BILL ANALYSIS �
SENATE GOVERNANCE & FINANCE COMMITTEE
Senator Lois Wolk, Chair
BILL NO: SB 331 HEARING: 1/11/12
AUTHOR: Padilla FISCAL: Yes
VERSION: As proposed to be amended TAX LEVY: No
CONSULTANT: Lui
RETAIL TOBACCO LICENSES
Prohibits new tobacco retailers from locating within 600
feet of schools. Changes the Board of Equalization's
Cigarette and Tobacco Products Licensing Act application.
Background and Existing Law
I. Synar Amendment
In 1992, Congress passed the Synar Amendment, which aimed
to decrease minors' access to tobacco. The Synar Amendment
requires states to adopt and enforce laws prohibiting any
manufacturer, retailer, or distributor from selling or
distributing tobacco products to minors. If the state's
Youth Purchase Survey-a state compliance check using
underage decoys to purchase cigarettes at random site
inspections-is above 20 percent, the federal government may
reduce each state's alcohol and substance abuse block grant
funding. This federal block grant amounts to nearly $100
million annually for California.
II. STAKE Act
In 1994, the Legislature enacted the Stop Tobacco Access to
Kids Enforcement (STAKE) Act (Hayden, SB 1927, 1994) was
adopted to meet the requirements of the Synar Amendment.
The STAKE Act created a new statewide enforcement program
to take regulatory action against businesses that sold
tobacco to minors. The California Department of Public
Health (DPH) implements certain provisions of the STAKE
Act, such as conducting compliance checks, using teenage
decoys, serving legal notices, administering penalty appeal
hearings, and assessing and collecting penalties. Many
cities and counties have also adopted local tobacco retail
licensing ordinances to further reduce the sales of tobacco
products to minors.
If any person, firm or corporation sells or furnishes
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minors with any tobacco paraphernalia, tobacco, cigarette,
or cigarette papers, an enforcing agency may assess the
following civil penalties:
For the first violation, a $400 to $600 fine.
For the second violation within 5 years, a $900 to
$1,000 fine.
For the third violation within 5 years, a $1,200 to
$1,800 fine.
For the fourth violation within 5 years, a $3,000
to $4,000 fine.
For a fifth or subsequent violation within 5 years,
a $5,000 to $6,000 fine.
If a retailer or person who sells or deals tobacco fails to
conspicuously post a notice that serving minors is illegal,
the enforcing agency may assess a $200 fine for the first
offense, $500 fine for the second. The DPH Food and Drug
Branch also conducts compliance checks and manages a
toll-free number to report illegal tobacco sales to minors.
III. Cigarette and Tobacco Products Licensing Act
To stem the tide of untaxed distributions and illegal sales
of cigarettes and tobacco products, the Cigarette and
Tobacco Products Licensing Act requires the Board of
Equalization (BOE) to license manufacturers, distributors,
wholesalers, importers and retailers of cigarette or
tobacco products who are engaged in business in California
(AB 71, Horton, 2003). A retailer must have and maintain a
license to sell cigarettes or tobacco products. Any
retailer that owns or controls more than one retail
location, where cigarette and tobacco products are sold,
must obtain a separate license for each retail location.
Each retailer is required to submit a one-time license fee
of one hundred dollars ($100) with each application, and
may submit a single application with a license fee of one
hundred dollars ($100) per location. Retailers must
annually renew their tobacco license. A "retail location"
is defined as any building from which cigarettes or tobacco
products are sold at retail or a vending machine.
All persons and firms engaged in the retail sale of
cigarettes and tobacco products must check the
identification of tobacco purchasers. The law prohibits
any person, firm or corporation from selling, giving, or in
any way furnishing cigarettes or tobacco products to any
person who is under 18 years old.
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The application requirements for the Licensing Act are as
follows:
Applicant's name, address, and telephone number.
Affirmation that the applicant has not been
convicted of a felony; the applicant must also affirm
that he or she will to violate any rule pertaining to
the manufacture, sale, or distribution of cigarettes
or tobacco products.
The license or permit number of any license or
permits issued by the Department of Alcoholic Beverage
Control.
