Amended in Assembly April 2, 2014

California Legislature—2013–14 Regular Session

Assembly Bill No. 1765

Introduced by Assembly Member Jones-Sawyer

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(Coauthor: Assembly Member Holden)

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February 14, 2014

An act to add and repeal Article 22 (commencing with Section 18900.20) of Chapter 3 of Part 10.2 of Division 2 of the Revenue and Taxation Code, relating to taxation.

LEGISLATIVE COUNSEL’S DIGEST

AB 1765, as amended, Jones-Sawyer. Personal income taxes: voluntary contributions: Habitat for Humanity Fund.

The Personal Income Tax Law authorizes an individual to contribute amounts in excess of his or her tax liability for the support of specified funds.

This bill would additionally allow an individual to designate on his or her tax return that a specified amount in excess of his or her tax liability be transferred to the Habitat for Humanity Fund, which would be created by this bill. The bill would require the Franchise Tax Board, when another voluntary contribution designation is removed, to revise the tax return forms to provide for the designation created by this bill.

The bill would require moneys in the Habitat for Humanity Fund, upon appropriation by the Legislature, to be allocated to the Franchise Tax Board and the Controller for reimbursement of costs, as provided, and the balance to the Department of Housing and Community Development to distribute grants to Habitat for Humanity affiliates in California that meet certain requirements, including a specified tax-exempt status. begin delete The bill would require these grants to be used for the sole purpose of building affordable housing in California. end delete begin insert The bill would require the Department of Housing and Community Development to award grants through a competitive, project-specific grant process. The bill would prohibit a Habitat for Humanity affiliate from using a grant award for administrative expenses or for any purposes outside of California. end insert

The bill would provide that these provisions would remain in effect only until January 1 of the 5th taxable year following the first appearance of the Habitat for Humanity Fund on the tax return, but would further provide for an earlier repeal if the Franchise Tax Board determines that the amount of contributions estimated to be received during a calendar year will not equal or exceed the minimum contribution amount, as defined, for that calendar year, in which case these provisions would be repealed on December 1 of that year.

Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: no.

The people of the State of California do enact as follows:

SECTION 1.  

Article 22 (commencing with Section 18900.20)
is added to Chapter 3 of Part 10.2 of Division 2 of the Revenue
and Taxation Code, to read:

 

Article 22.  Habitat for Humanity Fund

 

18900.20.  

(a) An individual may designate on the tax return
that a contribution in excess of the tax liability, if any, be made to
the Habitat for Humanity Fund established by Section 18900.22.

(b) The contributions shall be in full dollar amounts and may
be made individually by each signatory on a joint return.

(c) A designation under subdivision (a) shall be made for a
taxable year on the original return for that taxable year, and once
made shall be irrevocable. If payments and credits reported on the
return, together with any other credits associated with the
individual's account, do not exceed the individual’s tax liability,
the return shall be treated as though no designation has been made.

(d) If an individual designates a contribution to more than one
account or fund listed on the tax return, and the amount available
is insufficient to satisfy the total amount designated, the
contribution shall be allocated among the designees on a pro rata
basis.

(e) The Franchise Tax Board shall revise the form of the return
to include a space labeled “Habitat for Humanity Fund” to allow
for the designation permitted under subdivision (a). The form shall
also include in the instructions information that the contribution
may be in the amount of one dollar ($1) or more and that the
contribution shall be used to build affordable housing in California.

(f) Notwithstanding any other law, a voluntary contribution
designation for the Habitat for Humanity Fund shall not be added
on the tax return until another voluntary contribution designation
is removed.

(g) A deduction shall be allowed under Article 6 (commencing
with Section 17201) of Chapter 3 of Part 10 for a contribution
made pursuant to subdivision (a).

18900.22.  

