Amended in Assembly March 3, 2016

California Legislature—2015–16 Second Extraordinary Session

Assembly Bill No. 10

Introduced by Assembly Member Bloom

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(Principal coauthor: Senator McGuire)

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July 16, 2015

An act to begin delete amend Section end delete begin insert amend, repeal, and add Sections end insert 30111 begin insert and 30462 end insert of, and to add Section 7284.8 to, the Revenue and Taxation Code, relating to local government.

LEGISLATIVE COUNSEL’S DIGEST

AB 10, as amended, Bloom. Local taxes: authorization: cigarettes and tobacco products.

The Cigarette and Tobacco Products Tax Law imposes a tax on every distributor of cigarettes and tobacco products at specified rates. That law specifies that the taxes imposed by that law are in lieu of all other state, county, municipal, or district taxes on the privilege of distributing cigarettes or tobacco products. The California Constitution prohibits the Legislature from imposing taxes for local purposes, but allows the Legislature to authorize local governments to impose them.

This bill would begin delete authorize end delete begin insert authorize, on and after January 1, 2017, end insert the board of supervisors of a county or city and county to impose a tax on the privilege of distributing cigarettes and tobacco products in the county or city and county, including within an incorporated city within the begin delete county. end delete begin insert county, and would make conforming changes. This bill would define “distributing” to mean making a sale of cigarettes or tobacco products in a county or city and county that has not been taxed by a cigarette or tobacco products tax ordinance of that county or city and county. end insert

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This bill would authorize the board of supervisors of a county or city and county to enter into an agreement with another county or city and county to share any startup and ongoing administrative costs of a tax imposed pursuant to that authorization. This bill also would authorize the board of supervisors of a county or city and county to contract with the State Board of Equalization to perform functions incident to the administration or operation of the cigarette and tobacco products tax ordinance of the county, with reimbursement for costs incurred, and would require the State Board of Equalization to perform those functions pursuant to that contract.

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This bill also would require the State Board of Equalization to permit the examination of its records with respect to the tax imposed pursuant to the Cigarette and Tobacco Products Tax Law upon request by a county or city and county officer or employee to the extent necessary for the proper administration of that local cigarette and tobacco products tax, and authorizes the State Board of Equalization to require reimbursement. The bill would make knowingly accessing, using, or disclosing that confidential information without authorization a crime, thereby imposing a state-mandated local program.

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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.

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This bill would provide that no reimbursement is required by this act for a specified reason.

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Vote: majority. Appropriation: no. Fiscal committee:  begin delete no end delete begin insert yes end insert . State-mandated local program:  begin delete no end delete begin insert yes end insert .

The people of the State of California do enact as follows:

SECTION 1.  

Section 7284.8 is added to the Revenue and
Taxation Code, to read:

7284.8.  

(a) Subject to the limitations of the California
Constitution, a board of supervisors of a county or city and county
may, in accordance with Article 3.7 (commencing with Section
53720) of Chapter 4 of Part 1 of Division 2 of Title 5 of the
Government Code, impose a tax on the privilege of distributing
cigarettes and tobacco products in the county or city and county.
The board of supervisors may impose this tax within an
incorporated city within the county.

(b) For purposes of this section:

(1) “Cigarette” means a cigarette, as defined in Section 30003.

(2) “Tobacco products” means tobacco products, as defined in
subdivision (b) of Section 30121.

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(3) “Distributing” means making a sale of cigarettes or tobacco
products in a county or city and county that has not been taxed by
a cigarette or tobacco products tax ordinance of that county or
city and county.

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(4) “Sale” includes any transfer of title or possession for a
consideration, exchange, or barter, in any manner or by any means
whatever.

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(c) The board of supervisors of a county or city and county may
enter into an agreement with another county or city and county to
share any startup and ongoing administrative costs of a tax
imposed pursuant to the authorization of this section.

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(d) The board of supervisors of a county or city and county may
contract with the State Board of Equalization to perform functions
incident to the administration or operation of the cigarette and
tobacco products tax ordinance of the county or city and county,
and the State Board of Equalization shall perform those functions
pursuant to that contract. The county or city and county shall
reimburse the State Board of Equalization for any costs incurred
by the board in performing those functions.

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(e) (1) The State Board of Equalization shall permit the
examination of any records of the board with respect to the tax
imposed pursuant to the Cigarette and Tobacco Products Tax Law
(Part 13 (commencing with Section 30001)) upon request by a
county or city and county officer or employee to the extent
necessary for the proper administration of a tax imposed pursuant
to the authorization of this section.

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(2) The State Board of Equalization may require reimbursement
for costs incurred in complying with a request made pursuant to
paragraph (1).

