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AB-1639 Tobacco and cannabis products.(2019-2020)



Current Version: 06/17/20 - Amended Senate         Compare Versions information image


AB1639:v95#DOCUMENT

Amended  IN  Senate  June 17, 2020
Amended  IN  Assembly  August 21, 2019
Amended  IN  Assembly  August 13, 2019
Amended  IN  Assembly  July 02, 2019

CALIFORNIA LEGISLATURE— 2019–2020 REGULAR SESSION

Assembly Bill
No. 1639


Introduced by Assembly Members Gray, Cunningham, Robert Rivas, and Kamlager-Dove Flora, Kamlager, and Ting

February 22, 2019


An act to amend Sections 22952, 22956, 22958, and 22962 of, and to add Section 22964.5 Sections 22964.5, 22980.15, and 26070.3 to, the Business and Professions Code, to add Section 119408 to to, and to add Chapter 6 (commencing with Section 128590) to Part 3 of Division 107 of, the Health and Safety Code, and to amend Section 308 of the Penal Code, and to add Article 4 (commencing with Section 30135) to Chapter 2 of Part 13 of Division 2 of the Revenue and Taxation Code, relating to tobacco and cannabis products, making an appropriation therefor, and declaring the urgency thereof, to take effect immediately.


LEGISLATIVE COUNSEL'S DIGEST


AB 1639, as amended, Gray. Tobacco products. and cannabis products.
(1) Existing law, the Stop Tobacco Access to Kids Enforcement (STAKE) Act, prohibits a person from selling or otherwise furnishing tobacco products, as defined, to a person under 21 years of age. The STAKE Act requires a person engaged in the retail sale of tobacco products to check the identification of a tobacco purchaser to establish the purchaser’s age if the purchaser reasonably appears to be under 21 years of age.
This bill would, among other things, require a person engaged in the retail sale of tobacco products to use age verification software or an age verification device to establish the age of a tobacco purchaser.
The act requires the State Department of Public Health to, among other things, establish and develop a program to reduce the availability of tobacco products to persons under 21 years of age through enforcement activities, and conduct random, onsite sting inspections at retail sites. The act authorizes the department to also conduct onsite sting inspections in response to public complaints or at retail sites where violations have previously occurred.
This bill would, among other things, instead require the department to conduct random, onsite sting inspections at retail sites of at least 20% of the total number of licensed tobacco retailers, and in the event of a violation at a retail site, would require the department to conduct a 2nd sting inspection at that retail site within 6 months of the first violation, and a 3rd sting inspection within 12 months of the first violation.
The act imposes specified civil penalties for the furnishing of tobacco products to a person under 21 years of age. Existing law imposes additional civil penalties in the amount of $250 for a 3rd, 4th, and 5th violation, requires a 45-day suspension of the license to sell tobacco or cigarettes for a 3rd violation at the same location within a 5-year period, a similar 90-day suspension of the license for a 4th violation, and a revocation of the license for a 5th violation.
This bill would decrease the 5-year period for calculating the civil penalties and license suspensions and revocations for violations to a 36-month period and increase the penalty amount for a first, 2nd, and 3rd or subsequent violation imposed by an enforcement agency, as specified. The bill would instead require impose the additional $250 civil penalty and the license suspensions and revocation for the first, 2nd, and 3rd violations in a 36-month period, and would instead require a 60-day suspension of the license for the first violation, except as specified, a 90-day suspension for the 2nd violation, and a revocation of the license for a 3rd violation. The bill would also prohibit anyone under 21 years of age from entering a tobacco store, as defined, except for active duty military personnel who are 18 years of age or older, as specified.
(2) Existing law, the California Cigarette and Tobacco Products Licensing Act of 2003, provides for the licensure by the California Department of Tax and Fee Administration of manufacturers, distributors, wholesalers, importers, and retailers of cigarette or tobacco products that are engaged in business in California. The act prohibits retailers, manufacturers, distributors, and wholesalers from distributing or selling those cigarette and tobacco products unless they are licensed. The act authorizes the board to suspend or revoke the license of any manufacturer, distributor, wholesaler, importer, or retailer of tobacco products that is in violation of the act’s provisions. Existing law makes a violation of the act a misdemeanor.
This bill, commencing 90 days after the effective date of the bill, would prohibit a licensed retailer from selling a non-tobacco-flavored vapor product, as specified. The bill would authorize the State Department of Public Health to assess specified civil penalties for each violation.

