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Regulation 4604 & 4605 Section 100
Regulation 4604 & 4605
Section 100
Complete Rule Making File
OAL Approval with Approved Text Regulation 4604 & 4605
Index
1.
Form 400 and Proposed Regulation 4604 & 4605
2.
Statement of Explanation
Other Documents Relied upon
A.
Chief Counsel Memo Dated 09/04/14
B.
Draft Minutes, 09/23/14
C.
Reporters Transcript, 09/23/14
STATE OF CALIFORNIA - GOVERNMENT 0
,
TIONS AGENCY
EDMUND G. BROWN, Jr., Governor
OFFICE OF ADMINISTRATIVE LAW 300 Capitol Mall, Suite 1250
Sacramento, CA 95814
(916) 323-6225 FAX (916) 323-6826
DEBRA M. CORNEZ
Director
TO:
FROM:
DATE:
RE:
f
MEMORANDUM
Richard Bennion
OAL Front Desk
12/2/2014
Return of Approved Rulemaking Materials
OAL File No. 2014-1020-03N
OAL hereby returns this file your agency submitted for our review (OAL File No. 2014-1020-03N
regarding Penalties for Licensed or Unlicensed Wholesalers and Distributors).
If this is an approved file, it contains a copy of the regulation(s) stamped "ENDORSED APPROVED"
by the Office of Administrative Law and "ENDORSED FILED" by the Secretary of State. The effective
date of an approved regulation is specified on the Form 400 (see item B.5). Beginning January 1,
2013, unless an exemption applies, Government Code section 11343.4 states the effective date of an
approved regulation is determined by the date the regulation is filed with the Secretary of State (see the
date the Form 400 was stamped "ENDORSED FILED" by the Secretary of State) as follows:
(1)
(2)
(3)
(4)
January 1 if the regulation or order of repeal is filed on September 1 to November 30, inclusive.
April 1 if the regulation or order of repeal is filed on December 1 to February 29, inclusive.
July 1 if the regulation or order of repeal is filed on March 1 to May 31, inclusive.
October 1 if the regulation or order of repeal is filed on June 1 to August 31, inclusive.
If an exemption applies concerning the effective date of the regulation approved in this file, then it will
be specified on the Form 400. The Notice of Approval that OAL sends to the state agency will contain
the effective date of the regulation. The history note that will appear at the end of the regulation section
in the California Code of Regulations will also include the regulation's effective date. Additionally, the
effective date of the regulation will be noted on OAL's Web site once OAL posts the Internet Web site
link to the full text of the regulation that is received from the state agency. (Gov. Code, secs. 11343
and 11344.)
Please note this new requirement:
now requires:
Unless an exemption applies, Government Code section 11343
1. Section 11343(c)(1): Within 15 days of OAL filing a state agency's regulation with the Secretary
of State, the state agency is required to post the regulation on its Internet Web site in an easily
marked and identifiable location. The state agency shall keep the regulation posted on its Internet
Web site for at least six months from the date the regulation is filed with the Secretary of State.
2. Section 11343(c)(2): Within five (5) days of posting its regulation on its Internet Web site, the
state agency shall send to OAL the Internet Web site link of each regulation that the agency posts on
its Internet Web site pursuant to section 11343(c)(l).
OAL has established an email ad ss for state agencies to send the Intern
eb site link to for each
regulation the agency posts. Please send the Internet Web site link for each regulation posted to OAL at
[email protected]
NOTE ABOUT EXEMPTIONS. Posting and linking requirements do not apply to emergency
regulations; regulations adopted by FPPC or Conflict of Interest regulations approved by FPPC; and
regulations not subject to OAL/APA review. However, an exempt agency may choose to comply with
these requirements, and OAL will post the information accordingly.
DO NOT DISCARD OR DESTROY THIS FILE
Due to its legal significance, you are required by law to preserve this rulemaking record. Government
Code section 11347.3(d) requires that this record be available to the public and to the courts for possible
later review. Government Code section 11347.3(e) further provides that " ... no item contained in the
file shall be removed, altered, or destroyed or otherwise disposed of." See also the State Records
Management Act (Government Code section 14740 et seq.) and the State Administrative Manual (SAM)
section 1600 et seq.) regarding retention of your records.
If you decide not to keep the rulemaking records at your agency/office or at the State Records Center,
you may transmit it to the State Archives with instructions that the Secretary of State shall not remove,
alter, or destroy or otherwise dispose of any item contained in the file. See Government Code section
11347.3(±).
Enclosures
State of California Office of Administrative Law In re: NOTICE OF APPROVAL OF CHANGES
WITHOUT REGULATORY EFFECT
Board of Equalization Regulatory Action: California Code of Regulations, Title 1,
Section 100
Title 18, California Code of Regulations Adopt sections: Amend sections: 4604, 4605 Repeal sections: OAL File No. 2014-1020-03 N
This change without regulatory effect by the Board of Equalization amends two
regulation sections to provide the correct cross-reference to the proper subdivision in
sections 22978.4, 22978.5, 22979.5 and 22979.6 of the Business and Professions Code
when referring to the failure to comply with invoice requirements or the failure to retain
sales records regarding licensed or unlicensed wholesalers or distributers, or when
referring to the failure to retain sales records on premises or the failure to comply with
invoice requirements regarding licensed or unlicensed manufacturers and importers.
OAL approves this change without regulatory effect as meeting the requirements of
California Code of Regulations, Title 1, section 100.
Date:
12/1/2014
Debra M. Cornez
Director
Original: Cynthia Bridges
Copy: Richard Bennion
STATE OF,::ALIFbRN;.A-·OFFICE OF AO
For use by Secretary of State only
son
NOTICE PUBLICAT
STD. 4QQJ.qEV. 01-2orn
OAi.. FILE
EMERGENCY NUMBER
NOTICE FILE NUMBER
Z­
NUMBERS
NOTICE
REGULATIONS
AGENCY FILE NUMBER (If any)
AGENCY WITH RULEMAKING AUTHORITY
State Board of Equalization
A. PUBLICATION OF NOTICE (Complete for publication in Notice Register)
I
1. SUBJECT OF NOTICE
3. NOTICE TYPE.
n
14. AGENCY CONTACT PERSON
Notice re Proposed : :
1
Reaulatorv Action
I Other
OAL USE
ONLY
I
.
