Amended in Assembly June 12, 2014

Senate Bill No. 866

Introduced by Committee on Budget and Fiscal Review

January 9, 2014

begin delete An act relating to the Budget Act of 2014. end delete begin insert An act to amend Sections 12722 and 12728 of, and to add Section 12559 to, the Health and Safety Code, relating to fireworks, and declaring the urgency thereof, to take effect immediately. end insert

LEGISLATIVE COUNSEL’S DIGEST

SB 866, as amended, Committee on Budget and Fiscal Review. begin delete Budget Act of 2014. end delete begin insert Fireworks: tax on distribution. end insert

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Existing law authorizes the annual retail sale of safe and sane fireworks from June 28 to July 6, inclusive, pursuant to a license issued by the State Fire Marshal, unless otherwise prohibited or regulated by law or ordinance. Existing law authorizes various entities, including the State Fire Marshal, to seize certain prohibited fireworks. Existing law requires an authority that seizes fireworks to notify the State Fire Marshal of the seizure and to provide specified information. Existing law requires the State Fire Marshal to dispose of the seized fireworks and requires dangerous fireworks to be disposed of according to specified procedures. Existing law establishes the State Fire Marshal Fireworks Enforcement and Disposal Fund (fund) in the State Treasury. Existing law requires moneys in the fund to be used by the State Fire Marshal for various purposes, including for the education of public safety agencies in the proper handling and management of dangerous fireworks and to further assist in public safety and education efforts within the general public as well as public safety agencies on the proper and responsible use of safe and sane fireworks. Existing law makes a violation of the law and regulations relating to fireworks a crime.

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This bill would require the moneys in the fund to be used for the training of public safety agencies in the proper handling and management of dangerous fireworks and to further assist in public safety efforts within the general public as well as public safety agencies on the proper and responsible use, seizure, and storage of safe and sane fireworks. The bill would also authorize moneys in the fund to be used for the disposal of any seized fireworks and any infrastructure requirements necessary for the disposal of fireworks as well as used for the administration of the fund by the Office of the State Fire Marshal or its contracted designee.

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This bill would require, commencing January 1, 2015, a distributor, as defined, to pay a tax upon distribution, as defined, of safe and sane fireworks, as provided. The bill would require the revenue from the tax to be deposited into the fund to be used for the purposes described above. The bill would authorize the State Fire Marshal to adjust the tax rate if the revenue in the fund is not estimated to cover expenses. The bill would specifically exclude a violation of these provisions from being a crime. The bill would also authorize the seizure of safe and sane fireworks distributed in this state by an unlicensed distributor for which the required tax has not been paid.

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This bill would declare that it is to take effect immediately as an urgency statute.

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This bill would express the intent of the Legislature to enact statutory changes relating to the Budget Act of 2014.

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Vote:  begin delete majority end delete begin insert ²⁄₃ end insert . Appropriation: no. Fiscal committee:  begin delete no end delete begin insert yes end insert . State-mandated local program: no.

The people of the State of California do enact as follows:

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begin insert SECTION 1. end insert   

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begin insert Section 12559 is added to the end insert begin insert Health and Safety
Code end insert begin insert , to read: end insert

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begin insert 12559. end insert   

(a) Commencing January 1, 2015, a distributor shall
pay a tax upon his or her distribution of safe and sane fireworks
at the rate of ten cents ($0.10) per pound of the total weight of the
fireworks, including any packaging, unless adjusted by the State
Fire Marshal pursuant to subdivision (c).

(b) (1) Funds received by the State Fire Marshal or its designee
pursuant to this section shall be deposited into the State Fire
Marshal Fireworks Enforcement and Disposal Fund established
pursuant to Section 12728.

(2) Funds received pursuant to this section shall only be used,
upon appropriation by the Legislature, for the purposes listed in
Section 12728.

