BILL ANALYSIS Ó
SENATE COMMITTEE ON HEALTH
Senator Ed Hernandez, O.D., Chair
BILL NO: SB 331
AUTHOR: Padilla
AMENDED: As proposed to be amended
HEARING DATE: January 11, 2012
CONSULTANT: Orr
SUBJECT : Retail tobacco licenses.
SUMMARY : Creates a new violation of the Stop Tobacco
Access to Kids Enforcement Act (STAKE Act) by prohibiting a
retail location from being located within 600 feet of a
public or private elementary or secondary school, and
requires the California Department of Public Health (CDPH),
to direct the Board of Equalization (BOE) to revoke retail
licenses that are in violation of this provision.
Existing federal law:
1.Requires states to enact and enforce laws that prohibit
the sale of cigarettes and tobacco products to minors
under the age of 18 under the Public Health Service Act,
the relevant portions of which are commonly referred to
as the "Synar Amendment." Provides that the federal
government may reduce each state's alcohol and substance
abuse block grant funding unless the youth purchase
survey conducted by each state, using underage decoys to
purchase cigarettes, is below 20 percent.
2.Enacts the Family Smoking Prevention and Tobacco Control
Act to give the U.S. Food and Drug Administration the
authority to regulate tobacco products and the
advertising and promotion of those products.
Existing state law:
1.Establishes the STAKE Act for the purpose of prohibiting
the furnishing of tobacco products to, and the purchase
of tobacco products by, a person under 18 years of age.
2.Requires CDPH to take primary responsibility for
enforcement of the STAKE Act. Allows CDPH to use underage
decoys to conduct random onsite inspections at retail
sites to investigate illegal sales of tobacco products to
minors.
Continued---
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3.Permits additional state and local agencies, including
the Attorney General, to carry out investigations of
illegal tobacco sales to minors.
4.Requires, under the STAKE Act, all persons engaging in
the retail sale of cigarettes and tobacco products to
check the identification of tobacco purchasers, to
establish the age of the purchaser, if the purchaser
reasonably appears to be under 18 years of age. Requires
a retailer to have and maintain a license to sell
cigarettes or tobacco products.
5.Makes any individual who knowingly or under any
circumstances furnishes, gives, or sells cigarettes or
tobacco products to minors under the age of 18 subject to
a misdemeanor or subject to civil action and fines.
6.Requires BOE to administer the Cigarette and Tobacco
Products Licensing Act of 2003 (Licensing Act), a
statewide cigarette and tobacco products license program
for the sale of cigarettes and tobacco products.
Requires BOE to license manufacturers, distributors,
wholesalers, importers and retailers of cigarette or
tobacco products who are engaged in business in
California.
7.Provides BOE the authority to take enforcement action if
a retailer is convicted of either a Penal Code violation
of selling cigarettes or tobacco products to any person
who is under the age of 18 years, or if a retailer is
convicted of violating the provisions of the STAKE Act.
Limits this authority to those periods when the statewide
underage sales rate in California, as measured in an
annual survey conducted by CDPH, is 13 percent or more.
Provides for a range of penalties, from issuing a warning
letter on the first violation to revoking the license on
the eighth violation within a 24-month period that can be
levied against a licensee during the period when BOE has
the authority to act on licenses for violations of
underage sales laws.
8.Authorizes the Department of Alcohol and Beverage Control
to refuse to issue a retail license to sell alcohol for
premises located within 600 feet of schools, public
playgrounds, and nonprofit youth facilities, including,
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but not limited to, facilities serving Girl Scouts, Boy
Scouts, or Campfire Girls.
This bill:
1.Creates a new violation of the STAKE Act by prohibiting a
retail location from being located within 600 feet of a
public or private elementary or secondary school.
Requires CDPH to direct the BOE to cancel retail licenses
that are in violation of this provision. Requires CDPH to
provide relevant information to BOE regarding the
licensee and the violation in order to enable BOE to
cancel the license. Requires BOE to notify the licensee
about the cancellation of their license.
2.Requires a retailer seeking to obtain a tobacco license
to affirm that their retail location is located 600 feet
or more away from a public or private elementary or
secondary school.
3.Declares legislative intent to set minimum requirements
on the sale of cigarette and tobacco products from retail
locations. Declares the intent that the bill not preempt
any local standards or restrictions that are more
stringent.
FISCAL EFFECT : This bill has not been analyzed by a fiscal
committee.
COMMENTS :
1.Author's statement. According to the author, this bill
will allow BOE to deny new tobacco licenses for retailers
that are located within 600 feet of schools. The author
claims that tobacco use is one of the leading causes of
preventable deaths. According to CDPH, more than 35,000
Californians die each year from smoking-related
illnesses. Men who smoke are 23 times more likely to
develop lung cancer while women who smoke increase their
risk 13 times as compared to nonsmokers.
The author claims there are approximately 37,000 tobacco
retailers in California, with hundreds of them located
near schools. A study conducted by the Tobacco-Related
Disease Research Program found that on average 33 percent
of tobacco sales to minors takes place within 1,000 feet
from schools. This figure jumped up to 56 percent in Los
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Angeles prior to the city taking action. Eligibility for
a retail tobacco license is open to any retailer
interested in the business of selling tobacco. Every
prospective tobacco retailer must submit an application
for a tobacco license with the BOE. While many local
governments have already acted to prohibit the sale of
tobacco near schools, not all local jurisdictions have
been proactive in implementing their own ban on the sale
of tobacco near schools. SB 331 is designed to
supplement, not overrule, local government agencies to
help further protect children from tobacco.
2.Youth smoking prevalence. According to the United States
Department of Health and Human Services, approximately 80
percent of adult smokers began smoking before the age of
18. Youth smoking is associated with greater likelihood
of adult smoking, heavier use of cigarettes, and more
difficulty in quitting.
