Existing law authorizes an individual to contribute amounts in excess of his or her personal income tax liability for the support of specified funds. Existing law sets forth general administrative provisions applicable to voluntary contributions, which, among other things, provide for the disbursement of contributions following repeal of the fund provisions and require undesignated funds to be transferred to the General Fund.

This bill would allow a taxpayer to designate an amount in excess of personal income tax liability to be deposited into the California Senior Citizen Advocacy Voluntary Tax Contribution Fund, which the bill would create. The bill would require the Franchise Tax Board to revise the tax return to include a space for this fund. The bill would require moneys transferred to the California Senior Citizen Advocacy Voluntary Tax Contribution Fund to be continuously appropriated and allocated to the Controller and the Franchise Tax Board, and to the California Senior Legislature for the purpose of funding the activities of the California Senior Legislature, as provided. The bill would require the California Senior Legislatures Internet Web site to report specified information, including all events the California Senior Citizen Advocacy Voluntary Tax Contribution Fund supports each year.

This bill would require specified minimum contributions to be made in order for the fund to appear on the return for the following year. The bill would repeal these voluntary contribution provisions on January 1, 2025, or, if contributions made on returns are less than a specified minimum amount, by an earlier date as provided. By continuously appropriating these funds, the bill would make an appropriation.

Existing law authorizes an individual to contribute amounts in excess of his or her personal income tax liability for the support of specified funds. Existing law sets forth general administrative provisions applicable to voluntary contributions, which, among other things, provide for the disbursement of contributions following repeal of the fund provisions and require undesignated funds to be transferred to the General Fund.

This bill would allow a taxpayer to designate an amount in excess of personal income tax liability to be deposited into the California Senior Citizen Advocacy Voluntary Tax Contribution Fund, which the bill would create. The bill would require the Franchise Tax Board to revise the tax return to include a space for this fund. The bill would require moneys transferred to the California Senior Citizen Advocacy Voluntary Tax Contribution Fund to be continuously appropriated and allocated to the Controller and the Franchise Tax Board, and to the California Senior Legislature for the purpose of funding the activities of the California Senior Legislature, as provided. The bill would require the California Senior Legislatures Internet Web site to report specified information, including all events the California Senior Citizen Advocacy Voluntary Tax Contribution Fund supports each year.

This bill would require specified minimum contributions to be made in order for the fund to appear on the return for the following year. The bill would repeal these voluntary contribution provisions on January 1, 2025, or, if contributions made on returns are less than a specified minimum amount, by an earlier date as provided. By continuously appropriating these funds, the bill would make an appropriation.

Existing law authorizes an individual to contribute amounts in excess of his or her personal income tax liability for the support of specified funds. Existing law sets forth general administrative provisions applicable to voluntary contributions, which, among other things, specify when a voluntary contribution is to be placed on the return, provide for the disbursement of contributions following repeal of the fund provisions, provisions and require undesignated funds to be transferred to the General Fund.

This bill would allow a taxpayer, for taxable years beginning on or after January 1, 2017, taxpayer to designate an amount in excess of personal income tax liability to be deposited into the California Senior Citizen Advocacy Voluntary Tax Contribution Fund, which the bill would create. The bill would require the Franchise Tax Board to revise the tax return to include a space for this fund. The bill would require moneys transferred to the California Senior Citizen Advocacy Fund, upon appropriation by the Legislature, Voluntary Tax Contribution Fund to be continuously appropriated and allocated to the Controller and the Franchise Tax Board, and to the California Senior Legislature for the purpose of funding the activities of the California Senior Legislature, as provided. The bill would require the California Senior Legislatures Internet Web site to report specified information, including all events the California Senior Citizen Advocacy Voluntary Tax Contribution Fund supports each year.

This bill would require specified minimum contributions to be made in order for the fund to appear on the return for the following year, as specified. year. The bill would repeal these voluntary contribution provisions on January 1 of the 7th calendar year, January 1, 2025, or, if contributions made on returns are less than a specified minimum amount, by an earlier date as provided. By continuously appropriating these funds, the bill would make an appropriation.

Existing law authorizes an individual to contribute amounts in excess of his or her personal income tax liability for the support of specified funds. Existing law sets forth general administrative provisions applicable to voluntary contributions, which, among other things, specify when a voluntary contribution is to be placed on the return, provide for the disbursement of contributions following repeal of the fund provisions, and require undesignated funds to be transferred to the General Fund.

This bill would allow a taxpayer, for taxable years beginning on or after January 1, 2017, to designate an amount in excess of personal income tax liability to be deposited into the California Senior Citizen Advocacy Fund, which the bill would create. The bill would require moneys transferred to the California Senior Citizen Advocacy Fund, upon appropriation by the Legislature, to be allocated to the Controller and the Franchise Tax Board, as provided, and to the California Senior Legislature for the purpose of funding the activities of the California Senior Legislature, as provided. The bill would require specified minimum contributions to be made for the fund to appear on the return for the following year. The bill would require the California Senior Legislatures Internet Web site to report specified information, including all events the California Senior Citizen Advocacy Fund supports each year. The bill would provide that specified administrative provisions of existing law do not apply.

Existing law authorizes an individual to contribute amounts in excess of his or her personal income tax liability for the support of specified funds. Existing law sets forth general administrative provisions applicable to voluntary contributions, which, among other things, specify when a voluntary contribution is to be placed on the return, provide for the disbursement of contributions following repeal of the fund provisions, and require undesignated funds to be transferred to the General Fund.

This bill would allow a taxpayer, for taxable years beginning on or after January 1, 2017, to designate an amount in excess of personal income tax liability to be deposited into the California Senior Citizen Advocacy Fund, which the bill would create. The bill would require moneys transferred to the California Senior Citizen Advocacy Fund, upon appropriation by the Legislature, to be allocated to the Controller and the Franchise Tax Board, as provided, and to the California Senior Legislature for the purpose of funding the activities of the California Senior Legislature, as provided. The bill would require specified minimum contributions to be made for the fund to appear on the return for the following year. The bill would require the California Senior Legislatures Internet Web site to report specified information, including all events the California Senior Citizen Advocacy Fund supports each year. The bill would provide that specified administrative provisions of existing law do not apply.

Existing law authorizes an individual to contribute amounts in excess of his or her personal income tax liability for the support of specified funds. Existing law sets forth general administrative provisions applicable to voluntary contributions, which, among other things, specify when a voluntary contribution is to be placed on the return, provide for the disbursement of contributions following repeal of the fund provisions, and require undesignated funds to be transferred to the General Fund.

