BILL ANALYSIS Ó
SB 583
Page 1
Date of Hearing: July 6, 2011
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Felipe Fuentes, Chair
SB 583 (Vargas) - As Amended: May 11, 2011
Policy Committee: Revenue and
Taxation Vote: 7-0
Urgency: No State Mandated Local Program:
No Reimbursable:
SUMMARY
This bill reauthorizes the ALS/Lou Gehrig's Disease Research
Fund check-off on the personal income tax form upon the removal
of another voluntary contribution fund from the form.
Specifically, this bill:
1)Re-establishes the research fund in the State Treasury and
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 State Controller for
reimbursement of all costs incurred in administering the
check-off.
b) State Department of Public Health, for allocation to the
Amyotrophic Lateral Sclerosis (ALS) Association, to provide
research grants to develop and advance the understanding,
techniques and modalities effective in the prevention,
treatment and cure of ALS.
1)Specifies that moneys raised by this check-off shall only be
used to provide grants and may not be used by the ALS
Association for administrative purposes or for any other
purpose relating to its own operations.
2)Provides for the automatic repeal of the check-off on January
1, 2016, or on an earlier date if the check-off fails to meet
a minimum contribution amount initially set at $250,000 and
adjusted for inflation thereafter.
FISCAL EFFECT
SB 583
Page 2
FTB estimates this bill will cost the state about $20,000 per
year. This estimate assumes the check-off is added in the
2012-13 fiscal year, donations meet the average amount for the
other tax check-offs, and these donations are subsequently
claimed as charitable deductions by taxpayers. Revenue losses
would be similar in subsequent years, assuming there is no
significant change in the amount of donations.
COMMENTS
1)Purpose . ALS, commonly known as Lou Gehrig's disease, is a
degenerative disease of the motor nerves that causes
progressive weakness of all voluntary muscles. People with
ALS become unable to move, swallow, speak, and breathe without
assistance. This is a fatal disease that kills patients
usually within two to five years of diagnosis. It has been
almost 150 years since ALS was identified by the scientific
community and since that time, little has been accomplished in
terms of treatment.
2)Voluntary Contribution Funds. California taxpayers can make
voluntary contributions to any of 15 funds listed on the state
personal income tax return. The contributions are in addition
to tax liabilities so they do not directly reduce the amount
of state taxes. As charitable contributions, the taxpayer may
deduct the amount of the check-off on the subsequent year's
income tax return. These voluntary contributions support
various purposes, including cancer research, endangered
species preservation and emergency food assistance.
Contributions have historically ranged from $300,000 to
$800,000 per year. Except for the California Seniors Special
Fund, all have sunset dates, and most must meet a minimum
annual contribution to remain on the return.
3)Second time around . The ALS check-off was on the 2008 and
2009 income tax returns. The annual contributions for
calendar year 2009 (when most people were filing 2008 returns)
was $220,041 and for calendar year 2010 (for 2009 returns) was
$114,051. 2009 was the last year the check-off appeared on
the income tax return because the FTB estimated that the fund
would not meet the required $250,000 minimum contribution
amount for the 2010 calendar year. By law, the provision
creating the check-off was repealed effective January 1, 2010.
SB 583
Page 3
4)Related legislation . The following related bills address
personal income tax check-offs and have been introduced in the
current legislative session:
a) AB 233 (Hall) would authorize the addition of the
California YMCA Youth and Government Fund check-off to the
personal income tax form upon the removal of another
voluntary contribution fund from the form.
b) AB 564 (Smyth) would, among other things, add the
Municipal Shelter Spay-Neuter Fund to the form.
c) AB 764 (Swanson) would add the Child Victim of Human
Trafficking Fund to the form.
d) SB 164 (Simitian) would extend the repeal dates of the
State Children's Trust Fund for the Prevention of Child
Abuse and the Rare and Endangered Species Preservation
Program to January 1, 2018.
5)Previous legislation . SB 1502 (Steinberg, Stats. 2008, Ch.
354) added the Amyotrophic Lateral Sclerosis/Lou Gehrig's
Disease Research Fund to the personal income tax return as a
voluntary contribution fund.
Analysis Prepared by : Roger Dunstan / APPR. / (916) 319-2081