BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                            



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          |SENATE RULES COMMITTEE            |                        AB 394|
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                                    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  
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          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.             |

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           |-------------------+------------+-------------------------|
           |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      |

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           |                   |            |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).               |

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           |-------------------+------------+-------------------------|
           |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.             |
           |                   |            |                         |
            ---------------------------------------------------------- 


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          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. 

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          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  

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          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,  

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            Williams, Yamada, John A. Pérez
          NO VOTE RECORDED:  Lowenthal, Vacancy

          AB:d  8/14/13   Senate Floor Analyses 

                           SUPPORT/OPPOSITION:  SEE ABOVE

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