Introduce and Waive the First Reading of an Ordinance of the City Council of the City of Livingston Amending Livingston Municipal Code Title 3, “Business Regulations,” by Adding Chapter 17, Titled “Tobacco Retailer License,” Requiring the Licensure of Tobacco Retailers.

Meeting Date September 03, 2013

Agenda Item #3. Introduce and Waive the First Reading of an Ordinance of the City Council of the City of Livingston Amending Livingston Municipal Code Title 3, “Business Regulations,” by Adding Chapter 17, Titled “Tobacco Retailer License,” Requiring the Licensure of Tobacco Retailers.

STAFF REPORT

AGENDA ITEM: Introduce and Waive the First Reading of an Ordinance of the City Council of the City of Livingston Amending Livingston Municipal Code Title 3, Business Regulations", by Adding Chapter 17, Titled "Tobacco Retailer License," Requiring the Licensure of Tobacco Retailers.

MEETING DATE: September 3, 2013

PREPARED BY: Jose Antonio Ramirez, City Manager

REVIEWED BY: Jose Antonio Ramirez, City Manager

RECOMMENDATION:

Waive the first reading and introduce an Ordinance of the City Council of the City of Livingston Amending Livingston Municipal Code Title 3, Business Regulations", by adding Chapter 17, Titled ‘Tobacco Retailer License," Requiring the Licensure of Tobacco Retailers.

BACKGROUND DISCUSSION:

Representatives from the California Health Collaborative, a local 501(c)3 non-profit organization, met with City Manager Ramirez on November 22, 2011, to discuss the possibility of partnering with Livingston City officials to adopt a tobacco retail licensing (TRL) ordinance. Tobacco use continues to be the number one preventable cause of death in the United States and the majority of tobacco users start before the age of 18. The purpose of the TRL ordinance would be to reduce the sales of tobacco to minors under the age of 18 by increasing the enforcement of State and federal legislation that prohibit such sales. By placing a licensing fee on retailers that sell tobacco, at an amount to be determined by City officials, funds could be available for the Livingston Police Department to fund enforcement activities.

Since the original meeting with City Manager Ramirez, California Health Collaborative staff and representatives from the Merced County Tobacco Control Coalition have made three presentations to the Livingston City Council, held two community forums, conducted compliance checks and provided educational sessions to Livingston tobacco retailers that attempted to sell tobacco. Livingston would be the first and only city in Merced County to adopt a TRL ordinance, but would join a vastly growing number of local and county jurisdictions in California who have already adopted similar policies.

FISCAL IMPACT:

None to City of Livingston.

ATTACHMENTS:

I. Ordinance No.

ORDINANCE NO.

AN ORDINANCE OF THE COUNCIL OF THE CITY OF LIVINGSTON AMENDING LIVINGSTON MUNICIPAL CODE TITLE 3, "BUSINESS REGULATIONS," BY ADDING CHAPTER 17, TITLED "TOBACCO RETAILER LICENSE," REQUIRING THE LICENSURE OF TOBACCO RETAILERS

THE CITY COUNCIL OF THE CITY OF LIVINGSTON ORDAINS AS FOLLOWS:

SECTION 1. AMENDMENT. The Livingston Municipal Code, Title 3, "Business Regulations," is amended to add Chapter 17, "Tobacco Retailer License," to read as follows:

TITLE 3 CHAPTER 17 TOBACCO RETAILER LICENSE

3-17-1 Legislative Findings

3-17-2  Purpose

3-17-3  Definitions

3-17-4   Requirements for Tobacco Retailer’s License

3-17-5   Application Procedure

3-17-6  Issuance of License

3-17-7  Display of License

3-17-8  License Fee

3-17-9  Renewal of license

3-17-10  Licenses Nontransferable

3-17-11  Administrative Violations

3-17-12  Suspension and Administrative Penalties

3-17-13  Compliance Monitoring

3-17-14  Right to Administrative Review and Procedures; Appeals

3-17-1

LEGISLATIVE FINDINGS.

The City Council finds and determines that:

A. State law prohibits the sale or furnishings of cigarettes, Tobacco Products, and Tobacco Paraphernalia to minors, as well as the purchase, receipt, or possession of Tobacco Products by minors (California Penal Code 308).

B. State law requires that Tobacco Retailers check the identification of tobacco purchasers who reasonably appear to be under eighteen (18) years of age (California Business & Professions Code 22956) and provides procedures for using persons under eighteen 18 years of age to conduct onsite compliance checks of Tobacco Retailers (California Business & Professions Code 22952).

C. State law requires that Tobacco Retailers post a conspicuous notice at each point of sale, stating that selling Tobacco Products to anyone under eighteen (18) years of age is illegal (California Business & Professions Code 22952, Penal Code 308).

