in the Senate Governance and Finance Committee.
iv) AB 971 (Monning) would extend the current repeal
date for the California Sea Otter Fund. AB 971 is
currently pending in the Senate Governance and Finance
Committee.
v) SB 583 (Vargas) would reauthorize the addition of
the ALS/Lou Gehrig's Disease Research Fund checkoff. SB
583 is currently pending in the Assembly Appropriations
Committee.
REGISTERED SUPPORT / OPPOSITION :
Support
American Federation of State, County and Municipal Employees,
AFL-CIO
Audubon California
California Native Plant Society
Child Abuse Prevention Center
Children Now
First 5, Santa Clara County
Paw PAC
SB 164
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Opposition
None on file
Analysis Prepared by : M. David Ruff / REV. & TAX. / (916)
319-2098