Amended in Assembly April 13, 2016

Amended in Assembly March 18, 2016

California Legislature—2015–16 Regular Session

Assembly Bill No. 2430

Introduced by Assembly Member Beth Gaines

February 19, 2016

An act to add and repeal Article 7.5 (commencing with Section 18781) of Chapter 3 of Part 10.2 of Division 2 of the Revenue and Taxation Code, relating to taxation.

LEGISLATIVE COUNSEL’S DIGEST

AB 2430, as amended, Beth Gaines. Voluntary contributions: begin delete Juvenile end delete begin insert Type 1 end insert Diabetes Research Fund.

Under existing law, taxpayers are allowed to contribute amounts in excess of their personal income tax liability for the support of various funds. Existing law also contains administrative provisions that are generally applicable to voluntary contributions.

This bill would allow a taxpayer to designate an amount in excess of personal income tax liability to be deposited to the begin delete Juvenile end delete begin insert Type 1 end insert Diabetes Research Fund, which the bill would create. The bill would require moneys transferred to the begin delete Juvenile end delete begin insert Type 1 end insert Diabetes Research Fund, upon appropriation by the Legislature, to be allocated to the Franchise Tax Board and the Controller, as provided, and to begin delete the Juvenile Diabetes Research Fund for the purpose of fighting type 1 diabetes, end delete begin insert an authorized end insert begin insert diabetes research organization, as defined, for the purpose of type 1 diabetes research, end insert as provided.

Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: no.

The people of the State of California do enact as follows:

SECTION 1.  

Article 7.5 (commencing with Section 18781) is
added to Chapter 3 of Part 10.2 of Division 2 of the Revenue and
Taxation Code, to read:

 

Article 7.5.  begin delete Juvenile end delete begin insert Type 1 end insert Diabetes Research Fund

 

18781.  

(a) Any individual may designate on the tax return that
a contribution in excess of the tax liability, if any, be made to the
begin delete Juvenile end delete begin insert Type 1 end insert Diabetes Research Fund established by Section

begin delete 18782 to be used by the Juvenile Diabetes Research Fund. end delete begin insert 18782. end insert

(b) The contribution shall be in full dollar amounts and may be
made individually by each signatory on the joint return.

(c) A designation under subdivision (a) shall be made for any
taxable year on the begin delete initial end delete begin insert original end insert return for that taxable year, and
once made shall be irrevocable. If payments and credits reported
on the return, together with any other credits associated with the
individual’s account, do not exceed the individual’s tax liability,
the return shall be treated as though no designation has been made.

(d) (1) The Franchise Tax Board shall revise the form of the
return to include a space labeled begin delete “Juvenile end delete begin insert “Type 1 end insert Diabetes
Research Fund” to allow for the designation permitted under
subdivision (a). The form shall also include in the instructions
information that the contribution may be in the amount of one
dollar ($1) or more and that the contribution shall be used to
conduct the activities of begin delete the Juvenile Diabetes Research Fund. end delete begin insert an
authorized end insert begin insert diabetes research organization. end insert

(2) Notwithstanding any other law, a voluntary contribution
designation for the begin delete Juvenile end delete begin insert Type 1 end insert Diabetes Research Fund shall
not be added on the tax return until another voluntary contribution
designation is removed or space is available, whichever occurs
first.

(e) A deduction shall be allowed under Article 6 (commencing
with Section 17201) of Chapter 3 of Part 10 for any contribution
made pursuant to subdivision (a).

begin insert

begin insert 18781.5. end insert   

For purposes of this article:

(a) An “authorized diabetes research organization” means
either:

(1) A university, located within the state, with a research
program.

(2) A nonprofit charitable organization exempt from federal
income tax as an organization described in Section 501(c)(3) of
the Internal Revenue Code that engages in research.

(b) “Research” shall include, but not be limited to, expenditures
to develop and advance the understanding, techniques, and
modalities effective in the cure, screening, and treatment of type
1 diabetes.

end insert

18782.  

