Bill Text: CA AB2770 | 2015-2016 | Regular Session | Amended

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

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Bill Title: Cigarette and tobacco product licensing: fees and funding.

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Passed) 2016-09-27 - Chaptered by Secretary of State - Chapter 699, Statutes of 2016. [AB2770 Detail]

Download: California-2015-AB2770-Amended.html

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BILL NUMBER: AB 2770	AMENDED
	BILL TEXT

	AMENDED IN SENATE  JUNE 16, 2016
	AMENDED IN ASSEMBLY  MAY 12, 2016

INTRODUCED BY   Assembly Member Nazarian

                        FEBRUARY 19, 2016

   An act to amend Sections 22973 and 22977.1  of 
 of, and to add Sections 22990.5 and 22990.7 to,  the
Business and Professions Code, relating to cigarette and tobacco
product licensing.



	LEGISLATIVE COUNSEL'S DIGEST


   AB 2770, as amended, Nazarian. Cigarette and tobacco product
licensing: fees and funding. 
   The Cigarette and Tobacco Products Licensing Act of 2003 requires
the State Board of Equalization to administer a statewide program to
license manufacturers, importers, distributors, wholesalers, and
retailers of cigarettes and tobacco products, and imposes various
licensing fees. That act requires the moneys collected to be
deposited in the Cigarette and Tobacco Products Compliance Fund,
which are available for expenditure, upon appropriation by the
Legislature, solely for the purpose of implementing, enforcing, and
administering the licensing program under the act. The act requires
the board to report to the Legislature no later than January 1, 2019,
regarding the adequacy of funding for the licensing program . 

   This bill would instead require the board to report to the
Legislature on or before January 1, 2019, and on and before January 1
annually thereafter. The bill would also require the report to
include information on the board's compliance with the State Auditor'
s recommendation in the State Auditor's March 2016 report to
eliminate the excess fund balance in the Cigarette and Tobacco Tax
Compliance Fund, which would be required until the excess fund
balance is eliminated.  
   The Cigarette and Tobacco Products Tax Law imposes a tax on
distributors of cigarettes and tobacco products, and authorizes the
reimbursement of the State Board of Equalization for expenses
incurred in the administration and collection of the tax.  
   This bill would prohibit, on or after January 1, 2017, the
appropriation of revenues derived from the taxes imposed upon the
distribution of cigarettes and tobacco products to the board for the
purpose of implementing, enforcing, or administering the California
Cigarette and Tobacco Products Licensing Act of 2003.  
   The Cigarette and Tobacco Products Licensing Act of 2003 requires
the State Board of Equalization to administer a statewide program to
license manufacturers, importers, distributors, wholesalers, and
retailers of cigarettes and tobacco products. That act requires
retailers of cigarettes and tobacco products to obtain a separate
license for each retail location from the board, which is issued upon
receipt of a completed application and payment of a one-time fee,
unless specified conditions apply.  
   This bill would require a fee of $265 to be submitted with each
license application, as described above. The bill would require, for
calendar years beginning on and after January 1, 2017, a retailer to
file an application for renewal of a retailer's license accompanied
with a fee of $265 per retail location, in the form and manner
prescribed by the board.  
   The Cigarette and Tobacco Products Licensing Act of 2003 requires
a wholesaler or distributor that commences business selling or
distributing cigarettes or tobacco products, or that commences doing
so at a new or different place of business in the state, to apply for
a license accompanied by a required fee of $1,000 for each location.
The act also requires a wholesaler or distributor to file an
application for a license renewal accompanied by a required fee of
$1,000 for each location where cigarettes and tobacco products are
sold.  
   The bill would raise the fees described above to $1,200. 

   The bill would require the board to report to the Legislature no
later than July 1, 2018, regarding the adequacy of funding for the
Cigarette and Tobacco Licensing Act of 2003, as specified. 

   Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.