(2)

(3) Existing law makes 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 21 years of age any tobacco, cigarette, cigarette papers, or blunt wraps, or any other preparation of tobacco, or any other instrument or paraphernalia that is designed for the smoking or ingestion of tobacco, tobacco products, or any controlled substance, subject to either a criminal action for a misdemeanor or a civil action, punishable by a fine, as specified.
This bill would instead subject a person described above to that criminal or civil fine, specified community service, or the criminal or civil fine and community service.

(3)

(4) Existing law requires that cartridges for electronic cigarettes and solutions for filling or refilling an electronic cigarette be in child-resistant packaging, as defined.
This bill would create various advertising, promoting, packaging, and selling prohibitions on electronic cigarettes, including, among others, prohibiting an electronic cigarette manufacturer from advertising, promoting, or packaging the electronic cigarette in a manner that is attractive to persons under 21 years of age, as specified, or is intended to encourage persons under 21 years of age to use the device, prohibiting a person from displaying on an electronic cigarette, or on its packaging, an indication or illustration that could cause a person to believe that the product is flavored if there is reasonable belief that the indication or illustration could be appealing to persons under 21 years of age. The bill would authorize the State Department of Public Health to assess specified civil penalties for each violation.
(5) Existing law, the Control, Regulate and Tax Adult Use of Marijuana Act (AUMA), approved by the voters as Proposition 64 at the November 8, 2016, statewide general election, regulates the cultivation, distribution, transport, storage, manufacturing, testing, processing, sale, and use of marijuana for nonmedical purposes by people 21 years of age and older. The Medicinal and Adult-Use Cannabis Regulation and Safety Act (MAUCRSA), among other things, consolidates the licensure and regulation of commercial medicinal and adult-use cannabis activities.
This bill would amend AUMA by, among other things, commencing 90 days after the effective date of the bill, prohibiting a licensed retailer from selling any non-cannabis-flavored vapor product, as defined. The bill would authorize the licensing authority to issue a citation for each violation.
AUMA authorizes the Legislature to amend the act to further the purposes and intent of the act with a 2/3 vote of the membership of each house of the Legislature.
This bill would declare that its provisions further specified purposes and intent of AUMA.
(6) The Cigarette and Tobacco Products Tax Law, the violation of which is a crime, imposes a tax on distributors of cigarettes at the rate of $2.87 per package of 20 cigarettes and a tax on distributors of tobacco products, based on wholesale cost, at a rate determined annually that is equivalent to the combined rate of all taxes imposed on cigarettes plus an additional rate equivalent to $0.50 per package of 20 cigarettes. These taxes are inclusive of the taxes imposed under the Tobacco Tax and Health Protection Act of 1988, the California Families and Children Act of 1998, and the California Healthcare, Research and Prevention Tobacco Tax Act of 2016.
The California Healthcare, Research and Prevention Tobacco Tax Act of 2016 (Proposition 56), an initiative measure approved at the November 8, 2016, statewide general election, revised the definition of tobacco products to include electronic cigarettes, thereby extending the taxes on distributors of tobacco products to distributors of electronic cigarettes, which is based on the wholesale cost of these products. Proposition 56 requires the California Department of Tax and Fee Administration to adopt regulations providing for the implementation of the equivalent tax on electronic cigarettes and the methods for collection of the tax.
This bill would impose, commencing January 1, 2021, an additional tax on electronic cigarettes at a rate of $2.40 per every 40 milligrams of base product nicotine contained in the electronic cigarette, as specified. The bill, commencing January 1, 2021, would require a manufacturer of any electronic cigarette offered for sale in this state to include, on its sales invoice, the amount of base product nicotine contained in the product that is clearly identified by the milligrams. The bill would require, commencing January 1, 2021, on or before the 25th day of each month, every wholesaler of electronic cigarettes to file a report in the form, as prescribed by the department, which may include, but not be limited to, electronic media respecting the wholesaler’s inventory, purchases, and sales of electronic cigarettes during the preceding month.
The bill would require the revenues, interest, and penalties derived from the tax imposed above to be deposited into a newly created fund, the California Healthy Families Health Care Access Fund, which would be continuously appropriated for specified health-related purposes. By creating a continuously appropriated fund, the bill would make an appropriation.
By imposing new requirements in the Cigarette and Tobacco Products Tax Law, the violation of which is a crime, the bill would also impose a state-mandated local program.
(7) 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.

