BILL ANALYSIS �
SB 583
Page 1
SENATE THIRD READING
SB 583 (Vargas)
As Amended May 11, 2011
Majority vote
SENATE VOTE :38-0
REVENUE & TAXATION 7-0 APPROPRIATIONS 17-0
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|Ayes:|Perea, Donnelly, Beall, |Ayes:|Fuentes, Harkey, |
| |Cedillo, Fuentes, Gordon, | |Blumenfield, Bradford, |
| |Nestande | |Charles Calderon, Campos, |
| | | |Davis, Donnelly, Gatto, |
| | | |Hall, Hill, Lara, |
| | | |Mitchell, Nielsen, Norby, |
| | | |Solorio, Wagner |
| | | | |
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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.
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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
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)The Assembly Revenue and Taxation Committee staff comments:
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 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.
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
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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.
VCF policy : The Assembly Revenue and Taxation 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, the
Assembly Revenue and Taxation Committee's staff questions the
precedent of simply re-establishing past VCFs when they fail
to garner sufficient support to remain on the form.
Related legislation : The following related bills have been
introduced in the current legislative session:
a) AB 233 (Hall) would add the California YMCA Youth and
Government Fund to the form. AB 233 is currently pending
in the Senate Governance and Finance Committee.;
b) AB 564 (Smyth) would reauthorize the addition of the
Municipal Shelter Spay-Neuter Fund to the form. AB 564 is
currently pending on the Senate Third Reading File;
c) AB 764 (Swanson) would add the Child Victims of Human
Trafficking Fund to the form. AB 764 is currently pending
on the Senate Third Reading File;
d) AB 971 (Monning) would extend the current repeal date
for the California Sea Otter Fund. AB 971 has been ordered
to Engrossing and Enrolling; and,
e) 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 currently pending
in the Assembly Appropriations Committee.
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Analysis Prepared by : M. David Ruff / REV. & TAX. / (916)
319-2098
FN:
0002186