State Codes and Statutes

State Codes and Statutes

Statutes > California > Bpc > 22975-22978.8

BUSINESS AND PROFESSIONS CODE
SECTION 22975-22978.8



22975.  (a) In addition to licenses required pursuant to Part 13
(commencing with Section 30001) of Division 2 of the Revenue and
Taxation Code, commencing June 30, 2004, every distributor and every
wholesaler shall annually obtain and maintain a license to engage in
the sale of cigarettes or tobacco products.
   (b) Licenses shall be valid for a calendar year period upon
payment of the fee prescribed in Section 22977.1, unless surrendered,
suspended, or revoked prior to the end of the calendar year, and may
be renewed each year upon payment of such fee.
   (c) A license is not assignable or transferable. A person who
obtains a license as a distributor or as a wholesaler who ceases to
do business as specified in the license, or who never commenced
business, or whose license is suspended or revoked, shall immediately
surrender the license to the board.



22976.  A distributor or a wholesaler that, at the time of
application, holds a valid license issued by the board pursuant to
Section 30140 or 30155 of the Revenue and Taxation Code may be issued
a license without further investigation.


22977.  (a) An application for a license shall be on a form
prescribed by the board and shall include the following:
   (1) The name, address, and telephone number of the applicant.
   (2) The business name, address, and telephone number of each
location where cigarettes or tobacco products will be sold. For
applicants who control more than one location, an address for receipt
of correspondence or notices from the board, such as a headquarters
or corporate office, shall also be included in the application and
listed on the license. Citations issued to licensees shall be
forwarded to all addressees on the license.
   (3) A statement by the applicant affirming that the applicant has
not been convicted of a felony and has not violated and will not
violate or cause or permit to be violated any of the provisions of
this division or any rule of the board applicable to the applicant or
pertaining to the manufacture, sale, or distribution of cigarettes
or tobacco products. If the applicant is unable to affirm this
statement, the application shall contain a statement by the applicant
of the nature of any violation or the reasons that will prevent the
applicant from complying with the requirements with respect to the
statement.
   (4) If any other licenses or permits have been issued by the board
or the Department of Alcoholic Beverage Control to the applicant,
the license or permit numbers for such licenses or permits then in
effect.
   (5) A statement by the applicant that the contents of the
application are complete, true, and correct. Any person who signs a
statement pursuant to this subdivision that asserts the truth of any
material matter that he or she knows to be false is guilty of a
misdemeanor punishable by imprisonment of up to one year in the
county jail, or a fine of not more than one thousand dollars
($1,000), or both the imprisonment and the fine.
   (6) Signature of the applicant.
   (7) Any other information the board may require.
   (b) The board may investigate to determine the truthfulness and
completeness of the information provided in the application.
   (c) The board shall provide electronic means for applicants to
download and submit applications.



22977.1.  (a) Every distributor and every wholesaler shall file an
application, as prescribed in Section 22977, on or before April 15,
2004. Each application shall be accompanied by a fee of one thousand
dollars ($1,000) for each location. The fee shall be for a calendar
year and may not be prorated. Subject to meeting the requirements of
this section and Section 22977.2, the board shall issue a license.
   (b) Every distributor and every wholesaler who commences business
after the last day of May 2004, or who commences selling or
distributing cigarettes or tobacco products at a new or different
place of business in this state after the last day of May 2004, shall
file with the board an application as prescribed in Section 22977 at
least 30 days prior to commencing such business or commencing such
sales or distributions; and all distributors and all wholesalers that
fail to timely file an application for a license under subdivision
(a) shall file with the board an application as prescribed in Section
22977. Each application shall be accompanied by a fee of one
thousand dollars ($1,000) for each location. The fee shall be for a
calendar year and may not be prorated. Subject to Section 22977.2,
the board, within 30 days after receipt of an application and payment
of the proper fee shall issue a license.
   (c) For calendar years beginning on and after January 1, 2005,
every distributor and every wholesaler shall file an application for
renewal of the license prescribed in Section 22977, accompanied with
a fee of one thousand dollars ($1,000) for each location where
cigarettes and tobacco products are sold, in the form and manner as
prescribed by the board.