FAX NUMBER (Optional)
TELEPHONE NUMBER
I
D
ACTION ON.PROPOSED NOTICE
Approved as
Approved as
Submitted
Modified
D
2. REQUESTED PUBLICATION DATE
FIRST SECTION AFFECTED
TITLE($)
NOTICE REGISTER NUMBER
D
PUBLICATION DATE
Disapproved/
Withdrawn
B. SUBMISSION OF REGULATIONS (Complete when submitting regulations)
1b. All PREVIOUS RELATED OAL REGULATORY ACTION NUMBER(S)
1 a. SUBJECT OF REGULATION(S)
Penalties for Licensed or Unlicensed Wholesalers and Distributors
2. SPECIFY CALIFORNIA CODE OF REGULATIONS TITLE(S) AND SECTION(S) (Including title 26, if toxics related)
SECTION(S) AFFECTED
(List all section number(s)
individually. Attach
additional sheet if needed.)
TITLE($)
ADOPT
AMEND
4604,4605
REPEAL
18
3. TYPE OF FILING
O
D
D
Regular Rulemaking (Gov.
Code § 11346)
Resubmittal of disapproved or
withdrawn nonemergency
filing (Gov. Code §§11349.3,
11349.4)
Emergency (Gov. Code,
§ 11346.1 (b))
0
Certificate of Compliance: The agency officer named
below certifies that this agency complied with the
provisions of Gov. Code §§11346.2-11347.3 either
before the emergency regulation was adopted or
within the time period required by statute.
D Resubmittal of disapproved or withdrawn
[8]
Emergency Readopt (Gov.
D Code,
§11346.l(h))
D
File & Print
Changes Without Regulatory
Effect (Cal. Code Regs., title
1, §100)
PrintOnly
D Other(Specify) _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ __
emergency filing (Gov. Code, § 11346.1)
4. ALL BEGINNING AND END!NG DATES OF AVAILABILITY OF MODIFIED REGULATIONS AND/OR MATERIAL ADDED TO THE RULEMAKING FILE (Cal. Code Regs. title 1, §44 and Gov. Code §11347.1)
5. EFFECTIVE DATE OF CHANGES (Gov. Code,§§ 11343.4, 11346. l(d); Cal. Code Regs., title 1, §100)
D
Effective January 1. Apnl 1, July 1, or
October 1 (Gov. Code §11343.4(a))
D
Effective on filing with
Secretary of State
1)(1
§ 100 Changes Without
~ Regulatory Effect
o
Effective
other (Specify)
6. CHECK IF THESE REGULATIONS REQUIRE NOTICE TO. OR REVIEW. CONSULTATION, APPROVAL OR CONCURRENCE BY, ANOTHER AGENCY OR ENTITY
D
Department of Finance (Form STD. 399 ) (SAM § 6660 )
0
Fair Political Practices Commission
D
State Fire Marshal
Other (Specify)
7. CONTACT PERSON
TELEPHONE NUMBER
FAX NUMBER (Optional)
Richard E. Bennion
(916) 445-2130
(916) 324-3984
8.
I certify that the attached copy of the regulation(s) is a true and correct copy
of the regulation(s) identified on this form, that the information specified on this form is true and correct, and that I am the head of the agency taking this action, or a designee of the head of the a\jency, and am authorized to make this certification. DATE
October 10, 2014
E-MAIL ADDRESS (Optional)
[email protected]
only
Text of Proposed Changes to
Title 18. Public Revenue
4604. Penalties for Licensed or Unlicensed Wholesalers and Distributors.
The following penalties shall be assessed in addition to any other civil or criminal penalty
provided by law upon a finding that a wholesaler or distributor has violated any provision of the
Act:
(a) A first offense of a violation of any of the following provisions will result in the issuance of a
Warning Notice to the licensee or unlicensed person:
(1) ... (unchanged).
(2) Business and Professions Code section 22978.4, subdivision§..te)(a) or (b) (distributor's
or wholesaler's failure to comply with invoice requirements).
(3) Business and Professions Code section 22978.5, subdivision (bj(fil (distributor's or
wholesaler's failure to retain sales records).
(4) ... (unchanged).
(5) ... (unchanged).
(b) ... (unchanged):
(I) ... (unchanged).
(2) ... (unchanged).
(3) ... (unchanged).
(c) ... (unchanged).
(d) A violation of Business and Profession Code section 22978.2 (possession of counterfeit
stamped cigarettes by distributors, unstamped cigarettes by wholesalers or untaxed tobacco
products) shall result in the following:
(1) ... (unchanged).
(2) ... (unchanged).
(3) ... (unchanged).
(4) Both a 30-day suspension or revocation and a fine for a second or subsequent offense.
The fine will be determined in accordance with sectionRegulation 4607.
(e) ... (unchanged).
Page 1of2
(t) ... (unchanged).
Note: Authority cited: Section 22971.2, Business and Professions Code. Reference: Sections
22974.7, 22977(a)(5), 22978.1, 22978.2, 22978.4(a) and (b), 22978.Sfl:B(fil, 22978.7, 22979.7,
22980(b), 22980. l(b), (c), (d), (e), (t) and (g), 22980.2(a) and 22980.3(a)(2) and (d), Business
and Professions Code.
Page 2 of 2
Text of Proposed Changes to
Title 18. Public Revenue
4605. Penalties for Licensed or Unlicensed Manufacturers and Importers.
The following penalties shall be assessed in addition to any other civil or criminal penalty
provided by law upon a finding that a manufacturer or importer has violated any provision of the
Act:
(a) A first offense of a violation of any of the following provisions will result in the issuance of a
Warning Notice to the licensee or unlicensed person:
(1) ... (unchanged).
(2) ... (unchanged).
(3) Business and Professions Code section 22979.5, subdivision WW (manufacturer's or
importer's failure to retain sales records on premises).
