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Staff Report PREPARED BY: ROBERT SCHULTZ Town Attorney Reviewed by: Town Manager and Finance Director 110 E. Main Street Los Gatos, CA 95030 ● 408-354-6832 www.losgatosca.gov TOWN OF LOS GATOS COUNCIL AGENDA REPORT MEETING DATE: 05/02/2017 ITEM NO: 11 DATE: APRIL 24, 2017 TO: MAYOR AND TOWN COUNCIL FROM: ROBERT SCHULTZ, TOWN ATTORNEY SUBJECT: AN ORDINANCE OF THE TOWN OF LOS GATOS REQUIRING THE LICENSURE OF TOBACCO RETAILERS AND ADDING SECTION 18.60.020 TO THE TOWN CODE OF LOS GATOS ENTITLED PERMITS FOR RETAILERS OF TOBACCO PRODUCTS AND/OR ELECTRONIC SMOKING DEVICES RECOMMENDATION: Staff recommends that Town Council accept public comment and then move for introduction and first reading of an Ordinance, by title only, adding Section 18.60.020 to the Town Code to require permits for retailers of tobacco products. BACKGROUND: The Town Council recognizes the dangers of smoking and secondary smoke, and in 2016 adopted amendments to the Town’s Smoking Regulations to prohibit smoking in the Town's public spaces, including outdoor dining areas, entryways, public events, recreation areas, service areas, and multi-family residential units. During the discussion, the Town Council directed staff to also develop an ordinance to address regulating the sales of tobacco by businesses in Los Gatos. This report provides a draft ordinance for Town Council consideration. PAGE 2 OF 4 SUBJECT: AN ORDINANCE OF THE TOWN OF LOS GATOS REQUIRING THE LICENSURE OF TOBACCO RETAILERS AND ADDING SECTION 18.60.020 TO THE TOWN CODE OF LOS GATOS ENTITLED PERMITS FOR RETAILERS OF TOBACCO PRODUCTS AND/OR ELECTRONIC SMOKING DEVICES DATE : APRIL 24, 2017 S:\COUNCIL REPORTS\2017\05-02-17\Smoking Ordinance\Staff Report FINAL.docx 4/27/2017 1:13 PM SLL DISCUSSION: Tobacco use is the number one preventable cause of death and disease in California, killing nearly 40,000 Californians every year. The 2012 Surgeon General’s Report found that about 90 percent of all smokers first tried cigarettes as teens and that about three of every four teen smokers continue into adulthood. Further, young adults ages 18 to 24 have the highest smoking prevalence among any age group according to the California Department of Public Health. A recent report by the Centers for Disease Control and Prevention (CDC) indicates that nationally, e-cigarette use among middle and high school students tripled from 2013 to 2014. Studies have shown that limiting where tobacco is sold can curtail youth access to tobacco products, target enforcement of the licensing provisions, and combat social perceptions that tobacco use is normal or acceptable. Requiring a local tobacco retailer to obtain a permit generally increases compliance rates of tobacco sales laws and provides revenue to cover the administration of license and enforcement efforts. The Town Attorney’s office has researched best practices in other communities and fou nd that in the past two decades, more than 80 communities in California have adopted Tobacco Retail License/Permit Ordinances in an effort to reduce illegal sales of tobacco products to minors. The Town Attorney’s office has also been working closely with Santa Clara County Public Health Department in drafting the proposed Tobacco Retail Permit Licensing Ordinance (see Attachment 1). The draft Ordinance would require that owners of all retail businesses offering tobacco products, tobacco paraphernalia, and/or electronic smoking devices for sale to the public be subject to annual licensing and inspections by the Town or its designee. Additionally, the draft Ordinance includes regulations crafted in a manner to reduce underage access to tobacco products and establishes performance standards for these business that are consistent with those for retail establishments engaging in the sale of alcoholic beverages for off-site consumption. The primary components of the draft Ordinance are:  Require all establishments selling tobacco products to obtain a Tobacco Retail License (TRL) from the Town.  