1. Randy Kline, Staff Attorney TALC (Technical Assistance Legal Center) http://talc.phi.org 510.444.8252 rkline@phi.org The STORE Campaign: Local Licensing in California July 13th 2005 Technical Assistance Call

2. Youth Access: Problem Solved  Good news: California has passed a law that reads: “Every person who sells or gives or furnishes in any way to another who is in fact under the age of sixteen years, any tobacco, or preparation of tobacco, is guilty of a misdemeanor ….”

3. Youth Access: Problem Solved? (cont.)  Bad news! That law took effect in 1891—Penal Code 308— but it apparently hasn’t solved the problem  The law clearly makes youth access universally illegal—laws don’t come much simpler—so why are we still having to worry about kids and tobacco?

4. Youth Access: Problem Solved? (cont.)  Why is PC 308 not effective? Little or no enforcement Preempts local regulation  Why isn’t it enforced? Resources needed outweigh the motive to expend them –Jury trial possible (misdemeanor): »Costs court, attorney, law enforcement too much time –Only the clerk is held responsible, so store doesn’t care –Penalty is weak: $200 fine

5. Tobacco Retailer Licensing: The Solution to Ineffective PC 308 Key features motivating early local tobacco retailer licensing campaigns:  Avoids preemption  Holds the store responsible  Increases the financial impact of selling to kids …Progressive thinking!

6. Tobacco Retailer Licensing: The Solution to Ineffective PC 308 (cont.) A first wave of licensing laws were passed but were not enforced  Still require expensive and unfunded law enforcement operations  Still anticipate resource-intensive criminal prosecution of the clerk  Do not clearly anticipate problems associated with fully implementing the licensing program

7. State Solutions?  STAKE Act (Stop Tobacco Access to Kids Enforcement Act) Holds store accountable instead of clerk  Statewide Tobacco Retailer Licensing One time fee of $100  Neither solves the problem of youth access

8. State Licensing Basics: The Revenue Protection Concept  Require all retailers, distributors, and wholesalers to obtain a state license  Require that licensed retailers, distributors, and wholesalers only deal with other licensed retailers, distributors, and wholesalers  $$$ = Goal: reduce counterfeit and grey market products that avoid paying state tobacco taxes

9. State Licensing Basics: Local Licensing Encouraged  California Business & Professions Code: “22971.3. Nothing in this division preempts or supersedes any local tobacco control law other than those related to the collection of state taxes. Local licensing laws may provide for the suspension or revocation of the local license for any violation of a state tobacco control law.”

10. Local Licensing Basics: The Public Health Concept  1 st, ban the sale of all tobacco because it is a highly addictive and dangerous product  2 nd, permit only certain retailers to sell tobacco: retailers who obtain a license and agree to hold themselves to a high standard of conduct  3 rd, Violating any tobacco law is misconduct and results in temporary revocation of a license

11.  Enforce all tobacco control laws with licensing  Provide meaningful penalties for tobacco laws Temporary revocation goes to the heart of the matter  $$$ Fund enforcement with the license fee Fee = cost of program / number of retailers Licensing Basics: Strong Enforcement

12. Licensing Basics: Enforce All Tobacco Laws  Violations of tobacco control laws are separate and independent violations of the licensing law  A licensing penalty is in addition to the normal penalty for violating the underlying law  Licensing penalties serve to compel compliance with laws that local agencies can not or will not enforce directly (e.g., no jurisdiction or too costly)

13. Licensing Basics: Automatically Included Policies  Licensing imports policies of all existing laws: No underage sales No self-service displays of most tobacco products No workplace smoking Federal warning labels No single-cigarette sales Etc.  It is also a place to add effective tobacco policy

14. Licensing Basics: Meaningful Penalties  Hold the retailer responsible, not just the clerk  Ban retailers from selling tobacco for a set period of time after a violation (more violations = longer period)  Count all violations for at least the past five years (Note: it is legal to keep past violations on record forever)  Provide for multiple, non-exclusive penalties: license suspension misdemeanor (or infraction) public nuisance  Clearly designate an enforcement agency … but also provide that multiple agencies can enforce the law

15. Licensing Basics: Fund Enforcement $$$  Annual license fee should be calculated to include administration costs and the full cost of monitoring and enforcing compliance  Fee amount must be calculated using the unique cost structure of each individual community (e.g., cost per hour per officer, etc.) — there are no short cuts! (Sorry!) »But TALC has an EXCEL spreadsheet that can help

16. That Was Then, This Is Now: The 2 nd Wave of Local Licensing  Big change: Licenses are always revoked, never suspended: retailer may reapply for a license after a set ineligibility period (essentially a “suspension” period)  Retailers without a license can not display or advertise tobacco products or paraphernalia Improvements based on the lessons learned from the first wave of licensing include:

17. That Was Then, This Is Now: The 2 nd Wave of Local Licensing (cont.)  Ineligibility periods have been reduced in length compared to the previous suspension periods For example, 10 day “ineligibility period” for a first violation v. 30 day “suspension period” for a first violation  Definition of “Tobacco Product” expanded to include any form of new tobacco or nicotine product including so-called “harm reduction” products  New “Significant Tobacco Retailers” prohibited

18. That Was Then, This Is Now: The 2 nd Wave of Local Licensing (cont.)  All forms of self-service displays are banned  Tobacco sales at restaurants and bars prohibited  Financial penalty applies to renew lapsed license  Prohibition on sham ownership transfers has been strengthened  Must check the ID of anyone looking less than 27  No person may sell tobacco under the age of 18

19.  Smoking prohibited outside a tobacco retailer  License violation to violate sign laws  Minimum level of enforcement is explicitly set out  Partial automatic immunity for youth decoys  Youth decoys don’t have to testify  “No contest” plea results in license revocation if plea is for a tobacco control law violation That Was Then, This Is Now: The 2 nd Wave of Local Licensing (cont.)

20.  Selling without a license results in longer ineligibility than having, but violating, a license  Tobacco and paraphernalia can be seized and destroyed if offered for sale without a license  City attorneys and county counsel have express authority to settle cases Minimum standards for settlement are included That Was Then, This Is Now: The 2 nd Wave of Local Licensing (cont.)

21.  Civil fines are emphasized over criminal prosecution  Civil fines have been increased significantly Big Advance:  Ordinary citizens can enforce the licensing law in small claims court Non-profit agencies can enforce the law (e.g., ALA) Cities and counties can use small claims too! –No attorneys needed, staff can represent city or county –County health department can enforce within a city That Was Then, This Is Now: The 2 nd Wave of Local Licensing (cont.)

22. Licensing: Summary  Basic licensing: * makes selling tobacco a privilege, not a right  Licensing is (1) an improved enforcement tool (2) that can pay for itself  TALC’s revised model licensing ordinance contains many improvements based upon lessons learned from the field TALC can help adopt our revised Model Licensing Ordinance to the needs of YOUR community