BILL ANALYSIS                                                                                                                                                                                                    



                                                                  AB 2284
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          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  








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          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 








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