(4) ... (unchanged).
(5) ... (unchanged).
(6) Business and Professions Code section 22979.6, subdivision§ ttj(a) or (b) (manufacturer's or importer's failure to comply with invoice requirements). (b) ... (unchanged).
(c) ... (unchanged).
(d) ... (unchanged).
(e) ... (unchanged).
Note: Authority cited: Section 22971.2, Business and Professions Code. Reference: Sections
22974.7, 22979(b)(l), 22979.4, 22979.5fbjU!}, 22979.6ttj(a) and (b), 22979.7, 22980.l(a), (e)
and (f), and 22980.2(a), and 22980.3(a)(2) and (d), Business and Professions Code.
CALIFORNIA REGULATORY NOTICE REGISTER 2014, VOLUME NO. 50-Z of the year. Prior to formal initiation of the rulemaking
action, for example, CDFW will need to prepare the
various notice documents required by the APA, and
consider its obligations for and initiate related environ­
mental review under the California Environmental
Quality Act (CEQA) (Pub. Resources Code,§ 21000 et
seq.).
In granting your petition and deciding to initiate a re­
lated rulemaking action under the APA, CDFW would
also like to emphasize a number of impo1tant points.
First, in taking action today CDFW is not adopting and
has not adopted your requested amendment to Califor­
nia Code of Regulations, Title 14, section 228, subdivi­
sion (k)( I )(E). The decision today is simply a deter­
mination that CDFW will initiate rulemaking under the
APA to consider the proposed regulatory amendment
you seek. As to the rnlemaking effort and related final
action. CDFW reserves its future exercise of discretion
as provided by law.
Second, the use of any motorized vacuum or suction
dredge equipment is currently prohibited by statute
throughout California. (Fish & G. Code, § 5653.1,
subd. (b). ) Importantly, the prohibited use of such
equipment stands alone by law, separate from CDFW's
existing regulations. The same is true separate and apart
from CDFW's decision today to consider your pro­
posed regulatory amendment through a regular noticed
rulemaking action under the APA. That is, as ofthe date
of this letter, even if CDFW were to adopt the amend­
ment you propose and the amendment took effect for
purposes of Title 14 of the California Code of Regula­
tions, the use of any motorized vacuum or suction
dredge equipment is and will continue to be prohibited
as long as the statutory moratorium remains in effect.
In closing on behalf of CDFW, I hope this letter is
helpful. Any related questions can be directed to me, at
(916) 653-4674 or, via email, at [email protected]
wildlife.ca.gov. Please note as well that any interested
person may obtain a copy of your petition at issue here
by request to me at the same telephone number and
email address.
Sincerely
Isl
Craig P. Martz
Regulations Unit Manager
SUMMARY OF REGULATORY ACTIONS REGULATIONS FILED WITH SECRETARY OF STATE This Summary of Regulatory Actions lists regula­
t ions filed with the Secretary of State on the dates indi­
cated. Copies of the regulations may be obtained by
c ontacting the agency or from the Secretary of State,
A rchives, 1020 0 Street, Sacramento. CA 95814, (916)
6 53-7715. Please have the agency name and the date
filed (see below) when making a request.
File# 2014-1020-03
B OARD OF EQUALIZATION
Penalties for Licensed or Unlicensed Wholesalers and
Distributors
This change without regulato1y effect by the Board of
Equalization amends two regulation sections to provide
th e correct cross-reference to the proper subdivision in
sections 22978.4. 22978.5. 22979.5 and 22979.6 of the
Business and Professions Code when referring to the
failure to comply with invoice requirements or the fail­
ure to retain sales records regarding licensed or unli­
c ensed wholesalers or distributers, or when referring to
th e failure to retain sales records on premises or the fail­
ure to comply with invoice requirements regarding li­
c ensed or unlicensed manufacturers and importers.
Title 18
California Code of Regulations
AMEND: 4604, 4605
Filed 12101/2014
Agency Contact:
Richard E. Bennion
(916)445-2130
File# 2014-1027-03
B OARD OF FORESTRY AND FIRE PROTECTION
C hanges to TRA5 and, in Road Rules, TRA5 Revision
Date, 2014 (§ I 00)
The Board of Forestry and Fire Protection submitted
this Section I 00 action to update incorrect or obsolete
c ross-references in an incorporated by reference docu­
ment, ''Board of Forest1y Technical Rule Addendum
N umber 5: Guidance on Hydrologic Disconnection,
2006 Regulation 4604 and 4605
Section 100
Index
1.
Form 400 and Proposed Regulation 4604 & 4605
2.
Statement of Explanation
I
STATE OF CALIFORNIA-OFFICE OF
NOTICE PUBLIC1
STD. 400 (REV. 01-2013)
OAL FILE
NUMBERS
ructions on
erse)
For use by Secretar1 of State only
EMERGENCY NUMBER
NOTICE FILE NUMBER
Z­
REGULATIONS
NOTICE
AGENCY FILE NUMBER (If any)
AGENCY WITH RULEMAKING AUTHORITY
State Board of Equalization
================
~~~--~~~~~~~-~-~~--~~--~~---------===------------------
A. PUBLICATION OF NOTICE (Complete for publication in Notice Register)
3 NOTICETY~-------------"°T"~4.-A~G~E~NYic~y--;r_~~TA(;::;:-;;;=;;~r~--------tTELEfiH(fNE""N[JME!ER:------·--l"°·FA3<NiONf8El~(Cjpffimaf) _____________
Notice re Proposed Re ulato Action OAL USE
ONLY
Other
D
ACTION ON PROPOSED NOTI E D
Approved as
Submitted
NOTICE REGISTER NUMBER
Approved as
Modified D
PUBLICATION DATE
Disapproved/
Withdrawn
B. SUBMISSION OF REGULATIONS (Complete when submitting regulations)
1b. ALL PREVIOUS RELATED OAL REGULATORY ACTION NlJMBER(S)
1a. SUBJECT OF REGULATION(S)
Penalties for Licensed or Unlicensed Wholesalers and Distributors
2. SPECIFY CALIFORNIA CODE OF REGULATIONS TITLE($) AND SECTION($) (Including title 26, if toxics related)
SECTION(S) AFFECTED
(List all section number(s)
individually. Attach
additional sheet if needed.)