(4)

(8) This bill would declare that it is to take effect immediately as an urgency statute.
Vote: 2/3   Appropriation: NOYES   Fiscal Committee: YES   Local Program: NOYES  

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


SECTION 1.

 Section 22952 of the Business and Professions Code is amended to read:

22952.
 The State Department of Public Health shall do all of the following:
(a) Establish and develop a program to reduce the availability of tobacco products to persons under 21 years of age through the enforcement activities authorized by this division.
(b) Establish requirements that retailers of tobacco products post conspicuously, at each point of purchase, a notice stating that selling tobacco products to anyone under 21 years of age is illegal and subject to penalties. The notice shall also state that the law requires that all persons selling tobacco products check the identification of a purchaser of tobacco products who reasonably appears to be under 21 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 to any person under 21 years of age.
(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 of at least 20 percent of the total number of licensed tobacco retailers. In the event of a violation at a retail site, the department shall conduct a second sting inspection at that retail site within 6 months of the first violation, and a third sting inspection within 12 months of the first violation. The department may conduct onsite sting inspections in response to public complaints and investigate illegal sales of tobacco products to any person under 21 years of age by telephone, mail, or the internet. The department shall enlist the assistance of persons that are under 21 years of age in conducting these enforcement activities. A person under 21 years of age who participates in these enforcement activities is immune from prosecution under any law prohibiting the purchase of these products by a person under 21 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, adopt and publish guidelines for the use of persons under 21 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 21 years of age in random inspections to determine if sales of cigarettes or other tobacco products are being made to persons under 21 years of age.
(2) A photograph or video recording of the person under 21 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 21 years of age, if questioned about their age, need not state their 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 21 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 21 years of age shall be under the supervision of a regularly employed peace officer during the inspection.
(6) All persons under 21 years of age used in this manner by an enforcing agency shall display the appearance of a person under 21 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 21 years of age, under the actual circumstances presented to the seller of the 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 21 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.

SEC. 2.

 Section 22956 of the Business and Professions Code is amended to read:

22956.
 A person engaging in the retail sale of tobacco products shall check the identification of a tobacco purchaser using age verification software or an age verification device to establish the age of the purchaser.

SEC. 3.

 Section 22958 of the Business and Professions Code is amended to read:

22958.
 (a) (1) 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 21 years of age, any tobacco, cigarette, cigarette papers, any other instrument or paraphernalia that is designed for the smoking or ingestion of tobacco, tobacco products, or any controlled substance, according to the following schedule:
(A) A civil penalty of one thousand two hundred dollars ($1,200) to one thousand eight hundred dollars ($1,800) for the first violation.
(B) A civil penalty of three thousand dollars ($3,000) to four thousand dollars ($4,000) for a second violation within a 36-month period.
(C) A civil penalty of five thousand dollars ($5,000) to six thousand dollars ($6,000) for a third or subsequent violation within a 36-month period.
(2) This subdivision does not apply to the sale, giving, or furnishing of any of the products specified in paragraph (1) to active duty military personnel who are 18 years of age or older. An identification card issued by the United States Armed Forces shall be used as proof of age for this purpose.
(b) (1) In addition to the civil penalties described in subdivision (a), upon the assessment of a civil penalty for a 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 California Department of Tax and Fee Administration of the violation. The California Department of Tax and Fee Administration 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 22971.7) of Division 8.6 in accordance with the following schedule:
(A) A 60-day suspension of the license for the first violation.
(B) A 90-day suspension of the license for a second violation at the same location within a 36-month period.
(C) Revocation of the license for a third violation at the same location within a 36-month period.
(2) (A) When a decision of the department to suspend a license pursuant to subparagraph (A) of paragraph (1) becomes final, whether by failure of the licensee to appeal the decision or by exhaustion of all appeals and judicial review, the licensee may, before the operative date of the suspension, petition the department for permission to make an offer in compromise, to be paid into the Cigarette and Tobacco Products Compliance Fund established pursuant to Section 22990, consisting of a sum of money, as specified in subparagraph (C), in lieu of serving the suspension.
(B) Upon the receipt of the petition, the department may stay the proposed suspension and cause any investigation it deems desirable to be made, and may grant the petition if it is satisfied that both of the following conditions are met:
(i) The public welfare and morals would not be impaired by permitting the licensee to operate during the period set for suspension, and the payment of the sum of money will achieve the desired disciplinary purposes.
(ii) The books and records of the licensee are kept in such a manner that the loss of sales of any tobacco, cigarette, cigarette papers, any other instrument or paraphernalia that is designed for the smoking or ingestion of tobacco, tobacco products, or any controlled substance, that the licensee would have suffered had the suspension gone into effect can be determined with reasonable accuracy from those books and records.
(C) The offer in compromise for retail licensees shall be the equivalent of 50 percent of the estimated gross sales of any tobacco, cigarette, cigarette papers, any other instrument or paraphernalia that is designed for the smoking or ingestion of tobacco, tobacco products, or any controlled substance, for each day of a proposed suspension, but shall not be less than one thousand five hundred dollars ($1,500).

(2)

(3) 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 California Department of Tax and Fee Administration 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 California Department of Tax and Fee Administration, upon appropriation by the Legislature, for the purposes of meeting its duties under subdivision (b).
(2) The department shall, upon request, provide to the California Department of Tax and Fee Administration 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 California Department of Tax and Fee Administration 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 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 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) If a corporation or business has 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) If a retail location 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 in which 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. 4.

 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 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 a product or device as defined in subdivision (d) of Section 22950.5 of the Business and Professions Code.
(4) “Tobacco store” means a retail business that meets all of the following requirements:
(A) Primarily sells tobacco products.
(B) Generates more than 60 percent of its gross revenues annually from the sale of tobacco products and tobacco paraphernalia.
(C) Does not permit any person under 21 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 to sell, offer for sale, or display for sale any tobacco product or tobacco paraphernalia by self-service display.
(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 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, the greater restriction on the access to tobacco products in the local standard shall prevail.

SEC. 5.

 Section 22964.5 is added to the Business and Professions Code, to read:

22964.5.
 (a) No person under 21 years of age may enter into a tobacco store.
(b) This section does not apply to active duty military personnel who are 18 years of age or older. An identification card issued by the United States Armed Forces shall be used as proof of age for this purpose.
(c) For purposes of this section, “tobacco store” means a retail business that meets all of the following requirements:
(1) Primarily sells tobacco products.
(2) Generates more than 60 percent of its gross revenues annually from the sale of tobacco products and tobacco paraphernalia.
(3) Does not sell alcoholic beverages or food for consumption on the premises.

SEC. 6.

 Section 22980.15 is added to the Business and Professions Code, to read:

22980.15.
 (a) (1) A licensed retailer shall not sell non-tobacco-flavored vapor products, except as provided in paragraph (1) of subdivision (b).
(2) “Non-tobacco-flavored vapor product” means any electronic cigarette that contains flavor other than tobacco flavor that can be used to deliver nicotine to a person in aerosolized or vaporized form.
(b) (1) A licensed retailer may sell a non-tobacco-flavored vapor product if that product is approved by the United States Food and Drug Administration through the premarket tobacco product application pathway for electronic nicotine delivery systems, pursuant to Section 387j of Title 21 of the United States Code and applicable regulations.
(2) A licensed retailer may not sell a cannabis-flavored electronic cigarette.
(c) The State Department of Public Health may assess civil penalties for a violation of this section according to the schedule described in Section 119408 of the Health and Safety Code.
(d) This section does not preempt any local ordinance or regulation that imposes prohibitions on the sale of electronic cigarettes.
(e) This section shall become operative 90 days after the effective date of the act that added this section.

SEC. 7.