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(3) Any person who knowingly accesses, uses, or discloses any
confidential information provided by the State Board of
Equalization pursuant this subdivision without authorization is
guilty of a misdemeanor.

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(f) This section shall become operative on January 1, 2017.

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SEC. 2.  

Section 30111 of the Revenue and Taxation Code is
amended to read:

30111.  

The taxes imposed by this part are in lieu of all other
state, municipal, or district taxes on the privilege of distributing
cigarettes or tobacco products.

This section does not prohibit the application of Part 1
(commencing with Section 6001), Part 1.5 (commencing with
Section 7200), Part 1.6 (commencing with Section 7251), or Article
2 (commencing with Section 37021) of Part 17 to the sale, storage,
use or other consumption of cigarettes or tobacco products.

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begin insert SEC. 2. end insert   

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begin insert Section 30111 of the end insert begin insert Revenue and Taxation Code end insert begin insert is
amended to read: end insert

30111.  

begin insert (a) end insert begin insert   end insert The taxes imposed by this part are in lieu of all
other state, county, municipal, or district taxes on the privilege of
distributing cigarettes or tobacco products.

This section does not prohibit the application of Part 1
(commencing with Section 6001), Part 1.5 (commencing with
Section begin delete 7200), end delete begin insert 7200) or end insert Part 1.6 (commencing with Section begin delete 7251),
or Article 2 (commencing with Section 37021) of Part 17 end delete begin insert 7251) end insert
to the sale, storage, begin delete use end delete begin insert use, end insert or other consumption of cigarettes or
tobacco products.

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(b) This section shall become inoperative and shall be repealed
on January 1, 2017.

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begin insert SEC. 3. end insert   

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begin insert Section 30111 is added to the end insert begin insert Revenue and Taxation
Code end insert begin insert , to read: end insert

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begin insert 30111. end insert   

(a) The taxes imposed by this part are in lieu of all
other state, city, or district taxes on the privilege of distributing
cigarettes or tobacco products. This section does not prohibit the
application of Part 1 (commencing with Section 6001), Part 1.5
(commencing with Section 7200), or Part 1.6 (commencing with
Section 7251) to the sale, storage, use, or other consumption of
cigarettes or tobacco products.

(b) This section shall become operative on January 1, 2017.

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begin insert SEC. 4. end insert   

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begin insert Section 30462 of the end insert begin insert Revenue and Taxation Code end insert begin insert is
amended to read: end insert

30462.  

(a) All money deposited in the Cigarette Tax Fund
under this part is hereby appropriated, subject to the provisions of
any budget bill heretofore or hereafter enacted, and shall, upon
order of the Controller, be drawn therefrom and allocated for the
following purposes:

(1) To pay the refunds authorized by this part.

(2) The balance remaining in the fund shall be transferred to
the General Fund of this state on or before the last calendar day
of each month.

(b) It is the intent of the Legislature that Section 30111 continues
to prohibit the imposition of local taxes by any city, charter city,
town, county, charter county, city and county, charter cities and
counties, or other political subdivision or agency of this state, on
the sale, use, ownership, holding, or other distribution of cigarettes
and tobacco products except as provided by Section 30111. The
Legislature finds and declares that the need for uniform statewide
regulation and collection of cigarette taxes is a matter of statewide
concern, and it is the Legislature’s intent to regulate the subject
matter of cigarette taxes comprehensively and to occupy the field
to the exclusion of local action except as specifically provided by
Section 30111.

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(c) This section shall become inoperative and shall be repealed
on January 1, 2017.

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begin insert SEC. 5. end insert   

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begin insert Section 30462 is added to the end insert begin insert Revenue and Taxation
Code end insert begin insert , to read: end insert

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begin insert 30462. end insert   

(a) All money deposited in the Cigarette Tax Fund
under this part is hereby appropriated, subject to the provisions
of any budget bill heretofore or hereafter enacted, and shall, upon
order of the Controller, be drawn therefrom and allocated for the
following purposes:

(1) To pay the refunds authorized by this part.

(2) The balance remaining in the fund shall be transferred to
the General Fund of this state on or before the last calendar day
of each month.

(b) It is the intent of the Legislature that Section 30111 continues
to prohibit the imposition of local taxes by any city, charter city,
town, or political subdivision or agency of this state other than a
county, charter county, city and county, and charter city and
county, on the sale, use, ownership, holding, or other distribution
of cigarettes and tobacco products except as provided by Section
30111. The Legislature finds and declares that the need for uniform
statewide regulation and collection of cigarette taxes is a matter
of statewide concern and it is the Legislature’s intent to regulate
the subject matter of cigarette taxes comprehensively and to occupy
the field to the exclusion of local action except as specifically
provided by Section 30111.

(c) This section shall become operative on January 1, 2017.

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begin insert SEC. 6. end insert   

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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.

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