HomeMy WebLinkAboutItem 8.2 Calif Cancer Research~~~~ Off' nU~~~
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DATE: May 1, 2012
TO:
FROM:
Honorable Mayor and City Councilmembers
~~
Joni Pattillo, City Manager ° ~'
SUBJECT: Resolution in Support of Proposition 29 -the California Cancer
Research Act of 2012
Prepared by Roger Bradley, Assistant to the City Manager
EXECUTIVE SUMMARY:
The City Council will consider adopting a Resolution in support of Proposition 29 -the California
Cancer Research Act of 2012, which is a qualified ballot initiative that will be placed before
voters in June 2012. Through a $1.00 per-pack tax on cigarettes, Proposition 29 is expected to
generate over $700 million every year for cancer research and program to prevent the
proliferation of smoking among the youth.
FINANCIAL IMPACT:
None.
RECOMMENDATION:
Staff recommends that the City Council adopt the Resolution supporting Proposition 29 -the
California Cancer Research Act of 2012.
H _~ ...
~µ,
Submitted By"
Assistant to the City Manager
DESCRIPTION:
~,
Reviewed By
Assistant City Manager
The California Cancer Research Act of 2012 (CCRA) is a qualified ballot initiative that will be
placed before voters in the June 2012 statewide election. Through a $1 per-pack tax on
cigarettes, the CCRA would generate over $700 million per year to pursue potential cures of
cancers and other tobacco-attributed diseases including heart disease, drive down smoking
rates by investing in proven smoking cessation and tobacco control efforts, and assist tobacco
law enforcement. A breakdown of the funds is below:
• 60% will fund cancer and other smoking-related research ($441 million).
• 20% will fund tobacco use prevention and smoking cessation ($147 million).
STAFF REPORT
CITY COUNCIL
CITY CLERK
File #660-40
Page 1 of 2 ITEM NO. 8.2
. 15% will pay for facilities and equipment to support research ($110 million).
· 3% will help enforce anti-tobacco laws and stop tobacco smuggling ($22 million).
. 2% is the maximum amount used for administering the program ($15 million).
A nine-member oversight committee of cancer center directors, University of California
chancellors, and representatives of disease advocacy organizations will award all funds. The
legislation and analysis by the Legislative Analyst's Office are included as Attachment 1 and 2.
NOTICING REQUIREMENTS/PUBLIC OUTREACH:
None.
ATTACHMENTS:
1. Proposition 29 Text.
2. Legislative Analyst Independent Analysis of Proposition 29.
3. Resolution Supporting Proposition 29.
Page 2 of 2
12/7/2009
The people of the State of California do enact as follows:
HOPE 2010: THE CALIFORNIA CANCER RESEARCH ACT
SECTION 1. Findings and Declarations
(a) Despite continuing advancements in medical treatment and prevention,
cancer remains a leading cause of death in California, responsible for
nearly one in every four deaths each year.
(b) Medical experts expect more than 140,000 Californians to be diagnosed
with cancer each year.
(c) Cigarette smoking and other uses of tobacco remain the leading causes of
cancer in California, as well as many other serious health problems,
including cardiovascular disease, emphysema and other chronic illnesses.
(d) The treatment of tobacco-related diseases continue to impose a significant
burden upon California's overstressed health care system. Tobacco use
costs Californians billions of dollars a year in medical expenses and lost
productivity.
(e) Given the urgent need for new and effective treatments for cancer and
other tobacco-related illnesses, tobacco tax revenues are an appropriate
source of funds for research into the causes, early detection, and effective
treatment, care, prevention, and potential cures of lung cancer and other
types of cancer, cardiovascular disease, emphysema and other chronic
diseases and to provide facilities for such research.
(f) HOPE 2010: TheCalifornia Cancer Research Act will provide an ongoing
SOLjrce of funds to allow California's leading researchers to advance
human understanding and knowledge about the causes, early detection,
effective treatment, care, prevention and potential cures for cancer and
other tobacco-related illnesses.
(g) Tobacco tax increases are an appropriate way to fund efforts to prevent
and reduce tobacco-caused cancers and other diseases because
increasing tobacco product prices directly reduces smoking and other
tobacco uses.
(h) In order to control cancer, sustained support for cancer research is
paramount and must include all phases of cancer research, from basic
and applied research to that which transfers technology from academic
institutions and laboratories to use by medical providers and consumers.
SECTION 2. Statement of Purpose
The purpose of this measure is to increase the tax on tobacco to fund the
following:
(1) Grants and loans for biomedical, epidemiological, behavioral, health
services, and other research in California to enhance the state of
medical knowledge regarding lung cancer and other types of cancer,
cardiovascular disease, emphysema and other tobacco-related
illnesses.
(2) Creation, staffing and equipping of California research facilities
engaged in biomedical, epidemiological, behavioral, health services,
and other research whose primary focus is to identify and refine
promising prevention, early detection, treatments, complementary
treatments and potential cures of lung cancer and other types of
cancer, cardiovascular disease, emphysema and other tobacco-related
diseases.
(3) Increased efforts to reduce tobacco use in the State and prevent
children from becoming addicted users.
SECTION 3. HOPE 2010: California Cancer Research Act
Article 2.5 (commencing with Section 30130.50) is added to Chapter 2 of Part 13
of Division 2 of the Revenue and Taxation Code, to read:
~ 30130.50. HOPE 2010 Cancer Research Cigarette Excise Tax
(a) In addition to any other tax imposed under this part, a separate excise tax
is hereby imposed upon every distributor of cigarettes upon the
distribution of cigarettes at the rate of fifty mills ($0.050) for each cigarette
distributed on and after the first day of the first calendar quarter
commencing more than 90 days after the effective date of this section.
