BILL ANALYSIS �
SENATE GOVERNANCE & FINANCE COMMITTEE
Senator Lois Wolk, Chair
BILL NO: SB 1468 HEARING: 4/25/12
AUTHOR: Calderon FISCAL: Yes
VERSION: 4/18/12 TAX LEVY: No
CONSULTANT: Weinberger
FIREWORKS SALES REGULATION
Allows new retail licenses for selling fireworks during the
week before New Year's Day.
Background and Existing Law
The State Fireworks Law establishes a comprehensive scheme
for regulating the use, manufacture, wholesale, import,
export, and sale of all classes of fireworks.
The Law authorizes the State Fire Marshal to license
retailers to sell certified "safe and sane" fireworks from
June 28 to July 6 each year, unless otherwise prohibited by
local ordinance. Currently, 288 California communities
permit the sale and use of state-approved fireworks each
4th of July.
In anticipation of the millennial celebration, the
Legislature authorized the State Fire Marshal to issue a
one-time retail license to permit the sale of certified
fireworks from 9:00 on December 26, 1999, until midnight of
January 1, 2000 (AB 2090, Miller, 1998).
The State Fireworks Law authorizes the State Fire Marshal
to issue a wholesaler's license to allow the sale and
transportation of all types of fireworks to licensed
retailers, or retailers operating under a permit, licensed
public display operators, and other licensed wholesalers in
California.
The State Fire Marshal must establish and collect original
and annual renewal fees for fireworks licenses. The fees
cannot exceed the amount necessary to cover the Fire
Marshal's administrative and enforcement costs. The
original and annual renewal fee for a retail license is
$50. The fee for a wholesale license is $3000.
SB 1468 -- 4/18/12 -- Page 2
To increase fireworks sales and expand fundraising
opportunities, fireworks industry representatives and local
organizations that sell fireworks want the Legislature to
create a five-year pilot program to license fireworks sales
for the week before each New Year's Day.
Proposed Law
Senate Bill 1468 amends the state laws governing fireworks
sales to:
Require the State Fire Marshal to issue licenses
for the retail sale of fireworks from December 26
through January 1.
Allow local governments to impose permit fees on
licensed fireworks retailers.
Require the State Fire Marshal to issue wholesale
licenses for the sale of fireworks to retailers
licensed to sell fireworks during the December 26
through January 1 period.
Fund a fireworks data collection program using
wholesale license fee revenues.
I. Retail licenses . SB 1468 requires the State Fire
Marshal to issue separate one-time retail licenses
authorizing the retail sale of safe and sane fireworks
within California from 9 a.m. on December 26 to midnight of
January 1 of the following year. SB 1468 specifies that
the State Fire Marshal must issue the licenses each year
from 2013 to 2017.
A retail license issued for the December 26 through January
1 period is valid for only one seven-day period and expires
at the end of the period for which it is valid. The bill
requires all fireworks sold pursuant to the license to have
been certified as safe and sane by the State Fire Marshal
as of June of the year in which the license becomes valid.
The bill prohibits other licenses issued pursuant to
specified statutes from authorizing the sale of fireworks
during the December 26 through January 1 period.
SB 1468 prohibits the State Fire Marshal from issuing a
retail license for the December 26 through January 1
license period unless:
SB 1468 -- 4/18/12 -- Page 3
The charter city, city, county, fire district, or
city and county having jurisdiction over the fixed
location where the fireworks would be sold adopts an
ordinance or resolution allowing that sale, and
The application for that license is received by the
State Fire Marshal on or before December 15 of the
year in which the validity of the license is to
commence.
SB 1468 allows the ordinance or resolution authorizing the
sale of fireworks to limit the period during which the
fireworks can be used to specified days and hours within
the period during which fireworks can be sold.
II. Local permit fees . SB 1468 allows the governing body
of a charter city, city, county, fire district, or city and
county that adopts an ordinance or resolution authorizing
fireworks sales to adopt an ordinance or resolution
requiring each applicant receiving a permit to pay a fee to
the charter city, city, county, fire district, or city and
county. The amount of the fee is a pro rata portion of the
costs the local government incurs related to:
Processing and issuing permits.
Inspecting fireworks stands.
Public education and awareness campaigns regarding
the safe and responsible use of safe and sane
fireworks, and the dangers and risks posed by the use
of illegal fireworks.
