BILL ANALYSIS �
AB 1301
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Date of Hearing: May 4, 2011
ASSEMBLY COMMITTEE ON GOVERNMENTAL ORGANIZATION
Isadore Hall, Chair
AB 1301 (Hill) - As Amended: April 25, 2011
SUBJECT : Retail tobacco sales: STAKE Act.
SUMMARY : Impose 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) 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.
4) Deletes the provision conditioning the BOE's authority to
take action against retailers on the results of a youth purchase
survey.
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5) Declares the intent of the Legislature regarding the
enforcing agency reporting violations to BOE within 30 days of
determining that a violation has occurred.
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) The California Cigarette and Tobacco Licensing Act of 2003,
requires a retailer to obtain a license from BOE to engage in
the sale of cigarette and tobacco products in California.
4) The STAKE Act establishes various requirements for retailers
relating to tobacco sales to minors. Specifically:
a) Prevents 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
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inspections, as specified.
g) Permits DPH to enter into an agreement with a local
law enforcement agency for delegation of enforcement of the
STAKE Act.
5) Makes it a misdemeanor (Penal Code Section 308) for a
retailer to knowingly or under circumstances in which it has
knowledge, or should otherwise have grounds for knowledge, sell,
give, or in any way furnish a minor with tobacco products or
paraphernalia.
6) Violations of the STAKE Act or Penal Code Section 308 result
in BOE action, on a set schedule, relating to the licensure of
the retailer when the youth purchase survey finds that 13% or
more of youth are able to purchase cigarettes, and makes the
board's authority inoperative when a youth purchase survey shows
less than 13% of youth were able to purchase cigarettes.
7) Provides that for the first conviction of a violation of the
STAKE Act or Penal Code Section 308, the retailer receives a
warning letter, as specified. For the 2nd conviction of a
violation in 12 months, the retailer is subject to a fine of
$500. For the 3rd conviction of a violation in 12 months, the
retailer is subject to a fine of $1,000. For the 4th to 7th
conviction of a violation, inclusive, in 12 months, the
retailer's license to sell cigarettes and tobacco products is
suspended for 90 days. For the 8th conviction of a violation in
24 months, the retailer's license is revoked.
8) Existing law provides for a 30-day appeal of BOE's decision.
FISCAL EFFECT : Unknown.
COMMENTS :
Purpose the bill : AB 1301 is intended to hold retailers more
accountable for repeated violations of the STAKE Act or Penal
Code Section 308, by requiring the BOE to take further action
against a retailer's license that engage in the sale of
cigarettes or tobacco products in this state. This bill would
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revise the schedule for BOE action in response to the occurrence
of the violation, as specified.
AB 1301 is needed to reduce the availability and accessibility
of tobacco products for minors. Despite existing laws that
prohibit the sale of tobacco products to minors and media
efforts aimed at deglamorizing tobacco use, children are still
sold tobacco products by a variety of retailers and commercials
are marketed increasingly to younger audiences.
According to the author, the penalty provisions, under the
Licensing Act have only been utilized twice because Business and
Professions Code Section 22974.8 (d) contains a "trigger" making
the penalty provisions inoperative if the Department of Public
Health's (DPH) annual youth purchase survey finds that less than
13% of youth were able to purchase tobacco products. In recent
years the youth purchase survey has been around 10%. In
addition, during the periods of operation, BOE did not receive
any conviction information.
The author maintains, however, the DPH survey results can be
deceiving since rates of sales to minors in STAKE Act
inspections have been around 17% or higher. According to data
from the San Mateo County Tobacco Education Coalition, 25
percent of stores in San Mateo County sold tobacco to a minor
decoy between 2005-2010.
According to the United States Centers for Disease Control and
Prevention (CDCP), almost 90 percent of adults who are regular
smokers started at or before age 19. A 2009 CDCP survey found
that more than one out of four high school students were current
tobacco users. Smoking-related diseases remain the leading cause
of preventable death in the United States, claiming the lives of
438,000 Americans annually.
According to the State Department of Public Health's California
Tobacco Control Program survey, 74 percent of youth access
enforcement agencies reported issuing warnings to merchants
selling tobacco products to minors in 2006. The California
Tobacco Control Program survey also found that law enforcement
agencies continued to rank the suspension or revocation of
licenses and civil and criminal penalties for owners and clerks,
as effective strategies to reduce youth access to tobacco.
The author states, the "trigger" provision in the Licensing Act
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prevents the state license penalties from becoming operative for
any length of time. AB 1301 will allow BOE to start using the
Licensing Act so all retailers who sell tobacco products to
minors can be held accountable for their adverse actions while
having to endure a more stringent penalty upon a violation of
the STAKE Act or Section 308 of the Penal Code, as defined.