TITLE(S)
ADOPT
AMEND
4604,4605
REPEAL
18
3. TYPE OFFILING
O Regular Rulemaking (Gov.
Code §11346)
D Resubmittal of disapproved or
withdrawn nonemergency
filing (Gov. Code§§ 11349.3,
11349.4)
Emergency (Gov. Code,
D §11346.l(b))
0
Certificate of Compliance: The agency officer named
below certifies that this agency complied with the
provisions of Gov. Code §§11346.2-11347.3 either
before the emergency regulation was adopted or
within the time period required by statute.
O Resubmittal of disapproved or withdrawn
emergency filing (Gov. Code, § 11346.1)
Emergency Readopt (Gov.
Changes Without Regulatory
D Code,
§11346.l(h))
Effect (Cal. Code Regs., title
1. §100)
0 File Print
D Print Only
0 Other(Specify) _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ __
&
4. ALL BEGINNING AND ENDING DATES OF AVAILABIL!TY OF MODIFIED REGULATIONS AND/OR MATERIAL ADDED TO THE RULEMAKING FILE (Cal. Code Regs. title 1, §44 and Gov. Code §11347.1)
5. EFFECTIVE DATE OF CHANGES (Gov. Code,§§ 11343.4, 11346.1 (dl; Cal. Code Regs., title 1, §100)
D
Effective January 1, Apnl 1, July 1. or
October 1 (Gov Code §11343.4(a))
D
Effective on filing with
Secretary of State
f5(l
§ 100 Changes Without
~ Regulatory Effect
D
Effective
other (Specify)
6. CHECK IF THESE REGULATIONS REQUIRE NOTICE TO, OR REVIEW. CONSULTATION, APPROVAL OR CONCURRENCE BY, ANOTHER AGENCY OR ENTITY
D
Department of Finance (Form STD. 399 ) (SAM § 6660 )
D
Other (Specify)
7. CONTACT PERSON Richard E. Bennion 8. D
Fair Political Practices Commission
TELEPHONE NUMBER
(916) 445-2130
FAX NUMBER (Optional)
(916) 324-3984
I certify that the attached copy of the regulation(s) is a true and correct copy
of the regulation(s) identified on this form, that the information specified on this form
is true and correct, and that I am the head of the agency taking this action,
or a designee of the head of the agency, and am authorized to make this certification.
SIGNATURE OF AGENCY
DATE
October 10, 2014
State Fire Marshal
E-MAIL ADDRESS (Optional)
[email protected]
For use by Office of Administrative Law (OAL) only
Text of Proposed Changes to
Title 18. Public Revenue
4604. Penalties for Licensed or Unlicensed Wholesalers and Distributors.
The following penalties shall be assessed in addition to any other civil or criminal penalty
provided by law upon a finding that a wholesaler or distributor has violated any provision of the
Act:
(a) A first offense of a violation of any of the following provisions will result in the issuance of a
Warning Notice to the licensee or unlicensed person:
(1) ... (unchanged).
(2) Business and Professions Code section 22978.4, subdivision§_fe)(a) or (b) (distributor's
or wholesaler's failure to comply with invoice requirements).
(3) Business and Professions Code section 22978.5, subdivision WW (distributor's or
wholesaler's failure to retain sales records).
(4) ... (unchanged).
(5) ... (unchanged).
(b) ... (unchanged):
( 1) ... (unchanged).
(2) ... (unchanged).
(3) ... (unchanged).
(c) ... (unchanged).
(d) A violation of Business and Profession Code section 22978.2 (possession of counterfeit
stamped cigarettes by distributors, unstamped cigarettes by wholesalers or untaxed tobacco
products) shall result in the following:
(1) ... (unchanged).
(2) ... (unchanged).
(3) ... (unchanged).
(4) Both a 30-day suspension or revocation and a fine for a second or subsequent offense.
The fine will be determined in accordance with sectionRegulation 4607.
(e) ... (unchanged).
Page 1of2
(f) ... (unchanged).
Note: Authority cited: Section 22971.2, Business and Professions Code. Reference: Sections
22974.7, 22977(a)(5), 22978.1, 22978.2, 22978.4(a) and (b), 22978.Sfbt(fil, 22978.7, 22979.7,
22980(b), 22980.l(b), (c), (d), (e), (f) and (g), 22980.2(a) and 22980.3(a)(2) and (d), Business
and Professions Code.
Page 2 of 2
Text of Proposed Changes to Title 18. Public Revenue 4605. Penalties for Licensed or Unlicensed Manufacturers and Importers.
The following penalties shall be assessed in addition to any other civil or criminal penalty
provided by law upon a finding that a manufacturer or importer has violated any provision of the
Act:
(a) A first offense of a violation of any of the following provisions will result in the issuance of a
Warning Notice to the licensee or unlicensed person:
(1) ... (unchanged).
(2) ... (unchanged).
(3) Business and Professions Code section 22979.5, subdivision WW (manufacturer's or
importer's failure to retain sales records on premises).
(4) ... (unchanged).
(5) ... (unchanged).
(6) Business and Professions Code section 22979.6, subdivision§ fe)(a) or (b) (manufacturer's or importer's failure to comply with invoice requirements). (b) ... (unchanged).
(c) ... (unchanged).
(d) ... (unchanged).
(e) ... (unchanged).
Note: Authority cited: Section 22971.2, Business and Professions Code. Reference: Sections
22974.7, 22979(b)(l), 22979.4, 22979.5WW, 22979.6fe)(a) and (b), 22979.7, 22980.l(a), (e)
and (f), and 22980.2(a), and 22980.3(a)(2) and (d), Business and Professions Code.
CHANGES WITHOUT REGULATORY EFFECT UNDER
CALIFORNIA CODE OF REGULATIONS, TITLE 1, SECTION 100
Statement of Explanation
Title 18. Public Revenues
Regulation 4604, Penalties for Licensed or Unlicensed Wholesalers and Distributors
Regulation 4605, Penalties for Licensed or Unlicensed Manufacturers and Importers
A.