This bill would allow a taxpayer, for taxable years beginning on or after January 1, 2017, to designate an amount in excess of personal income tax liability to be deposited into the California Senior Citizen Advocacy Fund, which the bill would create. The bill would require moneys transferred to the California Senior Citizen Advocacy Fund, upon appropriation by the Legislature, to be allocated to the Controller and the Franchise Tax Board, as provided, and to the California Senior Legislature for the purpose of funding the activities of the California Senior Legislature, as provided. The bill would require specified minimum contributions to be made for the fund to appear on the return for the following year. The bill would require the California Senior Legislatures Internet Web site to report specified information, including all events the California Senior Citizen Advocacy Fund supports each year. The bill would provide that specified administrative provisions of existing law do not apply.

This bill would repeal these voluntary contribution provisions on December 1, 2022, or, if contributions made on returns are less than a specified minimum amount, by an earlier date as provided.

CONCURRENCE IN SENATE AMENDMENTS

CSA1 Bill Id:AB 519

Author:(Levine and Ridley-Thomas)

As Amended Ver:September 8, 2017

Majority vote

Original Committee Reference: REV. & TAX.

SUMMARY: Authorizes the addition of the California Senior Citizen Advocacy Voluntary Tax Contribution Fund (Fund) as a voluntary contribution fund (VCF) on the personal income tax (PIT) return for taxable years 2017 to 2023, inclusive.

The Senate amendments:

1. Rename the Fund to include the term "Voluntary Tax Contribution".
2. Provide that the Fund shall appear on the return for taxable years 2017 to 2023, inclusive.
3. Provide that, notwithstanding Government Code Section 13340, all moneys transferred to the Fund shall be continuously appropriated.
4. Require the California Senior Legislature to use at least 10% of moneys for purposes of marketing and promoting the Fund.
5. Make other conforming changes.

EXISTING LAW

1. Allows taxpayers to contribute to one or more of 19 VCFs on the 2016 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.

AS PASSED BY THE ASSEMBLY, this bill:

1. Established the Fund in the State Treasury.
2. Provided that the Fund is the successor fund of the California Senior Legislature Fund. Specifically, all assets, liabilities, revenues, and expenditures of the California Senior Legislature Fund shall be transferred to, and become a part of, the Fund, as provided.
3. Allowed a deduction for any contribution made to the Fund.
4. Provided that all money transferred to the Fund, upon appropriation by the Legislature, shall be allocated to the:
   1. Franchise Tax Board (FTB) and the Controller for reimbursement of all costs incurred in administering the VCF; and,
   2. California Senior Legislature, for its ongoing activities on behalf of older persons.
5. Provided 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.
6. Required the California Senior Legislature's Internet Web site to report the goals of the organization, the number of and summary of bills proposed by the California Senior Legislature, and all events the Fund supports each year.
7. Provided that the Fund's statutory provisions shall remain in effect only until January 1 of the seventh calendar year following the Fund's first appearance on the return.
8. Required the Fund to meet a minimum contribution requirement of $250,000.

FISCAL EFFECT: According to the Senate Approrpriations Committee:

1. The FTB estimates that, beginning in 2018-19, this bill would result in an annual revenue loss of $8,000 (General Fund).
2. The State Controller's Office and FTB would be reimbursed for related administrative costs.

COMMENTS:

1. The author has provided the following statement in support of this bill:

The California Senior Legislature has been an effective tool for senior citizens in California to create meaningful change in their government and their communities. This model of civic education gives individuals a lesson in the legislative process, while also providing a forum to advocate for policy issues to the state and federal government. Participation is imperative to our democracy, and as our population ages, the California Senior Legislature must be able to continue their role of advising the state legislature on policies that affect them.

1. Committee Staff Comments
   1. The California Senior Legislature's first VCF: The California Senior Legislature was originally supported by the California Fund for Senior Citizens which, the FTB notes, first appeared on the 1983 PIT return. From 2010 to 2013, the California Fund for Senior Citizens received the following contribution amounts:

The California Fund for Senior Citizens' minimum contribution amount was set at $250,000 and, unlike most other VCF thresholds, was not annually adjusted for inflation. 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.

• 1. What happened in 2014? In 2014, contributions to the California Fund for Senior Citizens lagged slightly behind contributions in the prior year. The California Senior Legislature grew understandably concerned that the California Fund for Senior Citizens would not meet its minimum contribution amount in 2014, thereby jeopardizing the VCF's place on the 2014 PIT return.

Thus, the California Senior Legislature advocated for the enactment of SB 997 (Morrell), Chapter 248, Statutes of 2014, which sunset the California Fund for Senior Citizens and effectively replaced it with a newly named VCF – the California Senior Legislature Fund. SB 997 (Morrell) was designed to serve two main purposes. First, it ensured that a VCF supporting the work of the California Senior Legislature was 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 agreed to index the new California Senior Legislature Fund's minimum contribution requirement for inflation in subsequent years. Second, SB 997 (Morrell) included the California Senior Legislature's name in the newly enacted VCF to make promotion of the fund easier and to avoid taxpayer confusion with the California Seniors Special Fund.

• 1. Best laid plans: Unfortunately, the newly named California Senior Legislature Fund did not generate significant support following its creation. In 2015, the fund generated only $60,137 in valid contributions. Moreover, in 2016 the fund only generated $68,950. The California Senior Legislature speculates that this dramatic drop in historic contribution levels is associated with the addition of the word "Legislature" in the fund's name. Thus, they are advocating for this bill, which would add a third VCF to the form highlighting the California Senior Legislature's advocacy work.

Analysis Prepared by: M. David Ruff / REV. & TAX. / (916) 319-2098 FN: 0002257

 THIRD READING  

Bill No: AB 519

Author:

:

Vote:

SENATE GOVERNANCE & FIN. COMMITTEE: 7-0, 6/21/17

AYES: McGuire, Nguyen, Beall, Hernandez, Hertzberg, Lara, Moorlach

SENATE APPROPRIATIONS COMMITTEE: 7-0, 7/10/17

AYES: Lara, Bates, Beall, Bradford, Hill, Nielsen, Wiener

ASSEMBLY FLOOR: 77-0, 5/22/17 - See last page for vote

SUBJECT:

SOURCE: California Senior Legislature

DIGEST:

This bill authorizes the addition of the California Senior Citizen Advocacy Voluntary Tax Contribution Fund as a voluntary contribution fund on the personal income tax return to provide funding for the California Senior Legislature.

Senate Floor Amendments of 9/8/17 insert “Voluntary Tax Contribution” into the name of the new fund, continuously appropriate the moneys deposited in the fund first to the State Controller and the Franchise Tax Board (FTB) to offset their administrative costs, with the balance to the California Senior Legislature for its ongoing activities on behalf of older persons. The amendments further require the California Senior Legislature to use at least 10 percent of this balance for purposes of marketing and promoting the fund. The amendments also add a coauthor and make various technical changes.

ANALYSIS: Existing law allows taxpayers to contribute money to voluntary contribution funds (VCFs), by checking a box on their state income tax returns. Contributions made through VCFs are made from taxpayers’ own resources and not from their tax liability. There are currently 20 check-offs listed on the tax return form.