Background : According to the United States Department of Health
and Human Services (DHS), 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.
According to the DHS, with the passage of Proposition 99 in 1988
and the enactment of subsequent legislation throughout the
1990s, California has mounted the largest and most comprehensive
anti-smoking campaign in the United States. DHS states that
California's campaign sets the standard for the rest of the
nation and the world, setting a goal of changing public
perception of tobacco use and emphasizing local interventions,
regional coalitions, media, research, and evaluation. The
campaign has focused on four key areas: countering pro-tobacco
influences; protecting youth and adults from secondhand
smoke; reducing the availability of tobacco products to youth;
and, providing support for quitting tobacco use. Since the
passage of Proposition 99, adult smoking prevalence dropped by
more than 30 percent and per-capita cigarette consumption
in California fell by more than 50 percent.
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
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:
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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,
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.
Penal Code Section 308 . Penal Code Section 308 prohibits every
person, firm, or corporation which knowingly or under
circumstances in which it has knowledge, or should otherwise
have grounds for knowledge, from selling, giving, or in any way
furnishing to another person who is under the age of 18 years:
Any tobacco, cigarette, or cigarette papers, or blunt wraps, or
any other preparation of tobacco, or any other instrument or
paraphernalia that is designed for the smoking or ingestion of
tobacco, products prepared from tobacco, or any controlled
substance.
Any person failing to comply is subject to criminal action for a
misdemeanor or to a civil action brought by a city attorney, a
county counsel, or a district attorney, punishable by a fine of
two hundred dollars ($200) for the first offense, five hundred
dollars ($500) for the second offense, and one thousand dollars
($1,000) for the third offense.
Section 308 also requires every person, firm, or corporation
which sells, or deals in tobacco or any preparation thereof, to
post conspicuously and keep posted at each point of purchase a
notice that states, in part, selling tobacco products to anyone
under 18 years of age is illegal.
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Cigarette and Tobacco Products Licensing Act of 2003 : The
Licensing Act requires the BOE to take action against a retailer
convicted of a violation of either the STAKE Act or Penal Code
Section 308, according to the following schedule:
a) Upon the first conviction of a violation, the retailer
receives a warning letter from the BOE that delineates the
circumstances under which a retailer's license may by suspended
or revoked and the amount of time the license may be suspended
or revoked. The retailer and its employees are required to
receive training on tobacco control laws DPH upon a first
conviction.
b) Upon the second conviction of a violation within 12
months, the retailer is subject to a fine of five hundred
dollars ($500).
c) Upon the third conviction of a violation within 12
months, the retailer is subject to a fine of one thousand
dollars ($1,000).
d) Upon the fourth to the seventh conviction of a
violation within 12 months, the BOE is required to suspend the
retailer's license to sell cigarette and tobacco products for 90
days.
e) Upon the eighth conviction of a violation within 24
months, the BOE is required to revoke the retailer's license to
sell cigarette and tobacco products. Convictions of violations
by a retailer at one retail location are not accumulated against
other locations of that same retailer.
This provision becomes operative on the date results from the
Youth Tobacco Survey are released if the survey finds that 13
percent or more of youth were able to purchase cigarettes
(trigger language).
Currently, the BOE has approximately 37,000 retailers and 1,000
distributors and wholesalers licensed to engage in the sale of
cigarettes and tobacco products in California.
" Trigger language :" This bill removes the "trigger language"
for the BOE to impose penalties for STAKE Act and Penal Code
Section 308 violations. Existing law provides that the BOE's
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authority to take action against retailers pursuant to Section
22974.8 commences on the date results from the Youth Tobacco
Survey are released if the survey finds that 13 percent or more
of youth were able to purchase cigarettes. Further, the BOE's
authority to take action under this provision will become
inoperative on or after the date of the subsequent release of
the results from the survey showing that less than 13 percent of
youth were able to purchase cigarettes.
In 2009, the results of the Youth Tobacco Survey found that 8.6
percent of youth were able to purchase cigarettes; this was a
decrease from the 2008 results which was 12.6 percent. In 2004
and 2006 when the survey results were over 13 percent, the BOE
had the authority to take action against a retailer, however the
BOE was never notified of a conviction of a violation.
According to DPH staff, final administrative adjudication occurs
when a violation is appealed and processed through an
administrative hearing with an administrative law judge making a
ruling on that violation. However, not all violations of the
STAKE Act are appealed and heard before an administrative law
judge. Such violations include those in which the fines imposed
pursuant to the STAKE Act are simply paid upon receipt of a
demand letter and the violation is not contested, which would
also be considered a violation under Section 22974.8.
