Existing law allows individuals, until January 1, 2025, to designate on their personal income tax return that a specified amount in excess of their tax liability be contributed to the California Breast Cancer Research Voluntary Tax Contribution Fund, which is continuously appropriated to the Franchise Tax Board, the Controller, and the University of California for specified purposes. Existing law also allows individuals, until January 1, 2025, to designate on their tax returns that a specified amount in excess of their tax liability be contributed to the California Cancer Research Voluntary Tax Contribution Fund, which is continuously appropriated to the Franchise Tax Board, the Controller, and the University of California for specified purposes. Existing law requires that each of these funds equal or exceed a minimum contribution amount of $250,000 to continue appearing on the return.

This bill would extend the operation of each funds provisions to January 1, 2032. By extending operation of continuously appropriated funds, this bill would make an appropriation.

Existing law allows individuals, until January 1, 2025, to designate on their personal income tax return that a specified amount in excess of their tax liability be contributed to the California Breast Cancer Research Voluntary Tax Contribution Fund, which is continuously appropriated to the Franchise Tax Board, the Controller, and the University of California for specified purposes. Existing law also allows individuals, until January 1, 2025, to designate on their tax returns that a specified amount in excess of their tax liability be contributed to the California Cancer Research Voluntary Tax Contribution Fund, which is continuously appropriated to the Franchise Tax Board, the Controller, and the University of California for specified purposes. Existing law requires that each of these funds equal or exceed a minimum contribution amount of $250,000 to continue appearing on the return.

This bill would extend the operation of each funds provisions to January 1, 2032. By extending operation of continuously appropriated funds, this bill would make an appropriation.

The Personal Income Tax Law imposes taxes on taxable income, as provided.

This bill would make nonsubstantive changes to the provision that names that law.

Date of Hearing: June 19, 2024

ASSEMBLY COMMITTEE ON APPROPRIATIONS

Buffy Wicks, Chair

SBPCA Bill Id:SB 1172

Author:(Grove) – As Amended Ver:March 18, 2024

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

SUMMARY:

This bill extends, by seven years, the sunset dates of both the California Breast Cancer Research Voluntary Tax Contribution Fund (Breast Cancer Fund) and the California Cancer Research Voluntary Tax Contribution Fund (Cancer Fund) on the personal income tax (PIT) return.

FISCAL EFFECT:

1. General Fund (GF) revenue loss of approximately $20,000 beginning fiscal year 2026-27.

The Franchise Tax Board (FTB) assumes both voluntary tax contribution funds (VCFs) would continue to receive amounts similar to prior years, averaging $450,000 annually to the Breast Cancer Fund and $500,000 annually to the Cancer Fund and resulting in $9,000 and $11,000 of annual GF revenue loss attributable to each VCF, respectively, as a taxpayer may deduct such charitable contributions in the next taxable year.

1. Minor and absorbable costs to FTB and the University of California (UC) to continue administering both VCFs.

COMMENTS:

1. Purpose. According to the author, the Breast Cancer Fund and Cancer Fund “make important contributions to research on the causes, detection, treatment, and prevention of cancer, as well as supporting community support and education.” The author notes extending the sunset dates of these VCFs “allows people to donate to these research funds so that they can continue this necessary work.” This bill is co-sponsored by the American Cancer Society Cancer Action Network and UC and supported by other healthcare entities.
2. Background.

VCFs. Existing law allows a taxpayer to donate an amount in excess of their PIT liability to one or more VCFs listed on the PIT return. There were 18 VCFs listed on the 2023 return. Generally, a VCF remains on the PIT return until a statutory sunset date, but if FTB determines the VCF fails to meet a $250,000 minimum contribution amount, the VCF is statutorily repealed and FTB removes the VCF from the return.