 Section 26070.3 is added to the Business and Professions Code, to read:

26070.3.
 (a) (1) A licensed retailer shall not sell non-cannabis-flavored vapor products, except as provided in paragraph (1) of subdivision (b).
(2) “Non-cannabis-flavored vapor product” means cannabis or a cannabis product that contains flavor not derived or synthesized from the cannabis plant and that can be used to deliver cannabis to a person in aerosolized or vaporized form.
(b) (1) A licensed retailer may sell a non-cannabis-flavored vapor product if the flavor of that non-cannabis-flavored vapor product is substantially similar to a non-tobacco-flavored vapor product, as defined in Section 22980.15, that has been approved by the United States Food and Drug Administration through the premarket tobacco product application pathway for electronic nicotine delivery systems, pursuant to Section 387j of Title 21 of the United States Code and applicable regulations.
(2) The bureau may adopt regulations to implement this section.
(3) A retailer shall not sell a non-nicotine tobacco-flavored cannabis vapor product.
(c) The licensing authority may assess administrative fines for a violation of this section according to Chapter 3 (commencing with Section 26030).
(d) This section shall become operative 90 days after the effective date of the act that added this section.

SEC. 6.SEC. 8.

 Section 119408 is added to the Health and Safety Code, to read:

119408.
 (a) An electronic cigarette manufacturer shall not advertise, promote, or package electronic cigarettes in a manner that does either of the following:
(1) Is intended to encourage persons under 21 years of age to use an electronic cigarette.
(2) Is attractive to persons under 21 years of age, including, but not limited to, by showing any of the following:
(A) Cartoons.
(B) An image, character, or phrase that is similar to one popularly used to advertise to children.
(C) A video game, movie, video, or animated television show known to appeal primarily to persons under 21 years of age.
(D) An imitation of candy packaging or labeling.
(E) The terms “candy” or “candies,” or other variants in spelling, such as “kandy” or “kandeez.”
(F) The terms of common dessert foods, including, but not limited to, “milkshake,” “cupcake,” and “thin mint.”
(b) (1) No person shall display on an electronic cigarette, or on its packaging, an indication or illustration, including a brand element, that could cause a person to believe that the product is flavored if there is reasonable belief that the indication or illustration could be appealing to persons under 21 years of age.
(2) No person shall sell an electronic cigarette described in paragraph (1).
(c) No person shall advertise an electronic cigarette, an electronic cigarette-related brand element, or anything that displays an electronic cigarette-related brand element by means of lifestyle advertising.
(d) No person shall advertise or promote an electronic cigarette, including by means of packaging, in a manner that could cause a person to believe that health benefits may be derived from the use of the electronic cigarette or from its emissions, unless approved by the federal United States Food and Drug Administration.
(e) No person shall advertise or promote an electronic cigarette, including by means of packaging, by comparing the health effects arising from the use of the electronic cigarette or from its emissions with those arising from the use of other tobacco products or from its emissions.
(f) No person shall advertise or promote an electronic cigarette, an electronic cigarette-related brand element, or anything that displays an electronic cigarette-related brand element, by means of paid or unpaid sponsorships of concerts, sports events, and any events with an intended audience having a significant percentage of persons who are under 21 years of age and events with paid participants who are under 21 years of age.
(g) No person shall promote electronic cigarettes through a testimonial or an endorsement, however displayed or communicated, including by means of packaging.
(h) The State Department of Public Health may assess civil penalties for a violation of this section according to the following schedule:
(1) A civil penalty of one thousand dollars ($1,000) for the first or second violation.
(2) A civil penalty of two thousand five hundred dollars ($2,500) for the third or fourth violation.
(3) A civil penalty of ten thousand dollars ($10,000) for the fifth violation or any violation thereafter.
(i) Proceedings under this section shall be conducted pursuant to Section 131071.
(j) For purposes of this section, the following terms have the following definitions:
(1) “Electronic cigarette” means either of the following:
(A) An electronic device that delivers nicotine or other vaporized liquids to the person inhaling from the device, including, but not limited to, an electronic cigarette, vape pen, cigar, hookah, or pipe.
(B) A component, part, or accessory of an electronic cigarette, with or without nicotine, whether or not sold separately.
(2) “Electronic cigarette manufacturer” means a person or business who produces an electronic cigarette to be sold within this state, including a person or business who imports an electronic cigarette from outside of this state.
(3) “Lifestyle advertising” means advertising that associates a product with, or evokes a positive or negative emotion about or image of, a way of life, including one that includes glamor, glamour, recreation, excitement, vitality, risk, or daring.