(c) The State Fire Marshal may adjust the rate specified in
subdivision (a), not to exceed twenty cents ($0.20) per pound, at
a public meeting to be held in January of each year in order to
provide sufficient revenues to pay for the estimated expenses
described in Section 12728.

(d) The State Fire Marshal may contract with another public
agency to administer this section.

(e) The State Fire Marshal is authorized to adopt emergency
regulations necessary to implement this section during the 2014-15
fiscal year in accordance with the rulemaking provisions of the
Administrative Procedure Act (Chapter 3.5 (commencing with
Section 11340) of Part 1 of Division 3 of Title 2 of the Government
Code). The adoption of emergency regulations shall be deemed
an emergency and necessary for the immediate preservation of
the public peace, health, and safety, or general welfare.

(f) The State Fire Marshal may, by regulation, establish the
period for reporting of information, returns, billings, and payment
of taxes due pursuant to this section.

(g) A violation of this section, or any regulation adopted
pursuant to this section, does not constitute a crime for purposes
of Section 12700.

(h) For purposes of this section, the following terms have the
following meanings:

(1) (A) “Distribution” means either or both of the following:

(i) The sale of previously untaxed safe and sane fireworks in
this state.

(ii) The use or consumption of previously untaxed safe and sane
fireworks in this state. For purposes of this clause, “use or
consumption” includes the exercise of a right or power over safe
and sane fireworks incident to the ownership of those fireworks,
other than the sale of the safe and sane fireworks or the keeping
or retention of those fireworks by a licensee pursuant to Section
12571, 12572, or 12573.

(B) For purposes of this paragraph, “previously untaxed safe
and sane fireworks” means fireworks that have not yet been
distributed in a manner as to result in a tax liability under this
section.

(2) “Distributor” means either of the following:

(A) A person who holds a license issued by the State Fire
Marshal pursuant to Section 12571, 12572, or 12573.

(B) A person who does not hold a license described in
subparagraph (A) and who, after the effective date of this section,
distributes, as that term is described in paragraph (1), safe and
sane fireworks in this state.

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begin insert SEC. 2. end insert   

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begin insert Section 12722 of the end insert begin insert Health and Safety Code end insert begin insert is
amended to read: end insert

12722.  

The following fireworks may be seized pursuant to
Section 12721:

(a) Those fireworks begin delete which end delete begin insert that end insert are sold, offered for sale,
possessed, stored, used, or transported within this state prior to
having been examined, classified, and registered by the State Fire
Marshal, except those specific items designated as samples pending
examination, classification, and registration by the State Fire
Marshal where the licensee provides documentary evidence that
such action by the State Fire Marshal is pending.

(b) All imported fireworks possessed without benefit of the
filing of notices as required by this part.

(c) Safe and sane fireworks stored in violation of the conditions
required by the permit as provided in this part.

(d) Safe and sane fireworks sold or offered for sale at retail
begin delete which end delete begin insert that end insert do not bear the State Fire Marshal label of registration
and firing instructions.

(e) Safe and sane fireworks sold or offered for sale at retail
begin delete which end delete begin insert that end insert are in unsealed packages or containers begin delete which end delete begin insert that end insert do
not bear the State Fire Marshal label of registration and firing
instructions.

(f) Safe and sane fireworks sold or offered for sale at retail
before 12 noon on the 28th day of June or after 12 noon on the
sixth day of July of each year.

(g) Each safe and sane fireworks item sold or offered for sale
at retail begin delete which end delete begin insert that end insert does not have its fuse or other igniting device
protected by a cap approved by the State Fire Marshal, or groups
of fireworks with exposed fuses begin delete which end delete begin insert that end insert are not enclosed in
sealed packages begin delete which end delete begin insert that end insert bear the State Fire Marshal label of
registration. The State Fire Marshal shall approve begin delete such end delete begin insert the end insert caps
as he begin insert or she end insert determines provide reasonable protection from
unintentional ignition of the fireworks.

