State Codes and Statutes

State Codes and Statutes

Statutes > California > Bpc > 22970-22971.5

BUSINESS AND PROFESSIONS CODE
SECTION 22970-22971.5



22970.  This division shall be known as and may be cited as the
Cigarette and Tobacco Products Licensing Act of 2003.



22970.1.  The Legislature finds and declares all of the following:
   (a) The State of California has enacted excise taxes on the
distribution of cigarettes and tobacco products to provide funding
for local and state programs, including health services, antismoking
campaigns, cancer research, and education programs.
   (b) Tax revenues have declined by hundreds of millions of dollars
per year due, in part, to unlawful distributions and untaxed sales of
cigarettes and tobacco products conducted by organized crime
syndicates, street gangs, and international terrorist groups.
   (c) The enforcement of California's cigarette and tobacco products
tax laws is necessary to collect millions of dollars in lost tax
revenues each year.
   (d) The licensing of manufacturers, importers, wholesalers,
distributors, and retailers will help stem the tide of untaxed
distributions and illegal sales of cigarettes and tobacco products.



22970.2.  The board shall administer a statewide program to license
manufacturers, importers, distributors, wholesalers, and retailers of
cigarettes and tobacco products.



22970.3.  The board may create a Tobacco Tax Compliance Task Force
for the purpose of advising the board on cigarette and tobacco
products tax compliance issues that may include, but not be limited
to, representatives from the following:
   (a) The board.
   (b) The office of the Attorney General.
   (c) The Franchise Tax Board.
   (d) The Department of Alcoholic Beverage Control.
   (e) The State Department of Health Services.
   (f) Federal agencies necessary to coordinate programs to combat
tobacco tax evasion, smuggling, and counterfeiting.
   (g) One person from each of the categories of persons required by
this division to have a license.
   (h) Other states engaged in tobacco tax compliance efforts.
   (i) Local law enforcement agencies.



22971.  For purposes of this division, the following terms shall
have the following meanings:
   (a) "Board" means the State Board of Equalization.
   (b) "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.
   (c) "Cigarette" means a cigarette as defined in Section 30003 of
the Revenue and Taxation Code.
   (d) (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 as otherwise provided; however, no
individual shall be deemed to control a person solely on account of
being a director, officer, or employee of that person.
   (2) For purposes of subparagraph (B) of paragraph (1), 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 that other person.
   (3) For purposes of this division, the board may determine whether
a person in fact controls another person.
   (e) "Display for sale" means the placement of cigarettes or
tobacco products in a vending machine or in retail stock for the
purpose of selling or gifting the cigarettes or tobacco products. For
purposes of this definition, the clear and easily visible display of
cigarettes or tobacco products shall create a rebuttable presumption
that either were displayed for sale.
   (f) "Distributor" means a distributor as defined in Section 30011
of the Revenue and Taxation Code.
   (g) "Gifting" means any transfer of title or possession without
consideration, exchange, or barter, in any manner or by any means, of
cigarettes or tobacco products that have been purchased for resale
under a license issued pursuant to this division if the transfer
occurs while the license is suspended or after the effective date of
its revocation.
   (h) "Importer" means an importer as defined in Section 30019 of
the Revenue and Taxation Code.
   (i) "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.
   (j) "License" means a license issued by the board pursuant to this
division.
   (k) "Licensee" means any person holding a license issued by the
board pursuant to this division.
   (l) "Manufacturer" means a manufacturer of cigarettes or tobacco
products sold in this state.
   (m) "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.
   (n) "Package of cigarettes" means a package as defined in Section
30015 of the Revenue and Taxation Code.
   (o) "Person" means a person as defined in Section 30010 of the
Revenue and Taxation Code.
   (p) "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.
   (q) "Retail location" means both of the following:
   (1) Any building from which cigarettes or tobacco products are
sold at retail.
   (2) A vending machine.
   (r) "Sale" or "sold" means a sale as defined in Section 30006 of
the Revenue and Taxation Code.
   (s) "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.
   (t) "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."
   (u) "Wholesaler" means a wholesaler as defined in Section 30016 of
the Revenue and Taxation Code.



22971.1.  Commencing January 1, 2006, the Bureau of State Audits
shall conduct a performance audit of the licensing and enforcement
provisions of this division, and shall report its findings to the
board and the Legislature by July 1, 2006. The report shall include,
but not be limited to:
   (a) The actual costs of the program.
   (b) The level of additional revenue generated by the program
compared to the period before its implementation.
   (c) Tax compliance rates.
   (d) The costs of enforcement at the varying levels.
   (e) The appropriateness of penalties assessed in this division.
   (f) The overall effectiveness of enforcement programs.




22971.2.  The board shall administer and enforce the provisions of
this division and may prescribe, adopt, and enforce rules and
regulations relating to the administration and enforcement of this
division.


22971.3.  Nothing in this division preempts or supersedes any local
tobacco control law other than those related to the collection of
state taxes. Local licensing laws may provide for the suspension or
revocation of the local license for any violation of a state tobacco
control law.


22971.4.  No person is subject to the requirements of this division
if that person is exempt from regulation under the United States
Constitution, the laws of the United States, or the California
Constitution.


22971.5.  Any notice required by this division shall be served
personally or by mail. If by mail, the notice shall be placed in a
sealed envelope, with postage paid, addressed to the licensee at the
address as it appears in the records of the board. The giving of
notice shall be deemed complete at the time of deposit of the notice
in the United States Post Office, or a mailbox, subpost office,
substation, or mail chute, or other facility regularly maintained or
provided by the United States Postal Service, without extension of
time for any reason. In lieu of mailing, a notice may be served
personally by delivering to the person to be served and service shall
be deemed complete at the time of delivery. Personal service to a
corporation may be made by delivery of a notice to any person
designated in the Code of Civil Procedure to be served for the
corporation with summons and complaints in a civil action.