BILL NUMBER: AB 1617	INTRODUCED
	BILL TEXT


INTRODUCED BY   Assembly Member DeSaulnier

                        FEBRUARY 23, 2007

   An act to add Section 22964 to, and to repeal and add Section
22963 of, the Business and Professions Code, to amend Section 308.1
of the Penal Code, and to repeal Section 30101.7 of the Revenue and
Taxation Code, relating to tobacco products.


	LEGISLATIVE COUNSEL'S DIGEST


   AB 1617, as introduced, DeSaulnier. Tobacco products.
   (1) Existing law, the Cigarette and Tobacco Products Tax Law,
requires every distributor of cigarettes to pay taxes, as prescribed,
on the distribution of cigarettes. In addition to the requirement to
pay taxes on the distribution of cigarettes, existing law also
requires distributors and wholesalers of cigarette and tobacco
products to be licensed by the State Board of Equalization. Existing
federal law, known as the Jenkins Act, requires any person that sells
or transfers, in interstate commerce, cigarettes into a state that
taxes the sale or use of cigarettes to file and report specified
information with the tobacco tax administrator of that state.
   Existing law prohibits, except under specified circumstances, a
retail sale of cigarettes that is not a face-to-face sale, as
defined, and prohibits distribution of tobacco products through the
mail. Existing law exempts a person from the face-to-face sale
restriction, if that person has paid all applicable state taxes and
is in compliance with the federal Jenkins Act.
   This bill would enact substantially similar provisions relating to
tobacco products, including, but not limited to, cigars and pipe
tobacco. The bill would, for cigarettes, as defined, repeal the
face-to-face sale requirement, and the related tax reporting
provisions, would repeal the prohibitions against distribution
through the mail, and would, instead, with certain exceptions,
prohibit shipping or transporting of cigarettes to persons in
California, and would establish criminal and civil penalties for
violation of this prohibition.
   (2) Existing law prohibits the offer, sale, distribution, or
importation of a tobacco product know as "bidis" or "beedies," as
defined, unless it is sold or intended for sale in business
establishments that exclude minors.
   This bill would amend the definition of "bidis" or "beedies" to
include any product that is marketed and sold as "bidis" or "beedies"
and would clarify that persons who violate this prohibition are
subject to both criminal and civil liability.
   (3) By changing the definition of related crimes, 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.  The Legislature finds and declares that the shipment of
cigarettes sold via the Internet or by telephone or by mail order to
residents of this state poses a serious threat to public health,
safety, and welfare, and to the economy of the state. The Legislature
also finds that when cigarettes are shipped directly to a consumer,
adequate proof that the purchaser is of legal age cannot be obtained
by the vendor, thereby enabling sellers of cigarettes to evade
provisions of law designed to prevent sales to minors. It is also the
Legislature's finding that by preventing shipment of cigarettes
directly to consumers, the state will be better able to measure and
monitor cigarette consumption and to better determine the public
health and fiscal consequences of smoking. The Legislature further
finds that preexisting penalties for cigarette bootlegging have been
an inadequate deterrent.
  SEC. 2.  Section 22963 of the Business and Professions Code is
repealed. 
   22963.  (a) The distribution or sale of tobacco products directly
or indirectly to any person under the age of 18 years through the
United States Postal Service or through any other public or private
postal or package delivery service at locations, including, but not
limited to, public mailboxes and mailbox stores, is prohibited.
   (b) Any person selling or distributing tobacco products directly
to a consumer in the state through the United States Postal Service
or by any other public or private postal or package delivery service,
including orders placed by mail, telephone, facsimile transmission,
or the Internet, shall comply with the following provisions:
   (1) (A) Before enrolling a person as a customer or distributing or
selling the tobacco product through any of these means, the
distributor or seller shall verify that the purchaser is 18 years of
age or older. The distributor or seller shall attempt to match the
name, address, and date of birth provided by the customer to
information contained in records in a database of individuals whose
age has been verified to be 18 years or older by reference to an
appropriate database of government records kept by the distributor, a
direct marketing firm, or any other entity. The distributor or
seller shall also verify that the billing address on the check or
credit card offered for payment by the purchaser matches the address
listed in the database.
