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ARIZONA STATE SENATE
Fifty-Fifth Legislature, First Regular Session
tobacco; retail; licensing.
Purpose
Establishes licensure for tobacco retail sales (tobacco retail license) under the Department of Liquor Licenses and Control (DLLC) and prescribes enforcement requirements. Prescribes penalties on a retail tobacco vendor that sells to persons under 21 years old and modifies penalties relating to underage tobacco possession and purchase.
Background
In 2019, the Federal Food, Drug and Cosmetic Act was amended to raise the federal minimum age for the sale of tobacco products from 18 years old to 21 years old (legal age) (Further Consolidated Appropriations Act, 2020). Statute deems a person to be guilty of a petty offense if the person: 1) knowingly sells, gives or furnishes a tobacco product, vapor product or any instrument or paraphernalia designed for smoking or ingesting tobacco to a person who is under 18 years old (minor); and 2) is a minor who buys, possesses or knowingly receives a tobacco product, vapor product or any instrument or paraphernalia designed for smoking or ingesting tobacco. A minor who misrepresents their age to induce any person to sell, give or furnish a tobacco product, vapor product or any instrument or paraphernalia designed for smoking or ingesting of tobacco is guilty of a petty offense and must pay a fine up to $500 (A.R.S. § 13-3622).
In 2006, Arizona voters passed the Smoke-Free Arizona Act to establish smoking restrictions. The Act prohibits smoking in all public places and places of employment, with outlined exceptions. A person who smokes where smoking is prohibited is guilty of a petty offense (A.R.S. § 36-601.01).
The
DLLC regulates the production, distribution and sale of alcoholic beverages
through the State Liquor Board (Board) and the Office of the DLLC Director. The
Board: 1) grants and denies liquor license applications; 2) adopts
rules; and 3) hears appeals and holds hearings relating to liquor
regulation. The duties of the Director of the DLLC (Director) include: 1)
adopting rules to establish licensure requirements; 2) responding to
a law enforcement agency investigative reports relating to violations of liquor
regulations; 3) coordinating with law enforcement agencies to enforce
Arizona law against the consumption of spirituous liquor by underage persons;
and
4) establishing an investigation unit. The Director may suspend, revoke or
refuse to renew a liquor license for outlined violations and impose a civil
penalty between $200 and $3,000 (A.R.S. Title 4).
S.B. 1402 directs 10 percent of tobacco licensure fees to the state General Fund. If the collection of licensure fees results in a change in revenues, there may be a fiscal impact to the state General Fund associated with this legislation.
Provisions
Tobacco Licensure
1. Prohibits, beginning January 1, 2023, a retail tobacco vendor from distributing tobacco products in Arizona without a valid tobacco retail license.
2. Requires a retail tobacco vendor to secure and display a DLLC-issued tobacco retail license for each location before engaging or continuing to engage in tobacco product distribution.
3. Prohibits the DLLC from issuing a tobacco license to a vendor within a local licensing authority's jurisdiction until the vendor obtains the required local license and provides a copy to the DLLC.
4. Requires a tobacco vendor, before license issuance or renewal, to sign a form stating the vendor has:
a) read licensing and sale of tobacco products requirements; and
b) provided training to all employees on tobacco product sales relating to identification requirements, illegality of tobacco sales to underage persons and that underage tobacco sales subjects the vendor to penalties.
5. Deems a tobacco retail license to be nontransferable and valid for one year, unless suspended or revoked.
6. Establishes the Tobacco Retail Sales Licensing Fund (Tobacco Fund) administered by the DLLC and consisting of collected tobacco licensing fees.
7. Requires the DLLC to establish initial and renewal tobacco retail license fees and deposit 90 percent of collected fees in the Tobacco Fund and the remaining 10 percent in the state General Fund.
8. Requires Tobacco Fund monies be used to administer and enforce tobacco licensing regulations, subject to legislative appropriation.
9. Adds to the Director's powers:
a) removing tobacco products from the marketplace that may be contaminated, illegal or adulterated;
b) issuing and enforcing cease and desist orders against an entity that sells tobacco products without an appropriate license or permit;
c) accepting and expending private grants for educational programs on the repercussions of the underage use of tobacco products.
10. Allows the DLLC to receive and review tobacco retail license applications electronically.
11. Prohibits a tobacco retail license from being renewed if the vendor has outstanding penalties.
12. Requires a vendor that ceases to be a retailer at the licensed location to notify the DLLC in writing at the effective time of the vendor's discontinuance, sale or transfer.
13. Specifies that state licensure requirements do not affect a local government's ability to require retail licensure for the sale of tobacco products.
Underage Sales Enforcement
14. Conforms the minimum legal age for the sale of tobacco products to the federal minimum age of sale for tobacco products.
15. Requires a vendor or vendor's representative, agent or employee to verify that a tobacco product purchaser who is under 30 years old is at least 21 years old by examining the purchaser's government-issued photo identification.
16. Excludes, from the ID check requirement, a purchaser who is at least 30 years old but specifies that a purchaser appearing 30 years old or older does not constitute a defense to a violation of the underage sales prohibition.
