ALZHEIMER'S ASSC: TAX CHECK-OFF S.B. 150 & H.B. 4082:
ANALYSIS AS ENACTED
Senate Bill 150 (as enacted) PUBLIC ACT 90 of 2013
House Bill 4082 (as enacted) PUBLIC ACT 88 of 2013
Sponsor: Senator John Pappageorge (S.B. 150)
Representative Matt Lori (H.B. 4082)
Senate Committee: Finance (S.B. 150)
Government Operations (H.B. 4082)
House Committee: Tax Policy (H.B. 4082)
RATIONALE
According to the national Alzheimer's Association, approximately 180,000 individuals in Michigan aged 65 and older had Alzheimer's disease in 2010, and this number is projected to grow to 190,000 by 2025. In addition, an unknown number of individuals under 65 also have the disease. In many cases, those with Alzheimer's disease or related dementia are taken care of by unpaid caregivers, primarily family members. In Michigan, according to the Association, some 507,000 caregivers provided approximately 577.0 million hours of unpaid care, valued at over $7.1 billion, in 2012. Services for individuals with the disease and their families, as well as other caregivers, are available from two Michigan chapters of the Alzheimer's Association. The Greater Michigan Chapter, which serves 60 counties, is headquartered in Southfield and has five regional offices. The Michigan Great Lakes Chapter, serving 23 counties, is headquartered in Chelsea and has three regional offices. Both chapters are tax-exempt, nonprofit organizations supported by contributions from individuals, corporations, and foundations. To provide another source of revenue for the Alzheimer's Association chapters, and the services they provide to unpaid caregivers in particular, it was suggested that people should be given an opportunity to donate when filing their income tax returns.
CONTENT
Senate Bill 150 amended the Income Tax Act to create a tax check-off for the Michigan Alzheimer's Association Fund, beginning with the 2013 tax year. House Bill 4082 enacted the "Michigan Alzheimer's Association Fund Act" to create the Fund; require amounts from the new income tax check-off to be credited to it; and provide for distribution of money in the Fund to the Greater Michigan Chapter and the Michigan Great Lakes Chapter of the Alzheimer's Association to benefit programs and services for unpaid caregivers.
The bills were tie-barred and took effect on June 28, 2013.
Senate Bill 150
Section 435 of the Income Tax Act allows an individual to designate on his or her annual tax return that a contribution of $5, $10, or more of his or her State income tax refund (or additional tax liability) be credited to any of the funds specified in the Act. The Department of Treasury must create a schedule of the specified check-offs to be included with an annual income tax return. The schedule may not include more than 10 separate check-offs in a single year, and the Department must discontinue a check-off that fails to raise $50,000 in a tax year for two consecutive years.
Check-offs on the schedule include the Animal Welfare Fund, the Children of Veterans Tuition Grant Program, the Children's Trust Fund, the Girl Scouts of
Michigan Fund, the Military Family Relief Fund, the Special Olympics Fund, and the United Way Fund.
Under the bill, the schedule also includes the Michigan Alzheimer's Association Fund, for the 2013 tax year and each subsequent tax year.
The bill also added to the schedule the ALS of Michigan ("Lou Gehrig's Disease") Fund and the Michigan Amber Alert Fund. (Those Funds were created by Public Acts 89 and 92 of 2013, respectively.)
House Bill 4082
The bill created the "Michigan Alzheimer's Association Fund" in the Department of Treasury to provide funds to benefit the programs and services for unpaid caregivers of individuals with Alzheimer's disease provided by the Greater Michigan Chapter and the Michigan Great Lakes Chapter of the Alzheimer's Association.
The State Treasurer must credit to the Fund all amounts appropriated for this purpose under Section 435 of the Income Tax Act, and money from any other source for deposit into the Fund. The Fund will consist of these amounts and any interest and earnings from the saving and investment of the tax check-off proceeds.
The money, interest, and earnings of the Fund may be spent solely for donation to the Greater Michigan Chapter of the Alzheimer's Association for distribution to the Greater Michigan and Michigan Great Lakes Chapters of the Alzheimer's Association.
The money in the Fund that is available for distribution must be appropriated each year. Money granted or received as a gift or donation to the Fund will be available for distribution upon appropriation. Money in the Fund at the close of the fiscal year will remain in the Fund.
The State Treasurer must direct the investment of the Fund, and the Department will be the administrator of the Fund for auditing purposes.
206.961-206.969 (H.B. 4082)
ARGUMENTS
(Please note: The arguments contained in this analysis originate from sources outside the Senate Fiscal Agency. The Senate Fiscal Agency neither supports nor opposes legislation.)
