McGeorge School of Law

Proposition 10

Proposition 10:
State and County Early Childhood
Development Programs

By John Grimes

Copyright © 2000 by University of the McGeorge School of Law

JD, McGeorge School of Law, University of the Pacific
to be conferred 2000

 

Table of Contents

Executive Summary

General Description

Ballot Pamphlet Text

Text of Proposed Law

 

The Initiative Review is produced by the Governmental Affairs Student Association of the McGeorge School of Law


Chapter 1

Executive Summary

 

Proposition 10, the California Children and Families First Initiative, seeks to amend the California Constitution, the Health and Safety Code, and the Revenue and Taxation Code to establish a system of information and services designed to promote early development in children from the prenatal stage to age five. Proponents of this initiative argue that while California taxpayers spend billions of dollars on public education each year, there are few programs specifically designed to help prepare children to enter school in good health. Initiative proponents further contend that the first three years of a child=s life are the most critical for child brain development, making money spent on well-coordinated programs designed to foster healthy children will save billions of dollars in remedial programs, treatment services, social services, and criminal justice system expenses.

If passed, Proposition 10 will create California Children and Families First, a state-wide committee that will establish community-based programs to provide parental education and family support services in areas not currently served by existing programs. The act will also consolidate existing programs and services into an integrated system that will include skills training in nurturing and in the avoidance of substance abuse during pregnancy. Once created, these committees will use mass media to educate the public about the dangers of tobacco use for both pregnant women and for their children. These programs will also assist pregnant woman and parents of young children to quit smoking.

These goals will be achieved by a $0.50 per pack increase in the state surtax on cigarettes and an equivalent increase in the state surtax on tobacco products. The term "tobacco products" includes all forms of cigars, smoking tobacco, chewing tobacco, snuff, and any other articles or products made of or containing at least 50% tobacco other than cigarettes. The surtax will impact both purchasers and distributors of cigarettes and tobacco products. This excise tax will likely increase state revenues by about $350 million in 1998-1999, $700 million in 1999-2000, and gradually decreasing amounts in subsequent years. Almost all of this money will be used to fund the newly created California Children and Families First program. Proposition 10 will likely result in increased state General Fund sales and excise tax revenues on cigarettes and tobacco products of a few million dollars in 1998-1999 and 1999-2000 and a decrease of about $4 million annually thereafter. Furthermore, it will also likely result in increased local government sales tax revenues of about $6 million in 1998-1999 and $412 million annually thereafter. Lastly, the program may reduce the Cigarette and Tobacco Products Surtax Fund (Proposition 99) revenues of $15 million in 1998-1999 and $30 million annually thereafter, for the benefit of certain health and resources programs.

 

Chapter 2

General Description

 

A. CONSTITUTIONAL AMENDMENTS

1. The Super-Majority

The California State Constitution, in Article XIIIA, Section 3, contains what is often referred to as a supermajority requirement. The relevant parts of this provision state that "...any changes in State taxes enacted for the purpose of increasing revenues...must be imposed by an Act passed by not less than two-thirds of all members elected to each of the two houses of the Legislature." Proposition 10 would allow voters to bypass the Section 3 requirement of supermajority approval for "any" tax increase. The California Children and Families First Initiative proposes to add Section 7 to Article XIIIA of the California State Constitution, formerly known as Proposition 13 and the Jarvis-Gann Initiative. The new Section 7 states: "Section 3 of Article XIIIA does not apply to the California Children and Families First Act of 1998."

In 1988, the voters enacted an initiative similar to Proposition 10 that also imposed a tobacco tax designed to fund anti-tobacco programs. This initiative was Proposition 99 and is now codified as Revenue and Tax Code, Section 30122. Proposition 99 was challenged in Kennedy Wholesale, Inc. v. State Board of Equalization on the grounds that it was in direct conflict with the supermajority requirement found in the above-mentioned Article XIIIA, Section 3 of the California Constitution. (Kennedy v. State Board of Equalization (1991) 53 Cal. 3d 245, 248.) In Kennedy, the plaintiff argued for a strict interpretation of Article XIIIA, Section 3, but the court recognized that a plain meaning interpretation of this section would effectively infringe on the constitutional initiative process itself. People of California, in Article IV, Section 1, expressly "reserve to themselves the powers of initiative and referendum." (Kennedy, 53 Cal 3d. at 248.) The California Supreme Court preserved the power of initiative, despite the supermajority requirement, in Kennedy by holding that "when a new enactment conflicts with an existing provision, in order for the second law to repeal or supersede the first, the former must constitute a revision of the entire subject, so that the court may say that it was intended to be a substitute for the first." (Id. at 248.) With Proposition 10, such a characterization would probably be forthcoming in that Kennedy dealt with similar issues and was found to satisfy this test.

 

2. Appropriations Subject to Limitation

This initiative also proposes to add Section 13 to Article XIIIB of the California Constitution. Section 13 states in part, "The surtax created by the California Children and Families First Act of 1998 shall not be considered General Fund revenues for the purposes of Article XVI, Section 8 of the California Constitution." Article XVI, Section 8 provides that "from all state revenues there shall first be set apart the moneys to be applied by the state for support of the public school system and public institutions of higher education." Section 13 therefore prevents the revenue generated from Proposition 10 from being used for public schools. The funds would instead be directly deposited into the Children and Families First trust fund.

 

3. Amendment or Revision?

Article XVIII, Section 3 of the California Constitution provides that "the electors may amend the constitution by initiative," but a "revision" of the Constitution may be accomplished only by convening a Constitutional Convention and obtaining popular ratification (Id., Section 2), or by legislative submission of the measure to the voters (Id., Section 1). Amendments are considered proper for voters to pass by initiative because they are considered to be changes within the structure of the Constitution which will improve the instrument, and make it more efficient in its purpose. Revisions are not considered proper for voters because such "comprehensive changes' to the Constitution require more formality, discussion and deliberation than is available though the initiative process." (Raven v. Deukmejian (1990) 52 Cal. 3d 336, 349.) In analyzing whether a particular constitutional enactment is a revision or an amendment, the courts follow two tests: quantitative and qualitative. (Amador Valley Joint Union High School District v. State Board of Equalization (1978) 22 Cal. 3d. 208, 223.)

The quantitative test requires the courts to ask whether the proposal "is so extensive in its provisions as to change directly the 'substantial' entirety of the Constitution by the deletion or alteration of numerous existing provisions." (Id. at 223.) This test looks at the actual number of constitutional provisions to be added, altered, or deleted without considering the substantive effect of these changes. The quantitative test also relies on the Single Subject Rule, codified as Article XI, Section 8 of the California Constitution. This rule provides that "an initiative measure embracing more than one subject may not be submitted to the electors or have any effect." The Single Subject Rule protects voters form confusion and deception by requiring the voting public to vote on independent, easily identifiable issues, not broad, complex ones.

In contrast, the qualitative test ignores the quantity of the proposal, and looks to the results of the proposed enactment. The test asks whether the enactment would "accomplish such far reaching changes in the nature of our basic governmental plan as to amount to a revision." (Amador Valley Joint Union High School District, 22 Cal 3d. at 223.)

These tests are strictly applied, and rarely has an initiative been declared to be a revision. California courts aggressively protect the power of initiative and adhere to a presumption of validity towards the initiative process. (Legislature of California. v. Eu (1991) 54 Cal. 3d 492, 501.)

 

a. The Quantitative Test

Quantitatively, Proposition 10 does not directly appear to change the Constitution. It will not delete existing constitutional language, and it will add only two new sections to the California constitution: § 7 will be added to Article XIIIA and § 13 will be added to Article XIIIB.

The Single Subject Rule, which basically requires that any one initiative put only one issue before the voters, provided the basis for a challenge to the validity of Proposition 99 and possibly provides the basis for a challenge to Proposition 10. Proposition 99 enacted a tobacco tax which deposited funds into a Cigarette and Tobacco Products Surtax Fund. The revenue generated by Proposition 99 was appropriated to improve the following:

(1) Tobacco-related school and community health education programs; (2) Tobacco-related disease research; (3) Medical and hospital care an 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 or in part 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. (Revenue and Taxation Code, Section 30122.)

