First Substitute S.B. 39

Senator Robert F. Montgomery proposes to substitute the following bill:

1 PENALTIES FOR SALE OF TOBACCO TO YOUTH
2 1998 GENERAL SESSION
3 STATE OF UTAH
4 Sponsor: Robert F. Montgomery
5 AN ACT RELATING TO HEALTH; PROVIDING CIVIL PENALTIES AGAINST PERSONS
6 LICENSED TO SELL TOBACCO, IF THE TOBACCO IS SOLD TO UNDERAGE YOUTH;
7 LIMITING THE NUMBER OF RANDOM INSPECTIONS; PROVIDING PENALTIES FOR
8 SALE OF TOBACCO WITHOUT A LICENSE; REQUIRING LICENSES TO BE
9 RENEWABLE; AND PROVIDING FOR TAKING ACTION AGAINST THE LICENSE TO
10 SELL TOBACCO, IF THE TOBACCO IS SOLD TO UNDERAGE PERSONS.
11 This act affects sections of Utah Code Annotated 1953 as follows:
12 AMENDS:
13 59-14-201, as last amended by Chapter 313, Laws of Utah 1994
14 59-14-202, as renumbered and amended by Chapter 2, Laws of Utah 1987
15 59-14-203, as renumbered and amended by Chapter 2, Laws of Utah 1987
16 59-14-301, as renumbered and amended by Chapter 2, Laws of Utah 1987
17 77-39-101, as enacted by Chapter 168, Laws of Utah 1994
18 ENACTS:
19 26-40-101, Utah Code Annotated 1953
20 26-40-102, Utah Code Annotated 1953
21 26-40-103, Utah Code Annotated 1953
22 26-40-104, Utah Code Annotated 1953
23 26-40-105, Utah Code Annotated 1953
24 26-40-106, Utah Code Annotated 1953
25 26-40-107, Utah Code Annotated 1953

1 59-14-203.5, Utah Code Annotated 1953
2 59-14-301.5, Utah Code Annotated 1953
3 Be it enacted by the Legislature of the state of Utah:
4 Section 1. Section 26-40-101 is enacted to read:
5 CHAPTER 40. CIVIL PENALTIES FOR TOBACCO SALES
6 TO UNDERAGE PERSONS
7 26-40-101. Title.
8 This chapter is known as "Civil Penalties for Tobacco Sales to Underage Persons."
9 Section 2. Section 26-40-102 is enacted to read:
10 26-40-102. Definitions.
11 As used in this chapter:
12 (1) "Commission" means the Utah State Tax Commission.
13 (2) "Employee" means an employee of a licensee.
14 (3) "Enforcing agency" means the state Department of Health, or any local health
15 department enforcing the provisions of this chapter.
16 (4) "Licensee" means a person licensed:
17 (a) under Section 59-14-201 to sell cigarettes at retail; or
18 (b) under Section 59-14-301 to sell tobacco products at retail.
19 (5) "License to sell tobacco" or "license" means a license issued:
20 (a) under Section 59-14-201 to sell cigarettes at retail; or
21 (b) under Section 59-14-301 to sell tobacco products at retail.
22 (6) "Tobacco" means cigarettes or tobacco products as defined in Section 59-14-102.
23 Section 3. Section 26-40-103 is enacted to read:
24 26-40-103. Violations and penalties -- Imposition by enforcing agency and tax
25 commission.
26 (1) If, following an investigation or issuance of a citation or information under Section
27 77-39-101, an enforcing agency determines under Section 26-40-104 that a licensee or any
28 employee has sold tobacco to a person younger than 19 years of age, as prohibited by Section
29 76-10-104, the enforcing agency may impose upon the licensee the following administrative
30 penalties:
31 (a) upon the first violation, a penalty of not more than $300;

