BILL ANALYSIS
SB 400
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Date of Hearing: July 8, 2009
ASSEMBLY COMMITTEE ON GOVERNMENTAL ORGANIZATION
Joe Coto, Chair
SB 400 (Corbett) - As Amended: June 23, 2009
SENATE VOTE : Vote not relevant
SUBJECT : Tobacco
SUMMARY : This bill would update both the Stop Tobacco Access
to Kids Enforcement (STAKE) Act and the California Cigarette and
Tobacco Products Licensing Act of 2003 to define electronic
cigarettes under state law and to halt the sale of electronic
cigarettes to minors. Specifically, this bill :
1) Amends existing law to include electronic cigarettes in
the definition of "tobacco product" as a "tobacco
substitute" [Business and Professions Code Section 22950.5
(c)].
2) Defines "tobacco substitute" as a battery-powered device
that can provide inhaled doses of nicotine by delivering a
vaporized solution [Business and Professions Code Sections
22950.5 (d) and 22971 (m)].
3) Requires that the suppliers and sellers of electronic
cigarettes be in full compliance of established state law
relevant to the distribution of tobacco products to minors
[Business and Professions Code Sections 22962 and 22971.
4) Makes technical and conforming changes.
EXISTING 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.
2) Makes it a misdemeanor, subject to civil action and
fines, any individual who knowingly or under circumstances
furnishes, gives, or sells cigarettes or tobacco products
to minors under the age of 18.
3) Provides that any individual desiring to engage in the
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sale of cigarettes or tobacco products as a distributor
shall file with the 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.
4) 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.
5) Establishes, under the California Cigarette and Tobacco
Products Licensing Act of 2003 (Act), a statewide
licensing program for tobacco manufacturers, importers,
wholesalers, distributors and retailers administered by the
BOE for monitoring and collection of excise taxes, and it
imposes additional criminal and civil penalties on
violators of tobacco-related tax laws Also, this law
requires-
a. A retailer to obtain a license from the BOE to
engage in the sale of cigarette and tobacco products
in this state.
b. A retailer to obtain a separate license for
each retail location.
c. Retail licensees to pay a one-time license fee
of $100, no renewal fee, and a reinstatement fee of
$100 if the license is renewed after the lapse.
d. Authorizes the BOE to suspend or revoke the
license of any retailer of tobacco products that is in
violation of the Act.
e. Requires all moneys collected pursuant to the
Act be deposited into the Cigarette and Tobacco
Products Compliance Fund, which is available for
appropriation by the Legislature solely for the
purpose of implementing, enforcing, and administering
the Act.
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6) 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.
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.
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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 : According to the author, a 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 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.
The most recent innovation in marketing tobacco products to the
public is electronic cigarettes. Electronic cigarettes are 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. Because the
producers, predominantly foreign-based companies, have not
sought approval from the federal Food and Drug Administration
According to the author, electronic cigarettes are unregulated
by state and federal law. 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 Food and Drug Administration, 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 electronic cigarettes as a tobacco
product and, make illegal, the sale of these devices to minors.
Background . In 1992 Congress passed Section 1926 of Title XIX
of the federal Public Health Service Act, commonly called the
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Synar Amendment. The Synar Amendment requires states to pass
and enforce laws that prohibit the sale of tobacco to
individuals under 18 years of age. It also requires that
federal alcohol and substance abuse block grant funding be
applied to enforcing state law in a a manner that can reasonably
be expected to reduce the illegal sales rate of tobacco products
to minors. Up to 40% of the block grant funding can be withheld
from states for not complying with the Synar Amendment.
In May 1994, the Department of Health Services, Tobacco Control
Section (DHS/TCS) and tobacco control advocates from 23 counties
throughout the state undertook an unprecedented massive effort
to document how easily available tobacco products were to
minors. Over 400 youth, 13-17 years of age, surveyed more than
1,800 retail stores. The results of the 1994 Youth Purchase
Survey indicated that the illegal sales rate was 52.1%.
Synar Amendment and the STAKE Act . In 1992, Congress passed the
Synar Amendment, which requires states to pass and enforce laws
that prohibit the sale of tobacco to minors. It also requires
that federal alcohol and substance abuse block grant funding be
applied to enforcing state law in a manner that can reasonably
be expected to reduce the illegal sales rate of tobacco products
to minors. Up to 40 percent of the block grant funding can be
withheld from states for not complying with the Synar Amendment.
SB 1927 (Hayden, Chapter 1009, Statutes of 1994) enacted 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. Authority for enforcement and
responsibility for implementation of the Act was delegated to
the then-State Department of Health Services' Food and Drug
Branch, which is required to:
1) Implement the program to reduce the illegal sale of
tobacco products to minors and to conduct sting operations
using 15 and 16 year old minors;
2) Operate a toll-free number for the public to report
illegal tobacco sales to minors;
3) Assure that tobacco retailers post signs, which include
the toll-free number, to report violations;
4) Assure that clerks check the identification of
youthful-appearing persons prior to a sale;
5) Assess civil penalties ranging from $200 to $6,000
against store owners for violations; and,
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6) Comply with the Synar Amendment and prepare an annual
report for the federal government, state Legislature, and
the Governor regarding enforcement activities and their
effectiveness.
Implementation of the STAKE Act . Onsite inspections of
retailers under the STAKE Act have been occurring since late
1995. Between that time and 2004, almost 15,000 inspections
were conducted statewide. Over 4,000 inspections (29 percent)
identified the illegal sales of tobacco to minors. This figure
does not represent the entire underage sales rate, because the
inspections do not constitute a random sample since they include
stores where illegal sales were suspected. There were close to
4,000 cases in which fines were paid and over $1 million
collected. Between 1995 and 2004, the toll-free public
complaint line generated over 32,850 calls.
The most recent statewide data compiled by the DHS through the
Youth Tobacco Purchase Survey suggests that the illegal sales
rate to minors (14 percent in 2004) had not changed
significantly from the 2003 rate (Call DPH on Monday morning to
see if stats have changed.
In Support . California Medical Association supports this bill
because they say it "keeps the addictive and harmful drug
nicotine away from minors."
Related legislation . SJR 8 (Corbett, 2009 Legislative Session)
requests that the federal Food and Drug Administration prohibit
all sales of electronic cigarettes until they have been found to
be safe. On the Senate Floor.
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 who violate tobacco-related,
anti-contraband laws, and laws prohibiting tobacco-related sales
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to minors.
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.
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
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 :
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Support
California Medical Association
Opposition
None on file
Analysis Prepared by : Rod Brewer / G. O. / (916) 319-2531