BILL ANALYSIS Ó Senate Appropriations Committee Fiscal Summary Senator Kevin de León, Chair AB 394 (Yamada) - Personal Income Taxes: Voluntary Contributions: Alzheimer's Disease Amended: April 18, 2013 Policy Vote: G&F 7-0 Urgency: No Mandate: No Hearing Date: August 12, 2013 Consultant: Robert Ingenito This bill does not meet the criteria for referral to the Suspense File. Bill Summary: AB 394 would extend the sunset date for the California Alzheimer's Disease and Related Disorders Research Fund from January 1, 2015 to January 1, 2020. Fiscal Impact: The Franchise Tax Board (FTB) estimates that this bill would result in an annual revenue loss of $10,000 (General Fund) beginning in 2016-17. Both FTB and the State Controller's Office would be reimbursed for related administrative costs. Background: Current law allows taxpayers to contribute money to one or more of 18 voluntary contribution funds during the process of filing their state income tax return (tax check-off). These contributions are made from taxpayers' own resources, not from their tax liability (as is possible on federal tax returns). Check-off amounts are deductible as charitable contributions on taxpayers' returns during the subsequent tax year. With several exceptions, each voluntary contribution fund has a sunset date and is required to meet a minimum contribution amount of $250,000, adjusted annually for inflation. The California Alzheimer's Disease and Related Disorders Research Fund was created in 1987 and to date has funded (in whole or in part) 122 studies related to the cause, diagnosis, treatment, prevention and care of people living with Alzheimer's and related disorders. The tax check-off's funds are distributed by the Department of Public Health to California researchers through a competitive grant process, and work to leverage funding from other entities. Since its creation, the check-off has raised about $11 million, and has collected about $500,000 annually over the last four years, exceeding the minimum AB 394 (Yamada) Page 1 required to remain on the form. Proposed Law: This bill would extend the California Alzheimer's Disease and Related Disorders Research Fund check-off on the personal income tax form by an additional five years, to January 1, 2020. The bill would maintain all the existing reporting requirements. Related Legislation: SB 91 (Correa, Chapter 29, Statutes of 2009) extended the repeal date of the Fund's voluntary contribution check-off from January 1, 2010, to January 1, 2015. Staff Comments: FTB data indicate that roughly 90,000 taxpayers (less than one percent of the statewide total) made contributions to the various tax check-off programs in 2012.