Despite the petitioner's argument that Proposition 99 allowed expenditures not related to the problems caused by tobacco use, the California Supreme Court upheld its validity, citing its prior ruling in Amador that an initiative measure does "not violate the single-subject requirement if, despite its varied collateral effects, all of its parts are 'reasonably germane' to each other." (Kennedy v. State Board of Equalization (1991) 53 Cal. 3d 252, citing Amador Valley Joint Union High School, (1978) 22 Cal. 3d at 230.)

In light of the treatment of Proposition 99 by the court in Kennedy, it is not likely that a court would find Proposition 10 in violation of the single-subject rule. Proposition 10 will establish California Children and Families First, a program designed to promote and develop early childhood development programs. California Children and Families First will be administered by state and county officials who will formulate statewide program guidelines, distribute educational material, provide technical assistance to the county commissions, and conduct research and evaluations of early childhood development programs. The program guidelines must address parenting education and related support services; the availability and provision of high quality, accessible, and affordable child care; and the provision of specified types of child health care and prenatal and postnatal maternal health care services. All of these programs will likely be "reasonably germane to each other" in that they all seek to promote the early development of children in order to better prepare children for school. Since the nexus between these programs seems even greater than in Proposition 99, Proposition 10 will likely pass Single Subject Rule scrutiny just as Proposition 99 did.

b. The Qualitative Test

It is extremely rare for the courts to label an initiative a qualitative revision. In fact, Proposition 115, enacted by voters on June 5, 1990, is the only initiative to have been declared a qualitative revision. Proposition 115, known as the Crime Victims Justice Reform Act, enacted a variety of changes to the California Constitution. Of particular concern was an amendment to Article I, Section 24, which essentially eliminated 32 rights provided to the people and vested all judicial interpretive power in the United States Supreme Court. Under the newly amended section, California state courts were to interpret rights such as the right to due process of law, equal protection of the law, assistance of counsel, and avoidance of cruel and unusual punishment consistently with the United States Supreme Court. In Raven v. Deukmejian, the California Supreme Court held that the effect of Section 24 would be so far reaching as to amount to a qualitative revision beyond the scope of the initiative process. (Raven v. Deukmejian (1990) 52 Cal. 3d 336, 350.) The court reasoned that Proposition 115 would restrict state judicial power in a way that would severely limit the independent force and effect of the California Constitution. (Id. at 353.)

Qualitatively, Proposition 10 does not appear to "accomplish such far reaching changes in the nature of our basic governmental plan as to amount to a revision". The proposed tax will be imposed only on those purchasing cigarettes and tobacco products, while all citizens will feel the benefits of the tax. Furthermore, Proposition 99 demonstrates that such a tax can endure Qualitative Test scrutiny. The circumvention of the supermajority requirement incorporated in Proposition 10 comes closest to violating the Qualitative Testis provision, but Proposition 99 included such a provision and was still codified by the initiative process.

 

B. ADDITIONS TO HEALTH AND SAFETY CODE

Proposition 10 proposes to add Sections 130100 through 130150 to the Health and Safety Code. Section 130100 creates the California Children and Families First program, which seeks to promote, to support, and to the early development of children from the prenatal stage through the age of five. The programs created by this initiative shall be administered by the California Children and Families First Commission and by county Children and Families First Commissions.

1. Funding

Section 130105 creates The California Children and Families First Trust Fund in the State Treasury to fund all programs and activities created by Proposition 10. The California Children and Families First trust fund will allocate 20% of its revenue into separate accounts of the state commission for expenditure as follows:

Mass Media Communications Account 6%

Education Account 5%

Child Care Account 3%

Research and Development Account 3%

Research and Account 1%

Unallocated Account 2%

The remaining eighty percent will be distributed to individual counties for them to spend on local programs authorized and/or established by proposition 10. All costs associated with the implementation of the provisions of Proposition 10 will be paid out of the money deposited in the California Children and Families First Trust Fund.

Within one year after the implementation of Proposition 10, the State Board of Equalization will determine the effect that the additional taxes imposed on cigarettes and tobacco products has had on the consumption of cigarettes and tobacco products in California. If the State Board of Equalization finds Proposition 10 to have resulted in decreased cigarette and tobacco consumption, revenues lost as a result of this lower consumption will be compensated for by funds derived from the Proposition 10 tax. Proposition 10 specifically protects the programs supported by Proposition 99, the Tobacco Tax and Health Protection Act of 1988.

2. Appointments

Sections 130110 and 130115 establish the make-up of the State Commission. The California Children and Families First Commission will be composed of seven voting members and two ex-officio members. Members must possess knowledge, experience, and expertise in early child development, childcare, education, social services, public health, and the prevention and treatment of tobacco and other substances. The Governor will appoint three members of the Commission, with one of these people being the chairperson. The Speaker of the State Assembly and the Senate Rule Committee will each appoint two members. The ex-officio members will consist of the Secretary of Health and Welfare and the Secretary of Child Development and Education. The terms of all of these members will be for four years, except for the initial appointments which will be for two, three, or four years in order to achieve long-term staggering of terms. No member will be allowed to serve more than two four-year terms.

3. Powers and Duties

Section 130120 provides that the State Commission will hire an Executive Director and any other staff as necessary.

Section 130125 provides that the powers and duties of the state commission include providing for statewide dissemination of public information and education materials and adopting guidelines for an integrated and comprehensive statewide program. These guidelines are to include parental education and support services in all areas relevant to healthy parenting. The State Commission will conduct at least one public hearing on its proposed guidelines before adoption, and will review and revise its adopted guidelines as necessary. Section 130130 provides that bylaws will be adopted to assist the commission in conducting its business. The voting members themselves will not be compensated except for reasonable per diem travel expenses. (Section 130135)

Section 130140 provides that any county or counties may develop local early childhood development programs consistent with the goals and guidelines provided by the State Commission. The county's board of supervisors must establish a county Children and Families First Commission that will operate within the guidelines provided by the board of supervisors. The County Commission must also adopt a strategic plan for the support and improvement of early childhood development consistent with the above-mentioned Section 130125.

Section 130145 provides that the State Commission and each County Commission will establish one or more advisory committees to provide technical and professional expertise and support for this act.

Section 130150 provides that the State Commission and each County Commission will conduct a performance audit and issue a written report to the state commission. The state commission will prepare a written report on the annual audits submitted by all of the county commissions for the preceding fiscal year. This report will be sent to the Governor, to the Legislature, to each county commission, and to members of the general public.

 

C. ADDITIONS TO THE REVENUE AND TAXATION CODE

This initiative will add Article 2.5 (Sections 30131 through 30131.6) to the Revenue and Taxation Code. The provisions will establish the items to be assessed additional taxation and also the level of that additional taxation.

Section 30131 will establish the California Children and Families First trust fund in the State Treasury for the exclusive purpose of funding the California Children and Families First Act of 1998.

Section 30131.1 and Section 30131.2 define "cigarette" and "tobacco products" and then stipulate how additional taxes will be assessed. A "cigarette" is "any roll for smoking, made wholly or in part of tobacco, irrespective of size or shape and irrespective of whether the tobacco is flavored, adulterated or mixed with any other ingredient, where such roll has a wrapper or cover made of paper or any other material, except where such wrapper is wholly or in the greater part made of tobacco and such roll weighs over three pounds per thousand." "Tobacco product" includes, but is not limited to, "all forms of cigars, smoking tobacco, chewing tobacco, snuff, and other articles or products made of or containing at least 50% tobacco, but does not include cigarettes." Cigarette distributors will be subject to a surtax of $0.025 (twenty-five mils) for each cigarette distributed. Distributors of "tobacco products" will be assessed a tax on their products based upon the same ratio of taxation surcharge to wholesale cost as cigarettes in mind. Section 31031.5 allows for yearly adjustments on the taxation of tobacco products based on wholesale cost of the product on March 1st of each fiscal year.

