AB 924
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Date of Hearing: April 20, 2015
ASSEMBLY COMMITTEE ON REVENUE AND TAXATION
Philip Ting, Chair
AB 924 (Cooley) – As Amended April 13, 2015
Majority vote. Fiscal committee.
SUBJECT : Personal income tax: voluntary contributions: State Children's Trust Fund
SUMMARY : Reauthorizes the addition of the State Children's Trust Fund (Fund) checkoff to the personal income tax (PIT) return upon the removal of another voluntary contribution fund
(VCF) from the return, or as soon as space is available. Specifically, this bill :
1) Provides that all money transferred to the Fund, upon appropriation by the Legislature, shall be allocated as follows: a) To the Franchise Tax Board (FTB) and the State Controller for reimbursement of all costs incurred in administering the VCF; b) Up to 10% to the State Department of Social Services (CDSS) to pursue public education about child abuse and neglect prevention and early intervention in order to encourage voluntary contributions to the Fund. The CDSS may delegate these duties by entering into a contract with a designated private entity that has demonstrated experience in education and promotion; and, c) The remainder to the CDSS for innovative child abuse and neglect prevention and intervention programs operated by private nonprofit organizations or public institutions of higher education with recognized expertise in fields related to child welfare and for evaluation, research, or dissemination of information concerning existing program models for the purpose of replication of successful models as specified in Welfare and
Institutions Code (WIC) Section 18965 et seq .
2) Provides that it is the Legislature's intent to create an additional source of funding, and that moneys generated shall not be used in place of funds from other sources that are available to the Fund.
3) Provides for the Fund provisions' automatic sunset on January 1 of the fifth taxable year following the Fund's first appearance on the PIT return.
4) Requires the Fund to meet a minimum contribution threshold of $250,000 indexed for inflation.
EXISTING LAW :

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1) Allows taxpayers to contribute to one or more of 18 VCFs on the 2014 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.
4) Establishes, pursuant to WIC Section 18969, the Fund in the State Treasury. Money in the
Fund, upon appropriation by the Legislature, is allocated to the CDSS to fund child abuse and neglect prevention and intervention programs.
5) Provides that the CDSS shall use no more than 5% of the funds appropriated under WIC
Section 18969 for administrative costs.
FISCAL EFFECT : The FTB estimates annual revenue losses of roughly $8,000 for every
$250,000 contributed to the Fund by taxpayers who itemize.
COMMENTS :
1) The author has provided the following statement in support of this bill:
Over the last five years, the Trust Fund received between $305,000 and $760,000 from voluntary "check-off" contributions annually. The contributions each year have represented roughly 52 percent of the revenue deposited into the fund, a critically important source of funding activities. The loss of this funding stream is resulting in fewer prevention programs that directly target child abuse and neglect receiving funds.
To ensure these programs remain supported, AB 924 reinstates [. . .] the State Children's
Trust Fund as a donation option for a person to make in completing their taxes, if they expect a refund.
2) Proponents of this bill note the following:
The State Children's Trust Fund has, until now, been one of the twenty donation options on California Tax Forms. AB 924 would reinstate the State Children's Trust Fund, ensuring that voluntary contributions to the Fund remain an option on tax forms.
The loss of this funding stream is resulting in fewer prevention programs that directly target child abuse and neglect, a preventable tragedy that affects nearly half a million
California children each year.
3) Committee Staff Comments a) So many causes, so little space: There are countless worthy causes that would benefit from the inclusion of a VCF on the state's income tax returns. At the same time, space on the returns is limited. Thus, it could be argued that the current system for adding VCFs to the form is subjective and essentially rewards organizations that can convince the
Legislature to include their fund on the form.

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$324,972. The VCF, however, only received valid contributions totaling $303,159.
Thus, the VCF was not included on the 2014 PIT return filed in 2015. c) VCF policy: This Committee's VCF policy provides that "[A]ll proponents seeking authorization for a new or reauthorized checkoff shall provide information justifying their expectation that the checkoff will meet its minimum contribution requirement." In addition, this Committee's VCF policy states that, "Checkoffs that have failed to meet their minimum contribution requirement will not be extended or reauthorized." To this end, Committee staff questions the precedent of simply re-establishing past VCFs when they fail to garner sufficient support to remain on the form. Moreover, the Committee may wish to consider whether it is appropriate to effectively "re-set" this VCF's minimum contribution threshold back to $250,000, as if it were a completely new VCF. d) A question of percentages: This bill would allow the CDSS to spend up to 10% of Fund moneys to encourage voluntary contributions to the Fund. Ostensibly, this is being done to prevent the Fund from falling off the PIT return in the future for failing to meet its minimum contribution threshold. While it is not entirely clear from this bill's language,
Committee staff assumes that the 10% limit applies to the entire amount contributed to the VCF, and not the remaining amount distributed to the CDSS after reimbursing the
FTB and the State Controller for their administrative expenses. Thus, if the Fund were to receive $250,000 through the VCF, up to $25,000 could be spent to promote future donations. The CDSS could apparently spend this money directly or contract promotion services out to a private entity.
It is not clear, however, how this limitation would interact, if at all, with the existing limitation on administrative expenses imposed by WIC Section 18969, which established the Fund and specifies that the CDSS shall use no more than 5% of the funds appropriated under WIC Section 18969 for administrative costs. Would this 5% limitation also apply to moneys generated through the VCF? If so, would this 5% cap for administrative costs be on top of the 10% available for VCF promotion? The author may wish to clarify these issues through appropriate amendments.
REGISTERED SUPPORT / OPPOSITION :
Support
Child Abuse Prevention Council of Sacramento
Insights Counseling Group
Kern County Network for Children
KidsFirst
Plumas Crisis Intervention and Resource Center
Prevent Child Abuse California
Opposition
None on file

Analysis Prepared by : M. David Ruff / REV. & TAX. / (916) 319-2098
AB 924
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