BILL ANALYSIS Ó ----------------------------------------------------------------- |SENATE RULES COMMITTEE | AB 394| |Office of Senate Floor Analyses | | |1020 N Street, Suite 524 | | |(916) 651-1520 Fax: (916) | | |327-4478 | | ----------------------------------------------------------------- THIRD READING Bill No: AB 394 Author: Yamada (D), et al. Amended: 4/18/13 in Assembly Vote: 21 SENATE GOVERNANCE & FINANCE COMMITTEE : 7-0, 6/26/13 AYES: Wolk, Knight, Beall, DeSaulnier, Emmerson, Hernandez, Liu SENATE APPROPRIATIONS COMMITTEE : 5-0, 8/12/13 AYES: De León, Gaines, Hill, Lara, Steinberg NO VOTE RECORDED: Walters, Padilla ASSEMBLY FLOOR : 78-0, 4/22/13 - See last page for vote SUBJECT : Personal income tax: voluntary contributions: Alzheimers disease SOURCE : Alzheimers Association DIGEST : This bill extends from 2015 until 2020 the California Alzheimers Disease and Related Disorders Research Fund check-off on the personal income tax form. ANALYSIS : Existing law allows taxpayers to contribute to one or more of 18 voluntary contribution funds (VCFs) or check-offs, by checking a box on their state income tax return. California law requires contributions made through check-offs to be made from taxpayers' own resources and not from their tax liability, as is possible on federal tax returns. Check-off amounts may be claimed as charitable contributions on taxpayers' tax returns in CONTINUED AB 394 Page 2 the subsequent year. This bill extends from January 1, 2015, the current expiration date, until January 1, 2020, the California Alzheimer's Disease and Related Disorders Research Fund check-off on the tax form. This bill maintains all the existing requirements for the program including the annual reporting by September 1st of each year, and the minimum contribution requirements adjusted for inflation. Background The Franchise Tax Board (FTB) designs tax returns to provide for the designation of contributions to specified funds either on the return itself or on a separate schedule that must be attached to the return. With a few exceptions, VCFs remain on the return until they are either repealed by a sunset date, or if they fail to meet a minimum contribution amount. Minimum contribution amounts are adjusted annually for inflation, with specific exceptions. For most VCFs, the minimum contribution amount is $250,000, beginning in the fund's second year. By September 1st of each year, the FTB must determine the minimum contribution amount required for each fund to remain on the form for the following calendar year and estimate whether contributions to each fund meet that amount. If the FTB estimates that a fund will fail to meet its minimum contribution amount, that fund is repealed for the following calendar year. Proceeds from tax check-offs are dedicated to a range of programs. The following list provides information on all the check-offs as well as how many groups are eligible to receive funding. Some of the funds have been repealed by their own terms. ---------------------------------------------------------- |Voluntary | 2012 | Contribution Allotment | |Contribution Fund |Contribution| | | | Totals | | |-------------------+------------+-------------------------| |ALS/Lou Gehrig's | $137,290 |As many as apply and | |Disease Research | |receive grants provided | |Fund | |for by the monies | | | |contributed. | CONTINUED AB 394 Page 3 |-------------------+------------+-------------------------| |Alzheimer's | $466,485 |As many as contract or | |Disease/Related | |receive grants provided | |Disorders Fund | |by the monies | | | |contributed. | |-------------------+------------+-------------------------| |Arts Council Fund | $165,647 |As many as apply and | | | |receive grants provided | | | |by the monies | | | |contributed. | |-------------------+------------+-------------------------| |CA Breast Cancer | $440,771 |As many as apply and | |Research Fund | |receive grants provided | | | |from the monies | | | |contributed. | |-------------------+------------+-------------------------| |CA Cancer Research | $432,355 |As many as apply and | |Fund | |receive grants provided | | | |from the monies | | | |contributed. | |-------------------+------------+-------------------------| |CA Firefighters' | $152,004 |1 Group: California Fire | |Memorial Fund | |Foundation. | |-------------------+------------+-------------------------| |CA Fund for Senior | $272,742 |1 Group: California | |Citizens | |Senior Legislature. | |-------------------+------------+-------------------------| |CA