BILL NUMBER: AB 478 CHAPTERED 10/01/93 BILL TEXT CHAPTER 660 FILED WITH SECRETARY OF STATE OCTOBER 1, 1993 APPROVED BY GOVERNOR OCTOBER 1, 1993 PASSED THE SENATE SEPTEMBER 9, 1993 PASSED THE ASSEMBLY JUNE 14, 1993 AMENDED IN ASSEMBLY MAY 12, 1993 INTRODUCED BY Assembly Member Barbara Friedman (Principal coauthor: Assembly Member Statham) (Coauthors: Assembly Members Alpert, Bornstein, Caldera, Eastin, Terry Friedman, Hannigan, Katz, Klehs, Margolin, Martinez, and Speier) (Coauthors: Senators Hughes, McCorquodale, Morgan, Rosenthal, and Watson) FEBRUARY 15, 1993 An act to amend Sections 30101 and 30461 of, to add Section 30461.6 to, and to add and repeal Article 3 (commencing with Section 30131) of 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 478, B. Friedman. Cigarette tax increase: Breast Cancer Act of 1993. The existing Cigarette and Tobacco Products Tax Law imposes a tax at a rate of 5 mills on every distributor for the distribution of each cigarette and also imposes a cigarette and tobacco products surtax at a rate of 121/2 mills per cigarette and at a rate for tobacco products equivalent to 171/2 mills per cigarette. This bill would increase the tax on cigarettes by one mill per cigarette or 2 per package of 20 cigarettes for distributions on and after January 1, 1994. It would also impose compensating floor stocks and indicia adjustment taxes on cigarettes on the operative date of this bill and would make other related technical changes. i Existing law creates the Cigarette Tax Fund and the Cigarette and Tobacco Products Surtax Fund into which the proceeds of cigarette and tobacco products taxes are deposited and are appropriated, or may only be appropriated, for certain purposes. This bill would provide that the revenue resulting from the bill's increase in cigarette taxes and the imposition of compensatory floor stock taxes on cigarettes shall be deposited in the Breast Cancer Fund, which the bill would create. This bill would provide that the moneys in that fund shall, upon appropriation by the Legislature, be allocated to the State Board of Equalization for reimbursement of all costs incurred in connection with the compensating floor stocks and indicia adjustment taxes and the balance shall be allocated for purposes of breast cancer research, detection services, and education, as provided. This bill would make certain legislative findings and declarations regarding breast cancer. This bill would take effect immediately as a tax levy, but it would not become operative until January 1, 1994. THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS: SECTION 1. The Legislature finds and declares as follows: (a) Breast cancer is a significant threat to the health of women. Breast cancer is the most common form of cancer in women, and causes the death of a woman in the United States every 12 minutes. (b) The incidence of breast cancer continues to increase at a dramatic rate. During the past decade, the incidence has increased by 30 percent. In 1960, one woman in 20 developed breast cancer over the course of her lifetime. By 1992, the probability had increased to one woman in eight. At the current rate of increase, in the year 2000, one woman in six will develop breast cancer over the course of her lifetime. (c) Breast cancer exacts an enormous economic toll on our society, including over two billion dollars ($2,000,000,000) in direct medical costs, and over eight billion dollars ($8,000,000,000) in both direct medical and indirect costs. (d) Medical experts still do not know the cause of breast cancer, or how to prevent breast cancer. (e) Without access to health care and early detection services, the 2.7 million women in California without health care insurance face an unacceptable risk of discovering that they suffer from breast cancer only after the malignancy has reached an advanced and deadly stage. (f) The State of California must take the lead in combating the increasingly rapid spread of breast cancer and the current lack of knowledge with respect to breast cancer's cause and cure, and effective methods of prevention. (g) This act shall be known and may be cited as the Breast Cancer Act of 1993. It is the intent of the Legislature in enacting this act to fund essential research and services with respect to the cause, cure, detection, and prevention of breast cancer, and breast cancer education. SEC. 2. Section 30101 of the Revenue and Taxation Code is amended to read: 30101. Every distributor shall pay a tax upon his or her distributions of cigarettes at the rate of one and one-half mills ($0.0015) for the distribution after 4 o'clock a.m. on July 1, 1959, of each cigarette until 12:01 o'clock a.m. on August 1, 1967, at the rate