Bill Text: CA AB2733 | 2009-2010 | Regular Session | Introduced

NOTE: There are more recent revisions of this legislation. Read Latest Draft

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Bill Title: Cigarettes and tobacco products.

Spectrum: Partisan Bill (Democrat 2-0)

Status: (Passed) 2010-09-30 - Chaptered by Secretary of State - Chapter 607, Statutes of 2010. [AB2733 Detail]

Download: California-2009-AB2733-Introduced.html

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BILL NUMBER: AB 2733	INTRODUCED
	BILL TEXT


INTRODUCED BY   Assembly Member Ruskin

                        FEBRUARY 19, 2010

   An act to amend Sections 22971 and 22980.3 of, and to add Sections
22980.4 and 22980.5 to, the Business and Professions Code, relating
to cigarette and tobacco products.


	LEGISLATIVE COUNSEL'S DIGEST


   AB 2733, as introduced, Ruskin. Cigarettes and tobacco products.
   Existing law, the California Cigarette and Tobacco Products
Licensing Act of 2003, provides for the licensure by the State Board
of Equalization of manufacturers, distributors, wholesalers,
importers, and retailers of cigarette or tobacco products that are
engaged in business in California. The act prohibits retailers,
manufacturers, distributors, and wholesalers from distributing or
selling those cigarette and tobacco products unless they are
licensed. The act authorizes the board to suspend or revoke the
license of any manufacturer, distributor, wholesaler, importer, or
retailer of tobacco products that is in violation of the act's
provisions. Violation of the act is a misdemeanor.
   This bill would, among other things, prohibit the transfer of
title or possession of cigarettes or tobacco products without
consideration, exchange, or barter if the cigarettes or tobacco
products had been purchased for resale under a license issued
pursuant to the act and the transfer occurs without a license or
after receipt of a notice of suspension or revocation of the license.
It would also prohibit specified displays of cigarettes or tobacco
products. It would impose prescribed notices to be posted when a
license has been suspended or revoked by the board, and would make
violation of these posting requirements subject to a civil penalty.
By adding a new crime, this bill would impose a state-mandated local
program.
   The California Constitution requires the state to reimburse local
agencies and school districts for certain costs mandated by the
state. Statutory provisions establish procedures for making that
reimbursement.
   This bill would provide that no reimbursement is required by this
act for a specified reason.
   Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: yes.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

