30121-30130

REVENUE AND TAXATION CODE
SECTION 30121-30130




30121.  For purposes of this article:
   (a) "Cigarettes" has the same meaning as in Section 30003, as it
read on January 1, 1988.
   (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.
   (c) "Fund" means the Cigarette and Tobacco Products Surtax Fund
created by Section 30122.


30122.  (a) The Cigarette and Tobacco Products Surtax Fund is hereby
created in the State Treasury. The fund shall consist of all
revenues deposited therein pursuant to this article. Moneys in the
fund may only be appropriated for the following purposes:
   (1) Tobacco-related school and community health education
programs.
   (2) Tobacco-related disease research.
   (3) Medical and hospital care and treatment of patients who cannot
afford to pay for those services, and for whom payment will not be
made through any private coverage or by any program funded in whole
by the federal government.
   (4) Programs for fire prevention; environmental conservation;
protection, restoration, enhancement, and maintenance of fish,
waterfowl, and wildlife habitat areas; and enhancement of state and
local park and recreation purposes.
   (b) The fund consists of six separate accounts, as follows:
   (1) The Health Education Account, which shall only be available
for appropriation for programs for the prevention and reduction of
tobacco use, primarily among children, through school and community
health education programs. Revenues from the Health Education Account
shall not be used to match federal funds for any purpose.
   (2) The Hospital Services Account, which shall only be available
for appropriation for payment to public and private hospitals
licensed pursuant to subdivision (a) of Section 1250 of the Health
and Safety Code for the treatment of hospital patients who cannot
afford to pay for that treatment and for whom payment for hospital
services will not be made through private coverage or by any program
funded in whole by the federal government.
   (3) The Physician Services Account, which shall only be available
for appropriation for payment to physicians for services to patients
who cannot afford to pay for those services, and for whom payment for
physician services will not be made through private coverage or by
any program funded in whole by the federal government.
   (4) The Research Account, which shall only be available for
appropriation for tobacco-related disease research. Revenues from the
Public Research Account shall not be used to match federal funds for
any purpose.
   (5) The Public Resources Account, which shall only be available
for appropriation in equal amounts for both of the following:
   (A) Programs to protect, restore, enhance, or maintain fish,
waterfowl, and wildlife habitat on an equally funded basis.
   (B) Programs to enhance state and local park and recreation
resources.
   (6) The Unallocated Account, which shall be available for
appropriation for any purpose specified in subdivision (a).




30123.  (a) In addition to the tax imposed upon the distribution of
cigarettes by this chapter, there shall be imposed upon every
distributor a tax upon the distribution of cigarettes at the rate of
twelve and one-half mills ($0.0125) for each cigarette distributed.
   (b) There shall be imposed upon every distributor a tax upon the
distribution of tobacco products, based on the wholesale cost of
these products, at a tax rate, as determined annually by the State
Board of Equalization, which is equivalent to the combined rate of
tax imposed on cigarettes by subdivision (a) and the other provisions
of this part.
   (c) The wholesale cost used to calculate the amount of tax due
under subdivision (b) does not include the wholesale cost of tobacco
products that were returned by a customer during the same reporting
period in which the tobacco products were distributed, when the
distributor refunds the entire amount the customer paid for the
tobacco products either in cash or credit. For purposes of this
subdivision, refund or credit of the entire amount shall be deemed to
be given when the purchase price less rehandling and restocking
costs is refunded or credited to the customer. The amount withheld
for rehandling and restocking costs may be a percentage of the sales
price determined by the average cost of rehandling and restocking
returned merchandise during the previous accounting cycle.



30124.  (a) With the exception of payments of refunds made pursuant
to Article 1 (commencing with Section 30361) of Chapter 6, and
reimbursement of the State Board of Equalization for expenses
incurred in the administration and collection of the tax imposed by
Section 30123, pursuant to its powers vested by this part, all moneys
raised pursuant to the taxes imposed by Section 30123 shall be
deposited into the fund as provided in subdivision (b).
   (b) Moneys shall be deposited in the fund according to the
following formula:
   (1) Twenty percent shall be deposited in the Health Education
Account.
   (2) Thirty-five percent shall be deposited in the Hospital
Services Account.
   (3) Ten percent shall be deposited in the Physician Services
Account.
   (4) Five percent shall be deposited in the Research Account.
   (5) Five percent shall be deposited in the Public Resources
Account.
   (6) Twenty-five percent shall be deposited in the Unallocated
Account.
   (c) Any amounts appropriated from any account specified in
subdivision (b) which is not encumbered within the period prescribed
by law shall revert to the account from which it was appropriated.
   (d) This section shall become operative July 1, 1996.



30125.  Funds expended pursuant to this article shall be used only
for the purposes expressed in this article and shall be used to
supplement existing levels of service and not to fund existing levels
of service. The fund and accounts in the fund may be used for loans
to the General Fund as provided in Sections 16310 and 16381 of the
Government Code. The loans shall be repaid with interest from the
General Fund at the Pooled Money Investment Account rate.



30126.  The annual determination required of the State Board of
Equalization pursuant to subdivision (b) of Section 30123 shall be
made based on the wholesale cost of tobacco products as of March 1,
and shall be effective during the state's next fiscal year.




30128.  This article shall take effect on January 1, 1989.



30129.  The tax imposed by Section 30123 shall be imposed on every
cigarette and tobacco product in the possession or under the control
of every dealer and distributor on and after 12:01 a.m. on January 1,
1989, pursuant to rules and regulations promulgated by the State
Board of Equalization.


30130.  This article may be amended only by vote of four-fifths of
the membership of both houses of the Legislature. All amendments to
this article must be consistent with its purposes.