This bill:

1. Establishes the California Senior Citizen Advocacy Voluntary Tax Contribution Fund in the State Treasury as a VCF on the personal income tax return for taxable years beginning on or after January 1, 2017.
2. Provides that this fund is the successor fund of the California Senior Legislature Fund, and all assets, liabilities, revenues, and expenditures of the California Senior Legislature Fund shall be transferred to, and become a part of, the new fund.

FISCAL EFFECT: Appropriation: Fiscal Com.: Local:

According to the Senate Appropriations Committee, FTB estimates annual revenue loss of less than $8,000 beginning 2018-19.

SUPPORT: (Verified 9/11/17)

California Senior Legislature (source)

Advisory Council on Aging

California Association for Health Services at Home

California Association of Public Authorities

California State Retirees

County Welfare Directors Association of California

OPPOSITION: (Verified 9/11/17)

None received

ASSEMBLY FLOOR: 77-0, 5/22/17

AYES: Acosta, Aguiar-Curry, Travis Allen, Arambula, Baker, Berman, Bigelow, Bloom, Bocanegra, Brough, Burke, Caballero, Calderon, Cervantes, Chau, Chávez, Chiu, Choi, Chu, Cooley, Cooper, Cunningham, Dababneh, Dahle, Daly, Eggman, Flora, Fong, Frazier, Friedman, Gallagher, Cristina Garcia, Eduardo Garcia, Gipson, Gloria, Gomez, Gonzalez Fletcher, Gray, Grayson, Harper, Holden, Irwin, Jones-Sawyer, Kalra, Kiley, Lackey, Levine, Limón, Low, Maienschein, Mathis, Mayes, McCarty, Medina, Melendez, Mullin, Muratsuchi, Obernolte, O'Donnell, Patterson, Quirk, Quirk-Silva, Reyes, Ridley-Thomas, Rodriguez, Rubio, Salas, Santiago, Steinorth, Mark Stone, Thurmond, Ting, Voepel, Waldron, Weber, Wood, Rendon

NO VOTE RECORDED: Bonta, Chen, Nazarian

Prepared by:

9/11/17 20:05:46

**** END ****

 THIRD READING  

Bill No: AB 519

Author:

:

Vote:

SENATE GOVERNANCE & FIN. COMMITTEE: 7-0, 6/21/17

AYES: McGuire, Nguyen, Beall, Hernandez, Hertzberg, Lara, Moorlach

SENATE APPROPRIATIONS COMMITTEE: 7-0, 7/10/17

AYES: Lara, Bates, Beall, Bradford, Hill, Nielsen, Wiener

ASSEMBLY FLOOR: 77-0, 5/22/17 - See last page for vote

SUBJECT:

SOURCE: California Senior Legislature

DIGEST:

This bill establishes the California Senior Citizen Advocacy Fund as a voluntary contribution fund on the personal income tax return to provide funding for the California Senior Legislature.

ANALYSIS: Existing law authorizes an individual to contribute amounts in excess of his or her personal income tax liability for the support of specified funds. There are general administrative provisions applicable to these voluntary contributions, which, among other things, specify when a voluntary contribution is to be placed on the return, provide for the disbursement of contributions following repeal of the fund provisions, and require undesignated funds to be transferred to the General Fund.

This bill establishes the California Senior Citizen Advocacy Fund as a voluntary contribution fund on the personal income tax return to provide funding for the California Senior Legislature.

FISCAL EFFECT: Appropriation: Fiscal Com.: Local:

According to the Senate Appropriations Committee, Franchise Tax Board estimates annual revenue loss of less than $8,000, beginning 2018-19.

SUPPORT: (Verified 7/12/17)

California Senior Legislature (source)

Advisory Council on Aging

California Association for Health Services at Home

California Association of Public Authorities

California State Retirees

County Welfare Directors Association of California

OPPOSITION: (Verified 7/12/17)

None received

ASSEMBLY FLOOR: 77-0, 5/22/17

AYES: Acosta, Aguiar-Curry, Travis Allen, Arambula, Baker, Berman, Bigelow, Bloom, Bocanegra, Brough, Burke, Caballero, Calderon, Cervantes, Chau, Chávez, Chiu, Choi, Chu, Cooley, Cooper, Cunningham, Dababneh, Dahle, Daly, Eggman, Flora, Fong, Frazier, Friedman, Gallagher, Cristina Garcia, Eduardo Garcia, Gipson, Gloria, Gomez, Gonzalez Fletcher, Gray, Grayson, Harper, Holden, Irwin, Jones-Sawyer, Kalra, Kiley, Lackey, Levine, Limón, Low, Maienschein, Mathis, Mayes, McCarty, Medina, Melendez, Mullin, Muratsuchi, Obernolte, O'Donnell, Patterson, Quirk, Quirk-Silva, Reyes, Ridley-Thomas, Rodriguez, Rubio, Salas, Santiago, Steinorth, Mark Stone, Thurmond, Ting, Voepel, Waldron, Weber, Wood, Rendon

NO VOTE RECORDED: Bonta, Chen, Nazarian

Prepared by:

7/12/17 11:56:54

**** END ****

SENATE COMMITTEE ON APPROPRIATIONS

Senator Ricardo Lara, Chair

2017 - 2018 Regular Session

AB 519 (Levine) - Personal income tax: voluntary contributions: California Senior Citizen Advocacy Fund

This bill does not meet the criteria for referral to the Suspense File.

Bill Summary:

AB 519 would authorize the addition of the California Senior Citizen Advocacy Fund (Fund) as a voluntary contribution fund on the personal income tax (PIT) return to provide funding for the California Senior Legislature.

Fiscal Impact:

• The Franchise Tax Board (FTB) estimates that, beginning in 2018-19, this bill would result in an annual revenue loss of $8,000 (General Fund).
• The State Controller’s Office (SCO), and FTB would be reimbursed for related administrative costs.

Current law allows taxpayers to contribute money to one or more of 20 voluntary contribution funds (VCF) during the process of filing their state income tax return. These contributions are made from taxpayers' own resources, not from their tax liability, as is the case with federal tax returns. Check-off amounts are deductible as charitable contributions on taxpayers' returns during the subsequent tax year. With some exceptions, each VCF (1) has a sunset date, and (2) is required to meet a minimum contribution amount of $250,000, adjusted annually for inflation.

When a taxpayer contributes to a VCF, FTB deposits the total of all contributions, less an administrative fee, into the fund created as part of its legislative authorization. For some VCFs, taxpayers’ contributions are allocated to a state agency for use in a state-administered grant program. Other VCFs’ authorizing statutes direct administrative agencies to allocate donations to a private organization, such as the American Red Cross. Still other VCFs require SCO to send the funds directly to private organizations, such as the California Fire Foundation, without passing through an administrative agency. Like FTB, SCO and administrative agencies may deduct administration fees from the amount of donations each VCF receives.