22977.2.  (a) The board shall issue a license to a distributor or a
wholesaler upon receipt of a completed application and payment of the
fee prescribed in Section 22977.1, unless any of the following
apply:
   (1) The distributor or the wholesaler, or if the distributor or
the wholesaler is not an individual, any person controlling the
distributor or the wholesaler, has previously been issued a license
that is suspended or revoked by the board for violation of any of the
provisions of this division.
   (2) The application is for a license or renewal of a license for a
distributor or a wholesaler, whose license is revoked or revocation
is pending, unless:
   (A) It has been more than five years since a distributor's or a
wholesaler's previous license was revoked.
   (B) The person applying for the license provides the board with
documentation demonstrating that the applicant has acquired or is
acquiring the business in an arm's length transaction. For purposes
of this section, an "arm's length transaction" is defined as a sale
in good faith and for valuable consideration that reflects the fair
market value in the open market between two informed and willing
parties, neither under any compulsion to participate in the
transaction. A sale of the business between relatives, related
companies or partners, or a sale for the primary purpose of avoiding
the effect of the violations of state tobacco control laws that were
committed by the distributor or wholesaler is presumed not to be made
at "arm's length."
   (3) The distributor or the wholesaler, or if the distributor or
the wholesaler is not an individual, any person controlling the
distributor or the wholesaler has been convicted of a felony pursuant
to Section 30473 or 30480 of the Revenue and Taxation Code.
   (b) (1) Any distributor or any wholesaler who is denied a license
may petition for a redetermination of the board's denial of the
license within 30 days after service upon that distributor or that
wholesaler of the notice of the denial of the license. If a petition
for redetermination is not filed within the 30-day period, the
determination of denial becomes final at the expiration of the 30-day
period.
   (2) Every petition for redetermination shall be in writing and
shall state the specific grounds upon which the petition is founded.
The petition may be amended to state additional grounds at anytime
prior to the date on which the board issues its order or decision
upon the petition for redetermination.
   (3) If the petition for redetermination is filed within the 30-day
period, the board shall reconsider the determination of the denial
and, if the distributor or the wholesaler has so requested in the
petition, shall grant the distributor or wholesaler an oral hearing
and shall give the distributor or the wholesaler at least 10 days'
notice of the time and place of the hearing. The board may continue
the hearing from time to time as may be necessary.
   (4) The order or decision of the board upon a petition for
redetermination becomes final 30 days after mailing of notice
thereof.


22978.  The board shall, upon request, provide to the State
Department of Health Services, the office of the Attorney General, a
law enforcement agency, and any agency authorized to enforce local
tobacco control ordinances, access to the board's database of
licenses issued to distributors and wholesalers for locations within
the jurisdiction of that agency or law enforcement agency. The
agencies authorized by this section to access the board's database
shall only access and use the board's database for purposes of
enforcing tobacco control laws and shall adhere to all state laws,
policies, and regulations pertaining to the protection of personal
information and individual privacy.



22978.1.  All distributors and all wholesalers shall retain purchase
records that meet the requirements set forth in Section 22978.5 for
all cigarettes or tobacco products purchased. The records shall be
maintained for a period of one year from the date of purchase on the
distributor's or the wholesaler's premises identified in the license,
and thereafter, the records shall be made available for inspection
by the board or a law enforcement agency for a period of four years.
Any distributor or any wholesaler found in violation of these
requirements, or any person who fails, refuses, or neglects to retain
or make available invoices for inspection and copying in accordance
with this section shall be subject to penalties pursuant to Section
22981.



22978.2.  (a) Notwithstanding any other provision of this division,
upon discovery by the board or a law enforcement agency that a
distributor possesses, stores, owns, or has made a sale of an
unstamped package of cigarettes bearing a counterfeit California
state tax stamp or that a wholesaler possesses, stores, owns, or has
made a sale of an unstamped package of cigarettes, the board or the
law enforcement agency shall be authorized to seize the unstamped
packages of cigarettes at the distributor's or the wholesaler's
location. Any cigarettes seized by a law enforcement agency shall be
delivered to the board, or its designee, within seven days, unless
otherwise required to be used as evidence in an administrative,
criminal, or civil proceeding, or as part of an ongoing law
enforcement investigation. Any cigarettes seized by the board or
delivered to the board by a law enforcement agency shall be deemed
forfeited and the board shall comply with procedures set forth in
Part 13 (commencing with Section 30436) of Division 2 of Chapter 7.5
of the Revenue and Taxation Code. In addition to the distributor's or
wholesaler's inventory of unstamped packages of cigarettes being
subject to seizure and forfeiture, the possession, storage, ownership
or sale by a distributor or wholesaler of the unstamped package of
cigarettes in the manner described above, shall constitute a
misdemeanor punishable by the following actions:
   (1) A first violation involving seizure of a total quantity of
less than 20 unstamped packages of cigarettes shall be a misdemeanor
punishable by a fine of one thousand dollars ($1,000) or imprisonment
not to exceed one year in a county jail, or both the fine and
imprisonment.
   (2) A second violation within five years involving seizure of a
total quantity of less than 20 unstamped packages of cigarettes shall
be a misdemeanor punishable by a fine of not less than two thousand
dollars ($2,000) but not to exceed five thousand dollars ($5,000) or
imprisonment not to exceed one year in a county jail, or both the
fine and imprisonment, and shall also result in the revocation of the
license.
   (3) A first violation involving seizure of a total quantity of 20
unstamped packages of cigarettes or more shall be a misdemeanor
punishable by a fine of two thousand dollars ($2,000) or imprisonment
not to exceed one year in a county jail, or both the fine and
imprisonment.
   (4) A second violation within five years involving seizure of a
total quantity of 20 unstamped packages of cigarettes or more shall
be a misdemeanor punishable by a fine of not less than five thousand
dollars ($5,000) but not to exceed fifty thousand dollars ($50,000)
or imprisonment not to exceed one year in a county jail, or both the
fine and imprisonment, and shall also result in the revocation of the
license.
   (b) Upon discovery by the board or a law enforcement agency that a
distributor or a wholesaler possesses, stores, owns, or has made a
sale of tobacco products on which tax is due but has not been paid to
the board, or its designee, the board or law enforcement agency is
authorized to seize such tobacco products at the distributor or
wholesaler location. Any tobacco products seized by a law enforcement
agency shall be delivered to the board within seven days, unless
otherwise required to be used as evidence in an administrative,
criminal, or civil proceeding, or as part of an ongoing law
enforcement operation. Any tobacco products seized by the board or
delivered to the board by a law enforcement agency shall be deemed
forfeited and the board shall comply with procedures set forth in
Part 13 (commencing with Section 30436) of Division 2 of Chapter 7.5
of the Revenue and Taxation Code. It shall be presumed that tax has
not been paid to the board on all tobacco products in the possession
of a distributor or a wholesaler until the contrary is established by
the distributor's proof of payment to the board or by a purchase
invoice that shows that the wholesaler paid the tax included purchase
price to a licensed distributor, wholesaler, manufacturer, or
importer as described in Section 22978.4. The burden of proof that
tax has been paid on tobacco products shall be upon the distributor
or wholesaler in possession thereof. Possession by a distributor or a
wholesaler of tobacco products on which tax is due but has not been
paid as required is a violation of this division and subjects the
distributor or wholesaler to the actions described in Section 22981.