   (B) If the distributor or seller is unable to verify that the
purchaser is 18 years of age or older pursuant to subparagraph (A),
he or she shall require the customer to submit an age-verification
kit consisting of an attestation signed by the customer that he or
she is 18 years of age or older and a copy of a valid form of
government identification. For the purposes of this section, a valid
form of government identification includes a driver's license, state
identification card, passport, an official naturalization or
immigration document, such as an alien registration receipt card
(commonly known as a "green card") or an immigrant visa, or military
identification. The distributor or seller shall also verify that the
billing address on the check or credit card provided by the consumer
matches the address listed in the form of government identification.
   (2) The distributor or seller shall impose a two-carton minimum on
each order of cigarettes, and shall require payment for the purchase
of any tobacco product to be made by personal check of the purchaser
or the purchaser's credit card. No money order or cash payment shall
be received or permitted. The distributor or seller shall submit to
each credit card acquiring company with which it has credit card
sales identification information in an appropriate form and format so
that the words "tobacco product" may be printed in the purchaser's
credit card statement when a purchase of a tobacco product is made by
credit card payment.
   (3) The distributor or seller shall make a telephone call after 5
p.m. to the purchaser confirming the order prior to shipping the
tobacco products. The telephone call may be a person-to-person call
or a recorded message. The distributor or seller is not required to
speak directly with a person and may leave a message on an answering
machine or by voice mail.
   (4) The distributor or seller shall deliver the tobacco product to
the purchaser's verified billing address on the check or credit card
used for payment. No delivery described under this section shall be
permitted to any post office box.
   (c) Notwithstanding subdivisions (a) and (b), if a distributor or
seller complies with all of the requirements of this section and a
minor obtains a tobacco product by any of the means described in
subdivision (b), the seller or distributor is not in violation of
this section.
   (d) For the purposes of the enforcement of this section pursuant
to Section 22958, the acts of the United States Postal Service or
other common carrier when engaged in the business of transporting and
delivering packages for others, and the acts of a person, whether
compensated or not, who transports or delivers a package for another
person without any reason to know of the package's contents, are not
unlawful and are not subject to civil penalties.
   (e) (1) For the purposes of this section, a "distributor" is any
person or entity, within or outside the state, who agrees to
distribute tobacco products to a customer within the state. The
United States Postal Service or any other public or private postal or
package delivery service are not distributors within the meaning of
this section.
   (2) For the purpose of this section, a "seller" is any person or
entity, within or outside the state, who agrees to sell tobacco
products to a customer within the state. The United States Postal
Service or any other public or private postal or package delivery
service are not sellers within the meaning of this section.
   (3) For the purpose of this section, a "carton" is a package or
container that contains 200 cigarettes.
   (f) A district attorney, city attorney, or the Attorney General
may assess civil penalties against any person, firm, corporation, or
other entity that violates this section, according to the following
schedule:
   (1) A civil penalty of not less than one thousand dollars ($1,000)
and not more than two thousand dollars ($2,000) for the first
violation.
   (2) A civil penalty of not less than two thousand five hundred
dollars ($2,500) and not more than three thousand five hundred
dollars ($3,500) for the second violation.
   (3) A civil penalty of not less than four thousand dollars
($4,000) and not more than five thousand dollars ($5,000) for the
third violation within a five-year period.
   (4) A civil penalty of not less than five thousand five hundred
dollars ($5,500) and not more than six thousand five hundred dollars
($6,500) for the fourth violation within a five-year period.
   (5) A civil penalty of ten thousand dollars ($10,000) for a fifth
or subsequent violation within a five-year period. 
  SEC. 3.  Section 22963 is added to the Business and Professions
Code, to read:
   22963.  (a) It is unlawful for any person engaged in the business
of selling or distributing cigarettes to ship or cause to be shipped
any cigarettes to any person in this state who is not any of the
following:
   (1) Licensed pursuant to Division 8.6 (commencing with Section
22970).
   (2) An export warehouse proprietor pursuant to Chapter 52 of the
Internal Revenue Code (26 U.S.C. Sec. 5701 et seq.).
