2005 California Business and Professions Code Sections 22972-22974.8 PRODUCTS

22972.  (a) Commencing June 30, 2004, a retailer shall have in place
and maintain a license to engage in the sale of cigarettes or
tobacco products.  A retailer 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.
   (b) The retailer shall conspicuously display the license at each
retail location in a manner visible to the public.
   (c) A license is not assignable or transferable.  A person who
obtains a license as a retailer who ceases to do business as
specified in the license, or who never commenced business, or whose
license is suspended or revoked, shall immediately surrender the
license to the board.
   (d) A license shall be valid for a 12-month period, and shall be
renewed annually.
22972.1.  (a) Notwithstanding Section 22972 or Section 22973, the
board may issue to a retailer a temporary license with a scheduled
expiration date, as determined by the board, that occurs on or before
September 30, 2004.
   (b) A temporary license issued pursuant to this section shall be
automatically terminated upon the board's issuance of a license
pursuant to Section 22973.1.
   (c) A temporary license issued pursuant to this section is subject
to the same suspension, revocation, and forfeiture provisions that
apply to licenses issued by the board pursuant to Section 22973.1.
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 such 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) (1) A one-time license fee of one hundred dollars ($100) 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 a one-time license fee of one hundred
dollars ($100) per location.
   (2) The one-time fee required by this subdivision does not apply
to an application for renewal of a license for a retail location for
which the one-time license fee has already been paid.
22973.1.  (a) The board shall issue a license to a retailer upon
receipt of a completed application and payment of the fees prescribed
in Section 22973, unless any of the following apply:
   (1) The retailer, or if the retailer is not an individual, any
person controlling the retailer, has previously been issued a license
that is suspended or revoked by the board for violation of any of
the provisions of this division.
   (2) The application is for a license or renewal of a license for a
retail location that is the same retail location as that of a
retailer whose license was revoked or is subject to revocation
proceedings for violation of any of the provisions of this division,
unless:
   (A) It has been more than five years since a previous license for
the retail location was revoked.
   (B) The person applying for the license provides the board with
documentation demonstrating that the applicant has acquired or is
acquiring the premises or business in an arm's length transaction.
For purposes of this section, an "arm's length transaction" is
defined as a sale in good faith and for valuable consideration that
reflects the fair market value in the open market between two
informed and willing parties, neither under any compulsion to
participate in the transaction.  A sale between relatives, related
companies or partners, or a sale for the primary purpose of avoiding
the effect of the violations of this division that occurred at the
retail location, is presumed not to be made at "arm's length."
   (3) The retailer, or if the retailer is not an individual, any
person controlling the retailer, has been convicted of a felony
pursuant to Section 30473 or 30480 of the Revenue and Taxation Code.
   (4) The retailer does not possess all required permits or licenses
required under the Revenue and Taxation Code.
   (b) (1) Any retailer who is denied a license may petition for a
redetermination of the board's denial of the license within 30 days
after service upon that retailer of the notice of the denial of the
license.  If a petition for redetermination is not filed within the
30-day period, the determination of denial becomes final at the
expiration of the 30-day period.
   (2) Every petition for redetermination shall be in writing and
shall state the specific grounds upon which the petition is founded.
The petition may be amended to state additional grounds at anytime
prior to the date on which the board issues its order or decision
upon the petition for redetermination.
   (3) If the petition for redetermination is filed within the 30-day
period, the board shall reconsider the determination of the denial
and, if the retailer has so requested in the petition, shall grant
the retailer an oral hearing and shall give the retailer at least 10
days' notice of the time and place of the hearing.  The board may
continue the hearing from time to time as may be necessary.
   (4) The order or decision of the board upon a petition for
redetermination becomes final 30 days after mailing of notice
thereof.
   (5) Any notice required by this subdivision shall be served
personally or by mail.  If by mail, the notice shall be placed in a
sealed envelope, with postage paid, addressed to the retailer at the
address as it appears in the records of the board.  The giving of
notice shall be deemed complete at the time of deposit of the notice
in the United States Post Office, or a mailbox, subpost office,
substation or mail chute or other facility regularly maintained or
provided by the United States Postal Service, without extension of
time for any reason.  In lieu of mailing, a notice may be served
personally by delivering to the person to be served and service shall
be deemed complete at the time of such delivery.  Personal service
to a corporation may be made by delivery of a notice to any person
designated in the Code of Civil Procedure to be served for the
corporation with summons and complaint in a civil action.
