BILL ANALYSIS                                                                                                                                                                                                    



                                                                  SB 882
                                                                  Page  1

          Date of Hearing:   June 23, 2010

                   ASSEMBLY COMMITTEE ON GOVERNMENTAL ORGANIZATION
                                   Joe Coto, Chair
                    SB 882 (Corbett) - As Amended:  June 17, 2010

           SENATE VOTE  :   28-0
           
          SUBJECT  :   Electronic cigarettes.

           SUMMARY  :   Prohibits the sale or distribution of an electronic  
          cigarette (e-cigarette) to a minor less than 18 years of age and  
          establishes infractions for violating this prohibition.   
          Specifically,  this bill  :   

          1)Makes it unlawful for a person to sell or otherwise furnish an  
            e-cigarette to a minor less than 18 years of age to the extent  
            not preempted by federal law, including but not limited to  
            regulation of e-cigarettes by the federal Food and Drug  
            Administration (FDA).

          2)Defines "electronic cigarette" as a device that can provide an  
            inhalable dose of nicotine by delivering a vaporized solution.

          3)Requires a violation of this section shall be an infraction  
            punishable by the following fine schedule:

             a)   A fine not exceeding $200 for the first violation,

             b)   A fine not exceeding $500 for the second violation,

             c)   A fine not exceeding $1,000 for a third or subsequent  
               violation.

          4)Adds a preemption clause which states that neither this  
            section nor any other provision of law shall invalidate an  
            ordinance adopted by a city, county, or city and county if it  
            is more restrictive than this section to the extent that the  
            ordinance is not preempted by federal law.

          5)Makes findings and declarations.

           EXISTING LAW  :

          1)Makes it a misdemeanor, subject to civil action and fines, any  








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            individual who knowingly or under circumstances furnishes,  
            gives, or sells cigarettes or tobacco products to minors under  
            the age of 18. 

          2)Provides that any individual desiring to engage in the sale of  
            cigarettes or tobacco products as a distributor shall file  
            with the State Board of Equalization (BOE) an application for  
            a distributor's license.  A distributor must apply and obtain  
            a license for each place of business where he or she will  
            engage in the business of distributing cigarettes or tobacco  
            products.

          3)Provides that any individual desiring to engage in the sale of  
            cigarettes or tobacco products as a wholesaler shall file with  
            the BOE an application for a wholesaler's license.  A  
            wholesaler must apply and obtain a license for each place of  
            business where he or she will engage in the business of  
            selling cigarettes or tobacco products as a wholesaler.

          4)Requires, under the Stop Tobacco Access to Kids Enforcement  
            (STAKE) Act-

             a)   Retailers from selling cigarettes and tobacco products  
               to minors under the age of 18 and requires that retailers  
               check identification of individuals trying to buy  
               cigarettes and tobacco products who appear under the age of  
               18.  

             b)   Increases civil penalties and expands the number of  
               agencies that are permitted to carry out investigations of  
               illegal tobacco sales to minors from the State Department  
               of Public Health (DPH) to include the Attorney General and  
               other state and local agencies.

             c)   Makes certain violations of the STAKE Act a criminal  
               offense.

             d)   Requires DPH to take primary responsibility for  
               enforcement of the STAKE Act and requires DPH to conduct  
               random, onsite inspections of retail sites.

             e)   Requires DPH to enlist the assistance of persons who are  
               15 or 16 years of age for this purpose and requires the DPH  
               to adopt and publish guidelines for the use of minors in  
               inspections.








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             f)   Requires the peace officer accompanying the minor to  
               re-enter the retail site following the completion of a sale  
               and inform the seller of the random inspection. Existing  
               law requires DPH, following an attempted sale, to notify  
               the retailer of the inspection.

             g)   Permits DPH to enter into an agreement with a local law  
               enforcement agency for delegation of enforcement of the  
               STAKE Act.

             h)   Requires any enforcement by DPH, in cases where DPH has  
               delegated enforcement to a local law enforcement agency, to  
               be coordinated with the local law enforcement agency and  
               prohibits duplication of enforcement activities that result  
               in a duplication of civil penalties or assessments.

             i)   Requires DPH to reimburse local law enforcement agencies  
               for enforcement costs pursuant to delegation contracts from  
               the Sale of Tobacco to Minors Control Account, which was  
               created under the STAKE Act and receives moneys collected  
               as civil penalties under the Act.

