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TO: BOARD OF SUPERVISORS
Contra
Orta
FROM: William B. Walker, MD, Health Services Director
DATE: May 13, 2003
County
SUBJECT: TOBACCO RETAILER'S LICENSE FEES (Resolution No. 2003/255)
SPECIFIC REQUEST(S)OR RECOMMENDATION(S)&BACKGROUND AND JUSTIFICATION
RECOMMENDATION:
1. CONTINUE the April 1, 2003 public hearing on adoption of tobacco retail'er's license fees.
2. CLOSE public hearing.
2. ADOPT resolution setting fees of$25.00 for annual tobacco retailer's license, $348.00 for
license revocation hearing or suspension hearing, and $112.00 for retailer re-inspections.
3. DIRECT the Health Services Department to bring the tobacco retailer's licensing program to
the Board of Supervisors for review in 12 months.
FISCAL IMPACT:
The annual tobacco retailer's license fee of$25.00 per license will allow the recovery of
reasonable administrative costs incurred by the Tax Collector, who is authorized to issue tobacco
retailer's licenses. The hearing fee of$348.00 per hearing will allow the full recovery of the
reasonable cost of holding a license suspension hearing or license revocation hearing. The re-
inspection fee of $112.00 per re-inspection will allow the full recovery of the reasonable cost of re-
inspecting retailers whose license has been suspended or revoked.
Some costs of enforcing Ordinance No. 2003-01 will be recovered by funds provided under a
California Department of Health Services grant.
CONTINUED ON ATTACHMENT:X YES —NO SIGNATURE: ,
]:;- ----------- --------- ----------------- —_------------------------------- --------------
=C MMENDATION OF COUNTY ADMINISTRATOR RECOMMENDATION OF BOARD COMMITTEE - -
APPROVE OTHER
SIGNATURE(S) a—�—:
ACT#ON OF 80 D N_, AqV 11- 91n1l APPROVE AS RECOMMENDED. y OTHER
VOTE OF SUPERVISORS I HEREBY CERTIFY THAT THIS IS A TRUE
AND CORRECT COPY OF AN ACTION TAKEN
x UNANIMOUS(ABSENT Now ) AND ENTERED ON THE MINUTES OF THE
BOARD OF SUPERVISORS ON THE DATE
AYES: NOES: SHOWN.
ABSENT: ABSTAIN:
DISMCT III SEAT 'VACANT ATTESTED May 13, 2003
CONTACT:Charlotte Dickson,313-6216 JOHN SWEETEN,CLERK OF THE BOARD OF SUPERVISORS
CC: William B.Walker,MD,HSD Director,20 Allen,Mtz AND COUNTY ADMINISTRATOR
Wendel Brunner,MD,Public Health Director,at
597 Center Avenue,#200,Mtz
BY ,DEPUTY
BACKGROUND:
This public hearing is continued from April 1, 2003.
On April 1, 2003, the Board of Supervisors adopted Resolution No. 2003/186, setting a fee of $25
for an annual tobacco retailer's license. The fee is authorized by Ordinance No. 2003-01, which
prohibits any retailer, individual, or entity from selling or offering for sale any tobacco products in
the unincorporated area of the county without first obtaining a license.
On April 1, 2003, the Board of Supervisors also directed Contra Costa Health Services to
determine the actual cost of providing license revocation hearings, license suspension hearings
and retailer re-inspections, and to establish fee amounts reflecting those costs and allowing their
recovery.
Contra Costa Health Services has determined that a fee of$348 per hearing would allow Health
Services to recover the actual cost of providing license revocation hearings and license
suspension hearings. This fee for a license suspension hearing or a license revocation hearing
was calculated based upon hourly rates of salaries and recoverable expenses for the Public
Health Director, support staff, and Tobacco Prevention Project staff. Hearings, including
preparation and follow-up administrative work, are expected to last one full hour.
Contra Costa Health Services has determined that a fee of$112 per re-inspection would allow
Health Services to recover the actual cost of providing a re-inspection. This fee was calculated
based upon hourly rates of salaries and recoverable expenses for Tobacco Prevention Project
staff, including the project manager and policy coordinator. The Health Services Department
anticipates that most re-inspections (including travel time) will last approximately one hour. A table
showing the Health Services Department's fee calculations is attached.