Sections 30131.3 and 30131.4 provide that all money raised by the above taxes will be deposited in the California Children and Families First trust fund for the exclusive use of funding the programs established by this initiative. None of this money will be used to supplant state or local General Fund money for any purpose.

Section 30131.6 provides that the taxes shall be imposed on every cigarette and on all tobacco products in the possession or under the control of every dealer and distributor on and after 12:01 a.m. on January 1, 1999.

 

D. CONCLUSION

Generally, Proposition 10 seems to be a constitutional way to help protect and maintain child health and welfare, but does so at the expense of cigarette and tobacco product users.

 

Appendix A

Ballot Pamphlet Text

 

Analysis by the Legislative Analyst

Background

Early Childhood Development Programs. Currently, state and local governments administer a variety of early childhood development programs, such as the Head Start Program, the State Preschool Program, and the Early Mental Health Initiative. In general, these types of programs focus on the social, emotional, and/or cognitive development of young children.

Tobacco Taxes. Current state law imposes an excise tax on cigarettes, which amounts to 37 cents for each pack. Of this amount, 25 cents is allocated to the Cigarette and Tobacco Products Surtax Fund (established by Proposition 99 of 1988), 10 cents is allocated for state General Fund purposes, and 2 cents is allocated to the Breast Cancer Fund. Cigarette and Tobacco Products Surtax Fund monies are earmarked for programs to reduce smoking, to provide health care services to indigents, to support tobacco-related research, and to fund resources programs (primarily in the Departments of Fish and Game and Parks and Recreation). The Breast Cancer Fund supports research and services related to breast cancer.

Current state law also imposes an excise tax on other tobacco products--such as cigars, chewing tobacco, pipe tobacco, and snuff. This excise tax is equivalent to the excise tax on cigarettes (if both taxes were calculated as a percentage of the wholesale costs of these products). All of these tax revenues are allocated to the Cigarette and Tobacco Products Surtax Fund for Proposition 99 programs.

Cigarette and tobacco product taxes are administered by the State Board of Equalization. In 1997-98, these state excise taxes generated about $450 million for Proposition 99 programs, $33 million for the Breast Cancer Fund, and $165 million for the General Fund.

In addition to the state excise tax, there is currently a federal excise tax on cigarettes of 24 cents per pack, as well as federal excise taxes (in varying amounts) on other tobacco products.

Proposal

Revenues

This measure imposes an additional excise tax on cigarettes of 50 cents per pack. The total state excise tax, therefore, would be 87 cents per pack.

The measure also increases the excise tax on other types of tobacco products--such as cigars, chewing tobacco, pipe tobacco, and snuff--in two ways:

* The measure imposes a new excise tax on these products that is equivalent (the same percentage in relation to the wholesale costs of these products) to a 50 cent per pack tax on cigarettes.

* Under current law, any increase in the tax on cigarettes automatically triggers an increase in the tax on other tobacco products. As a result, the measure increases the existing excise tax on these products by the equivalent of a 50 cent per pack increase in the tax on cigarettes, in addition to the amount above.

Thus, the measure increases the excise taxes on other tobacco products in total by the equivalent of a $1 per pack increase in the tax on cigarettes.

The measure requires that the revenues generated by the new excise taxes on cigarettes and other tobacco products be placed in a new special fund--the California Children and Families First Trust Fund. These revenues would:

* Fund early childhood development programs (described below).

* Offset revenue losses to Proposition 99 health education or research programs and Breast Cancer Fund programs. (As discussed in more detail later in this analysis, the revenue losses are the result of decreased sales due to the excise taxes imposed by this measure.)

The revenues resulting from the increase in the existing excise tax on other tobacco products would be placed in the Cigarette and Tobacco Products Surtax Fund (for Proposition 99 programs).

The additional excise tax on cigarettes would begin January 1, 1999. The increase in the excise tax on other tobacco products would begin July 1, 1999.

Expenditures

The measure establishes the California Children and Families First Program to promote and develop early childhood development programs. The program would be funded by the revenues resulting from the increased tax on cigarettes and other tobacco products. The new program would be carried out by state and county commissions.

State Commission. The measure creates a new state commission--the California Children and Families First Commission--which would be responsible for administration of the early childhood development program. The commission would be composed of seven voting members (appointed by the Governor, the Speaker of the Assembly, and the Senate Rules Committee) and two ex officio nonvoting members.

The commission would develop statewide program guidelines, distribute educational materials, provide technical assistance to the county commissions, and conduct research and evaluations of early childhood development programs. The program guidelines must address parenting education and related support services; the availability and provision of high quality, accessible, and affordable child care; and the provision of specified types of child health care and prenatal and postnatal maternal health care services.

Twenty percent of the available revenues would be allocated to the state commission, to be spent for the following purposes:

* Mass Media Communications. Six percent for mass media communications to the general public related to: methods of child nurturing and parenting which encourage proper childhood development; the selection of child care; health and social services; the prevention of tobacco, alcohol, and drug use by pregnant women; and the detrimental effects of secondhand smoke on early childhood development.

* Education. Five percent for the development of educational materials and parental and professional education and training.

* Child Care. Three percent for programs related to the education and training of child care providers and the development of educational materials and guidelines for child care workers.

* Research. Three percent for early childhood development research and for evaluating such programs and services.

* Administration. One percent for the administrative functions of the California Children and Families First Commission.

* General Purposes. The remaining 2 percent may be used for any of the specific purposes described above, except for the administrative costs of the commission.

County Commissions. Eighty percent of the available revenues would be allocated to counties that create county commissions (consisting of five to nine members appointed by the county board of supervisors) to implement programs in accordance with strategic plans to support and improve early childhood development in the county. The formula for allocating these funds is based on the number of births in each participating county. The strategic plans must be consistent with guidelines adopted by the state commission. Two or more counties could form a joint county commission, adopt a joint county strategic plan, or implement joint programs, services, or projects.

The measure requires that funds be used to supplement and not replace existing service levels. In addition, the measure amends the California Constitution to provide that (1) the new tax revenues shall not be considered General Fund revenues for the purposes of determining the level of funding to be provided for public schools pursuant to Proposition 98 of 1988, and (2) the appropriation of revenues from the additional taxes imposed by the measure shall not be subject to the existing state or local appropriations limits. (Current law places limits on the level of certain appropriations made by the state and local governments.)

 

Fiscal Effect

New Revenues and Expenditures--The California Children and Families First Trust Fund. The measure would raise revenues of approximately $400 million in 1998-99 (half year) and about $750 million in 1999-00 (first full year), and slightly declining amounts annually thereafter, for the new California Children and Families First Trust Fund.

This estimate assumes that the distributors of cigarettes and other tobacco products would likely pass the full amount of the tax increase along to consumers in the form of higher prices. This, in turn, is likely to cause a decrease in taxable sales within the state for two reasons:

* First, it would result in a decrease in consumption of tobacco products within the state.

* Second, it is likely to result in some increase in out-of-state sales of tobacco products, some of which would be subsequently brought back into the state, and would not be taxed.

This decrease in sales would reduce revenues from existing state excise taxes on tobacco products for the Breast Cancer Fund and the Cigarette and Tobacco Products Surtax Fund.

Most of the revenues generated by this measure would be available to fund the costs of the California Children and Families First Program. This includes the administrative costs for the new state and county commissions and the costs of program activities. Additionally, a small amount of the new revenues (less than 1 percent) would be used to offset revenue losses to the Breast Cancer Fund. Also, about 2 percent of the new revenues would be used to offset losses to the Cigarette and Tobacco Product Surtax Fund in 1998-99, and less than 1 percent in subsequent years, as discussed below.

Other Costs. The State Board of Equalization would incur administration and enforcement costs, related to the additional excise taxes, of about $800,000 in 1998-99, $850,000 in 1999-00, and $600,000 annually thereafter. These costs would be reimbursed out of the proceeds of the new taxes.

