BILL NUMBER: SB 24INTRODUCED BILL TEXT INTRODUCED BY Senator Hill DECEMBER 1, 2014 An act to amend Sections 22950.5, 22951, 22952, 22956, 22958, 22960, 22961, 22962, 22963, 22970.2, 22971, 22972, 22973, 22974, 22974.7, 22980, 22980.1, 22980.2, 22980.3, and 22980.4 of, and to add Section 22950.1 to, the Business and Professions Code, to add Section 119406 to the Health and Safety Code, and to amend Section 308 of the Penal Code, relating to electronic cigarettes. LEGISLATIVE COUNSEL'S DIGEST SB 24, as introduced, Hill. STAKE Act: electronic cigarettes. Existing law, the Stop Tobacco Access to Kids Enforcement Act (STAKE Act), establishes various requirements for distributors and retailers relating to tobacco sales to minors. Existing law makes it a crime, punishable by a fine not to exceed $500 or by imprisonment not exceeding 30 days in a county jail, to fail to post a notice, at each point of purchase, stating that the sale of tobacco products to minors is illegal. Existing law also permits enforcing agencies to assess various civil penalties for violations of the STAKE Act. Existing law prohibits a person from selling or otherwise furnishing an electronic cigarette to minors, and makes a violation punishable as an infraction. Existing law, the Cigarette and Tobacco Products Licensing Act, requires the State Board of Equalization to administer a statewide program to license manufacturers, importers, distributors, wholesalers, and retailers of cigarettes and tobacco products. Existing law makes a violation of the Cigarette and Tobacco Products Licensing Act a misdemeanor punishable by a fine not to exceed $5,000, by imprisonment not exceeding one year in a county jail, or by both the fine and imprisonment. Existing law also permits the State Board of Equalization to assess various civil penalties for violations of the Cigarette and Tobacco Products Licensing Act. This bill would extend the STAKE Act to sales of electronic cigarettes to minors. The bill would require the State Department of Public Health to enforce the STAKE Act's provisions with regard to sales of electronic cigarettes commencing July 1, 2016. The bill would provide that the STAKE Act does not invalidate existing local government ordinances regulating the distribution or sale of cigarettes, electronic cigarettes, or tobacco products, or prohibit local goverments from adopting ordinances regulating the distribution or sale of cigarettes, electronic cigarettes, or tobacco products that are more restrictive than state law. The bill would require that retailers apply for a license to sell electronic cigarettes commencing April 15, 2016, and to display the license at each retail location commencing June 30, 2016. The bill would require the State Board of Equalization to administer a statewide program to license retailers of electronic cigarettes. The bill would make the failure to post a notice, on and after July 1, 2016, at each point of purchase, stating that the sale of electronic cigarettes to minors is illegal, a crime. The bill would also make retailers of electronic cigarettes subject to various civil and criminal penalties if they fail to comply with licensing requirements. By expanding the scope of existing crimes, the bill would impose a state-mandated local program. The bill would require that cartridges for electronic cigarettes and solutions for filling electronic cigarettes be in child-proof packaging to protect children from opening and ingesting the contents. 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. Section 22950.1 is added to the Business and Professions Code, to read: 22950.1. Nothing in this division nor any other law shall be construed to invalidate an existing ordinance of, or prohibit the adoption of an ordinance by, a city or county that regulates the distribution or sale of cigarettes, electronic cigarettes, or tobacco products in a manner that is more restrictive than this division, to the extent that the ordinance is not otherwise prohibited by federal law. SEC. 2. Section 22950.5 of the Business and Professions Code is amended to read: 22950.5. For purposes of this division, the following terms have the following meanings: (a) "Department" means the State Department of Public Health. (b) "Enforcing agency" means the State Department of Public Health, another state agency, including, but not limited to, the office of the Attorney General, or a local law enforcement agency, including, but not limited to, a city attorney, district attorney, or county counsel. (c) "Tobacco product" means a product containing tobacco leaf, including, but not limited to, cigarettes, cigars, pipe tobacco, snuff, chewing tobacco, dipping tobacco, bidis, or other preparation of tobacco, or a tobacco substitute. (d) "Electronic cigarette" means a device that can provide an inhalable dose of nicotine by delivering a vaporized solution. SEC. 3. Section 22951 of the Business and Professions Code is amended to read: 22951. The Legislature finds and declares that reducing and eventually eliminating the illegal purchase and consumption of tobacco products and electronic cigarettes by minors is critical to ensuring the long-term health of our state's citizens. Accordingly, California must fully comply with federal regulations, particularly the "Synar Amendment," that restrict tobacco sales to minors and require states to vigorously enforce their laws prohibiting the sale and distribution of tobacco products to persons under 18 years of age. Full compliance and vigorous enforcement of the "Synar Amendment" requires the collaboration of multiple state and local agencies that license, inspect, or otherwise conduct business with retailers, distributors, or wholesalers that sell tobacco. SEC. 4. Section 22952 of the Business and Professions Code is amended to read: 22952.On or before July 1, 1995, theThe State Department of Public Health shall do all of the following: (a) Establish and develop a program to reduce the