BILL ANALYSIS �
AB 1833
Page 1
Date of Hearing: April 7, 2014
ASSEMBLY COMMITTEE ON REVENUE AND TAXATION
Raul Bocanegra, Chair
AB 1833 (Garcia) - As Introduced: February 18, 2014
Majority vote. Fiscal committee.
SUBJECT : Personal income taxes: voluntary contributions:
California Fund for Senior Citizens
SUMMARY : Eliminates the minimum contribution requirement for
the California Fund for Senior Citizens (Fund). Specifically,
this bill :
1)Eliminates the Fund's minimum contribution requirements,
thereby allowing the Fund to remain on the personal income tax
(PIT) return irrespective of the level of contributions
received.
2)Places the Fund out of conformity with the vast majority of
voluntary contribution funds (VCFs), which require a minimum
annual contribution amount to remain on the PIT return.
EXISTING LAW :
1)Allows taxpayers to contribute to one or more of 20 VCFs on
the 2013 PIT return.
2)Provides a specific sunset date for each VCF, except for the
California Seniors Special Fund and the State Parks Protection
Fund.
3)Requires each VCF to meet an annual minimum contribution
amount to remain in effect, except for the California
Firefighters' Memorial Fund, the California Peace Officer
Memorial Foundation Fund, and the California Seniors Special
Fund.
COMMITTEE RULES :
1)Require that VCF bills comply with this Committee's VCF
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(Income Tax Checkoff) Policy (VCF Policy). This Committee's
VCF Policy, in turn, requires all existing VCFs for which
reauthorization is sought "to comply with an
inflation-adjusted $250,000 minimum contribution requirement."
2)Provide that existing VCFs "that have failed to meet their
minimum level of contributions will not be extended."
FISCAL EFFECT : The Franchise Tax Board (FTB) estimates that
this bill would not impact the state's income tax revenues.
COMMENTS :
1)The author notes the following in support of this bill:
The California Senior Legislature (CSL) is a State Agency
supported entirely from voluntary contributions. During
2013[,] the CSL did not meet the minimum requirement and
therefore the existence of the organization is in jeopardy
should the minimum funding requirement not be met in 2014.
Eliminating the minimum requirement would solve this
problem.
2)This bill is sponsored by the California Senior Legislature,
which notes the following:
The California Senior Legislature is primarily funded
through a voluntary check off on the California State
Income Tax Return - identified as the "CA Fund for Senior
Citizens"; under current law the fund must receive a
minimum of $250,000 in contributions each year to remain on
the CA tax checkoff list. AB 1833 will eliminate the
minimum financial requirement for the voluntary tax
contribution fund, which has been difficult to acquire in
tough economic times. The CSL is dependent on voluntary
tax contributions to maintain operations and support
critical staff. The passing of AB 1833 is crucial to
sustaining the work of the small independent state agency.
AB 1833 will allow the CSL to keep its primary source of
funding in order to continue its mission to protect and
enhance the quality of life for aging Californians by
identifying senior concerns, developing proposals, and
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advocating for the inclusion of those concerns in
legislative bills.
3)Proponents of this bill note the following:
AB 1833 would allow for the Senior Legislature to continue
convening for a week every fall with the help of the funds
collected from taxpayer contributions, even if those funds
do not reach $250,000. As the senior population in
California continues to grow, public awareness about aging
issues is becoming more necessary than ever.
4)The FTB notes the following policy concern in its staff
analysis of this bill:
This bill would eliminate the $250,000 minimum contribution
requirement for the Senior Citizens Fund. Generally, each
voluntary contribution fund in its second year on the tax
return must meet an initial minimum contribution
requirement of $250,000. Eliminating the minimum
contribution requirement causes inequity between this fund
and other recently-enacted funds, and dilutes the efficacy
of the minimum contribution requirement.
