BILL ANALYSIS Ó
AB 1396
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ASSEMBLY THIRD READING
AB
1396 (Bonta)
As Amended June 1, 2015
2/3 vote
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|Committee |Votes |Ayes |Noes |
| | | | |
| | | | |
|----------------+------+--------------------+----------------------|
|Health |13-5 |Bonta, Bonilla, |Maienschein, Chávez, |
| | |Burke, Chiu, Gomez, |Patterson, Steinorth, |
| | |Gonzalez, |Waldron |
| | | | |
| | | | |
| | |Roger Hernández, | |
| | |Lackey, Nazarian, | |
| | |Rodriguez, | |
| | |Santiago, Thurmond, | |
| | |Wood | |
| | | | |
|----------------+------+--------------------+----------------------|
|Appropriations |12-5 |Gomez, Bonta, |Bigelow, Chang, |
| | |Calderon, Daly, |Gallagher, Jones, |
| | |Eggman, |Wagner |
| | | | |
| | | | |
| | |Eduardo Garcia, | |
| | |Gordon, Holden, | |
| | |Quirk, Rendon, | |
| | |Weber, Wood | |
AB 1396
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| | | | |
| | | | |
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SUMMARY: Allocates the revenues generated by SB 591 (Pan) of the
current legislative session, the California Tobacco Tax Act of
2015 (Tobacco Tax Act), to various state funds, as specified.
Makes the enactment of this bill contingent upon enactment of SB
591. Specifically, this bill:
1)Requires the Board of Equalization (BOE) to:
a) Calculate the adverse impact the tax proposed by SB 591
has on the revenues collected by existing tobacco taxes and
their specific purpose; and,
b) Determine the fiscal effect that any resulting decrease in
tobacco consumption has on the Cigarette and Tobacco Products
Surtax Fund, the Breast Cancer Fund, the California Children
and Families Trust Fund, and the General Fund (GF) and then
transfer revenues to offset the revenue decrease directly
resulting from imposition of additional taxes.
2)Creates the California Tobacco Tax Act Fund as a trust fund,
established solely to carry out the purposes set forth in this
bill.
3)Requires the state Controller to allocate the moneys remaining
to the following accounts and purposes, subject to review and
appropriation by the Legislature:
a) The Tobacco Prevention and Education Account to be used in
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specified percentages as follows:
i) Eighty percent to the Department of Public Health
(DPH);
ii) Ten percent to the Department of Education; and,
iii) Ten percent to the University of California (UC).
b) The Tobacco Disease Related Health Care Account to be used
by the Department of Health Care Services to improve existing
programs to provide quality and access to health care
programs for families and children; and,
c) The Tobacco Law Enforcement Account to be used by BOE,
DPH, and the Department of Justice for enforcing laws that
regulate the distribution and sale of cigarettes and other
tobacco products, including laws that prohibit cigarette
smuggling, counterfeiting, selling untaxed tobacco, selling
tobacco without a proper license, and selling tobacco to
minors, and enforcing tobacco-related laws, court judgments,
and settlements.
4)Limits administrative costs to no more than 5% of the funds
received from the Tobacco Tax Act Fund by any department.
5)Requires agencies receiving funds, except the BOE, to publish
annually on their respective Internet Web sites an accounting of
moneys received from the Tobacco Tax Act and how the moneys were
spent.
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FISCAL EFFECT: As coupled with SB 591, which raises tobacco tax
revenues by imposing the new tax, this bill would allocate over $1
billion to various funds defined in this bill. The funds would be
subject to appropriation by the Legislature.
COMMENTS: According to the author, this bill will ensure that
tobacco tax revenues generated by SB 591 are used to provide
efficiency, economy, and quality of care to all patients
regardless of economic circumstance. The author states the
revenue allocations in this bill would provide critical stability
to health care provider networks and ensure access to healthcare
services for people receiving services in the Medi-Cal program.
The author estimates $1.5 billion to be raised will help the
states cope with the dramatic expansion of enrollment in
California's Medi-Cal program, according to the author, in
particular helping to increase Medi-Cal rates.
According to supporters, this bill, together with SB 591, will
prevent kids from smoking, improve access to health care services,
fund prevention and education efforts, and help tobacco users
quit. Tobacco related diseases are the leading cause of
preventable death in California, claiming more than 40,000 lives
each year and costing the state of California over $13 billion in
healthcare costs annually. Over $3.5 billion are taxpayer dollars
used to treat Medi-Cal patients with tobacco-related illnesses.
The best way to offset these costs and protect millions of
California residents is through investment in the California
Tobacco Control Program, which has successfully reduced smoking
rates and cigarette consumption in our state. This program, since
its inception in 1989, has saved the state of California $139
billion dollars. This bill would generate over $151 billion in
revenues that will be used to fund proven and effective tobacco
prevention and cessation programs, as well as improved access to
health care for low-income families.
According to opponents, this bill will accelerate the decline of
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tobacco tax revenues received by the state and will place more
pressure on the GF to support existing programs. Opponents are
also concerned that the tax increase proposed by SB 591 increase
the amount of tobacco products sold on the black market, creating
a higher cost for law enforcement. Opponents further argue that a
tax will negatively impact the tobacco industry, including the
employees who work for tobacco companies.
Analysis Prepared by:
Rylan Gervase / HEALTH / (916) 319-2097 FN:
0000840