BILL ANALYSIS                                                                                                                                                                                                    Ó






           ----------------------------------------------------------------- 
          |SENATE RULES COMMITTEE            |                       AB 1561|
          |Office of Senate Floor Analyses   |                              |
          |(916) 651-1520    Fax: (916)      |                              |
          |327-4478                          |                              |
           ----------------------------------------------------------------- 


                                   THIRD READING 


          Bill No:  AB 1561
          Author:   Cristina Garcia (D) and Chang (R), et al.
          Amended:  8/15/16 in Senate
          Vote:     21 

           SENATE GOVERNANCE & FIN. COMMITTEE:  5-0, 6/22/16
           AYES:  Hertzberg, Nguyen, Beall, Hernandez, Pavley
           NO VOTE RECORDED:  Lara, Moorlach

           SENATE APPROPRIATIONS COMMITTEE:  7-0, 8/11/16
           AYES:  Lara, Bates, Beall, Hill, McGuire, Mendoza, Nielsen

           ASSEMBLY FLOOR:  78-0, 6/2/16 - See last page for vote

           SUBJECT:   Sales and use taxes:  exemption:  sanitary napkins:   
                     tampons:  menstrual sponges and menstrual cups


          SOURCE:    Author

          DIGEST:   This bill establishes a temporary sales and use tax  
          (SUT) exemption for tampons, sanitary napkins, menstrual cups,  
          and menstrual sponges.  


          ANALYSIS:  


          Existing law:


          1)Imposes a SUT on the sale, storage, or use of tangible  
            personal property unless exempted by state law.  








                                                                    AB 1561  
                                                                    Page  2




          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 tampons, sanitary  
            napkins, menstrual sponges, and menstrual cups.   


          2)Provides that the state shall not reimburse any local agency  
            for SUT revenues lost as a result of this exemption.


          3)Provides that the bill shall remain in effect until January 1,  
            2022.


          Background


          Current state provides sales and use exemptions for goods that  
          are considered "necessities of life."  The exemption includes  
          most food items, prescription medication, and gas, electricity  
          and water utilities sold to consumers through mains, lines, and  
          pipes.  Tampons, sanitary napkins, menstrual cups, and menstrual  
          sponges are medical necessities for women's health, but are  
          subject to sales and use tax.  The author of this bill argues  
          that other health related necessities of life are exempt from  
          SUT, and as a necessity of life for women, tampons, sanitary  
          napkins, menstrual sponges, and menstrual cups should also be  
          exempt from sales and use tax.









                                                                    AB 1561  
                                                                    Page  3




          FISCAL EFFECT:   Appropriation:    No          Fiscal  
          Com.:YesLocal:   No


          According to the Senate Appropriations Committee:




           The Board of Equalization (BOE) indicates that this bill would  
            result in a 2016-17 state and local revenue loss of $20  
            million, $10 million of which would be General Fund. 




           The BOE would incur absorbable implementation costs.




          SUPPORT:   (Verified8/12/16)


           Act for Women and Girls
           American Academy of Pediatrics
           Asian Pacific Islander American Public Affairs Association
           Bayer
           Black Women for Wellness
           California Asian Pacific Chamber of Commerce
           California Grocers Association
           California Latinas for Reproductive Justice
           California Primary Care Association
           California Retailers Association
           California State Board of Equalization
           California Women's Law Center
           California Young Democrats
           City of Glendale
           City of West Hollywood
           Community Action Fund of Planned Parenthood of Orange and San  
            Bernardino Counties
           Conscious Period







                                                                    AB 1561  
                                                                    Page  4


           Equal Rights Advocates
           Forward Together
           Hispanics Organized for Political Equality
           Junior League of Long Beach
           Junior Leagues of California State Public Affairs Committee
           NARAL Pro-Choice California
           National Association of Social Workers-California Chapter
           National Center for Youth Law
           National Council of Jewish Women
           Physicians for Reproductive Health
           Planned Parenthood Action Fund of Orange and San Bernardino  
            Counties
           Planned Parenthood Action Fund of Santa Barbara, Ventura, and  
            San Luis Obispo Counties
           Planned Parenthood Action Fund of the Pacific Southwest
           Planned Parenthood Advocacy Project Los Angeles County
           Planned Parenthood Advocates Pasadena and San Gabriel Valley
           Planned Parenthood Affiliates of California
           Planned Parenthood Mar Monte
           Planned Parenthood Northern California Action Fund
           State Board of Equalization Member Fiona Ma
           State Board of Equalization Member George Runner
           Target
           Unite for Reproductive and Gender Equity
           Walmart
           Women Lawyers of Sacramento


          OPPOSITION:   (Verified8/12/16)


          California State Association of Counties
          League of California Cities


          ARGUMENTS IN SUPPORT:     According to the author, "AB 1561 is a  
          bipartisan effort to make menstrual products exempt from the  
          sales and use tax at both the state and local level.  California  
          women pay over 20 million dollars annually for taxing tampons  
          and sanitary napkins, which are essential health items for  
          women.  As a state we should not be taxing women for being born  
          women.  The tax is especially unjust for women who are  
          low-income or homeless who struggle to pay for these basic  
          necessities each month for the majority of their adult life.   







                                                                    AB 1561  
                                                                    Page  5


          Menstrual products need to be more accessible and eliminating  
          the tax on tampons and sanitary napkins is an important first  
          step in making them more affordable.  California's tax code  
          exempts health items like walkers, medical identification tags,  
          and prescription medication, including Viagra. Tampons and  
          sanitary napkins are not exempt even though women do not have  
          the choice to ignore their periods and are far from being  
          luxuries items.  When these items are labeled as "feminine  
          hygiene" products, it makes people forget that the FDA regulates  
          both products as medical devices.  There is no equivalent health  
          product that is used only by one gender on a monthly basis for  
          40 years of life.  Across the world, countries as well as select  
          states in the US are organizing to repeal the sales tax on  
          feminine hygiene products.  California should continue to be a  
          leader by addressing the gender inequality in our tax code and  
          exempt menstrual products."  


          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:  78-0, 6/2/16
          AYES:  Achadjian, Alejo, Travis Allen, Arambula, Atkins, 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, Cristina Garcia, Eduardo Garcia, Gatto, Gipson, Gomez,  
            Gonzalez, Gordon, Gray, Grove, Hadley, Harper, Roger  
            Hernández, Holden, Irwin, Jones, Jones-Sawyer, Kim, Lackey,  
            Levine, Linder, Lopez, Low, Maienschein, Mathis, Mayes,  
            McCarty, Medina, Melendez, Mullin, Nazarian, O'Donnell, Olsen,  
            Patterson, Quirk, Ridley-Thomas, Rodriguez, Salas, Santiago,  
            Steinorth, Mark Stone, Thurmond, Ting, Wagner, Waldron, Weber,  
            Wilk, Williams, Wood, Rendon
          NO VOTE RECORDED:  Gallagher, Obernolte

          Prepared by:Myriam Bouaziz / GOV. & F. / (916) 651-4119
          8/15/16 20:10:05


                                   ****  END  ****







                                                                    AB 1561  
                                                                    Page  6