The applicant must sign a statement affirming the accuracy
and truthfulness of the application contents. If the
applicant falsifies any information, the applicant is
guilty of a misdemeanor punishable by imprisonment of up to
one year in county jail, and/or a fine of not more than
$1,000.
Proposed Law
I. STAKE Act. Senate Bill 331 prohibits tobacco retailers,
licensed after December 31, 2012, from locating within 600
feet of any public or private elementary or secondary
school. If a retailer is located within 600 feet, the
California Department of Public Health (DPH) will direct
the Board of Equalization to cancel the retailer's license.
Upon request, DPH will provide the Board of Equalization
information concerning any person, firm, or corporation in
violation.
II. Application. SB 331 makes several changes to the
tobacco license application.
On the Board of Equalization's license application,
the applicant must affirm that each retail location is
located 600 feet or more from a public or private
elementary or secondary school.
The BOE is authorized to deny a new license
application for a retail location if the applicant
does not affirm that its location is 600 feet or more
from a public or private elementary or secondary
school.
The BOE may revoke a license issued after January
1, 2013, for an application that is deemed incorrect,
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incomplete, or if the license was issued in error.
The license shall be invalid when revoked, and shall
be considered denied.
III. As proposed to be amended. BOE shall provide DPH the
application information for imposing the administrative
surcharge for any license application or renewal applicant
that fails to affirm its location as more than 600 feet
away from any public or private elementary or secondary
school.
IV. Definitions. SB 331 defines 600-feet radius as the
straight-line distance from the closest edge of a retail
location to the closest edge of a public or private
elementary or secondary school, or the closest edge of the
parking lot of a school. The shorter distance will
prevail.
V. Findings and declarations. SB 331 makes several
findings and declarations to support the bill's purpose.
State Revenue Impact
None available.
Comments
1. Purpose of the bill . Public health studies have found
that higher tobacco retailer density near schools is
associated with youths' increased susceptibility to future
smoking. Despite existing laws that prohibit the sale of
tobacco products to minors and public media efforts to
deglamorize tobacco use, retailers still sell tobacco
products to minors and market tobacco products to younger
audiences. In 2007, the Center for Disease Control and
Prevention reported that 21% of high school students were
tobacco users. Not only does early tobacco use pose
significant health problems for young people, but early
tobacco engagement increases the likelihood of lifelong
tobacco addiction. A Tobacco-Related Disease Research
Program study found that nearly 33% of tobacco sales to
minors take place within 1,000 feet of schools. Reducing
the number of tobacco retailers near schools will decrease
youth access to tobacco and in turn, provide California
with a healthier future.
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2. Clouds of smoke . Despite the bill's righteous cause,
the bill's approach raises several concerns.
First, the bill operates under the assumption that
retailer density to schools is a causal factor to
youth smoking. However, tobacco retailer density may
be correlated with an increased risk of tobacco sales
to minors but isn't the only causal factor. Smoking
perception, family history, and easy access in
non-retail settings also contribute to youth smoking.
The Committee may wish to consider if a more
comprehensive bill that addresses the various factors
influencing youth tobacco use would be more successful
at reducing tobacco sales to youth.
Second, it is unknown how many existing retailers
are within 600 feet of schools. While the bill
provides that existing retailers within 600 feet of a
school would not be affected by this SB 331's
prohibition, a retailer would be subject to the new
penalties if it fails to renew a license on time. By
chasing an unknown, the Committee may wish to require
a study to account for existing tobacco retailer
density in proximity to schools.
Third, the bill fails to mention any implementation
measures. For example, which agency will be
responsible for verifying that the applicant's
statement is true and correct? The Committee may wish
to remedy this noticeable silence.
3. Missing something ? The bill, as proposed to be
amended, authorizes BOE to provide DPH with the application
information necessary for imposing an administrative
surcharge fee for any applicant not affirming that it is
not located within 600 feet of schools. It is unclear
whether the author intends for this fee only to be imposed
on retailers within 600 feet of schools or all retailers.
By allowing any surcharge without a specific fee cap, SB
331 grants DPH a broad authority to impose any fee of any
amount on retailers regardless of their location. The bill
also references a non-existent section and does not talk
about this surcharge fee anywhere else in the bill. The
Committee may wish to consider deleting this surcharge
authority altogether.