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1 (b) upon a second violation at the same retail location, and within 12 months of the first
2 violation, a penalty of not more than $750; and
3 (c) upon a third or subsequent violation at the same retail location and within 12 months
4 of the first violation, a penalty of not more than $1,000.
5 (2) The enforcing agency shall notify the commission in writing of any order or order of
6 default finding a violation of Subsection (1) which is a third or fourth violation.
7 (3) The commission, upon receipt of the written notification under Subsection (2), shall
8 take action under Section 59-14-203.5 or 59-14-301.5 against the license to sell tobacco:
9 (a) by suspending the licensee's license to sell tobacco at that location for not more than
10 30 days, upon receipt of notification of a third violation under Subsection (1)(c); and
11 (b) by revoking the license to sell tobacco at that location held by the licensee, including
12 any license under suspension, upon receipt of notification of a fourth violation under Subsection
13 (1)(c).
14 (4) When the commission revokes a license under Subsection (3)(b), the commission may
15 not issue to the licensee, or to the business entity using the license that is revoked, a license under
16 Section 59-14-201 or 59-14-301 to sell tobacco at the location for which the license was issued for
17 one year after the date of the violation for which the license was revoked.
18 (5) This section does not prevent any bona fide purchaser of the business, who is not a sole
19 proprietor, director, corporate officer, or partner or other holder of significant interest in the entity
20 selling the business, from immediately applying for and obtaining a license to sell tobacco.
21 Section 4. Section 26-40-104 is enacted to read:
22 26-40-104. Enforcement by state and local health departments.
23 The state Department of Health and the local health departments shall enforce this chapter
24 under the procedures of Title 63, Chapter 46b, Administrative Procedures Act, as an informal
25 adjudicative proceeding, including:
26 (1) notifying licensees of alleged violations of Section 26-40-103;
27 (2) conducting hearings;
28 (3) determining violations of this chapter; and
29 (4) imposing civil monetary administrative penalties.
30 Section 5. Section 26-40-105 is enacted to read:
31 26-40-105. Hearing -- Evidence of criminal conviction.

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1 (1) At a civil hearing conducted under Section 26-40-104, evidence of the final criminal
2 conviction of a licensee or employee for violation of Section 76-10-104 at the same location and
3 within the same time period as the location and time period alleged in the civil hearing for
4 violation of Section 26-40-103 is prima facie evidence of a violation of Section 26-40-103.
5 (2) If the licensee has been convicted of violating Section 76-10-104 prior to a finding of
6 a violation of Section 26-40-103, the licensee may not be assessed a monetary penalty under this
7 chapter for the same offense for which the conviction was obtained.
8 Section 6. Section 26-40-106 is enacted to read:
9 26-40-106. Recognition of licensee's training program.
10 (1) In determining the amount of the monetary penalty to be imposed for an employee's
11 violation of Section 26-40-103, the hearing officer shall reduce the penalty by at least 50% if he
12 determines:
13 (a) the licensee has implemented a documented employee training program; and
14 (b) the employee has completed that training program within 30 days of commencing
15 duties of selling tobacco products.
16 (2) (a) If the hearing officer determines under Subsection (1), regarding a first offense at
17 a location, that the licensee has not implemented a documented training program with a written
18 curriculum for employees at that location regarding compliance with this chapter, the hearing
19 officer may suspend all or a portion of the monetary penalty, contingent upon the licensee's
20 initiating a training program for employees at that location within 30 days after the hearing date.
21 (b) If the hearing officer determines at a subsequent hearing that the licensee has not
22 implemented the training program within the time period required under Subsection (2)(a), the
23 suspended monetary penalty shall be promptly imposed, unless the licensee demonstrates good
24 cause for granting an extension of time for implementation of the training program.
25 Section 7. Section 26-40-107 is enacted to read:
26 26-40-107. Allocation of civil penalties.
27 Civil monetary penalties collected under this chapter shall be allocated as follows:
28 (1) if a local health department conducts an adjudicative proceeding under Section
29 26-40-104, the penalty shall be paid to the treasurer of the county in which the violation was
30 committed, and transferred to:
31 (a) the local health department if it conducts a civil hearing under Section 26-40-104