D. State law prohibits the sale or display of cigarettes through a Self-Service Display and prohibits public access to cigarettes without the assistance of a clerk (California Business & Professions Code 22962).

E. State law prohibits the sale of bidis (hand rolled filter less cigarettes imported primarily from India and Southeast Asian countries) except at those businesses that prohibit the presence of minors (California Penal Code 308.1).

F. State law prohibits the manufacture, distribution, or sale of cigarettes in packages of less than twenty (20) and prohibits the manufacture, distribution, or sale of "roll-your-own" tobacco in packages containing less than six tenths of an ounce of tobacco (California Penal Code 308.3).

G. State law prohibits public school students from smoking or using Tobacco Products while on campus, while attending school-sponsored activities, or while under the supervision or control of school district employees (California Education Code 48901 (a)).

H. Eighty-eight (88) percent of adults who have ever smoked tried their first cigarette by the age of eighteen (18), and the average age at which smokers try their first cigarette is fourteen and half (141/2).

I. The City of Livingston has a substantial interest in promoting compliance with Federal, State, and local laws intended to regulate tobacco sales and use; in discouraging the illegal purchase of Tobacco Products by minors; and in protecting children from being lured into illegal activity through the misconduct of adults.

J. State law authorizes local Tobacco Retailer licensing laws to provide for the suspension or revocation of the local Tobacco Retailer License for any violation of a State tobacco control law (California Business & Professions Code 22971.3).

K. A requirement for a Tobacco Retailer license will not unduly burden legitimate business activities of retail who sell or distribute cigarettes or other Tobacco Products to adults. It will, however, allow the City to regulate the operation of lawful businesses to discourage violations of Federal, State, and local tobacco­ related laws.

3-17-2 PURPOSE.

The purpose of this Chapter is to encourage responsible Tobacco Retailing and to discourage violations of all tobacco-related laws, especially those that prohibit or

discourage the sale or distribution of Tobacco Products to minors, but not to expand or reduce the degree to which the acts regulated by Federal or State law are criminally proscribed or to alter the penalty provided for violations.

3-17-3 DEFINITIONS.

As used in this Chapter:

A. "Arm’s Length Transaction" means a sale in good faith and for valuable consideration that reflects the fair market value in the open market between two informed and willing parties, neither of which is under any compulsion to participate in the transaction. A sale between relatives, related companies or partners, or sale for which a significant purpose is avoiding the effect of the violations of this Chapter is not an Arm’s Length Transaction.

B. "Department" means the Livingston Police Department.

C. "Chief’ means the Chief of the Livingston Police Department or his or her designee.

D. "Person" means any natural person, partnership, cooperative association, domestic or foreign corporation, receiver, trustee, assignee, or any other legal entity.

E. "Tobacco Products" means: (1) any substance containing tobacco leaf, including, but not limited to, cigarettes, cigars, pipe tobacco, snuff, chewing tobacco, dipping tobacco, hookah tobacco, bidis, or any other preparation of tobacco; and

(2) any product or formulation of matter containing biologically active amounts of nicotine that is manufactured, sold, offered for sale, or otherwise distributed with the expectation that the product or matter will be introduced into the human body (e.g. electronic cigarettes), but does not include any product specifically approved by the United States Food and Drug Administration for use in treating nicotine or Tobacco Product dependence.

F. "Tobacco Paraphernalia" means cigarette papers or wrappers, pipe holders of smoking materials of all types, cigarette rolling machines, and any other item designed for the smoking, preparation, storing, or ingestion of Tobacco Products.

G. "Tobacco Retailer" means any person who sells, offers for sale, or does or offers to exchange for any form of consideration, Tobacco Products or who distributes free or low-cost samples of Tobacco Products. This definition applies regardless of the quantity of Tobacco Products sold, offered for sale, exchanged, or offered for exchange. "Tobacco Retailing" means engaging in any of these things. "Tobacco Retailing" does not mean any person who sells, offers for sale, or does or offers to exchange for any form of consideration Tobacco Paraphernalia only.

H. "Newly established business" means a business which was not engaged in Tobacco Retailing within the City of Livingston during the immediately preceding license renewal period.

3-17-4 REQUIREMENTS FOR TOBACCO RETAILER’S LICENSE.

A. It shall be a misdemeanor for any person within the City to act as a Tobacco Retailer without first obtaining and maintaining a valid Tobacco Retailer’s License, pursuant to this Chapter, for each location at which that activity is to occur. No license will be issued to authorize Tobacco Retailing at any place other than a fixed location; peripatetic Tobacco Retailing and tobacco retailing from vehicles are prohibited.

B. Each day that a person offers Tobacco Products for sale or exchange without a valid license shall constitute a separate violation.