Effect on Cigarette and Tobacco Products Surtax Fund Revenues. The measure would result in a decrease in revenues to the Cigarette and Tobacco Products Surtax Fund (Proposition 99). The decrease is due to two offsetting factors. First, to the extent that the measure results in a reduction in overall tobacco product sales, it would decrease the revenues resulting from the existing excise taxes on these products. Second, the measure would increase the revenues resulting from the existing excise tax on other tobacco products (cigars, snuff, etc.) that are allocated to the Cigarette and Tobacco Products Surtax Fund. As noted above, this occurs because the measure triggers an increase in this existing excise tax.

The measure requires that the revenue losses to Proposition 99 health-related education and research programs be offset by revenues resulting from the new excise taxes established by this measure. However, revenue reductions to Proposition 99 health care and resources programs would not be offset. We estimate net revenue losses of about $18 million in 1998-99 and $7 million annually thereafter for Proposition 99 health care and resources programs.

Effect on the State General Fund and Local Tax Revenues. The measure would result in a net increase in state General Fund revenues of about $2 million in 1998-99 and $4 million annually thereafter. These net increases are due to the measure's effect on: (1) sales tax revenues (which increase because the measure would increase the price of tobacco products) and (2) existing cigarette excise tax revenues (which would decrease due to reduced sales). Also, there would be a net increase in local government sales tax revenues of about $3 million in 1998-99 and $6 million annually thereafter.

Potential Long-Term Savings. The use of tobacco products has been linked to various adverse health effects by the United States Surgeon General and numerous scientific studies. The state and local governments incur costs for providing (1) health care for low-income persons and (2) health insurance coverage for state and local government employees. Consequently, changes in state law that affect the health of the general populace--and low-income persons and public employees in particular--would affect publicly funded health care costs. To the extent that this measure results in a decrease in the consumption of tobacco products, it would probably reduce state and local health care costs over the long term. The magnitude of these savings is unknown.

Due to the potential effects of the additional expenditures on early childhood development programs, the measure also could result in state and local savings over the long term in programs such as special education. The amount of such potential savings is unknown.

 

Argument in Favor of Proposition 10

 

PROPOSITION 10 WILL GIVE OUR YOUNGEST CHILDREN THE HEALTHY FOUNDATION THEY NEED TO SUCCEED--IN SCHOOL AND IN LIFE.

Scientific evidence proves that the care a child receives from the prenatal through the first years of life is critical to the child's brain growth and development. It has a profound effect upon whether the child will become a productive, well-adjusted adult.

Billions are spent on remedial education and social services for children after they enter school. For too many children, this is too late.

PROPOSITION 10 WILL PROVIDE COMPREHENSIVE, INTEGRATED SERVICES FOR PRE-SCHOOL CHILDREN INCLUDING:

* Child immunizations, vision and hearing tests

* Prenatal and postnatal maternal and infant nutrition services

* Domestic violence intervention, prevention and treatment

* Treatment for children suffering from problems related to drug and alcohol abuse

* Child care, health care and social services not provided by existing programs

PROPOSITION 10 WILL MORE THAN DOUBLE CALIFORNIA'S ABILITY TO EDUCATE THE PUBLIC TO STOP SMOKING.

Smoking by pregnant women threatens the health and normal development of children. Smoking during pregnancy accounts for an estimated 20-30 percent of pre-term deliveries and increases the risk of sudden infant death syndrome.

Proposition 10 will more than double the dollars available for California's anti-smoking mass media campaign with a special emphasis on stopping smoking by pregnant women and parents of young children. It will also protect funding for breast cancer research.

PROPOSITION 10 IS FOR LOCAL CONTROL--NOT BIG GOVERNMENT.

80% of the money will go directly to counties. A local commission including experts in health care, education and child care will spend the money on programs that meet the priorities of parents in each community.

20% of the money will go to statewide programs including anti-smoking and parental education programs.

PROPOSITION 10 FUNDS ARE AUDITED ANNUALLY TO ASSURE ACCOUNTABILITY.

Section 130150 of the initiative requires an annual audit by the state and county commissions which must include ". . . the manner in which funds were expended, the progress toward and achievement of program goals and objectives, and the measurement of specific outcomes through appropriate reliable indicators . . ." THESE AUDITS WILL BE MADE PUBLIC.

PROPOSITION 10 IS ENDORSED BY LEADING HEALTH CARE, CHILD CARE, EDUCATION AND COMMUNITY GROUPS INCLUDING:

American Cancer Society, California Division American Heart Association of California American Lung Association of California California Medical Association California School Boards Association California Consortium To Prevent Child Abuse California Child Care Resource and Referral Network California Association of Catholic Hospitals National Council of Jewish Women National Black Child Development Institute Los Ninos Child Development Center Asian Family Resource Center

PROPOSITION 10 IS ENDORSED BY LEADERS FROM BOTH POLITICAL PARTIES.

Los Angeles Mayor Richard Riordan, Republican San Francisco Mayor Willie Brown, Jr., Democrat Businessman and Former Congressman Mike Huffington, Republican U.S. Senator Barbara Boxer, Democrat

Proposition 10 is opposed by the tobacco industry, their front groups and the politicians who follow their agenda. A YES VOTE ON PROPOSITION 10 IS A VOTE FOR OUR CHILDREN AND AGAINST THE TOBACCO INDUSTRY.

ROB REINER Chairman, I Am Your Child Campaign

ALAN HENDERSON, Dr. PH President, American Cancer Society, California Division

JOHN D'AMELIO President, California School Boards Association

 

Rebuttal to Argument in Favor of Proposition 10

 

Proposition 10 is a badly flawed initiative. Its language provides for no specific Early Childhood Development programs. Instead it creates 59 NEW STATE AND COUNTY COMMISSIONS, which in turn are AUTHORIZED TO SPEND HUNDREDS-OF-MILLIONS OF NEW TAX DOLLARS ON UNSPECIFIED NEW SOCIAL PROGRAMS.

Proposition 10 AUTHORIZES THE CREATION OF OVER 500 NEW POLITICAL APPOINTEES AND COULD LEAD TO A STAFF OF 8000 to serve them. Proposition 10 even exempts the staff and employees of these new commissions from California's civil service laws. This initiative is A DREAM COME TRUE FOR AMBITIOUS POLITICIANS AND THEIR POLITICAL OPERATIVES: THOUSANDS OF NEW PATRONAGE JOBS AT TAXPAYERS EXPENSE!

PROPOSITION 10's "SELF-AUDITING" PROVISION ALLOWS THESE POLITICAL APPOINTEES TO AUDIT THEMSELVES; WITHOUT ANY INDEPENDENT OVERSIGHT. THEY ARE ACCOUNTABLE TO NO ONE!

PROPOSITION 10 DEPRIVES BREAST CANCER RESEARCH AND TEEN SMOKING PROGRAMS OF MILLIONS OF DOLLARS. The Legislative Analyst's official fiscal analysis estimates Proposition 10 would wipe out millions in funds annually for health care programs such as breast cancer research.

Proposition 10 even goes to the extreme of exempting itself from the constitutional requirements of Proposition 98 that 40% of new tax dollars fund schools. The net effect is THAT PROPOSITION 10 RAISES $700 MILLION IN NEW TAXES, YET CALIFORNIA'S SCHOOLS DON'T GET THEIR FAIR SHARE!

Proposition 10 amounts to ONE OF THE LARGEST TAX INCREASES ON POOR PEOPLE IN CALIFORNIA'S HISTORY, WITH NO GUARANTEES THAT ANY OF THIS MONEY WILL END UP IN OUR COMMUNITIES. Vote no to more wasteful government.

WILLIAM CAMPBELL President Emeritus, California Manufacturers Association

FRANCESCA FELIZZATTO School Teacher

RAMON RODRIGUEZ Small Business Owner

 

Argument against Proposition 10

 

California education officials, taxpayer advocates and leading government watchdogs have determined that Proposition 10 is not what it claims to be. Proposition 10 is harmful to California's schools and actually takes money away from existing state programs that benefit children and families. It raises hundreds of millions in new taxes, creates a massive new state bureaucracy, but spends almost all of the new money on programs that have nothing to do with smoking or tobacco related issues.