  SECTION 1.  Section 22971 of the Business and Professions Code is
amended to read:
   22971.  For purposes of this division, the following terms shall
have the following meanings:
   (a) "Board" means the State Board of Equalization.
   (b) "Importer" means an importer as defined in Section 30019 of
the Revenue and Taxation Code. 
   (c) "Cigarette" means a cigarette as defined in Section 30003 of
the Revenue and Taxation Code.  
   (c) 
    (d)   "Distributor" means a distributor as
defined in Section 30011 of the Revenue and Taxation Code. 
   (e) "Law enforcement agency" means a sheriff, a police department,
or a city, county, or city and county agency or department
designated by the governing body of that agency to enforce this
chapter or to enforce local smoking and tobacco ordinances and
regulations.    
   (f) "License" means a license issued by the board pursuant to this
division.  
   (g) "Licensee" means any person holding a license issued by the
board pursuant to this division.  
   (d) 
    (h)    "Manufacturer" means a manufacturer of
cigarettes or tobacco products sold in this state. 
   (i) "Notice" or "notification" means, unless as otherwise
provided, the written notice or notification provided to a licensee
by the board by either actual delivery to the licensee or by
first-class mail addressed to the licensee at the address on the
license.  
   (j) "Package of cigarettes" means a package as defined in Section
30015 of the Revenue and Taxation Code.  
   (k) "Person" means a person as defined in Section 30010 of the
Revenue and Taxation Code.  
   (e) 
    (   l   )    "Retailer" means
a person who engages in this state in the sale of cigarettes or
tobacco products directly to the public from a retail location.
Retailer includes a person who operates vending machines from which
cigarettes or tobacco products are sold in this state. 
   (f)
    (m)  "Retail location" means both of the following:
   (1) Any building from which cigarettes or tobacco products are
sold at retail.
   (2) A vending machine. 
   (g) "Wholesaler" means a wholesaler as defined in Section 30016 of
the Revenue and Taxation Code.  
   (h) "Cigarette" means a cigarette as defined in Section 30003 of
the Revenue and Taxation Code.  
   (i) "License" means a license issued by the board pursuant to this
division.  
   (j) "Licensee" means any person holding a license issued by the
board pursuant to this division.  
   (k) 
    (n)  "Sale" or "sold" means a sale as defined in Section
30006 of the Revenue and Taxation Code. 
   (l) 
    (o)  "Tobacco products" means tobacco products as
defined in subdivision (b) of Section 30121 and subdivision (b) of
Section 30131.1 of the Revenue and Taxation Code. 
   (m) 
    (p)  "Unstamped package of cigarettes" means a package
of cigarettes that does not bear a tax stamp as required under Part
13 (commencing with Section 30001) of Division 2 of the Revenue and
Taxation Code, including a package of cigarettes that bears a tax
stamp of another state or taxing jurisdiction, a package of
cigarettes that bears a counterfeit tax stamp, or a stamped or
unstamped package of cigarettes that is marked "Not for sale in the
United States." 
   (n) "Person" means a person as defined in Section 30010 of the
Revenue and Taxation Code.  
   (o) "Package of cigarettes" means a package as defined in Section
30015 of the Revenue and Taxation Code.  
   (p) 
    (q)  (1) "Control" or "controlling" means possession,
direct or indirect, of the power:
   (A) To vote 25 percent or more of any class of the voting
securities issued by a person.
   (B) To direct or cause the direction of the management and
policies of a person, whether through the ownership of voting
securities, by contract (other than a commercial contract for goods
or nonmanagement services), or otherwise provided; however, no
individual shall be deemed to control a person solely on account of
being a director, officer, or employee of such person.
   (2) For purposes of subparagraph (B) of this subdivision, a person
who, directly or indirectly, owns, controls, holds, with the power
to vote, or holds proxies representing 10 percent or more of the then
outstanding voting securities issued by another person, is presumed
to control such other person.
   (3) For purposes of this division, the board may determine whether
a person in fact controls another person. 
   (q) "Law enforcement agency" means a sheriff, a police department,
or a city, county, or city and county agency or department
designated by the governing body of that agency to enforce this
chapter or to enforce local smoking and tobacco ordinances and
regulations. 
   (r) "Brand family" has the same meaning as that term is defined in
paragraph (2) of subdivision (a) of Section 30165.1 of the Revenue
and Taxation Code. 
   (s) The amendments made to this section by the act adding this
subdivision shall become operative May 1, 2007.  
   (s) "Wholesaler" means a wholesaler as defined in Section 30016 of
the Revenue and Taxation Code. 
  SEC. 2.  Section 22980.3 of the Business and Professions Code is
amended to read:
   22980.3.  (a) Licenses issued pursuant to this division shall be
subject to suspension or revocation for violations of  the
provisions of  this division or the Revenue and Taxation
Code as provided in this section.
   (1) In addition to any applicable fines or penalties for a
violation, upon first conviction of a violation, a licensee shall
receive a written notice from the board detailing the suspension and
revocation provisions of this  act   division
 . At its discretion, the board may also suspend a license for
up to 30 days.
   (2) In addition to any applicable fines or penalties for a
violation, upon a second conviction of a violation within four years
of a previous violation the license shall be revoked.
   (b) The date of the occurrence of a violation shall be used to
calculate the duration between subsequent violations. A violation
shall be noted in the license record at the board only after judicial
conviction or final adjudication of a violation. Upon updating a
record for a violation triggering a suspension, the board shall serve
the licensee with a notice of suspension and shall order the
licenseholder to  immediately  cease the sale  ,
transfer without consideration,   exchange, or barter
prohibited pursuant to Section 22980.4, and display for sale
prohibited pursuant to Section 22980.4,  of cigarettes or
tobacco products  for the period of the suspension. The notice of
suspension shall inform the licenseholder of the effective dates of
the suspension  .
   (c)  Upon notice of suspension, the board shall serve the
licensee with a notice of suspension and shall order the licensee to
