BILL ANALYSIS Ó
AB 394
Page 1
ASSEMBLY THIRD READING
AB 394 (Yamada and Grove)
As Amended April 18, 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:
AB 394
Page 2
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
that the current system for adding and keeping VCFs on the
form is subjective and essentially rewards causes whose
AB 394
Page 3
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, Statues 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.
v) SB 116 (Liu) would extend the repeal date of the
Emergency Food for Families Fund from January 1, 2014, to
AB 394
Page 4
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
FN: 0000184