BILL ANALYSIS �
SB 761
Page A
SENATE THIRD READING
SB 761 (DeSaulnier)
As Amended August 18, 2014
2/3 vote. Urgency
SENATE VOTE :30-1
REVENUE & TAXATION 9-0 APPROPRIATIONS 17-0
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|Ayes:|Bocanegra, Harkey, Beth |Ayes:|Gatto, Bigelow, |
| |Gaines, Gordon, Bloom, | |Bocanegra, Bradford, Ian |
| |Dahle, Pan, | |Calderon, Campos, |
| |V. Manuel P�rez, Ting | |Donnelly, Eggman, Gomez, |
| | | |Holden, Jones, Linder, |
| | | |Pan, Quirk, |
| | | |Ridley-Thomas, Wagner, |
| | | |Weber |
|-----+--------------------------+-----+--------------------------|
| | | | |
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SUMMARY : Modifies, in several respects, the statutory
provisions governing the allocation of moneys from the School
Supplies for Homeless Children Fund (Fund). Specifically, this
bill :
1)Transfers administrative responsibility for the Fund from the
State Department of Education (CDE) to the State Department of
Social Services (CDSS).
2)Provides that all moneys transferred to the Fund, upon
appropriation by the Legislature, shall first be allocated to
the Franchise Tax Board (FTB), the CDSS, and the State
Controller for reimbursement of all costs incurred in
administering the Fund.
3)Provides that, for the 2014-15 fiscal year, the State
Controller shall transfer the funds appropriated to the CDE
for this purpose from Budget Items 6110-001-8075 and
6110-101-8075 to the CDSS. Funds transferred may be used for
state operations or local assistance expenditures and for
distribution to a nonprofit organization exempt from federal
income tax under Internal Revenue Code Section 501(c)(3) for
the sole purpose of assisting California pupils on a statewide
basis under the federal McKinney-Vento Homeless Assistance Act
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Page B
by providing school supplies and health-related products to
partnering local education agencies for distribution to
homeless children, as defined.
4)Requires the nonprofit organization to provide a minimum 100%
match for all funds received from the Fund. If the nonprofit
organization provides in-kind materials towards the 100%
match, then the value of the in-kind materials shall be
verified by the donor donating the in-kind materials and
cannot exceed the market value of the materials if sold at
retail.
5)Requires the CDSS to enter into a subvention services
agreement<1> with the nonprofit organization.
6)Provides that the CDSS' first designation of a nonprofit
organization shall be valid until January 1, 2017. On that
date, and every three calendar years thereafter, the CDSS
shall designate the same or a different nonprofit
organization.
7)Authorizes the CDSS to revoke the designation should the
nonprofit organization fail to comply with this bill's
provisions. If a designation is revoked, the CDSS shall
designate a new nonprofit organization within three calendar
months or as soon as administratively feasible.
8)Provides that funds shall be distributed by the CDSS only
after evidence is presented to the CDSS demonstrating that the
local education agencies or domestic violence shelters have
received the materials.
9)Requires the CDSS to verify that the designated nonprofit
organization procured school supplies and health-related
products and provided matching funds or in-kind materials, as
specified.
10)Provides that funds distributed to the nonprofit organization
shall only be used for costs incurred to procure, assemble,
and ship school supplies and health-related products.
11)Provides that funds shall not be used:
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<1> Committee staff is informed that this is the term used by
the CDSS to describe a contract.
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a) For administrative purposes;
b) To reimburse costs associated with administering grants
of school supplies and health-related products to local
education agencies or domestic violence shelters; or,
c) For any purpose relating to the operation of the
nonprofit organization.
12)Authorizes the nonprofit organization to provide school
supplies and health-related products to children living in
domestic violence shelters.
13)Takes immediate effect as an urgency measure.
EXISTING LAW :
1)Allows taxpayers to contribute to one or more of 20 voluntary
contribution funds (VCFs) on the 2013 personal income tax
(PIT) return.
2)Authorizes the Fund as a VCF on the PIT return.
3)Provides that all money transferred to the Fund, upon
appropriation by the Legislature, shall be allocated to the:
a) FTB, the State Controller, and the CDE for reimbursement
of all costs incurred in administering the VCF; and,
b) CDE for the sole purpose of assisting pupils in
California under the federal McKinney-Vento Homeless
Assistance Act by providing school supplies and
health-related products to homeless children through a
competitive grant program developed and awarded by the
Superintendent of Public Instruction (Superintendent).