Peace Officer | $136,172 |1 Group: California | |Memorial | |Peace Officer Memorial | |Foundation Fund | |Commission. | |-------------------+------------+-------------------------| |CA Police | $67,202 |The state CALPAL and | |Activities League | |county CALPAL chapters. | |(CALPAL) Fund | | | |-------------------+------------+-------------------------| |CA Sea Otter Fund | $351,037 |Department of Fish and | | | |Wildlife, and as many as | | | |apply for grants and | | | |contracts provided for | | | |by 50% of contributions. | |-------------------+------------+-------------------------| |CA Seniors Special | $61,315 |The first $80K to the | |Fund | |Area Agency on Aging | | | |Advisory Council of | CONTINUED AB 394 Page 4 | | |California and the rest | | | |to area agencies as | | | |allocated by the | | | |California Department of | | | |Aging. | |-------------------+------------+-------------------------| |CA YMCA Youth and |Initial Tax |The first $300K to the | |Government Fund |Return 2012 |CA YMCA Youth and | | | |Government Program. The | | | |rest is allocated in | | | |$10K annual grants to | | | |the: African American | | | |Leaders for Tomorrow | | | |Program, Asian Pacific | | | |Youth Leadership | | | |Project, Chicano Latino | | | |Youth Leadership | | | |Project. The money is | | | |to be used to support | | | |program participation. | | | |Remaining funds | | | |allocated to the CA YMCA | | | |Youth and Government | | | |Program, whose board may | | | |award additional $10K | | | |annual grants to | | | |additional nonprofit | | | |civic youth | | | |organizations. The funds | | | |distributed to the CA | | | |YMCA Youth and | | | |Government Program are | | | |to be used for | | | |program-related | | | |expenses. | |-------------------+------------+-------------------------| |CA Youth |Initial Tax |1 group: Department of | |Leadership Fund |Return 2012 |Education to provide for | | | |the CA Youth Leadership | | | |Project. | |-------------------+------------+-------------------------| |CA Veterans Homes | $210,078 |The number of | |Fund | |established veteran's | | | |homes (7). | CONTINUED AB 394 Page 5 |-------------------+------------+-------------------------| |Child Victims of | $35,317 |As many counseling and | |Human Trafficking | |prevention centers that | |Fund | |apply and receive grants | | | |provided from monies | | | |contributed. | |-------------------+------------+-------------------------| |Emergency Food for | $551,515 |1 group: Department of | |Families Fund | |Social Services for the | | | |Emergency Food | | | |Assistance Program. | |-------------------+------------+-------------------------| |Municipal Shelter | $244,701 |As many as apply and | |Spay-Neuter Fund | |receive grants provided | | | |from the monies | | | |contributed. | |-------------------+------------+-------------------------| |Rare & Endangered | $558,681 |1 group: Department of | |Species | |Fish and Wildlife | |Preservation | |endangered conservation | |Program | |programs. | |-------------------+------------+-------------------------| |Safely Surrendered | $158,645 |1 group: Department of | |Baby Fund | |Social Services for | | | |Safely Surrender Baby | | | |Law awareness programs. | |-------------------+------------+-------------------------| |School Supplies |Initial Tax |As many as apply and | |for Homeless |Return 2012 |receive grants provided | |Children Fund | |for by the monies | | | |contributed. | |-------------------+------------+-------------------------| |State Children's | $376,243 |1 group: Department of | |Trust for the | |Social Services for | |Prevention of | |prevention and | |Child Abuse | |intervention programs. | |-------------------+------------+-------------------------| |State Parks |Initial Tax |As many as purchase a | |Protection |Return 2012 |parks pass that can be | |Fund/Parks Pass | |provided from the monies | |Purchase | |contributed. | | | | | ---------------------------------------------------------- CONTINUED AB 394 Page 6 The following check-offs do not have a minimum contribution requirement: California Firefighters' Memorial Foundation Fund, California Peace Officer Memorial Foundation Fund, and California Seniors Special Fund. Comments This bill extends, for five years, the sunset deadline for the tax check-off in support of the "California Alzheimer's Disease and Related Disorders Research Fund." Established in 1987, this tax check-off has raised $11.3 million dollars from 1.3 million tax payers, averaging $14.18 per