Enforcing local code provisions related to the sale
and use of safe and sane fireworks, including extra
personnel time, and cleanup of the fireworks trash and
debris. The bill defines "extra personnel time" as
employee or contracted employee time that the local
government would not otherwise incur but for the sale
and use of safe and sane fireworks.
Fire operation and suppression efforts that are
directly related to safe and sane fireworks.
SB 1468 requires that the pro rata share of the costs must
be determined using gross sales as shown on each
permittee's sales and use tax return for the applicable
period. The bill prohibits the pro rata share of costs
from exceeding 7% of the gross sales of the fireworks sold
in the charter city, city, county, fire district, or city
and county during the applicable period.
SB 1468 -- 4/18/12 -- Page 4
III. Wholesale Licenses . SB 1468 requires the State Fire
Marshal to issue separate one-time annual New Year's Eve
wholesaler licenses to an entity already having an existing
standard wholesaler license authorizing a wholesale
distributor to sell safe and sane fireworks to an entity
holding a retailer's license for the December 26 through
January 1 period. The wholesale license fee must be paid
to the State Fire Marshall on or before September 1 of each
year. The bill provides that only a wholesaler who has
paid the wholesaler license fee and been issued a license
may sell fireworks to an entity holding a retail license
for the sale of safe and sane fireworks for the period
beginning 9 a.m. on December 26 to midnight of January 1 of
the following year. On or before August 1, 2012 and on or
before April 1 of each year thereafter, the State Fire
Marshal must, in consultation with the State Fire Marshal's
Fireworks Advisory Committee, which consists of
representatives from local fire and law enforcement
agencies and the fireworks industry, establish a wholesaler
license fee. In sum, the fee cannot exceed the amount
reasonably necessary for the fireworks data collection
activities of the state that benefit the recipients of a
wholesaler license.
SB 1468 requires the New Year's Eve wholesaler license
collected by the State Fire Marshal to be deposited in the
Fireworks Special Data Collection Fund, which the bill
establishes as a special fund in the State Treasury. SB
1468 continuously appropriates all money in the fund to the
State Fire Marshal for the study and the actual reasonable
costs incurred by the State Fire Marshal and the local
participating jurisdictions to develop, implement, analyze,
and report the enhanced fireworks special data collection
program. The bill also appropriates money from the fund
for reasonable administrative expenses incurred in the
collection of the license fees. Moneys in the fund cannot
be used for any other purpose.
SB 1468 allows the Fireworks Special Data Collection Fund
to receive funding from:
Voluntary contributions from the fireworks
industry.
Federal, state, or private grants.
SB 1468 provides that the sale of safe and sane fireworks
for the December 26 to January 1 period will only be
SB 1468 -- 4/18/12 -- Page 5
permitted if by September 15 of each year, the State Fire
Marshal, in consultation with the State Fireworks Advisory
Committee, determines that there are sufficient funds
within the Fireworks Special Data Collection Fund to cover
the actual and reasonable costs for that year associated
with the special data collection program.
III. Fireworks Data Collection . SB 1468 requires the
State Fire Marshal's Fireworks Advisory Committee, on or
before May 1, 2013, to review and approve a plan developed
by the fireworks industry to collect and analyze data
relating to the sale of fireworks and related fire, injury,
and disposal issues. The plan must contain a sample design
and selection method to accurately capture a data set to be
used for statistical analysis relating to fires, damages,
seizures, arrests, administrative citations, and fireworks
disposal issues caused by dangerous fireworks and safe and
sane fireworks for the period surrounding both the 4th of
July and New Year's Eve periods. SB 1468 requires the data
set to be verified by a university or other nationally
recognized independent survey design expert. The plan for
data collection must attempt to collect the requisite data
not only in the target communities, but also in those
communities immediately adjoining or contiguous to the
target communities.
SB 1468 contains legislative findings and declarations
related to the fireworks data collection program created by
the bill.
SB 1468's provisions remain in effect until January 2,
2018, when they will be automatically repealed, unless the
Legislature deletes or extends that sunset date.
State Revenue Impact
No estimate.
