BILL ANALYSIS �
SB 583
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Date of Hearing: June 13, 2011
ASSEMBLY COMMITTEE ON REVENUE AND TAXATION
Henry T. Perea, Chair
SB 583 (Vargas) - As Amended: May 11, 2011
Majority vote. Fiscal committee.
SENATE VOTE : 38-0
SUBJECT : Personal Income Tax Law: voluntary contributions:
ALS/Lou Gehrig's Disease Research Fund
SUMMARY : Reauthorizes the addition of the ALS/Lou Gehrig's
Disease Research Fund (Fund) checkoff to the personal income tax
(PIT) form upon the removal of another voluntary contribution
fund (VCF) from the form. Specifically, this bill :
1)Re-establishes the Fund in the State Treasury.
2)Provides that all money transferred to the Fund, upon
appropriation by the Legislature, shall be allocated to the:
a) Franchise Tax Board (FTB) and the State Controller for
reimbursement of all costs incurred in administering the
checkoff; and,
b) State Department of Public Health, for allocation to the
Amyotrophic Lateral Sclerosis (ALS) Association, to provide
research grants to develop and advance the understanding,
techniques, and modalities effective in the prevention,
treatment, and cure of ALS.
3)Specifies that Fund moneys shall only be used to provide
grants and may not be used by the ALS Association for
administrative purposes or for any other purpose relating to
its own operations.
4)Defines "research" to include clinical trials as well as
expenditures to develop and advance the understanding,
techniques, and modalities effective in the prevention, cure,
screening, and treatment of ALS.
5)Provides for the VCF's automatic repeal on January 1, 2016, or
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on an earlier date if the VCF fails to meet a minimum
contribution amount initially set at $250,000 and adjusted for
inflation thereafter.
EXISTING LAW :
1)Allows taxpayers to designate on their PIT returns a
contribution to any of 15 VCFs.
2)Provides a specific sunset date for each VCF, except for the
California Seniors Special Fund.
3)Provides that each VCF must meet a minimum annual contribution
amount to remain in effect, except for the California Seniors
Special Fund, the California Firefighters' Memorial Fund, and
the California Peace Officer Memorial Foundation Fund.
FISCAL EFFECT : The FTB estimates revenue losses, resulting from
contribution deductions, to be around $20,000 annually.
COMMENTS :
1)The author notes that this bill would extend the Fund on the
state income tax form until January 1, 2016.
2)Proponents state:
ALS, commonly known as Lou Gehrig's Disease, is a
degenerative disease of the motor nerves that causes
progressive weakness of all voluntary muscles. People with
ALS become unable to move, swallow, speak, and breathe
without assistance. This is a fatal disease that kills
patients usually within 2-5 years of diagnosis.
It has been almost 150 years since ALS was identified by
the scientific community and since that time, little has
been accomplished in terms of treatment - it is still
commonly referred to as an orphan disease.
3)Committee Staff Comments:
a) So many causes, so little space : There are countless
worthy causes that would benefit from the inclusion of a
new VCF on the state's income tax returns. At the same
time, space on the returns is limited. Thus, it could be
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argued that the current system for adding VCFs to the form
is subjective and essentially rewards organizations that
can convince the Legislature to include their fund on the
form.
b) Legislative history : SB 1502 (Steinberg), Chapter 354,
Statutes of 2008, authorized the addition of an identical
VCF with the same name. This VCF appeared on the 2008 and
2009 tax returns in calendar years 2009 and 2010
respectively. The prior VCF received $220,041 in 2009 and
$114,051 in 2010. In 2010, the VCF needed to meet a
minimum contribution threshold of $250,000 but failed to do
so, and as a result, the VCF ceased to be operative.
c) VCF policy : This Committee's VCF policy provides that,
"All proponents seeking authorization for a new or
reauthorized checkoff shall provide information justifying
their expectation that the checkoff will meet its
contribution minimum." Given that an identically named VCF
just recently failed to meet its minimum contribution
threshold, it is an open question whether this Fund will
fare any better. It is possible that the original VCF
suffered as a result of the national economic downturn.
Nevertheless, Committee staff questions the precedent of
simply re-establishing past VCFs when they fail to garner
sufficient support to remain on the form.
d) Related legislation : The following related bills have
been introduced in the current Legislative Session:
i) AB 233 (Hall) would add the California YMCA Youth
and Government Fund to the form. AB 233 is pending in
Senate Rules for referral.
ii) AB 564 (Smyth) would reauthorize the addition of the
Municipal Shelter Spay-Neuter Fund to the form. AB 564
is pending in Senate Rules for referral.
iii) AB 764 (Swanson) would add the Child Victims of
Human Trafficking Fund to the form. AB 764 is pending in
Senate Rules for referral.
iv) AB 971 (Monning) would extend the current repeal
date for the California Sea Otter Fund. AB 971 is
pending in Senate Rules for referral.
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v) SB 164 (Simitian) would extend the repeal dates for
the following two VCFs: the State Children's Trust Fund
for the Prevention of Child Abuse and the Rare and
Endangered Species Preservation Program. SB 164 is
pending at the Assembly Desk.
REGISTERED SUPPORT / OPPOSITION :
Support
California ALS Advocacy Committee
Greater Sacramento Chapter of the ALS Association
Greater San Diego Chapter of the ALS Association
Orange County Chapter of the ALS Association
Pacific ALS Consortium
12 individuals
Opposition
None on file
Analysis Prepared by : M. David Ruff / REV. & TAX. / (916)
319-2098