PROPOSITION 10 CREATES A NEW STATE COMMISSION, AND 58 SEPARATE COUNTY COMMISSIONS. Thousands of new bureaucrats, controlled by over 500 new political appointees, would spend millions of new tax dollars on new programs that have nothing to do with anti-smoking or breast cancer research programs.

Proposition 10 directs millions of new tax dollars to UNSPECIFIED Child Development programs; GRANTING OPEN-ENDED AUTHORITY TO BUREAUCRATS AND POLITICAL APPOINTEES TO SPEND MILLIONS WITHOUT ANY OUTSIDE CONTROL.

PROPOSITION 10 REDUCES MONEY FOR BREAST CANCER RESEARCH. Proposition 10 would divert current tobacco tax revenue that funds critical research on breast cancer at the University of California and turn it over to new bureaucracies that have nothing to do with tobacco issues.

PROPOSITION 10 HURTS CURRENT PROGRAMS TO COMBAT TEEN SMOKING. Proposition 10 would actually take money away from Proposition 99 tobacco tax programs that fund anti-tobacco advertising, designed to curb teen smoking. If passed, Proposition 10 would raise millions in new tobacco tax dollars, yet it would actually decrease the amount of money spent to stop children from smoking.

PROPOSITION 10 ROBS FUNDING FROM CALIFORNIA'S SCHOOLS. PROPOSITION 10 ACTUALLY AMENDS THE CONSTITUTION IN ORDER TO CIRCUMVENT PROPOSITION 98. Proposition 98, approved by voters, ensures California schools receive a fair share of all state revenues in order to meet their basic funding needs. Despite the huge tax increases, Proposition 10 explicitly exempts any of the new money from going to California schools. UNDER PROPOSITION 10, CALIFORNIA SCHOOLS GET NOTHING FROM THIS NEW TAX.

PROPOSITION 10 EXEMPTS ITSELF FROM THE CONSTITUTIONAL LIMIT ON STATE SPENDING. Proposition 10 shields its massive bureaucracies from constitutional limits on all state spending. By amending the constitution, Proposition 10 purposefully avoids the constitutional spending limit previously approved by California voters. Proposition 10 will result in UNCONTROLLED SPENDING, WITH TAXPAYERS LEFT TO PAY THE BILL.

PROPOSITION 10 UNFAIRLY TARGETS POOR TAXPAYERS AND MINORITY TAXPAYERS. Proposition 10 is a regressive tax that singles out poor and minority Californians to pay the greatest share of the cost of this new government bureaucracy. Like any tax on business, this tax is passed on to the consumer. So poor people are going to pay disproportionately more for the thousands of new bureaucrats and their programs that have nothing to do with stopping smoking or breast cancer research.

Proposition 10 is a sham. It's bad for California's families, bad for California's children, bad for California's taxpayers and bad for California's schools. Taxpayer advocates, educators, and healthcare professionals urge you to VOTE NO ON PROPOSITION 10.

JANE ARMSTRONG State Chairman, Alliance of California Taxpayers & Involved Voters

HELENA RUTKOWSKI Member, Westminster School Board

Dr. KEN WILLIAMS Family Physician

 

Rebuttal to Argument against Proposition 10

 

THE TOBACCO INDUSTRY IS FUNDING THE CAMPAIGN AGAINST PROPOSITION 10.

Official reports list the opposition as "sponsored by tobacco companies," including Philip Morris, RJ Reynolds, Lorillard Tobacco and Brown & Williamson. Smoking decreased 32% in California after voters approved a 25 cent tobacco tax in 1988. That is why Big Tobacco opposes Proposition 10.

Their arguments are false and misleading. Here are the facts:

PROPOSITION 10 MORE THAN DOUBLES THE FUNDING AVAILABLE FOR ANTI-TOBACCO ADVERTISING AND ALSO HELPS FIGHT TEEN SMOKING. The National Cancer Policy Board says increasing the price of cigarettes is "the single most effective way" to reduce teen smoking. The American Lung Association and The American Heart Association endorse Proposition 10.

PROPOSITION 10 ALLOCATES MONEY SPECIFICALLY FOR BREAST CANCER RESEARCH. The American Cancer Society endorses it.

PROPOSITION 10 DOES NOT TAKE ONE PENNY FROM OUR SCHOOLS. The organization representing every local school board and the California Teacher's Association endorse Proposition 10.

PROPOSITION 10 IS A BIG BENEFIT FOR TAXPAYERS. A Families and Work Institute study showed that every dollar spent on early childhood programs can save taxpayers up to seven dollars in remedial education, welfare and juvenile crime.

THE TOBACCO COMPANIES DON'T CARE ABOUT MINORITIES, THE POOR OR ANYONE BUT THEMSELVES. They advertise heavily to minority and low income youth. The result--45,000 African-Americans die annually from smoking related diseases and smoking among Latino teens is skyrocketing.

WHO DO YOU BELIEVE? The tobacco industry or anti-smoking, healthcare, child care and education leaders. Please vote YES.

C. EVERETT KOOP, M.D. Former Surgeon General of the United States

DELAINE EASTIN Superintendent of Public Instruction

ALAN HENDERSON, Dr PH President, American Cancer Society, California Division

 

State and County Early Childhood Development Programs. Additional Tobacco Surtax. Initiative Constitutional Amendment and Statute.

Proposition 10 - Full Text of the Proposed Law

This initiative measure is submitted to the people in accordance with the provisions of Article II, Section 8 of the California Constitution.

This initiative measure expressly amends the California Constitution by adding sections thereto, and adds sections to the Health and Safety Code and the Revenue and Taxation Code. New provisions proposed to be added are printed in italic type to indicate they are new.

 

Proposition 10: Text of Proposed Law

CALIFORNIA CHILDREN AND FAMILIES FIRST INITIATIVE

SECTION 1. Title. This measure shall be known and may be cited as the "California Children and Families First Act of 1998."

SEC. 2. Findings and Declarations. The people find and declare as follows:

(a) There is a compelling need in California to create and implement a comprehensive, collaborative, and integrated system of information and services to promote, support, and optimize early childhood development from the prenatal stage to five years of age.

(b) There is a further compelling need in California to ensure that early childhood development programs and services are universally and continuously available for children until the beginning of kindergarten. Proper parenting, nurturing, and health care during these early years will provide the means for California's children to enter school in good health, ready and able to learn, and emotionally well developed.

(c) It has been determined that a child's first three years are the most critical in brain development, yet these crucial years have inadvertently been neglected. Experiences that fill the child's first three years have a direct and substantial impact not only on brain development but on subsequent intellectual, social, emotional, and physical growth.

(d) The seminal Starting Points report by the Carnegie Corporation of New York concludes that "how children function from the preschool years all the way through adolescence, and even adulthood, hinges in large part on their experiences before the age of three."

(e) New research from many sources, including the Carnegie Corporation, the Baylor College of Medicine, and the White House Conference on Early Childhood Development, demonstrates that the capacity of a child's brain grows more during the first three years than at any other time.

(f) The Education Commission of the States' report on the results of neuroscience research associated with early childhood development states: "Too many infants are born with problems that hinder their start in life. Damage that occurs to the embryo during critical growth times may lead to irreversible disabilities."

(g) California taxpayers spend billions of dollars on public education each year, yet there are few programs designed specifically to help prepare children to enter school in good health, ready and able to learn, and emotionally well developed. Children who succeed in school are far more likely to engage in meaningful social, economic, and civic participation as adults and to avoid the use of tobacco and other addictive substances.

(h) Dollars spent now on well-coordinated programs that enable children to begin school healthy, ready and able to learn, and emotionally well developed will save billions of dollars in remedial programs, treatment services, social services, and our criminal justice system.

(i) The well-being of California's infants and children is endangered. Each year, tens of thousands of children are born exposed to tobacco, drugs, and alcohol. Cigarette smoking and other tobacco use by pregnant women and new parents represent a significant threat to the healthy development of infants and young children. Smoking is the leading preventable cause of death and disease in California.

(j) Studies published by the American Lung Association state: "Smoking during pregnancy accounts for an estimated 20 to 30 percent of low birth weight babies, up to 14 percent of preterm deliveries, and some 10 percent of all infant deaths. Maternal smoking has been linked to asthma among infants and young children."