Breast Cancer Fund and Cancer Fund. Proceeds raised from the Breast Cancer Fund, after reimbursing state administrative costs, are allocated to UC to support the Breast Cancer Research Program. The Breast Cancer Fund has raised $413,725 in 2023, $436,035 in 2022, and $507,426 in 2021, and is set to sunset after the 2024 return. Proceeds raised from the Cancer Fund, after reimbursing state administrative costs, are allocated to UC for distribution of grants to (a) conduct research on the causes and treatments for cancer, (b) expand community-based education on cancer, and (c) provide culturally sensitive and appropriate prevention and awareness activities targeted toward communities that are disproportionately at risk or afflicted by cancer. The Cancer Fund has raised $427,091 in 2023, $437,025 in 2022, and $515,163 in 2021, and is set to sunset after the 2024 return. This bill extends the sunset dates of both VCFs by another seven years.

1. Related Legislation. AB 1828 (Waldron) extends, by seven years, the sunset dates of two VCFs on the PIT return established to support wildlife. AB 1828 is pending hearing in the Senate Natural Resources and Water Committee.

AB 1983 (Maienschein) recreates the previously repealed Prevention of Animal Homelessness and Cruelty VCF on the PIT return. AB 1983 is pending hearing in the Senate Appropriations Committee.

AB 2197 (Addis) extends, by seven years, the sunset date of the Protect Our Coast and Oceans VCF on the PIT return. AB 2197 is pending hearing in the Senate Appropriations Committee.

AB 2689 (Bains) extends, by seven years, the sunset date of the California Alzheimer’s Disease and Related Dementia Research VCF on the PIT return. AB 2689 is pending hearing in the Senate Appropriations Committee.

Analysis Prepared by: Irene Ho / APPR. / (916) 319-2081

Date of Hearing: June 10, 2024

ASSEMBLY COMMITTEE ON REVENUE AND TAXATION

Jacqui Irwin, Chair

SBPCA Bill Id:SB 1172

Author:(Grove) – As Amended Ver:March 18, 2024

Majority vote. Fiscal committee.

SENATE VOTE: 36-0

SUBJECT: Personal income tax: voluntary contributions: California Breast Cancer Research Voluntary Tax Contribution Fund and California Cancer Research Voluntary Tax Contribution Fund

SUMMARY: Extends the sunset date of two voluntary contribution funds (VCFs) on the personal income tax (PIT) return that support cancer research. Specifically, this bill:

1. Extends, from January 1, 2025, to January 1, 2032, the operability of the statutory provisions authorizing the California Breast Cancer Research Voluntary Tax Contribution Fund (Breast Cancer Fund).
2. Extends, from January 1, 2025, to January 1, 2032, the operability of the statutory provisions authorizing the California Cancer Research Voluntary Tax Contribution Fund (Cancer Fund).

EXISTING LAW:

1. Allows individuals to designate on their PIT return that a contribution in excess of their tax liability, if any, be made to the Breast Cancer Fund. (Revenue and Taxation Code (R&TC) Section 18793.)
2. Provides that all money transferred to the Breast Cancer Fund shall be continuously appropriated to the:
   1. Franchise Tax Board (FTB) and the State Controller for reimbursement of all costs incurred in connection with their administrative duties; and,
   2. University of California for the support of the Breast Cancer Research Program for the purposes stated therein that are related solely to breast cancer research. (R&TC Section 18795.)
3. Specifies that, except as provided, the statutory provisions authorizing the Breast Cancer Fund shall remain in effect only until January 1, 2025, and shall be repealed on December 1, 2025. (R&TC Section 18796.)
4. Allows individuals to designate on their PIT return that a contribution in excess of their tax liability, if any, be made to the Cancer Fund. (R&TC Section 18861.)
5. Provides that all money transferred to the Cancer Fund shall be continuously appropriated to the:
   1. FTB and the State Controller for reimbursement of all costs incurred in connection with their administrative duties; and,
   2. Regents of the University of California for distribution of grants for the purposes of:
      1. Conducting research on the causes and treatments for cancer;
      2. Expanding community-based education on cancer; and,
      3. Providing culturally sensitive and appropriate prevention and awareness activities targeted toward communities that are disproportionately at risk or afflicted by cancer. (R&TC Section 18863.)
6. Specifies that, except as provided, the statutory provisions authorizing the Cancer Fund shall remain in effect only until January 1, 2025, and shall be repealed on December 1, 2025. (R&TC Section 18864.)