SEC. 9.

 Chapter 6 (commencing with Section 128590) is added to Part 3 of Division 107 of the Health and Safety Code, to read:
CHAPTER  6. California Healthy Families Health Care Access Fund

128590.
 (a) There is hereby established in the State Treasury the California Healthy Families Health Care Access Fund. All revenues, interest, and penalties derived from the tax imposed pursuant to Section 30135.4 of the Revenue and Taxation Code shall be deposited into the California Healthy Families Health Care Access Fund. Notwithstanding Section 13340 of the Government Code, all moneys in the fund are hereby continuously appropriated, without regard to fiscal years, for the purposes described in this section.
(b) (1) The Controller shall annually transfer from the fund to the State Department of Health Care Services ten million dollars ($10,000,000) to provide grants to children’s hospitals and University of California children’s hospitals, as those terms are defined in Sections 10727 and 10728 of the Welfare and Institutions Code, for the purpose of training more pediatric specialty health care providers to address workforce shortages.
(2) To implement this subdivision, the department may enter into exclusive or nonexclusive contracts, or amend existing contracts, on a bid or negotiated basis. Contracts entered into or amended pursuant to this subdivision shall be exempt from Chapter 6 (commencing with Section 14825) of Part 5.5 of Division 3 of Title 2 of the Government Code, Part 2 (commencing with Section 10100) of Division 2 of the Public Contract Code, and the review or approval of a division of the Department of General Services.
(c) The Controller shall annually transfer from the fund to the Breast Cancer Fund established pursuant to Section 30461.6 of the Revenue and Taxation Code five million dollars ($5,000,000).
(d) After deducting and transferring the funds pursuant to subdivisions (b) and (c), the Controller shall annually allocate and transfer the remaining funds in the California Healthy Families Health Care Access Fund as follows:
(1) (A) Sixty percent shall be transferred to the University of California for the purpose and goal of increasing the number of primary care physicians, emergency care physicians, psychiatrists, and dentists trained in California.
(B) For the purposes of this paragraph, “primary care” means internal medicine, family medicine, obstetrics/gynecology, and pediatrics.
(C) Funding shall be prioritized for direct graduate medical education costs for programs serving medically underserved areas and populations.
(D) For the purposes of this paragraph, all allopathic and osteopathic residency programs accredited by federally recognized accrediting organizations and located in California shall be eligible to apply to receive funding to support resident education in California.
(E) The University of California shall annually review physician shortages by specialty across the state and by region. Based on this review, to the extent that there are demonstrated state or regional shortages of nonprimary care physicians, funds may be used to expand graduate medical education programs that are intended to address such shortages.
(F) Moneys made available pursuant to this paragraph shall supplement, not supplant, existing funds available to the university for graduate medical education programs.
(2) Forty percent shall be transferred to the State Department of Health Care Services for the purpose described in Section 14114 of the Welfare and Institutions Code for participation in the Proposition 56 Medi-Cal Physicians and Dentists Loan Repayment Act Program for loan repayment assistance awarded to a participating physician or dentist at the discretion of the State Department of Health Care Services and any entity contracted with, pursuant to the subdivision (g) of Section 14114 of the Welfare and Institutions Code, and shall be based on the criteria developed pursuant to subdivision (d) of Section 14114 of the Welfare and Institutions Code.

SEC. 7.SEC. 10.

