BILL ANALYSIS                                                                                                                                                                                                    Ó






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          |SENATE RULES COMMITTEE            |                       SB 1400|
          |Office of Senate Floor Analyses   |                              |
          |(916) 651-1520    Fax: (916)      |                              |
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                                   THIRD READING 


          Bill No:  SB 1400
          Author:   Wieckowski (D) 
          Introduced:5/31/16  
          Vote:     21 

           SENATE BUS., PROF. & ECON. DEV. COMMITTEE:  6-1, 4/11/16
           AYES:  Hill, Block, Hernandez, Jackson, Mendoza, Wieckowski
           NOES:  Berryhill
           NO VOTE RECORDED:  Bates, Galgiani

           SENATE APPROPRIATIONS COMMITTEE:  5-2, 5/27/16
           AYES: Lara, Beall, Hill, McGuire, Mendoza
           NOES: Bates, Nielsen
           
           SUBJECT:   Retail tobacco licenses


          SOURCE:    Author


          DIGEST:  This bill revises the definition of retail location  
          under the Cigarette and Tobacco Products Licensing Act to mirror  
          the definition of "tobacco store" under the Stop Tobacco Access  
          to Kids Enforcement Act starting in January 1, 2019.


          ANALYSIS:  
          
          Existing law:
          
          1)Defines a "tobacco store", under the Stop Tobacco Access to  
            Kids Enforcement Act, as a retail business that meets the  
            following requirements:  (Business and Professions Code (BPC)  








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            § 22962(4)(A))

             a)   Primarily sells tobacco products.

             b)   Generates more than 60 percent of its gross revenues  
               annually from the sale of tobacco products and tobacco  
               paraphernalia.

             c)   Does not permit any person under 18 years of age to be  
               present or enter the premises at any time, unless  
               accompanied by the person's parent or legal guardian, as  
               defined in Family Code § 6903.

             d)   Does not sell alcoholic beverages or food for  
               consumption on the premises. 

          2)Establishes the Cigarette and Tobacco Products Licensing Act,  
            which outlines the licensing requirements on all retailers,  
            wholesalers, and distributors of cigarettes and tobacco  
            products, and all manufacturers and importers of cigarettes.   
            (BPC § 22970 et seq.)

          3)Requires the State Board of Equalization (BOE), under the  
            Cigarette and Tobacco Products Licensing Act, to administer a  
            statewide program to license cigarette and tobacco products  
            manufacturers, importers, distributors, wholesalers, and  
            retailers.  (BPC § 22970.2)

          4)Defines "retail location" as both any building from which  
            cigarettes or tobacco products are sold at retail and a  
            vending machine.  (BPC § 22971(q))

          5)Requires a retailer, for purposes of collecting a tobacco tax,  
            to obtain a separate license for each retail location that  
            sells cigarettes and tobacco products and pay a one-time fee  
            of $100.  (BPC § 22973(7)(d))

          6)Prohibits selling tobacco products without a valid license and  
            makes violations punishable as a misdemeanor.  (BPC § 22980.2;  
            22981)


          This bill recasts the definition of "retail location" as a  
          tobacco store that is a retail business that, among other  







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          things, generates more than 60% of its gross revenues annually  
          from the sale of tobacco products and tobacco paraphernalia  
          beginning in January 1, 2019.  


          Background


          While California boasts the second-lowest smoking rate in the  
          nation, tobacco-related diseases still claim the lives of 40,000  
          Californians every year.  The state has worked successfully to  
          discourage people from smoking; however, tobacco products are  
          easily available in a gas station or grocery store.  Unlike  
          tobacco shops, there are no age restrictions on entering a gas  
          station or grocery store.  Consequently, tobacco products sold  
          in these stores are visible and easily available to minors to  
          purchase.  Tobacco advertising is also commonplace at many  
          retail locations. 


          A 2004 Stanford University study found that cigarettes are  
          marketed more heavily in stores where adolescents shop -  
          particularly the cigarette brands most popular with adolescent  
          smokers.  The report underscores that, "Compared to other stores  
          in the same community, stores popular among adolescents  
          displayed more than three times as many cigarette marketing  
          materials outside, and contained almost three times more  
          marketing materials and twice as much shelf space for Marlboro,  
          Camel, and Newport.  These three brands account for more than  
          80% of the cigarettes bought by US adolescents."


          FISCAL EFFECT:   Appropriation:    No          Fiscal  
          Com.:YesLocal:   No


          The Senate Committee on Appropriations analysis dated May 27,  
          2016, reports one time increases to the tobacco retailer  
          licensing fees, reduced total excise tax and sales tax revenues  
          on tobacco products, and other unknown but signification health  
          care cost savings to public payers. 










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          SUPPORT:   (Verified5/31/16)


          American Academy of Pediatrics
          American Lung Association
          Common Sense Kids Action
          County Health Executives Association of California
          First5 California
          Regional Asthma Management & Prevention
          Santa Clara County Board of Supervisors
          Tiburcio Vasquez Health Center


          OPPOSITION:   (Verified5/31/16)


          California Black Chamber of Commerce
          California Distributors Association
          California Grocers Association
          California Retailers Association
          California Manufacturers & Technology Association


          ARGUMENTS IN SUPPORT:     The American Lung Association in  
          California asserts that, "By limiting the sale of tobacco  
          products to tobacco only stores, this bill limits the ability of  
          the tobacco industry to market tobacco to our kids.  Studies  
          have shown that frequent exposure to tobacco retail displays has  
          been associated with increased smoking initiation among youth  
          and can create a negative impact on tobacco quit attempts."


          ARGUMENTS IN OPPOSITION:  The California Retailers Association  
          underscores that "While tobacco is a legal product in  
          California, our members would like to continue to responsibly  
          offer it for sale to age appropriate consumers.  In fact, our  
          members have been licensed to sell tobacco products for many  
          years and have done so responsibly."

          Prepared by:Mark Mendoza / B., P. & E.D. / (916) 651-4104
          5/31/16 20:45:46









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