BILL ANALYSIS Ó AB 394 Page 1 Date of Hearing: April 10, 2013 ASSEMBLY COMMITTEE ON APPROPRIATIONS Mike Gatto, Chair AB 394 (Yamada) - As Introduced: February 15, 2013 Policy Committee: Revenue and Taxation Vote: 9-0 Urgency: No State Mandated Local Program: No Reimbursable: SUMMARY This bill extends the repeal date of the income tax return check-off for the California Alzheimer's Disease and Related Disorders Research Fund from January 1, 2015, to December 1, 2020, allowing the fund to remain on the state personal income tax return through the 2019 taxable year, provided donations from taxpayers meet the required annual minimum. FISCAL EFFECT The FTB staff estimates annual GF revenue losses of roughly $10,000 from taxpayers deducting charitable contributions, beginning in the 2016-17 fiscal year. COMMENTS 1)Purpose. The author states that almost 600,000 Californians 55 and over are diagnosed with Alzheimer's disease. The author notes that 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. 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, according to the author. The author states that the check-off funds are distributed by a competitive grant process which enables scientists to establish credibility for their research concepts and helps them be competitive for National Institute of Health research grants. 2)Voluntary Contribution Funds. California taxpayers can make AB 394 Page 2 voluntary contributions to any of 15 funds listed on the state PIT return. The contributions are in addition to tax liabilities so they do not directly reduce the amount of state taxes in that tax year. As charitable contributions, the taxpayer may deduct the amount of the check-off on the subsequent year's income tax return, reducing state tax collections. These voluntary contributions support various purposes, including cancer research, endangered species preservation and emergency food assistance. Except for the California Seniors Special Fund, all have sunset dates, and most, including the California Alzheimer's Disease and Related Disorders Research Fund, must meet a minimum annual contribution to remain on the tax form. 3)Background . The California Alzheimer's Disease and Related Disorders Research Fund was created in 1986 by SB 214 (Mello), Chapter 944, Statutes of 1987. The sunset date has been extended four times. The check-off has collected approximately $500,000 annually over the last four years, well exceeding the minimum required to remain on the form. 4)Related Legislation . a) AB 247 (Wagner) extends the repeal date of the California Fund for Senior Citizens until December 1, 2020. AB 247 has been referred to Assembly Revenue and Taxation Committee. b) AB 511 (Pan) establishes and allows taxpayers to make voluntary contributions to the American Red Cross, California Chapters Fund. AB 511 has been referred to this Committee. c) AB 754 (Muratsuchi) establishes and allows taxpayers to make voluntary contributions to the California Beach and Coastal Enhancement Account. AB 754 has been referred to Assembly Revenue and Taxation Committee. d) AB 1286 (Skinner) suspends the annual adjustment of the minimum contribution amount threshold for the California Breast Cancer Research Fund. AB 1286 has been referred to Assembly Revenue and Taxation Committee. e) SB 116 (Liu) extends the repeal date of the Emergency Food for Families Fund from January 1, 2014, to January 1, AB 394 Page 3 2019. SB 116 has been referred to the Senate Committee on Governance and Finance. f) SB 571 (Price) establishes and allows 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. Analysis Prepared by : Roger Dunstan / APPR. / (916) 319-2081