FISCAL EFFECT: The FTB estimates that this bill would reduce General Fund revenues by $20,000 beginning in fiscal year 2026-27.

COMMENTS:

1. The author has provided the following statement in support of this bill:

The California Breast Cancer Research Fund and the California Cancer Research Fund make important contributions to research on the causes, detection, treatment, and prevention of cancer, as well as supporting community support and education. SB 1172 will extend the sunset date for the tax checkoff that allows people to donate to these research funds so that they can continue this necessary work.

1. This bill is co-sponsored by the University of California, which notes:

The funding collected through these tax check offs are distributed through a competitive grant application process. The breast cancer research funds have supported investigations on topics such as identifying and eliminating environmental factors that may cause breast cancer, as well as developing novel strategies for treating metastatic disease and triple negative breast cancer. The cancer research funds have supported research across the spectrum of cancer prevention and treatment such as a robotic-steerable surgical tool to remove brain tumors and reducing adverse health outcomes in young Latino men with testicular cancer.

The research funded with the tax checkoff proceeds aims to improve the lives of the approximately 1.5 million Californians with a history of cancer. Both funds will be eliminated from the state tax forms next year unless their sunset dates are extended. SB 1172 will extend these two voluntary income tax check-off programs and will help to continue to provide critical funding to support breast cancer and cancer research. For these reasons, UC urges your support of SB 1172.

1. This bill is supported by the Kern County Cancer Foundation, which notes the following:

The California Breast Cancer Research Program (CBCRP) was established by the 1993 Breast Cancer Act and is responsible for administering funding for breast cancer research in the State of California. Breast cancer is the most common cancer among women. Over the past six years, the CBCRF raised over $2.7 million. Funding generated through the voluntary tax check-off box on the state's tax forms has provided an important and stable revenue stream for the program. This revenue is used to make grants for California scientists and community researchers to find better ways to prevent, treat and cure breast cancer.

In 2022 and 2023[,] The Kern County Cancer Foundation received grant funds from the CBCRP and in conjunction with San Diego State University were able to conduct validating research on the financial stress a breast cancer diagnosis brings upon Latinas with breast cancer in our community. As a result, we have been able to implement financial navigation programs to address such issues.

1. Committee Staff Comments:
   1. California Breast Cancer Research Voluntary Tax Contribution Fund: According to previous Committee analyses, the Breast Cancer Fund first appeared on the state PIT return in 1992, and its sunset date has been extended several times. The Breast Cancer Fund has received significant support from taxpayers. Specifically, this VCF has received the following contribution totals over the last three years: $507,426 in 2021; $436,035 in 2022; and $413,725 in 2023. Contributions to the Breast Cancer Fund are first allocated to the FTB and State Controller for reimbursement of all costs incurred in administering the VCF. The moneys are then allocated to the University of California to support the Breast Cancer Research Program, with the University of California authorized to use up to 5% of allocated funds for administering and promoting the program.
   2. California Cancer Research Voluntary Tax Contribution Fund: According to previous Committee analyses, the Cancer Fund first appeared on the state PIT return in 2008. As with the Breast Cancer Fund, the Cancer Fund has received significant taxpayer support, garnering the following contribution totals over the last three years: $515,163 in 2021; $437,025 in 2022; and $427,091 in 2023. Contributions to the Cancer Fund are first allocated to the FTB and the State Controller to cover their administrative expenses. The moneys are then allocated to the University of California Regents for grant distribution focused on research, community-based education, and culturally sensitive prevention and awareness activities.
   3. Complying with best practices: In an effort to promote a fair playing field, the Legislature enacted a series of requirements for new and extended VCFs. Specifically, R&TC Section 18873 was added by SB 1476 (Committee on Governance and Finance), Chapter 597, Statutes of 2016, to bring a degree of uniformity and improvement to the disparate VCF statutes. Among other things, Section 18873 provides the following parameters:
      
      1. The words "voluntary tax contribution" shall be included as part of the name of the fund;
         
      2. The website of the fund's administering agency shall report the process for awarding money, the amount of money spent on administration, and an itemization of how program funds were awarded, as specified;
         
      3. The minimum contribution amount that must be received for the fund to continue appearing on the tax return is $250,000, without subsequent inflation adjustments; and,
         
      4. The statutory provisions establishing a VCF shall remain in effect only until
         January 1 of the seventh calendar year following the VCF's first appearance on the return.