22978.4.  (a) Except as otherwise provided in paragraph (7), each
distributor and each wholesaler shall include the following
information on each invoice for the sale of cigarettes or tobacco
products:
   (1) The name, address, and telephone number of the distributor or
wholesaler.
   (2) The license number of the distributor or the wholesaler as
provided by the board.
   (3) The amount of excise taxes due to the board by the distributor
on the sale of cigarettes and tobacco products.
   (4) The name, address, and license number of the retailer,
distributor, or wholesaler to whom cigarettes or tobacco products are
sold.
   (5) An itemized listing of the cigarettes or tobacco products
sold.
   (6) The date the cigarette or tobacco products are sold.
   (7) Notwithstanding paragraph (3), a distributor that is also a
retailer or manufacturer shall include either one of the following on
each invoice for the sale of cigarettes or tobacco products:
   (A) A statement that reads: "All California cigarette and tobacco
product taxes are included in the total amount of this invoice."
   (B) The amount of excise taxes due to the board by the distributor
on the distribution of cigarettes and tobacco products.
   (b) Each invoice for the sale of cigarettes or tobacco products
shall be legible and readable.
   (c) Failure to comply with the requirements of this section shall
be a misdemeanor subject to penalties pursuant to Section 22981.




22978.5.  (a) Each distributor and each wholesaler of cigarette and
tobacco products subject to licensing under this chapter shall
maintain accurate and complete records relating to the sale of those
products, including, but not limited to, receipts, invoices, and
other records as may be required by the board, during the past four
years with invoices for the past year to be maintained on the
premises for which the license was issued, and shall make these
records available upon request by a the board or a law enforcement
agency.
   (b) Failure of a distributor or a wholesaler to comply with this
section shall be a misdemeanor subject to penalties pursuant to
Section 22981.



22978.6.  The board shall revoke the license, pursuant to the
provisions applicable to the revocation of a license as set forth in
Section 30148 of the Revenue and Taxation Code, of any distributor or
any wholesaler or any person controlling any distributor or any
wholesaler that has:
   (a) Been convicted of a felony pursuant to Section 30473 or 30480
of the Revenue and Taxation Code.
   (b) Had any permit or license revoked under any provision of the
Revenue and Taxation Code.



22978.7.  In addition to any other civil or criminal penalty
provided by law, upon a finding that any distributor or any
wholesaler has violated any provision of this division, the board may
take the following actions:
   (a) In the case of the first offense, the board may revoke or
suspend the license or licenses of the distributor or the wholesaler
pursuant to the procedures applicable to the revocation of a license
set forth in Section 30148 of the Revenue and Taxation Code.
   (b) In the case of a second or any subsequent offense, in addition
to the action authorized under subdivision (a), the board may impose
a civil penalty in an amount not to exceed the greater of either of
the following:
   (1) Five times the retail value of the seized cigarettes or
tobacco products.
   (2) Five thousand dollars ($5,000).



22978.8.  The board shall include on its Web site the name of any
wholesaler or distributor whose license has been suspended or
revoked.