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1 alone; or
2 (b) in equal portions to the local health department and the other agencies that participated
3 in the hearing process;
4 (2) if the state Department of Health conducts a civil hearing under Section 26-40-104, the
5 penalty shall be deposited in the state's General Fund, and may be appropriated by the Legislature
6 to the state Department of Health for use in enforcement of this chapter; and
7 (3) if the civil penalty involves suspension or revocation of a license to sell tobacco under
8 Section 59-14-203.5 or 59-14-301.5, half of the penalty shall be paid to the commission, and the
9 other half shall be allocated under Subsection (1) or (2), as appropriate.
10 Section 8. Section 59-14-201 is amended to read:
11 59-14-201. License -- Fee -- Bond -- Exceptions.
12 (1) It is unlawful for any person in this state to barter, sell, exchange, or offer cigarettes
13 for sale without first having obtained a license issued by the commission under Section 59-14-202.
14 (2) (a) [No] A license may not be issued for the sale of cigarettes until the applicant has
15 paid a license fee [determined by the commission under Section 63-38-3.2] of $30 or a license
16 renewal fee of $20, as appropriate.
17 (b) The fee for reinstatement of a license that has been revoked, suspended, or allowed to
18 expire is $30.
19 (3) (a) [No] A license may not be issued until the applicant files a bond with the
20 commission. The commission shall determine the form and the amount of the bond, the minimum
21 amount of which shall be $500. The bond shall be [duly] executed by the applicant as principal,
22 with a corporate surety, payable to the state and conditioned upon the faithful performance of all
23 the requirements of this chapter, including the payment of all taxes, penalties, and other
24 obligations.
25 (b) Applicants are not required to post a bond who:
26 (i) purchase during the license year only products which have the proper state stamp
27 affixed as required by this chapter; and
28 (ii) file an affidavit with their application attesting to this fact[, are not required to post a
29 bond].
30 Section 9. Section 59-14-202 is amended to read:
31 59-14-202. Issuance of licenses -- Common carrier licenses -- Contents -- Valid for

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1 three years -- Revocation.
2 (1) Cigarette licenses [shall] may be issued only to a person owning or operating the place
3 or cigarette vending machine from which the cigarette sales are made.
4 (2) If sales are made at two or more separate places by that person, a separate license for
5 each place of business is required.
6 (3) A common carrier is not required to obtain more than one license for sales on
7 conveyances operated by that carrier within the state. All conveyances owned by a common
8 carrier are considered as one place of business for the purpose of this chapter.
9 (4) Each license shall be numbered, show the residence and place of business of the
10 licensee, and [shall be] is nontransferable.
11 (5) (a) Each license [shall be] is in [force and] effect [until such time as the holder of the
12 license ceases to barter, sell, exchange, or offer cigarettes for sale in this state] for three years from
13 the date of issuance, unless the license is earlier revoked by the commission.
14 (b) The license expires on the expiration date shown on the license, unless the licensee
15 renews it in accordance with commission rules.
16 (c) The commission shall by rule establish procedures for the renewal and reinstatement
17 of licenses.
18 (6) (a) The commission shall, after providing notice and a hearing, revoke the license of
19 any person found to have violated this title. [No]
20 (b) A license may not be issued to that person within a period of two years after the
21 violation.
22 Section 10. Section 59-14-203 is amended to read:
23 59-14-203. Selling without a license -- Penalty.
24 Any person engaging in the business of selling or offering to sell cigarettes without [having
25 secured] holding a valid license that is currently not suspended or revoked is guilty of a class B
26 misdemeanor for each offense.
27 Section 11. Section 59-14-203.5 is enacted to read:
28 59-14-203.5. Commission action to suspend or revoke license.
29 (1) (a) The commission shall suspend or revoke licenses to sell tobacco, as required under
30 Section 26-40-103 regarding suspension or revocation of a license due to the sale of cigarettes to
31 a person younger than 19 years of age, upon receipt of notice of an enforcing agency's finding of

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1 a violation of Section 26-40-103.
2 (b) The commission shall provide written notice of the suspension or revocation to the
3 licensee.
4 (2) It is the duty of the enforcing agency to advise the commission of any finding of a
5 violation of Section 26-40-103 for which suspension or revocation of the license is a penalty.
6 (3) When the commission revokes a licensee's license under this section the commission
7 may not issue to the licensee, or to the business entity using the license that is revoked, a license
8 under Section 59-14-202 or 59-14-301 to sell tobacco at the location for which the license was
9 issued for one year after the date of the violation for which the license was revoked.
10 Section 12. Section 59-14-301 is amended to read:
11 59-14-301. Registration and licensing -- Fee -- Bond exceptions.
12 (1) All manufacturers[,] and distributors[, and retailers] of all tobacco products, as defined
13 in Section 59-14-102, who are responsible for the collection of tax on tobacco products under this
14 chapter, and all retailers of all tobacco products shall:
15 (a) register with[,] the commission; and
16 (b) be licensed by[,] the commission under Section 59-14-202.
17 (2) [No] A fee may not be charged for registration and licensing of manufacturers, jobbers,
18 distributors, or retailers of tobacco products in addition to the cigarette license if such a license is
19 required.
20 (3) The commission shall require any manufacturer, wholesaler, retailer, or any other
21 person subject to this section, and who is responsible for the collection of tax on tobacco products
22 under this chapter, to post a bond as a prerequisite to registering. The bond shall be in a form and
23 an amount determined by the commission. If the bond is required under Section 59-14-201, the
24 bond may be a combination, the minimum amount of which shall be $1,000.
25 Section 13. Section 59-14-301.5 is enacted to read:
26 59-14-301.5. Commission action to suspend or revoke license.
27 (1) (a) The commission shall suspend or revoke licenses to sell tobacco, as required under
28 Section 26-40-103 regarding suspension or revocation of a license due to the sale of tobacco
29 products to a person younger than 19 years of age, upon receipt of notice of an enforcing agency's
30 order or order of default, finding a violation of Section 26-40-103.
31 (b) The commission shall provide written notice of the suspension or revocation to the