There is hereby established in the State Treasury the
begin delete Juvenile end delete begin insert Type 1 end insert Diabetes Research Fund to receive contributions
made pursuant to Section 18781. The Franchise Tax Board shall
notify the Controller of both the amount of money paid by
taxpayers in excess of their tax liability and the amount of refund
money that taxpayers have designated pursuant to Section 18781
to be transferred to the begin delete Juvenile end delete begin insert Type 1 end insert Diabetes Research Fund.
The Controller shall transfer from the Personal Income Tax Fund
to the begin delete Juvenile end delete begin insert Type 1 end insert Diabetes Research Fund an amount not in
excess of the sum of the amounts designated by individuals
pursuant to Section 18781 for payment into that fund.

18783.  

All moneys transferred to the begin delete Juvenile end delete begin insert Type 1 end insert Diabetes
Research Fund pursuant to Section 18782, upon appropriation by
the Legislature, shall be allocated as follows:

(a) To the Franchise Tax Board and the Controller for
reimbursement of all costs incurred by the Franchise Tax Board
and the Controller in connection with their duties under this article.

(b) The balance begin delete for the purpose of fighting type 1 diabetes. end delete begin insert to
an authorized diabetes research organization for the purpose of
type 1 diabetes research. The authorized diabetes research
organization may use up to 5 percent of the moneys allocated to
it for administering and promoting the research. end insert

18784.  

(a) Except as otherwise provided in paragraph (2) of
subdivision (b), this article shall remain in effect only until January
1 of the fifth taxable year following the first appearance of the
begin delete Juvenile end delete begin insert Type 1 end insert Diabetes Research Fund on the personal income
tax return, and is repealed as of December 1 of that year.

(b) (1)   By September 1 of the second calendar year and each
subsequent calendar year that the begin delete Juvenile end delete begin insert Type 1 end insert Diabetes
Research Fund appears on the tax return, the Franchise Tax Board
shall do both of the following:

(A) Determine the minimum contribution amount required to
be received during the next calendar year for the fund to appear
on the tax return for the taxable year that includes that next calendar
year.

(B) Determine whether the amount of contributions estimated
to be received during the calendar year will equal or exceed the
minimum contribution amount determined by the Franchise Tax
Board for the calendar year pursuant to subparagraph (A). The
Franchise Tax Board shall estimate the amount of contributions
to be received by using the actual amounts received and an estimate
of the contributions that will be received by the end of that calendar
year.

(2) If the Franchise Tax Board determines that the amount of
the contributions estimated to be received during a calendar year
will not at least equal the minimum contribution amount for the
calendar year, this article shall be inoperative with respect to
taxable years beginning on or after January 1 of that calendar year
and shall be repealed on December 1 of that year.

(3) For purposes of this section, the minimum contribution
amount for a calendar year means two hundred fifty thousand
dollars ($250,000) for the second calendar year after the first
appearance of the begin delete Juvenile end delete begin insert Type 1 end insert Diabetes Research Fund on the
personal income tax return or the minimum contribution amount
as adjusted pursuant to subdivision (c).

(c) For each calendar year, beginning with the third calendar
year after the first appearance of the begin delete Juvenile end delete begin insert Type 1 end insert Diabetes
Research Fund on the personal income tax return, the Franchise
Tax Board shall adjust, on or before September 1 of that calendar
year, the minimum contribution amount specified in subdivision
(b) as follows:

(1) The minimum begin delete estimated end delete contribution amount for the calendar
year shall be an amount equal to the product of the minimum
begin delete estimated end delete contribution amount for the begin insert prior end insert calendar year
multiplied by the inflation factor adjustment as specified in
subparagraph (A) of paragraph (2) of subdivision (h) of Section
17041, rounded off to the nearest dollar.

(2) The inflation factor adjustment used for the calendar year
shall be based on the figures for the percentage change in the
California Consumer Price Index for all items received on or before
August 1 of the calendar year pursuant to paragraph (1) of
subdivision (h) of Section 17041.

begin delete

(d) Notwithstanding the repeal of this article, any contribution
amounts designated pursuant to this article prior to its repeal shall
continue to be transferred and disbursed in accordance with this
article as in effect immediately prior to that repeal.

end delete