(b) (1) In addition to any other tax imposed under this part, every dealer and
wholesaler, for the privilege of holding or storing cigarettes for sale,
use, or consumption, shall pay a floor stock tax for each cigarette in his
or her possession or under his or her control in this state at 12:01 a.m.
on the first day of the first calendar quarter commencing more than 90
days after the effective date of this section at the rate of fifty mills
($0.050) for each cigarette.
(2) Every dealer and wholesaler shall file a return with the State Board of
Equalization on or before the first day of the first calendar quarter
commencing more than 180 days after the effective date of this section
on a form prescribed by the board, showing the number of cigarettes in
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his or her possession or under his or her control at 12:01 a. m. on the
first day of the first calendar quarter commencing more than 90 days
after the effective date of this section. The amount of tax shall be
computed and shown on the return.
(c) Notwithstanding any other provisions of law, the tax created by the HOPE:
2010 Cancer Research Act and the revenue derived there from, including
investment interest, shall be considered trust funds, to be expended solely
for the purposes set forth in this Act and shall not be considered to be part
of the General Fund, as thatterm used in Chapter 1, Part 2, ~ivision 4 of
the Government Code, commencing with Section 16300, and shall not be
considered General Fund revenue for purposes of Section 8 of Article XVI
of the California Constitution, and its implementing statues.
930130.51. Definitions
For the purposes of this article:
(a) "Cigarette" has the same meaning as that in Section 30003, as it read on
January 1, 2009.
(b) "Tobacco products" includes, but is not limited to, all forms of cigars,
smoking tobacco, chewing tobacco, snuff, and any other articles or
products made of, or containing at least 50 percent, tobacco, but does not
include cigarettes.
930130.52. Effect on Tobacco Consumption and Tax Revenue
(a) The State Board of Equalization shall determine within one year of the
operative date of this article, and annually thereafter, the effect that the
additional tax imposed on cigarettes by this article, and the resulting
increase in the tax on tobacco products required by subdivision (b) of
Section 30123, have on the consumption of cigarettes and tobacco
products in this state. To the extent that a decrease in consumption is
determined by the State Board of Equalization to be a direct result of the
additional tax imposed by this article, or the resulting increase in the tax
on tobacco products required by subdivision (b) of Section 30123, the
State Board of Equalization shall determine the fiscal effect the decrease
in consumption has on the Cigarette and Tobacco Products Surtax Fund
created by Section 30122 (Proposition 99 as approved by the voters at the
November 8, 1988, statewide general election), the Breast Cancer Fund
created by Section 30461.6, the California Children and Families Trust
Fund created by Section 30131 (Proposition 10 as approved by the voters
at the November 3, 1998 statewide general election), and the portion of
the General Fund created by Section 30101.
(b) The State Controller shall transfer funds from the California Cancer
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Research Life Sciences Innovation Trust Fund to the Cigarette and
Tobacco Products Surtax Fund, the Breast Cancer Fund, the California
Children and Families Trust Fund, and the General Fund, to offset the
revenue decrease directly resulting from imposition of additional taxes by
this article.
930130.53 HOPE 2010 Funds
(a) The California Cancer Research Life Sciences Innovation Trust Fund, and
within that Fund, the Hope 2010 Research Fund, the Hope 2010 Facilities.
Fund, the Hope 2010 Tobacco Prevention and Cessation Fund, the Hope
2010 Law Enforcement Fund, and the HOPE 2010 Committee Account,
are hereby established in the Treasury of the State of California.
(b) Notwithstanding any other provision of law, the California Cancer
Research Life Sciences Innovation Trust Fund and all funds, sub-funds or
sub-accounts of that Fund, are trust funds established solely to carry out
the purposes of this Act.
(c) All revenues from the excise and floor stock tax received by the State of
California, or State Officials, pursuant to the provisions of this Act, shall be
deposited into the California Cancer Research Life Sciences Innovation
Trust Fund.
(d) Revenue deposited into the California Cancer Research Life Sciences
Innovation Trust Fund shall be deposited and apportioned as follows:
(1) Sixty percent (60%) shall be deposited into the HOPE 2010 Research
Fund for the purpose of grants and loans to support research into the
prevention, early detection, treatments, complementary treatments and
potential cures of lung cancer and other types of cancer,
cardiovascular disease, emphysema and other tobacco-related
diseases, including but not limited to coronary heart disease,
cerebrovascular disease, and chronic obstructive lung disease, which
shall be awarded on the basis of scientific merit as determined by an
open, competitive peer review process that assures objectivity,
consistency, and high quality. All qualified investigators, regardless of
institutional affiliation, shall have equal access and opportunity to
compete for the funds in this Act. The peer review process for the
selection of grants awarded under this program shall be modeled on
the process used by the National Institutes of Health in its grant-
making process.
(2) Fifteen percent (15%) shall be deposited into the HOPE 2010
Facilities Fund for the purposes of grants and loans to provide
facilities, including but not limited to those buildings, building leases
and capital equipment as may be found necessary and appropriate by
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the Committee, to further biomedical, epidemiological, behavioral,
health services, and other research whose primary focus is to identify
and refine promising prevention, early detection, treatments,
complementary treatments, rehabilitation and potential cures of lung.
cancer and other types of cancer, cardiovascular disease, emphysema
and other tobacco-related diseases, subject to the authority of the
Committee to redirect surplus funds, as provided in this Act.