(k) Research and studies demonstrate that low birth weight infants are particularly at risk for severe physical and developmental complications.

(l) Studies by the federal Environmental Protection Agency demonstrate an increased risk of sudden infant death syndrome (SIDS) in infants of mothers who smoke. The federal Environmental Protection Agency also estimates that secondhand smoke is responsible for between 150,000 and 300,000 lower respiratory tract infections in infants and children under 18 months of age annually, resulting in between 7,500 and 15,000 hospitalizations each year.

(m) The California Children and Families First Act of 1998 addresses these issues by facilitating the creation of a seamless system of integrated and comprehensive programs and services, and a funding base for the system with program and financial accountability, that will:

(1) Establish community-based programs to provide parental education and family support services relevant to effective childhood development. These services shall include education and skills training in nurturing and in avoidance of tobacco, drugs, and alcohol during pregnancy. Emphasis will be on services not provided by existing programs and on the consolidation of existing programs and new services provided pursuant to this act into an integrated system from the consumer's perspective.

(2) Educate the public, using mass media, on the importance and the benefits of nurturing, health care, family support, and child care; and inform involved professionals and the general public about programs that focus on early childhood development.

(3) Educate the public, using mass media, on the dangers caused by smoking and other tobacco use by pregnant women to themselves and to infants and young children, and the dangers of secondhand smoke to all children.

(4) Encourage pregnant women and parents of young children to quit smoking.

(n) A 50-cent-per-pack increase in the state surtax on cigarettes and an equivalent increase in the state surtax on tobacco products to fund anti-smoking and early childhood development programs is necessary, appropriate, and in the public interest.

SEC. 3. Section 7 is added to Article XIII A of the Constitution, to read:

 

SEC. 7. Section 3 of this article does not apply to the California Children and Families First Act of 1998.

SEC. 4. Section 13 is added to Article XIII B of the Constitution, to read:

 

SEC. 13. "Appropriations subject to limitation" of each entity of government shall not include appropriations of revenue from the California Children and Families First Trust Fund created by the California Children and Families First Act of 1998. No adjustment in the appropriations limit of any entity of government shall be required pursuant to Section 3 as a result of revenue being deposited in or appropriated from the California Children and Families First Trust Fund. The surtax created by the California Children and Families First Act of 1998 shall not be considered General Fund revenues for the purposes of Section 8 of Article XVI.

SEC. 5. Division 108 (commencing with Section 130100) is added to the Health and Safety Code, to read:

 

DIVISION 108. CALIFORNIA CHILDREN AND FAMILIES FIRST PROGRAM

130100. There is hereby created a program in the state for the purposes of promoting, supporting, and improving the early development of children from the prenatal stage to five years of age. These purposes shall be accomplished through the establishment, institution, and coordination of appropriate standards, resources, and integrated and comprehensive programs emphasizing community awareness, education, nurturing, child care, social services, health care, and research.

(a) It is the intent of this act to facilitate the creation and implementation of an integrated, comprehensive, and collaborative system of information and services to enhance optimal early childhood development. This system should function as a network that promotes accessibility to all information and services from any entry point into the system. It is further the intent of this act to emphasize local decision-making, to provide for greater local flexibility in designing delivery systems, and to eliminate duplicate administrative systems.

(b) The programs authorized by this act shall be administered by the California Children and Families First Commission and by county children and families first commissions. In administering this act, the state and county commissions shall use outcome-based accountability to determine future expenditures.

(c) This division shall be known and may be cited as the "California Children and Families First Act of 1998."

130105. The California Children and Families First Trust Fund is hereby created in the State Treasury.

(a) The California Children and Families First Trust Fund shall consist of moneys collected pursuant to the taxes imposed by Section 30131.2 of the Revenue and Taxation Code.

(b) All costs to implement this act shall be paid from moneys deposited in the California Children and Families First Trust Fund.

(c) The State Board of Equalization shall determine within one year of the passage of this act the effect that additional taxes imposed on cigarettes and tobacco products by this act has 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 the direct result of additional taxes imposed by this act, the State Board of Equalization shall determine the fiscal effect the decrease in consumption has on the funding of any Proposition 99 (the Tobacco Tax and Health Protection Act of 1988) state health-related education or research programs in effect as of November 1, 1998, and the Breast Cancer Fund programs that are funded by excise taxes on cigarettes and tobacco products. Funds shall be transferred from the California Children and Families First Trust Fund to those affected programs as necessary to offset the revenue decrease directly resulting from the imposition of additional taxes by this act. Such reimbursements shall occur, and at such times, as determined necessary to further the intent of this subdivision.

(d) Moneys shall be allocated and appropriated from the California Children and Families First Trust Fund as follows:

(1) Twenty percent shall be allocated and appropriated to separate accounts of the state commission for expenditure according to the following formula:

(A) Six percent shall be deposited in a Mass Media Communications Account for expenditures for communications to the general public utilizing television, radio, newspapers, and other mass media on subjects relating to and furthering the goals and purposes of this act, including, but not limited to, methods of nurturing and parenting that encourage proper childhood development, the informed selection of child care, information regarding health and social services, the prevention of tobacco, alcohol, and drug use by pregnant women, and the detrimental effects of secondhand smoke on early childhood development.

(B) Five percent shall be deposited in an Education Account for expenditures for programs relating to education, including, but not limited to, the development of educational materials, professional and parental education and training, and technical support for county commissions in the areas described in subparagraph (A) of paragraph (1) of subdivision (b) of Section 130125.

(C) Three percent shall be deposited in a Child Care Account for expenditures for programs relating to child care, including, but not limited to, the education and training of child care providers, the development of educational materials and guidelines for child care workers, and other areas described in subparagraph (B) of paragraph (1) of subdivision (b) of Section 130125.

(D) Three percent shall be deposited in a Research and Development Account for expenditures for the research and development of best practices and standards for all programs and services relating to early childhood development established pursuant to this act, and for the assessment and quality evaluation of such programs and services.

(E) One percent shall be deposited in an Administration Account for expenditures for the administrative functions of the state commission.

(F) Two percent shall be deposited in an Unallocated Account for expenditure by the state commission for any of the purposes of this act described in Section 130100 provided that none of these moneys shall be expended for the administrative functions of the state commission.

(G) In the event that, for whatever reason, the expenditure of any moneys allocated and appropriated for the purposes specified in subparagraphs (A) to (F), inclusive, is enjoined by a final judgment of a court of competent jurisdiction, then those moneys shall be available for expenditure by the state commission for mass media communication emphasizing the need to eliminate smoking and other tobacco use by pregnant women, the need to eliminate smoking and other tobacco use by persons under 18 years of age, and the need to eliminate exposure to secondhand smoke.

(H) Any moneys allocated and appropriated to any of the accounts described in subparagraphs (A) to (F), inclusive, that are not encumbered or expended within any applicable period prescribed by law shall (together with the accrued interest on the amount) revert to and remain in the same account for the next fiscal period.

(2) Eighty percent shall be allocated and appropriated to county commissions in accordance with Section 130140.

(A) The moneys allocated and appropriated to county commissions shall be deposited in each local Children and Families First Trust Fund administered by each county commission, and shall be expended only for the purposes authorized by this act and in accordance with the county strategic plan approved by each county commission.

(B) Any moneys allocated and appropriated to any of the county commissions that are not encumbered or expended within any applicable period prescribed by law shall (together with the accrued interest on the amount) revert to and remain in the same local Children and Families First Trust Fund for the next fiscal period under the same conditions as set forth in subparagraph (A).

(e) All grants, gifts, or bequests of money made to or for the benefit of the state commission from public or private sources to be used for early childhood development programs shall be deposited in the California Children and Families First Trust Fund and expended for the specific purpose for which the grant, gift, or bequest was made. The amount of any such grant, gift, or bequest shall not be considered in computing the amount allocated and appropriated to the state commission pursuant to paragraph (1) of subdivision (d).