C. A Tobacco Retailer without a valid Tobacco Retailer’s License, including a person whose license has been suspended or revoked:

1. Shall not keep any Tobacco Products at the regulated facility. The public display of Tobacco Products in violation of this provision shall constitute Tobacco Retailing without a license under this Section.

2. Shall not display any advertisement relating to Tobacco Products that promotes the sale or distribution of such products from the Tobacco Retailer’s location or that could lead a reasonable consumer to believe that such products can be obtained at that location.

D. This Section shall become operative January 1, 2014.

3-17-5 APPLICATION PROCEDURE.

Application for a Tobacco Retailer’s License shall be submitted to the Department in the name of the person proposing to conduct retail tobacco sales, and shall be signed by each person or an authorized agent thereof. Each person shall be responsible for reviewing the conditions of conducting retail tobacco sales within the City and shall agree to abide by these conditions by signing the application under penalty of perjury.

All applications shall be submitted on a form supplied by the Department and shall contain the following information:

A. The name, mailing address and telephone number of the applicant;

B. The business name, address and telephone number of each location for which a Tobacco Retailer’s License is sought.

C. A single name and mailing address to receive all communications and notices required by or authorized by this Chapter. If such address is not provided, each License shall be understood to consent to the provision of notice at the business address specified in Section 3-17-5 (B).

D. Proof that the location for which a Tobacco Retailer’s License is sought has been issued a valid State Tobacco Retailer’s license by the California Board of Equalization.

E. Such other information as the Department deems necessary for the administration or enforcement of this Chapter.

An application for a Tobacco Retailer’s License must be obtained by a Newly Established Business on or before the last day of the month following the month in which the business started. All information submitted as part of the application process shall be updated with the Department whenever the information changes. A Tobacco Retailer shall provide the Department with any updates within ten (10) business days of a change.

3-17-6 ISSUANCE OF LICENSE.

A. The License shall state on its face:

1. Legal owner;

2. Any fictitious business name used by the owner;

3. Business address;

4. Date license issued;

5. License number.

B. Upon the receipt of an application for a Tobacco Retailer’s License, the Department shall issue the license, subject to Section 3-17-4 of this Chapter and verification by the Department that there is no substantial record of evidence that demonstrates one of the following bases for denial:

1. The information presented in the application is incomplete, inaccurate or false; or

2. The application seeks authorization for Tobacco Retailing by a person or at a location for which a suspension is in effect; or

3. The application seeks authorization for Tobacco Retailing that is unlawful pursuant to this Code or any other applicable law.

4. The application seeks authorization for Tobacco Retailing at a location for which this Chapter prohibits issuance of a License. However, this subsection shall not constitute a basis for denial of an application if the applicant provides the Department with documentation demonstrating by clear and convincing evidence that the applicant has acquired or is acquiring the location or business in an Arm’s Length Transaction .

3-17-7 DISPLAY OF LICENSE.

Each licensee shall prominently display the License at each location where Tobacco Retailing occurs and according to the applicable portions of Sections 3-17-4 and 3-17-6.

This Section shall become operative January 1, 2014.

3-17-8 LICENSE FEE.

A fee shall be charged for a Tobacco Retailer’s License of $100 annually . The fee shall be adjusted , no more frequently than annually, to recover the cost of administrating the License program, including the cost of issuing the License, renewing the license, administering the retailer license program, retailer education , retailer inspection and compliance checks, documentation of violations, and other related actions. All fees are nonrefundable, except where required by law and shall be used exclusively to fund the program . Fees shall not be prorated.

3-17-9 RENEWAL OF LICENSE.

Renewal of the Tobacco Retailer’s License shall be subject to the provisions of Sections 3-17-4 and 3-17-8 of this Chapter.

3-17-10 LICENSES NONTRANSFERABLE .

A Tobacco Retailer’s License is nontransferable. If a new person acquired a business engaged in Tobacco Retailing, that person must apply for a new License on or before the last day of the month following the month in which the Tobacco Retailing business is acquired. The transferee of the License must apply for a License in the transferee’s name before acting as a Tobacco Retailer.

Notwithstanding any other provision of this Chapter, prior violations at a location shall continue to be counted against a location and License ineligibility periods shall continue to apply to a location unless:

1. The location has been fully transferred to a new owner or fully transferred to entirely new owners; and

2. The new owner(s) provide the Department with clear and convincing evidence that the new owner(s) have acquired or are acquiring the location in an Arm’s Length Transaction.

3-17-11 ADMINISTRATIVE VIOLATIONS

A. The violations set forth in this Section are cumulative to, and in addition to, any other violations of State or local law and shall be punished as specified in Section 3-17-12 of this Chapter.