           FISCAL EFFECT  :   Unknown.

           COMMENTS  :   This bill is similar to legislation introduced last  
          year (Corbett, SB 400, 2009 Legislative Session), which sought  
          to prohibit the sale of e-cigarettes to minors under the STAKE  
          Act.  This bill places the prohibition under its own stand-alone  
          section of the Health and Safety Code.

           Background  .  According to a 2008 report titled "  Current  
          Practices in Enforcement of California Laws Regarding Youth  
          Access to Tobacco Products and Exposure to Secondhand Smoke  "  
          that was prepared by the Public Health Institute for DPH and the  
          California Tobacco Control Program, found that law enforcement  
          agencies continue to rank policies and procedures, such as  
          suspension or revocation of business licenses and civil and  
          criminal penalties for owners and clerks who sell tobacco to  
          minors, as effective strategies to reduce youth access to  
          tobacco.

          According to the author, another study published by the Journal  
          of the National Cancer Institute found that teens were more  
          likely to be influenced to smoke by cigarette marketing than by  








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          peer pressure.  The author states that a similar report  
          published by the Journal of the American Medical Association  
          discovered that approximately one-third of underage  
          experimentation with smoking was attributable to tobacco company  
          marketing efforts.

          According to the author, e-cigarettes are unregulated by both  
          state and federal laws.  The author claims that because the  
          producers of electronic cigarettes, many of which are  
          predominantly foreign-based companies, have not applied for  
          approval from the FDA, some retailers have taken the opportunity  
          to market and sell these products to adults and minors, alike,  
          through using shopping mall kiosks and promoting flavored  
          cartridges.

          This bill seeks to define e-cigarettes and, make illegal, the  
          sale of these devices to minors.  

           Electronic cigarettes  .  The most recent innovation in marketing  
          tobacco products to the public are electronic cigarettes  
          (e-cigarettes).  E-cigarettes are considered to be a tobacco  
          substitute that is being marketed as a healthy and smokeless  
          alternative to traditional cigarettes.  These devices are  
          battery-operated, rechargeable drug delivery devices that look  
          similar to cigarettes and allow the user to inhale a smokeless  
          vapor that often contains nicotine.       

          According to the FDA, e-cigarettes generally contain cartridges  
          filled with nicotine, flavor (e.g. chocolate and mint) and other  
          chemicals.  These devices work by turning nicotine and the other  
          chemicals into a vapor that is inhaled by the user.  

          E-cigarette brands, like NJOY, can argue that these devices can  
          serve as an "alternative to traditional smoked tobacco products"  
          and are "designed to replicate the adult experience of smoking  
          without combustion or the use of cancerous by-products."

          In a July 22, 2009 press release, the FDA states, "These  
          products are marketed and sold to young people and are readily  
          available online and in shopping malls."  FDA also says,  
          "[T]hese products do not contain any health warnings comparable  
          to FDA-approved nicotine replacement products or conventional  
          cigarettes."  The FDA and the e-cigarette manufacturers disagree  
          over these devices and whether they are safer than cigarettes.









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           Civil litigation  .  FDA is being challenged in federal court by  
          e-cigarette manufacturers and distributors regarding its  
          jurisdiction over certain e-cigarettes in a federal district  
          court case (Smoking Everywhere, Inc., and Sottera, Inc., doing  
          business as NJOY, v. U.S. Food and Drug Administration, et al.,  
          Civil Case No. 09-771).  

          On January 14, 2010, the U.S. District Court for the District of  
          Columbia ruled against the FDA from taking action to regulate  
          e-cigarettes as drugs/devices under the federal Food, Drug, and  
          Cosmetics Act, thus allowing e-cigarette brands to sell and  
          distribute their products in retail facilities throughout the  
          United States.  In short, these devices can be regulated as  
          tobacco products under the federal Family Smoking Prevention and  
          Tobacco Control Act of 2009.  The federal judge in the case  
          opined that, "[T]he FDA has no authority to regulate the  
          products and can't stop them from entering the country." 

