BILL ANALYSIS AB 2284 Page 1 Date of Hearing: April 22, 2002 ASSEMBLY COMMITTEE ON GOVERNMENTAL ORGANIZATION Jerome Edgar Horton, Chair AB 2284 (Horton) - As Introduced: February 20, 2002 SUBJECT : Department of Alcoholic Beverage Control: revenue sources: study. SUMMARY : Requires the Department of Alcoholic Beverage Control (ABC) to conduct a study to identify potential revenue sources, as specified, to fund its programs and systems. EXISTING LAW 1)Requires the Department of Alcoholic Beverage Control to administer the provisions of the Alcoholic Beverage Control Act. 2)Requires ABC to conduct a study to assess its existing automation and information technology systems and identify necessary improvements and possible enhancements. The results of this report must be reported back to the Legislature on or before May 15, 2002. 3)Requires the ABC to study the feasibility of adopting a "fee for service" policy that would presumably benefit the public by allowing ABC to charge a fee to applicants and licensees for services provided by the department. The results of this report must be reported back to the Legislature on or before May 15, 2002. 4)Requires the Department, with regard to the automation report, to identify potential revenue sources that could be used to fund these improvements and enhancements including, but not limited to, receiving federal grants, earmarking a portion of any future CPI adjustments, or utilizing any "fee for service" revenue as described above. FISCAL EFFECT : Unknown COMMENTS : AB 1298 (Wesson & Oropeza, Ch. 488, Statutes of 2001) was enacted last year to address the structural budget deficit that had negatively affected the ABC since the mid 1990's. AB 1298 represented a collaborate effort that involved extensive AB 2284 Page 2 negotiations between the ABC and the alcoholic beverage industry. AB 1298 phases in over a three-year period a $7.5 million license fee increase, and provides that beginning January 1, 2005, the ABC may annually adjust these fees by the percentage increase of the CPI. The bill also requires the ABC to publish the adjusted fee list and transmit the list to the Legislature for approval as part of ABC's budget submission for the fiscal year in which the adjusted fees would be implemented. A second provision of AB 1298 required the ABC to conduct a study to assess its existing automation and information technology systems and identify necessary improvements and possible enhancements. A second report is also required that would direct ABC to study the feasibility of adopting a "fee for service" policy that would presumably benefit the state by allowing ABC to charge a fee to applicants and licensees for services provided by the department. The results of both of these reports must be reported back to the Legislature on or before May 15, 2002. With regard to the automation report, ABC is required to identify potential revenue sources that could be used to fund these improvements and enhancements including, but not limited to, receiving federal grants, earmarking a portion of any future CPI adjustments authorized by the bill, or utilizing any "fee for service" revenue as described above. The purpose of this bill is to potentially accommodate the findings of the above mentioned reports that are due to the Legislature by May 15, 2002. This vehicle would be available should there be a need for any statutory changes to the Alcoholic Beverage Control Act, and should there be agreement among the ABC, the alcoholic beverage industry, and the public, as to acting upon the findings of the report. REGISTERED SUPPORT / OPPOSITION : Support None on file. Opposition None on file. Analysis Prepared by : Eric Johnson / G. O. / (916) 319-2531 AB 2284 Page 3