(h) Dangerous fireworks, including fireworks kits, used,
possessed, stored, manufactured, or transported by begin delete any end delete begin insert a end insert person
who does not possess a valid permit authorizing begin delete any end delete begin insert an end insert activity
listed in this part.

(i)  begin delete Any fireworks end delete begin insert Fireworks end insert stored or sold in begin delete any end delete begin insert a end insert public
garage or public oil station, or on begin delete any end delete begin insert a end insert premises where gasoline
or begin delete any end delete other class 1 flammable liquids are stored or dispensed.

(j)  begin delete Any fireworks end delete begin insert Fireworks end insert still possessed by a person who
has just thrown begin delete any end delete ignited fireworks at begin delete any end delete begin insert a end insert person or group of
persons.

(k)  begin delete Any model end delete begin insert Model end insert rocket engines or model rockets with
engines possessed by begin delete any end delete begin insert a end insert person begin insert who does end insert not begin delete holding end delete begin insert hold end insert a
valid permit.

(l)  begin delete Any end delete begin insert An end insert emergency signaling device sold, offered for sale,
or used begin delete which end delete begin insert that end insert does not bear the State Fire Marshal label of
registration as required by this part.

(m)  begin delete Any fireworks end delete begin insert Fireworks end insert or pyrotechnic device offered for
sale by begin delete any end delete begin insert a end insert person violating begin delete any provision of end delete this part.

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(n) Safe and sane fireworks distributed in this state by an
unlicensed distributor and for which the tax required pursuant to
Section 12559 has not been paid.

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begin insert SEC. 3. end insert   

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begin insert Section 12728 of the end insert begin insert Health and Safety Code end insert begin insert is
amended to read: end insert

12728.  

(a) The State Fire Marshal Fireworks Enforcement and
Disposal Fund is hereby established in the State Treasury.

(b) All of the moneys collected pursuant to Section 12706 shall
be deposited in the fund and shall be available, upon appropriation
by the Legislature, to the State Fire Marshal for the exclusive use
in statewide programs for the enforcement, prosecution related to,
disposal, and management of seized dangerous fireworks, and for
the begin delete education end delete begin insert training end insert of public safety agencies in the proper
handling and management of dangerous fireworks.

(c) All of the moneys collected pursuant to Section 12727 shall
be deposited in the fund and shall be available, upon appropriation
by the Legislature, to the State Fire Marshal for the exclusive use
in statewide programs for all of the following:

(1) To further assist in statewide programs for the enforcement,
prosecution related to, disposal, and management of seized
dangerous fireworks.

(2) The begin delete education end delete begin insert training end insert of public safety agencies in the proper
handling and management of dangerous fireworks as well as safety
issues involving all fireworks and explosives.

(3) Assist the State Fire Marshal in identifying and evaluating
methods to capture more detailed data relating to fires, damages,
and injuries caused by both dangerous and safe and sane fireworks,
and to assist with funding the eventual development and
implementation of those methods.

(4) To further assist in public safety begin delete and education end delete efforts within
the general public as well as public safety agencies on the proper
and responsible begin delete use end delete begin insert use, seizure, and storage end insert of safe and sane
fireworks.

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(5) Disposal of any seized fireworks and any infrastructure
requirements necessary for the disposal of fireworks.

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(6) Administration of the fund by the Office of the State Fire
Marshal or its contracted designee.

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begin insert SEC. 4. end insert   

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This act is an urgency statute necessary for the
immediate preservation of the public peace, health, or safety within
the meaning of Article IV of the Constitution and shall go into
immediate effect. The facts constituting the necessity are:

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In order for regulatory changes to be adopted to address the
public safety and environmental damage caused by illegal
fireworks in the state at the earliest possible time, it is necessary
that this act take effect immediately.

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SECTION 1.  

It is the intent of the Legislature to enact statutory
changes relating to the Budget Act of 2014.

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