 Section 308 of the Penal Code is amended to read:

308.
 (a) (1) (A) (i) Every 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 21 years of age any tobacco, cigarette, or cigarette papers, or blunt wraps, or any other preparation of tobacco, or any other instrument or paraphernalia that is designed for the smoking or ingestion of tobacco, tobacco products, or any controlled substance, is subject to either a criminal action for a misdemeanor or a civil action brought by a city attorney, a county counsel, or a district attorney, punishable by a fine of four hundred dollars ($400) for the first offense, one thousand dollars ($1,000) for the second offense, and two thousand dollars ($2,000) for the third offense.
(ii) Every person who knowingly or under circumstances in which the person has knowledge, or should otherwise have grounds for knowledge, sells, gives, or in any way furnishes to another person who is under 21 years of age any tobacco, cigarette, or cigarette papers, or blunt wraps, or any other preparation of tobacco, or any other instrument or paraphernalia that is designed for the smoking or ingestion of tobacco, tobacco products, or any controlled substance, is subject to (I) either a criminal action for a misdemeanor or a civil action brought by a city attorney, a county counsel, or a district attorney, punishable by a fine of four hundred dollars ($400) for the first offense, one thousand dollars ($1,000) for the second offense, and two thousand dollars ($2,000) for the third offense, (II) performing not less than 24 hours of community service during hours when the person is not employed and is not attending school, or (III) both the criminal or civil fine and the community service.
(iii) This subparagraph does not apply to the sale, giving, or furnishing of any of the products specified in clause (i) to active duty military personnel who are 18 years of age or older. An identification card issued by the United States Armed Forces shall be used as proof of age for this purpose.
(B) 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.
(C) Proof that a defendant, or the defendant’s 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 Military Selective Service Act (50 U.S.C. Sec. 3801 et seq.), or an identification card issued to a member of the Armed Forces.
(D) For purposes of this section, the person liable for selling or furnishing tobacco products to persons under 21 years of age by a tobacco vending machine shall be the person authorizing the installation or placement of the tobacco vending machine upon premises they manage or otherwise control and under circumstances in which the person has knowledge, or should otherwise have grounds for knowledge, that the tobacco vending machine will be utilized by persons under 21 years of age.
(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, firm, or corporation that sells, or deals in tobacco or any preparation thereof, shall post conspicuously and keep so posted in 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.
(c) 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.
(d) 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.
(e) For purposes of this section, “smoking” has the same meaning as in subdivision (c) of Section 22950.5 of the Business and Professions Code.
(f) For purposes of this section, “tobacco products” means a product or device as defined in subdivision (d) of Section 22950.5 of the Business and Professions Code.

SEC. 11.

 Article 4 (commencing with Section 30135) is added to Chapter 2 of Part 13 of Division 2 of the Revenue and Taxation Code, to read:
Article  4. Electronic Cigarette Tax Act of 2020

30135.
 This article shall be known and may be cited as the “Electronic Cigarette Tax Act of 2020.”

30135.2.
 Except where the context otherwise requires, the definitions given in this section govern the construction of this article.
(a) “Base product nicotine” means the amount of nicotine contained in the electronic cigarette product as finished by the manufacturer for purpose of sale.
(b) (1) “Electronic cigarettes” means any of the following:
(A) A device or delivery system sold in combination with nicotine that can be used to deliver to a person nicotine in aerosolized or vaporized form, including, but not limited to, an e-cigarette, e-cigar, e-pipe, vape pen, or e-hookah.
(B) Any component, part, or accessory of such a device that is used during the operation of the device when sold in combination with any liquid or substance containing nicotine.
(C) Any liquid or substance containing nicotine, whether sold separately or sold in combination with any device that could be used to deliver to a person nicotine in aerosolized or vaporized form.
(2) Electronic cigarettes do not include any of the following:
(A) Any device not sold in combination with any liquid or substance containing nicotine, or any battery, battery charger, carrying case, or other accessory not used in the operation of the device if sold separately.
(B) Any product that has been approved by the United States Food and Drug Administration for sale as a tobacco cessation product or for other therapeutic purposes where that product is marketed and sold solely for such approved use.
(3) As used in this subdivision, nicotine does not include any food products as that term is defined pursuant to Section 6359.
(c) “In this state” means within the exterior limits of the State of California and includes all territory within these limits owned by or ceded to the United States of America.
(d) “Sale” includes any transfer of title or possession for a consideration, exchange or barter, in any manner or by any right or power over electronic cigarette incident to the ownership thereof, other than the sale of the electronic cigarette or the keeping or retention thereof by a licensed distributor for the purpose of sale.
(e) “Wholesaler” means any person, other than a licensed distributor, who engages in this state in making sales for resale of electronic cigarettes on which the tax imposed in Section 30130.51 has been paid.