availability of tobacco products and electronic cigarettes to persons under 18 years of age through the enforcement activities authorized by this division. (b) Establish requirements that retailers of tobacco products or electronic cigarettes post conspicuously, at each point of purchase, a notice stating that selling tobacco products or electronic cigarettes to anyone under 18 years of age is illegal and subject to penalties. The notice shall also state that the law requires that all persons selling tobacco products or electronic cigarettes check the identification of a purchaser of tobacco products or electronic cigarettes who reasonably appears to be under 18 years of age. The warning signs shall include a toll-free telephone number to the department for persons to report unlawful sales of tobacco products or electronic cigarettes to minors. (c) Provide that primary responsibility for enforcement of this division shall be with the department. In carrying out its enforcement responsibilities, the department shall conduct random, onsite sting inspections at retail sites and shall enlist the assistance of persons that are 15 and 16 years of age in conducting these enforcement activities. The department may conduct onsite sting inspections in response to public complaints or at retail sites where violations have previously occurred, and investigate illegal sales of tobacco products or electronic cigarettes to minors by telephone, mail, or the Internet. Participation in these enforcement activities by a person under 18 years of age does not constitute a violation of subdivision (b) of Section 308 of the Penal Code for the person under 18 years of age, and the person under 18 years of age is immune from prosecution thereunder, or under any other provision of law prohibiting the purchase of these products by a person under 18 years of age. (d) In accordance with Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code, the department shall adopt and publish guidelines for the use of persons under 18 years of age in inspections conducted pursuant to subdivision (c) that shall include, but not be limited to, all of the following: (1) An enforcing agency may use persons under 18 years of age who are 15 or 16 years of age in random inspections to determine if sales of cigarettes , electronic cigarettes, or other tobacco products are being made to persons under 18 years of age. (2) A photograph or video recording of the person under 18 years of age shall be taken prior to each inspection or shift of inspections and retained by the enforcing agency for purposes of verifying appearances. (3) An enforcing agency may use video recording equipment when conducting the inspections to record and document illegal sales or attempted sales. (4) The person under 18 years of age, if questioned about his or her age, need not state his or her actual age but shall present a true and correct identification if verbally asked to present it. Any failure on the part of the person under 18 years of age to provide true and correct identification, if verbally asked for it, shall be a defense to an action pursuant to this section. (5) The person under 18 years of age shall be under the supervision of a regularly employed peace officer during the inspection. (6) All persons under 18 years of age used in this manner by an enforcing agency shall display the appearance of a person under 18 years of age. It shall be a defense to an action under this division that the person's appearance was not that which could be generally expected of a person under 18 years of age, under the actual circumstances presented to the seller of the cigarettes , electronic cigarettes, or other tobacco products at the time of the alleged offense. (7) Following the completion of the sale, the peace officer accompanying the person under 18 years of age shall reenter the retail establishment and shall inform the seller of the random inspection. Following an attempted sale, the enforcing agency shall notify the retail establishment of the inspection. (8) Failure to comply with the procedures set forth in this subdivision shall be a defense to an action brought pursuant to this section. (e) Be responsible for ensuring and reporting the state's compliance with Section 1926 of Title XIX of the federal Public Health Service Act (42 U.S.C. Sec. 300x-26) and any implementing regulations adopted in relation thereto by the United States Department of Health and Human Services. A copy of this report shall be made available to the Governor and the Legislature. (f) Provide that any civil penalties imposed pursuant to Section 22958 shall be enforced against the owner or owners of the retail business and not the employees of the business. (g) The amendments made to this section by the act adding this subdivision shall become operative on July 1, 2016. SEC. 5. Section 22956 of the Business and Professions Code is amended to read: 22956. All persons engaging in the retail sale of tobacco products or electronic cigarettes shall check the identification oftobaccopurchasers of those items , to establish the age of the purchaser, if the purchaser reasonably appears to be under 18 years of age. SEC. 6. Section 22958 of the Business and Professions Code is amended to read: 22958. (a) An enforcing agency may assess civil penalties against any person, firm, or corporation that sells, gives, or in any way furnishes to another person who is under the age of 18 years, any tobacco, cigarette, electronic cigarette, cigarette papers, any other instrument or paraphernalia that is designed for the smoking or ingestion of tobacco, products prepared from tobacco, or any controlled substance, according to the following schedule: (1) a civil penalty of from four hundred dollars ($400) to six hundred dollars ($600) for the first violation, (2) a civil penalty of from nine hundred dollars ($900) to one thousand dollars ($1,000) for the second violation within a five-year period, (3) a civil penalty of from one thousand two hundred dollars ($1,200) to one thousand eight hundred dollars ($1,800) for a third violation within a five-year period, (4) a civil penalty of from three thousand dollars ($3,000) to four thousand dollars ($4,000) for a fourth violation within a five-year period, or (5) a civil penalty of from five thousand dollars ($5,000) to six thousand dollars ($6,000) for a fifth violation within a five-year period. (b) (1) In addition to the civil penalties described in subdivision (a), upon the assessment of a civil penalty for the third, fourth, or fifth violation, the department, within 60 days of the date of service of the final administrative adjudication on the parties or payment of the civil penalty for an uncontested violation, shall notify the State Board of Equalization of the violation. The State Board of Equalization shall then assess a civil penalty of two hundred fifty dollars ($250) and suspend or revoke a license issued pursuant to Chapter 2 (commencing with Section 22972) of Division 8.6 in accordance with the following schedule: (A) A 45-day suspension of the license for a third violation at the same location within a five-year period. (B) A 90-day suspension of the license for a fourth violation at the same location within a five-year period. (C) Revocation of the license for a fifth violation at the same location within a five-year period. (2) The provisions of Chapter 4 (commencing with Section 55121) of Part 30 of Division 2 of the Revenue and Taxation Code apply with respect to the collection of the penalty imposed by the State Board of Equalization pursuant to paragraph (1). (c) (1) For each suspension or revocation pursuant to subdivision (b), the civil penalty of two hundred fifty dollars ($250) assessed pursuant to that subdivision, notwithstanding Section 22953, shall be deposited into the Cigarette and Tobacco Products Compliance Fund established pursuant to Section 22990. Moneys from that civil penalty deposited into this fund shall be made available to the State Board of Equalization, upon appropriation by the Legislature, for the purposes of meeting its duties under subdivision (b). (2) The department shall, upon request, provide to the State Board of Equalization information concerning any person, firm, or corporation that has been assessed a civil penalty for violation of the STAKE Act pursuant to this section when the department has notified the State Board of Equalization of the violation. (d) The enforcing agency shall assess penalties pursuant to the schedule set forth in subdivision (a) against a person, firm, or corporation that sells, offers for sale, or distributes tobacco products or electronic cigarettes from a cigarette or tobacco products vending machine, or a person, firm, or corporation that leases, furnishes, or services these machines in violation of Section 22960. (e) An enforcing agency may assess civil penalties against a person, firm, or corporation that sells or deals in tobacco or any preparation thereof, and fails to post conspicuously and keep posted in the place of business at each point of purchase the notice required pursuant to subdivision (b) of Section 22952. The civil penalty shall be in the amount of two hundred dollars ($200) for the first offense and five hundred dollars ($500) for each additional violation. (f) An enforcing agency shall assess penalties in accordance with the schedule set forth in subdivision (a) against a person, firm, or corporation that advertises or causes to be advertised a tobacco product or electronic cigarette on an outdoor billboard in violation of Section 22961. (g) If a civil penalty has been assessed pursuant to this section against a person, firm, or corporation for a single, specific violation of this division, the person, firm, or corporation shall not be prosecuted under Section 308 of the Penal Code for a violation based on the same facts or specific incident for which the civil penalty was assessed. If a person, firm, or corporation has been prosecuted for a single, specific violation of Section 308 of the Penal Code, the person, firm, or corporation shall not be assessed a civil penalty under this section based on the same facts or specific incident upon which the prosecution under Section 308 of the Penal Code was based. (h) (1) In the case of a corporation or business with more than one retail location, to determine the number of accumulated violations for purposes of the penalty schedule set forth in subdivision (a), violations of this division by one retail location shall not be accumulated against other retail locations of that same corporation or business. (2) In the case of a retail location that operates pursuant to a franchise as defined in Section 20001, violations of this division accumulated and assessed against a prior owner of a single franchise location shall not be accumulated against a new owner of the same single franchise location for purposes of the penalty schedule set forth in subdivision (a). (i) Proceedings under this section shall be conducted pursuant to Section 131071 of the Health and Safety Code, except in cases where a civil penalty is assessed by an enforcing agency other than the department, in which case proceedings shall be conducted pursuant to the procedures of that agency that are consistent with Section 131071 of the Health and Safety Code. SEC. 7. Section 22960 of the Business and Professions Code is amended to read: 22960. (a) Except as provided in subdivision (b),noa cigarette , electronic cigarette, or tobacco product shall not be sold, offered for sale, or distributed from a vending machine or appliance, or any other coin or token operated mechanical device designed or used for vending purposes, including, but not limited to, machines or devices that use remote control locking mechanisms. (b) (1)Commencing January 1, 1996, cigaretteCigarette, electronic cigarette, or tobacco product vending machines or appliances may be located at least 15 feet away from the entrance of a premise issued an on-sale public premises license as defined in Section 23039 by the Department of Alcoholic Beverage Control to sell alcoholic beverages. (2) As used in this subdivision "at least 15 feet away from the entrance" means within the premises of the licensed establishment and not outside those premises. (c) This section and subdivision (b) of Section 22958 set forth minimum state restrictions on the sale of cigarettes , electronic cigarettes, or tobacco products from vending machines or devices and do not preempt or otherwise prohibit the adoption of a local standard that further restricts access to and reduces the availability of cigarette s, electronic cigarettes, or tobacco products from vending machines or devices or that imposes a complete ban on the sale of cigarettes or tobacco products from vending machines or devices. A local standard that further restricts or imposes a complete ban on the sale of cigarettes , electronic cigarettes, or tobacco products from vending machines or devices shall control in the event of an inconsistency between this section and a local standard. (d) The amendments made to this section by the act adding this subdivision shall become operative on July 1, 2016. SEC. 8. Section 22961 of the Business and Professions Code is amended to read: 22961. (a) No person, firm, corporation, partnership, or other organization shall advertise or cause to be advertised any tobacco products or electronic cigarettes on any outdoor billboard located within 1,000 feet of any public or private elementary school, junior high school, or high school, or public playground. (b) This section sets forth minimum state restrictions on the advertisement of any tobacco products or electronic cigarettes on outdoor billboards near schools and public playgrounds and does not preempt or otherwise prohibit the adoption of a local standard that imposes a more restrictive or complete ban on billboard advertising or on tobacco-related billboard advertising. A local standard that imposes a more restrictive or complete ban on billboard advertising or on tobacco-related billboard advertising shall control in the event of any inconsistency between this section and a local standard. (c) This section shall not be construed to prohibit the display of a message or advertisement opposing the use of tobacco products or electronic cigarettes . However, this subdivision shall not be construed to permit an advertisement promoting the use of tobacco products or electronic cigarettes by including a message opposing the use of tobacco products or electronic cigarettes within that advertisement. SEC. 9. Section 22962 of the Business and Professions Code is amended to read: 22962. (a) For purposes of this section, the following terms have the following meanings: (1) "Self-service display" means the open display of electronic c igarettes, tobacco products , or tobacco paraphernalia in a manner that is accessible to the general public without the assistance of the retailer or employee of the retailer. (2) "Tobacco paraphernalia" means cigarette papers or wrappers, blunt wraps as defined in Section 308 of the Penal Code, pipes, holders of smoking materials of all types, cigarette rolling machines, or other instruments or things designed for the smoking or ingestion of tobacco products.(3) "Tobacco product" means any product containing tobacco leaf, including, but not limited to, cigarettes, cigars, pipe tobacco, snuff, chewing tobacco, dipping tobacco, bidis, or any other preparation of tobacco.(4)(3) "Tobacco store" means a retail business that meets all of the following requirements: (A) Primarily sells tobacco products or electronic cigarettes . (B) Generates more than 60 percent of its gross revenues annually from the sale of electronic cigarettes, tobaccoproductsproducts, and tobacco paraphernalia. (C) Does not permit any person under 18 years of age to be present or enter the premises at any time, unless accompanied by the person' s parent or legal guardian, as defined in Section 6903 of the Family Code. (D) Does not sell alcoholic beverages or food for consumption on the premises. (b) (1) (A) Except as permitted in subdivision (b) of Section 22960, it is unlawful for a person engaged in the retail sale of tobacco products or electronic cigarettes to sell, offer for sale, or display for sale any electronic cigarette, tobaccoproductproduct, or tobacco paraphernalia by self-service display. A person who violates this section is subject to those civil penalties specified in the schedule in subdivision (a) of Section 22958. (B) A person who violates this section is subject to those civil penalties specified in the schedule in subdivision (a) of Section 22958. (2) It is unlawful for a person engaged in the retail sale of blunt wraps to place or maintain, or to cause to be placed or maintained, any blunt wraps advertising display within two feet of candy, snack, or nonalcoholic beverage displayed inside any store or business. (3) It is unlawful for any person or business to place or maintain, or cause to be placed or maintained, any blunt wrap advertising display that is less than four feet above the floor. (c) Subdivision (b) shall not apply to the display in a tobacco store of cigars, pipe tobacco, snuff, chewing tobacco, or dipping tobacco, provided that in the case of cigars they are generally not sold or offered for sale in a sealed package of the manufacturer or importer containing less than six cigars. In any enforcement action brought pursuant to this division, the retail business that displays any of the items described in this subdivision in a self-service display shall have the burden of proving that it qualifies for the exemption established in this subdivision. (d) The Attorney General, a city attorney, a county counsel, or a district attorney may bring a civil action to enforce this section. (e) This section does not