Press Release

Bill to Safeguard Charitable Contributions Made on Tax Returns Goes to Governor

SB 1476 increases transparency and oversight of tax checkoffs, ensuring the money is distributed promptly to the appropriate agency

August 25, 2016

SACRAMENTO – The Senate approved legislation today by Sen. Bob Hertzberg, D-Van Nuys, that increases transparency and oversight of charitable contributions made on tax returns.

SB 1476, which passed as part of the Senate consent calendar and has already cleared the Assembly, goes next to the governor for his consideration. The legislation is the result of a Senate Governance and Finance Committee oversight hearing held in December that found problems with how the donations are managed. The committee learned that contributions could take years to reach the intended recipient and sometimes money that wasn’t spent ended up reverting to the state general fund.   

“When Californians choose to make a charitable contribution by checking off a box to do so on their tax returns, they should know that the money will go to the appropriate organization or agency, be delivered promptly and be spent properly,” Hertzberg said. “This legislation ensures that the state is prudently administering these contributions.”

Among other provisions, SB 1476 requires donations to be continuously appropriated to the administering agency and that the administering agency post online the process for awarding the money, how program funds are awarded and how much is spent on administration.

Under current law, a fund must raise a minimum of $250,000 by its second calendar year to remain on the tax return, and each subsequent year, the minimum amount is adjusted upward for inflation. The bill eliminates the inflation adjustment, giving funds a better chance of meeting the minimum, and also allows funds to stay on the tax returns for seven years instead of five before needing to be reauthorized.

The state Legislature created the tax check-off system in 1982, and it has raised more than $102 million for charitable causes. State tax returns currently list 19 checkoffs, and those funds collect, on average, between $4 million and $5 million each year.

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Bob Hertzberg, chair of the Senate Committee on Governance and Finance, represents nearly 1 million San Fernando Valley residents of Senate District 18, which includes part of Burbank and the following communities in Los Angeles: Arleta, Granada Hills, Hansen Dam, Lake View Terrace, Mission Hills, North Hills, North Hollywood, part of Northridge, Pacoima, Panorama City, Sherman Oaks, Studio City, part of Sun Valley, Sylmar, Toluca Lake, Valley Glen, Valley Village, Van Nuys, the City of San Fernando and Universal City. See a district map at http://sd18.senate.ca.gov/district.  After serving in the Assembly from 1996-2002, including two years as Speaker, Hertzberg invested in solar, wind and electric-car projects; and worked for structural changes in government through the Think Long Committee of California. Learn more at www.senate.ca.gov/hertzberg.

MEDIA CONTACT: Andrew LaMar
Communications Director
Senator Robert M. Hertzberg
Capitol Building, Room 4038
Sacramento, CA 95814
(916) 651-4018

 

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