Factual Basis
1. Regulation 4604
Business and Professions Code (BPC) section 22978.4 provides as follows:
22978.4.
(a) Except as otherwise provided in paragraph (7), each distributor and each
wholesaler shall include the following information on each invoice for the sale of
cigarettes or tobacco products:
(1) The name, address, and telephone number of the distributor or wholesaler.
(2) The license number of the distributor or the wholesaler as provided by the
board.
(3) The amount of excise taxes due to the board by the distributor on the sale of
cigarettes and tobacco products.
(4) The name, address, and license number of the retailer, distributor, or
wholesaler to whom cigarettes or tobacco products are sold.
(5) An itemized listing of the cigarettes or tobacco products sold.
(6) The date the cigarette or tobacco products are sold.
(7) Notwithstanding paragraph (3), a distributor that is also a retailer or
manufacturer shall include either one of the following on each invoice for the sale
of cigarettes or tobacco products:
(A) A statement that reads: "All California cigarette and tobacco product taxes
are included in the total amount of this invoice."
(B) The amount of excise taxes due to the board by the distributor on the
distribution of cigarettes and tobacco products.
(b) Each invoice for the sale of cigarettes or tobacco products shall be legible and
readable.
(c) Failure to comply with the requirements of this section shall be a misdemeanor
subject to penalties pursuant to Section 22981.
Page 1of6
Subdivision (a) of California Code of Regulations, title 18, section (Regulation) 4604, Penalties
for Licensed or Unlicensed Wholesalers and Distributors, lists provisions of the Cigarette and
Tobacco Products Licensing Act (BPC § 22970 et seq.) and provides that a first offense for the
violation of any of the listed provisions will result in the issuance of a Warning Notice.
Currently, Regulation 4604, subdivision (a)(2), refers to subdivision (c) of BPC section 22978.4,
which is a penalty provision. However, it should have referred to subdivisions (a) and (b) of
BPC section 22978.4, instead, because subdivisions (a) and (b) are provisions imposing
invoicing requirements and it is a first offense for a violation of either of the invoicing
requirements that will result in the issuance of a Warning Notice. As a result, the State Board of
Equalization (Board) proposes to replace the reference to BPC section 22978.4, subdivision "(c)"
with a reference to BPC section 22978.4, subdivision "(a) or (b)," in subdivision (a)(2) of the
regulation, and add a reference to BPC section 22978.4, subdivisions (a) and (b) to the
regulation's reference note.
BPC section 22978.5 provides as follows:
22978.5.
(a) Each distributor and each wholesaler of cigarette and tobacco products subject
to licensing under this chapter shall maintain accurate and complete records
relating to the sale of those products, including, but not limited to, receipts,
invoices, and other records as may be required by the board, during the past four
years with invoices for the past year to be maintained on the premises for which
the license was issued, and shall make these records available upon request by a
the board or a law enforcement agency.
(b) Failure of a distributor or a wholesaler to comply with this section shall be a
misdemeanor subject to penalties pursuant to Section 22981.
Currently, Regulation 4604, subdivision (a)(3), refer to BPC section 22978.5, subdivision (b),
which is also a penalty provision. However, it should have referred to BPC section 22978.5,
subdivision (a), instead, because subdivision (a) is a provision imposing record-keeping
requirements and it is a first offense for a violation of the record-keeping requirements that will
result in the issuance of a Warning Notice. As a result, the Board proposes to replace the
references to BPC section 22978.5, subdivision "(b)" with references to BPC section 22978.5,
subdivision "(a)" in subdivision (a)(3) of the regulation and the regulation's reference note.
Currently, Regulation 4604, subdivision (c), refers to Regulation 4607, Determination ofFine, as
"Regulation 4607." However, Regulation 4604, subdivision (d)(4), refers to Regulation 4607 as
"section 4607." As a result, the Board proposes to replace the reference to "section" 4607 with a
reference to "Regulation" 4607 in subdivision (d)(4) of the regulation, in order to make
subdivision (d)(4) consistent with subdivision (c).
2. Regulation 4605
Page 2 of 6
BPC section 22979.5 provides as follows:
22979.5.
(a) Each manufacturer and each importer of cigarette and tobacco products
subject to licensing under this chapter shall maintain accurate and complete
records relating to the sale of those products, including, but not limited to,
receipts, invoices, and other records as may be required by the board, during the
past four years with invoices for the past year to be maintained on the premises
for which the license was issued, and shall make these records available upon
request by a representative of the board or a law enforcement agency.
(b) Failure of a manufacturer or an importer to comply with this section shall be a
misdemeanor subject to penalties pursuant to Section 22981.
Subdivision (a) of Regulation 4605, Penalties for Licensed or Unlicensed Manufacturers and
Importers, also lists provisions of the Cigarette and Tobacco Products Licensing Act and
provides that a first offense for the violation of any of the listed provisions will result in the
issuance of a Warning Notice. Currently, Regulation 4605, subdivision (a)(3), refers to BPC
section 22979.5, subdivision (b), which is a penalty provision. However, it should have referred
to BPC section 22979.5, subdivision (a), instead, because subdivision (a) is a provision imposing
record-keeping requirements and it is a first offense for a violation of the record-keeping
requirements that will result in the issuance of a Warning Notice. As a result, the Board
proposes to replace the references to BPC section 22979.5, subdivision "(b)" with references to
BPC section 22979.5, subdivision "(a)" in subdivision (a)(3) of the regulation and the
regulation's reference note.
BPC section 22979.6 provides as follows:
22979.6.
(a) Each manufacturer and each importer shall include the following information
on each invoice for the sale for distribution, wholesale, or retail sale of cigarettes
or tobacco products:
(1) The name, address, and telephone number of the manufacturer, or importer.
(2) The license number of the manufacturer or importer as provided by the
board.
(3) The name, address, and license number of the person to whom cigarettes or
tobacco products are sold.
(4) An itemized listing of the cigarettes or tobacco products sold.
