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CDTFA seeks $3.5M to implement seizure authority for flavored tobacco; agency cites enforcement and hazardous disposal costs
Summary
The California Department of Tax and Fee Administration requested $3.5 million in one-time funding to implement AB 3218 and SB 1230, which authorize seizure and destruction of flavored tobacco products sold in violation of the state's flavor ban.
Jason Mallett, chief financial officer for the California Department of Tax and Fee Administration (CDTFA), told the subcommittee that AB 3218 and SB 1230 (effective Jan. 1 this year) authorized CDTFA to seize flavored tobacco products from retailers violating the flavor ban. CDTFA requested one year of funding (a $3.5 million appropriation from the cigarette and tobacco compliance fund) to implement seizure, destruction, and penalty assessment operations; the department said it requested only one year because the volume and revenue from seizures and penalties are uncertain.
Seth Kerstein (LAO) noted federal revenue declines associated with the flavor ban and documented that CDTFA has fewer filled tobacco positions than in prior years, which has coincided with fewer inspections but an increased value per seizure. Jason Mallett explained that inspections have become more targeted toward likely noncompliant retailers and that the cost of safe destruction of seized vaping liquids (toxic nicotine solution) is high and a material part of the requested funding.
CDTFA representatives described hiring challenges for field inspectors, the need for limited peace-officer accompaniment for enforcement at unlicensed businesses, and that seized-product destruction and recordkeeping are labor-intensive. The department said it would return next year with an ongoing funding recommendation after it has better visibility into the volume of seized product and penalty revenue.
No vote occurred; LAO found the request reasonable in budgetary terms but flagged uncertainty about whether existing enforcement positions can be filled and whether new responsibilities could further strain limited field resources.
