BILL ANALYSIS Ó
AB 1301
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Date of Hearing: May 18, 2011
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Felipe Fuentes, Chair
AB 1301 (Hill) - As Amended: April 25, 2011
Policy Committee: Governmental
Organization Vote: 14 - 2
Urgency: No State Mandated Local Program:
No Reimbursable:
SUMMARY
This bill imposes stronger penalties on retailers engaged in the
sale of tobacco products when they or their employees sell to an
underage individual. Specifically, this bill:
1)Revises the schedule for the State Board of Equalization (BOE)
action in response to the occurrence of a violation, as
defined, of the Stop Tobacco Access to Kids Enforcement (STAKE
Act) or the misdemeanor provision as follows:
a) For a first violation, the retailer would get a warning
letter.
b) For the 2nd violation in 3 years, the retailer would be
fined $500 unless he or she can prove to the board that he
or she has purchased an identification verification scanner
since the date of the violation.
c) For the 3rd violation in 3 years, the retailer's license
would be suspended for 45 days.
d) For the 4th violation in 3 years, the retailer's license
would be suspended for 180 days.
e) For the 5th violation in 3 years, the retailer's license
would be revoked.
2)Prohibits the BOE from considering violations that occurred
prior to January 1, 2012.
3)Deletes the provision conditioning the BOE's authority to take
action against retailers on the results of a youth purchase
survey. Currently, BOE can take action only after a youth
purchase survey shows that 13% of youth were able to purchase
cigarettes.
AB 1301
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4)Provides the decision of BOE to suspend or revoke the
retailer's license may be appealed to the board within 30 days
after the notice of suspension or revocation. All appeals
shall be submitted in writing.
FISCAL EFFECT
Based on BOE estimates of similar legislation, administering the
provisions in this bill including the workload associated with
suspending and revoking licenses, processing appeals, inspecting
retail licensee locations with suspending and revoked licenses,
and seizing cigarettes or tobacco products being sold by former
licensees, the costs could exceed $1 million per year (Cigarette
and Tobacco Products Compliance Fund).
COMMENTS
1)Rationale . This bill strengthens penalties for retailers who
sell tobacco products to minors and removes the youth purchase
survey trigger. The author hopes that strengthening the STAKE
Act in this way will reduce the sale of tobacco to minors.
2)Support . In support of the bill, the American Lung Association
in California argues that the current penalties for violating
the statewide tobacco licensing law are weak and provide no
real deterrent to retailers, including the threat of losing a
tobacco license.
They contend AB 1301 will strengthen those provisions and
enhance enforcement. Currently, law enforcement in
jurisdictions where there is no local tobacco licensing law
can only levy fines of a few hundred dollars against stores
that sell to minors instead of suspending or revoking their
license for repeat sales.
Finally, they note that AB 1301 will remove the arbitrary 13 %
survey trigger so stores throughout California can be held
accountable every year for selling tobacco products to minors.
AB 1301
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3)Compliance Fund Condition . Existing law requires retailers of
cigarette and tobacco products to pay a one-time license fee
of $100 and requires annual renewal of the retailer license.
A retailer is subject to a $100 reinstatement fee if they
allow the license to expire. Fees collected pursuant to the
Cigarette and Tobacco Licensing Act are deposited into the
Cigarette and Tobacco Products Compliance Fund and are
available solely for the purpose of implementing, enforcing,
and administering the Act. Approximately 40,000 retailers are
currently licensed by BOE. Each year approximately 6,000 new
licenses are issued, but a corresponding number are typically
surrendered, so the total number of active licenses has been
fairly stable since the Licensing Act was established in 2003.
Up until 2005-06, all BOE costs to enforce and administer the
Licensing Act were fully covered by license fee revenues,
penalties, and fines deposited into the Compliance Fund.
However, since the retail license revenues were predominantly
a one-time revenue gain, the Compliance Fund does not have
sufficient revenues to cover BOE's ongoing costs. In 2008-09,
for example, revenues deposited into the Compliance Fund
totaled $1.1 million, while BOE's costs to administer and
enforce the Licensing Act were approximately $10.2 million.
The difference between revenues and costs are currently offset
with $1.1 million General Fund and other tobacco tax revenues:
$209,000 Breast Cancer Fund; $2.6 million Cigarette and
Tobacco Products Surtax Fund (Proposition 99); and $5.2
million from the California Children and Families First Trust
Fund (Proposition 10).
4)Related Legislation . In 2009, SB 602 (Padilla) contained
similar provisions to this bill. However, that bill was
ultimately amended to deal with food safety issues.
Analysis Prepared by : Julie Salley-Gray / APPR. / (916)
319-2081