Require an annual license renewal.  Require an annual inspection of the premises for compliance with the requirements.  Require TRL be displayed in a publicly visible location at the licensed location.  Prohibit the sale or transfer of tobacco products to anyone under the age of 21. PAGE 3 OF 4 SUBJECT: AN ORDINANCE OF THE TOWN OF LOS GATOS REQUIRING THE LICENSURE OF TOBACCO RETAILERS AND ADDING SECTION 18.60.020 TO THE TOWN CODE OF LOS GATOS ENTITLED PERMITS FOR RETAILERS OF TOBACCO PRODUCTS AND/OR ELECTRONIC SMOKING DEVICES DATE : APRIL 24, 2017 S:\COUNCIL REPORTS\2017\05-02-17\Smoking Ordinance\Staff Report FINAL.docx 4/27/2017 1:13 PM SLL DISCUSSION (cont’d):  Prohibit a person under the age of 21 to engage in tobacco retailing.  Prohibit all self-service displays of tobacco products. • Prohibit the sale of flavored tobacco products. • Prohibit the sale of tobacco products in pharmacies. • Prohibit new tobacco retailing within 1,000 feet of a school, parks, and playgrounds. • Prohibit any new tobacco retailers within 500 feet of another tobacco retailer. • Identifies that permit violations would result in fines. • Allows for a process for license suspension and revocation for violations. Throughout the Ordinance, there are references to the Town or its designee. Staff is currently working on an Agreement with the County of Santa Clara that would allow the County of Santa Clara to administer the ordinance and collect the annual permit fees as the Town’s designee. If the Council approves the staff recommendation and the proposed Ordinance is introduced, then the Agreement will be on the Town Council agenda at its next meeting along with the second reading of the Ordinance. The benefit of the Ordinance and the Agreement with the County establishing a Tobacco Retailers Permit Program is the Town will have the authority to respond to tobacco product sales to anyone under the age of 21 at the local level. A verified violation could result in the suspension or possible revocation of a business' ability to sell tobacco products. This enforcement tool furthers the Town Council's expressed desire to eliminate tobacco sales to anyone under the age of 21 by providing a quicker response to violations than is currently provided at the State level. CONCLUSION: Staff recommends that the Town Council adopt the attached draft Ordinance establishing a Tobacco Retailers Permit Program. COORDINATION: The Town of Los Gatos sent two separate notifications to tobacco retailers in Los Gatos and also held an informational workshop on the components of the draft TRL Ordinance on April 12, 2017 at 5:30 p.m. PAGE 4 OF 4 SUBJECT: AN ORDINANCE OF THE TOWN OF LOS GATOS REQUIRING THE LICENSURE OF TOBACCO RETAILERS AND ADDING SECTION 18.60.020 TO THE TOWN CODE OF LOS GATOS ENTITLED PERMITS FOR RETAILERS OF TOBACCO PRODUCTS AND/OR ELECTRONIC SMOKING DEVICES DATE : APRIL 24, 2017 S:\COUNCIL REPORTS\2017\05-02-17\Smoking Ordinance\Staff Report FINAL.docx 4/27/2017 1:13 PM SLL FISCAL IMPACT: There would be no fiscal impact as staff has developed an agreement for the County of Santa Clara to administer and enforce a new tobacco retail permit program in the Town of Los Gatos. Currently, the County only enforces the County’s tobacco retail permit program in unincorporated areas of the County. The agreement would establish an administration and enforcement partnership with the Town. ENVIRONMENTAL ASSESSMENT: This is not a project defined under CEQA, and no further action is required. Attachments: 1. Draft Ordinance requiring the licensure of tobacco retailers and adding section 18.60.020 to the Town Code of Los Gatos entitled permits for retailers of tobacco products and/or electronic smoking devices.