BILL ANALYSIS
AB 2496
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CONCURRENCE IN SENATE AMENDMENTS
AB 2496 (Nava)
As Amended August 18, 2010
Majority vote
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|ASSEMBLY: |58-16|(June 1, 2010) |SENATE: |23-10|(August 23, |
| | | | | |2010) |
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Original Committee Reference: G.O.
SUMMARY : Amends the California Cigarette and Tobacco Products
Licensing Act of 2003 in governing the financial and other
obligations of non-participating tobacco manufacturers (NPMs) as
part of its diligence obligation.
The Senate amendments :
1)Require a manufacturer or importer to additionally consent to
jurisdiction of the California courts for the purpose of
enforcement of the Master Settlement Agreement (MSA) and the
Cigarette and Tobacco Products Tax Law or, in lieu of this
consent, to post a surety bond, as specified.
2)Provide that a licensee who does not waive the sovereign
immunity defense or post a surety bond is ineligible to obtain
or maintain a license and would also make a licensee who
raises a sovereign immunity defense in a specified action
subject to revocation of its license.
3)Require the manufacturer or importer to additionally identify
the registered agent to the Attorney General.
4)Clarify the allowance of vendor-assisted, face-to-face
delivery sales, as defined, in specified circumstances.
Violation of this provision would be a misdemeanor, thus
imposing s state-mandated local program.
5)Add a contingency clause to avoid a chaptering conflict with
AB 2733 (Ruskin) relating to cigarettes and tobacco products.
6)Make technical changes.
EXISTING FEDERAL LAW :
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1)Requires, state Attorneys General and various tobacco product
manufacturers to enter into a MSA as a settlement of various
lawsuits that provides for the allocation of money to the
states and certain territories.
2)Enters this state into a memorandum of understanding providing
for the allocation of the state's share of funds to be
received under the MSA between the state and counties and
certain cities within the state.
3)Requires any tobacco product manufacturer selling cigarettes
to consumers in this state to place specified amounts into a
qualified escrow fund by April 15 of each year.
EXISTING STATE LAW :
1)Prohibits the sale, offer for sale, distribution, or import of
"bidis" or "beedies," defined as a product containing tobacco
that is wrapped in temburni leaf or tendu leaf, unless it is
sold or intended for sale in business establishments that
exclude minors.
2)Requires, under the Cigarette and Tobacco Products Tax Law, a
tax with respect to distributions of cigarettes paid by
distributors through the use of stamps or meter impressions,
and:
a) Requires that these stamps or impressions be affixed to
each package of cigarettes sold;
b) Requires certification of additional information, as
specified; and,
c) Requires the State Attorney General to post on the
Attorney General's Internet Web site a directory of tobacco
product manufacturers that are participating manufacturers
that are participating manufacturers under the MSA, and
that have made the required escrow payments and provided
certification of related information to the Attorney
General;
i) Requires the Attorney General's Internet Web site to
include specified brand families, as defined, that have
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been identified by the by the tobacco product
manufacturers;
ii) Requires that a manufacturer and brand families be
excluded from the directory, under certain circumstances;
and,
iii) Requires certain cigarette and tobacco products be
forfeited to the state, under certain circumstances, upon
seizure by the State Board of Equalization.
3)Imposes licensing requirements on tobacco manufacturers,
wholesalers, retailers and importers; requires manufacturers
to pay a one-time fee; and, imposes additional civil and
criminal penalties on individuals and businesses that violate
tobacco-related, anti-contraband laws and laws prohibiting
tobacco-related sales to minors. (Cigarette and Tobacco
Products Licensing Act)
4)Establishes the Stop Tobacco Access to Kids Enforcement Act to
reduce or eliminate the illegal purchase and consumption of
tobacco products by minors.
a) Requires retailers from selling cigarettes and tobacco
products to minors under the age of 18 and requires that
retailers check identification of individuals trying to buy
cigarettes and tobacco products who appear under the age of
18;
b) Increases civil penalties and expands the number of
agencies that are permitted to carry out investigations of
illegal tobacco sales to minors from the State Department
of Public Health to include the Attorney General and other
state and local agencies.
5)AS PASSED BY THE ASSEMBLY , this bill amends the Cigarette and
Tobacco Products Licensing Act in governing the financial and
other obligations of the NPMs as part of its diligence
obligation.
FISCAL EFFECT : According to the Senate Appropriations
Committee, pursuant to Senate Rule 28.8, negligible state costs.
COMMENTS : The author states, "This bill would bring California
law into conformity with Virginia's law and those of the other
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states to prevent participating manufacturers (PMs) from arguing
in future litigation that California has failed to 'diligently
enforce' against NPMs." This bill is modeled on similar NPM
escrow statute enhancements made in Virginia, Kentucky, Kansas,
and Idaho. This bill would protect against the sale of
cigarettes below market prices, and would help protect the
state's share of tobacco settlement payments under the MSA.
According to the sponsor, the Department of Justice, this bill
will "enhance the department's efforts to enforce existing
provisions of state law related to the MSA between California
and the major tobacco manufacturers." In addition, sponsor
states that this bill would protect against the sale of
cigarettes below market prices, and would help protect the
state's share of tobacco settlement payments due to it under the
MSA.
Analysis Prepared by : Rod Brewer / G.O. / (916) 319-2531
FN: 0006571