BILL NUMBER: AB 89	INTRODUCED
	BILL TEXT


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-, 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:

  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 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
   (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.