In 2016, SB 1476 (Committee on Governance and Finance) established general provisions for all VCFs established or extended after January 2, 2017. Specifically, the bill: (1) set a minimum contribution amount of $250,000 beginning the second calendar year after the fund’s first appearance on the income tax return, with no inflation adjustment in subsequent years, (2) increased the current standard five-year sunset to seven years, (3) required administering agencies to post online the process for awarding money, the amount of money spent on administration, and an itemization of how program funds were awarded, including, but not limited to, information regarding recipients of funds, (4) provided that funds shall be continuously appropriated to the administering agency to be spent as prescribed in the bill that enacts the voluntary contribution, and (5) required “voluntary tax contribution” in the name of the fund.

Taxpayer contributions to VCFs have fallen significantly thus far in 2017. Between January and April this year, taxpayers have contributed $1.7 million to VCFs compared to $3.4 million for the same period in 2016. Consequently, some or possibly all legislatively-authorized VCFs could not appear on the return for the 2017 tax year absent legislative action because contribution amounts won’t meet their statutory minimums. FTB attributes the decline to changes made to Intuit’s TurboTax product, which this year included the choice to donate to VCFs as part of a “landing table” that includes questions about more specific issues such as tax credits. In previous years, TurboTax had included the option for taxpayers to donate to VCFs as part of its general interview questions. Intuit indicates that they have already remedied the issue for 2016 returns, which will apply to future tax years. However, because most returns have already been filed, legislative action is necessary to ensure that no VCF will be removed as a result of this year’s decreases. SB 503 (currently pending in the Assembly) would reset the minimum contribution amount to $0 for the 2016 tax year, thereby ensuring that each VCF on the 2016 tax return will appear on the 2017 return.

The California Senior Legislature is a volunteer body whose primary mission is to (1) gather ideas for legislation at the state and federal levels, (2) craft the ideas into formal proposals, (3) prioritize the proposals, and present them to members of the Legislature or the Congress, and (4) advocate for laws implementing the ideas.

Since its inception, the California Senior Legislature primarily has been funded through VCF taxpayer contributions. The California Senior Legislature Fund first appeared on the 1983 tax return.. The name of the fund was changed in 1994 to the California Fund for Senior Citizens. This fund’s minimum contribution was set at $250,000, not annually adjusted for inflation, unlike other VCFs. In 2013, this fund received $234,247 in valid contributions, but was still placed on the 2013 tax return because FTB incorrectly estimated that the California Fund for Senior Citizens would meet its minimum contribution amount for the year.

Concerned that their VCF might fall off of the 2014 tax return, the California Senior Legislature sponsored legislation to sunset the California Fund for Senior Citizens and replace it with a new VCF – the California Senior Legislature Fund (SB 997, Morrell, 2014). Enacting a new VCF to support the work of the California Senior Legislature essentially forestalled the minimum contribution problem for the 2014 PIT return. SB 997 indexed the new California Senior Legislature Fund's minimum contribution requirement for inflation in subsequent years.

However, the new California Senior Legislature Fund generated $60,137 in valid contributions in 2015 and $68,950 in 2016. Consequently, FTB dropped this VCF from the 2016 tax return. The California Senior Legislature speculates that this dramatic drop in historic contribution levels is associated with the addition of the word "Legislature" in the fund's name.

Proposed Law:

This bill would establish the California Senior Citizen Advocacy Fund (Fund) in the State Treasury as a voluntary contribution fund (VCF) on the personal income tax return for taxable years beginning on or after January 1, 2017. The bill provides that the Fund is the successor fund of the California Senior Legislature Fund, and all assets, liabilities, revenues, and expenditures of the California Senior Legislature Fund shall be transferred to, and become a part of, the Fund. Additionally, the bill provides that all money transferred to the Fund, upon appropriation by the Legislature, shall be allocated (1) to FTB and SCO for reimbursement of all costs incurred in administering the VCF, and (2) the California Senior Legislature, for its ongoing activities on behalf of older persons.

The bill provides that 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. The bill further requires the California Senior Legislature's Internet Web site to report the goals of the organization, the number of and summary of bills proposed by the California Senior Legislature, and all events the Fund supports each year. The bill complies with the minimum contribution requirement of $250,000 established by SB 1476.

Related Legislation:

SB 1476 (Committee on Governance and Finance, Chapter 597, Statutes of 2016) added general requirements applicable to VCFs added or extended on or after January 2, 2017.

Staff Comments:

FTB notes that approximately 56 percent of taxpayers who contributed itemized their deductions. Assuming an average tax rate of six percent, FTB estimates the annual revenue loss from the bill would be $8,000.

Contributions related to the extension of the fund will be in made 2018 when the 2017 return is filed. The deduction for such contributions would be claimed on the 2018 return filed by April 15, 2019; consequently, revenue impact from the bill would not begin until 2018-19.

-- END --

SENATE COMMITTEE ON GOVERNANCE AND FINANCE

Senator Mike McGuire, Chair

2017 - 2018 Regular

Personal income tax: voluntary contributions: California Senior Citizen Advocacy Fund

Authorizes the addition of the California Senior Citizen Advocacy Fund (Fund) as a voluntary contribution fund (VCF) on the personal income tax (PIT) return to provide funding for the California Senior Legislature.

Background

Existing state law allows taxpayers to contribute money to voluntary contribution funds (VCFs), by checking a box on their state income tax returns. California law requires contributions made through VCFs, or tax check-offs, to be made from taxpayers’ own resources and not from their tax liability, as is possible on federal tax returns. Check-off amounts may be claimed as charitable contributions on taxpayers’ tax returns in the subsequent year. There are currently 20 check-offs listed on the tax return form, which raise between four and five million dollars annually.

The Legislature adds each VCF by statute. When a taxpayer contributes to VCFs, the Franchise Tax Board (FTB) deposits the total of all contributions, less an administrative fee, into the fund created as part of the VCF’s legislative authorization. For some VCFs, taxpayers’ contributions are allocated to a state agency for use in a state administered grant program. Other VCFs’ authorizing statutes direct administrative agencies to allocate donations to a private organization. For example, the Office of Emergency Services passes VCF funds to the American Red Cross. Other funds require the State Controller to send the funds directly to private organizations without passing through an administrative agency, such as the California Fire Foundation. The Controller and administrative agencies may deduct administrations fees from the amount of donations each VCF receives.