(3) Twenty percent (20%) shall be deposited into the HOPE 2010
Tobacco Prevention and Cessation Fund for carrying out
comprehensive tobacco prevention and control programs, and
apportioned in the following manner:
(A) Eighty percent (80%) of the HOPE 2010 Tobacco Prevention
and Cessation Fund shall be allocated to the California Department
of Public Health Tobacco Control Program to support the tobacco
control programs described beginning at Section 104375 of the
Health and Safety Code.
(B) Twenty percent (20%) of the HOPE 2010 Tobacco Prevention
and Cessation Fund shall be allocated to the California Department
of Education for programs to prevent and reduce the use of tobacco
products as described in Section 104420 of the Health and Safety
Code.
(4) Three percent (3%) shall be deposited into theHOPE 2010 Law
Enforcement Fund to support law enforcement efforts to reduce
cigarette smuggling, tobacco tax evasion, and counterfeit tobacco
products, to reduce illegal sales of tobacco products to minors, and to
enforce legal settlement provisions and conduct law enforcement
training and technical assistance activities for tobacco-related statutes,
and apportioned in the following manner:
(A) Forty percent (40%) of the HOPE 2010 Law Enforcement Fund
to the State Board of Equalization to be used to enforce laws that
regulate the distribution and retail sale of cigarettes and other
tobacco products, such as laws that prohibit untaxed cigarette and
tobacco product smuggling and counterfeiting and sales of
cigarettes and other tobacco products without a proper license. .
(B) Forty percent (40%) of the HOPE 2010 Law Enforcement Fund
to the State Department of Public Health to be used to support
programs, including, but not limited to, providing grants to local law
enforcement agencies to provide training and funding for the
enforcement of state and local laws related to the illegal sales of
, tobacco to minors, increasing investigative activities, and
compliance checks, and other appropriate activities to reduce illegal
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sales of tobacco products to minors, including, but not limited to
the Stop Tobacco Access to Kids Enforcement (STAKE) Act,
pursuant to Section 22952 of the Business and Professions Code.
(C) Twenty percent (20%) of the HOPE 2010 Law Enforcement
. Fund to the Attorney General to be used for activities including, but
not limited to, enforcing laws that regulate the distribution and sale
of cigarettes and other tobacco products, such as laws that prohibit
cigarette smuggling, counterfeiting, selling untaxed tobacco, selling
tobacco without a proper license and selling tobacco to minors, and
enforcing tobacco-related laws, court judgments, and settlements.
(5) Two percent (2%) shall be deposited into a HOPE 2010 Committee
Account which may be used by the Committee and the State Board of
Equalization for the costs and expenses of administering this Act.
(e) Funds deposited into the California Cancer Research Life Sciences
Innovation Trust Fund or any sub-fund or sub-account ofthat Fund, may
be placed into the Pooled Money Investment Account for investment only,
and interest earned shall be credited to the Fund and deposited,
apportioned and expended only in accordance with the provisions of this
Act and its purposes.
(f) Funds deposited into the California Cancer Research Life Sciences
Innovation Trust Fund, together with interest earned by the Fund or any
sub-fund, are hereby continuously appropriated for the purposes of this
Act without regard to fiscal year, and shall be used solely for the purposes
Qf this Act and shall not be subject to appropriation, reversion or transfer
by the Legislature, the Governor or the Director of Einance for any other
purpose and may not be loaned to the General Fund, or any other fund,
for any purpose.
930130.54 HOPE 2010 Cancer Research Citizens Oversight Committee
(a) There is hereby created within the Government of the State of California,
the HOPE 2010 Cancer Research Citizens Oversight Committee. All
references in this Act to the "Committee" are to the HOPE2010 Cancer
Research Citizens Oversight Committee. The Committee shall consist of
nine members, appointed as follows:
(1) Four members appointed by the Governor, as follows:
(A) One member affiliated with a California Academic Medical Center
who is a practicing physician with expertise in the prevention,
treatment or research of cardiovascular disease.
'.' j
(B) Three members selected from among the Cancer Center
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Directors of National Cancer Institute designated cancer centers
located within the State of California. Each Director may designate
a person to attend meetings of the Committee in their place, so
long as that person is employed at their respective center and that
employment provides background and experience in cancer
treatment.
(2) The Chancellor from each of the campuses of the University of
California which is a member of the California Institute for Quantitative
Biological Research. Each Chancellor may designate a person to
attend meetings of the Committee in their place, so long as that person
is employed at their respective campus and that employment provides
background and experience in quantitative bioscience.
(3) Two appointed by the Director of the California Department of Public
Health, the appointments to be selected from among California
representatives of California or national disease advocacy groups
whose focus is tobacco-related illness, at least one of whom shall be a
person who has been treated for a tobacco-related illness.
(4) No person who is required to register as a lobbyist under the
provisions of any law of the United States, the State of California or
any local government, is eligible for appointment to the Committee. A
member of the Committee who registers with any governmental entity
as a lobbyist is deemed to have resigned from the Committee and his
or her office is deemed vacant as of the date of registration as a
lobbyist.
(5) Notwithstanding any other provision of law, no member of the
Committee, or those persons appointed by Committee members to
attend meetings on their behalf, shall be an officer, employee, director,
independent contractor, or grant recipient of any company or other
business engaged in the manufacture, marketing, distribution, or sale
of tobacco products, or have received any grants or payments for
services of any kind from any such company or business during the
past two years.