30135.4.
 (a) (1) There shall be imposed a tax upon the sale of electronic cigarettes in this state at the rate of two dollars and forty cents ($2.40) per every 40 milligrams of base product nicotine contained in the electronic cigarette.
(2) If the amount of base product nicotine contained in an electronic cigarette is not a multiple of 40 milligrams, then that amount shall be rounded up to the next amount that is a multiple of 40 milligrams and taxed on that rounded up amount.

30135.5.
 (a) (1) The department may adopt regulations to implement the tax on electronic cigarettes imposed by this section through the use of stamps and meter impressions pursuant to subdivision (b).
(2) The department shall prescribe by regulation the method and manner in which stamps or meter impressions are to be affixed to packages of electronic cigarettes and may provide for the cancellation of stamps or meter impressions.
(b) (1) Stamps and meter impressions shall be of the design and specification as may be prescribed by the department.
(2) Stamps and meter impressions shall be generated by a technology capable of being read by a scanning or similar device and shall be encrypted with, at a minimum, the following information:
(A) The name and address of the distributor affixing the stamp or meter impression.
(B) The date the stamp or meter impression was affixed.
(C) The denominated value of the stamp or meter impression.
(c) The department may approve a vendor of the technology described in paragraph (2) of subdivision (b) only if that vendor meets both of the following requirements:
(1) A vendor shall demonstrate the ability to apply 200 stamps per minute on all packages of electronic cigarettes.
(2) A vendor shall supply automated machines at a competitive industry price to all distributors licensed under this part.
(d) Notwithstanding Section 30135.15, this section shall become operative when a technology that meets the requirements described in paragraph (2) of subdivision (b) is commercially available.

30135.6.
 All revenues, interest, and penalties derived from the tax imposed pursuant to Section 30135.4, less refunds, shall be deposited into the California Healthy Families Health Care Access Fund established pursuant to Section 128590 of the Health and Safety Code.

30135.8.
 A manufacturer of any electronic cigarette offered for sale in this state shall include, on its sales invoice, the amount of base product nicotine contained in the product that is clearly identified by the milligrams of nicotine contained in the product.

30135.10.
 (a) Upon finding that a manufacturer has inaccurately reported the base product nicotine content on its sales invoice, the department shall not determine that a licensed distributor has underpaid the tax as calculated pursuant to Section 30135.4 unless the licensed distributor has paid less than the tax owed, as calculated based on the base product nicotine content reported on a manufacturer’s sales invoice pursuant to Section 30135.8.
(b) Any manufacturer that has inaccurately reported the base product nicotine content on its sales invoice and that results in an underpayment of the tax calculated pursuant to Section 30135.4 shall be liable for the underpayment amount of that tax as if the manufacturer were the distributor making the distribution of the electronic cigarette.
(c) The department may adopt regulations to implement this section.

30135.12.
 On or before the 25th day of each month, every wholesaler of electronic cigarettes shall file a report in the form, as prescribed by the department, which may include, but not be limited to, electronic media respecting the wholesaler’s inventory, purchases, and sales of electronic cigarettes during the preceding month and any other information as the department may require to carry out the purposes of this part. Returns shall be authenticated in a form or pursuant to methods as may be prescribed by the department.

30135.15.
 This article shall become operative on January 1, 2021.

SEC. 12.

 The provisions of this act are severable. If any provision of this act or its application is held invalid, that invalidity shall not affect other provisions or applications that can be given effect without the invalid provision or application.

SEC. 13.

 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.

SEC. 14.

 The Legislature finds and declares that this act furthers the purposes and intent of the Control, Regulate and Tax Adult Use of Marijuana Act of 2016.

SEC. 8.SEC. 15.

 This act is an urgency statute necessary for the immediate preservation of the public peace, health, or safety within the meaning of Article IV of the California Constitution and shall go into immediate effect. The facts constituting the necessity are:
In order to substantially reverse the youth use trend, prompted by increasing access to tobacco products among youth, it is necessary that this act take effect immediately.