(f) All grants, gifts, or bequests of money made to or for the benefit of any county commission from public or private sources to be used for early childhood development programs shall be deposited in the local Children and Families First Trust Fund and expended for the specific purpose for which the grant, gift, or bequest was made. The amount of any such grant, gift, or bequest shall not be considered in computing the amount allocated and appropriated to the county commissions pursuant to paragraph (2) of subdivision (d).

130110. There is hereby established a California Children and Families First Commission composed of seven voting members and two ex officio members.

(a) The voting members shall be selected, pursuant to Section 130115, from persons with knowledge, experience, and expertise in early child development, child care, education, social services, public health, the prevention and treatment of tobacco and other substance abuse, behavioral health, and medicine (including, but not limited to, representatives of statewide medical and pediatric associations or societies), upon consultation with public and private sector associations, organizations, and conferences composed of professionals in these fields.

(b) The Secretary of Health and Welfare and the Secretary of Child Development and Education, or their designees, shall serve as ex officio nonvoting members of the state commission.

130115. The Governor shall appoint three members of the state commission, one of whom shall be designated as chairperson. One of the Governor's appointees shall be either a county health officer or a county health executive. The Speaker of the Assembly and the Senate Rules Committee shall each appoint two members of the state commission. Of the members first appointed by the Governor, one shall serve for a term of four years, and two for a term of two years. Of the members appointed by the Speaker of the Assembly and the Senate Rules Committee, one appointed by the Speaker of the Assembly and the Senate Rules Committee shall serve for a period of four years with the other appointees to serve for a period of three years. Thereafter, all appointments shall be for four-year terms. No appointee shall serve as a member of the state commission for more than two four-year terms.

130120. The state commission shall, within three months after a majority of its voting members have been appointed, hire an executive director. The state commission shall thereafter hire such other staff as necessary or appropriate. The executive director and staff shall be compensated as determined by the state commission, consistent with moneys available for appropriation in the Administration Account. All professional staff employees of the state commission shall be exempt from civil service. The executive director shall act under the authority of, and in accordance with the direction of, the state commission.

130125. The powers and duties of the state commission shall include, but are not limited to, the following:

(a) Providing for statewide dissemination of public information and educational materials to members of the general public and to professionals for the purpose of developing appropriate awareness and knowledge regarding the promotion, support, and improvement of early childhood development.

(b) Adopting guidelines for an integrated and comprehensive statewide program of promoting, supporting, and improving early childhood development that enhances the intellectual, social, emotional, and physical development of children in California.

(1) The state commission's guidelines shall, at a minimum, address the following matters:

(A) Parental education and support services in all areas required for, and relevant to, informed and healthy parenting. Examples of parental education shall include, but are not limited to, prenatal and postnatal infant and maternal nutrition, education and training in newborn and infant care and nurturing for optimal early childhood development, parenting and other necessary skills, child abuse prevention, and avoidance of tobacco, drugs, and alcohol during pregnancy. Examples of parental support services shall include, but are not limited to, family support centers offering an integrated system of services required for the development and maintenance of self-sufficiency, domestic violence prevention and treatment, tobacco and other substance abuse control and treatment, voluntary intervention for families at risk, and such other prevention and family services and counseling critical to successful early childhood development.

(B) The availability and provision of high quality, accessible, and affordable child care, both in-home and at child care facilities, that emphasizes education, training and qualifications of care providers, increased availability and access to child care facilities, resource and referral services, technical assistance for caregivers, and financial and other assistance to ensure appropriate child care for all households.

(C) The provision of child health care services that emphasize prevention, diagnostic screenings, and treatment not covered by other programs; and the provision of prenatal and postnatal maternal health care services that emphasize prevention, immunizations, nutrition, treatment of tobacco and other substance abuse, general health screenings, and treatment services not covered by other programs.

(2) The state commission shall conduct at least one public hearing on its proposed guidelines before they are adopted.

(3) The state commission shall, on at least an annual basis, periodically review its adopted guidelines and revise them as may be necessary or appropriate.

(c) Defining the results to be achieved by the adopted guidelines, and collecting and analyzing data to measure progress toward attaining such results.

(d) Providing for independent research, including the evaluation of any relevant programs, to identify the best standards and practices for optimal early childhood development, and establishing and monitoring demonstration projects.

(e) Soliciting input regarding program policy and direction from individuals and entities with experience in early childhood development, facilitating the exchange of information between such individuals and entities, and assisting in the coordination of the services of public and private agencies to deal more effectively with early childhood development.

(f) Providing technical assistance to county commissions in adopting and implementing county strategic plans for early childhood development.

(g) Reviewing and considering the annual audits and reports transmitted by the county commissions and, following a public hearing, adopting a written report that consolidates, summarizes, analyzes, and comments on those annual audits and reports.

(h) Applying for gifts, grants, donations, or contributions of money, property, facilities, or services from any person, corporation, foundation, or other entity, or from the state or any agency or political subdivision thereof, or from the federal government or any agency or instrumentality thereof, in furtherance of a statewide program of early childhood development.

(i) Entering into such contracts as necessary or appropriate to carry out the provisions and purposes of this act.

(j) Making recommendations to the Governor and the Legislature for changes in state laws, regulations, and services necessary or appropriate to carry out an integrated and comprehensive program of early childhood development in an effective and cost-efficient manner.

130130. Procedures for the conduct of business by the state commission not specified in this act shall be contained in bylaws adopted by the state commission. A majority of the voting members of the state commission shall constitute a quorum. All decisions of the state commission, including the hiring of the executive director, shall be by a majority of four votes.

130135. Voting members of the state commission shall not be compensated for their services, except that they shall be paid reasonable per diem and reimbursement of reasonable expenses for attending meetings and discharging other official responsibilities as authorized by the state commission.

130140. Any county or counties developing, adopting, promoting, and implementing local early childhood development programs consistent with the goals and objectives of this act shall receive moneys pursuant to paragraph (2) of subdivision (d) of Section 130105 in accordance with the following provisions:

(a) For the period between January 1, 1999 and

June 30, 2000, county commissions shall receive the portion of the total moneys available to all county commissions equal to the percentage of the number of births recorded in the relevant county (for the most recent reporting period) in proportion to the entire number of births recorded in California (for the same period), provided that each of the following requirements has first been satisfied:

(1) The county's board of supervisors has adopted an ordinance containing the following minimum provisions:

(A) The establishment of a county children and families first commission. The county commission shall be appointed by the board of supervisors and shall consist of at least five but not more than nine members.

(i) Two members of the county commission shall be from among the county health officer and persons responsible for management of the following county functions: children's services, public health services, behavioral health services, social services, and tobacco and other substance abuse prevention and treatment services.

(ii) One member of the county commission shall be a member of the board of supervisors.

(iii) The remaining members of the county commission shall be from among the persons described in clause (i) and persons from the following categories: recipients of project services included in the county strategic plan; educators specializing in early childhood development; representatives of a local child care resource or referral agency, or a local child care coordinating group; representatives of a local organization for prevention or early intervention for families at risk; representatives of community-based organizations that have the goal of promoting nurturing and early childhood development; representatives of local school districts; and representatives of local medical, pediatric, or obstetric associations or societies.

(B) The manner of appointment, selection, or removal of members of the county commission, the duration and number of terms county commission members shall serve, and any other matters that the board of supervisors deems necessary or convenient for the conduct of the county commission's activities, provided that members of the county commission shall not be compensated for their services, except they shall be paid reasonable per diem and reimbursement of reasonable expenses for attending meetings and discharging other official responsibilities as authorized by the county commission.

(C) The requirement that the county commission adopt an adequate and complete county strategic plan for the support and improvement of early childhood development within the county.

(i) The county strategic plan shall be consistent with, and in furtherance of the purposes of, this act and any guidelines adopted by the state commission pursuant to subdivision (b) of Section 130125 that are in effect at the time the plan is adopted.