(6) The terms of office for appointed members shall commence on the
effective date of this Act and continue for four years, except that the
initial appointment of two members by the Governor and one member
by the Public Health Director shall be for two year terms which shall
expire two years after the effective date of this Act.
(7) Except for vacancies that occur as set forth in subdivision (a)(4) of this
section, members appointed for a term shall continue to serve until
their replacement is selected. If a vacancy occurs within a term, the
appointing authority shall appoint a replacement member to serve the
7
remainder of the term within 30 days of the date of the vacancy.
(b) The members, by majority vote, shall annually select one of their number
to serve as chair of the Committee and preside over its meetings and
perform such other duties as may be delegated by the C;ommittee.
(c) Except for those members who are also public officers or employees, the
members of the Committee shall receive $100 per day for each day
occupied with attendance at public meetings of the Committee and
reimbursement for their usual and ordinary expenses, as provided by the
general law. Members of the Committee who are public officers or
employees shall not be otherwise compensated for their service on the
Committee,
(d) The Committee is vested with the power and authority to do all of the
following:
(1) Oversee the operations of the California Cancer Research Life
Sciences Innovation Trust Fund and its sub-funds and sub-accounts
and to act as trustee of the trust funds created by this Act.
(2) Appoint a Chief Executive Officer who shall be exempt from the civil
service pursuant to Article VII, Section 4 of the California Constitution.
The Chief Executive Officer shall have the power to appoint such
employees as are necessary for the administration of the Fund and the
performance of those duties imposed upon the Committee by law,
except that, notwithstanding any other provisions of law, no officer or
employee of the Committee shall be an officer, employee, director,
independent contractor, or grant recipient of any company or other
business engaged in the manufacture, marketing, distribution, orsale
of tobacco products, or have received any grants or payments for
services of any kind from any such company or business during the
past two years.
(3) Establish such sub-funds and sub-accounts within the California
Cancer Research and Life Sciences Innovation Fund, and apportion
money in the Fund into such sub-funds and sub-accounts, as is found
necessary and appropriate for administration of this Act.
(4) Establish a process for soliciting, reviewing, and awarding grants and
loans for research, facilities and patient treatment.
(5) Establish and appoint such committees and advisory bodies as it
deems necessary and appropriate to carry out its duties.
(6) Develop annual and long-term strategic research and financial plims
for the Fund, including an annual budget for administration of this Act.
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(7) Make final decisions on the award of loans and grants, and to revoke
or rescind loans and grants which do not conform to approved
research standards. Employ auditors to prepare an annual financial
audit of the Fund's operations.
(8) Issue, at least annually, public reports on the activities of the
Committee and the Fund.
(9) Establish policies regarding intellectual property rights arising from
research funded by the Committee, which shall be consistent with
those implemented by the University of California.
(10) Establish rules and guidelines for the operation of the Fund and its
employees.
(11) Periodically review the income and expenditures ofthe HOPE 2010
Facilities Fund. If the Committee determines that there is a surplus in
the Fund it may redirect money in that Fund to the HOPE 2010
Research Fund, the HOPE 2010 Tobacco Prevention and Cessation
Fund, or the HOPE 2010 Law Enforcement Fund in the amounts and
for the period determined by the Committee
(12) Reimburse the State Board of Equalization for the cost of services
required by this Act.
(13) The following activities are inconsistent, incompatible or in conflict
with the duties of members of the Committee or its officers or
employees:
(A) Using the prestige or influence of the State or the Committee for
the officer's or employee's private gain or advantage or the private
gain of another.
(B) Using state time, facilities, equipment, or supplies for private gain
or advantage.
(C) Using, or having access to, confidential information available by
virtue of state employment for private gain or advantage or
providing confidential information to persons to whom issuance of
this information has not been authorized.
(0) Receiving or accepting money or any other consideration from
anyone other than the State for the performance of his or her
duties as a state officer or employee.
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(E) Performance of an act in other than his or her capacity as a state
officer or employee knowing that the act may later be subject,
directly or indirectly to the control, inspection, review, audit, or
enforcement by the officer or employee.
(F) Receiving or accepting, directly or indirectly, any gift, including
money, or any service, gratuity, favor, entertainment, hospitality,
loan, or any other thing of value from anyone who is doing or is
seeking to do business of any kind with the officer's or employee's
appointing authority or whose activities are regulated or controlled
by the appointing authority under circumstances from which it
reasonably could be substantiated that the gift was intended to
influence the officer or employee in his or her official duties or was
intended as a reward for any official actionsperformed by the
officer or employee.
(G) Subject to any other laws, rules, or regulations as pertain thereto,
not devoting his or her full time, attention, and efforts to his or her
state office or employment during his or her hours of duty as a
state officer or employee.
Pursuant to Section 19990 of the Government Code, The Committee shall
adopt rules governing the application of this subdivision, including a
provision to provide notice of its requirements to all officers and
employees.
(14) Adopt, amend, and rescind rules and regulations to carry out the
purposes and provisions of this chapter, and to govern the procedures
of the Committee, in accordance with the provisions of the
Administrative Procedures Act (Article 6 (Commencing with Section
11340), Chapter 3.5, Part 1, Division 3, Title 2, ofthe Government
Code).
(15) Perform all other acts necessary or appropriate in the exercise of its
power, authority, and jurisdiction. .
(f) Meetings
The Committee, and all subcommittees and advisory bodies created by it,
are a "state body" as that term is used in Government Code Section
11121 and all meetings of the Committee, its subcommittees and advisory
bodies, shall conform to the provisions of the Bagley-Keene Open Meeting
Act (Article 9, commencing with Section 11120, Chapter 1, Part 1, Division
3, Title 2 of the Government Code).