preempt or otherwise prohibit the adoption of a local standard that imposes greater restrictions on the access to tobacco products or electronic cigarettes than the restrictions imposed by this section. To the extent that there is an inconsistency between this section and a local standard that imposes greater restrictions on the access to tobacco products or electronic cigarettes , the greater restriction on the access to tobacco products or electronic cigarettes in the local standard shall prevail. SEC. 10. Section 22963 of the Business and Professions Code is amended to read: 22963. (a) The sale, distribution, or nonsale distribution of tobacco products or electronic cigarettes 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, or engaging in the nonsale distribution of, tobacco products or electronic cigarettes 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, or engaging in the nonsale distribution of, the tobacco product or electronic cigarette through any of these means, the distributor or seller shall verify that the purchaser or recipient of the product 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. In the case of a sale, 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 seller, distributor, or nonsale distributor, is unable to verify that the purchaser or recipient is 18 years of age or older pursuant to subparagraph (A), he or she shall require the customer or recipient to submit an age-verification kit consisting of an attestation signed by the customer or recipient 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. In the case of a sale, 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) In the case of a sale, 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 or electronic cigarette 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" or "electronic cigarette" may be printed in the purchaser's credit card statement when a purchase of a tobacco product or electronic cigarette is made by credit card payment. (3) In the case of a sale, 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 or electronic cigarettes . 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 nonsale distributor shall deliver the tobacco product or electronic cigarette to the recipient's verified mailing address, or in the case of a sale, the seller or distributor shall deliver the tobacco product or electronic cigarette 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 seller, distributor, or nonsale distributor, complies with all of the requirements of this section and a minor obtains a tobacco product or electronic cigarette by any of the means described in subdivision (b), the seller, distributor, or nonsale 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) (A) For the purposes of this section, a "distributor" is any person or entity, within or outside the state, who agrees to distribute tobacco products or electronic cigarettes to a customer or recipient 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. (B) A "nonsale distributor" is any person inside or outside of this state who, directly or indirectly, knowingly provides tobacco products or electronic cigarettes to any person in this state as part of a nonsale transaction. "Nonsale distributor" includes the person or entity who provides the tobacco product or elec tronic cigarette for delivery and the person or entity who delivers the product to the recipient as part of a nonsale transaction. (C) "Nonsale distribution" means to give electronic cigarettes, smokelesstobaccotobacco, or cigarettes to the general public at no cost, or at nominal cost, or to give coupons, coupon offers, gift certificates, gift cards, or other similar offers, or rebate offers for electronic cigarettes, smokelesstobaccotobacco, or cigarettes to the general public at no cost or at nominal cost. Distribution of electronic cigarettes, tobacco products, coupons, coupon offers, gift certificates, gift cards, or other similar offers, or rebate offers in connection with the sale of another item, including electronic cigarettes, tobacco products, cigarette lighters, magazines, or newspapers shall not constitute nonsale distribution. (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 or electronic cigarettes 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. 11. Section 22970.2 of the Business and Professions Code is amended to read: 22970.2. The board shall administer a statewide program to license manufacturers, importers, distributors, wholesalers, and retailers of cigarettes and tobacco products , and retailers of electronic cigarettes . SEC. 12. 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) (1) "Cigarette" means a cigarette as defined in Section 30003 of the Revenue and Taxation Code. (2) "Electronic cigarette" means a device as defined in subdivision (d) of Section 22950.5. (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 , electronic cigarettes, or tobacco products in a vending machine or in retail stock for the purpose of selling or gifting the cigarettes , electronic cigarettes, or tobacco products. For purposes of this definition, the clear and easily visible display of cigarettes , electronic cigarettes, or tobacco products shall create a rebuttable presumption thateitherthe products 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 , electronic 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 , electronic 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 , electronic cigarettes, or tobacco products directly to the public from a retail location. Retailer includes a person who operates vending machines from which cigarettes , electronic cigarettes, or tobacco products are sold in this state. (q) "Retail location" means both of the following: (1) Any building from which cigarettes , electronic cigarettes, or tobacco products are sold at retail. (2) A vending machine. (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. SEC. 13. Section 22972 of the Business and Professions Code is