   (3) An operator of a customs bonded warehouse pursuant to Section
1311 or 1555 of Title 19 of the United States Code.
   (4) A person who is an officer, employee, or agent of the federal
government, or of this state or of a department, agency,
instrumentality, or political subdivision of the federal government
or this state, when the person is acting in accordance with his or
her official duties.
   (b) It is unlawful for any common or contract carrier to knowingly
transport cigarettes to any person in this state reasonably believed
by the carrier to be other than a person described in subdivision
(a). It is unlawful for any other person to knowingly, or with reason
to know, transport cigarettes to any person in this state, other
than a person described in subdivision (a), except that this
subdivision shall not be construed to prohibit a person other than a
common or contract carrier from transporting 800 or fewer cigarettes
at any one time to any adult in this state.
   (c) When a person engaged in the business of selling or
distributing cigarettes ships or causes to be shipped any cigarettes
to any person in this state, other than in the cigarette manufacturer'
s original container or wrapping, the container or wrapping shall be
plainly or visibly marked with the term "cigarettes."
   (d) Notwithstanding any other provision of this division, upon
discovery by the State Board of Equalization or a law enforcement
agency of any cigarettes that have been, or are being, shipped or
transported in violation of this section, the board or the law
enforcement agency may seize and take possession of the cigarettes.
Any cigarettes seized by a law enforcement agency shall be delivered
to the board, or its designee, within seven days, unless the
cigarettes will be destroyed by that law enforcement agency, or
unless the cigarettes are otherwise required to be used as evidence
in an administrative, criminal, or civil proceeding, or as part of an
ongoing law enforcement operation. 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 Chapter 7.5 (commencing with Section 30435) of Part 13 of
Division 2 of the Revenue and Taxation Code.
   (e) (1) A violation of this section is a misdemeanor and shall be
subject to the following penalties:
   (A) Upon the first violation, a fine of not more than one thousand
dollars ($1,000).
   (B) Upon the second violation, a fine of not more than five
thousand dollars ($5,000) and imprisonment not to exceed three
months.
   (C) Upon the third violation or subsequent violations, a fine of
not more than twenty-five thousand dollars ($25,000) and imprisonment
not to exceed six months.
   (2) In addition to the criminal penalty, the Attorney General,
district attorney, or city attorney may bring a civil action against
any person, firm, corporation, or other entity that violates this
section. If a court determines that this section has been violated,
the court shall assess civil penalties not to exceed five thousand
dollars ($5,000) per violation, plus the costs of investigating and
prosecuting the action, including expert fees, reasonable attorney's
fees, and court costs.
   (f) For the purposes of this section, "cigarette" has the same
meaning as in paragraph (3) of subdivision (a) of Section 30165.1 of
the Revenue and Taxation Code and implementing regulations.
  SEC. 3.5.  Section 22964 is added to the Business and Professions
Code, to read:
   22964.  (a) The distribution or sale of tobacco products directly
or indirectly to any person under the age of 18 years through the
United States Postal Service or through any other public or private
postal or package delivery service at locations, including, but not
limited to, public mailboxes and mailbox stores, is prohibited.
   (b) Any person selling or distributing tobacco products directly
to a consumer in the state through the United States Postal Service
or by any other public or private postal or package delivery service,
including orders placed by mail, telephone, facsimile transmission,
or the Internet, shall comply with the following provisions:
   (1) (A) Before enrolling a person as a customer or distributing or
selling tobacco products through any of these means, the distributor
or seller shall attempt to match the name, address, and date of
birth provided by the customer to information contained in records in
a database of individuals whose age has been verified to be 18 years
or older by reference to an appropriate database of government
records kept by the distributor, a direct marketing firm, or any
other entity. The distributor or seller shall also verify that the
billing address on the check or credit card offered for payment by
the purchaser matches the address listed in the database.