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1 licensee.
2 (2) It is the duty of the enforcing agency to advise the commission of any order or order
3 of default finding a violation of Section 26-40-103, for which suspension or revocation of the
4 license is a penalty.
5 (3) When the commission revokes a licensee's license under this section the commission
6 may not issue to the licensee, or to the business entity using the license that is revoked, a license
7 under Section 59-14-202 or 59-14-301 to sell tobacco at the location for which the license was
8 issued for one year after the date of the violation for which the license was revoked.
9 Section 14. Section 77-39-101 is amended to read:
10 77-39-101. Investigation of sales of alcohol and tobacco to under age persons.
11 (1) (a) A peace officer, as defined by Section 77-1a-1, may investigate the possible
12 violation of Section 32A-12-203 or Section 76-10-104 by requesting a person under the legal age
13 to attempt to purchase alcohol as provided in Section 32A-12-203, or tobacco as provided in
14 Section 76-10-104, to enter into and attempt to purchase or make a purchase of alcohol or tobacco
15 products from a retail establishment.
16 (b) A peace officer who is present at the site of a proposed purchase shall direct, supervise,
17 and monitor the person requested to make the purchase.
18 (c) Immediately following the purchase or attempted purchase or as soon as practical the
19 supervising peace officer shall inform the cashier and the proprietor or manager of the retail
20 establishment that the attempted purchaser was under the legal age to purchase alcohol or tobacco.
21 (d) If a citation or information is issued, it shall be issued within seven days of the
22 purchase.
23 (2) (a) If a person under the age of 18 years old is requested to attempt a purchase, a
24 written consent of that person's parent or guardian shall be obtained prior to that person
25 participating in any attempted purchase.
26 (b) A person requested by the peace officer to attempt a purchase may be a trained
27 volunteer or receive payment but may not be paid based on the number of successful purchases
28 of alcohol or tobacco.
29 (3) The person requested by the peace officer to attempt a purchase and anyone
30 accompanying the person attempting a purchase may not during the attempted purchase
31 misrepresent the age of the person by false or misleading identification documentation in

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1 attempting the purchase.
2 (4) A person requested to purchase alcohol or tobacco pursuant to this section is immune
3 from prosecution, suit, or civil liability for the purchase of, attempted purchase of, or possession
4 of alcohol or tobacco if a peace officer directs, supervises, and monitors the person.
5 (5) (a) Except as provided in Subsection (5)(b), a purchase attempted under this section
6 shall be conducted on a random basis, but not more often than four times within a 12-month period
7 at any one retail establishment location.
8 (b) Nothing in this section shall prohibit an investigation under this section if:
9 (i) there is reasonable suspicion to believe the retail establishment has sold alcohol or
10 tobacco to a person under the age established by Section 32A-12-203 or 76-10-104; and
11 (ii) the supervising peace officer makes a written record of the grounds for the reasonable
12 suspicion.
13 (6) The peace officer exercising direction, supervision, and monitoring of the attempted
14 purchase shall make a report of the attempted purchase, whether or not a purchase was made. The
15 report shall include:
16 (a) the name of the supervising peace officer;
17 (b) the name of the person attempting the purchase;
18 (c) a photograph of the person attempting the purchase showing how that person appeared
19 at the time of the attempted purchase;
20 (d) the name and description of the cashier or proprietor from whom the person attempted
21 the purchase;
22 (e) the name and address of the retail establishment; and
23 (f) the date and time of the attempted purchase.

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