HomeMy WebLinkAboutMINUTES - 04282009 - C.20RECOMMENDATION(S):
SUPPORT Assembly Bill 89 (Torlakson), a bill that imposes an additional excise tax on the
distribution of cigarettes, and requires that revenues collected would be deposited in the
Tobacco Excise Tax Account, and would be allocated for certain education, health, and
child-related purposes, as recommended by Dr. William Walker, Director of the Health
Services Department.
FISCAL IMPACT:
This bill would result in a change in state taxes for the purpose of increasing state revenues
within the meaning of Section 3 of Article XIIIA of the California Constitution, and thus
would require for passage the approval of 2⁄3 of the membership of each house of the
Legislature.
AB 89 imposes a $2.10 tax per pack of 20 cigarettes on cigarette distributors. This tax
would raise approximately $2 billion annually for education, children’s health care, tobacco
cessation services, lung cancer research, and general health care.
APPROVE OTHER
RECOMMENDATION OF CNTY ADMINISTRATOR RECOMMENDATION OF BOARD COMMITTEE
Action of Board On: 04/28/2009 APPROVED AS RECOMMENDED OTHER
Clerks Notes:
VOTE OF SUPERVISORS
AYE:John Gioia, District I
Supervisor
Gayle B. Uilkema, District II
Supervisor
Mary N. Piepho, District III
Supervisor
Susan A. Bonilla, District IV
Supervisor
Federal D. Glover, District V
Supervisor
Contact: L. DeLaney, 5-1097
I hereby certify that this is a true and correct copy of an action taken and entered on the minutes of the Board
of Supervisors on the date shown.
ATTESTED: April 28, 2009
David J. Twa, County Administrator and Clerk of the Board of Supervisors
By: June McHuen, Deputy
cc:
C.20
To:Board of Supervisors
From:Legislation Committee
Date:April 28, 2009
Contra
Costa
County
Subject:SUPPORT POSITION for AB 89 (Torlakson): Taxation: Cigarettes and Other Tobacco Products
BACKGROUND:
At its April 6, 2009 meeting, the Legislation Committee requested that AB 89
(Torlakson) be referred to the Health Services Department for analysis and position
recommendation.
Dr. Walker has reviewed the bill and recommends that the Board of Supervisor support
it. The bill is scheduled for hearing by the Assembly Governmental Organization
Committee on April 22, 2009.
AB 89 is similar to Senate Bill 24, a bill introduced last year by then-Senator Torlakson.
AB 89 would raise approximately $2 billion annually for education, children’s
healthcare, and tobacco-related disease, research, and cessation programs by raising the
tobacco tax by $2.10 per pack. Since 2000, 42 of the 50 states have increased their
cigarette excise taxes, while California’s levels haven’t changed from .87 since 1998.
Thirty-three other states have a higher tax than California.
According to the author, about $1 billion would go to the public education
system--partially backfilling lost Proposition 98 dollars and "cost-of-living" cuts. A
portion of this funding could go towards enrolling 700,000 uninsured children into the
Healthy Families and dental care programs, fortifying the Medi-Cal program, reversing
cuts already made to programs serving our state's developmentally disabled and autistic
children, and preventing further cuts to protective services for children.
Each year, smoke causes 31,000 asthma attacks in children and hundreds of thousands
lower respiratory tract infections. At the same time, reports show that while smoking
among teenagers was on the decline in California until 2004, the trend reversed course
and increased from 13 percent in 2004 to 16 percent in 2006. Additionally, 11 percent of
children, six years and younger are regularly exposed to secondhand smoke in the home.
In 2006, voters narrowly defeated Proposition 86, which would have imposed an
additional $2.60 tax per pack.
ATTACHMENTS
Bill Text AB 89
california legislature—2009–10 regular session
ASSEMBLY BILL No. 89
Introduced by Assembly Member Torlakson
January 5, 2009
An act to add Article 2.5 (commencing with Section 30130.5) to
Chapter 2 of Part 13 of Division 2 of the Revenue and Taxation Code,
relating to taxation, to take effect immediately, tax levy.
legislative counsel’s digest
AB 89, as introduced, Torlakson.Taxation: cigarettes and other
tobacco products.
The Cigarette and Tobacco Products Tax Law, the violation of which
is a crime, imposes a tax on every distributor of cigarettes and tobacco
products at specified rates, including additional taxes imposed under
the Tobacco Tax and Health Protection Act of 1988 (Proposition 99)
and the California Families and Children Act of 1998 (Proposition 10).
A provision of that law imposes a tax upon the distribution of tobacco
products at a tax rate which is equivalent to the combined rate of all
taxes imposed on cigarettes, which is deposited in specified accounts.
