BILL ANALYSIS Ó
AB 2709
Page 1
Date of Hearing: May 4, 2016
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Lorena Gonzalez, Chair
AB
2709 (Quirk) - As Amended April 14, 2016
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Urgency: No State Mandated Local Program: YesReimbursable:
No
SUMMARY:
This bill, beginning January 1, 2018, prohibits selling,
distributing or releasing balloons made of or attached to
electrically conductive material, unless the balloons are not
designed to be buoyant in ambient air when filled with any air.
Specifically, this bill:
1)Sunsets existing provisions of law regarding electrically
conductive balloon sales, distribution and release on January
1, 2018, unless a later enacted statute, that is enacted
before January 1, 2018, deletes or extends that date.
2)Prohibits selling or distributing, or releasing balloons made
AB 2709
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of, or attached to, electrically conductive material;
violations are punished as follows:
a) A first offense is as an infraction punishable by a fine
of up to $250; and
b) A second and subsequent offense is punishable as a
misdemeanor.
3)Prohibits releasing balloons made of, or attached to,
electrically conductive material, violations are treated as
infractions with a fine of up to $250.
3)Exempts manned hot air balloons, or balloons used in
governmental or scientific research projects.
FISCAL EFFECT:
1)Annual sales tax revenue loss in the $6 - 7.5 million range,
$3.2- 3.9 million would be to the GF. This assumes a net
sales drop in the $80 - 100 million range; because a portion
of the $150 million in sales (60 million balloons times
average price of $2.50) is not replaced with other products,
such as flowers or toys. Since the current alternative
accounts for approximately one percent of balloon sales, the
revenue impact could be absorbed in the range estimated.
2)Additional penalty assessment funds revenues. The amounts of
penalty assessments are spelled out in statute, and they are
related to the base fine. Assuming a defendant is fined $100
under the Penal Code, approximately $310 in penalty
assessments is imposed pursuant to the Government and Penal
codes.
AB 2709
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COMMENTS:
1)Background/Purpose. Since 2011, there have been over 6,500
power outages in California caused by balloons made of, or
attached to, electrically conductive material. These metallic
balloons, or metallic balloon strings, are one of two primary
types of balloons available for regular consumers. One type
are typically constructed of Mylar nylon and coated with a
metallic finish. When these electrically conductive metallic
balloons come into contact with electrical lines, they can
cause a bridge, which often results in a power outage. If
these balloons are not weighted and they are released, they
can travel for many miles and end up tangling in power lines
far away from where they were released. In an average year,
PG&E will have 300 outages caused by metallic balloons
-affecting nearly 165,000 homes.
According to the author, repair to damaged equipment can cost
thousands of dollars; and the loss of power due to these
balloons represents a significant cost to our economy, on the
order of tens of millions of dollars. Power outages caused by
metallic balloons can be prevented by prohibiting electrically
conductive balloons from being sold in California, and phasing
into currently available alternatives.
Support. According to Pacific Gas and Electric Company, "PG&E
takes our responsibility to provide safe, reliable and
affordable electric delivery services to our customers
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seriously. Mylar balloon-related outages are a public safety
issue and can impact both our residential and non-residential
customers. Our non-residential customers include public
safety providers, businesses, schools, hospitals and military
facilities. PG&E supports AB 2709 in an effort to reduce
outages and avoid the unnecessary adverse impacts that follow
electric system outages."
2)Opposition. According to the California Teamsters Public
Affairs Council, "Our members are employed by four of the
largest suppliers of helium gas in California, whose use in
balloons constitutes approximately 20% of the sales of helium
in this state. Each balloon contains 30-40 cents of helium and
about 60 million foil balloons are sold in this state
annually. As such, the bill would eliminate the sales of
$15-$20 million in sales by our employers and would,
therefore, be harmful to our members' jobs.
"There is only one alternative to foil balloons. This is a
plastic balloon material that is held under patent by a
Japanese company. As such, this bill would create a state
mandated monopoly for one company. Plastic balloons are
already nearly twice the price of foil balloons.
3)Prior Legislation: SB 1499 (Scott), of the 2007-2008
Legislative Session, would have increased the fine for a
violation of those provisions punished as an infraction. The
bill would have further specified the type of weight that must
be attached to the balloon and the specifications for the
required warning, and would have required that the consumer be
provided a separate warning notice, as specified. The bill
would also have prohibited a manufacturer or distributor from
sending or shipping these types of balloons to retailers
without the shipment containing a notice describing the
retailer's responsibilities. SB 1499 was vetoed by the
Governor Schwarzenegger. At the time, the Governor vetoed
many bills because the budget was late.
AB 2709
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Analysis Prepared by:Pedro Reyes / APPR. / (916)
319-2081