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

   SECTION 1.    Section 22973 of the  
Business and Professions Code  is amended to read: 
   22973.  (a) An application for a license shall be filed on or
before April 15, 2004, 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
retail location. For applicants who control more than one retail
location, an address for receipt of correspondence or notices from
the board, such as a headquarters or corporate office of the
retailer, shall also be included on 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 number of those 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) The 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. The
board may issue a license without further investigation to an
applicant for a retail location if the applicant holds a valid
license from the Department of Alcoholic Beverage Control for that
same location.
   (c) The board shall provide electronic means for applicants to
download and submit applications.
   (d) A fee of two hundred sixty-five dollars ($265) shall be
submitted with each application. An applicant that owns or controls
more than one retail location shall obtain a separate license for
each retail location, but may submit a single application for those
licenses with an application license fee of two hundred sixty-five
dollars ($265) per location.
   (e) For calendar years beginning on and after January 1, 2017,
every retailer shall file an application for renewal of the license
prescribed in Section 22972, accompanied with a fee of two hundred
sixty-five dollars ($265) per retail location, in the form and manner
prescribed by the board. 
   (f) (1) The board shall report back to the Legislature no later
than January 1, 2019, regarding the adequacy of funding for the
Cigarette and Tobacco Products Licensing Act of 2003. The report
shall include data and recommendations about whether the annual
licensing fee funding levels are set at an appropriate level to
maintain an effective enforcement program.  
   (2) The report required by paragraph (1) shall be submitted in
compliance with Section 9795 of the Government Code. 
   SEC. 2.    Section 22977.1 of the   Business
and Professions Code   is amended to read: 
   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 two hundred dollars ($1,200) 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, and
before January 1, 2017, 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. For calendar years
beginning on and after January 1, 2017, the fee accompanying an
application for renewal of the license prescribed in Section 22977
shall be one thousand two hundred dollars ($1,200) for each location
where cigarettes and tobacco products are sold. 
   (d) (1) The board shall report back to the Legislature no later
than January 1, 2019, regarding the adequacy of funding for the
Cigarette and Tobacco Products Licensing Act of 2003. The report
shall include data and recommendations about whether the annual
licensing fee funding levels are set at an appropriate level to
maintain an effective enforcement program.  
   (2) The report required by paragraph (1) shall be submitted in
compliance with Section 9795 of the Government Code. 
   SEC. 3.    Section 22990.5 is added to the  
Business and Professions Code   , to read:  
   22990.5.  Notwithstanding Sections 30124 and 30131.3 or any other
law, on or after January 1, 2017, no revenues derived from the taxes
imposed upon the distribution of cigarettes and tobacco products by
Article 1 (commencing with Section 30101), Article 2 (commencing with
Sections 30121), and Article 3 (commencing with Section 30131) of
Chapter 2 of Part 13 of Division 2 of the Revenue and Taxation Code
shall be appropriated to the State Board of Equalization for the
purpose of implementing, enforcing, or administering the California
Cigarette and Tobacco Products Licensing Act of 2003. 
   SEC. 4.    Section 22990.7 is added to the  
Business and Professions Code   , to read:  
   22990.7.  (a) The board shall report to the Legislature on or
before January 1, 2019, and on and before January 1 annually
thereafter, regarding the adequacy of funding for the Cigarette and
Tobacco Products Licensing Act of 2003. The report shall include data
and recommendations about whether the annual licensing fee funding
levels are set at an appropriate level to maintain an effective
enforcement program. The report shall also include information on the
board's compliance with the State Auditor's recommendation in the
State Auditor's March 2016 report to eliminate the excess fund
balance in the Cigarette and Tobacco Tax Compliance Fund, which shall
be required until the excess fund balance is eliminated.
   (b) The report required by subdivision (a) shall be submitted in
compliance with Section 9795 of the Government Code.  
  SECTION 1.    Section 22973 of the Business and
Professions Code is amended to read:
   22973.  (a) An application for a license shall be filed on or
before April 15, 2004, 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
retail location. For applicants who control more than one retail
location, an address for receipt of correspondence or notices from
the board, such as a headquarters or corporate office of the
retailer, shall also be included on 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 number of those 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) The 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. The
board may issue a license without further investigation to an
applicant for a retail location if the applicant holds a valid
license from the Department of Alcoholic Beverage Control for that
same location.
   (c) The board shall provide electronic means for applicants to
download and submit applications.
   (d) A fee of two hundred sixty-five dollars ($265) shall be
submitted with each application. An applicant that owns or controls
more than one retail location shall obtain a separate license for
each retail location, but may submit a single application for those
licenses with an application license fee of two hundred sixty-five
dollars ($265) per location.
   (e) For calendar years beginning on and after January 1, 2017,
every retailer shall file an application for renewal of the license
prescribed in Section 22972, accompanied with a fee of two hundred
sixty-five dollars ($265) per retail location, in the form and manner
prescribed by the board.
   (f) (1) The board shall report to the Legislature no later than
July 1, 2018, regarding the adequacy of funding for the Cigarette and
Tobacco Products Licensing Act of 2003. The report shall include
data and recommendations about whether the annual licensing fee
funding levels are set at an appropriate level to maintain an
effective enforcement program. The report shall also include
information on the board's compliance with the State Auditor's
recommendation in the State Auditor's March 2016 report to eliminate
the excess fund balance in the Cigarette and Tobacco Tax Compliance
Fund.
   (2) The report required by paragraph (1) shall be submitted in
compliance with Section 9795 of the Government Code. 

  SEC. 2.    Section 22977.1 of the Business and
Professions Code is amended to read:
   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 two hundred dollars ($1,200) 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, and
before January 1, 2017, 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. For calendar years
beginning on and after January 1, 2017, the fee accompanying an
application for renewal of the license prescribed in Section 22977
shall be one thousand two hundred dollars ($1,200) for each location
where cigarettes and tobacco products are sold.
   (d) (1) The board shall report to the Legislature no later than
July 1, 2018, regarding the adequacy of funding for the Cigarette and
Tobacco Products Licensing Act of 2003. The report shall include
data and recommendations about whether the annual licensing fee
funding levels are set at an appropriate level to maintain an
effective enforcement program. The report shall also include
information on the board's compliance with the State Auditor's
recommendation in the State Auditor's March 2016 report to eliminate
the excess fund balance in the Cigarette and Tobacco Tax Compliance
Fund.
   (2) The report required by paragraph (1) shall be submitted in
compliance with Section 9795 of the Government Code.