Last year, SB 1476 (Committee on Governance and Finance) established general provisions for all VCFs established or extended after January 2, 2017. Specifically, the bill:

• Set a minimum contribution amount of $250,000 beginning the second calendar year after the first appearance of the fund on the income tax return and eliminates the inflation adjustment in subsequent years.
• Lengthened the standard five year sunset to seven years.
• Required the administering agency to post online the process for awarding money, the amount of money spent on administration, and an itemization of how program funds were awarded by the agency, including, but not limited to, information regarding recipients of funds.
• Provided that funds shall be continuously appropriated to the administering agency to be spent as prescribed in the bill that enacts the voluntary contribution.
• Required “voluntary tax contribution” in the name of the fund.

VCF minimum contribution amounts. With a few exceptions, VCFs remain on the return until they are repealed by a sunset date or fail to generate a minimum contribution amount. In general, the minimum contribution amount is $250,000, beginning in the fund’s second year, and is adjusted yearly for inflation thereafter. The following check-offs do not have a minimum contribution requirement:

• California Firefighters’ Memorial Foundation Fund,
• California Peace Officer Memorial Foundation Fund, and
• California Seniors Special Fund.

Historical VCF Funding of California Senior Legislature, The California Senior Legislature is a volunteer body whose primary mission is to gather ideas for legislation at the state and federal levels, craft the ideas into formal proposals, prioritize the proposals, present them to members of the Legislature or the Congress, and advocate for laws implementing the ideas.

Since its inception, the California Senior Legislature primarily has been funded through VCF taxpayer contributions. The California Senior Legislature Fund first appeared on the 1983 tax return (AB 50, Agnos, 1983). The name of the fund was changed in 1994 to the California Fund for Senior Citizens (SB 3, Greene, 1993). This fund’s minimum contribution was set at $250,000, not annually adjusted for inflation, unlike other VCFs. In 2013, this fund received only $234,247 in valid contributions, but was still placed on the 2013 tax return because the FTB incorrectly estimated that the California Fund for Senior Citizens would meet its minimum contribution amount for the year.

Concerned that their VCF might fall off of the 2014 tax return, the California Senior Legislature successfully sponsored legislation to sunset the California Fund for Senior Citizens and replace it with a new VCF – the California Senior Legislature Fund (SB 997, Morrell, 2014). Enacting a new VCF to support the work of the California Senior Legislature essentially forestalled the minimum contribution problem for the 2014 PIT return. SB 997 indexed the new California Senior Legislature Fund's minimum contribution requirement for inflation in subsequent years.

Unfortunately, the new California Senior Legislature Fund generated only $60,137 in valid contributions in 2015 and $68,950 in 2016. Thus, FTB dropped this VCF from the 2016 tax return. The California Senior Legislature speculates that this dramatic drop in historic contribution levels is associated with the addition of the word "Legislature" in the fund's name. The California Senior Legislature wants to alter its VCF to support its activities with stabilized funding.

Proposed Law

Assembly Bill 519 establishes the California Senior Citizen Advocacy Fund (Fund) in the State Treasury as a voluntary contribution fund (VCF) on the personal income tax return for taxable years beginning on or after January 1, 2017. The bill provides that the Fund is the successor fund of the California Senior Legislature Fund, and all assets, liabilities, revenues, and expenditures of the California Senior Legislature Fund shall be transferred to, and become a part of, the Fund. Additionally, the bill provides that all money transferred to the Fund, upon appropriation by the Legislature, shall be allocated to the:

• Franchise Tax Board (FTB) and the Controller for reimbursement of all costs incurred in administering the VCF; and,
• California Senior Legislature, for its ongoing activities on behalf of older persons.

The bill provides that 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. The bill further requires the California Senior Legislature's Internet Web site to report the goals of the organization, the number of and summary of bills proposed by the California Senior Legislature, and all events the Fund supports each year. The bill complies with the minimum contribution requirement of $250,000 established by SB 1476.

State Revenue Impact

FTB estimates annual revenue loss of less than $8,000 beginning 2018-19.

Comments

1. Purpose of the bill. According to the author, “The California Senior Legislature has been an effective tool for senior citizens in California to create meaningful change in their government and their communities. This model of civic education gives individuals a lesson in the legislative process, while also providing a forum to advocate for policy issues to the state and federal government. Participation is imperative to our democracy, and as our population ages, the California Senior Legislature must be able to continue their role of advising the state legislature on policies that affect them.”

2. Fourth Bite at the Apple? The California Senior Legislature relies on VCF taxpayer contributions for its funding but has had trouble meeting the minimum contribution requirement in law. This bill proposes the fourth formulation of a VCF to support this body. The minimum contribution requirement of $250,000 is intended to ensure that VCFs have sufficient public support to warrant placement on the tax return. The Committee may wish to consider the efficacy of the minimum contribution requirement by simply reinstating a checkoff that has just fallen off the tax return for failing to meet that requirement.

Assembly Actions

Assembly Revenue and Taxation 9-0

Assembly Aging and Long Term Care 7-0

Assembly Appropriations 17-0

Assembly Floor 77-0

Support and Opposition

(6/12/17)

Support: California Senior Legislature (Sponsor); Advisory Council on Aging; California Association for Health Services at Home (CAHSAH); California Association of Public Authorities (CAPA); California State Retirees; County Welfare Directors Association of California (CWDA).

Opposition: Unknown.

-- END --

ASSEMBLY THIRD READING

ATR Bill Id:AB 519

Author:(Levine and Ridley-Thomas)

As Amended Ver:May 15, 2017

Majority vote

SUMMARY: Authorizes the addition of the California Senior Citizen Advocacy Fund (Fund) as a voluntary contribution fund (VCF) on the personal income tax (PIT) return for taxable years beginning on or after January 1, 2017. Specifically, this bill:

1. Establishes the Fund in the State Treasury.
2. Provides that the Fund is the successor fund of the California Senior Legislature Fund. Specifically, all assets, liabilities, revenues, and expenditures of the California Senior Legislature Fund shall be transferred to, and become a part of, the Fund, as provided.
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:
   1. Franchise Tax Board (FTB) and the Controller for reimbursement of all costs incurred in administering the VCF; and,
   2. 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.
6. Requires the California Senior Legislature's Internet Web site to report the goals of the organization, the number of and summary of bills proposed by the California Senior Legislature, and all events the Fund supports each year.
7. Provides that the Fund's statutory provisions shall remain in effect only until January 1 of the seventh calendar year following the Fund's first appearance on the return.
8. Requires the Fund to meet a minimum contribution requirement of $250,000.

EXISTING LAW

1. Allows taxpayers to contribute to one or more of 19 VCFs on the 2016 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: According to the Assembly Appropriations Committee:

1. Minor ongoing General Fund revenue losses of up to $8,000 per year resulting from itemized taxpayer deductions.
2. Modest costs for the FTB and the State Controller's Office for administering the VCF.