amended to read: 22972. (a)Commencing June 30, 2004, aA retailer shall have in place and maintain a license to engage in the sale of cigarettes , electronic 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. (e) The amendments made to this section by the act adding this subdivision shall become operative on June 30, 2016. SEC. 14. Section 22973 of the Business and Professions Code is amended to read: 22973. (a) An application for a license shall be filedon 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 , electronic 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 those 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. If a license is reinstated after its expiration, the retailer, as a condition precedent to its reinstatement, shall pay a reinstatement fee of one hundred dollars ($100). (3) The one-time fee required by this subdivision does not apply to a retail location selling electronic cigarettes if the retail location has already obtained a license to sell cigarettes or tobacco products. (e) The amendments made to this section by the act adding this subdivision shall become operative on April 15, 2016. SEC. 15. Section 22974 of the Business and Professions Code is amended to read: 22974. A retailer shall retain purchase invoices that meet the requirements set forth in Section 22978.4 for all cigarettes , electronic 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. SEC. 16. Section 22974.7 of the Business and Professions Code is amended to read: 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 , electronic cigarettes, or tobacco products. (2) Five thousand dollars ($5,000). SEC. 17. Section 22980 of the Business and Professions Code is amended to read: 22980. (a) (1) Any peace officer, or board employee granted limited peace officer status pursuant to paragraph (6) of subdivision (a) of Section 830.11 of the Penal Code, upon presenting appropriate credentials, is authorized to enter any place as described in paragraph (3) and to conduct inspections in accordance with the following paragraphs, inclusive. (2) Inspections shall be performed in a reasonable manner and at times that are reasonable under the circumstances, taking into consideration the normal business hours of the place to be entered. (3) Inspections may be at any place at which cigarettes , electronic cigarettes, or tobacco products are sold, produced, or stored or at any site where evidence of activities involving evasion of cigarette or tobacco products tax and violations of Section 30165.1 of the Revenue and Taxation Code may be discovered. (4) Inspections shall be requested or conducted no more than once in a 24-hour period. (b) Any person that refuses to allow an inspection shall be subject to the penalties imposed pursuant to Section 22981. SEC. 18. Section 22980.1 of the Business and Professions Code is amended to read: 22980.1. (a) No manufacturer or importer shall sell cigarettes , electronic cigarettes, or tobacco products to a distributor, wholesaler, retailer, or any other person who is not licensed pursuant to this division or whose license has been suspended or revoked. (b) (1) Except as provided in paragraph (2), no distributor or wholesaler shall sell cigarettes , electronic cigarettes, or tobacco products to a retailer, wholesaler, distributor, or any other person who is not licensed pursuant to this division or whose license has been suspended or revoked. (2) This subdivision does not apply to any sale of cigarettes , electronic cigarettes, or tobacco products by a distributor, wholesaler, or any other person to a retailer, wholesaler, distributor, or any other person that the state, pursuant to the United States Constitution, the laws of the United States, or the California Constitution, is prohibited from regulating. (c) No retailer, distributor, or wholesaler shall purchase packages of cigarettes or tobacco products from a manufacturer or importer who is not licensed pursuant to this division or whose license has been suspended or revoked. (d) (1) No retailer, or wholesaler shall purchase cigarettes , electronic cigarettes, or tobacco products from any person who is not licensed pursuant to this division or whose license has been suspended or revoked. (2) Notwithstanding subdivision (c), no distributor shall purchase cigarettes , electronic cigarettes, or tobacco products from any person who is required to be licensed pursuant to this division but who is not licensed or whose license has been suspended or revoked. (e) Each separate sale to, or by, a retailer, wholesaler, distributor, importer, manufacturer, or any other person who is not licensed pursuant to this division shall constitute a separate violation. (f) No manufacturer, distributor, wholesaler, or importer may sell cigarettes , electronic cigarettes, or tobacco products to any retailer or wholesaler whose license has been suspended or revoked unless all outstanding debts of that retailer or wholesaler that are owed to a wholesaler or distributor for cigarettes , electronic cigarettes, or tobacco products are paid and the license of that retailer or wholesaler has been reinstated by the board. Any payment received from a retailer or wholesaler shall be credited first to the outstanding debt for cigarettes , electronic cigarettes, or tobacco products and must be immediately reported to the board. The board shall determine the debt status of a suspended retailer or wholesaler licensee 25 days prior to the reinstatement of the license. (g) No importer, distributor, or wholesaler, or distributor functioning as a wholesaler, or retailer, shall purchase, obtain, or otherwise acquire any package of cigarettes to which a stamp or meter impression may not be affixed in accordance with subdivision (b) of Section 30163 or subdivision (e) of Section 30165.1 of the Revenue and Taxation Code, or any cigarettes obtained from a manufacturer or importer that cannot demonstrate full compliance with all requirements of the