There is hereby established in the State Treasury
the Habitat for Humanity Fund to receive contributions made
pursuant to Section 18900.20. The Franchise Tax Board shall notify
the Controller of both the amount of money paid by taxpayers in
excess of their tax liability and the amount of refund money that
taxpayers have designated pursuant to Section 18900.20 to be
transferred to the Habitat for Humanity Fund. The Controller shall
transfer from the Personal Income Tax Fund to the Habitat for
Humanity Fund an amount not in excess of the sum of the amounts
designated by individuals pursuant to Section 18900.20 for
payment into that fund.

18900.24.  

All money transferred to the Habitat for Humanity
Fund, upon appropriation by the Legislature, shall be allocated as
follows:

(a) To the Franchise Tax Board and the Controller for
reimbursement of all costs incurred by the Franchise Tax Board
and the Controller in connection with their duties under this article.

(b) The Department of Housing and Community Development
for distribution of grants to Habitat for Humanity affiliates in
California that are in active status, as described on the Business
search page of the Secretary of State’s Internet Web site, and that
are exempt from federal income taxation as an organization
described in Section 501(c)(3) of the Internal Revenue Code. begin delete These
grants shall be used for the sole purpose of building affordable
housing in California. end delete begin insert The Department of Housing and Community
Development shall award grants through a competitive,
project-specific grant process. A Habitat for Humanity affiliate
shall not use a end insert begin insert grant award for administrative expenses or for any
purposes outside of California. end insert

18900.26.  

(a) Except as otherwise provided in subdivision (b),
this article shall remain in effect only until January 1 of the fifth
taxable year following the first appearance of the Habitat for
Humanity Fund on the personal income tax return, and is repealed
as of December 1 of that year.

(b) (1) By September 1 of the second calendar year and each
subsequent calendar year that the Habitat for Humanity Fund
appears on the tax return, the Franchise Tax Board shall do all of
the following:

(A) Determine the minimum contribution amount required to
be received during the next calendar year for the fund to appear
on the tax return for the taxable year that includes that next calendar
year.

(B) Provide written notification to the Controller and the
Department of Housing and Community Development of the
amount determined in subparagraph (A).

(C) Determine whether the amount of contributions estimated
to be received during the calendar year will equal or exceed the
minimum contribution amount determined by the Franchise Tax
Board for the calendar year pursuant to subparagraph (A). The
Franchise Tax Board shall estimate the amount of contributions
to be received by using the actual amounts received and an estimate
of the contributions that will be received by the end of that calendar
year.

(2) If the Franchise Tax Board determines that the amount of
the contributions estimated to be received during a calendar year
will not at least equal the minimum contribution amount for the
calendar year, this article shall be inoperative with respect to
taxable years beginning on or after January 1 of that calendar year
and shall be repealed on December 1 of that year.

(3) For purposes of this section, the minimum contribution
amount for a calendar year means two hundred fifty thousand
dollars ($250,000) for the second calendar year after the first
appearance of the Habitat for Humanity Fund on the personal
income tax return or the minimum contribution amount as adjusted
pursuant to subdivision (c).

(c) For each calendar year, beginning with the third calendar
year after the first appearance of the Habitat for Humanity Fund
on the personal income tax return, the Franchise Tax Board shall
adjust, on or before September 1 of that calendar year, the
minimum contribution amount specified in subdivision (b) as
follows:

(1) The minimum contribution amount for the calendar year
shall be an amount equal to the product of the minimum
contribution amount for the prior calendar year multiplied by the
inflation factor adjustment as specified in subparagraph (A) of
paragraph (2) of subdivision (h) of Section 17041, rounded off to
the nearest dollar.

(2) The inflation factor adjustment used for the calendar year
shall be based on the figures for the percentage change in the
California Consumer Price Index for all items received on or before
August 1 of the calendar year pursuant to paragraph (1) of
subdivision (h) of Section 17041.

(d) Notwithstanding the repeal of this article, any contribution
amounts designated pursuant to this article prior to its repeal shall
continue to be transferred and disbursed in accordance with this
article as in effect immediately prior to that repeal.