Both the Breast Cancer Fund and the Cancer Fund fully comply with these parameters.

• 1. Related legislation:
     1. AB 1828 (Waldron) would extend the sunset date of two VCFs on the PIT return that support wildlife. AB 1828 is pending hearing by the Senate Committee on Revenue and Taxation.
     2. AB 1983 (Maienschein) would authorize the addition of the Prevention of Animal Homelessness and Cruelty Voluntary Tax Contribution Fund as a VCF on the PIT return. AB 1983 is pending hearing by the Senate Committee on Revenue and Taxation.
     3. AB 2197 (Addis) would extend the sunset date for the statutory provisions authorizing the Protect Our Coast and Oceans Voluntary Tax Contribution Fund until January 1, 2032 unless the minimum contribution amount of $250,000 is not met, as specified. AB 2197 is pending hearing by the Senate Committee on Revenue and Taxation.
     4. AB 2689 (Bains) would extend the sunset date for the statutory provisions authorizing the California Alzheimer's Disease and Related Dementia Research Voluntary Tax Contribution Fund until December 1, 2032 unless the fund fails to meet its minimum contribution amount of $250,000, as specified. AB 2689 is pending hearing by the Senate Committee on Revenue and Taxation.
     5. AB 3051 (Muratsuchi) would authorize the addition of the California K-12 Climate Change Education Voluntary Tax Contribution Fund as a VCF on the PIT return. AB 3051 was held on the Assembly Committee on Appropriation's Suspense File.
  2. Prior legislation: SB 440 (Hertzberg), Chapter 427, Statutes of 2017, extended the operation of both cancer-related VCF provisions to January 1, 2025.

REGISTERED SUPPORT / OPPOSITION:

Support

American Cancer Society Cancer Action Network (Co-sponsor)

University of California (Co-sponsor)

Adventist Health

Kern County Cancer Foundation

Opposition

None on file

Analysis Prepared by: M. David Ruff / REV. & TAX. / (916) 319-2098

 THIRD READING  

Bill No: SB 1172

Author: Grove (R)

Amended: 3/18/24

Vote: 21

SENATE REVENUE AND TAXATION COMMITTEE: 6-0, 4/10/24

AYES: Glazer, Dahle, Ashby, Bradford, Dodd, Padilla

NO VOTE RECORDED: Skinner

SENATE APPROPRIATIONS COMMITTEE: Senate Rule 28.8

SUBJECT: Personal income tax: voluntary contributions: California Breast Cancer Research Voluntary Tax Contribution Fund and California Cancer Research Voluntary Tax Contribution Fund

SOURCE: American Cancer Society Cancer Action Network Inc.

University of California

DIGEST:

This bill extends the sunset dates for the California Breast Cancer Voluntary Contribution Fund and California Cancer Research Voluntary Contribution Fund from January 1, 2025 to January 1, 2032.