          The FDA is appealing the federal district court's ruling and has  
          asked a federal appeals court to immediately stay an order that  
          prevents them from blocking the entry of e-cigarettes from  
          entering the country.  The U.S. Court of Appeals ruled to  
          temporarily reinstate the FDA's authority and granted the stay. 

           Related legislation  .   SB 400 (Corbett, 2009 Legislative Session)   
          would have amended the STAKE Act to include electronic  
          cigarettes in its definition of tobacco product and halt the  
          sale of electronic cigarettes to minors.  Vetoed by the Governor  
          on October 11, 2009.  

           Prior legislation  .    SB 1927 (Hayden, Chapter 1009, Statutes of  
          1994)  enacts the Stop Tobacco Access to Kids Enforcement (STAKE)  
          Act to address the increase in tobacco sales to minors in  
          California and fulfill the federal mandate that prohibited the  
          sale of cigarettes and tobacco products to minors.

           AB 71 (Jerome Horton, Chapter 890, Statutes of 2003)  enacts the  
          Cigarette and Tobacco Products Licensing Act of 2003 and imposes  
          licensing requirements on tobacco manufacturers, wholesalers,  
          retailers, and importers.  Requires manufacturers to pay a  
          one-time fee.  Imposes civil and criminal penalties on  
          individuals and businesses that violate tobacco-related,  
          anti-contraband laws, and laws prohibiting tobacco-related sales  
          to minors. 









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           AB 2344 (Beall, 2008 Legislative Session)  would have required  
          tobacco retailers to pay an annual licensing fee of $185 to  
          offset the State Board of Equalization's funding shortfall for  
          the administration and enforcement of the California Cigarette  
          and Tobacco Products Act.  Vetoed by the Governor on September  
          27, 2008.

           SB 400 (Kuehl, 2005 Legislative Session)  would seek to make  
          changes to the penalties imposed on a retailer convicted of  
          furnishing cigarettes or tobacco products to a minor under 18  
          years of age.  Held on the Senate Appropriations Committee  
          Suspense File.

           SB 433 (Ortiz, 2004 Legislative Session)  would change the  
          conditions under which the State Board of Equalization levies  
          penalties against tobacco retailers for sales to minors and  
          requires local agencies to report convictions for illegal sales  
          to the State Board of Equalization.  Held on the Senate  
          Appropriations Committee Suspense File. 

           SB 1843 (Budget and Fiscal Review Committee, 2002 Legislative  
          Session)  would have enacted the Cigarette and Tobacco Products  
          Licensing Act of 2002.  Also, would have established licensing  
          requirements for cigarettes and tobacco products retailers,  
          wholesalers and importers, creates an enhanced cigarette tax  
          compliance and enforcement program; revises the cigarette  
          "distributor discount" for applying tax stamps; appropriates  
          funds to implement the program in 2002-2003;  establishes a  
          long-term funding mechanism  for the program.   Held in the  
          Assembly.
           
          AB 2205 (Koretz, Chapter 687, Statutes of 2002)  creates an  
          additional $100 penalty on each knowingly possessed carton of  
          untaxed cigarettes where the proceeds would be used to fund a  
          local competitive grant program to reduce availability of  
          tobacco products on the black market.  The program had a sunset  
          clause that took place on January 1, 2006.  
           SB 1766 (Ortiz, Chapter 686, Statutes of 2002)  requires that all  
          sales of cigarettes in the State be vendor-assisted,  
          face-to-face sales unless the seller receives valid  
          identification, that the purchaser is over 18, the product is  
          shipped to the address provided on the identification, the sales  
          is at least for two cartons, and the seller either provides the  
          State Board of Equalization with all taxes due on the sale or  
          includes with the shipment a notice that the purchaser is  








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          responsible for state taxes.  

           AB 1830 (Frommer, Chapter 685, Statutes of 2002)  prohibits the  
          sales of tobacco products to minors through the United States  
          Postal Service or through any other public or private postal or  
          package delivery service, and imposes specified age-verification  
          requirements on tobacco product sellers or distributors. 

           REGISTERED SUPPORT / OPPOSITION  :

           Support 
           
          First 5 Association of California
          Health Officers Association of California
           
            Opposition 
           
          None on file

           Analysis Prepared by  :    Rod Brewer / G. O. / (916) 319-2531