Minor change to AB 1181 on 8/12/19

Image courtesy of Adobe Stock.

Subtle changes were made to AB 1181 on August 12, 2019 by Assembly member Limón (the bill’s author) and the chair of the Senate Judiciary Committee. The bill was re-referred to the Appropriations Committee, which is still scheduled to hold hearings on August 19.

Two changes were made yesterday.

A very minor one moves one sentence to a new subparagraph. The comment on the section not applying to government grants which specify the value of GIK was moved to 17510.5 (c) (2).

The other change specifies this bill applies to medical GIK, not all GIK. The explicit scope is now “.. a noncash pharmaceutical drug, nonprescription drug, medication, medical device, or medical supply contribution received by a charitable organization is restricted by the donor so that it cannot be used in the United States…”

I will make a wild but slightly educated guess this narrowing in scope will affect a minuscule number of items. I’ll further guess the difference in valuation outside and inside the US for non-medical GIK is trivial. Thus the impact of this clarified scope will likely be a trivial percentage of a minuscule volume of GIK.

A further guess is that an extremely small volume of donated nonprescription meds, medical devices, and medical supplies are received with a restriction that the items only be used outside the US. In addition, if there is such a geographic restriction, I’ll guess the difference of values inside and outside the US is likely to be small.

This change is deep inside baseball detail, somewhere around the level of the tensile strength of the thread used to sew a baseball. Still, it is interesting to some of us. For those closely following this issue here is the change made yesterday with red strikeout showing the deleted text and blue italics showing new wording:

(c) (1)  Notwithstanding subdivision (a), if a noncash pharmaceutical drug, nonprescription drug, medication, medical device, or medical supply  contribution received by a charitable organization is restricted by the donor so that it cannot be used in the United States, the contribution shall be valued using the fair value of the end recipient market or a reasonable estimate thereof if the end recipient market value cannot be ascertained following a reasonable inquiry. If the end recipient market is unknown when the noncash pharmaceutical drug, nonprescription drug, medication, medical device, or medical supply contribution is received, the charitable organization shall value the contribution using only those markets in which the contribution is reasonably likely to be distributed or used, taking into consideration all facts and circumstances that are consistent with any restrictions, including donor restrictions, and with the charitable organization’s mission and charitable purpose. This subdivision does not apply to noncash grants awarded by the United States, any state, territory, or possession of the United States, the District of Columbia, the Commonwealth of Puerto Rico, or any of their agencies or governmental subdivisions that provide valuations for their noncash grants to the charitable organization. 

(2) This subdivision does not apply to noncash grants awarded by the United States, any state, territory, or possession of the United States, the District of Columbia, the Commonwealth of Puerto Rico, or any of their agencies or governmental subdivisions that provide valuations for their noncash grants to the charitable organization.

If you are really, really interested, you can see the incremental changes at this page. Select the version you want to see and click “compare version.” You can then read the current and selected version with the red strikeouts / blue italics showing the changes.

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