ANALYSIS:

Existing law:

1. Allows taxpayers to contribute money from their own resources in excess of the amount they owe in taxes to Voluntary Contribution Funds (VCF), by checking a box on their state Personal Income Tax return.
2. Establishes 18 VCFs, including the California Breast Cancer Voluntary Contribution Fund and California Cancer Research Voluntary Contribution Fund for on the Personal Income Tax (PIT) Return.
3. Generally requires contributions to exceed $250,000 annually for either VCF to remain on the Personal Income Tax form.
4. Provides that when a taxpayer donates to the California Breast Cancer Voluntary Contribution Fund, the Franchise Tax Board (FTB) deposits the total of all contributions, into a fund named for the VCF, then continuously appropriates them first to FTB and the Controller to reimburse their costs, and then to the University of California for the support of the Breast Cancer Research Program.
5. Provides that when a taxpayer donates to the California Cancer Research Voluntary Contribution Fund, FTB deposits the total of all contributions, into a fund named for the VCF, then continuously appropriates them first to FTB and the Controller to reimburse their costs, then to the Regents of the University of California for distribution of grants for the purposes of conducting research on the causes and treatments for cancer, expanding community-based education on cancer, and providing culturally sensitive and appropriate prevention and awareness activities targeted toward communities that are disproportionately at risk or afflicted by cancer, and for reimbursement of any costs incurred by the regents for administering the grants.
6. Sunsets both VCFs on January 1, 2025.

This bill:

1. Extends the sunset date on the California Breast Cancer Voluntary Contribution Fund from January 1, 2025 to January 1, 2032.
2. Extends the sunset date on the California Cancer Research Voluntary Contribution Fund from January 1, 2025 to January 1, 2032.

Background

A voluntary contribution for the California Breast Cancer Research Fund first appeared on the state PIT return in 1992. The Legislature has extend it several times, most recently in 2017 (SB 440, Hertzberg, Chapter 427, Statutes of 2017). SB 440 also reset the minimum contribution threshold for the fund to remain on the PIT return to $250,000 (it had increased to $376,556 in 2016), and deleted the previously required inflation adjustment for the minimum contribution threshold. This VCF remains one of the most popular voluntary contribution funds on the form, consistently generating between $410,000 (2023) and $516,923 (2019).

A voluntary contribution for the California Cancer Research Fund first appeared on the state PIT return in 2008, and was also last extended by SB 440. Like the VCF for breast cancer research, SB 440 also reset the minimum contribution threshold for the fund to remain on the PIT return to $250,000 (it had increased to $277,944 in 2016), and deleted the previously required inflation adjustment for the minimum contribution threshold. The VCF has received more than $400,000 in annual contributions in 2022 and 2023 and more than $500,000 the years before that, well above the $250,000 minimum.

FISCAL EFFECT: Appropriation: Yes Fiscal Com.: Yes Local: No

SUPPORT: (Verified 4/23/24)

American Cancer Society Cancer Action Network Inc. (co-source)
University of California (co-source)
Adventist Health System West
Kern County Cancer Foundation

OPPOSITION: (Verified 4/23/24)

None received

ARGUMENTS IN SUPPORT: According to the author, “The California Breast Cancer Research Fund and the California Cancer Research Fund make important contributions to research on the causes, detection, treatment, and prevention of cancer, as well as supporting community support and education. SB 1172 will extend the sunset date for the tax checkoff that allows people to donate to these research funds so that they can continue this necessary work.”

Prepared by: Colin Grinnell / REV. & TAX. / (916) 651-4117

4/23/24 16:13:33

**** END ****

SENATE COMMITTEE ON REVENUE AND TAXATION

Senator Steven Glazer, Chair

2023 - 2024 Regular

Personal income tax: voluntary contributions: California Breast Cancer Research Voluntary Tax Contribution Fund and California Cancer Research Voluntary Tax Contribution Fund

Extends the sunset dates for the California Breast Cancer Voluntary Contribution Fund and California Cancer Research Voluntary Contribution Fund from January 1, 2025 to January 1, 2032.

Background

Voluntary Tax Contribution Funds. California allows taxpayers to contribute money towards voluntary contribution funds (VCFs) on their Personal Income Tax (PIT) return. Taxpayers may contribute money from their own resources in excess of the amount they owe in taxes; their contribution is only made if their payments and credits exceed the amount that they owe in taxes. Currently, taxpayers can make voluntary contributions to any number of 18 organizations directly on the income tax return. These organizations include nonprofits focused on disease, natural resource conservation, and more.