Smoking prevalence (indicated by whether or not an
individual has "smoked in the last 30 days") among
California youth declined dramatically between 1996 and
2004, according to CDPH. However, California experienced
an increase in smoking prevalence among all grade levels
and demographic groups from 2004 to 2006. Possible
factors that may contribute to increased smoking
prevalence in California youth can include: a decrease in
students' intentions not to smoke, decreasing cigarette
prices, and substantial increases in tobacco industry
marketing.
Despite California's relatively low smoking prevalence,
the federal Centers for Disease Control and Prevention
estimates that smoking caused the deaths of over 37,000
Californians ages 35 years and older. Smokers incur
$17,500 more in lifetime health care costs than
non-smokers. A 2004 University of California study
estimated the annual societal cost of smoking, without
considering the cost of tobacco, is $3,331 per smoker,
including $1,810 in medical costs and $1,521 in lost
productivity costs.
3.Tobacco sales to minors. According to CDPH, the rate of
illegal tobacco sales to minors in California has dropped
to a record low of 8.6 percent in 2009, down from 12.6
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percent in 2008. The CDPH 2009 Youth Tobacco Purchase
Survey showed this rate is a historical low from the 37
percent rate of tobacco sales to minors recorded in 1995,
when the state first started monitoring the illegal sales
to minors. Retail stores commonly associated with the
selling of tobacco products, such as grocery, drug,
tobacco, liquor, or gas stations, sold to minors at an
all-time low of 8.5 percent. Drugstores and pharmacies
had the lowest rate of illegal sales at 2.3 percent.
The decline is attributed to a variety of factors
including the increased price of cigarettes, strong local
tobacco retailers licensing laws, state and local
enforcement, and ongoing public education via media ads
placed on television and on major motion picture DVDs.
Despite the overall drop in illegal sales statewide, the
survey found sales in certain retail outlets remain high.
Non-traditional retail stores, such as doughnut shops,
discount stores, or deli/meat markets, were found on
average to sell tobacco to minors at 13 percent. The
highest rate of illegal sales occurred at doughnut shops
at 21.6 percent and tobacco shops at 21.1 percent.
4.California licensing requirements. AB 71 (Jerome Horton),
Chapter 890, Statutes of 2003, established the Licensing
Act, a statewide program to license manufacturers and
importers of cigarettes, and distributors, wholesalers,
and retailer of cigarettes and tobacco products. AB 71
was intended to provide an additional enforcement tool to
address the unlawful distribution and sales of untaxed
cigarettes and tobacco products.
Under the Licensing Act, the BOE may deny an application
for a tobacco license under four circumstances: if the
retailer has previously had a license revoked or
suspended; if the application is for a license at the
same location as that of a retailer whose license was
revoked or suspended previously; if the applicant has
been convicted of a specified felony; or if the retailer
does not have all the required permits or licenses
required under statute.
Many local governments have also instituted their own
tobacco regulations and licensing laws. For example,
there are 23 municipalities in California that have
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adopted an ordinance to restrict the location of tobacco
retailers within a certain distance from a school,
according to the Center for Tobacco Policy & Organizing.
These programs can enforce their provisions by revoking
or suspending a retailer's license for underage sales.
5.Double referral. This bill is double referred. Should
it pass out of Senate Governance and Finance Committee,
it will be referred to this committee.
6.Related legislation. SB 330 (Padilla) would require CDPH
to develop and maintain a Tobacco license Query System
for the purpose of compiling information on retailers
that violate laws prohibiting tobacco sales to minors. SB
330 is awaiting hearing on January 11, 2012, in the
Senate Government and Finance Committee.
AB 1301 (Hill) would require CDPH to direct BOE to
suspend or revoke a retailer's license for specified
violations of the STAKE Act or tobacco-related
misdemeanor provisions for specified time periods,
depending on the number of previous violations, and
requires BOE to do so as directed by CDPH. Would also
allow CDPH to assess additional civil penalties, as
specified. AB 1301 is awaiting hearing on January 11,
2012, in the Senate Government and Finance Committee.
7.Prior legislation SB 601 (Padilla) of 2009 would have
prohibited BOE from issuing a new cigarette and tobacco
products license for a retail location within 600 feet of
a public or private elementary and secondary school,
unless public convenience or necessity would be served by
the issuance, as specified. Would have restricted the
issuance of a new retail license to "traditional retail
locations." Held in Senate Appropriations.
SB 602 (Padilla) of 2009 would have prohibited BOE from
issuing new retail tobacco licenses in areas of
over-concentration. Would have repealed the restrictions
that limited BOE's enforcement actions against retail
tobacco license holders for violations of underage sales
laws to periods when the percentage of underage sales, as
measured by the statewide youth purchase survey, is 13
percent or more. Would have required enforcement
agencies to notify BOE of retailers' violations of
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underage sales laws. These provisions were subsequently
amended out of the bill.
SB 603 (Padilla) of 2009 would have established a $100
annual fee on each license issued by BOE for the retail
sale of cigarette and tobacco products. Would have
established a statewide standard relative to the
traditional retailers definition and proximity
limitations. SB 603 died in the Assembly Governmental
Organization Committee.
AB 2344 (Beall) of 2008 would have required tobacco
retailers to pay an annual licensing fee of $185 to
offset BOE's funding shortfall for the administration and
enforcement of the California Cigarette and Tobacco
Products Act. Vetoed by the Governor.
8.Technical and clarifying amendments. The proposed
amendments clarify that licenses will be canceled instead
of revoked, require BOE to notify the licensee about the
cancellation of their license, require CDPH to provide
relevant information to BOE, and make other
non-substantive technical changes.
SUPPORT AND OPPOSITION :
Support: None received.
Oppose: None received.
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