of three and one-half mills ($0.0035) for the distribution of each cigarette on and after August 1, 1967, until 12:01 o'clock a.m. on October 1, 1967, at the rate of five mills ($0.005) on and after 12:01 o'clock a.m. on October 1, 1967, until 12:01 a.m. on January 1, 1994, and at the rate of six mills ($0.006) on and after 12:01 a.m. on January 1, 1994. SEC. 3. Article 3 (commencing with Section 30131) is added to Chapter 2 of Part 13 of Division 2 of the Revenue and Taxation Code, to read: Article 3. Floor Stocks and Indicia Adjustment Taxes 30131. For the privilege of holding or storing cigarettes for sale, use, or consumption, a floor tax is hereby imposed upon every dealer and every wholesaler at the rate of one mill ($0.001) for each cigarette in his or her possession or under his or her control in this state at 12:01 a.m. on January 1, 1994. 30131.1. Every dealer and every wholesaler shall take an inventory as of 12:01 a.m. on January 1, 1994, of all cigarettes in his or her possession or under his or her control. He or she shall file a report with the board on or before February 25, 1994, in a form which the board may prescribe, showing the number of cigarettes in his or her possession or under his or her control at 12:01 a.m. on January 1, 1994. The amount of tax required to be paid on the cigarettes shall be computed and shown on the dealer's or wholesaler's return. 30131.2. For the privilege of distributing cigarettes as a licensed distributor and for holding or storing cigarettes for sale, use, or consumption, a floor tax and cigarette indicia adjustment tax is hereby imposed upon every licensed distributor as follows: (a) In the amount of two and one-half cents ($0.025) for each California cigarette tax stamp or meter impression bearing the designation "25," in the amount of two cents ($0.02) for each California cigarette tax stamp or meter impression bearing the designation "20," and in the amount of one cent ($0.01) for each California cigarette tax stamp bearing the designation "10" which is affixed to any package of cigarettes in the possession of the licensed distributor or under his or her control at 12:01 a.m. on January 1, 1994. (b) In the amount of two and one-half cents ($0.025) for each unaffixed California cigarette tax stamp bearing the designation "25," two cents ($0.02) for each unaffixed California cigarette tax stamp bearing the designation "20," and one cent ($0.01) for each unaffixed California cigarette tax stamp bearing the designation "10" and twenty cents ($0.20) for each unused meter register unit, in the possession of the licensed distributor or under his or her control at 12:01 a.m. on January 1, 1994. 30131.3. (a) Every licensed distributor shall take an inventory as of 12:01 a.m. on January 1, 1994, of all packages of cigarettes to which are affixed California cigarette tax stamps or meter impressions and all unaffixed California cigarette tax stamps and unused meter register units in his or her possession or under his or her control. Every licensed distributor shall file a report with the board on or before February 25, 1994, in a form which the board may prescribe, showing: (1) The number of California cigarette tax stamps and meter impressions, with the designations thereof, which were affixed to packages of cigarettes in his or her possession or under his or her control at 12:01 a.m. on January 1, 1994. (2) The number of unaffixed California cigarette tax stamps, with the designations thereof, and unused meter register units which were in his or her possession or under his or her control at 12:01 a.m. on January 1, 1994. (b) The amount of tax required to be paid with respect to the stamps, meter impressions, and meter register units shall be computed and shown on the distributor's return. 30131.4. The taxes required to be paid by this article are due and payable on or before February 25, 1994. Payments shall be made by remittances payable to the board and the payments shall accompany the reports required to be filed by this article. Any amount required to be paid by this article which is not timely paid shall bear interest at the rate and by the method established pursuant to Section 30202 from February 25, 1994, until paid, and shall be subject to determination, and redetermination, and any penalties provided with respect to determinations and redeterminations. 