BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                  AB 394
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          ASSEMBLY THIRD READING
          AB 394 (Yamada and Grove)
          As Introduced  February 15, 2013
          Majority vote 

           REVENUE & TAXATION  9-0         APPROPRIATIONS      17-0        
           
           ----------------------------------------------------------------- 
          |Ayes:|Bocanegra, Dahle, Gordon, |Ayes:|Gatto, Harkey, Bigelow,   |
          |     |Harkey, Mullin, Nestande, |     |Bocanegra, Bradford, Ian  |
          |     |Pan,                      |     |Calderon, Campos,         |
          |     |V. Manuel Pérez, Ting     |     |Donnelly, Eggman, Gomez,  |
          |     |                          |     |Hall, Holden, Linder,     |
          |     |                          |     |Pan, Quirk, Wagner, Weber |
          |-----+--------------------------+-----+--------------------------|
          |     |                          |     |                          |
           ----------------------------------------------------------------- 
           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 was $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:








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

             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 his or her 2012 tax return.  The taxpayer may take an  
            itemized deduction on his or her 2013 tax return, which he or  
            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)Assembly Revenue and Taxation 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  








                                                                  AB 394
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               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)     AB 292 (Yamada), Chapter 232, Statutes of 2009,  
                 extended the Fund's sunset to January 1, 2015.

               ii)    AB 1799 (Mullin), Chapter 370, Statutes of 2004,  
                 extended the Fund's sunset to January 1, 2010.

               iii)   AB 160 (Alquist), Chapter 315, Statutes of 1999,  
                 extended the Fund's sunset to January 1, 2005.

               iv)    SB 1447 (Mello), Chapter 494, Statutes of 1996,  
                 extended the Fund's sunset to January 1, 2000.

               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 is set to be heard in the Assembly  
                 Committee on Revenue and Taxation on April 22, 2013.

               ii)    AB 511 (Pan) would establish and allow taxpayers to  
                 make voluntary contributions to the American Red Cross,  
                 California Chapters Fund.  AB 511 is pending in the  
                 Assembly Committee on Appropriations.

               iii)   AB 754 (Muratsuchi) would establish and allow  
                 taxpayers to make voluntary contributions to the  
                 California Beach and Coastal Enhancement Account.  AB 754  
                 is set to be heard in the Assembly Committee on Revenue  
                 and Taxation on April 22, 2013.

               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 the Assembly Committee on Revenue  
                 and Taxation.








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               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.

           
          Analysis Prepared by  :    M. David Ruff / REV. & TAX. / (916)  
          319-2098 


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