BILL ANALYSIS Ó
SENATE COMMITTEE ON
BUSINESS, PROFESSIONS AND ECONOMIC DEVELOPMENT
Senator Jerry Hill, Chair
2015 - 2016 Regular
Bill No: SB 1470 Hearing Date: April 11,
2016
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|Author: |Wieckowski |
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|Version: |February 19, 2016 |
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|Urgency: |No |Fiscal: |No |
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|Consultant|Mark Mendoza |
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Subject: Tobacco
SUMMARY: Revises a definitional requirement of "tobacco store" to
indicate that a retail business primarily sells tobacco products
and tobacco paraphernalia.
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) § 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,
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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: Revises a definitional requirement of "tobacco
store" to indicate that a retail business primarily sells
tobacco products and tobacco paraphernalia.
FISCAL
EFFECT: None. This bill is not keyed fiscal by Legislative
Counsel.
COMMENTS:
1. Purpose. The Author is the sponsor of the bill. According
to the Author, "SB 1470 is a companion bill to SB 1400. With
this in mind, this bill seeks to build on SB 1400 to further
specify where tobacco products can be purchased."
2. 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
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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."
3. License for Retailers. Through AB 71 (Jerome Horton, Chapter
890, Statutes of 2003), the State of California enacted the
Cigarette and Tobacco Products Licensing Act, which
established a statewide licensing program under the Business
and Professions Code (BPC § 22970 et seq.). The Act imposed
licensing requirements on all retailers, wholesalers, and
distributors of cigarettes and tobacco products, and all
manufacturers and importers of cigarettes. These licensing
requirements are in addition to the permits and licenses that
may be required depending on the individual's business
operations. The Act, intended to decrease tax evasion on the
sales of cigarettes and tobacco products in California, also
included provisions for new recordkeeping requirements,
inspection and seizure of any untaxed cigarettes or tobacco
products, and imposed civil and criminal penalties for
violations.
Every retailer who sells or will sell cigarettes or tobacco
products in California is required to obtain a retailer's
license from the BOE. An individual must obtain a license
for each retail location they own or operate. For example,
if a person operates several different stores, which each
sell cigarettes or tobacco products, they must obtain a
separate license for each store location. However, a person
may submit a single application for multiple licenses, and
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include $100 for each location's license (BPC § 22972 (a)).
The license is valid for one year and must be renewed
annually. There is no additional charge to renew a license.
There are severe penalties of up to $5,000, or up to one year
imprisonment in the county jail, or both the fine and
imprisonment if an individual is caught selling cigarettes or
tobacco products without a license (BPC § 22972(a);
22980.1(h); 22981).
4. Tobacco Products Banned from Pharmacies. In 2008, San
Francisco became the first city in the United States to ban
the sale of tobacco products from retail pharmacies. The
Author reports that San Francisco has "since expanded the law
to apply to all stores containing pharmacies, such as Costco.
One hundred six cities have since joined San Francisco in
passing tobacco-free pharmacy laws."
Additionally, CVS has announced that it will ban tobacco
products from all of its stores.
5. The Potential Impacts of Expanding the Definition of "Tobacco
Store". As mentioned in the analysis for SB 1400
(Wieckowski) of 2016, SB 1400 would prohibit retailers from
selling cigarettes and tobacco products in retail locations
by revising the definition of "retail location" to mirror
that of "tobacco store". This bill builds on that measure
and further limits the sale of tobacco paraphernalia. SB
1400 (Wieckowski) and this measure are meant to complement
each other.
6. Related and Prior Legislation. SB 1400 (Wieckowski) of 2016
recasts the definition of "retail location" as a tobacco
store that is a retail business that, among other things,
generates more than 60% of its gross revenues annually from
the sale of tobacco products and tobacco paraphernalia.
( Status: This bill is currently set to be heard in this
committee on April 11, 2016.)
SBX2 - 5 (Leno) of 2015 recasts and broadens the definition
of "tobacco product" in current law to include electronic
cigarettes, as specified; extends current restrictions and
prohibitions against the use of tobacco products to
electronic cigarettes; extends current licensing requirements
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for manufacturers, importers, distributors, wholesalers, and
retailers of tobacco products to electronic cigarettes; and
requires electronic cigarette cartridges to be
child-resistant. ( Status: This bill is currently in
engrossing and enrolling, pending the Governor's signature.)
SB X2 - 7 (Hernandez) of 2015 increases the minimum legal age
to purchase or consume tobacco from 18 to 21 and makes
additional conforming changes to restrictions and enforcement
mechanisms in current law. ( Status: This bill is currently
in engrossing and enrolling, pending the Governor's
signature.)
SB X2 - 10 (Beall) of 2015 revised the Cigarette and Tobacco
Products Licensing Act of 2003 to change the retailer license
fee from a $100 one-time fee to a $265 annual fee, and
increased the distributor and wholesaler license fee from
$1,000 to $1,200. ( Status: This bill was held at the
Assembly desk.)
SB 24 (Hill) of 2015 would have classified electronic
cigarettes separately from tobacco products, added electronic
cigarettes to the Stop Tobacco Access to Kids Enforcement
Act, and smoking location prohibitions, and mandated
childproof packaging for e-liquid used in electronic
cigarettes. ( Status: This bill was ultimately amended to
deal with the California Public Employees' Pension Reform Act
of 2013.)
ABX2 - 6 (Cooper) of 2015 defined the term smoking for
purposes of the Stop Tobacco Access to Kids Enforcement Act,
expanded the definition of a tobacco product to include
electronic cigarettes (e-cigarettes), and extended current
restrictions and prohibitions against the use of tobacco
products to electronic cigarettes. The bill further extended
current licensing requirements for manufacturers, importers,
distributors, wholesalers, and retailers of tobacco products
to electronic cigarettes. ( Status: This bill was never
heard on the Assembly Floor.)
AB 1500 (Dickinson) of 2014 would have prohibited a delivery
seller, as defined, from selling or delivering an electronic
cigarette to a person under 18 years of age . ( Status AB
1500 failed passage in the Assembly Appropriations
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Committee.)
SB 568 (Steinberg, Chapter 336, Statues of 2013) prohibits an
operator of an Internet Web site, online service, online
application, or mobile application, as specified, from
marketing or advertising electronic cigarettes to a minor.
SB 648 (Corbett) of 2013 would have restricted electronic
cigarettes from being sold in vending machines. ( Status: SB
648 failed passage in the Assembly Appropriations Committee.)
SB 882 (Corbett, Chapter 312, Statutes of 2010) made it
unlawful, to the extent not preempted by federal law, for a
person to sell or otherwise furnish an electronic cigarette
to a person less than 18 years of age.
SJR 8 (Corbett) of 2009 would have requested that the FDA
prohibit sale of electronic cigarettes until they are deemed
safe. ( Status: SJR8 failed passage in the Assembly.)
SUPPORT AND OPPOSITION:
Support:
None on file as of April 4, 2016.
Opposition:
None on file as of April 4, 2016.
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