federal Cigarette Labeling and Advertising Act (15 U.S.C. Sec. 13335a et seq.) for the reporting of ingredients added to cigarettes. (h) (1) Failure to comply with the provisions of this section shall be a misdemeanor subject to penalties pursuant to Section 22981. (2) Notwithstanding paragraph (1), a manufacturer or importer who uses the most up-to-date licensing information provided by the board on the board's Internet Web site to determine a person's licensing status is presumed to be in compliance with this section. (i) The amendments that are made to this section by the act adding this subdivision shall become operative May 1, 2007. SEC. 19. Section 22980.2 of the Business and Professions Code is amended to read: 22980.2. (a) A person or entity that engages in the business of selling cigarettes , electronic cigarettes, or tobacco products in this state either without a valid license or after a license has been suspended or revoked, and each officer of any corporation that so engages in this business, is guilty of a misdemeanor punishable as provided in Section 22981. (b) Each day after notification by the board or by a law enforcement agency that a manufacturer, wholesaler, distributor, importer, retailer, or any other person required to be licensed under this division offers cigarettes , electronic cigarettes, and tobacco products for sale or exchange without a valid license for the location from which they are offered for sale shall constitute a separate violation. (c) Continued sales or gifting of cigarettes , electronic cigarettes, and tobacco products either without a valid license or after a notification of suspension or revocation shall constitute a violation punishable as provided in Section 22981, and shall result in the seizure of all cigarettes , electronic cigarettes, and tobacco products in the possession of the person by the board or a law enforcement agency. Any cigarettes , electronic cigarettes, and tobacco products seized by the board or by a law enforcement agency shall be deemed forfeited. SEC. 20. Section 22980.3 of the Business and Professions Code is amended to read: 22980.3. (a) Licenses issued pursuant to this division shall be subject to suspension or revocation for violations of this division or the Revenue and Taxation Code as provided in this section. (1) In addition to any applicable fines or penalties for a violation, upon first conviction of a violation, a licensee shall receive a written notice from the board detailing the suspension and revocation provisions of this division. At its discretion, the board may also suspend a license for up to 30 days. (2) In addition to any applicable fines or penalties for a violation, upon a second conviction of a violation within four years of a previous violation, the license shall be revoked. (b) The date of the occurrence of a violation shall be used to calculate the duration between subsequent violations. A violation shall be noted in the license record at the board only after judicial conviction or final adjudication of a violation. (c) Upon updating a record for a violation triggering a suspension, the board shall serve the licensee with a notice of suspension and shall order the licensee to cease the sale, gifting, or displaying for sale of cigarettes , electronic cigarettes, or tobacco products for the period of the suspension. The notice of suspension shall inform the licensee of the effective dates of the suspension. (d) Continued sales or gifting of cigarettes , electronic cigarettes, or tobacco products after the effective date of the suspension shall constitute a violation of this division and result in the revocation of a license. (e) Upon completion of a suspension period, a license shall be reinstated by the board upon certification that all outstanding debts of that retailer or wholesaler that are owed to a wholesaler or distributor for the purchase of cigarettes , electronic cigarettes, and tobacco products are paid. (f) Upon updating a record for a violation triggering a revocation, the board shall serve the licensee with a notice of revocation and shall order the licensee to cease the sale, gifting, or displaying for sale of cigarettes , electronic cigarettes, or tobacco products on and after the effective date of the revocation. The notice of revocation shall inform the licensee of the effective date of the revocation. (g) After a revocation, a previously licensed applicant may apply for a new license after six months. The board may, at its discretion, issue a new license. (h) Upon updating a license record for a violation, suspension, or revocation to a license of a person or entity that owns or controls more than one location, the board shall send notice in writing of the violations, suspensions, or revocations within 15 days of the board' s action to the address included in the application and listed on the license for receipt of correspondence or notices from the board. (i) Upon suspension or revocation of a license pursuant to this section, the board shall notify all licensed distributors and wholesalers by electronic mail within 48 hours of the suspension or revocation of that license. All licensed distributors and wholesalers shall provide the board and shall update, as necessary, an electronic mail address that the board can use for purposes of making the notifications required by this subdivision. (j) Violations by a licensee at one location may not be accumulated against other locations of that same licensee. Violations accumulated against a prior owner at a licensed location may not be accumulated against a new owner at the same licensed location. (k) For purposes of this section, a violation includes violations of the Revenue and Taxation Code relating to cigarettes and tobacco products, and violations of this division. Only one violation per discrete action shall be counted toward a suspension or revocation of a license. SEC. 21. Section 22980.4 of the Business and Professions