Cigarette and Tobacco Products Licensing Act of 2003
The Investigations Division of the Board of Equalization (BOE) is authorized to issue citations for violations of the California Cigarette and Tobacco Products Licensing Act of 2003 (AB 71). Two types of citations may be issued: Civil Citations and Criminal Citations. The Civil Citation is processed by the Board of Equalization. The Criminal Citation is a Notice to Appear in court. Both types of citations are subject to civil penalties.
If a civil citation is issued, a copy of the citation is sent to the Special Taxes and Fees Division for processing, and civil penalties may be imposed. An appeals process is available to the licensee.
If a criminal citation is issued, it must first be processed through the court system. Depending on the violation(s) cited, the court may impose fines, jail time or both. Once the criminal court proceeding is complete, the Board will obtain the court's ruling. In addition to any criminal penalties levied by the court, the Board may impose additional civil penalties. For more information about Board imposed civil penalties, see Publication 161, Criminal Citations Include a Civil Administrative Process. A civil appeals process is available to the licensee.
Civil Appeals Process for Notices, Suspensions, Revocations, and Civil Fines
When the Board's Special Taxes and Fees Division (STFD) receives the citation, the STFD will enter the violation(s) on the license record. Depending on the type of violation(s), a Warning Notice or a Notice of Violation will be sent to the licensee. A Warning Notice notifies the licensee that the listed violation(s) will be entered on the license record, but there will be no civil fine, suspension, or revocation. A Notice of Violation notifies the licensee of the violation(s) that will be entered on the license record, and the specific penalty. The Warning Notice and the Notice of Violation advise licensees of their appeal rights.
The licensee may appeal the violation(s) and/or penalties outlined in the Warning Notice or Notice of Violation. The procedures for requesting an appeal are outlined in the notices. The appeal must be filed within 10 days from the date of the notice, and must include the licensee's contentions and any supporting documentation. If no appeal is requested, the violation(s) are added to the licensee's permanent license record and applicable penalties are assessed.
If STFD receives a timely request for appeal, a Notice of Conference will be sent to the licensee. This notice will provide a conference date, time, and telephone number to call. The Response to Notice of Conference (on the back of the Conference Notice) must be completed and filed within 10 days from the date of the notice.
Designated Board staff will preside over the appeal. A member of the Investigations Division staff will attend to represent the department.
Approximately 4-6 weeks after the conference, the STFD will issue a Notice of First Decision to the licensee. A licensee who wishes to appeal the decision must complete the Request for Appeals Conference (on the back of the notice) and return that notice with contentions and any supporting documentation. The Request for Appeals Conference must be filed within 10 days from the date of the Notice of First Decision.
The Board's Case Management Division will notify the licensee of the date, time and place of the scheduled Appeals Conference. The Appeals Conference will be conducted by a Board Appeals Division attorney. A member of the Investigations Division staff will attend to represent the department.
After the Appeals Conference, the Appeals Division will notify the licensee of the outcome of the appeal in a Notice of Second Decision. If the violation(s) and penalties are dismissed, the violation(s) will be removed from the license record. If the violation(s) and/or penalties are upheld, and do not include a fine in excess of $2,500, the STFD will issue a Notice of Suspension or Warning Notice and/or a demand billing to the licensee for civil penalties, as applicable.
If the Appeals Division upholds the violation(s) and the penalties include a fine in excess of $2,500 or a revocation of a license, the licensee has one additional level of appeal available. The licensee may request a hearing before the elected Board Members. The instructions for requesting a hearing before the Board Members is outlined in the Notice of Second Decision.
After a hearing before the Board Members, the Board Proceedings Division will notify STFD of the outcome of the appeal. If the violation(s) and/or penalties are upheld, the STFD will issue a demand billing and a Notice of Suspension or Notice of Revocation in accordance with the Board Members' decision. If the violation(s) and penalties are dismissed, the violation(s) will be removed from the license record.
Civil Fines and Penalties
The Board of Equalization will issue fines and penalties pursuant to its authority under Business and Professions Code Section 22974.7(1). This section provides:
In addition to any other civil or criminal penalties provided by law, upon a finding that a retailer has violated any provision of this division [AB 71], the Board may take the following actions:
- In the case of the first offense, the Board may revoke or suspend the license or licenses of the retailer pursuant to the procedures applicable to the revocation of a license set forth in Section 30148 of the Revenue and Taxation Code.
- In the case of a second or any subsequent offense, in addition to the action authorized under subdivision (a), the Board may impose a civil penalty in an amount not to exceed the greater of either of the following:
- Five times the retail value of the [seized] cigarettes or tobacco products.
- Five thousand dollars ($5,000).
The Board may reduce civil fines by the amount of any criminal fine imposed by the court for the specific violation. The criminal fine is the statutory penalty imposed for the specific violation, and does not include any other court-imposed fees or costs.
1. Business and Professions Code § 22974.7 applies to retailers. Similar sections apply to distributors, wholesalers, manufacturers and importers (See Business and Professions Code §§ 22978.7 and 22979.7).