Amended in Senate May 31, 2016

Senate Bill No. 1400

Introduced by Senator Wieckowski

February 19, 2016

An act to begin delete amend end delete begin insert amend, repeal, and add end insert Section 22971 of the Business and Professions Code, relating to cigarette and tobacco products.

LEGISLATIVE COUNSEL’S DIGEST

SB 1400, as amended, Wieckowski. Retail tobacco licenses.

Existing law, the Cigarette and Tobacco Products Licensing Act of begin delete 2003 end delete begin insert 2003, end insert requires a retailer to obtain a license from the State Board of Equalization to engage in the sale of begin delete cigarette end delete begin insert cigarettes end insert and tobacco products in this state and defines a retailer as a person who engages in this state in the sale of cigarettes or tobacco products directly to the public from a retail location. The act defines a “retail location” as both any building from which cigarettes or tobacco products are sold at retail and a vending machine.

This bill would begin insert , beginning January 1, 2019, end insert revise the definition of a “retail location” to mean a tobacco store that is a retail business that, among other things, generates more than 60% of its gross revenues annually from the sale of tobacco products and tobacco paraphernalia.

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 22971 of the Business and Professions
Code is amended to read:

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.

begin delete

(q) “Retail location” means a tobacco store as defined in Section
22962.

end delete begin insert

(q) “Retail location” means both of the following:

end insert begin insert

(1) Any building from which cigarettes or tobacco products are
sold at retail.

end insert begin insert

(2) A vending machine.

end insert

(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.

begin insert

(v) This section shall remain in effect only until January 1, 2019,
and as of that date is repealed, unless a later enacted statute, that
is enacted before January 1, 2019, deletes or extends that date.

end insert

begin insert

begin insert SEC. 2. end insert   

end insert

begin insert Section 22971 is added to the end insert begin insert Business and Professions
Code end insert begin insert , to read: end insert

begin insert

begin insert 22971. end insert   

(a) For purposes of this division, the following terms
shall have the following meanings:

(1) “Board” means the State Board of Equalization.

(2) “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.

(3) “Cigarette” means a cigarette as defined in Section 30003
of the Revenue and Taxation Code.

(4) (A)   “Control” or “controlling” means possession, direct
or indirect, of the power:

(i) To vote 25 percent or more of any class of the voting
securities issued by a person.

(ii) 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.

(B) For purposes of clause (ii) of subparagraph (A), 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.

(C) For purposes of this division, the board may determine
whether a person in fact controls another person.

(5) “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.

(6) “Distributor” means a distributor as defined in Section
30011 of the Revenue and Taxation Code.

(7) “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.

(8) “Importer” means an importer as defined in Section 30019
of the Revenue and Taxation Code.

(9) “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.

(10) “License” means a license issued by the board pursuant
to this division.

(11) “Licensee” means any person holding a license issued by
the board pursuant to this division.

(12) “Manufacturer” means a manufacturer of cigarettes or
tobacco products sold in this state.

(13) “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.

(14) “Package of cigarettes” means a package as defined in
Section 30015 of the Revenue and Taxation Code.

(15) “Person” means a person as defined in Section 30010 of
the Revenue and Taxation Code.

(16) “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.

(17) “Retail location” means a tobacco store as defined in
Section 22962.

(18) “Sale” or “sold” means a sale as defined in Section 30006
of the Revenue and Taxation Code.

(19) “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.

(20) “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.”

(21) “Wholesaler” means a wholesaler as defined in Section
30016 of the Revenue and Taxation Code.

(b) This section shall become operative on January 1, 2019.

end insert