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(g) Records
All records of the Committee shall be public records as those terms are
defined in the California Public Records Act (Article 1 (commencing with
Section 6250), Chapter 3.5, Division 7, Title I of the Government Code)
and may only be withheld from public disclosure in accordance with the
provisions of that Act.
(h) Conflicts of Interest
(1) Notwithstanding any other provision of law, no member of the
Committee, or those persons appointed by Committee members to
attend meetings on their behalf, or those officers or employees
employed by the Committee, shall participate in an evaluation, review,
recommendation, or decision upon an application or proposal for grant
or loan, or other distribution of funds by the Committee, if that person
has a direct or indirect financial interest in the applicant or the subject
of an application or proposal for a grant or loan or other distribution of
funds. If such persons have a financial interest in the application or
proposal, it shall be publicly announced at the first meeting of the
Committee following disclosure of the interest and recorded in the
minutes of the Committee meeting. Notwithstanding any other
provision of law to the contrary, where such a financial interest is found
to exist, upon such disclosure and disqualification, the Committee may
otherwise consider and take action upon any application for grant,
loan, or other distribution of funds.
(2) No member of the Committee or those persons appointed to attend
meetings on their behalf, its staff, contractors, or grant recipients shall
receive funding or be employed by persons or business entities
engaged in any aspect of tobacco growing, manufacturing, processing,
distributing, marketing, or other activities within the tobacco industry.
(3) Nothing herein is intended to limit application of the Political Reform
Act (Title 9, commencing with Section 81000, of the Government
Code) to the Committee or its officers and employees.
(i) Annual Public Report
The Committee shall issue an annual report to the public which sets forth
its activities, grants awarded and in progress, research accomplishments,
and future program directions. Each annual report shall include, but not be
limited to, the following: the number and dollar amounts of research,
facilities and treatment grants; the administrative expenses of the
Committee, the Fund, and the State Board of Equalization; and a
summary of research findings.
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(j) Independent Financial Audit
The Committee shall annually commission an independent financial audit
of its activities from a certified public accounting firm. Any firm that
provides consulting services to the Committee shall be disqualified from
providing audit services. . The resulting audit shall be provided to the State
Controller, who shall review the audit and annually issue a public report of
that review.
(k) Limitation on Administrative Costs
Not more than two percent (2%) of the annual revenues derived from this
Act shall be used for the costs of general administration of this Act. The
State Controller shall provide the Committee and its Auditor with reports
that set forth the allowable costs for general administration. The annual
audit shall include a review of the costs of general administration of the
Committee, the Fund, and the State Board of Equalization.
S30130.56 Penalties
(a) Each officer or employ,ee of the Committee, and every other person
charged with the receipt, safekeeping, transfer, or disbursement of trust
funds as defined in this Act, who either:
(1) Without authority of law, appropriates the same, or any portion
thereof, to his or her own use, or to the use of another; or,
(2) Loans the same or any portion thereof,' makes any profit out of, or
uses the same for any purpose not authorized by law; or,
(3) Knowingly keeps any false account, or makes any false entry or
erasure in any account of or relating to the same; or,
(4) Fraudulently alters, falsifies, conceals, destroys, or obliterates any
account; or,
(5) Willfully refuses or omits to pay over, on demand, any public
moneys in his or her hands, upon the presentation of a draft, order,
or warrant drawn upon these moneys by competent authority; or,
. (6) Willfully omits to transfer the same, when transfer is required by
law; or
(7) Willfully omits or refuses to pay over to any officer or person
authorized by law to receive the same, any money received by him
or her under any duty imposed by law so to pay over the same;
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(8) Is punishable by imprisonment in the state prison for two, three, or
four years, and is disqualified from holding any office in this state.
(b) As used in this section, "public moneys" includes the proceeds derived
from trust funds, as defined in this Act and from loans or grants authorized
by the Committee from such trust funds.
930130.55 Statutory References
Unless otherwise stated, all references in this Act refer to statutes as they existed
on December 31, 2009.
SECTION 4. Severability
If the provisions of this Act, or part thereof, is for any reason held to be invalid or
unconstitutional, the remaining provisions shall not be affected, but shall remain
in full force and effect and to this end the provisions of this Act are severable.
SECTION 5. Conflicting Measures
(a) It is the intent of the People that in the event that this measure and
another measure relating to the taxation of tobacco shall appear on the
same statewide election ballot, the provisions of the other measure or
measures shall not be deemed to be in conflict with this measure, and if
approved by the voters, this measure shall take effect notwithstanding
approval.by the voters of another measure relating to the taxation of
tobacco by a greater number of affirmative votes.
(b) If this measure is approved by the voters but superseded by law by any
other conflicting ballot measure approved by the voters at the same
election, and the conflicting measure is later held invalid, this measure
shall be self-executing and given the full force of law.
SECTION 6. Amendments
(a) Except as hereafter provided, this Act may only be amended by the
electors as provided in Article II, Section 10, subdivision (c) of the
California Constitution.
(b) Notwithstanding the provisions of sub.division (a) of this section, not earlier
than fifteen (15) years from the effective date of this Act, the Committee, by
majority vote of its m"embers, may recommend changes in the structure and
operation of the Committee tothe Legislature. The Legislature may amend
the provisions of Revenue and Taxation Code Section 30130.54 to further
the purposes of the Act by a statute passed in each house by roll-call vote
entered in the journal, two-thirds of the membership concurring, that is
consistent with the recommendations of the Committee.