This bill would, commencing on or after the first day of the first
calendar quarter commencing more than 90 days on or after the effective
date of the bill, impose an additional excise tax on the distribution of
cigarettes at the rate of $0.105 for each cigarette distributed, and would
require a dealer or wholesaler to file a return with the State Board of
Equalization showing the number of cigarettes in his or her possession
or under his or her control on that date, as specified. The revenues
collected from the additional tax would be deposited in the Tobacco
Excise Tax Account, which would be created by the bill, and would be
allocated, upon appropriation by the Legislature, for certain education-,
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health-, and child-related purposes. Because the bill would impose an
additional tax on cigarettes under the Cigarette and Tobacco Products
Tax Law, it would increase the tax upon the distribution of tobacco
products under that law.
This bill would result in a change in state taxes for the purpose of
increasing state revenues within the meaning of Section 3 of Article
XIII A of the California Constitution, and thus would require for passage
the approval of 2⁄3 of the membership of each house of the Legislature.
Because this bill would impose new requirements under the Cigarette
and Tobacco Products Law, the violation of which is a crime, it would
impose a state-mandated local program.
The California Constitution requires the state to reimburse local
agencies and school districts for certain costs mandated by the state.
Statutory provisions establish procedures for making that reimbursement.
This bill would provide that no reimbursement is required by this act
for a specified reason.
This bill would take effect immediately as a tax levy.
Vote: 2⁄3. Appropriation: no. Fiscal committee: yes.
State-mandated local program: yes.
The people of the State of California do enact as follows:
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SECTION 1.Article 2.5 (commencing with Section 30130.5)
is added to Chapter 2 of Part 13 of Division 2 of the Revenue and
Taxation Code, to read:
Article 2.5. Cigarette and Tobacco Products Excise Tax
30130.5.(a) In addition to any other tax imposed under this
part, an excise tax is hereby imposed upon every distributor of
cigarettes at the rate of one hundred five mills ($0.105) for each
cigarette distributed on and after the first day of the first calendar
quarter commencing more than 90 days after the effective date of
this section.
(b) (1) Every dealer and wholesaler, for the privilege of holding
or storing cigarettes for sale, use, or consumption, shall pay a floor
stock tax for each cigarette in his or her possession or under his
or her control in this state at 12:01 a.m. on the first day of the first
calendar quarter commencing more than 90 days after the effective
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date of this section at the rate of one hundred five mills ($0.105)
for each cigarette.
(2) Every dealer and wholesaler shall file a return with the State
Board of Equalization on or before the first day of the first calendar
quarter commencing more than 180 days after the effective date
of this section on a form prescribed by the board, showing the
number of cigarettes in his or her possession or under his or her
control at 12:01 a.m. on the first day of the first calendar quarter
commencing more than 90 days after the effective date of this
section. The amount of tax shall be computed and shown on the
return.
(c) (1) Every licensed cigarette distributor, for the privilege of
distributing cigarettes and for holding or storing cigarettes for sale,
use, or consumption, shall pay a cigarette indicia adjustment tax
for each California cigarette tax stamp that is affixed to any
package of cigarettes and for each unaffixed California cigarette
tax stamp in his or her possession or under his or her control at
12:01 a.m. on the first day of the first calendar quarter commencing
more than 90 days after the effective date of this section at the
following rates:
(A) Two dollars and six hundred twenty-five mills ($2.625) for
each stamp bearing the designation “25.”
(B) Two dollars and ten cents ($2.10) for each stamp bearing
the designation “20.”
(C) One dollar and five cents ($1.05) for each stamp bearing
the designation “10.”
(2) Every licensed cigarette distributor shall file a return with
the board on or before the first day of the first calendar quarter
commencing 180 days after the effective date of this section on a
form prescribed by the board, showing the number of stamps
described in subparagraphs (A), (B), and (C), of paragraph (1).
The amount of tax shall be computed and shown on the return.
(d) The taxes imposed under this section shall be administered
and collected in accordance with this part.
(e) All revenues, less refunds, derived from a tax imposed
pursuant to this section shall be transferred to the Tobacco Excise
Tax Account, which is hereby created in the General Fund and
shall, upon appropriation by the Legislature, be allocated for each
fiscal year exclusively to fund the following:
(1) Education
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AB 89— 3 —
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(2) Children’s health care.
(3) Tobacco cessation services.
(4) Lung cancer research.
(5) General health care.
SEC. 2.It is the intent of the Legislature that revenues derived
from the taxes imposed pursuant to Section 30130.5 of the Revenue
and Taxation Code shall be deemed General Fund revenues or
General Fund proceeds of taxes within the meaning of Section 8
of Article XVI of the California Constitution.
SEC. 3.No reimbursement is required by this act pursuant to
Section 6 of Article XIII B of the California Constitution because
the only costs that may be incurred by a local agency or school
district will be incurred because this act creates a new crime or
infraction, eliminates a crime or infraction, or changes the penalty
for a crime or infraction, within the meaning of Section 17556 of
the Government Code, or changes the definition of a crime within
the meaning of Section 6 of Article XIII B of the California
Constitution.
SEC. 4.This act provides for a tax levy within the meaning of
Article IV of the California Constitution and shall go into
immediate effect.
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