COMMENTS:

1. The author has provided the following statement in support of this bill:

The California Senior Legislature has been an effective tool for senior citizens in California to create meaningful change in their government and their communities. This model of civic education gives individuals a lesson in the legislative process, while also providing a forum to advocate for policy issues to the state and federal government. Participation is imperative to our democracy, and as our population ages, the California Senior Legislature must be able to continue their role of advising the state legislature on policies that affect them.

1. Committee Staff Comments
   1. The California Senior Legislature's first VCF: The California Senior Legislature was originally supported by the California Fund for Senior Citizens which, the FTB notes, first appeared on the 1983 PIT return. From 2010 to 2013, the California Fund for Senior Citizens received the following contribution amounts:

The California Fund for Senior Citizens' minimum contribution amount was set at $250,000 and, unlike most other VCF thresholds, was not annually adjusted for inflation. 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.

• 1. What happened in 2014? In 2014, contributions to the California Fund for Senior Citizens lagged slightly behind contributions in the prior year. The California Senior Legislature grew understandably concerned that the California Fund for Senior Citizens would not meet its minimum contribution amount in 2014, thereby jeopardizing the VCF's place on the 2014 PIT return.

Thus, the California Senior Legislature advocated for the enactment of SB 997 (Morrell), Chapter 248, Statutes of 2014, which sunset the California Fund for Senior Citizens and effectively replaced it with a newly named VCF – the California Senior Legislature Fund. SB 997 (Morrell) was designed to serve two main purposes. First, it ensured that a VCF supporting the work of the California Senior Legislature was 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 agreed to index the new California Senior Legislature Fund's minimum contribution requirement for inflation in subsequent years. Second, SB 997 (Morrell) included the California Senior Legislature's name in the newly enacted VCF to make promotion of the fund easier and to avoid taxpayer confusion with the California Seniors Special Fund.

• 1. Best laid plans: Unfortunately, the newly named California Senior Legislature Fund did not generate significant support following its creation. In 2015, the fund generated only $60,137 in valid contributions. Moreover, in 2016 the fund only generated $68,950. The California Senior Legislature speculates that this dramatic drop in historic contribution levels is associated with the addition of the word "Legislature" in the fund's name. Thus, they are advocating for this bill, which would add a third VCF to the form highlighting the California Senior Legislature's advocacy work.

Analysis Prepared by: M. David Ruff / REV. & TAX. / (916) 319-2098 FN: 0000435

Date of Hearing: May 10, 2017

ASSEMBLY COMMITTEE ON APPROPRIATIONS

Lorena Gonzalez Fletcher, Chair

ABPCA Bill Id:AB 519

Author:(Levine) – As Amended Ver:April 3, 2017

Urgency: No State Mandated Local Program: No Reimbursable: No

SUMMARY:

This bill adds the California Senior Citizen Advocacy Fund, a voluntary contribution fund (VCF,) to the personal income tax (PIT) return. All money transferred to the VCF, upon appropriation by the Legislature, will be allocated to the Franchise Tax Board (FTB) and the State Controller (SCO) for reimbursement of administrative costs and to the California Senior Legislature (CSL).

FISCAL EFFECT:

1. Minor ongoing GF revenue losses of up to $8,000 per year resulting from itemized taxpayer deductions.
2. Modest costs for the FTB and SCO for administering the VCF.

COMMENTS:

1. Background and Purpose. The CSL is a volunteer organization which advocates for policies that support senior citizens. It pursues its priorities by way of model legislation to present to members of the State Legislature and Congress. CSL has historically been funded by the California Fund for Senior Citizens, another VCF. In 2014, following a gradual decline in donations, that VCF was renamed to the California Senior Legislature Fund. However, that fund also experienced a steep decline in donations, perhaps in part because the name change made the group less sympathetic to potential donors. AB 519 will put another VCF on the PIT return to support the CSL.
2. Recent changes to VCF policy. The proliferation of VCFs and the lack of consistency around their design and implementation resulted in SB 1476 (Senate Committee on Government and Finance), Chapter 597, Statutes of 2016, which established various administrative guidelines for all future or renewed VCFs. SB 1476 set a minimum contribution amount of $250,000 (not adjusted for inflation), lengthened the current five-year sunset to seven years, provided for the continuous appropriation of funds, and required that specified information be made public. Recent policy committee amendments to AB 519 removed the minimum contribution threshold and the sunset, putting the bill out of compliance with SB 1476’s standards.
3. Related legislation. AB 1031 (Waldron), which establishes the Native California Wildlife Rehabilitation Fund, AB 846 (Cooley), which establishes the California YMCA Youth and Government Voluntary Tax Contribution Fund, and AB 280 (Low), which establishes the Rape Kit Back Log Voluntary Tax Contribution Fund, will be heard today in this committee.

Analysis Prepared by: Luke Reidenbach / APPR. / (916) 319-2081

Date of Hearing: April 18, 2017

ASSEMBLY COMMITTEE ON AGING AND LONG-TERM CARE

Ash Kalra, Chair

ABPCA Bill Id:AB 519 (

Author:Levine) – As Amended Ver:April 3, 2017

SUBJECT: Personal income tax: voluntary contributions: California Senior Citizen Advocacy Fund.

SUMMARY: Authorizes the addition of the California Senior Citizen Advocacy Fund as a voluntary contribution fund on the personal income tax return form to serve as the principal source of funding for the California Senior Legislature. Specifically, this bill:

1. Establishes the California Senior Citizen Advocacy Fund, in the State Treasury.
2. Requires the Franchise Tax Board to include on an individual tax form the California Senior Citizens Advocacy Fund to allow individuals to contribute.
3. For taxable years beginning on or after January 1, 2017, any individual may designate on the tax return that a contribution in excess of the tax liability be made to the California Senior Citizen Advocacy Fund to be used to conduct the sessions of the California Senior Legislature and to support its ongoing activities on behalf of older persons.
4. Permits contributions made to the California Senior Citizen Advocacy Fund to be treated as a deduction.
5. Directs the California Senior Citizen Advocacy Fund, to reimburse the Franchise Tax Board and the Controller for costs incurred by the Franchise Tax Board and the Controller for administration of the fund.
6. Authorizes unspent funds to be carried-over from year to year.
7. Requires the Joint Rules Committee of the California Senior Legislature (CSL) to direct fund expenditures in a manner consistent with the bylaws of the CSL, established by a majority vote of the members of the CSL.
8. The California Senior Legislature’s Internet Web site shall report the goals of the organization, the number of and summary of bills proposed by the California Senior Legislature, and all events the California Senior Citizen Advocacy Fund supports each year.