(b) Each invoice for the sale of cigarettes or tobacco products shall be legible and
readable.
(c) Failure to comply with the requirements of this section shall be a misdemeanor
subject to penalties pursuant to Section 22981.
Page 3 of 6
Currently, Regulation 4605, subdivision (a)(6) refers to BPC section 22979.6, subdivision (c),
which is a penalty provision. However, it should have referred to BPC section 22979.6,
subdivisions (a) and (b), instead, because subdivisions (a) and (b) are provisions imposing
invoicing requirements and it is a first offense for a violation of either of the invoicing
requirements that will result in the issuance of a Warning Notice. As a result, the Board
proposes to replace the reference to BPC section 22979.6, subdivision "(c)" with a reference to
BPC section 22979.6, subdivision "(a) or (b)," in subdivision (a)(6) of the regulation, and replace
the reference to BPC section 22979.6, subdivision "(c)" with a reference to BPC section 22979.6,
subdivisions "(a) and (b)" in the regulation's reference note.
The Board has determined that the proposed changes to Regulations 4604 and 4605 are
appropriate for processing under California Code of Regulations, title 18, section (Rule) 100.
This is because the changes revise statutory cross-references in Regulations 4604 and 4605 to
correct minor, inadvertent cross-referencing errors, update the regulations' reference notes to
make them consistent with the revised cross-references, revise the format of the cross-reference
to a Regulation 4607 in Regulation 4604, and do not materially alter any requirement, right,
responsibility, condition, prescription or other regulatory element of any California Code of
Regulations provision.
B.
Proposed Changes
The following Rule 100 changes are proposed to Regulations 4604 and 4605:
TEXT OF PROPOSED CHANGES
4604. Penalties for Licensed or Unlicensed Wholesalers and Distributors.
The following penalties shall be assessed in addition to any other civil or criminal penalty
provided by law upon a finding that a wholesaler or distributor has violated any provision of the
Act:
(a) A first offense of a violation of any of the following provisions will result in the issuance of a
Warning Notice to the licensee or unlicensed person:
(1) ... (unchanged).
(2) Business and Professions Code section 22978.4, subdivision ~(a) or (b) (distributor's or
wholesaler's failure to comply with invoice requirements).
(3) Business and Professions Code section 22978.5, subdivision Will (distributor's or
wholesaler's failure to retain sales records).
Page 4 of 6
(4) ... (unchanged).
(5) ... (unchanged).
(b) ... (unchanged):
(1) ... (unchanged).
(2) ... (unchanged).
(3) ... (unchanged).
(c) ... (unchanged).
(d) A violation of Business and Profession Code section 22978.2 (possession of counterfeit
stamped cigarettes by distributors, unstamped cigarettes by wholesalers or untaxed tobacco
products) shall result in the following:
(1) ... (unchanged).
(2) ... (unchanged).
(3) ... (unchanged).
(4) Both a 30-day suspension or revocation and a fine for a second or subsequent offense.
The fine will be determined in accordance with seetionRegulation 4607.
(e) ... (unchanged).
(f) ... (unchanged).
Note: Authority cited: Section 22971.2, Business and Professions Code. Reference: Sections
22974.7, 22977(a)(5), 22978.1, 22978.2, 22978.4(a) and (b), 22978.5~, 22978.7, 22979.7,
22980(b), 22980.l(b), (c), (d), (e), (f) and (g), 22980.2(a) and 22980.3(a)(2) and (d), Business
and Professions Code.
4605. Penalties for Licensed or Unlicensed Manufacturers and Importers.
The following penalties shall be assessed in addition to any other civil or criminal penalty
provided by law upon a finding that a manufacturer or importer has violated any provision of the
Act:
(a) A first offense of a violation of any of the following provisions will result in the issuance of a
Warning Notice to the licensee or unlicensed person:
(1) ... (unchanged).
Page 5 of 6
(2) ... (unchanged).
(3) Business and Professions Code section 22979.5; subdivision ~ill (manufacturer's or
importer's failure to retain sales records on premises).
(4) ... (unchanged).
(5) ... (unchanged).
(6) Business and Professions Code section 22979.6, subdivision tej(a) or (b) (manufacturer's
or importer's failure to comply with invoice requirements).
(b) ... (unchanged).
(c) ... (unchanged).
(d) ... (unchanged).
(e) ... (unchanged).
Note: Authority cited: Section 22971.2, Business and Professions Code. Reference: Sections
22974.7, 22979(b)(l), 22979.4, 22979.5~(fil, 22979.6tej(a) and (b), 22979.7, 22980.l(a), (e)
and (f), and 22980.2(a), and 22980.3(a)(2) and (d), Business and Professions Code.
Page 6 of 6
State of California
Board of Equalization
Legal Department-MIC:83
Office of the Chief Counsel
(916) 445-4380
Fax: (916) 322-0341
Memorandum
To:
Ms. Cynthia Bridges
Executive Director, MIC:73
From: Randy Ferris, Chief Counsel
Legal Department, MIC:83
Subject: Board Meeting, September 23-24, 2014
Item J - Chief Counsel's Rulemaking Calendar
Regulation 4604, Penalties for Licensed or Unlicensed Wholesalers and Distributors
Regulation 4605, Penalties for Licensed or Unlicensed Manufacturers and Importers
Date: September 4, 2014
We request your approval to place proposed changes to two Cigarette and Tobacco Products
Licensing Act (Act) regulations on the Chief Counsel's Rulemaking Calendar for the
September 23-24, 2014, Board meeting in order to request the Board's authorization to
complete the changes. The changes correct statutory references in both regulations and update
a reference to a regulation in one of the regulations.
Proposed Changes to Regulation 4604, Penalties [or Licensed or Unlicensed Wholesalers
and Distributors
Regulation 4604, subdivision (a) lists provisions of the Act and provides that a first offense for
the violation of any of the listed provisions will result in the issuance of a Warning Notice.