(ii) The county strategic plan shall, at a minimum, include the following: a description of the goals and objectives proposed to be attained; a description of the programs, services, and projects proposed to be provided, sponsored, or facilitated; and a description of how measurable outcomes of such programs, services, and projects will be determined by the county commission using appropriate reliable indicators. No county strategic plan shall be deemed adequate or complete until and unless the plan describes how programs, services, and projects relating to early childhood development within the county will be integrated into a consumer-oriented and easily accessible system.

(iii) The county commission shall, on at least an annual basis, be required to periodically review its county strategic plan and to revise the plan as may be necessary or appropriate.

(D) The requirement that the county commission conduct at least one public hearing on its proposed county strategic plan before the plan is adopted.

(E) The requirement that the county commission conduct at least one public hearing on its periodic review of the county strategic plan before any revisions to the plan are adopted.

(F) The requirement that the county commission submit its adopted county strategic plan, and any subsequent revisions thereto, to the state commission.

(G) The requirement that the county commission prepare and adopt an annual audit and report pursuant to Section 130150. The county commission shall conduct at least one public hearing prior to adopting any annual audit and report.

(H) The requirement that the county commission conduct at least one public hearing on each annual report by the state commission prepared pursuant to subdivision (b) of Section 130150.

(I) Two or more counties may form a joint county commission, adopt a joint county strategic plan, or implement joint programs, services, or projects.

(2) The county's board of supervisors has established a county commission and has appointed a majority of its members.

(3) The county has established a local Children and Families First Trust Fund pursuant to subparagraph (A) of paragraph (2) of subdivision (d) of Section 130105.

(b) Notwithstanding any provision of this act to the contrary, no moneys made available to county commissions under subdivision (a) shall be expended to provide, sponsor, or facilitate any programs, services, or projects for early childhood development until and unless the county commission has first adopted an adequate and complete county strategic plan that contains the provisions required by clause (ii) of subparagraph (C) of paragraph (1) of subdivision (a).

(c) In the event that any county elects not to participate in the California Children and Families First Program, the moneys remaining in the California Children and Families First Trust Fund shall be reallocated and reappropriated to participating counties in the following fiscal year.

(d) For the fiscal year commencing on July 1, 2000, and for each fiscal year thereafter, county commissions shall receive the portion of the total moneys available to all county commissions equal to the percentage of the number of births recorded in the relevant county (for the most recent reporting period) in proportion to the number of births recorded in all of the counties participating in the California Children and Families First Program (for the same period), provided that each of the following requirements has first been satisfied:

(1) The county commission has, after the required public hearings, adopted an adequate and complete county strategic plan conforming to the requirements of subparagraph (C) of paragraph (1) of subdivision (a), and has submitted the plan to the state commission.

(2) The county commission has conducted the required public hearings, and has prepared and submitted all audits and reports required pursuant to Section 130150.

(3) The county commission has conducted the required public hearings on the state commission annual reports prepared pursuant to subdivision (b) of Section 130150.

(e) In the event that any county elects not to continue participation in the California Children and Families First Program, any unencumbered and unexpended moneys remaining in the local Children and Families First Trust Fund shall be returned to the California Children and Families First Trust Fund for reallocation and reappropriation to participating counties in the following fiscal year.

130145. The state commission and each county commission shall establish one or more advisory committees to provide technical and professional expertise and support for any purposes that will be beneficial in accomplishing the purposes of this act. Each advisory committee shall meet and shall make recommendations and reports as deemed necessary or appropriate.

130150. On or before October 15 of each year, the state commission and each county commission shall conduct an audit of, and issue a written report on the implementation and performance of, their respective functions during the preceding fiscal year, including, at a minimum, the manner in which funds were expended, the progress toward, and the achievement of, program goals and objectives, and the measurement of specific outcomes through appropriate reliable indicators.

(a) The audits and reports of each county commission shall be transmitted to the state commission.

(b) The state commission shall, on or before January 31 of each year, prepare a written report that consolidates, summarizes, analyzes, and comments on the annual audits and reports submitted by all of the county commissions for the preceding fiscal year. This report by the state commission shall be transmitted to the Governor, the Legislature, and each county commission.

(c) The state commission shall make copies of each of its annual audits and reports available to members of the general public on request and at no cost. The state commission shall furnish each county commission with copies of those documents in a number sufficient for local distribution by the county commission to members of the general public on request and at no cost.

(d) Each county commission shall make copies of its annual audits and reports available to members of the general public on request and at no cost.

130155. The following definitions apply for purposes of this act:

(a) "Act" means the California Children and Families First Act of 1998.

(b) "County commission" means each county children and families first commission established in accordance with Section 130140.

(c) "County strategic plan" means the plan adopted by each county children and families first commission and submitted to the California Children and Families First Commission pursuant to Section 130140.

(d) "State commission" means the California Children and Families First Commission established in accordance with Section 130110.

SEC. 6. Article 3 (commencing with Section 30131) is added to Chapter 2 of Part 13 of Division 2 of the Revenue and Taxation Code, to read:

Article 3. California Children and Families First Trust Fund Account

30131. Notwithstanding Section 30122, the California Children and Families First Trust Fund is hereby created in the State Treasury for the exclusive purpose of funding those provisions of the California Children and Families First Act of 1998 that are set forth in Division 108 (commencing with Section 130100) of the Health and Safety Code.

30131.1. The following definitions apply for purposes of this article:

(a) "Cigarette" has the same meaning as in Section 30003, as it read on January 1, 1997.

(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.

30131.2. (a) In addition to the taxes imposed upon the distribution of cigarettes by Article 1 (commencing with Section 30101) and Article 2 (commencing with Section 30121) and any other taxes in this chapter, there shall be imposed an additional surtax upon every distributor of cigarettes at the rate of twenty-five mills ($0.025) for each cigarette distributed.

(b) In addition to the taxes imposed upon the distribution of tobacco products by Article 1 (commencing with Section 30101) and Article 2 (commencing with Section 30121), and any other taxes in this chapter, there shall be imposed an additional tax upon every distributor 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 rate of tax imposed on cigarettes by subdivision (a).

30131.3. Except for payments of refunds made pursuant to Article 1 (commencing with Section 30361) of Chapter 6, reimbursement of the State Board of Equalization for expenses incurred in the administration and collection of the taxes imposed by Section 30131.2, and transfers of funds in accordance with subdivision (c) of Section 130105 of the Health and Safety Code, all moneys raised pursuant to the taxes imposed by Section 30131.2 shall be deposited in the California Children and Families First Trust Fund and are continuously appropriated for the exclusive purpose of the California Children and Families First Program established by Division 108 (commencing with Section 130100) of the Health and Safety Code.

30131.4. All moneys raised pursuant to taxes imposed by Section 30131.2 shall be appropriated and expended only for the purposes expressed in the California Children and Families First Act, and shall be used only to supplement existing levels of service and not to fund existing levels of service. No moneys in the California Children and Families First Trust Fund shall be used to supplant state or local General Fund money for any purpose.

30131.5. The annual determination required of the State Board of Equalization pursuant to subdivision (b) of Section 30131.2 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.

30131.6. The taxes imposed by Section 30131.2 shall be imposed on every cigarette and on tobacco products in the possession or under the control of every dealer and distributor on and after 12:01 a.m. on January 1, 1999, pursuant to rules and regulations promulgated by the State Board of Equalization.

SEC. 7. Effective date. Notwithstanding the imposition of the taxes authorized by Section 30131.2 of the Revenue and Taxation Code as of January 1, 1999, this act shall take effect and become operative on the date that the Secretary of State certifies the results of the election at which this act was approved.

SEC. 8. Amendment. This act may be amended only by a vote of two-thirds of the membership of both houses of the Legislature. All amendments to this act shall be to further the act and must be consistent with its purposes.

SEC. 9. Liberal construction. The provisions of this act shall be liberally construed to effectuate its purposes of promoting, supporting, and improving early childhood development from the prenatal stage to five years of age.

SEC. 10. No conflict with other laws. The provisions of this act are intended to be in addition to and not in conflict with any other initiative measure that may be adopted by the people at the November 1998 election, and the provisions of this act shall be interpreted and construed so as to avoid conflicts with any such measure whenever possible.

SEC. 11. Severability. If any provision 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.