B. In the course of Tobacco Retailing or in the operation of the business or maintenance of the location for which a License is issued, it shall be a violation of this Chapter for a licensee, or any of the licensee agents or employees, to:

1. Violate any local, State, or Federal law applicable to Tobacco Products or Tobacco Retailing;

2. Sell or transfer Tobacco Products to another Person who is under the age of eighteen (18) years;

3. Sell or transfer Tobacco Products to another Person who appears to be under the age of twenty-seven (27) years without first examining the identification of the recipient to confirm the recipient is at least the minimum age under state law to purchase and possess the Tobacco Product.

c. No Person who is younger than the minimum age established by State law for the purchase or possession of Tobacco Products shall engage in Tobacco Retailing.

3-17-1 2 SUSPENSION AND ADMINISTRATIVE PENALTIES.

A. Upon a determination by the Chief, or a designee, that a person has engaged in any conduct that violates the provisions of this Chapter, the Chief or his/her designee may suspend a Tobacco Retailer’s License, impose administrative penalties, or both suspend the license and impose administrative penalties.

B. The Department shall notify the offender that there has been an initial determination of violation under the provisions of this Chapter, and shall specify the violation and the sanction imposed, including the effective date of the suspension, if any. The notice shall further state that the offender may, within fifteen (15) days, submit to the Department any written or documentary evidence to contest the initial determination of violation. After receiving such evidence as may be provided, the Department shall prepare a final written decision and shall serve this decision upon the tobacco retailer. Upon written request, the offender shall have the right to receive copies of any records or files upon which the administrative decision is based. This final determination shall be served within thirty (30) days of the initial determination.

C. When this Chapter licenses the Chief to suspend a license, the following sanction may be imposed:

1. For the first violation in any five (5) year period, the Tobacco Retailer shall receive a letter of reprimand from the Department.

2. For the second violation in any five (5) year period, the Tobacco Retailer’s License shall be suspended for up to thirty (30) days.

3. For a third violation in any five (5) year period, the person’s Tobacco Retailer’s License shall be suspended for up to ninety (90) days.

4. For a fourth or subsequent violation in any five (5) year period, the Tobacco Retailer’s License shall be suspended for up to one hundred eighty (180) days and/or revoked.

D. When this Chapter allows the Chief to impose an administrative penalty, the Chief, or his or her designee, may issue an administrative citation pursuant to Title 1, Chapter 18 of this Code. All notice, appeals, hearing and collection procedures outlines in Title 1, Chapter 18 "Administrative Citations," will be followed. The following penalty may be imposed:

1. For the first violation, a penalty not to exceed one hundred dollars ($100.00);

2. For the second violation within one year from the date of the first violation, a penalty not to exceed two hundred dollars ($200.00);

3. For the third and each subsequent violation within one year from the date of the first violation, a penalty not to exceed five hundred dollars ($500.00).

3-17-13 COMPLIANCE MONITORING.

A. Compliance with this Chapter shall be monitored by the Department. Any peace officer may enforce the provisions of this Chapter.

B. Each Tobacco Retailer may be monitored for compliance.

C. Compliance checks shall determine, at a minimum, if the Tobacco Retailer is conducting business in a matter that complies with tobacco laws regulating youth access to tobacco. When appropriate, the compliance checks shall determine compliance with other laws applicable to Tobacco Retailing.

D. The City shall not enforce any law establishing a minimum age for tobacco purchases or possession against a person who otherwise might be in violation of such law because of the person’s age (hereinafter "Youth Decoy") if the potential violation occurs when the Youth Decoy is participating in a compliance check funded directly or indirectly by any state or local agency, organization, or

Department.

3-17-14 RIGHT TO ADMINISTRATIVE REVIEW AND PROCEDURES; APPEALS

A. The Tobacco Retailer shall have the right to appeal any final decision/determination of the Department to the City Council. To obtain a review of the final determination, the Tobacco Retailer must file with the City clerk within fifteen (15) days of the date of the final determination and, a written request for a hearing. The timely filing of a request for hearing shall hold in abeyance any license suspension until the administrative review is heard and decided.

B. If a review is requested, the City clerk shall provide written notice, within thirty

(30) days of its receipt of the request, to the Tobacco Retailer of the date, time and place of the hearing on the appeal.

C. At the time fixed in the notice, the City Council shall proceed to hear testimony from any interested person regarding the specified violation deemed by the Department to be the basis for the proposed administrative penalty, and any other matter which the City Council may deem pertinent thereto.

D. Upon the conclusion of the hearing, the City Council will make a determination based on the evidence presented at the hearing, and may impose a suspension penalty without regard to the limits in Section 3-17-12.

E. The decision of the City Council shall be final. Introduced: September 3, 2013

Passed and Adopted: September 17, 2013

RODRIGO ESPINOZA, Mayor of the City of Livingston

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