Currently, Regulation 4604, subdivision (a)(2) references Business and Professions Code
(BPC) section 22978.4, subdivision (c), which is a penalty provision. It should instead
reference BPC section 22978.4, subdivisions (a) and (b), which are provisions imposing
invoicing requirements. As a result, the proposed non-substantive changes to Regulation 4604
replace the reference to BPC section 22978.4, subdivision"(c)" with a reference to BPC
section 22978.4, subdivision "(a) or (b)," in subdivision (a)(2) of the regulation, and add
references to BPC section 22978.4, subdivisions (a) and (b) to the regulation's reference note.
Currently, Regulation 4604, subdivision (a)(3) references BPC section 22978.5, subdivision
(b), which is also a penalty provision. It should instead reference BPC section 22978.5,
subdivision (a), which is a provision imposing record-keeping requirements. As a result, the
proposed non-substantive changes to Regulation 4604 replace the references to BPC section
22978.5, subdivision "(b)'' with references to BPC section 22978.5, subdivision "(a)" in
subdivision (a)(3) of the regulation and the regulation's reference note.
Currently, Regulation 4604, subdivision (c) refers to Regulation 4607, Determination of
Fine, as "Regulation 4607." Regulation 4604, subdivision (d)(4) refers to Regulation 4607 as
"section 4607." The proposed non-substantive change to Regulation 4604, subdivision (d)(4)
replaces the reference to "section" 4607 with a reference to "Regulation" 4607 to make
subdivisions (c) and (d)(4) consistent.
Item J:L
09-23-14
Ms. Cynthia Bridges, Executive Director
-3­
September 4, 2014
Approved:
BOARD APPROVED
Board Meeting
At the
Lynn Bartolo, Acting Deputy Director
Special Taxes Department
Jofnn Richmond, Chief
Board Proceedings Division
RF:PAM:yg
Attachments
cc:
Ms. Debbie Kalfsbeek
Ms. Joann Richmond
Mr. Robert Tucker
Mr. Stephen Smith
Mr. Bradley M. Heller
Mr. Robert Zivkovich
MIC:
MIC:
MIC:
MIC:
MIC:
MIC:
62
80
82
82
82
31
Text of Proposed Rule 100 Changes to California Code of Regulations, Title 18, Section 4604 4604. Penalties for Licensed or Unlicensed Wholesalers and Distributors.
The following penalties shall be assessed in addition to any other civil or criminal penalty
provided by law upon a finding that a wholesaler or distributor has violated any provision of the
Act:
(a) A first offense of a violation of any of the following provisions will result in the issuance of a
Warning Notice to the licensee or unlicensed person:
(1) Business and Professions Code section 22978.1 (distributor's or wholesaler's failure to
retain purchase invoices).
(2) Business and Professions Code section 22978.4, subdivisionftj(a) or (b) (distributor's or
wholesaler's failure to comply with invoice requirements).
(3) Business and Professions Code section 22978.5, subdivision ~.{fil (distributor's or
wholesaler's failure to retain sales records).
(4) Business and Professions Code section 22980.1, subdivision (b), (c), (d), (e) (sales to or
purchases from unlicensed person or person with suspended or revoked license) or (f) (sales
of cigarettes or tobacco products to retailer or wholesaler revoked or suspended until debts
are clear).
(5) Business and Professions Code section 22980.2, subdivision (a) (sales of cigarettes or
tobacco products by unlicensed person or person with suspended or revoked license).
(b) A first offense of a violation of any of the following provisions will result in the issuance of a
20-day suspension:
(1) Business and Professions Code section 22977, subdivision (a)(5) (distributor's or wholesaler's false statement on application). (2) Business and Professions Code section 22980, subdivision (b) (any person's refusal to
allow inspection).
(3) Business and Professions Code section 22980.1, subdivision (g) (purchase of cigarettes to
which a stamp may not be affixed in accordance with Rev. & Tax. Code,§ 30163, subd. (b)).
(c) A second or subsequent offense for a violation of the provisions listed in subdivision (a) or
(b) above shall result in both a 30-day suspension or revocation, and a fine. The fine shall be
determined in accordance with Regulation 4607.
(d) A violation of Business and Profession Code section 22978.2 (possession of counterfeit
stamped cigarettes by distributors, unstamped cigarettes by wholesalers or untaxed tobacco
products) shall result in the following:
Text of Proposed Rule 100 Changes to California Code of Regulations, Title 18, Section 4605 4605. Penalties for Licensed or Unlicensed Manufacturers and Importers.
The following penalties shall be assessed in addition to any other civil or criminal penalty
provided by law upon a finding that a manufacturer or importer has violated any provision of the
Act:
(a) A first offense of a violation of any of the following provisions will result in the issuance of a
Warning Notice to the licensee or unlicensed person:
(1) Business and Professions Code section 22979.4 (importer's failure to retain purchase
invoices on premises).
(2) Business and Professions Code section 22979, subdivision (b)(l) (participating manufacturer's false statement on certification to the Board). (3) Business and Professions Code section 22979.5, subdivision fbj.(fil (manufacturer's or
importer's failure to retain sales records on premises).
(4) Business and Professions Code section 22980.1, subdivision (a), (e) or (f) (purchases or
sales from or to an unlicensed person or person with suspended or revoked license).
(5) Business and Professions Code section 22980.2, subdivision (a) (sales of cigarettes or
tobacco products by unlicensed person or person with suspended or revoked license).
(6) Business and Professions Code section 22979.6, subdivision fej(a) or (b) (manufacturer's
or importer's failure to comply with invoice requirements).
(b) A first offense of a violation of Business and Professions Code section 22980.1, subdivision
(g) (purchase of cigarettes to which a stamp may not be affixed in accordance with Rev. & Tax.
Code,§ 30163, subd. (b)) shall result in a 20-day suspension.
(c) A second or subsequent offense for a violation of the provisions listed in subdivision (a) or
(b) above shall result in both a 30-day suspension or revocation and a fine.
(d) In cases involving multiple violations, the violation punishable by the most severe penalty
will be used for purposes of determining the penalty assessed.
(e) Notwithstanding subdivisions (b) through (d) above, a reduction in the length of a suspension
period may be warranted if mitigating circumstances are present, as set forth in Regulation 4606.
