The California Healthcare, Research and Prevention Tobacco Tax Act (Proposition 56), passed by the voters in November 2016, increases the excise tax rate on cigarettes and electronic cigarettes, effective April 1, 2017, and other tobacco products effective July 1, 2017. The excise tax increased by $2 from 87 cents to $2.87 per pack of 20 cigarettes on distributors selling cigarettes in California with an equivalent excise tax rate increase on other tobacco products. In accordance with AB 120 (Chapter 22, Statutes of 2017) the Department of Health Care Services (DHCS) shall develop the structure of the supplemental payments.

Senate Bill 856 (Stats. 2018, ch. 30, § 44, Item 4260-101-3305) appropriates Proposition 56 funds in the 2018-19 state fiscal year to DHCS for continual use as the nonfederal share of health care expenditures.  SB 849 (Chapter 47, Statutes of 2018), established the Proposition 56 Medi-Cal Physicians and Dentists Loan Repayment Act Program and appropriates $220 million for a loan assistance program for recently graduated physicians and dentists. The selection of physicians and dentists for participation will be based on the department’s eligibility criteria which will prioritize agreeing to work in geographic shortage areas, ensuring quality care in the Medi-Cal program, and requiring minimum years of commitment.