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l
Legislative Analyst's Office
2/16/2012 9 AM
FINAL
Proposition 29
Imposes Additional Tax on Cigarettes for Cancer Research.
Initiative Statute.
Summary of Legislative Analyst's Estimate of Net State and Local Government
Fiscal Impact
Fiscal Impact: Net increase in cigarette excise tax revenues of about $735 million arinually
by 2013-14 for certain research and tobacco prevention and cessation programs. Other state
and local revenue increases amounting to tens of millions of dollars annuall~.
Yes/No Statement
A YES vote on this measure means: State excise taxes on cigarettes would increase by $1 per
pack to a total of $1.87 per pack. These additional revenues would be dedicated to fund cancer
and tobacco-related disease research and tobacco prevention and cessation programs.
A NO vote on this measure means: State excise taxes on cigarettes would remain at the
current level of 87 cents per pack and would continue to be used for existing purposes, including
childhood development programs and various health and tobacco prevention and cessation
programs.
BACKGROUND
Tobacco Taxes
Existing State Excise Taxes. Current state law imposes excise taxes on the distribution of
cigarettes and other tobacco products, such as cigars and chewing tobacco. Tobacco excise taxes
are paid by distributors who supply cigarettes and 9ther tobacco products to retail stores. These
taxes are typically passed on to consumers as higher cigarette and other tobacco product prices.
The state's cigarette excise tax is currently 87 cents per pack. Figure 1 describes the different
components of the per-pack tax. As the figure shows, two voter-approved measures-
Proposition 99 in 1988 and Proposition lOin 1998-are responsible for generating the vast
majority of tobacco excise tax revenues. As Figure 1 indicates, total state revenues from existing
excise taxes on cigarettes and other tobacco products were just over $900 million in 20 I 0-11.
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FtglH'el.
Existing State TopaccoEX'cisE! Taxes
2:
5il
Totals
Revenues from existing excise taxes on other tobacco products support Propositions 10 and
99 purposes. Under current law, any increase in cigarette taxes automatically triggers an
equivalent increase in excise taxes on other tobacco products, with the revenues going to support
Proposition 99 purposes.
Existing Federal Excise Tax. The federal government also imposes an excise tax on
cigarettes and other tobacco products. In 2009, this tax was increased by 62 cents per pack (to a
total of$1.0l per pack) to help fund the Children's Health Insurance Program, which provides
subsidized health insurance coverage to children in low-income families.
Existing State and Local Sales and Use Taxes. Sales of cigarettes and other tobacco
products are also subject to state and local sales and use taxes. These taxes are imposed on the
retail price of a product, which includes excise taxes that have generally been passed along from
distributors. The average retail price of a pack of cigarettes in California currently is over $5.
More than $400 million in annual revenues from sales and use taxes on cigarettes and other
tobacco products go to the state and local governments.
Current Health Research and Tobacco Cessation Activities
Across the country, substantial amounts of money are spent on research related to cancer and
tobacco-related diseases, such as heart disease. For example, the federal National Institutes of
Health provide several billion do\1ars annually for grants and research in these areas. Private
entities and nonprofits also provide funds for such research. In California; the University of
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California (UC) is one of the primary recipients of these research dollars. In addition, UC uses
some state funds for this purpose.
Tobacco prevention and cessation programs are currently conducted by public entities, health
insurers, and various other organizations. For example, approximately $50 million a year from
Proposition 99 revenues is used to fund tobacco prevention and cessation programs in California.
PROPOSAL
This measure increases excise taxes on the distribution of cigarettes and other tobacco
products. It uses the additional revenues raised for research on cancer and tobacco-related
diseases (such as heart disease and emphysema), as well as for other specified purposes. The
major provisions of the measure are described below.
New State Tobacco Tax Revenues
This measure increases--effective October 20 12-the existing state excise tax on cigarettes
by $1 per pack. The total state excise tax, therefore, would be $1.87 per pack. The measure also
creates a one-time "floor tax" on the majority of cigarettes that are stored by businesses at the
time the new excise tax is levied. Floor taxes are typically used to prevent businesses from
avoiding taxes by stockpiling products before a tax goes into effect.
Existing state law requires the Board of Equalization (BOE) to annually set a tax on other
tobacco products-such as cigars and chewing tobacco-at an amount equivalent to the tax on
cigarettes. Accordingl;;., this measure would also result in a comparable increase in the excise tax
on other tobacco products, with the revenues supporting Proposition 99 purposes.
How New Cigarette Tax Revenues Would Be Spent
Revenues from the cigarette excise tax increase would be deposited in a new special fund,
called the California Cancer Research Life Sciences Innovation Trust Fund. These revenues
would be dedicated to the support of research on cancer and tobacco-related diseases, as well as
for other specified purposes. After compensating existing tobacco tax program funds for any
losses due to the imposition of the new tax (as described in the next section), the remaining
money would be distributed among five funds:
. Hope 2010 Research Fund. Sixty percent of the funds would be used to provide
grants and loans to support research on prevention, diagnosis, treatment, and
potential cures for cancer and tobacco-related diseases. The measure states that all
qualified researchers would have an equal opportunity to compete for these
research funds.
. Hope 2010 Facilities Fund. Fifteen percent would be used to provide grants and
loans to build and lease facilities and provide capital equipment for research on
cancer and tobacco-related diseases.
