BILL ANALYSIS �
SB 997
Page 1
Date of Hearing: June 25, 2014
ASSEMBLY COMMITTEE ON REVENUE AND TAXATION
Raul Bocanegra, Chair
SB 997 (Morrell) - As Amended: June 16, 2014
Majority vote. Fiscal committee.
SENATE VOTE : 35-0
SUBJECT : Personal Income Tax Law: voluntary contributions:
California Senior Legislature Fund
SUMMARY : Authorizes the addition of the California Senior
Legislature Fund (Fund) as a voluntary contribution fund (VCF)
on the personal income tax (PIT) return for taxable years
beginning on or after January 1, 2014. Specifically, this bill :
1)Repeals the statutory authorization for the existing
California Fund for Senior Citizens, which supports the work
of the California Senior Legislature.
2)Establishes the new Fund in the State Treasury.
3)Allows a deduction for any contribution made to the Fund.
4)Provides that all money transferred to the Fund, upon
appropriation by the Legislature, shall be allocated to the:
a) Franchise Tax Board (FTB) and the Controller for
reimbursement of all costs incurred in administering the
VCF; and,
b) California Senior Legislature, for its ongoing
activities on behalf of older persons.
5)Provides that the funds allocated to the California Senior
Legislature shall be spent pursuant to the purview of the
Joint Rules Committee of the California Senior Legislature in
a manner consistent with the bylaws of the California Senior
Legislature, established through a majority vote of the
California Senior Legislature.
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6)Provides that the Fund's statutory provisions shall remain in
effect only for taxable years beginning before January 1,
2019.
7)Requires the Fund to meet a standard minimum contribution
requirement of $250,000 in its second year. Thereafter, the
minimum contribution amount will be indexed for inflation.
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.
FISCAL EFFECT : The FTB's fiscal estimate for this bill is
pending.
COMMENTS :
1)The author has provided the following statement in support of
this bill:
The California Senior Legislature receives its primary
funding from the California Fund for Senior Citizens
(CFSC). The Fund is one of [20] that utilize a voluntary
tax check-off on California's Individual Income Tax Return
form. Current law requires a minimum contribution amount
of $250,000 in order to remain on the form. The CFSC is
not currently on track to meet that minimum and is in
danger of being removed from the form and therefore
eliminating the primary funding source for the California
Senior Legislature.
Part of their loss in contributions has been attributed to
confusion that the fund is not named after the organization
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it funds.
This proposal will keep a valuable advocate for our seniors
from closing their doors by sun-setting the CFSC at the end
of this year and establishing a new check off more properly
named the "California Senior Legislature Fund."
2)This bill is sponsored by the California Senior Legislature,
which notes the following:
The California Senior Legislature (CSL) 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. SB 997 would sunset the
California Fund for Senior Citizens (CFSC) at the end of
this year and establish a new check off more properly named
"California Senior Legislature." This would allow them a
year to raise funds before having to [meet] the minimum
required contribution of $250,000 in order to remain on the
form. SB 997 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
advocating for the [inclusion] of those concerns in
legislative bills.
3)Proponents of this bill note the following:
I have personally given countless presentations to the
public asking them to donate to the tax check off fund for
the California Senior Legislature. Many people promised to
do so but tell me later that they could not find the right
fund since there are three funds with the "senior"
designation on the list. I strongly feel that with a
listed name that uses the actual title of California Senior
Legislature, our efforts to increase donors will be
successful.
4)Committee Staff Comments
a) The California Senior Legislature : Currently, the
ongoing work of the California Senior Legislature is
supported by contributions to the existing California Fund
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for Senior Citizens. 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) Background on the existing California Fund for Senior
Citizens : The FTB notes that the California Fund for
Senior Citizens first appeared on the 1983 PIT return.
Since 2010, the California Fund for Senior Citizens has
received the following contribution amounts:
-------------------------------------------------------
| 2010 | 2011 | 2012 | 2013 |
|-------------+-------------+-------------+-------------|
| $296,144 | $308,763 | $272,742 |$234,247 |
-------------------------------------------------------
The California Fund for Senior Citizens' minimum
contribution amount is set at $250,000 and, unlike most
other VCF thresholds, is not annually adjusted for
inflation. Thus, by September 1 of each year, the FTB must
estimate whether 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 California Fund for Senior
Citizens will not meet its minimum contribution amount in a
given calendar year, the VCF will not appear on the tax
return for that year.
While the California Fund for Senior Citizens received only
$234,247 in valid contributions in 2013, the VCF was still
placed on the 2013 PIT return. This is because, by
September 1, 2013, the FTB estimated (incorrectly, it turns
out) that the California Fund for Senior Citizens would
meet its minimum contribution amount for the year.
c) What about 2014 ? The FTB reports that the California
Fund for Senior Citizens has received only $185,800 in
valid contributions thus far in 2014, slightly below the
$195,211 received by the same point last year. The
California Senior Legislature is understandably concerned
that the California Fund for Senior Citizens may not meet
its minimum contribution amount in 2014, thereby
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jeopardizing the VCF's place on the 2014 PIT return.
Thus, the California Senior Legislature is advocating for
this bill, which would sunset the existing California Fund
for Senior Citizens and effectively replace it with a newly
named VCF. This would serve two main purposes. First, it
would ensure that a VCF supporting the work of the
California Senior Legislature is included on the 2014 PIT
return, thus allowing the California Senior Legislature to
continue its work. In exchange for this temporary reprieve
from a minimum contribution requirement, the California
Senior Legislature has agreed to index the new Fund's
minimum contribution requirement for inflation in
subsequent years. Second, this bill would include the
California Senior Legislature's name in the newly enacted
Fund to make promotion of the Fund easier and to avoid
taxpayer confusion with the California Seniors Special
Fund.
REGISTERED SUPPORT / OPPOSITION :
Support
California Senior Legislature (Sponsor)
California State Retirees
Elder Financial Protection Network
Retired Public Employees Association
Solano County Senior Coalition
17 individuals
Opposition
None on file
Analysis Prepared by : M. David Ruff / REV. & TAX. / (916)
319-2098