17. Requires DLLC or its designee to conduct:
a) at least two unannounced compliance checks annually by engaging persons between 18 and 21 years old to attempt tobacco product purchase; and
b) unannounced follow-up compliance checks within three months after a violation of tobacco sales regulations.
18. Allows the DLLC to:
a) delegate enforcement and compliance inspections to a county that accepts the delegation;
b) collaborate with and use other agencies' findings to ensure that complaints are forwarded to the DLLC for timely investigation and action.
19. Requires a local licensing authority or law enforcement or local entity that conducts compliance checks to report the results to the DLLC.
20. Deems any compliance check violation to be a violation of the vendor's tobacco license.
21. Adds to the DLLC Director duties:
a) taking steps necessary to liaison with the Department of Public Safety and local law enforcement agencies to enforce laws against the use of tobacco products by underaged persons;
b) enforcing statutory tobacco sales regulations relating to beedies or bidis, vending machines, the unlawful manufacture, sale or distribution of cigarettes and roll-your-own tobacco and prohibitions against tobacco products at schools, delivery sales and unsolicited deliveries.
22. Requires the DLLC investigations unit to include investigating licensees alleged to have sold tobacco products to an underaged person.
Penalties
23. Subjects a business selling tobacco products without a license to a civil penalty of $500 to $1,000 for a first or second violation within 36 months.
24. Requires the DLLC to issue to a business that receives a second violation within 36 months a cease and desist order prohibiting the sale of tobacco products and notifying the owner that the business is ineligible to receive a tobacco license for three years after the date of the second violation.
25. Subjects a vendor to the following penalties if the vendor or the vendor's representative, agent or employee violates underage sales prohibitions:
a) for the first violation, attendance of an education class or, if an education class is not available, a maximum civil penalty of $500;
b) for a second violation within 36 months, a civil penalty of $750 to $1,000 and a prohibition on tobacco product distribution for at least 14 days;
c) for a third violation within 36 months, a civil penalty of $1,000 to $1,500 and a prohibition on tobacco product distribution for at least 30 days; and
d) for a fourth or subsequent violation within 36 months, a civil penalty of $1,500 to $3,000 and a prohibition on tobacco product distribution for at least three years.
26. Subjects, to noncriminal, nonmonetary penalties, including education classes or community service, a person who violates underage tobacco sales prohibitions while acting as a mismanagement agent or employee.
27. Removes the petty offense classification of a person who knowingly sells, gives or furnishes a tobacco product to a minor.
28. Removes the petty offense classification of a minor who buys, possesses or knowingly receives a tobacco product and the $100 fine or community restitution if the offense involves paraphernalia.
29. Reduces, from a petty offense with a maximum fine of $500 to a civil offense with a maximum fine of $100, the penalty for an underage person who misrepresents the person's age by means of identification with intent to induce a person to sell, give or furnish a tobacco product.
Definitions
30. Defines tobacco product for the purposes of licensure requirements, penalties for underage sales and tobacco sale regulations as:
a) a product containing made of or derived from tobacco or nicotine that is intended for human consumption or is likely to be consumed, whether inhaled, absorbed or ingested, including a cigarette, cigar, pipe tobacco, shisha, beedies, bidis, chewing tobacco, snuff or snus;
b) an electronic smoking device and any substance that may be aerosolized or vaporized by the device, whether or not the substance contains nicotine;
c) a component, part or accessory of the listed products, whether or not containing tobacco or nicotine, including filters, rolling papers, blunt or hemp wraps and pipes.
31. Excludes, from the definitions of tobacco product and electronic smoking device, drugs, devices or combination products authorized for sale by the U.S. FDA as defined in the Federal Food, Drug, and Cosmetic Act.
32. Defines electronic smoking device for the purposes of licensure requirements, penalties for underage sales and tobacco sale regulations:
a) as a
device that may be used to deliver any aerosolized or vaporized substance to
the person who inhales from the device, including an e-cigarette, e-cigar,
e-pipe, vape pen or
e-hookah; and
b) to include any component, part or accessory of the device and any substance intended to be aerosolized or vaporized during the use of the device, whether or not the substance contains nicotine.
33. Defines retail tobacco vendor.
Miscellaneous
34. Allows a person to sell cigars or pipe tobacco through a self-service display if the person primarily engages in:
a) selling cigars, pipe tobacco, cigar-related or pipe tobacco-related accessories; or
b) renting on-premises humidors or other storage units.
35. Removes the requirement that a sign be affixed to the front of each tobacco product vending machine that:
a) measures at least 80 inches tall; and
b) states in block letters that it is illegal for a minor to purchase cigarettes or tobacco products, subject to a fine of up to $300.
36. Subjects a person who violates self-service display regulations to the prescribed tobacco vendor penalties.
37. Defines electronic smoking device, retail tobacco vendor and tobacco product.
38. Makes technical and conforming changes.
39. Becomes effective on the general effective date.
Prepared by Senate Research
February 16, 2021
LB/kja