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4. Charter cities . The California Constitution lets
charter cities control their municipal affairs. The 120
charter cities must follow statewide laws only for issues
of statewide concern when the Legislature has fully
occupied the field. The courts -- not the Legislature --
interpret the Constitution and decide what's a municipal
affair and what's an issue of statewide concern. Because
SB 331 does not explicitly declare that regulating tobacco
retailers' proximity to schools is an issue of statewide
concern, the bill may not apply to charter cities. If the
Committee wants the bill to control charter cities, then it
should insert a specific declaration that the Legislature
considers regulating tobacco retailers' proximity to
schools to be an issue of statewide concern. Even then,
the court may not agree.
5. Local control . Local voters elect county supervisors
and city council members to make public policy in response
to local needs. Local land use decisions must strike a
delicate balance between protecting schools and ensuring a
stable business environment. However, a statewide
prohibition against new tobacco retailers locating near
schools eliminates local official's discretion. The
Committee may wish to consider whether SB 331 substitutes
an arbitrary, one-size-fits-all standard for local
officials' informed judgments about their communities.
6. You look familiar . SB 331 proposes a similar policy to
SB 847 (Correa, 2011), which sought to prohibit the
location of medical marijuana dispensaries within 600 feet
of residential zoning or residences. Despite SB 331
allowing local standards to stand if they are stricter than
the state's, the bill still sets minimum state
restrictions. Governor Brown vetoed SB 847 stating: "This
bill goes in the opposite direction by preempting local
control and prescribing the precise locations where
dispensaries may not be located. Decisions of this kind
are best made in cities and counties, not the State
Capitol." The Committee may wish to consider if this bill
invites a similar response.
7. Mandamus . SB 331 may create a new crime for retail
locations to be located within 600 feet of a public or
private elementary or secondary school, after January 1,
2013. If it is a new crime, SB 331 also creates a new
state-mandated program. However, the bill does not
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disclaim the state's responsibility for reimbursing local
governments for enforcing these new crimes (California
Constitution Article XIIIB, �6�a]�2]). The Committee may
wish to ask if the bill does in fact create a new crime and
if so, to add a clarifying amendment to disclaim that
state's responsibility.
8. Technical amendments . The author intends to take
technical amendments, which strike out "revoke" and insert
"cancel" throughout the bill.
9. Legislative efforts . The author has presented several
similar topic measures in the past.
SB 330 (Padilla, 2012) requires the California
Department of Public Health to create, and update
quarterly, a Tobacco Query System. The bill also
imposes a $100 fee on retailers located within a 600
foot radius of schools. SB 330 is double-referred to
the Senate Health Committee and will be heard on
January 11, 2012.
SB 601 (Padilla, 2009) would have added provisions
to the Licensing Act, prohibiting the issuance of a
retail license for a location within 1,000 feet of a
school, and limited retail licenses to "traditional
retail locations," like grocery stores, convenience
stores, pharmacies, liquor stores, or tobacco or cigar
stores. SB 601 (Padilla, 2009) was held in the Senate
Appropriations Committee suspense file.
Before being amended, SB 602 (Padilla, 2009) would
have added provisions to the Licensing Act to prohibit
the issuance of a new license to a retailer in an
"area of overconcentration," and made reporting
requirement changes related to sales to minors. When
SB 602 was chaptered, it transformed into a bill about
food safety.
SB 603 (Padilla, 2009) would have imposed an annual
retailer fee, limited the total number of retailer
licenses issued in a county, and provided for the
transfer of a license under specified conditions. SB
603 was referred to the Assembly Governmental
Organization Committee, but was never heard.
10. Process . Should SB 331 pass out of the Senate
Governance and Finance Committee, the bill is
double-referred to the Senate Health Committee on January
11, 2012.
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Support and Opposition (1/5/12)
Support : Latino Coalition for a Health California;
American Lung Association of California.
Opposition : California Grocers Association; California
Independent Oil Marketers Association; California Retailers
Association; California Manufacturers & Technology
Association; California Taxpayers Association.