BILL ANALYSIS Ó
AB 1286
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ASSEMBLY THIRD READING
AB 1286 (Skinner)
As Amended May 8, 2013
Majority vote
REVENUE & TAXATION 8-0
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|Ayes:|Bocanegra, Dahle, Harkey, | | |
| |Mullin, Nestande, Pan, V. | | |
| |Manuel Pérez, Ting | | |
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SUMMARY : Specifies that for calendar years 2014 and 2015, the
California Breast Cancer Research Fund's (Fund's) minimum
contribution amount shall equal the minimum contribution amount
for the 2013 calendar year. Specifically, this bill provides
that this amount shall be adjusted for inflation beginning with
the 2016 calendar year.
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 (PIT)
return. One such VCF is this Fund.
2)Provides that this Fund shall remain on the state PIT return
until it sunsets or until 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, 2018, and the minimum contribution amount for the
2013 calendar year is $371,724. The minimum contribution
amount adjusts annually for inflation, based on the percentage
change in the California Consumer Price Index.
FISCAL EFFECT : The FTB estimates that this bill would not
significantly impact the agency's costs or impact the state's
income tax revenues.
COMMENTS :
1)Committee rules: The Assembly Revenue and Taxation Committee
(Committee) requires that VCF bills comply with this
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Committee's VCF (Income Tax Checkoff) Policy (VCF Policy).
This Committee's VCF Policy, in turn, requires all existing
checkoffs to meet an inflation-adjusted $250,000 minimum
contribution threshold.
2)The author has provided the following statement in support of
this bill:
In light of the improved economic forecast, freezing
the minimum contribution will allow the [California
Breast Cancer Research Program (CBCRP)] to regain its
momentum in contributions while simultaneous[ly]
alleviating concerns about reaching the minimum
contribution amount. This critical program should not
be jeopardized by a temporary economic downturn.
3)Proponents state:
While the annual minimum contribution amount set by
the Franchise Tax Board has increased steadily during
the past decade, tax-deductible contributions towards
breast cancer research [have] declined significantly.
In 2002, the amount contributed was $724,965;
meanwhile, in 2012 that figure dropped to $440,711.
The decrease in contributions places CBCRP at risk of
not obtaining the minimum contribution and losing
critical funding for innovative research.
4)Committee staff comments:
a) A Questionable Precedent : As noted above, this
Committee's VCF Policy requires that all existing checkoffs
meet an inflation-adjusted $250,000 minimum contribution
requirement. This bill would freeze inflation adjustments
for 2014 and 2015 for the Fund, in violation of this
Committee's Rules. The Committee's VCF Policy was
originally adopted in response to the proliferation of VCF
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legislation, and in recognition of the fact that space on
the return is limited. Were the Legislature to make an
exception for the Fund, it would open the door to the
supporters of every other checkoff advocating for a
suspension of inflation adjustments or for lower minimum
contribution thresholds. To give the Fund special
dispensation would also be unfair to the many other VCFs
whose public support has diminished in recent years.
b) A Real Danger ?: Even without this bill, there may not
be a significant danger that the Fund will fall off the
state PIT return in the near future. The Fund raised
$440,771 in 2012. The Fund's minimum contribution
threshold in 2013 is $371,724. Even assuming the minimum
contribution amount for 2014 reflected an ($440,771 /
$371,724) - 1 = 18.57% inflation adjustment and assuming
the Fund raised as much as it did in 2012, it would still
meet its minimum contribution threshold in 2014, even
without this bill. An 18.57% or greater increase in
year-to-year inflation is highly unlikely. Since the
creation of the California Consumer Price Index, the Index
has never increased at least 18.57% in a single year.
c) 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. The Fund's purpose is
inarguably laudable. So too, however, are the purposes
advanced by the 17 other VCFs on the return. If
California's taxpayers decide, for whatever reason, not to
support a particular fund, it opens space on the return for
other VCFs and other worthy causes.
Analysis Prepared by : Edward Beeby and M. David Ruff / REV. &
TAX. / (916) 319-2098
FN: 0000394
AB 1286
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