City of Stockton
Legislation Text
File #: 23-0089, Version: 1
DISCUSSION REGARDING AN ORDINANCE AMENDING TITLE 5, CHAPTER 5.16 OF THE
STOCKTON MUNICIPAL CODE TO IMPOSE LICENSING AND OPERATING RESTRICTIONS
ON TOBACCO RETAILERS
RECOMMENDATION
Staff recommends that the Legislation and Environmental Committee provide feedback and direction concerning an ordinance imposing licensing and operating restrictions on certain tobacco retailers.
Summary
This report will provide the backdrop for a discussion on new licensing and operating restrictions for tobacco retailers. Following previous input from this Committee, staff presented a proposed ordinance to the City Council at its November 15, 2022, meeting. There, the item was pulled from the agenda. Staff now seeks input and direction concerning the proposed ordinance.
DISCUSSION
Background
On July 20, 2022, the Committee directed the City Attorney’s Office to draft a proposed ordinance requiring tobacco retailers to obtain a license prior to conducting business within the City. The Committee expressed concern that the City cannot currently track the number or location of tobacco retailers in the City. The Committee also expressed a desire to enact certain business-specific restrictions and requirements for tobacco retailers to conduct business within the City.
Stockton Municipal Code (SMC) Title 5 regulates requirements for licenses and permits to conduct business within City limits. Currently, Title 5 does not include a requirement for tobacco retailers to obtain a business-specific license in order to operate within the City. Instead, tobacco retailers are only required to obtain a standard retailer business license.
In accordance with Committee direction, staff proposed an amendment to Title 5, Chapter 5.16, section 5.16.010, and adding Chapter 5.102 to the SMC requiring tobacco retailers to obtain a special license from the City.
According to the California Department of Tax and Fee Administration, there are approximately 272 State-licensed tobacco retailers within the City. The State of California defines a tobacco retailer as a “person who engages in this state in the sale of cigarettes or tobacco products directly to the public from a retail location. Retailer includes a person who operates vending machines from which cigarettes or tobacco products are sold in this state.” (Business and Professions Code 22971(q).) City of Stockton Printed on 2/9/2023Page 1 of 5
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File #: 23-0089, Version: 1
Pursuant to the State’s definition of tobacco retailer, the 272 licensed businesses include those which sell tobacco products in any volume, including gas stations and grocery stores, in addition to dedicated tobacco retailers which are commonly known as “smoke shops.” The proposed SMC amendment was presented to Council at its November 15, 2022, meeting, though the item was pulled from the agenda and not discussed.
Present Situation
Defining Tobacco Retailer
The Committee requested that the proposed ordinance define tobacco retailer in a manner that would prevent businesses from changing their use to avoid the licensing requirement. As discussed above, the State defines a tobacco retailer broadly to include all businesses which sell tobacco products, regardless of the volume of tobacco sales. To ensure the ordinance addresses “smoke shops” specifically and to address the Committee’s request, staff chose to define “tobacco retailer” as any person or entity whose principal business is selling tobacco products, tobacco paraphernalia, or both, as
evidenced by 50% or more of floor area and display area being devoted to the sale or exchange of tobacco products, tobacco paraphernalia, or both.
As a result, the ordinance as currently drafted would not impose any new licensing restrictions on a retailer who does not meet the 50% threshold discussed above, even if that retailer does engage in the sale of tobacco products.
Distance Restrictions
To address the Committee’s concerns regarding the location of tobacco retailers, the proposed ordinance includes distance restrictions that are consistent with cannabis distance restrictions in both sections 5.102.100(F-H) addressing grounds for denial of tobacco retail license and sections
5.102.130(F-H) addressing operating regulations and conditions. Both sections restrict tobacco retail licenses from being issued to a business located within 600 feet of a school, public park, public playground, public recreational area, or youth facility.
Both sections create exemptions for tobacco retailers operating lawfully on the day before the effective date of the ordinance. There is also an exemption for lawfully operating tobacco retailers that would otherwise become ineligible due to the creation or relocation of a school, park, playground, recreational area, or youth facility. However, these exemptions will cease to apply if the tobacco retailer fails to timely renew the tobacco retail license or if the tobacco retail license is revoked. In those instances, the existing tobacco retailers would have to re-apply for a new tobacco retail license, at which point they would not be eligible to receive a license if the location was in violation of the distance restrictions.
Background Checks for Owners, Officers, Co-partners, and Stockholders Similar to regulation of cannabis businesses, a tobacco retailer license application would ask that a business applicant’s owners, officers, co-partners, and stockholders all provide information to the City of Stockton Printed on 2/9/2023Page 2 of 5
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ATTACHMENT A
File #: 23-0089, Version: 1
City, including disclosures of arrests and criminal convictions, employment histories, fingerprints, photographs, and other information sufficient for the City to perform a check on the identity, character, and background of the individual(s). At section 5.102.060, the Chief of Police reserves the right to deny a permit where any of the individuals providing information are found to have been convicted of a felony, or for a conviction of various types of misdemeanors, including crimes of violence, moral turpitude, and tax evasion.