immediately cease the sale of cigarettes or tobacco products.
 Continued sales  , transfers without consideration,
exchange, or barter prohibited pursuant to Section 22980.4, or
displays for sale prohibited pursuant to Section 22980.4  after
the notification of suspension shall  constitute a violation
of the licensing provisions of this division and shall 
result in the revocation of a license.
   (d) Upon completion of a suspension period, a license shall be
reinstated by the board upon certification that all outstanding debts
of that retailer or wholesaler that are owed to a wholesaler or
distributor for the purchase of cigarette and tobacco products are
paid.
   (e)  Upon updating a record for a violation triggering a
revocation, the board shall serve the licensee with a notice of
revocation and shall order the licenseholder to cease the sale,
transfer without consideration, exchange, or barter prohibited
pursuant to Section 22980.4, and displays for sale  
prohibited pursuant to Section 22980.4 of cigarettes or tobacco
products on and after the effective date of the revocation. 
After a revocation, a previously licensed applicant may apply for a
new license after six months. The board may, at its discretion, issue
a new license.
   (f) Upon updating a license record for a violation, suspension, or
revocation to a license of a person or entity that owns or controls
more than one location, the board shall send notice in writing of the
violations, suspensions, or revocations within 15 days of the board'
s action to the address included in the application and listed on the
license for receipt of correspondence or notices from the board.
   (g) Upon suspension or revocation of a license pursuant to this
section, the board shall notify all licensed distributors and
wholesalers by electronic mail within 48 hours of the suspension or
revocation of that license. All licensed distributors and wholesalers
shall provide the board and shall update, as necessary, an
electronic mail address that the board can use for purposes of making
the notifications required by this subdivision.
   (h) Violations by a licensee at one location may not be
accumulated against other locations of that same licensee. Violations
accumulated against a prior owner at a licensed location may not be
accumulated against a new owner at the same licensed location.
   (i) For purposes of this section, a violation includes violations
of the Revenue and Taxation Code relating to cigarettes and tobacco
products, and violations of this division. Only one violation per
discrete action shall be counted towards a suspension or revocation
of a license.
  SEC. 3.  Section 22980.4 is added to the Business and Professions
Code, to read:
   22980.4.  (a) (1) A person or entity that purchases cigarettes or
tobacco products for resale under a license issued pursuant to this
division and then transfers, in any manner or by any means, title or
possession of cigarettes or tobacco products without consideration,
exchange, or barter is guilty of a misdemeanor punishable as provided
in Section 22981 if the transfer occurs without a license issued
pursuant to this division or after receipt of a notice of suspension
or revocation of the license.
   (2) Continued transfers prohibited pursuant to this subdivision
shall constitute a violation punishable as provided in Section 22981
and shall result in the seizure of all cigarettes and tobacco
products in the possession of the person by the board or a law
enforcement agency. Any cigarettes and tobacco products seized by the
board or by a law enforcement agency shall be deemed forfeited.
   (b) A person or entity that, after receiving a notice of
suspension, continues to display for the purpose of selling or
transferring without consideration, exchange, or barter cigarettes or
tobacco products by placing the cigarettes or tobacco products in a
vending machine or in retail stock so that the cigarettes or tobacco
products are clearly and easily visible is subject, notwithstanding
Section 22981, to a civil penalty of one thousand dollars ($1,000)
for each offense. For purposes of this subdivision, a rebuttable
presumption shall be established that cigarettes or tobacco products
that are clearly and easily visible in retail stock are displayed for
the purpose of selling the cigarettes or tobacco products.
  SEC. 4.  Section 22980.5 is added to the Business and Professions
Code, to read:
   22980.5.  (a) A licensee whose license has been suspended or
revoked by order of the board shall conspicuously post a notice at
both of the following locations:
   (1) Each public entrance to the retail location. The notice shall
directly face any person who enters the retail location and shall not
be obstructed from view or placed at a height of less than four feet
or greater than nine feet from the floor.
   (2) Each cash register and other point of retail sale. The notice
shall be posted so as to be readily viewable by a person standing at
or approaching the cash register or other point of retail sale. The
notice shall directly face the purchaser and shall not be obstructed
from view or placed at a height of less than four feet or greater
than nine feet from the floor.
   (b) The notices described in this section shall be in the size and
form prescribed by the board. The notice shall be provided by the
board and may be reproduced in the same size and form to comply with
subdivision (a).
   (c) A licensee whose license was suspended shall post the notice
at the retail location that was the subject of the suspension for the
duration of the suspension.
   (d) A licensee whose license was revoked shall post the notice at
the retail location that was the subject of the revocation for a
30-day period from the effective date of the revocation.
   (e) Every licensee who fails to post the notices as required by
this section, who alters the notice provided by the board, or who
removes the notice before the posting period required in subdivision
(c) or (d) expires, shall be subject, notwithstanding Section 22981,
to a civil penalty of one thousand dollars ($1,000) for each offense.

  SEC. 5.  No reimbursement is required by this act pursuant to
Section 6 of Article XIII B of the California Constitution because
the only costs that may be incurred by a local agency or school
district will be incurred because this act creates a new crime or
infraction, eliminates a crime or infraction, or changes the penalty
for a crime or infraction, within the meaning of Section 17556 of the
Government Code, or changes the definition of a crime within the
meaning of Section 6 of Article XIII B of the California
Constitution.