BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                    AB 2430


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          Date of Hearing:  May 11, 2016


                        ASSEMBLY COMMITTEE ON APPROPRIATIONS


                               Lorena Gonzalez, Chair


          AB  
          2430 (Beth Gaines) - As Amended April 27, 2016


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          Urgency:  No  State Mandated Local Program:  NoReimbursable:  No


          SUMMARY:


          This bill authorizes the addition of the Type 1 Diabetes  
          Research Fund (Fund) checkoff to the personal income tax return  
          upon the removal of another voluntary contribution fund (VCF)  
          from the return, or as soon as space is available. Specifically,  








                                                                    AB 2430


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          this bill: 


          1)Requires that all money transferred to the Fund, upon  
            appropriation by the Legislature, will be allocated as  
            follows:  



             a)   To the Franchise Tax Board (FTB) and the State  
               Controller for reimbursement of all costs incurred in  
               administering the Fund; and,  



             b)   To the University of California (UC) for distribution of  
               grants to authorized diabetes research organizations. Both  
               the UC and the authorized research organizations may also  
               use up to 5% of the grant moneys for administrative cost. 



          2)Defines an "authorized diabetes research organization" as a  
            California-based university, with a research program or a  
            nonprofit charitable organization that engages in research. 



          3)Defines "research" to include expenditures to develop and  
            advance the understanding, techniques, and modalities  
            effective in the cure, screening, and treatment of type 1  
            diabetes.
               


          4)Requires the Fund to meet a standard minimum contribution  
            requirement of $250,000 in its second year.  Thereafter, the  
            minimum contribution amount will be indexed for inflation. 









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          5)Sunsets the Fund on the fifth taxable year following the  
            Fund's appearance on tax returns.


          FISCAL EFFECT:


          1)Minor ongoing GF revenue losses of up to $15,000 per year  
            resulting from itemized taxpayer deductions. 


          2)Minor and absorbable administrative costs for the FTB or UC,  
            the administering agency responsible for the Fund.  

          





          COMMENTS:


          1)Purpose. According to the author, AB 2430 would allow  
            taxpayers to donate directly to an organization such as the  
            Juvenile Diabetes research Foundation (JDRF), who is the  
            leading global organization funding Type 1 diabetes research.  
            The author notes that California has the lowest per capita  
            funding for diabetes prevention in the nation.


          2)Background. Current state tax law allows taxpayers to make  
            contributions on their tax returns to a number of VCFs. Like  
            many other VCFs, AB 2430 would require the Fund to meet a  
            current minimum contribution amount to return on state tax  
            returns ($250,000, indexed to inflation after the second  
            year). Moreover, AB 2430 would establish an administrating  








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            agency: The money deposited into the Fund are allocated to the  
            University of California for distribution of grants to  
            authorized research organizations.  


          3)JDRF. According to the nonprofit tracking organization Guide  
            Star, JDRF currently sponsors $568 million in scientific  
            research in 17 countries. In 2012, JDRF provided more than  
            $110 million in research. AB 2430 does not require funds to go  
            to JDRF, and the author's office notes that JDRF is one  
            example of an organization that does critical research on Type  
            1 diabetes.  


          4)New VCF Bills in 2016.  Four Assembly bills were introduced in  
            2016 that would either extend existing VCFs or create new  
            ones. In addition to AB 2430, those bills are:   





             a)   AB 1789 (Santiago), also on today's Committee agenda,  
               extends the voluntary contribution for the School Supplies  
               for Homeless Children Fund.  



             b)   AB 2497 (Wagner), also on today's Committee agenda,  
               repeals the voluntary contribution for the California  
               Senior Legislature Fund and replaces it with a voluntary  
               contribution for the California Senior Citizen Advocacy  
               Fund.  


             c)   AB 2371 (Frazier), also on today's Committee agenda,  
               adds a voluntary contribution for the Special Olympics  
               Fund.  









                                                                    AB 2430


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          Analysis Prepared by:Luke Reidenbach / APPR. / (916)  
          319-2081