4)Requires the Superintendent to develop the competitive grant
program, including application forms and deadlines, while
considering the most effective, efficient, and widest
distribution of school supplies and health-related products to
homeless children.
FISCAL EFFECT : According to the Assembly Appropriations
Committee, this bill is estimated to have an insignificant
impact on state income tax revenues.
SB 761
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COMMENTS : The author has provided the following statement in
support of this bill:
SB 761 relocates the School Supplies for Homeless
Children Fund from the California Department of
Education to the Department of Social Services to
avoid their costly budget process, and allow a timely
and efficient distribution process that will ensure
all awarded funds go directly to the benefit of
homeless children.
SB 761 allocates funding from the Department of Social
Services to a qualified nonprofit organization that
will distribute materials to homeless children in
California through partnering learning education
agencies. The nonprofit must spend all funds on
supplies, assembly of materials, and shipping, in
addition to providing a 100% in-kind match.
Assembly Revenue and Taxation Committee comments:
California's homeless children: According to the author,
California has the nation's largest population of homeless
children. As of 2012, more than 250,000 children and youth were
identified as homeless under the federal definition.
Additionally, thousands more children and youth living in
domestic violence shelters meet the federal definition of
homelessness, but are not identified for safety reasons.
In addition to the many other challenges they face, homeless
children often lack basic school supplies such as backpacks,
binders, and pens and pencils. These children also often lack
basic toiletries and supplies essential to good oral health.
The Fund: The Fund was originally authorized by SB 1571
(DeSaulnier), Chapter 459, Statutes of 2012, to help provide
essential school supplies to homeless children. To date, the
Fund has established a successful record of generating taxpayer
contributions. In 2013, the Fund received $367,868 in valid
contributions, and the Fund has already received $315,255 in
contributions this year.
As currently structured, Fund moneys are to be allocated to the
CDE for the sole purpose of assisting California pupils by
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providing school supplies and health-related products to
homeless children through a competitive grant program.
Specifically, current law instructs the Superintendent to
develop this grant program while considering the most effective
and efficient distribution of supplies and products.
According to the author, however, the Fund's current statutory
provisions require the CDE to follow a two-year budget process
that will cost $150,000 for first-year administrative costs and
several tens of thousands of dollars more in each subsequent
year. The author also notes that, as currently structured, the
Fund is not expected to provide any material assistance to
homeless children for an extended period of time.
The author argues that this bill simplifies the Fund allocation
process by avoiding the CDE's budget process and moving the Fund
to the CDSS. The author contends this will allow a timely and
efficient distribution process that will ensure that funds go
directly to the benefit of homeless children.
What would this bill do? As noted above, this bill would
transfer administrative responsibility for the Fund from the CDE
to the CDSS. The CDSS, in turn, would distribute Fund moneys to
a nonprofit organization (likely "K to College", which is
sponsoring this bill). The designated nonprofit would then use
these funds to provide school supplies and health-related
products to partnering "local education agencies" for
distribution to homeless children. The designated nonprofit
organization would also be required to provide a minimum 100%
match for all funds received from the Fund.
Trust, but verify: The Legislature has different models to
choose from when designing the administration of a new VCF. In
some cases, moneys are distributed directly to a private
organization with a well-documented history of advancing the
VCF's purposes. In other cases, state agencies establish
competitive grant programs to direct fund moneys to several
entities supporting the VCF's underlying cause.
K to College: K to College notes that it is a nonprofit, public
benefit corporation that operates the largest charitable school
and dental supply program in California. K to College's mission
is to ensure that every child attends school with the basic
materials required to succeed. K to College's business model
begins with raising funds from government agencies,
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corporations, foundations, and individuals. By purchasing bulk
materials factory direct, K to College is then able to drive
down costs. Pursuant to legislation K to College successfully
sponsored, inmates within the California prison system are
engaged, as part of their rehabilitation, to assemble purchased
supplies into kits. Finally, K to College partners directly
with school districts to ensure that materials reach students in
need. To this end, each district is required to verify its
distribution process in writing.
Analysis Prepared by : M. David Ruff / REV. & TAX. / (916)
319-2098
FN: 0004866