   (B) If the distributor or seller is unable to verify that the
purchaser is 18 years of age or older pursuant to subparagraph (A),
he or she shall require the customer to submit an age-verification
kit consisting of an attestation signed by the customer that he or
she is 18 years of age or older and a copy of a valid form of
government identification, which includes a driver's license, state
identification card, passport, an official naturalization or
immigration document, such as an alien registration receipt card
(commonly known as a "green card") or an immigrant visa, or military
identification. The distributor or seller shall also verify that the
billing address on the check or credit card provided by the consumer
matches the address listed in the form of government identification.
   (2) The distributor or seller shall require payment for the
purchase of any tobacco products to be made by personal check of the
purchaser or the purchaser's credit card. No money order or cash
payment shall be received or permitted. The distributor or seller
shall submit to each credit card acquiring company with which it has
credit card sales identification information in an appropriate form
and format so that the words "tobacco product" may be printed in the
purchaser's credit card statement when a purchase of tobacco products
is made by credit card payment.
   (3) The distributor or seller shall make a telephone call after 5
p.m. to the purchaser confirming the order prior to shipping the
tobacco products. The telephone call may be a person-to-person call
or a recorded message. The distributor or seller is not required to
speak directly with a person and may leave a message on an answering
machine or by voice mail.
   (4) The distributor or seller shall deliver the tobacco products
to the purchaser's verified billing address on the check or credit
card used for payment. No delivery described under this section shall
be permitted to any post office box.
   (c) Notwithstanding subdivisions (a) and (b), if a distributor or
seller complies with all of the requirements of this section and a
minor obtains tobacco products by any of the means described in
subdivision (b), the seller or distributor is not in violation of
this section.
   (d) For the purposes of the enforcement of this section pursuant
to Section 22958, the acts of the United States Postal Service or
other common carrier when engaged in the business of transporting and
delivering packages for others, and the acts of a person, whether
compensated or not, who transports or delivers a package for another
person without any reason to know of the package's contents, are not
unlawful and are not subject to civil penalties.
   (e) (1) For the purposes of this section, "tobacco products"
includes any form of smoking tobacco, cigars, pipe tobacco, smokeless
tobacco, chewing tobacco, snuff, or any other article or product
containing tobacco, but does not include cigarettes as defined in
subdivision (a) of Section 30165.1 of the Revenue and Taxation Code
and implementing regulations.
   (2) For the purposes of this section, a "distributor" is any
person or entity, within or outside the state, who agrees to
distribute tobacco products to a customer within the state. The
United States Postal Service or any other public or private postal or
package delivery service are not distributors within the meaning of
this section.
   (3) For the purpose of this section, a "seller" is any person or
entity, within or outside the state, who agrees to sell tobacco
products to a customer within the state. The United States Postal
Service or any other public or private postal or package delivery
service are not sellers within the meaning of this section.
   (f) A district attorney, city attorney, or the Attorney General
may assess civil penalties against any person, firm, corporation, or
other entity that violates this section, according to the following
schedule:
   (1) A civil penalty of not less than one thousand dollars ($1,000)
and not more than two thousand dollars ($2,000) for the first
violation.
   (2) A civil penalty of not less than two thousand five hundred
dollars ($2,500) and not more than three thousand five hundred
dollars ($3,500) for the second violation.
   (3) A civil penalty of not less than four thousand dollars
($4,000) and not more than five thousand dollars ($5,000) for the
third violation within a five-year period.
   (4) A civil penalty of not less than five thousand five hundred
dollars ($5,500) and not more than six thousand five hundred dollars
($6,500) for the fourth violation within a five-year period.
   (5) A civil penalty of not less than seven thousand dollars
($7,000) for a fifth or subsequent violation within a five-year
period.
  SEC. 4.  Section 308.1 of the Penal Code is amended to read:
   308.1.  (a) Notwithstanding any other provision of law, no person
shall sell, offer for sale, distribute, or import any tobacco product
commonly referred to as "bidis" or "beedies," unless that tobacco
product is sold, offered for sale, or intended to be sold in a
business establishment that prohibits the presence of persons under
18 years of age on its premises.
   (b) For purposes of this section, "bidis" or "beedies" means
 a   any of the following: 
    (1)     A  product containing tobacco
that is wrapped in temburni leaf (diospyros melanoxylon) or tendu
leaf (diospyros exculpra). 