Comments
1. Purpose of the bill . Fourth of July fireworks sales
are a vital source of revenues for thousands of
community-based, non-profit organizations throughout
California. Many non-profits face fiscal challenges as a
SB 1468 -- 4/18/12 -- Page 6
result of the recent economic downturn, which has decreased
charitable giving and reduced government funding for
community-based organizations while increasing demand for
their services. By creating a 5-year pilot program to
allow the licensed sale of safe and sane fireworks during
the week leading up to New Year's Day, SB 1468 provides
struggling non-profit organizations with a much-needed
fundraising tool. The bill maintains local control by
allowing local government officials to "opt-in" to the New
Year's fireworks sales, and allows local governments to
impose permit fees that will pay for local enforcement,
education, fire operation, suppression, and training
activities. New Year's fireworks sales also may benefit
local communities by offering a safe alternative and
deterrent to the use of dangerous illegal fireworks that
often are used on New Year's Eve. By creating a dedicated
funding stream from wholesale license fees to pay for
reliable data gathering and analysis, SB 1468 offers
policymakers a valuable opportunity to monitor the pilot
program's effect on public health, safety, and the
environment.
2. Putting the cart before the horse . Some local public
safety officials argue that expanding fireworks sales will
harm the public by increasing fireworks-related injuries
and fires. Fireworks advocates and some public officials
disagree about how available research and data on injuries
and fires should be interpreted. SB 1468 responds to this
concern by proposing to collect reliable data on fires,
injuries, and disposal issues during the bill's 5-year
pilot program for New Year's fireworks sales. However, the
data collection is funded by revenues from expanded
fireworks sales during the week leading up to New Year's
Day. The Legislature may wish to consider whether it makes
sense to expand fireworks sales before collecting data and
conducting research to determine what risks, if any, are
associated with expanded fireworks sales. The Committee
may wish to consider amending SB 1468 to provide an
alternative funding source for data collection and research
efforts that would precede any expansion of licensed
fireworks sales.
3. Premature ? In her capacity as the Chair of the Joint
Legislative Committee on Emergency Management,
Assemblymember Bonnie Lowenthal recently organized
stakeholder working group meetings to discuss the full
SB 1468 -- 4/18/12 -- Page 7
spectrum of issues associated with fireworks sales, use,
and disposal in California. The working groups have just
begun to meet and discuss topics that include environmental
concerns related to fireworks disposal, funding options,
data collection, and enforcement issues. The additional
fireworks sales that SB 1468 would authorize would have
implications for many of the other issues being discussed
by the stakeholder working groups, including disposal,
safety, and enforcement. The Committee may wish to
consider whether legislators should wait to see the results
of Assemblymember Lowenthal's comprehensive review of the
state's fireworks policies before acting on SB 1468.
4. Proposition 26 . In the November 2010 election,
California voters approved Proposition 26, which amended
the California Constitution to expand the definitions of
taxes and tax increases that require approval by two-thirds
of the Legislature. Before Proposition 26 took effect, a
law that increased the amount of taxes
charged to some taxpayers but offered an equal (or larger)
reduction in taxes for other taxpayers could be approved by
a majority vote of the Legislature. Proposition 26
requires state laws that result in any taxpayer paying a
higher tax to be approved by two-thirds of each house of
the Legislature. Because Legislative Counsel says that SB
1468 will result in a taxpayer paying a higher tax, SB 1468
is subject to Proposition 26's two-thirds vote requirement.
5. Similar legislation . SB 1468 is not the first
legislative proposal to authorize licensed fireworks sales
during the week before New Year's Day.
AB 1295 (Bermudez, 2005), which would have allowed
New Year's fireworks sales and used fee revenues to
pay for disposal costs associated with seized
fireworks, died in the Assembly Appropriations
Committee.
AB 1371 (V. Manuel Perez, 2011), which would have
allowed New Year's fireworks sales and authorized
local governments to impose permit fees, died in the
Assembly Governmental Organization Committee.
6. Mandate . By creating a new crime, SB 1468 also creates
a new state-mandated program. But the bill disclaims the
state's responsibility for reimbursing local governments
for enforcing these new crimes. That's consistent with the
California Constitution, which says that the state does not
SB 1468 -- 4/18/12 -- Page 8
have to reimburse local governments for the costs of new
crimes (Article XIIIB, 6�a] �2]).
Support and Opposition (4/19/12)
Support : American Promotional Events, Inc. (TNT
Fireworks), approximately 160 individuals.
Opposition : Orange County Fire Authority.