person, to fund 122 research studies on the cause, diagnosis, treatment, prevention and care of people living with Alzheimer's and related dementias. The Alzheimer's Disease Program in the Department of Public Health (DPH) distributes tax check-off funds to California researchers through a competitive grant process, which enables them to gain creditability, funding, and competitive position to receive further funding from other entities. This bill temporarily extends the fund's lifespan on the tax check-off form. Related Legislation Assembly Bill 247 (Wagner) extends the repeal date for the California Fund for Senior Citizens tax check-off on the tax form from 2015 to 2020. Assembly Bill 511 (Pan) creates the American Red Cross, California Chapters Fund check-off on the tax form. Assembly Bill 754 (Muratsuchi) creates the Protect Our Coast and Oceans Fund check-off on the tax form. Assembly Bill 1286 (Skinner) temporarily suspends the annual inflation ad-justment for minimum contribution levels for the California Breast Cancer Research Fund check-off on the tax form. CONTINUED AB 394 Page 7 Senate Bill 116 (Liu) extends the repeal date for the Emergency Food Assis-tance Program check off on the tax form from 2014 to 2019. Senate Bill 571 (Price) creates the Art for Kids Fund check-off on the tax form. FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes Local: No According to the Senate Appropriations Committee, the FTB estimates that this bill will result in an annual revenue loss of $10,000 (General Fund) beginning in 2016-17. Both FTB and the State Controller's Office will be reimbursed for related administrative costs. SUPPORT : (Verified 8/13/13) Alzheimer's Association (source) AARP California Assisted Living Association California Association for Health Services at Home California Association of Area Agencies on Aging California Commission on Aging California Long-Term Care Ombudsman Association Human Services Department County of Sonoma Leading Age California On Lock Senior Health Services University of California OPPOSITION : (Verified 8/13/13) Department of Finance ARGUMENTS IN SUPPORT : According to the author's office, a report by the DPH reveals there are 588,208 Californians 55 and over living 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 CONTINUED AB 394 Page 8 lacks a means of prevention or reversal. While the burden of care falls primarily on families, the rapid growth in the prevalence of Alzheimer's will cause California's healthcare costs to rise significantly. The Medi-Cal program cost for an individual with Alzheimer's disease or a related dementia is 3 times greater than the cost for an individual not having a diagnosis of dementia. Contributions from the Alzheimer's tax check-off have funded 122 research studies on the cause, diagnosis, treatment, prevention and care of people living with Alzheimer's and related dementias. Only through ongoing support of this research can we develop the medical advances necessary to continue the fight against this devastating disease. ARGUMENTS IN OPPOSITION : The Department of Finance opposes this bill for the following reason: This bill is of limited value as there is nothing currently preventing California taxpayers from contributing directly to this cause if they so choose. It is not clear that a special preference should be given to the organizations receiving the grant supported by this tax check-off, a compared to other organizations also dedicated to supporting the research related to the cause, prevention, diagnosis, and treatment of other diseases. This bill could result in a $10,000 annual General fund revenue loss beginning in 2016-17. ASSEMBLY FLOOR : 78-0, 4/22/13 AYES: Achadjian, Alejo, Allen, Ammiano, Atkins, Bigelow, Bloom, Blumenfield, Bocanegra, Bonilla, Bonta, Bradford, Brown, Buchanan, Ian Calderon, Campos, Chau, Chávez, Chesbro, Conway, Cooley, Dahle, Daly, Dickinson, Donnelly, Eggman, Fong, Fox, Frazier, Beth Gaines, Garcia, Gatto, Gomez, Gordon, Gorell, Gray, Grove, Hagman, Hall, Harkey, Roger Hernández, Holden, Jones, Jones-Sawyer, Levine, Linder, Logue, Maienschein, Mansoor, Medina, Melendez, Mitchell, Morrell, Mullin, Muratsuchi, Nazarian, Nestande, Olsen, Pan, Patterson, Perea, V. Manuel Pérez, Quirk, Quirk-Silva, Rendon, Salas, Skinner, Stone, Ting, Torres, Wagner, Waldron, Weber, Wieckowski, Wilk, CONTINUED AB 394 Page 9 Williams, Yamada, John A. Pérez NO VOTE RECORDED: Lowenthal, Vacancy AB:d 8/14/13 Senate Floor Analyses SUPPORT/OPPOSITION: SEE ABOVE **** END **** CONTINUED