Health Services Finance will invoice retailers for hearing fees and re-inspection fees after services
are rendered. A license will not be re-issued until these fees are paid. This resolution setting fees
of$25.00 per annual tobacco retailer's license, $348.00 per license revocation hearing or
suspension 'hearing, and $112.00 per retailer re-inspection would supersede Resolution No.
2003/186.
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Office of the County Counsel Contra Costa County
651 Pine Street, 9th Floor Phone: (925)335-1800
Martinez, CA 94553 Fax: (925)646-9478
Date: April 29,'2003
To: William Walker,M.D.,Health Services Director
Attn:Wendel Brunner,M.D., Public Health Director
From: Silvan B. Marchesi, County Counsel
By:Thomas L. Geiger,Deputy County Counsel
Re: TOBACCO RETAILER'S LICENSE SUSPENSIONS AND REVOCATIONS
SUMMARY
We conclude that the County's tobacco retailer's licensing ordinance can be amended to
provide for a permanent license revocation after the license has been suspended several times. While
we cannot state to a legal certainty whether a court would uphold a permanent revocation,there
appears to be legal authority that would allow a court to do so under the proper circumstances.
BACKGROUND
This responds to the Board's April 1,2003 request for a discussion of whether tobacco
retailer's licenses may permanently revoked for retailers who repeatedly violate local, state,or
federal tobacco-related laws. You can include this memo as part of the agenda packet for the May 13,
2003 Board of Supervisors meeting.
DISCUSSION
A. Existing Ordinance
On January 13,2003,the Board of Supervisors adopted Ordinance No. 2003-01. The
ordinance prohibits any retailer, individual, or entity from selling or offering for sale any tobacco
products' n the unincorporated area of the county without first obtaining a license. Each licensee must
prominently display the license at the location where tobacco retail sales are conducted.
Under the ordinance, all tobacco retailer's'licenses will be issued by the tax collector. Each
license will be issued and due for renewal effective July l",and will expire on the subsequent June 30.
A license will not be issued unless a licensing fee is paid.
Health Services will enforce the ordinance. Several enforcement remedies are available,
including the issuance of infraction citations or the imposition of administrative fines of up to $500. The
ordinance also establishes methods for suspending or revoking licenses after a hearing.
Board of Supervisors
April 29, 2003
Pa e 2
Under the ordinance, a license may be suspended for any violation of local, state,or federal
tobacco-relatedlaws. A suspension may be up to 30 days for a first violation, up to 90 days for a
second violation occurring within two years of the first, and up to one year for each subsequent
violation occurring within two years of the most recent prior suspension.
The ordinance also provides that a license may be revoked under certain circumstances. A
license may be revoked if fees are unpaid, if the license was illegally transferred, or if the license was
issued in error. The ordinance allows a retailer whose license has been revoked to file a new
application if the condition resulting in the revocation has been corrected. The ordinance currently does
not provide for a permanent license revocation.
B. Permanent Revocation
Under Ordinance No.2003-01, it is illegal to sell tobacco without a license issued by the
County. Under the ordinance,therefore, a tobacco-retailer's license is a permit to do what would
otherwise be unlawful. In this respect, a tobacco retailer's license issued by the County is like a liquor
license issued by the state. Under state law, it is illegal to sell liquor without a license. A liquor license
is therefore a permit to do what would otherwise be unlawful. (Cornell v. Reilly(1954) 127
Cal.App.2d 178, 185.)
A liquor license is a type of property that the state,under its police power, has the power to
control and regulate. (Cooper v. State Board of Equalization(1955) 137 Cal.App.2d 672,'679.)
Courts have held there is no proprietary right within the meaning of the Constitution's due process
clause to sell liquor. (Ibid.) The state is authorized by its police power and by statute to permanently
revoke liquor licenses. ;Courts have determined'that the statutes that authorize the revocation of liquor
licenses do not violate the due process clause. (Ibid.) However,the state must not act arbitrarily or
capriciously when it revokes'licenses. (Santa Ana Food Market, Inc. a alcoholic Beverage
Control Appeals Bd. (1999) 76 Cal.AppAth 570, 574.)