EXISTING LAW:

1. Establishes the California Senior Legislature, comprised of two houses, with 80 and 40 members, each member serving four-year terms, elected or appointed, in all 33 Area Agencies on Aging, according to rules developed by the California Senior Legislature in cooperation with the California Association of Area Agencies on Aging.
2. Finds and declares that senior citizens can best assess the needs of senior citizens for public programs in health, social services, recreation, transportation, education, housing, cultural services, and other appropriate areas of service.
3. States that the California Senior Legislature has been effective in providing model legislation for older citizens and advocating for the needs of seniors.
4. Grants the California Senior Legislature full authority to define its program and utilize its funds in any way necessary to carry out the organizational duties.
5. Requires that funds for the California Senior Legislature be allocated from the California Senior Legislature Fund, or from private funds directed to CSL, for the purpose of funding activities of the California Senior Legislature.
6. Permits the California Senior Legislature to accept grants from any source, public or private, to help perform its functions.
7. Requires each voluntary contribution fund (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: Unknown.

COMMENTS:

Author’s Statement: “The California Senior Legislature has been an effective tool for senior citizens in California to create meaningful change in their government and their communities. This model of civic education gives individuals a lesson in the legislative process, while also providing a forum to advocate for policy issues to the state and federal government. Participation is imperative to our democracy, and as our population ages, the California Senior Legislature must be able to continue their role of advising the state legislature on policies that affect them.”

Background: The California Senior Legislature (CSL) is a volunteer organization which advocates for priorities to support senior citizens. The CSL pursues its priorities by way of model legislation to present to members of the State Legislature and Congress. Traditionally, the CSL meets in a mock legislative session every fall, made impossible in 2015 with plummeting funds.

The CSL was created in 1979 by legislation authored by then-Assembly Member Henry Mello. Volunteers are 60 years and older, elected by their peers. The CSL is organized into two committees, the Joint Rules Committee which provides for the governance, and the Legislative Committee which directs advocacy activities related to CSL priorities.

CSL has seen over 200 proposals authored by legislators and proposed into legislation. Key policy achievements include advances in Alzheimer’s disease treatment and programs, and improved care in long-term care facilities, as well as expanded consumer protections addressing the prevention of elder abuse, identity theft, gender discrimination, and reverse mortgage fraud.

How Voluntary Contribution Funds (VCF) Work: For 35 years, CSL funding derived from taxpayer contributions. Taxpayers can contribute to voluntary contribution funds (VCFs) by checking a box and designating an amount on their state income tax returns. Legislation is necessary to add a VCF to the tax return, and is repealed by a sunset date or failure to generate a required minimum contribution amount. The minimum contribution amount for most VCFs is $250,000, beginning in the fund’s second year. The Franchise Tax Board (FTB) determines the minimum contribution amount required for each VCF to remain on the form and also whether contributions to each VCF meet that amount. There are 3 exceptions to the minimum level which include the California Firefighters’ Memorial Foundation Fund, the California Peace Officer Memorial Foundation Fund, and, the California Seniors Special Fund which supports the Triple-A Council of California by accepting surrendered senior tax credits by those eligible for that credit.

History of CSL Funding and Contributions: The California Senior Legislature was originally supported by the California Fund for Senior Citizens which, the FTB notes, first appeared on the 1983 personal income tax (PIT) returns. The CSL Fund has not always been subject to a minimum amount. In 1999 the Fund’s sunset date was extended and a minimum contribution requirement of $250,000 was created, and, unlike most other VCF thresholds, was not annually adjusted for inflation.

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.

What happened next? In 2014, contributions to the California Fund for Senior Citizens lagged slightly behind contributions in the prior year. The California Senior Legislature grew understandably concerned that the California Fund for Senior Citizens would not meet its minimum contribution amount in 2014, thereby jeopardizing the VCF’s place on the 2014 PIT return.

Thus, the California Senior Legislature advocated for the enactment of SB 997 (Morrell), Chapter 248, Statutes of 2014, which sunset the California Fund for Senior Citizens and effectively replaced it with a newly named VCF – the California Senior Legislature Fund.
SB 997 (Morrell) was designed to serve two main purposes. First, it ensured that a VCF supporting the work of the California Senior Legislature was 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 agreed to index the new California Senior Legislature Fund’s minimum contribution requirement for inflation in subsequent years. Second, SB 997 (Morrell) included the California Senior Legislature’s name in the newly enacted VCF to make promotion of the fund easier and to avoid taxpayer confusion with the California Seniors Special Fund.

Unfortunately, the newly named California Senior Legislature Fund did not generate significant support following its creation. In 2015, the fund generated only $60,137 in valid contributions. Moreover, in 2016 the fund only generated $68,950. The California Senior Legislature speculates that this dramatic drop in historic contribution levels is associated with the addition of the word “Legislature” in the fund’s name. Thus, they are advocating for this bill, which would add a third VCF to the form highlighting the California Senior Legislature’s advocacy work.

Traditionally, the Assembly Revenue and Taxation Committee’s VCF Policy provides that VCFs “that have failed to meet their minimum contribution requirement will not be extended or reauthorized.” The Committee’s policy also required a sunset date. 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.

The amendments adopted in the Assembly Revenue and Taxation Committee eliminated the minimum contribution requirement and the sunset date.

Proponents of this bill might argue that the California Senior Legislature should once again be given special dispensation given their vital work advancing the interests of senior Californians. Critics, however, might contend that it is unfair to give this one organization special treatment in light of the many other VCFs whose public support has diminished in recent years. There are no fewer than 30 VCFs that have been eliminated from the return in recent years, mainly for failing to meet their minimum contribution amount.

Arguments in Support: Letters received in support of AB 519 state that, “Given the state’s demographics and the anticipated growth in the number of Californians aged 60 and over, it is important to ensure the continuation of a robust CSL for our residents.” They cite many legislative proposals resulting in state laws have contributed to improved lives of people in California.

Arguments in Opposition: None.

Related Legislation

SB 1249 (Alquist), Chapter 645, Statutes of 2006 removes the annual inflation factor adjustment on the minimum tax contributions for the California Fund for Senior Citizens, and reduces and fixes the minimum contribution threshold amount in order for the checkoff to remain on the tax return at $250,000.

SB 997 (Morrell), Chapter 248, Statutes of 2014 repealed authorization for the California Fund for Senior Citizens, which supported work of the California Senior Legislature, and authorized the creation of a new California Senior Legislature Fund as a voluntary contribution fund on the personal income tax return for taxable years beginning on or after January 1, 2014.

REGISTERED SUPPORT / OPPOSITION:

Support

California Senior Legislature – Sponsor

California Association for Health Services at Home (CAHSAH)

California Association of Public Authorities (CAPA)

County Welfare Directors Association of California (CWDA)

Two individuals.

Opposition

None on file.

Analysis Prepared by: Barry Brewer / AGING & L.T.C. / (916) 319-3990

Date of Hearing: March 27, 2017

ASSEMBLY COMMITTEE ON REVENUE AND TAXATION

Sebastian Ridley-Thomas, Chair

ABPCA Bill Id:AB 519 (

Author:Levine) – As Introduced Ver:February 13, 2017

Majority vote. Fiscal committee.