Code is amended to read: 22980.4. A person who, after receiving a notice of suspension or revocation, continues to display for sale cigarettes , electronic cigarettes, or tobacco products shall be subject to a civil penalty of one thousand dollars ($1,000) for each offense, and shall not be subject to Section 22981. SEC. 22. Section 119406 is added to the Health and Safety Code, to read: 119406. (a) All cartridges for electronic cigarettes and solutions for filling or refilling an electronic cigarette shall be in child-proof packaging. (b) "Child-proof packaging" means packaging that contains elements, including, but not limited to, safety caps or blister packs, designed to protect children from being able to open and ingest the contents. SEC. 23. Section 308 of the Penal Code is amended to read: 308. (a) (1) Every person, firm, or corporation that knowingly or under circumstances in which it has knowledge, or should otherwise have grounds for knowledge, sells, gives, or in any way furnishes to another person who is under the age of 18 years any tobacco, cigarette, or cigarette papers, or blunts wraps, or any other preparation of tobacco, or any other instrument or paraphernalia that is designed for the smoking or ingestion of tobacco, products prepared from tobacco, or any controlled substance, is subject to either a criminal action for a misdemeanor or to a civil action brought by a city attorney, a county counsel, or a district attorney, punishable by a fine of two hundred dollars ($200) for the first offense, five hundred dollars ($500) for the second offense, and one thousand dollars ($1,000) for the third offense. Notwithstanding Section 1464 or any other law, 25 percent of each civil and criminal penalty collected pursuant to this subdivision shall be paid to the office of the city attorney, county counsel, or district attorney, whoever is responsible for bringing the successful action, and 25 percent of each civil and criminal penalty collected pursuant to this subdivision shall be paid to the city or county for the administration and cost of the community service work component provided in subdivision (b). Proof that a defendant, or his or her employee or agent, demanded, was shown, and reasonably relied upon evidence of majority shall be defense to any action brought pursuant to this subdivision. Evidence of majority of a person is a facsimile of or a reasonable likeness of a document issued by a federal, state, county, or municipal government, or subdivision or agency thereof, including, but not limited to, a motor vehicle operator's license, a registration certificate issued under the federal Selective Service Act, or an identification card issued to a member of the Armed Forces. For purposes of this section, the person liable for selling or furnishing tobacco products to minors by a tobacco vending machine shall be the person authorizing the installation or placement of the tobacco vending machine upon premises he or she manages or otherwise controls and under circumstances in which he or she has knowledge, or should otherwise have grounds for knowledge, that the tobacco vending machine will be utilized by minors. (2) For purposes of this section, "blunt wraps" means cigar papers or cigar wrappers of all types that are designed for smoking or ingestion of tobacco products and contain less than 50 percent tobacco. (b) Every person under the age of 18 years who purchases, receives, or possesses any tobacco, cigarette, or cigarette papers, or any other preparation of tobacco, or any other instrument or paraphernalia that is designed for the smoking of tobacco, products prepared from tobacco, or any controlled substance shall, upon conviction, be punished by a fine of seventy-five dollars ($75) or 30 hours of community service work. (c) Every person, firm, or corporation that sells, or deals in tobacco or any preparation thereof, and, on and after July 1, 2016, every person, firm, or corporation that sells or deals in electronic cigarettes, shall post conspicuously and keep so posted in his, her, or their place of business at each point of purchase the notice required pursuant to subdivision (b) of Section 22952 of the Business and Professions Code, and any person failing to do so shall, upon conviction, be punished by a fine of fifty dollars ($50) for the first offense, one hundred dollars ($100) for the second offense, two hundred fifty dollars ($250) for the third offense, and five hundred dollars ($500) for the fourth offense and each subsequent violation of this provision, or by imprisonment in a county jail not exceeding 30 days. (d) For purposes of determining the liability of persons, firms, or corporations controlling franchises or business operations in multiple locations for the second and subsequent violations of this section, each individual franchise or business location shall be deemed a separate entity. (e) Notwithstanding subdivision (b), any person under 18 years of age who purchases, receives, or possesses any tobacco, cigarette, electronic cigarette, or cigarette papers, or any other preparation of tobacco, any other instrument or paraphernalia that is designed for the smoking of tobacco, or products prepared from tobacco is immune from prosecution for that purchase, receipt, or possession while participating in either of the following: (1) An enforcement activity that complies with the guidelines adopted pursuant to subdivisions (c) and (d) of Section 22952 of the Business and Professions Code. (2) An activity conducted by the State Department of Public Health, a local health department, or a law enforcement agency for the purpose of determining or evaluating youth tobacco purchase rates. (f) It is the Legislature's intent to regulate the subject matter of this section. As a result, a city, county, or city and county shall not adopt any ordinance or regulation inconsistent with this section. SEC. 24. 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.