22973.2.  The board shall, upon request, provide to the State
Department of Health Services, the office of the Attorney General, a
law enforcement agency, and any agency authorized to enforce local
tobacco control ordinances, access to the board's database of
licenses issued to retailers within the jurisdiction of that agency
or law enforcement agency.  The agencies authorized by this section
to access the board's database shall only access and use the board's
database for purposes of enforcing tobacco control laws and shall
adhere to all state laws, policies, and regulations pertaining to the
protection of personal information and individual privacy.
22974.  A retailer shall retain purchase invoices that meet the
requirements set forth in Section 22978.4 for all cigarettes or
tobacco products the retailer purchased for a period of four years.
The records shall be kept at the retail location for at least one
year after the purchase.  Invoices shall be made available upon
request during normal business hours for review inspection and
copying by the board or by a law enforcement agency.  Any retailer
found in violation of these requirements or any person who fails,
refuses, or neglects to retain or make available invoices for
inspection and copying in accordance with this section shall be
subject to penalties pursuant to Section 22981.
22974.3.  (a) Notwithstanding any other provision of this division,
upon discovery by the board or a law enforcement agency that a
retailer or any other person possesses, stores, owns, or has made a
retail sale of an unstamped package of cigarettes, the board or the
law enforcement agency shall be authorized to seize unstamped
packages of cigarettes at the retail, or any other person's location.
  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 Part 13 (commencing with Section 30436) of Division 2 of Chapter
7.5 of the Revenue and Taxation Code.  In addition to the inventory
of unstamped packages of cigarettes of a retailer or of any other
person that is subject to forfeiture and seizure, the possession,
storage, ownership, or retail sales of unstamped packages of
cigarettes by a retailer or other person, as applicable, shall
constitute a misdemeanor punishable by the following actions:
   (1) A first violation involving seizure of a total quantity of
less than 20 packages of unstamped cigarettes shall be a misdemeanor
punishable by a fine of one thousand dollars ($1,000) or imprisonment
not to exceed one year in a county jail, or both the fine and
imprisonment.
   (2) A second violation within five years involving a seizure of a
total quantity of less than 20 packages of unstamped cigarettes shall
be a misdemeanor punishable by a fine of not less than two thousand
dollars ($2,000) but not to exceed five thousand dollars ($5,000) or
imprisonment not to exceed one year in a county jail, or both the
fine and imprisonment, and shall also result in the revocation of the
license.
   (3) A first violation involving seizure of a total quantity of 20
packages of unstamped cigarettes or more shall be a misdemeanor
punishable by a fine of two thousand dollars ($2,000) or imprisonment
not to exceed one year in a county jail, or both the fine and
imprisonment.
   (4) A second violation within five years involving seizure of a
quantity of 20 packages of unstamped cigarettes or more shall be a
misdemeanor punishable by a fine of not less than five thousand
dollars ($5,000) but not to exceed fifty thousand dollars ($50,000)
or imprisonment not to exceed one year in a county jail, or both the
fine and imprisonment, and shall also result in the revocation of the
license.
   (b) Upon discovery by the board or a law enforcement agency that a
retailer or any other person possesses, stores, owns, or has made a
retail sale of tobacco products on which tax is due but has not been
paid to the board, the board or law enforcement agency is authorized
to seize such tobacco products at the retail, or any other person's
location.  Any tobacco products seized by a law enforcement agency
shall be delivered to the board, or its designee, within seven days,
unless otherwise required to be used as evidence in an
administrative, criminal, or civil proceeding, or as part of an
ongoing law enforcement operation.  Any tobacco products 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 Part 13 (commencing with Section 30436) of Division 2 of
Chapter 7.5 of the Revenue and Taxation Code.  It shall be presumed
that tax has not been paid to the board on all tobacco products in
the possession of a retailer or of any other person until the
contrary is established by a proof of payment to the board or by a
purchase invoice that shows that the retailer or other person, as
applicable, paid the tax included purchase price to a licensed
distributor, wholesaler, manufacturer, or importer as described in
Section 22978.4.  The burden of proof that tax has been paid on
tobacco products shall be upon the retailer or the other person, as
applicable, in possession thereof.  Possession of untaxed tobacco
products on which tax is due but has not been paid as required is a
violation of this division and subjects the retailer or other person,
as applicable, to the actions described in Section 22981.
