BILL NUMBER: AB 2518 CHAPTERED 09/26/08 CHAPTER 330 FILED WITH SECRETARY OF STATE SEPTEMBER 26, 2008 APPROVED BY GOVERNOR SEPTEMBER 26, 2008 PASSED THE SENATE AUGUST 22, 2008 PASSED THE ASSEMBLY AUGUST 29, 2008 AMENDED IN SENATE AUGUST 4, 2008 AMENDED IN SENATE JULY 10, 2008 AMENDED IN SENATE JUNE 16, 2008 AMENDED IN SENATE JUNE 5, 2008 AMENDED IN ASSEMBLY MARCH 24, 2008 INTRODUCED BY Assembly Member Torrico FEBRUARY 21, 2008 An act to add and repeal Article 15 (commencing with Section 18861) of Chapter 3 of Part 10.2 of Division 2 of the Revenue and Taxation Code, relating to taxation. LEGISLATIVE COUNSEL'S DIGEST AB 2518, Torrico. Taxpayer contributions: California Cancer Research Fund. Existing law, relating to the administration of personal income taxes, authorizes individual taxpayers to contribute amounts in excess of their tax liability for the support of specified funds or accounts. This bill would allow taxpayers to designate on their tax returns, that a specified amount in excess of their tax liability be transferred to the California Cancer Research Fund, which would be created by this bill. However, the bill would provide that a voluntary contribution designation for this fund may not be added on the tax return until another voluntary contribution designation is removed from the return. This bill would provide that all moneys contributed to the fund pursuant to these provisions, upon appropriation by the Legislature, be allocated to the Franchise Tax Board and the Controller for reimbursement of costs, as provided, and the Regents of the University of California for distribution of grants for the purposes of conducting cancer research, expanding education on cancer, and providing prevention and awareness activities, as provided, and for reimbursement of any costs incurred by the regents for administering the grants. This bill would provide that these voluntary contribution provisions are repealed on either January of the fifth taxable year following the taxable year the fund first appears on the personal income tax return or on January 1 of an earlier calendar year, if the Franchise Tax Board estimates that the annual contribution amount will be less than $250,000, or an adjusted amount, as specified, for subsequent taxable years. THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS: SECTION 1. Article 15 (commencing with Section 18861) is added to Chapter 3 of Part 10.2 of Division 2 of the Revenue and Taxation Code, to read: Article 15. California Cancer Research Fund 18861. (a) Any individual may designate on the tax return that a contribution in excess of the tax liability, if any, be made to the California Cancer Research Fund, pursuant to Section 18862. (b) The contributions shall be in full dollar amounts and may be made individually by each signatory on a joint return. (c) A designation under subdivision (a) shall be made for any taxable year on the individual return for that taxable year, and once made shall be irrevocable. In the event that payments and credits reported on the return, together with any other credits associated with the individual's account, do not exceed the individual's liability, the return shall be treated as though no designation has been made. (d) If an individual designates a contribution to more than one account or fund listed on the tax return, and the amount available is insufficient to satisfy the total amount designated, the contribution shall be allocated among the designees on a pro rata basis. (e) The Franchise Tax Board shall revise the forms of the return to include a space labeled the "California Cancer Research Fund" to allow for the designation permitted under subdivision (a). The forms shall also include in the instructions information that the contribution may be in the amount of one dollar ($1) or more and that the contribution shall be used to conduct research relating to the causes, detection, and prevention of cancer, to expand community-based education on cancer, and to provide prevention and awareness activities for communities that are disproportionately at risk or afflicted by cancer. (f) Notwithstanding any other provision of law, a voluntary contribution designation for the California Cancer Research Fund may not be added to the tax return until another voluntary contribution is removed. (g) A deduction shall be allowed under Article 6 (commencing with Section 17201) of Chapter 3 of Part 10 for any contribution made pursuant to subdivision (a). 18862. There is hereby created in the State Treasury the California Cancer Research Fund to receive contributions made pursuant to Section 18861. The Franchise Tax Board shall notify the Controller of both the amount of money paid by taxpayers in excess of their tax liability and the amount of refund money which taxpayers have designated pursuant to Section 18861 to be transferred to the California Cancer Research Fund. The Controller shall transfer from the Personal Income Tax Fund to the California Cancer Research Fund an amount not in excess of the sum of the amounts designated by individuals pursuant to Section 18861 for payment into that fund. 18863. All money transferred to the California Cancer Research Fund, upon appropriation by the Legislature, shall be allocated as follows: (a) To the Franchise Tax Board and the Controller for reimbursement of all costs incurred by the Franchise Tax Board and the Controller in connection with their duties under this article. (b) To the Regents of the University of California for distribution of grants for the purposes of conducting research on the causes and treatments for cancer, expanding community-based education on cancer, and providing culturally sensitive and appropriate prevention and awareness activities targeted toward communities that are disproportionately at risk or afflicted by cancer, and for reimbursement of any costs incurred by the regents for administering the grants authorized pursuant to this section. 18864. (a) Except as otherwise provided in subdivision (b), this article shall remain in effect only until January 1 of the fifth taxable year following the first appearance of the California Cancer Research Fund on the personal income tax return, and as of that date is repealed, unless a later enacted statute, that is enacted before the applicable date, deletes or extends that date. (b) (1) By September 1 of the second calendar year and each subsequent calendar year that the California Cancer Research Fund appears on the tax return, the Franchise Tax Board shall do all of the following: (A) Determine the minimum contribution amount required to be received during the next calendar year for the fund to appear on the tax return for the taxable year that includes that next calendar year. (B) Provide written notification to the Regents of the University of California of the amount determined in subparagraph (A). (C) Determine whether the amount of contributions estimated to be received during the calendar year will equal or exceed the minimum contribution amount determined by the Franchise Tax Board for the calendar year pursuant to subparagraph (A). The Franchise Tax Board shall estimate the amount of contributions to be received by using the actual amounts received and an estimate of the contributions that will be received by the end of that calendar year. (2) If the Franchise Tax Board determines that the amount of the contributions estimated to be received during a calendar year will not at least equal the minimum contribution amount for the calendar year, this article is repealed with respect to taxable years beginning on or after January 1 of that calendar year. (3) For purposes of this section, the minimum contribution amount for a calendar year means two hundred fifty thousand dollars ($250,000) for the second calendar year after the first appearance of the California Cancer Research Fund on the personal income tax return or the adjusted minimum contribution amount adjusted pursuant to subdivision (c). (c) For each calendar year, beginning with the third calendar year after the first appearance of the California Cancer Research Fund on the personal income tax return, the Franchise Tax Board shall adjust, on or before September 1 of that calendar year, the minimum contribution amount specified in subdivision (b) as follows: (1) The minimum estimated contribution amount for the calendar year shall be an amount equal to the product of the minimum estimated contribution amount for the calendar year multiplied by the inflation factor adjustment as specified in subparagraph (A) of paragraph (2) of subdivision (h) of Section 17041, rounded off to the nearest dollar. (2) The inflation factor adjustment used for the calendar year shall be based on the figures for the percentage change in the California Consumer Price Index received on or before August 1 of the calendar year pursuant to paragraph (1) of subdivision (h) of Section 17041. (d) Notwithstanding the repeal of this article, any contribution amounts designated pursuant to this article prior to its repeal shall continue to be transferred and disbursed in accordance with this article as in effect immediately prior to that repeal.