Supporting Argument
Services and programs for unpaid caregivers are important to their own health and welfare. Caring for an individual with Alzheimer's disease or another form of dementia can be very difficult, and many family members and other unpaid caregivers experience high levels of emotional stress and depression as a result. Caregiving also may have a negative impact on the physical health, employment, income, and financial security of caregivers. According to the Alzheimer's Association, over half are the primary breadwinners of the household, nearly half are employed full- or part-time, and just over one-quarter of family caregivers have children under 18 living with them. Even after a person with Alzheimer's or other dementia moves to an assisted living facility or nursing home, the caregivers often continue to help with activities of daily living, such as bathing and dressing, as well as assist with legal and financial affairs, arrange medical care, and provide emotional support.
The Michigan chapters of the Alzheimer's Association provide a variety of services that benefit caregivers. These services include, for example, respite programs, support groups, care consultations, 24/7 helplines, and online message boards and chat rooms. The Respite Care Assistance Program also provides financial assistance to eligible caregivers.
Of the money the chapters raise, 78% to 80% is used for programs, services, and research efforts. The lion's share of their income comes from contributions, events, grants, and bequests. Like nearly everyone else in today's economy, the organizations have felt the impact of budget cuts. The bills provide an easy and convenient way for Michigan taxpayers to contribute to the State's two Alzheimer's Association chapters, through a check-off on the income tax form. The donated funds will be specifically directed toward programs and services for unpaid caregivers.
Legislative Analyst: Suzanne Lowe
FISCAL IMPACT
The revenue from the income tax check-offs for the Michigan Alzheimer's Association Fund, the ALS of Michigan ("Lou Gehrig's Disease") Fund and the Michigan Amber Alert Fund will depend on the size and number of taxpayer donations. These voluntary contributions will have no impact on State revenue.
The Department of Treasury will incur additional costs of an unknown amount to administer and track the new funds.
The income tax check-off revenue history
in recent years is summarized in the Table 1 below. Several funds that previously were on the voluntary contributions schedule no longer appear on it. These are Amanda's Fund for Breast Cancer, Children's Hospital of Michigan Fund, Children's Miracle Network Fund, Foster Care Trust Fund, Michigan Council for the Arts Fund, Michigan Housing and Community Development Fund, Michigan Law Enforcement Memorial Fund, Prostate Cancer Research, and Renewable Fuels Fund. (Those that did not receive revenue during the three years shown on Table 1 are not listed on the table.)
Table 1
Estimated Income Tax Check-Off Donations by Fund
|
|
Tax Year 2010 |
Tax Year 2011a) |
Tax Year 2012a) |
|||
|
|
Number of Donations |
Total Donated |
Number of Donations |
Total Donated |
Number of Donations |
Total Donated |
|
Animal Welfare Fund1) |
10,852 |
$148,164 |
10,800 |
$125,636 |
11,049 |
$123,421 |
|
Children's Hospital of MI Fund |
7,418 |
90,853 |
|
|
|
|
|
Children's Miracle Network Fund |
4,707 |
56,901 |
|
|
|
|
|
Children's Trust Fund1) |
7,387 |
92,631 |
8,499 |
88,839 |
8,126 |
84,009 |
|
Children of Veterans Tuition Grant Program1) |
5,928 |
76,417 |
5,878 |
70,374 |
5,890 |
64,094 |
|
Foster Care Trust Fund |
3,467 |
40,057 |
|
|
|
|
|
Girl Scouts of Michigan Fund1) |
|
|
3,500 |
44,163 |
3,277 |
38,844 |
|
Michigan Military Relief Fund1) |
7,443 |
128,603 |
9,463 |
134,757 |
9,582 |
131,289 |
|
Michigan Council for the Arts Fund |
3,356 |
34,677 |
|
|
|
|
|
Renewable Fuels Fund |
2,589 |
23,648 |
|
|
|
|
|
Special Olympics Michigan1) |
|
|
|
|
5,521 |
75,976 |
|
United Way Fund1) |
7,747 |
389,080 |
5,574 |
163,937 |
5,016 |
163,169 |
|
Total |
|
$1,081,031 |
|
$627,706 |
|
$680,802 |
a) Collections through May 23, 2013.
1) Check-offs on the 2012 contribution schedule.
Source: Department of Treasury
Fiscal Analyst: Elizabeth Pratt
This analysis was prepared by nonpartisan Senate staff for use by the Senate in its deliberations and does not constitute an official statement of legislative intent.