The primary purpose of a proceeding to revoke a liquor license is to protect the public, not
to punish. (Cornell, supra, 127 Cal.App.2d at 184.) Similarly, the state licenses various professions,
vocations, and businesses. The state is entitled to revoke these licenses,and the purpose of doing so is
"to protect the public from incompetence and lack of integrity in those practicing trades and
professions." (Hughes v. Board ofarchitectural Examiners (1998) 17 Cal.4th 763, 785, citing
Murrill v. State Board'ofAccountancy(1950)97 Cal.App.2d 709, 712.)
Ordinance No. 2003-01 was adopted by the County under its police power. The
County's police power authorizes it to enact ordinances to protect the health, safety and welfare of its
citizens. (Cal.Const., art. XI,'§ 7.) The County:may enact any local, police, sanitary or other
Board of Supervisors
April 29,2003
Pa 3
ordinance as long as it is not in conflict with state law. (California Rifle &Pistol Assn. v. City of
West Hollywood(1998)66 Cal.App.4th 1302, 1310.) There is no statute authorizing the state to
license tobacco retailers.
Just as the state's police power authorizes it to regulate and permanently revoke liquor
licenses,the County's police power authorizes it to regulate tobacco retailer's licenses. Based on
liquor license case law, a court could uphold an ordinance authorizing the County to permanently
revoke a'tobacco retailer's license as a valid exercise of the County's police power. In addition, a
court could find that there is no proprietary right to sell tobacco. If the court were to make this finding,
it would be able to determine that the;permanent revocation of a tobacco retailer's license would not
violate due process, as long as the County did:not act arbitrarily or capriciously in revoking the license.
Ordinance No. 2003.01 can be amended to provide for a permanent license revocation
after the'license has been suspended several times. The purpose of,providing for a permanent
revocation only after several suspensions would be to lessen the risk that a permanent revocation would
be an arbitrary or capricious exercise of the County's police power.
A draft ordinance providing for permanent revocation is attached. Under an amended
ordinance,a tobacco retailer's license would be suspended up to 30 days for a first violation of any
local, state,or federal tobacco-related lax!,up to 90 days for a second violation occurring within two
years of the first,and up to one year for a third violation occurring within two years of the second
suspension. The license would be revoked permanently if a fourth violation occurred within two years
of the third suspension. If the Board so directs, this ordinance can be placed on an upcoming consent
agenda for introduction and subsequent adoption.
TLG:
cc: Denice Dennis,Tobacco Prevention project,Health Services Department
Charlotte Dickson,Tobacco Prevention Project,Health Services Department
H.Q1)o3iM,4th savix.lT;fiai�zrk¢i t ttw rko.a.isra,,w t
ORDINANCE NO.2003 - DRAFT
TOBACCO RETAILER'S LICENSE SUSPENSION AND REVOCATION
The Contra Costa County Board of Supervisors ordains as follows(omitting the parenthetical footnotes
from the official text of the enacted or amended provisions of the County Ordinance Code):
SECTION I. SUMMARY. This ordinance amends the County Ordinance Code to authorize the
permanent revocation of a tobacco retailer's license after the license has been suspended three times.
SECTION H. Section 445-10.016 of the County Ordinance Code is amended to read:
445-I0.016 License Suspension and Revocation.
(a) Suspension or Permanent Revocation for Violation.
(1) Grounds for Suspension or Permanent Revocation. A tobacco retailer's license may be
suspended or permanently revoked for any violation of this division,Division 440 of this
code, or any state or federal tobacco-related laws.
(2) Time Period.
(A) A tobacco retailer's license suspension may be up to 30 days for a first
violation.
(B) A tobacco retailer's license suspension may be up to 90 days for a second
violation occurring within 24 months of the first violation.
(C) A tobacco retailer's license suspension may up to one year for a third
violation occurring within 24 months of the second violation.
