BILL ANALYSIS Ó
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|SENATE RULES COMMITTEE | AB 717|
|Office of Senate Floor Analyses | |
|(916) 651-1520 Fax: (916) | |
|327-4478 | |
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THIRD READING
Bill No: AB 717
Author: Gonzalez (D), et al.
Amended: 1/21/16 in Assembly
Vote: 21
SENATE GOVERNANCE & FIN. COMMITTEE: 7-0, 5/11/16
AYES: Hertzberg, Nguyen, Beall, Hernandez, Lara, Moorlach,
Pavley
SENATE APPROPRIATIONS COMMITTEE: 7-0, 8/11/16
AYES: Lara, Bates, Beall, Hill, McGuire, Mendoza, Nielsen
ASSEMBLY FLOOR: 76-0, 1/28/16 - See last page for vote
SUBJECT: Sales and use taxes: exemption: diapers
SOURCE: Author
DIGEST: This bill provides a temporary sales and use tax (SUT)
exemption for diapers designed, manufactured, processed,
fabricated, or packaged for use by infants and toddlers,
designated size 3 or under.
ANALYSIS:
Existing law:
1)Imposes a SUT on the sale, storage, or use of tangible
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personal property unless exempted by state law.
2)Provides that the current state SUT is 7.5%, but beginning
January 1, 2017, the state SUT rate on tangible personal
property will be 7.25%.
3)Allows cities and counties to increase the SUT rate up to 2%
as a transactions and use tax for either specific or general
purposes with voter approval as required by the California
Constitution.
This bill:
1)Establishes a temporary SUT exemption for diapers designed,
manufactured, processed, fabricated, or packaged for use by
infants and toddlers, designated size 3 or under.
2)Provides that the state shall not reimburse any local agency
for SUT revenues lost as a result of this exemption.
3)Remains in effect until January 1, 2022.
Background
Existing federal law classifies diapers with cigarettes,
alcohol, and pet food as disallowed purchases under CalFresh and
the California Special Supplemental Food Program for Women,
Infants, and Children. However, both the Head Start (serving
children three to five years old) and Early Head Start (serving
children under three years) programs must provide diapers and
formula to participants who need them. The state can supplement
this benefit by providing TANF (Temporary Assistance for Needy
Families), CalWORKs, CalFresh, and California Special
Supplemental Food Program for Women, Infants, and Children
recipients with diapers.
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In 2014, AB 1516 (Gonzalez) would have established a young child
special needs supplement of $80 per month within the CalWORKs
program for each child younger than two years of age in an
assistance unit. AB 1516 was held on the Senate Appropriations
Committee's Suspense File. This year's AB 492 (Gonzalez)
provides that necessary supportive services would include
vouchers in the amount of $50 per month for diaper products for
every child two years of age or younger enrolled in child care,
as specified. AB 492 is currently pending in the Senate
Committee on Human Services. A targeted approach, like that in
AB 492 may aid more low income families, while an SUT exemption
benefits all families, regardless of income, that purchase
diapers.
FISCAL EFFECT: Appropriation: No Fiscal
Com.:YesLocal: No
According to the Senate Appropriations Committee, BOE estimates
that this bill would result in an annual state and local revenue
loss of $35 million, $17 million of which would be General Fund.
The agency would incur absorbable implementation costs.
SUPPORT: (Verified8/12/16)
9 to 5 California
ACCESS Women's Health Justice
Alliance of Californians for Community Empowerment
American Academy of Pediatrics, California District IX
American Association of University Women
A Stronger California Network
Black Women for Wellness
Board of Equalization
California Employer Law Center
California Immigrant Policy Center
California Latinas for Reproductive Justice
California Partnership
California Primary Care Association
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California Retailer's Association
California Women's Law Center
California Work and Family Coalition
Career Ladders Project
Child Care Law Center
City of Glendale
Common Sense Kids Action
Courage Campaign
Diane L. Harkey, Board of Equalization Member
Equal Rights Advocates
Fiona Ma, Board of Equalization Member
Forward Together
George Runner, Board of Equalization Member
Help a Mother Out
Mujeres Unidas Y Activas
National Center for Youth Law
National Council of Jewish Women California Policy Advocacy
Network
National Diaper Bank Network
National Domestic Workers Alliance
Next Generation
Parent Voices
Raising California Together
San Diego County Taxpayers Association
The Center for Popular Democracy
TradesWomen Inc.
UC Berkeley Center on Reproductive Rights and Justice
UltraViolet
Western Center on Law and Poverty
Women's Foundation of California
OPPOSITION: (Verified8/12/16)
California State Association of Counties
California Tax Reform Association
ARGUMENTS IN SUPPORT: According to the author, "It is time
for California's tax code to reflect the fact that diapers are
an absolute health necessity for young children. By updating
our tax code to accurately identify diapers as a necessity of
life we can also make them more affordable. The high price of
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diapers has a cost for public health and our economy. Diaper
need puts families in the position of changing their children's
diapers less often which has unhealthy consequences ranging from
diaper rash to infections requiring medical treatment. It also
creates a barrier between parents and gainful employment when
families cannot afford the number of diapers required by
childcare providers."
ARGUMENTS IN OPPOSITION: Opponents argue that SUT exemptions
continue to erode the already shrinking local sales tax base.
Cities and counties continue to struggle financially, and SUT
exemptions only further exacerbate the issue.
ASSEMBLY FLOOR: 76-0, 1/28/16
AYES: Achadjian, Alejo, Travis Allen, Baker, Bigelow, Bloom,
Bonilla, Bonta, Brough, Brown, Burke, Calderon, Campos, Chang,
Chau, Chávez, Chiu, Chu, Cooley, Cooper, Dababneh, Dahle,
Daly, Dodd, Eggman, Frazier, Beth Gaines, Gallagher, Cristina
Garcia, Eduardo Garcia, Gatto, Gipson, Gomez, Gonzalez,
Gordon, Gray, Grove, Hadley, Harper, Roger Hernández, Holden,
Irwin, Jones, Kim, Lackey, Levine, Linder, Lopez, Low,
Maienschein, Mayes, McCarty, Medina, Melendez, Mullin,
Nazarian, O'Donnell, Olsen, Patterson, Quirk, Rendon,
Ridley-Thomas, Rodriguez, Salas, Santiago, Steinorth, Mark
Stone, Thurmond, Ting, Wagner, Waldron, Weber, Wilk, Williams,
Wood, Atkins
NO VOTE RECORDED: Jones-Sawyer, Mathis, Obernolte
Prepared by:Myriam Bouaziz / GOV. & F. / (916) 651-4119
8/15/16 20:01:56
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