5)Committee Staff Comments:
a) The California Senior Legislature : The Fund supports
the ongoing work of the California Senior Legislature. The
California Senior Legislature notes that, since 1981, it
has labored to identify, develop, and support legislative
proposals that protect and enhance the quality of life of
California's seniors.
b) Fund background : The FTB notes that the Fund first
appeared on the 1983 PIT return. Since 2010, the Fund has
received the following contribution amounts:
-------------------------------------------------------
| 2010 | 2011 | 2012 | 2013 |
|-------------+-------------+-------------+-------------|
| $296,144 | $308,763 | $272,742 |$234,247 |
-------------------------------------------------------
The Fund's minimum contribution amount is set at $250,000,
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and, unlike most other VCF thresholds, is not annually
adjusted for inflation. Thus, by September 1 of each year,
the FTB must estimate whether Fund contributions will equal
or exceed $250,000 in that year. The FTB makes this
calculation using the actual amounts received and an
estimate of the contributions that will be received by the
end of the year. If the FTB determines that the Fund will
not meet its minimum contribution amount in a given
calendar year, the Fund will not appear on the tax return
for that year.
While the Fund received only $234,247 in valid
contributions in 2013, the Fund was still placed on the
2013 PIT return. This is because, by September 1, 2013,
the FTB estimated (incorrectly, it turns out) that the Fund
would meet its minimum contribution amount for the year.
c) What about 2014 ? The FTB reports that the Fund has
received only $33,739 in valid contributions thus far in
2014, slightly below the $34,664 received by the same point
last year. The Fund's supporters are understandably
concerned that the Fund may not meet its minimum
contribution amount in 2014, thereby jeopardizing the
Fund's place on the 2014 PIT return. Thus, they are
advocating for this bill, which would secure the Fund's
placement on future returns by eliminating the minimum
contribution requirement outright.
d) A questionable precedent : As noted above, this
Committee's VCF Policy requires all existing VCFs for which
reauthorization is sought "to comply with an
inflation-adjusted $250,000 minimum contribution
requirement." The VCF Policy also provides that existing
VCFs "that have failed to meet their minimum level of
contributions will not be extended." This bill, however,
would permanently eliminate the Fund's minimum contribution
requirement, in violation of this Committee's Rules.
The Committee's VCF Policy was originally adopted in
response to the proliferation of VCF legislation and in
recognition of the fact that space on the PIT return is
limited. Were this Committee to make an exception for the
Fund, it would open the door to the supporters of every
other checkoff advocating for a suspension of inflation
adjustments or for lower or eliminated minimum contribution
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thresholds. To give the Fund special dispensation would
also be unfair to the many other VCFs whose public support
has diminished in recent years. There are no fewer than 24
VCFs that have been eliminated from the return in recent
years, mainly for failing to meet their minimum
contribution amount. The following is only a
representative sample:
i) The ALS/Lou Gehrig's Disease Research Fund received
only $131,655 in 2013 and, as a result, was eliminated
from the return;
ii) The Municipal Shelter Spay-Neuter Fund received only
$217,883 in 2013 and, as a result, was eliminated from
the return;
iii) The Arts Council Fund received only $165,647 in 2012
and, as a result, was eliminated from the return;
iv) The California Police Activities League Fund
received only $67,202 in 2012 and, as a result, was
eliminated from the return;
v) The California Veterans Homes Fund received only
$210,078 in 2012 and, as a result, was eliminated from
the return;
vi) The Safely Surrendered Baby Fund received only
$158,645 in 2012 and, as a result, was eliminated from
the return;
vii) The California Military Family Relief Fund received
only $202,010 in 2010 and, as a result, was eliminated
from the return; and,
viii) The California Ovarian Cancer Research Fund received
only $121,427 in 2010 and, as a result, was eliminated
from the return.
e) Related legislation : AB 2012 (Morrell) contains
provisions identical to this bill. AB 2012 not yet been
heard by this Committee.
REGISTERED SUPPORT / OPPOSITION :
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Support
California Senior Legislature (Sponsor)
California Assisted Living Association
National Association of Social Workers, California Chapter
Opposition
None on file
Analysis Prepared by : M. David Ruff / REV. & TAX. / (916)
319-2098