(D) A tobacco retailer's license may be permanently revoked for a fourth violation
occurring within 24 months of the third violation.
(b) Revocation Without Prejudice.
(1) Grounds for Revocation Without Prejudice. A tobacco retailer's license may be
revoked without prejudice on any of the following grounds:
(A) One or more of the grounds for denial of a tobacco retailer's license under
section 445-10.010 existed either when a license application was made or
before the tobacco retailer's license was issued.
ORDINANCE NO. 2003 - DRAFT
1
(B) The tobacco retailer's license fee is unpaid.
(C) The tobacco retailer's license has been transferred in violation of section 445-
10.010.
(2) A tobacco retailer whose license has been revoked without prejudice may file a new
application for a tobacco retailer's license if grounds for revocation without prejudice
no longer exist.
{c) Notice of Suspension or Revocation Hearing. If any grounds for suspension or revocation
exist,the Director may issue a Notice of Suspension or Revocation Hearing. A notice will be
served to a tobacco retailer as specified in Section 445-10.022 and will include all of the
following information:
(1) The address or a definite description of the location where the tobacco retailer's license
is issued.
(2) The grounds for suspension or revocation.
(3) The date of the suspension or revocation hearing before the Public Health Director.
The notice will set the hearing date no sooner than 20 days and no later than 45 days
following the date the notice is served.
(d) Hearing. A tobacco retailer's license may be suspended or revoked by the Public Health
Director after a tobacco retailer's license suspension or revocation hearing. At the hearing,the
licensee will be given the opportunity to testify and:to present evidence concerning the grounds
set forth in the Notice of Suspension or Revocation Hearing. After considering the testimony
and evidence submitted at the hearing,the Public Health Director will issue a written decision
and will list in the decision the reason or reasons for that decision. The written decision will be
served as specified in section 445.10.022.
(e) Appeal. The decision of the Public Health Director to suspend or revoke a tobacco retailer's
license is appealable to the Board of Supervisors and will be heard at a noticed public hearing
as provided in Chapter 14-4 of this Cade.
(f) Final Order. The tobacco retailer's license suspension or revocation becomes a final
administrative order at one of the following times:
(1) On the date of the suspension or revocation hearing, if a tobacco retailer fails to appear
at a scheduled hearing..
(2) On the date the Public Health Director's decision is served, if a tobacco retailer fails to
ORDINANCE NO. 2003 - DRAFT
2
file a written appeal to the Board of Supervisors within the time specified.
(3) On the date of the appeal hearing, if a tobacco retailer fails to appear at a scheduled
appeal hearing before the Board of Supervisors.
(4) On the slate of the decision by the Board of Supervisors,if a tobacco retailer appears
at a scheduled appeal hearing before the Board of Supervisors.
(g) During a period of license suspension or revocation, the tobacco retailer must remove from
public view all tobacco products. (Ords. 2003- § 2, 2003-01 § 3, 98-50 § 2.)
SECTION III. Section 445-10.018 of the County Ordinance Code is repealed in its entirety.
SECTION IV. Section 445-10.020 of the County Ordinance Code is amended to read:
445-10.020 Enforcement. The County may seek compliance with this chapter by any remedy
allowed under this code, including, but not limited to,suspension or revocation(Section 445-10.016),
administrative fines(Chapter 14-12), criminal citations(Section 14-8.008), and any other remedy
allowed by law. (Ords. 2403- § 4, 2043-41 § 3,98-54 § 2.)
SECTION V. EFFECTIVE DATE. This ordinance becomes effective 30 days after passage, and
within 15 days after passage shall be published once with the names of supervisors voting for or against
it in the Contra Costa Times,a newspaper published in this County.
PASSED on ,by the following vote:
AYES.
NOES:
ABSENT:
ABSTAIN:
.ATTEST: JOHN SWEETEN,
Clerk of the Board of Supervisors Board Chair
and'County Administrator
By: [SEAL)
Deputy
TLG:
H:120OMealth Services\Tobaccollicrose suspend revoke ord.wpd
ORDINANCE NO. 2003 DRAFT
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