Get Full Government Meeting Transcripts, Videos, & Alerts Forever!
Get email alerts on the Tobacco Enforcement Cdtfa topic
No spam. Unsubscribe anytime.
CDTFA seeks one‑year funding to implement flavored tobacco seizure authority; lawmakers flag enforcement staffing concerns
Summary
The California Department of Tax and Fee Administration asked the Senate subcommittee for one year of funding to implement seizure, destruction and penalty assessment authority for flavored tobacco; the Legislative Analyst flagged staff vacancies and declines in inspections as potential limits on enforcement capacity.
The California Department of Tax and Fee Administration (CDTFA) asked the Senate Budget subcommittee for limited‑term funding of about $3.5 million in FY 2025‑26 from the Cigarette and Tobacco Compliance Fund to implement AB 3218 and SB 1230, which authorize CDTFA to seize flavored tobacco products from retailers and assess penalties.
Background and request CDTFA Director Trista Gonzales and Chief Financial Officer Jason Mallett told the committee that until Jan. 1, 2025 the department lacked statutory seizure authority; the new laws permit CDTFA to seize, destroy, and assess penalties on illegal flavored tobacco. The department requested one‑year limited funding because it cannot yet predict the value of seized product or penalty revenue — seizing illegal product removes that inventory from potential taxed sales, complicating short‑term revenue estimates.
Department testimony and early enforcement experience Director Gonzales said the department has focused enforcement on smaller retailers where illegal product is disproportionately found, rather than large chain stores where compliance is higher. CDTFA reported substantial increases in seizures over recent years: from roughly 600,000 cigarette sticks seized (four years earlier) to about 2,000,000 sticks at the end of the most recent fiscal year. Since Jan. 1, 2025, CDTFA said it had conducted more than 100 inspections and seized over 300,000 packages of flavored product.
LAO analysis and committee concerns Seth Kirstein of the Legislative Analyst’s Office told the committee that tobacco program revenue has declined in recent years and the department has 32% fewer filled positions now than in FY 2018‑19; the number of inspections has dropped by 52% over recent years. LAO concluded that while the proposed one‑year funding request is reasonable, CDTFA’s historical hiring and retention challenges raise uncertainty about whether the department can scale enforcement as the new seizure authority requires.
Department response CDTFA told the committee it has recently improved hiring outcomes and reduced vacancy rates in tobacco enforcement from about 40% to roughly 10% after recent hiring efforts, and it highlighted progress seizing illegal product. Because penalties and seized product values remain uncertain, CDTFA asked only for one year of funding and said it will return with an ongoing funding recommendation once enforcement costs and revenues are better understood.
Next steps Senators asked CDTFA to provide metrics it would use to evaluate the program and to return to the subcommittee as the fiscal year proceeds so lawmakers can assess whether ongoing funding is warranted. The subcommittee held the item open for further review; no final appropriation was approved during the hearing.