. Hope 2010 Tobacco Prevention and Cessation Fund. Twenty percent would be
used for tobacco prevention and cessation programs administered by the
California Department of Public Health (DPH) and the California Department of
Education. .
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c Hope 2010 Law Enforcement Fund. Three percent would be allocated to state
agencies to support law enforcement efforts to reduce cigarette smuggling,
tobacco tax evasion, and illegal sales of tobacco to minors, and to otherwise
improve enforcement of existing law.
· Hope 2010 Committee Account. Two percent would be deposited into an account
that would be used to pay the costs of administering the measure, most of which
would likely be reimbursing BOE for tax collection costs.
Backfill of Existing Tobacco Tax Programs. This measure requires the transfer of some
revenues from the trust fund to "backfill," or offset, all revenue losses that are likely to occur to
existing state cigarette and tobacco taxes that directly result from the imposit.ion of the additional
tax. These revenue losses would occur mainly because an increase in the price of cigarettes and
other tobacco products generally reduces consumption and results in more sales for which taxes
are not collected, such as Internet purchases and purchases of out-of-state products. This, in turn,
would reduce the amount of revenues collected through the existing state excise taxes described
above. The amount of backfill payments needed to offset any loss of funding in these areas
would be determined by BOE.
Committee Established to Administer Trust Fund
The trust fund would be overseen by a newly created Cancer Research Citizen's Oversight
Committee. The committee would be composed of the following nine members:
o Four members appointed by the Governor, three of whom are directors of one of
the ten designated cancer centers in California.
· Two members appointed by the Director ofDPH, at least one of whom has been
treated for a tobacco-related illness.
· Three chancellors from UC campuses that are members of the California Institute
for Quantitative Biosciences Research. (Currently, three UC campuses-Santa
Cruz, Berkeley, and San Francisco-are institute members.)
Authority Granted to the Committee. The measure authorizes the committee to administer
the trust fund. The funds would have to be expended solely for the purposes described in the act.
The funds would be allocated by the committee. Thus, they would not be subject to appropriation
by the Legislature. Furthermore, these funds could not be loaned to other state funds.
The measure gives the committee the authority to:
. Develop short- and long-term financial plans.
o Establish a process for soliciting, reviewing, and awarding grants and loans for
researchers and facilities.
· Appoint a chief executive officer and other employees.
. Establish policies regarding intellectual property rights arising from research
funded by this measure.
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Other Major Provisions
Transfers Permitted From Facilities Fund. In the event the committee determines that there
is a surplus in the Hope 20 I 0 Facilities Fund, the measure would authorize the committee to
transfer the surplus money to the Hope 2010 Research Fund, the Hope 2010 Tobacco Prevention
and Cessation Fund, or the Hope 2010 Law Enforcement Fund.
Accountability Measures. The measure requires the committee to issue an annual report to
the public that includes information on its administrative expenses, the number and amount of
grants provided, and a summary of research accomplishments. The committee would also be
required to have an independent financial audit each year. The measure includes conflict-of-
interest provisions that govern the conduct of committee members, and includes specific criminal
penalties for anyone convicted for the misuse of trust fund monies.
FISCAL EFFECTS
This measure would have a number of fiscal effects on state and local governments. The
major impacts are discussed below.
Impacts on State and Local Revenues
Revenues Would Be Affected by Consumer Response. Our revenue estimates assume that
the proposed excise tax increase would be passed along to consumers. In other words, we assume
that the retail prices of cigarettes and other tobacco products would be raised to include the
excise tax increase. This would result in various consumer responses. The price increase would
result in consumers reducing the quantity of taxable tobacco products they consume. Consumers
could also change the way they acquire tobacco products so that fewer transactions are taxed,
such as through Internet purchases or purchases of out-of-state products. While we believe a
reasonable projection of consumer response is incorporated into our revenue estimates, they are
still subject to some uncertainty.
New Cigarette Excise Tax Revenues. We estimate that the increase in cigarette excise taxes
required by this measure would raise about $615 million in 2012-13 (partial-year effect) and
about $810 million in 2013-14 (the first full-year impact). Our estimate of the allocation of new
cigarette excise tax revenues in 2013-14 is shown in Figure 2. After backfilling losses in existing
tobacco excise tax revenue (described in more detail below), the new cigarette excise tax would
generate an estimated $735 million in net revenue in 2013-14 for the purposes described in the
measure. The cigarette excise tax increase would generate somewhat lower amounts of revenue
each year thereafter, based on our projections of continued declining cigarette consumption.
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Figure 2
HOw Estirnated RevenLJe' FrQrn New cigarette Tax
WouldSe Allocated
(t)Qltarii in MiltiQHS)
E s1i mated revenue tram new.c:iga rette' tax
LW'f;> back.fill toProp<lsi!ion9;g,.'
propos:itioii 10, General FunCli and Breast
Cancer Fund
Estlrmltad Nat R~venue
Aliocation of estimated l1efrevenue
ReseawifFund
Hlciljlies Hmd
Tobacco P~eventjorrand CessalionFund
L.aw, EnforcenlEmt Fund
Cornmit!e€! Ac;<:;ount
$810,
~7'fi:
$rJ5
,BO%
15
20
:3
2
$441
110
147'
22.
15
a LAO eslifTlate.BacldElam,c';'"!1ts '\"'J.'Jid bei.:l~termihetJ by the80ardct Equalization.,
Effects on Existing Tobacco Excise Tax Revenues. The decline in consumption of cigarettes
and other tobacco products caused by this measure would reduce revenues from the existing
excise taxes that go to support Propositions 99 and 10 purposes, the General Fund, and the Breast
Cancer Fund. The measure provides for the backfill of these losses from revenues raised by the
new excise tax. We estimate that the amount of backfill funding needed to comply with this
requirement would be about $75 million annually, as shown in Figure 2.