22974.4.  The board shall revoke the license, pursuant to the
provisions applicable to the revocation of a license as set forth in
Section 30148 of the Revenue and Taxation Code, of any retailer or
any person controlling the retailer that has:
   (a) Been convicted of a felony pursuant to Section 30473 or 30480
of the Revenue and Taxation Code.
   (b) Had any permit or license revoked under any provision of the
Revenue and Taxation Code.
22974.5.  Any retailer who fails to display a license as required in
Section 22972 shall, in addition to any other applicable penalty, be
liable for a penalty of five hundred dollars ($500).
22974.7.  In addition to any other civil or criminal penalty
provided by law, upon a finding that a retailer has violated any
provision of this division, the board may take the following actions:
   (a) In the case of the first offense, the board may revoke or
suspend the license or licenses of the retailer pursuant to the
procedures applicable to the revocation of a license set forth in
Section 30148 of the Revenue and Taxation Code.
   (b) In the case of a second or any subsequent offense, in addition
to the action authorized under subdivision (a), the board may impose
a civil penalty in an amount not to exceed the greater of either of
the following:
   (1) Five times the retail value of the seized cigarettes or
tobacco products.
   (2) Five thousand dollars ($5,000).
22974.8.  (a) (1) The board shall take action against a retailer,
convicted of a violation of either the Stake Act (Division 8.5
(commencing with Section 22950) or Section 308 of the Penal Code,
according to the schedule set forth in subdivision (b).
   (2) Convictions of violations by a retailer at one retail location
may not be accumulated against other locations of that same
retailer.
   (3) Convictions of violations accumulated against a prior retail
owner at a licensed location may not be accumulated against a new
retail owner at the same retail location.
   (4) Prior to suspending or revoking a retailer's license to sell
cigarette and tobacco products, the board shall notify the retailer.
The notice shall include instructions for appealing the license
suspension or revocation.
   (b) (1) Upon the first conviction of a violation of either the
STAKE Act (Division 8.5 (commencing with Section 22950) or Section
308 of the Penal Code, the retailer shall receive a warning letter
from the board that delineates the circumstances under which a
retailer's license may by suspended or revoked and the amount of time
the license may be suspended or revoked.  The retailer and its
employees shall receive training on tobacco control laws from the
Department of Health Services upon a first conviction.
   (2) Upon the second conviction of a violation of either the STAKE
Act (Division 8.5 (commencing with Section 22950)) or Section 308 of
the Penal Code within 12 months, the retailer shall be subject to a
fine of five hundred dollars ($500).
   (3) Upon the third conviction of a violation of either the STAKE
Act (Division 8.5 (commencing with Section 22950)) or Section 308 of
the Penal Code within 12 months, the retailer shall be subject to a
fine of one thousand dollars ($1,000).
   (4) Upon the fourth to the seventh conviction of a violation of
either the STAKE Act (Division 8.5 (commencing with Section 22950))
or Section 308 of the Penal Code within 12 months, the board shall
suspend the retailer's license to sell cigarette and tobacco products
for 90 days.
   (5) Upon the eighth conviction of a violation of the STAKE Act
(Division 8.5 (commencing with Section 22950) or Section 308 of the
Penal Code within 24 months, the board shall revoke the retailer's
license to sell cigarette and tobacco products.
   (c) The decision of the board to suspend or revoke the retailer's
license may be appealed to the board within 30 days after the notice
of suspension or revocation.  All appeals shall be submitted in
writing.
   (d) The board's authority to take action against retailers, as set
forth in this section, commences on the date of the release of the
results from the survey undertaken by the Department of Health
Services pursuant to Section 22952 of the Business and Professions
Code Section 22952 to comply with Section 1926 of Title XIX of the
federal Public Health Service Act (42 U.S.C.  300x-26), and any
implementing regulations adopted in relation thereto by the United
States Department of Health and Human Services, showing that the
youth purchase survey finds that 13 percent or more of youth were
able to purchase cigarettes.  The board's authority to take action
under this section is inoperative on or after the date of the
subsequent release of the results from the survey showing that less
than 13 percent of youth were able to purchase cigarettes.