SUBJECT: Personal income tax: voluntary contributions: California Senior Citizen Advocacy Fund

SUMMARY: Authorizes the addition of the California Senior Citizen Advocacy Fund (Fund) as a voluntary contribution fund (VCF) on the personal income tax (PIT) return for taxable years beginning on or after January 1, 2017. Specifically, this bill:

1. Establishes the Fund in the State Treasury.
2. Provides that the Fund is the successor fund of the California Senior Legislature Fund. Specifically, all assets, liabilities, revenues, and expenditures of the California Senior Legislature Fund shall be transferred to, and become a part of, the Fund, as provided.
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:
   
   1. Franchise Tax Board (FTB) and the Controller for reimbursement of all costs incurred in administering the VCF; and,
      
   2. 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.
   
6. Requires the California Senior Legislature's Internet Web site to report the goals of the organization, the number of and summary of bills proposed by the California Senior Legislature, and all events the Fund supports each year.
   
7. Provides that the Fund's statutory provisions shall remain in effect only for taxable years beginning before January 1, 2022.
   
8. Requires the Fund to meet a minimum contribution requirement of $250,000, which is thereafter indexed for inflation.

EXISTING LAW

1. Allows taxpayers to contribute to one or more of 19 VCFs on the 2016 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 (Income Tax Checkoff) Policy (VCF Policy).
   
2. Provide that VCFs "that have failed to meet their minimum contribution requirement will not be extended or reauthorized."

FISCAL EFFECT: The FTB estimates that this bill would result in annual General Fund revenue losses of $8,000.

COMMENTS:

1. The author has provided the following statement in support of this bill:

The California Senior Legislature has been an effective tool for senior citizens in California to create meaningful change in their government and their communities. This model of civic education gives individuals a lesson in the legislative process, while also providing a forum to advocate for policy issues to the state and federal government. Participation is imperative to our democracy, and as our population ages, the California Senior Legislature must be able to continue their role of advising the state legislature on policies that affect them.

1. This bill is supported by the California Association of Public Authorities for IHSS, which notes the following:

AB 519 would re-name the contribution fund from the California Senior Legislature Fund to the "California Senior Citizen Advocacy Fund" to more accurately portray the mission of the organization, and to remove the stigma of being associated with the State Legislature. This name change would provide for retention on the Franchise Tax Board's Form 540, and thus allow the marketing and promotional efforts to continue to be pursued. Renaming the California Senior Legislature Fund is the simplest method to prevent removal from the Franchise Tax Board's Form 540, and allows the California Senior Legislature (CSL) to rebuild their primary source of funding.

1. Committee Staff Comments
   1. The California Senior Legislature: According to the author, the California Senior Legislature allows individuals over the age of 60 to take an active role in government. Members meet annually to prioritize and sponsor legislation at the state and federal level. The author notes that the California Senior Legislature was established in 1980 through legislation by Senator Henry Mello. The 40 Senior Senators and 80 Senior Assemblymembers meet annually for a four-day model legislative session at the State Capitol, where proposals are voted on and prioritized.
      
   2. The California Senior Legislature's first VCF: The California Senior Legislature was originally supported by the California Fund for Senior Citizens which, the FTB notes, first appeared on the 1983 PIT return. From 2010 to 2013, the California Fund for Senior Citizens received the following contribution amounts:

The California Fund for Senior Citizens' minimum contribution amount was set at $250,000 and, unlike most other VCF thresholds, was not annually adjusted for inflation. 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.

• 1. What happened in 2014? In 2014, contributions to the California Fund for Senior Citizens lagged slightly behind contributions in the prior year. The California Senior Legislature grew understandably concerned that the California Fund for Senior Citizens would not meet its minimum contribution amount in 2014, thereby jeopardizing the VCF's place on the 2014 PIT return.
     

Thus, the California Senior Legislature advocated for the enactment of SB 997 (Morrell), Chapter 248, Statutes of 2014, which sunset the California Fund for Senior Citizens and effectively replaced it with a newly named VCF – the California Senior Legislature Fund. SB 997 (Morrell) was designed to serve two main purposes. First, it ensured that a VCF supporting the work of the California Senior Legislature was 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 agreed to index the new California Senior Legislature Fund's minimum contribution requirement for inflation in subsequent years. Second, SB 997 (Morrell) included the California Senior Legislature's name in the newly enacted VCF to make promotion of the fund easier and to avoid taxpayer confusion with the California Seniors Special Fund.

• 1. Best laid plans: Unfortunately, the newly named California Senior Legislature Fund did not generate significant support following its creation. In 2015, the fund generated only $60,137 in valid contributions. Moreover, in 2016 the fund only generated $68,950. The California Senior Legislature speculates that this dramatic drop in historic contribution levels is associated with the addition of the word "Legislature" in the fund's name. Thus, they are advocating for this bill, which would add a third VCF to the form highlighting the California Senior Legislature's advocacy work.
  2. A potentially questionable precedent: As noted above, this Committee's VCF Policy provides that VCFs "that have failed to meet their minimum contribution requirement will not be extended or reauthorized." 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.

Proponents of this bill might argue that the California Senior Legislature should once again be given special dispensation given their vital work advancing the interests of senior Californians. Critics, however, might contend that it is unfair to give this one organization special treatment in light of the many other VCFs whose public support has diminished in recent years. There are no fewer than 30 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:

• • 1. The ALS/Lou Gehrig's Disease Research Fund received only $131,655 in 2013 and, as a result, was eliminated from the return;
       
    2. The Municipal Shelter Spay-Neuter Fund received only $217,883 in 2013 and, as a result, was eliminated from the return;
       
    3. The Arts Council Fund received only $165,647 in 2012 and, as a result, was eliminated from the return;
       
    4. The California Police Activities League Fund received only $67,202 in 2012 and, as a result, was eliminated from the return;
       
    5. The California Veterans Homes Fund received only $210,078 in 2012 and, as a result, was eliminated from the return;
       
    6. The Safely Surrendered Baby Fund received only $158,645 in 2012 and, as a result, was eliminated from the return;
       
    7. The California Military Family Relief Fund received only $202,010 in 2010 and, as a result, was eliminated from the return; and,
       
    8. The California Ovarian Cancer Research Fund received only $121,427 in 2010 and, as a result, was eliminated from the return.
       
  1. Prior legislation: AB 2497 (Wagner), of the 2015-16 Legislative Session, contained provisions substantially similar to this bill. AB 2497 died in the Senate Committee on Appropriations.

REGISTERED SUPPORT / OPPOSITION:

Support

California Association for Health Services at Home

California Association of Public Authorities for IHSS

County Welfare Directors Association of California

One individual

Opposition

None on file

Analysis Prepared by: M. David Ruff / REV. & TAX. / (916) 319-2098