According to DPH, final administrative adjudication occurs when
a violation is appealed and processed through an administrative
hearing with an administrative law judge making a ruling on that
violation. However, not all violations of the STAKE Act are
appealed and heard before an administrative law judge. Such
violations include those in which the fines imposed pursuant to
the STAKE Act are simply paid upon receipt of a demand letter
and the violation is not contested, which would also be
considered a violation under Section 22974.8.
Local Ordinances : Many local cities and counties in California
have adopted local tobacco retailer licensing laws which require
a retailer to pay an annual licensing fee and be subject to
suspension or revocation of that license if they are found
selling tobacco to minors. Therefore, California retailers
engaged in the sale of cigarettes or tobacco products and
located in a city or county that has adopted local tobacco
retailer licensing laws have two licenses (state and
city/county).
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Existing local ordinances in some jurisdictions require
cigarette and tobacco product retailers to comply with specific
provisions of the jurisdiction's land use and zoning ordinances,
including provisions that regulate the location of these
retailers.
Arguments in support : Supporters state it has been well
established in numerous studies since the 1980's that active
enforcement of state and local tobacco sales to minors laws
reduces the percentage of retailers who illegally sell tobacco
to minors. It's time to put some teeth into the state licensing
law. A strong state tobacco licensing law makes sense because
keeping retailers from selling tobacco to children is crucial if
we want to prevent future generations from suffering a lifetime
of addiction to one of the world's most deadly products.
Selling tobacco products to minors remains a problem in
California. Every category of retailer - large supermarkets,
mom and pop stores, pharmacies, gas stations and convenience
stores - has a responsibility to not sell cigarettes and other
tobacco products to minors.
Policy consideration : Would larger scale retailers and grocers
be at a disproportionate disadvantage under the proposed new
penalty structure. Larger retailers and grocers conduct
thousands more transactions than small businesses. With more
transactions and more employees, there is a greater opportunity
for the retailer to pay the penalty for a reduced percentage of
violations per transaction. It should also be noted that Penal
Code Section 308 violations that are not prosecuted would not be
considered a violation for purposes of this bill.
Prior legislation : SB 603 (Padilla) 2009-2010 Legislative
Session. Under the Licensing Act, imposes an annual retailer
fee, limits the total number of retailer licenses issued in a
county, and provides for the transfer of a license under
specified conditions. (Never Heard in Assembly Governmental
Organization Committee)
SB 601 (Padilla), 2009-2010 Legislative Session. Would prohibit
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.
Restricts the issuance of a new retail license to "traditional
retail locations." (Held in Senate Appropriations)
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SB 624 (Padilla), Chapter 653, Statutes of 2007. Increased the
civil penalties under the STAKE Act and expanded the role of
agencies that are permitted to carry out investigations of
illegal tobacco sales to minors under the Act from the DPH to
include the Attorney General and other state and local agencies.
AB 2344 (Beall), 2007-2008 Legislative Session. 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)
SB 400 (Kuehl), 2004-2005 Legislative Session. Sought 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), 2004-2005 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 BOE. (Held on the Senate Appropriations Committee Suspense
File)
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 that violate tobacco-related,
anti-contraband laws, and laws prohibiting tobacco-related sales
to minors.
SB 1766 (Ortiz), Chapter 686, Statutes of 2002. Required 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.
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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.
SB 1927 (Hayden), Chapter 1009, Statutes of 1994. Enacted 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.
Related legislation : AB 1030 (Achadjian) of 2011. Subjects any
person who fails to pay a tax liability in violation of the
Cigarette and Tobacco Products Tax Law to suspension of their
distributor's license and to seizure of any assets "related to
distribution of cigarettes or tobacco products." (Assembly
Committee on Revenue and Taxation
SB 331 (Padilla) of 2011. Requires BOE to deny a new tobacco
retailer permit, if the retailer is located within 600 feet of a
public or private elementary or secondary school. This
prohibition would not be applicable for retail locations that
seek to renew or transfer a license for a retail location within
600 feet of any school. In addition, the bill repeals the
existing eight-strike conviction penalty schedule. SB 331
proposes a three-strike penalty schedule for retailers who sell
to minors. (Set to be heard by Senate Governance and Finance
Committee)
REGISTERED SUPPORT / OPPOSITION :
Support
American Heart Association
American Lung Association
Asian American Recovery Services, Inc.
Breathe California
California State Sheriffs' Association
Greg Munks, Sheriff of San Mateo
San Mateo County Tobacco Education Coalition
Youth Leadership Institute
Opposition
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None on file
Analysis Prepared by : Eric Johnson / G. O. / (916) 319-2531