BILL ANALYSIS                                                                                                                                                                                                    �



                                                                  AB 2323
                                                                  Page  1

          Date of Hearing:   May 21, 2014

                        ASSEMBLY COMMITTEE ON APPROPRIATIONS
                                  Mike Gatto, Chair

                     AB 2323 (Gorell) - As Amended:  May 15, 2014

          Policy Committee:                              Revenue &  
          Taxation     Vote:                            6-1

          Urgency:     Yes                  State Mandated Local Program:  
          No     Reimbursable:              No

           SUMMARY  

          This bill excludes from adjusted gross income under the Personal  
          Income Tax law, from taxable years beginning on or after January  
          1, 2014 to January 1, 2022, the value of any medal or prize  
          money or honoraria given to a taxpayer by the International  
          Olympic Committee or the United States Olympic Committee on  
          account of either the Olympic games or the Paralympic games.

           FISCAL EFFECT  

          1)Insignificant cost to the Franchise Tax Board (FTB) to  
            implement the exclusion.

          2)Estimated decreases to GF revenue of $8,000, $50,000, and  
            $30,000 in FY 2014-15, FY 2015-16, and FY 2016-17,  
            respectively.

           COMMENTS  

          1)  Purpose.   According to the author, most countries compensate  
            their Olympic and Paralympic athletes, but athletes  
            representing the United States compete on a voluntary basis,  
            unless they win a medal.  In addition to the physical medals  
            earned, the US Olympic Committee (USOC) provides honoraria to  
            medaling athletes.  Athletes are generally awarded $25,000 for  
            a gold medal, $15,000 for silver, and $10,000 for bronze.   
            This amount, in addition to the value of the medal itself, is  
            subject to federal and state taxes.  In 2012, some bronze  
            medalists were levied a tax of $3,500, silver medalists a tax  
            of $5,385, and gold medalists a tax of $8,986.









                                                                  AB 2323
                                                                  Page  2

            Most American Olympic and Paralympic athletes are amateurs  
            with modest incomes who earn nothing for their competition.   
            This bill would exempt California Olympians and Paralympians  
            from state taxes assessed on cash prizes awarded by the USOC.   
            The exemption does not include sponsorship deals and other  
            endorsement income.

          2)  California's Olympians.   California has a proud Olympic  
            history, having served as host of the Los Angeles Olympic  
            Games in 1932 and 1984, and the 1960 Olympic Winter Games in  
            Squaw Valley.  In addition, California is home to one of three  
            national Olympic Training Centers.  Finally, the USOC notes  
            that approximately 14% of all Olympic and Paralympic athletes  
            reside in California.



           Analysis Prepared by  :    Joel Tashjian / APPR. / (916) 319-2081