As noted earlier, this measure would have an additional fiscal effect on excise taxes which go
to support Proposition 99 purposes. Under current law, any cigarette tax increase triggers an
automatic corresponding increase in the taxes on other tobacco products, with the additional
revenues going to support Proposition 99 purposes. We estimate that the higher tax on other
tobacco products would result in a full-year Proposition 99 revenue gain of about $50 million,
beginning in 2013-14.
Effects on State and Local Sales and Use Tax Revenues. Sales and use taxes are levied on a
variety of products, including the retail price of tobacco products. The retail price usually
includes the cost of all excise taxes. The higher retail price of tobacco products resulting from
the new excise tax, therefore, would increase state and local revenue from the sales and use tax
on tobacco products. This effect would be offset somewhat by several factors, including lower
spending on other products subject to sales and use taxes. On net, we estimate an increase in
revenue of about $10 million to $20 million annually.
Effects on Excise Tax Collection. As discussed above, the measure would deposit 3 percent
of revenues from the new cigarette tax into a Law Enforcement Fund to support state law
enforcement efforts. These funds would be used to support increased enforcement efforts to
reduce tax evasion, counterfeiting, smuggling, and the unJ.icensed sales of cigarettes and other
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tobacco products. The funds would also be used to support efforts to reduce sales of tobacco
products to minors. These activities would have an unknown net impact on the amount of
revenues collected through excise taxes.
Impact on State and Local Government Health Care Costs
The state and local governments in California incur costs for providing (1) health care for
low-income and uninsured persons and (2) health insurance coverage for state and local
government employees and retirees. Consequently, changes in state law such as those made by
this measure that affect the health of the general population-and low-income and uninsured
persons and public employees in particular-would affect publicly funded health care costs.
For example, as discussed above, this measure would result in a decrease in the consumption
of tobacco products. The use of tobacco products has been linked to various adverse health
effects by federal health authorities and numerous scientific studies. Thus, this measure would
reduce state and local government health care spending on tobacco-related diseases over the long
term. This measure would have other fiscal effects that offset these cost savings. For example,
the state and local governments would incur future costs for the provision of health care and
social services that otherwise would not have occurred as a result of individuals who avoid
tobacco-related diseases living longer. Thus, the net fiscal impact Of this measure on state and
local government costs is unknown.
Page 7 of7
RESOLUTION NO. XX - 12
A RESOLUTION OF THE CITY COUNCIL
OF THE CITY OF DUBLIN
***********
SUPPORTING PROPOSITION 29 -THE CALIFORNIA CANCER RESEARCH ACT
WHEREAS, the California Cancer Research Act is a state ballot measure which, if
passed by voters in June 2012, would save lives by preventing 104,000 premature smoking-
caused deaths; and
WHEREAS, more than 332,000 California high school students are current smokers,
more than 34,000 California youth start smoking every year and 3,383,000 California adults are
current smokers; and
WHEREAS, the California Cancer Research Act would increase the state's tobacco tax
by $1 per pack and according to the Campaign for Tobacco-Free Kids, the $1 tax increase alone
would prevent 228,000 children from becoming smokers in adulthood and more than 118,000
adult smokers in California would quit smoking; and
WHEREAS, the tobacco industry will spend millions to stop the California Cancer
Research Act because they know it will stop hundreds of thousands from smoking; and
WHEREAS, the California Cancer Research Act would provide nearly $735 million
annually to fund research and make advances in the prevention, detection, treatment, causes
and cures for cancer, lung disease, heart disease and stroke, and other tobacco-related
illnesses; and
WHEREAS, the California Cancer Research Act would provide more than $147 million
annually to the state's existing tobacco control programs to prevent and reduce the use of
tobacco, including school based programs to reduce youth smoking; and
WHEREAS, the Legislative Analyst Office analysis of the California Cancer Research Act
determined that local governments would likely experience an annual increase in sales tax
revenues of approximately $10 million; and
WHEREAS, by providing the funding we need to keep California's anti-smoking programs
strong, we can keep our kids from smoking and give smokers the help they need to quit
smoking; and
WHEREAS, the California Cancer Research Act would provide $22 million annually for
law enforcement efforts to reduce illegal sales of tobacco products to minors, and other anti-
tobacco law enforcement; and
WHEREAS, the California Cancer Research Act will result in $5.1 billion in long-term
health savings from reduced smoking; and
WHEREAS, cigarette smoking and other uses of tobacco remain the leading causes of
cancer, heart disease and stroke, and lung disease in California; and
ATTACHMENT 3
WHEREAS, 36,687 adults die annually from smoking in California
NOW THEREFORE, BE IT RESOLVED, that the City Council of the City of Dublin does
hereby support the California Cancer Research Act of 2012, which will reduce smoking,
especially among children and fund critical research to prevent and treat cancer, heart disease
and stroke, lung disease and other tobacco-related illnesses.
BE IT FURTHER RESOLVED, that a copy of this Resolution shall be forwarded to the
Proposition 29 Coalition: Californians for a Cure.
PASSED, APPROVED AND ADOPTED this 1st day of May, 2012, by the following vote:
AYES:
NOES:
ABSENT:
ABSTAIN:
ATTEST:
City Clerk
Mayor
ATTACHMENT 3