The Legislature adds each VCF individually through legislation. With a few exceptions, VCFs remain on the return until the Franchise Tax Board (FTB) removes the VCF due to a sunset provision, or the VCF fails to meet the minimum contribution amount. In general, the minimum contribution amount is $250,000 beginning in the fund’s second year, unadjusted for inflation. However, while subject to sunset dates, the VCFs listed below do not have a minimum contribution requirement:

• California Firefighters’ Memorial Foundation Fund;
• California Peace Officer Memorial Foundation Fund; and
• California Senior Citizen Advocacy Voluntary Tax Contribution Fund.

When a taxpayer contributes to a VCF, FTB deposits the total of all contributions, minus its costs of administration, into a fund named for the VCF. Most VCF funds are administered by state agencies to fund purposes set forth in the legislation placing the VCF on the income tax form. For other VCFs, the State Controller’s office allocates taxpayer contributions directly to the private organization, without going through an administrative agency. For example, the State Controller’s office passes the taxpayer’s contributions to the California Fire Foundation.

The California Breast Cancer Research Voluntary Contribution Fund. A voluntary contribution for the California Breast Cancer Research Fund first appeared on the state PIT return in 1992. The Legislature has extend it several times, most recently in 2017 (SB 440, Hertzberg). SB 440 also reset the minimum contribution threshold for the fund to remain on the PIT return to $250,000 (it had increased to $376,556 in 2016), and deleted the previously required inflation adjustment for the minimum contribution threshold. This VCF remains one of the most popular voluntary contribution funds on the form, consistently generating between $410,000 (2023) and $516,923 (2019). Contributions made to this VCF are first allocated to the FTB and State Controller for reimbursement of all costs incurred in connection with administering it. Second, funds are allocated to the UC for support of the Breast Cancer Research Program.

The California Cancer Research Voluntary Contribution Fund. A voluntary contribution for the California Cancer Research Fund first appeared on the state PIT return in 2008, and was also last extended by SB 440. Like the VCF for breast cancer research, SB 440 also reset the minimum contribution threshold for the fund to remain on the PIT return to $250,000 (it had increased to $277,944 in 2016), and deleted the previously required inflation adjustment for the minimum contribution threshold. The VCF has received more than $400,000 in annual contributions in 2022 and 2023 and more than $500,000 the years before that, well above the $250,000 minimum. After funds are allocated to the FTB and State Controller for reimbursement of all costs incurred in connection with administering the VCF, funds are allocated to the UC. UC designated the Cancer Research Coordinating Committee (CRCC), a University of California system-wide research program to administer grants using VCF proceeds. The CRCC provides independent merit review of proposals submitted in response to an annual Request for Proposals.

With both VCFs set to sunset on January 1, 2025, the author wants to extend them until January 1, 2032.

Proposed Law

Senate Bill 1172 extends the sunset dates for the California Breast Cancer Voluntary Contribution Fund and the California Cancer Research Voluntary Contribution Fund from January 1, 2025 to January 1, 2032.

State Revenue Impact

FTB estimates that SB 1172 will result in a revenue loss of $9,000 in 2026-27.

Comments

1. Purpose of the bill. According to the author, “The California Breast Cancer Research Fund and the California Cancer Research Fund make important contributions to research on the causes, detection, treatment, and prevention of cancer, as well as supporting community support and education. SB 1172 will extend the sunset date for the tax checkoff that allows people to donate to these research funds so that they can continue this necessary work.”

2. Many worthy causes. The California Breast Cancer Voluntary Contribution Fund and California Cancer Research Voluntary Contribution Fund has consistently met its minimum contribution requirement, unlike several others. However, while the Legislature has added many VCFs on the return, the total amount of donations has remained fairly stagnant. As a result, extending current or adding new ones may make it more difficult for each to meet its minimum contribution requirement.

Support and Opposition

(4/5/24)

Support: American Cancer Society Cancer Action Network INC. (Co-Sponsor)
University of California (Co-Sponsor)
Adventist Health System West
Kern County Cancer Foundation

Opposition: None submitted.

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