Window Obstruction
The Committee expressed concerns that when tobacco retailers block windows or doors to the extent that peace officers cannot see into the business, it creates a safety hazard for the employees of the store and obstructs peace officers from enforcing laws related to underage customers. Considering these concerns, the proposed ordinance includes restrictions on window obstruction in section
5.102.130(I). This section states that no more than twenty (20) percent of windows or clear doors at the premises where tobacco retailing occurs shall bear advertising or other signage of any sort, and all signage shall be placed and maintained in a manner that ensures that law enforcement personnel have a clear and unobstructed view of the interior of the premises, including the area in which the cash registers are maintained, from the exterior public sidewalk or entrance. This language mirrors that of SMC section 16.80.040(D)(5)(b)(xv) for off-sale alcoholic beverage establishments.
Blight/Loitering Prevention
The Committee expressed concern that some tobacco retailers have become hotspots for criminal activity. Specifically, the Committee requested that the proposed ordinance address blight and loitering issues at tobacco retail establishments. The proposed ordinance addresses these issues in several sections. At the application stage, section 5.102.050(B)(1) allows the City to consider whether the issuance of a tobacco retail license and subsequent operation will be detrimental to the health, safety, and welfare of the Citizens of the City of Stockton. Similarly, section 5.102.090(E) allows the City to deny an application for a tobacco retail license where there is evidence of prior unlawful or nuisance-creating operation in this or another jurisdiction.
Furthermore, section 5.102.110(A)(1)(b) allows the City to immediately suspend a tobacco retail license where, based on ascertainable facts, the operation of the tobacco retailer substantially aggravates the crime problems in the City, makes law enforcement unduly difficult, or is detrimental to the public health, safety, or welfare of the City. This language mirrors that of SMC section
5.100.120 for the suspension and revocation of cannabis operator permits.
Finally, sections 5.102.130(K)(3-7) create affirmative duties for tobacco retailers related to the prevention of blight and loitering. Tobacco retailers are required to post “No Loitering” signs and ask individuals loitering for more than 15 minutes to leave the area and to contact law enforcement if such persons refuse to leave. Tobacco retailers are also required to prevent any condition constituting a nuisance on the premises, remove all graffiti or signs of vandalism within 48 hours, maintain signage and general appearance of the premises in a manner that is not attractive to minors, and maintain clean and orderly premises to ensure public safety. Violation of any of these provisions may subject the tobacco retailer to criminal charges, civil litigation, administrative penalties, and/or suspension or revocation of the tobacco retail license.
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ATTACHMENT A
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Compliance With Local, State, and Federal Law
The Committee requested that the proposed ordinance require tobacco retailers to comply with all local, state, and federal laws. This concern is addressed at several points in the ordinance, such as section 5.102.040(D) which requires applicants to provide permits or licenses from any state or county agency where such permits are required to lawfully engage in tobacco retailing.
Flavored Tobacco Products
After the Committee’s previous discussion of the ordinance, the voters of California approved Proposition 31 at the November 8, 2022, election. With its passage, California Senate Bill 793 (2019- 2020) (“SB 793”) went into effect, which imposes a state ban on flavored tobacco products.
SB 793 created three exemption categories from the flavored tobacco ban:
- Premium Cigars, which are defined as being handmade; have a wrapper made entirely from whole tobacco leaf; cannot have a filter, tip, or nontobacco mouthpiece; is capped by hand; and has a wholesale price of at least $12.00.
- Loose leaf tobacco
- Shisha tobacco products (aka hookah tobacco) which are intended to be smoked in a hookah, but only if the retailer does not permit persons under age 21 into the premises at any time.
SB 793 allows a local jurisdiction to impose flavored tobacco restrictions that are more severe than SB 793 itself, so the City may strike some, or all, of the SB 793 flavored tobacco exemptions. In the version of the ordinance proposed here, the SB 793 exemptions are not further limited or stricken.
FINANCIAL SUMMARY
If the ordinance is approved by the City Council, staff would recommend adoption of associated fees to offset the cost of administering licensing. The new fees would include:
· $102.00 Annual Tobacco Retail License Fee for new license applicants and renewals, one fee per application to cover processing costs of the application. · $234.00 Annual Investigative Fee for new license applicants and renewals, charged for each owner, officer, co-partner, or stockholder that needs to be investigated for compliance.
· $147.00 Verification of Distance Requirements, a one-time fee for new tobacco retailers, as applicable, to verify a business location is allowable under ordinance
5.102.130.
· $102.00 Appeal Fee for denial of permit, pursuant to Ordinance Section 5.102.120.
Additionally, existing City fees for ID cards and fingerprinting (Livescan, state, and federal) would also apply to the ordinance and be charged for each owner, officer, co-partner, or stockholder.
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ATTACHMENT A
File #: 23-0089, Version: 1
There are limitations in the ordinance discussed herein as it does not create additional staff positions or allocate additional funding to expand enforcement efforts. The additional workload from complaint-driven cases may lead to longer response times.
Attachment A - Proposed Ordinance - Redline
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ATTACHMENT A