Tobacco Manufacturer and Importer Bond - Statewide in California

Brief Summary

This bond is filed with the California Attorney General, not CDTFA, and it is the alternative to waiving sovereign immunity. A cigarette manufacturer or importer that does not sign the written waiver posts a bond of at least $50,000, and more if its past California escrow obligation was larger. For any company that will not sign that waiver, the bond is the only way to hold the license.

Business and Professions Code Section 22979(a)(4) requires every licensed cigarette manufacturer and importer to either waive any sovereign immunity defense in writing or file a surety bond with the Attorney General. The bond runs in favor of the State of California, must be posted by a corporate surety located within the United States, and equals the greater of $50,000 or the escrow the manufacturer or importer was required to deposit as a result of the largest of its most recent five calendar years' California sales. The Attorney General's bond form is JUS-TOB14.

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How to Apply for a Tobacco Manufacturer and Importer Bond:

• Decide whether the company will sign the Attorney General's written sovereign immunity waiver or post the bond instead.
• Gather California sales and escrow history for the most recent five calendar years to compute the bond amount.
• Identify any surety bond already in force under Revenue and Taxation Code Section 30165.1, which reduces the amount.
• Provide the manufacturer's legal name and, if applicable, its importer's, exactly as on the CDTFA license application.
• Have a corporate surety located within the United States execute Attorney General form JUS-TOB14 in favor of the State of California.
• Mail the bond to the Attorney General's Tobacco Litigation and Enforcement Section and keep it in force while licensed.

Detailed Information About the California Tobacco Manufacturer and Importer Bond:

Waiver or bond

CDTFA's manufacturer and importer page states that a cigarette manufacturer or importer must waive any sovereign immunity defense or post a surety bond as provided in Business and Professions Code Section 22979(a)(4). The waiver must be express, in writing, and in a form acceptable to the Attorney General. A manufacturer or importer that does not give it files the bond instead. The bond is conditioned on performance of all duties under the Cigarette and Tobacco Products Licensing Act, Health and Safety Code Sections 104555 to 104557, the Cigarette and Tobacco Products Tax Law, and the regulations adopted under them.

How the amount is figured

The bond equals the greater of:

• $50,000, or
• the escrow the manufacturer or importer, in its current or predecessor form, was required to deposit as a result of the largest of its most recent five calendar years' sales in California.

If the principal is a nonparticipating manufacturer that already has a surety bond in force under Revenue and Taxation Code Section 30165.1, the Section 22979 bond is reduced by that amount.

One form, two purposes

The Attorney General's California Tobacco Manufacturer and Importer Surety Bond, form JUS-TOB14 (rev. October 2011), names the State of California as obligee and serves both the Section 22979(a)(4) license bond and the Section 30165.1 directory bond. Under Section 30165.1, newly qualified and elevated-risk nonparticipating manufacturers file a bond of the greater of $50,000 or their escrow amount for the next three years of their directory listing, or longer if they are found to pose an elevated risk. The principal is the manufacturer and, if applicable, its importer.

Not a CDTFA deposit

CDTFA's licensing guide says there are no security deposit requirements for a manufacturer's or importer's license. That refers to CDTFA security deposits. This bond is a separate obligation filed with the Attorney General's Tobacco Litigation and Enforcement Section. Manufacturers and importers also pay CDTFA a one-time license administration fee.

Other tobacco products

The waiver or bond paragraph sits in Section 22979, the cigarette manufacturer and importer license. Companies that make or import only other tobacco products are licensed under Section 22979.21 and should confirm with the Attorney General's office which filing applies to them before the bond is issued.

Filing and term

Mail the executed bond to the Tobacco Litigation and Enforcement Section, Office of the Attorney General, P.O. Box 944255, Sacramento, California 94244-2550. The form is continuous. It stays in effect until the surety withdraws by giving 60 days advance written notice by registered mail, and cancellation follows Article 13 of the Code of Civil Procedure bond provisions beginning at Section 996.310.

Eligibility and Requirements for a California Tobacco Manufacturer and Importer Bond:

• Bond amount equal to the greater of $50,000 or the largest escrow obligation from the most recent five calendar years of California sales, per Business and Professions Code Section 22979(a)(4).
• Obligee is the State of California, on Attorney General form JUS-TOB14.
• Corporate surety located within the United States.
• Valid CDTFA cigarette manufacturer or importer license and payment of the one-time license administration fee.
• Continuous bond. The surety withdraws by giving 60 days advance written notice by registered mail.

California Tobacco Manufacturer and Importer Bond FAQs:

Official and Additional Resources for the California Tobacco Manufacturer and Importer Bond: