BILL ANALYSIS                                                                                                                                                                                                    



                                                                  AB 394
                                                                  Page  1

          Date of Hearing:  April 1, 2013

                     ASSEMBLY COMMITTEE ON REVENUE AND TAXATION
                                Raul Bocanegra, Chair

            AB 394 (Yamada and Grove) - As Introduced:  February 15, 2013

          Majority vote.  Fiscal committee.

           SUBJECT  :  Personal income tax:  voluntary contributions:   
          Alzheimer's disease 

           SUMMARY :  Extends the repeal date of the California Alzheimer's  
          Disease and Related Disorders Research Fund (Fund) from January  
          1, 2015, to December 1, 2020.  Specifically,  this   bill  allows  
          the Fund to remain on the state personal income tax return  
          through the 2019 taxable year, subject to contributions meeting  
          the annual minimum contribution amount.


           EXISTING LAW  :


          1)Allows taxpayers to contribute their own funds (and not tax  
            liability) to any of the 18 voluntary contribution funds  
            (VCFs) listed on the 2012 state personal income tax return.   
            One such VCF is the Fund.

          2)Provides that the Fund shall remain on the state personal  
            income tax return until it sunsets or the Franchise Tax Board  
            (FTB) projects the Fund will fail to meet its minimum annual  
            contribution amount.  The Fund's current sunset date is  
            January 1, 2015, and the minimum contribution amount for the  
            2012 calendar year is $335,154.  The minimum contribution  
            amount adjusts annually for inflation, based on the percentage  
            change in the California Consumer Price Index.

          3)Provides that all money transferred to the Fund, upon  
            appropriation by the Legislature, goes to the:

             a)   FTB and the State Controller for reimbursement of all  
               costs incurred in administering the Fund; and, 










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             b)   Appropriate state department as established by the  
               Secretary of California Health and Human Services in  
               consultation with the Department of Aging.  These funds are  
               to be expended for the purpose of conducting research  
               relating to the care, treatment, and the cure of  
               Alzheimer's disease through contracts or grants.

          4)Allows individual taxpayers to deduct charitable contributions  
            for the taxable year in which the contribution was made.  For  
            example, in 2013 a taxpayer designates a contribution to the  
            Fund on her 2012 tax return.  The taxpayer may take an  
            itemized deduction on her 2013 tax return, which she must file  
            in 2014.
           
          FISCAL EFFECT  :  The FTB staff estimates annual revenue losses of  
          roughly $10,000 resulting from itemized charitable deductions,  
          beginning in the 2016-17 fiscal year.

           COMMENTS  : 

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

               588,208 Californians 55 and over [live] with Alzheimer's  
               disease[,] which is one-tenth of the nation's Alzheimer's  
               patients.  Among California's baby boomers aged 65 and  
               over, one in eight will develop Alzheimer's disease, and  
               half of people 85 or older will have the disease.  By 2030,  
               this number will nearly double in California; rising to  
               over 1.1 million.  Alzheimer's disease is now the sixth  
               leading cause of death in California and is the only  
               leading cause of death that lacks a means of prevention or  
               reversal.

          2)Proponents State:

               According to our recently released Alzheimer's Association  
               2013 Alzheimer's Disease Facts and Figures, Alzheimer's  
               disease is now the 5th leading cause of death in  
               California, and is the only leading cause of death that  
               does not have a means to prevent or reverse the progression  










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               of the disease.  With an aging population, projections  
               estimate the number of Californians living with Alzheimer's  
               will grow to more than 660,000 by 2025, as increased age is  
               the primary risk factor for developing the disease.  It is  
               therefore imperative that California continue to fund  
               research that can slow or reverse the progression of this  
               memory-robbing disease.

               General Fund support for Alzheimer's research was  
               eliminated in 2009, when the Legislature reduced funding  
               for the California Alzheimer's Disease Centers by 50%.   
               Since it first appeared on the tax return in 1987, this  
               fund has collected more than $11.3 million in donations and  
               funded 122 research studies.  By extending this tax  
               check-off fund, we can ensure that funds are available to  
               investigate the causes of and treatments for this disease.

          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 and keeping VCFs on the  
               form is subjective and essentially rewards causes whose  
               proponents can convince the Legislature to include their  
               fund on the form.

              b)   Related Legislation  :  The following related bills were  
               introduced in previous Legislative Sessions:

               i)     2009: AB 292 (Yamada) extended the Fund's sunset to  
                 January 1, 2015.

               ii)    2004: AB 1799 (Mullin) extended the Fund's sunset to  
                 January 1, 2010.

               iii)   1999: AB 160 (Alquist) extended the Fund's sunset to  
                 January 1, 2005.

               iv)    1996: SB 1447 (Mello) extended the Fund's sunset to  
                 January 1, 2000.










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               The following related bills have been introduced in the  
               current Legislative Session:

               i)     AB 247 (Wagner) would extend the repeal date of the  
                 California Fund for Senior Citizens until December 1,  
                 2020.  AB 247 has been referred to this Committee.

               ii)    AB 511 (Pan) would establish and allow taxpayers to  
                 make voluntary contributions to the American Red Cross,  
                 California Chapters Fund.  AB 511 has been referred to  
                 this Committee.

               iii)   AB 754 (Muratsuchi) would establish and allow  
                 taxpayers to make voluntary contributions to the  
                 California Beach and Coastal Enhancement Account.  AB 754  
                 has been referred to this Committee.

               iv)    AB 1286 (Skinner) would suspend the annual  
                 adjustment of the minimum contribution amount threshold  
                 for the California Breast Cancer Research Fund.  AB 1286  
                 has been referred to this Committee.

               v)     SB 116 (Liu) would extend the repeal date of the  
                 Emergency Food for Families Fund from January 1, 2014, to  
                 January 1, 2019.  SB 116 has been referred to the Senate  
                 Committee on Governance and Finance.

               vi)    SB 571 (Price) would establish and allow taxpayers  
                 to make voluntary contributions to the Arts for Kids Fund  
                 on their state personal income tax returns.  SB 571 has  
                 been referred to the Senate Committee on Governance and  
                 Finance.

           REGISTERED SUPPORT / OPPOSITION  :   

           Support 
           
          Alzheimer's Association (sponsor)
          California Assisted Living Association
          California Association of Area Agencies on Aging
          California Association for Health Services at Home










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          Leading Age California

           Opposition 
           
          None on file
           
          Analysis Prepared by  :  Edward Beeby and M. David Ruff/ REV. &  
          TAX. / (916) 319-2098