If any suspension period is reduced, the redetermined period of suspension shall be 0 days, 5
days, 10 days, or 20 days. The existence of mitigating circumstances may also warrant reducing
a revocation penalty to a 30-day suspension, unless revocation is mandated pursuant to Business
and Professions Code section 22980.3, subdivision (a)(2) or subdivision (d).
2014 MINUTES OF THE STATE BOARD OF EQUALIZATION
179
Tuesday, September 23, 2014
Board Roll Changes
2011, 2012 and 2013 State-Assessed Property Rolls
Action:
Upon motion of Ms. Yee, seconded by Ms. Steel and unanimously carried, Mr. Horton, Ms. Steel, Ms. Yee and Mr. Runner voting yes, Ms. Mandel not participating in accordance with Government Code section 7.9, the Board approved corrections to the 2011, 2012 and 2013 Board Rolls of State-Assessed Property as recommended by staff (Exhibit 9.3). OFFER·IN·COMPROMISE RECOMMENDATIONS
Action:
Upon motion of Mr. Runner, seconded by Ms. Steel and unanimously carried,
Mr. Horton, Ms. Steel, Ms. Yee, Mr. Runner and Ms. Mandel voting yes, the Board approved the
Offer in Compromise Recommendations of Audcon Group ofCompanies, Inc.; John A. Bart; Tye
Allon Bayless; California Granite & Tile, Corp.,· James David Frasco; Karanjit Singh Gill and
Jasvir Kaur Gill; Valeri Ghazaryan,· Richard Nolan Hill; King Capital, LLC; Jason Yoohwan Oh
and Jane Yoon Oh; Rigoberto Pena; Laquetta Karen Perry; R & R Furniture Co., Inc.,- William
Warren Rader; Gary Beeman Rogers; SCB, LLC and Stephen Wolchuk,· Nam Ky Ton, and, John
Michael Villeneuve,· as recommended by staff.
LOCAL
TAX REALLOCATION MATTERS
City of Fillmore, 626418
01101/09 to Current, $2,489,919.00 Tax Considered by the Board: June 25, 2014, Summary Decision (Rev. & Tax. Code,§ 40) Action:
Upon motion of Ms. Yee, seconded by Ms. Mandel and duly carried, Mr. Horton, Ms. Yee, Mr. Runner and Ms. Mandel voting yes, Ms. Steel voting no, the Board adopted the written summary decision as presented by staff. CHIEF COUNSEL MATTERS
RULEMAKING
Section 100 Changes
Cigarette and Tobacco Products Licensing Act Regulations 4604, Penalties for
Licensed or Unlicensed Wholesalers and Distributors, and 4605, Penalties for
Licensed or Unlicensed Manufacturers and Importers
Bradley Heller, Tax Counsel, Tax and Fee's Programs Division, Legal
Department, made introductory remarks regarding staffs request for authorization to complete
Section 100 changes to correct statutory references in Regulations 4604 and 4605 and to update a
reference to a regulation in Regulation 4604 (Exhibit 9.4)
Action:
Upon motion of Mr. Runner, seconded by Ms. Steel and unanimously carried,
Mr. Horton, Ms. Steel, Ms. Yee, Mr. Runner and Ms. Mandel voting yes, the Board approved the
Section 100 changes to Regulations 4604 and 4605 as recommended by staff.
Page 1
BEFORE THE CALIFORNIA STATE BOARD OF EQUALIZATION 450 N STREET SACRAMENTO, CALIFORNIA REPORTER'S TRANSCRIPT
SEPTEMBER 23, 2014
CHIEF COUNSEL MATTERS
J
RULEMAKING
SECTION 100 CHANGES
Jl
Cigarette and Tobacco Products
Licensing Act Regulations 4604 and 4605
Reported by: Juli Price Jackson
No. CSR 5214
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P R E S E N T
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For the Board
of Equalization:
Jerome E. Horton
Chairman
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Michelle Steel
Vice-Chairwoman
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Betty T. Yee
Member
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George Runner
Member
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Marcy Jo Mandel
Appearing for John
Chiang, State
Controller (per
Government Code
Section 7.9)
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Joann Richmond
Chief, Board
Proceedings Division
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For Staff:
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Bradley Heller
Tax Counsel IV
Legal Department
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450 N STREET
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SACRAMENTO, CALIFORNIA
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SEPTEMBER 23, 2014
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MR. HORTON:
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MS. RICHMOND:
Ms. Richmond, our next matter.
Our next matter are Chief
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Counsel Matters, item J, rulemaking.
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Section 100 change.
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MR. HORTON:
We have a
Welcome, Mr. Heller, please
introduce yourself for the record.
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MR. HELLER:
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Good afternoon, Chairman Horton, Members of
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the Board.
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Legal Department.
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Thank you.
I'm Bradley Heller from the Board's
And I'm here to request that the Board vote
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to authorize staff to complete Rule 100 changes to
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Cigarette and Tobacco Products Licensing Act
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Regulations 4604, penalties for licensed or
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unlicensed wholesalers and distributors, and 4605,
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penalties for licensed or unlicensed
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manufacturers -- excuse me, manufacturers and
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importers.
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And the changes correct statutory
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references and update a cross-reference to a
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regulation.
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MR. RUNNER:
Move adoption.
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MR. HORTON:
Member Runner moves to -­
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moves to authorize staff to complete Rule 100
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changes to modify the statutory re
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Regulation 4604 and 4605 and to update the reference
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to a regulation in Regulation 4604.
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Did I get there?
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Second by Member Steel.
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Without objection, Members, such will be
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rence in
the order.
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REPORTER'S CERTIFICATE
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State of California
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SS
County of Sacramento
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I, JULI PRICE JACKSON, Hearing Reporter for
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the California State Board of Equalization certify
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that on SEPTEMBER 23, 2014 I recorded verbatim, in
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shorthand, to the best of my ability, the
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proceedings in the above-entitled hearing; that I
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transcribed the shorthand writing into typewriting;
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and that the preceding pages 1 through 4 constitute
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a complete and accurate transcription of the
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shorthand writing.
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Dated:
October 1, 2014
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