   (2) A product that is marketed and sold as "bidis" or "beedies."

   (c) Any person who violates this section is guilty of a
misdemeanor  or   and is also  subject to a
civil action brought by the Attorney General, a city attorney,
county counsel, or district attorney for an injunction and a civil
penalty of up to two thousand dollars ($2,000) per violation. This
subdivision does not affect any other remedies available for a
violation of this section.
  SEC. 5.  Section 30101.7 of the Revenue and Taxation Code is
repealed. 
   30101.7.  (a) It is the intent of the Legislature in enacting this
section to facilitate the collection of all applicable state
surtaxes and sales or use taxes on cigarettes sold to residents of
the state.
   (b) Except as provided in subdivision (d), no person may engage in
a retail sale of cigarettes in California unless the sale is a
vendor-assisted, face-to-face sale.
   (c) For the purposes of this section, "face-to-face sale" means a
sale in which the purchaser is in the physical presence of the seller
or the seller's employee or agent at the time of the sale. A
face-to-face sale does not include any transaction conducted by mail
order, the Internet, telephone, or any other anonymous transaction
method in which the buyer is not in the seller's physical presence or
the physical presence of the seller's employee or agent at the time
of the sale.
   (d) A person may engage in a non-face-to-face sale of cigarettes
to a person in California provided that both of the following
conditions are met:
   (1) The seller has fully complied with all of the requirements of
Chapter 10A (commencing with Section 375) of Title 15 of the United
States Code, otherwise known as the Jenkins Act.
   (2) The seller has fully complied with either of the following
requirements:
   (A) All applicable California taxes on the cigarettes have been
paid.
   (B) The seller includes on the outside of the shipping container
for any cigarettes shipped to a resident in California from any
source in the United States an externally visible and easily legible
notice located on the same side of the shipping container as the
address to which the package is delivered stating as follows:

  "IF THESE CIGARETTES HAVE BEEN SHIPPED TO YOU FROM A SELLER LOCATED
OUTSIDE OF THE STATE IN WHICH YOU RESIDE, THE SELLER HAS REPORTED
PURSUANT TO FEDERAL LAW THE SALE OF THESE CIGARETTES TO YOUR STATE
TAX COLLECTION AGENCY, INCLUDING YOUR NAME AND ADDRESS. YOU ARE
LEGALLY RESPONSIBLE FOR ALL APPLICABLE UNPAID STATE TAXES ON THESE
CIGARETTES."

   (e) The State Board of Equalization shall provide information
relative to a seller's failure or attempt to comply with the Jenkins
Act to the Attorney General.
   (f) The Attorney General or a city attorney, county counsel, or
district attorney may bring a civil action to enforce this section
against any person that violates this section and, in addition to any
other remedies provided by law, the court shall assess a civil
penalty in accordance with the following schedule:
   (1) A civil penalty of not less than one thousand dollars ($1,000)
and not more than two thousand dollars ($2,000) for the first
violation.
   (2) A civil penalty of not less than two thousand five hundred
dollars ($2,500) and not more than three thousand five hundred
dollars ($3,500) for the second violation within a five-year period.
   (3) A civil penalty of not less than four thousand dollars
($4,000) and not more than five thousand dollars ($5,000) for the
third violation within a five-year period.
   (4) A civil penalty of not less than five thousand five hundred
dollars ($5,500) and not more than six thousand five hundred dollars
($6,500) for a fourth violation within a five-year period.
   (5) A civil penalty of ten thousand dollars ($10,000) for a fifth
or subsequent violation within a five-year period.
   (g) The Attorney General shall provide an annual report to the
Legislature regarding all actions taken to comply with, and enforce,
the Jenkins Act.
   (h) This section does not prohibit any lawful sale of a tobacco
product that occurs by means of a vending machine.
   (i) Nothing in this section shall relieve the seller of cigarettes
from any other applicable requirement of state law relating to the
sale of cigarettes.
   (j) The provisions of this section are severable. If any provision
of this section or its application is held invalid, that invalidity
shall not affect other provisions or applications that can be given
effect without the invalid provision or application. 
  SEC. 6.  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.