Proposition EE Funding Retention Rate Reduction

The act refers a ballot issue to the voters at the November 7, 2023, statewide election to allow the state to retain and spend state revenues that would otherwise need to be refunded for exceeding the estimate in the ballot information booklet analysis for proposition EE and to allow the state to maintain the tax rates established in proposition EE that would otherwise need to be decreased. If voters reject the ballot issue, the state will both: Refund $23.65 million to distributors and wholesalers in a reasonable manner determined by the department of revenue; and Reduce by 11.53% the tax rates of the taxes on cigarettes, tobacco products, and nicotine products created or increased by proposition EE. If voters approve the ballot measure: The money set aside for the potential refund related to proposition EE will instead be transferred to the preschool programs cash fund and the general fund; and The new tax on nicotine products and the increased taxes on cigarettes and tobacco products in proposition EE will stay at the rates required by proposition EE. The refund or alternative spending is made or backfilled from revenue in the newly created proposition EE cash fund, which consists of $23.65 million from the preschool programs cash fund and the general fund. APPROVED by Governor June 2, 2023 EFFECTIVE June 2, 2023 (Note: This summary applies to this bill as enacted.)