30131.5. This article shall remain in effect only until January 1, 1997, and as of that date is repealed. SEC. 4. Section 30461 of the Revenue and Taxation Code is amended to read: 30461. All amounts required to be paid to the state under this part shall be paid to the board in the form of remittances payable to the State Board of Equalization. Except as provided in Section 30461.6, the board shall transmit the payments to the Treasurer to be deposited in the State Treasury to the credit of the Cigarette Tax Fund, which is hereby created. SEC. 5. Section 30461.6 is added to the Revenue and Taxation Code, to read: 30461.6. Notwithstanding Section 30461, the board shall transmit the revenue derived from the increase in the cigarette tax rate of one mill ($0.001) per cigarette imposed by Section 30101 on and after January 1, 1994, and from the taxes imposed pursuant to Article 3 (commencing with Section 30131) of Chapter 2, to the Treasurer to be deposited in the State Treasury to the credit of the Breast Cancer Fund, which fund is hereby created. The moneys in the fund shall, upon appropriation by the Legislature, be allocated to the board for reimbursement of all costs incurred in connection with the collection of the taxes imposed pursuant to Article 3 (commencing with Section 30131) of Chapter 2 and the balance shall be allocated as follows: (a) Forty-five percent to be allocated for research with respect to the cause, cure, and prevention of breast cancer, as follows: (1) Forty percent to the University of California's scientific advisory committee established pursuant to Article 8.7 (commencing with Section 424.10) of Chapter 2 of Part 1 of Division 1 of the Health and Safety Code, for the awarding of grants to researchers for research with respect to the cause, cure, prevention, and early detection of breast cancer and with respect to the cultural barriers to accessing the health care system for early detection and treatment of breast cancer, based on the merits of specific proposals and specific research priorities established by a panel of experts convened by the committee. The panel of experts shall consist of researchers from public and private institutions, and representatives from voluntary, nonprofit health organizations, health care professional organizations, breast cancer survivor groups, and breast cancer-related advocacy groups. It is the intent of the Legislature that the membership of the panel broadly reflect the ethnic, racial, cultural, economic, and geographic diversity and gender balance of the state. The panel of experts shall be convened and shall establish specific research priorities prior to the scientific advisory committee issuing a Request For Proposals (RFP) with respect to research grants, and may be reconvened by the scientific advisory committee as necessary. (2) Five percent to the Cancer Surveillance Section of the State Department of Health Services for the collection of breast cancer-related data and the conduct of breast cancer related epidemiological research by the state cancer registry established pursuant to Section 211.3 of the Health and Safety Code. (b) Forty-five percent to be allocated to the breast and cervical cancer control program undertaken by the state pursuant to Public Law 101-354 for the provision of early breast cancer detection services for uninsured and underinsured women. Those services shall include all of the following: (1) Mammography screening of women for breast cancer as an early detection health care measure. (2) Medical referral of screened women for definitive diagnosis, including sonograms or biopsy, and, to the extent practical, followup services for those women. If followup services cannot be provided, then assistance shall be provided to help the person obtain necessary followup services. (3) Educational and training programs for health care professionals, including allied health care professionals, to improve the detection and control of breast cancer, and communication with breast cancer patients after diagnosis. (4) Outreach to groups with high proportions of uninsured women. (c) Ten percent to be allocated to the State Department of Health Services for a campaign to increase awareness and provide education with respect to breast cancer, including steps to ensure early detection. In developing this campaign, the department shall consult with an advisory panel appointed by the State Director of Health Services and consisting of breast cancer researchers, and representatives from voluntary, nonprofit health organizations, health care professional organizations, breast cancer survivor groups, and breast cancer-related advocacy groups. It is the intent of the Legislature that the membership of the panel broadly reflect the ethnic, racial, cultural, economic, and geographic diversity and gender balance of the state. SEC. 6. This act provides for a tax levy within the meaning of Article IV of the Constitution and shall go into immediate effect. However, the provisions of this act shall become operative on January 1, 1994.