PRINTER'S NO. 405
No. 396 Session of 1999
INTRODUCED BY SCHWARTZ, O'PAKE, HELFRICK, WAGNER, BOSCOLA AND
MUSTO, FEBRUARY 12, 1999
REFERRED TO FINANCE, FEBRUARY 12, 1999
AN ACT
1 Amending the act of April 9, 1929 (P.L.343, No.176), entitled,
2 as amended, "An act relating to the finances of the State
3 government; providing for the settlement, assessment,
4 collection, and lien of taxes, bonus, and all other accounts
5 due the Commonwealth, the collection and recovery of fees and
6 other money or property due or belonging to the Commonwealth,
7 or any agency thereof, including escheated property and the
8 proceeds of its sale, the custody and disbursement or other
9 disposition of funds and securities belonging to or in the
10 possession of the Commonwealth, and the settlement of claims
11 against the Commonwealth, the resettlement of accounts and
12 appeals to the courts, refunds of moneys erroneously paid to
13 the Commonwealth, auditing the accounts of the Commonwealth
14 and all agencies thereof, of all public officers collecting
15 moneys payable to the Commonwealth, or any agency thereof,
16 and all receipts of appropriations from the Commonwealth,
17 authorizing the Commonwealth to issue tax anticipation notes
18 to defray current expenses, implementing the provisions of
19 section 7(a) of Article VIII of the Constitution of
20 Pennsylvania authorizing and restricting the incurring of
21 certain debt and imposing penalties; affecting every
22 department, board, commission, and officer of the State
23 government, every political subdivision of the State, and
24 certain officers of such subdivisions, every person,
25 association, and corporation required to pay, assess, or
26 collect taxes, or to make returns or reports under the laws
27 imposing taxes for State purposes, or to pay license fees or
28 other moneys to the Commonwealth, or any agency thereof,
29 every State depository and every debtor or creditor of the
30 Commonwealth," defining "tobacco product"; further defining
31 "retailer," "vending machine operator" and "wholesaler";
32 further providing for cigarette dealers' licenses and for
33 license fees; prohibiting cigarette vending machines and
1 sales to minors; and imposing penalties.
2 The General Assembly finds and declares as follows:
3 (1) The National Centers for Disease Control have found
4 that at least 434,000 Americans die each year from tobacco-
5 caused diseases.
6 (2) The Surgeon General of the Public Health Service has
7 determined that smoking is the leading cause of preventable
8 death in this country.
9 (3) The National Institute on Drug Abuse has concluded
10 that the nicotine in tobacco products is a powerful addictive
11 drug and has identified nicotine addiction as the most
12 widespread example of drug dependence in the United States.
13 (4) According to the Surgeon General, an estimated
14 3,700,000 teenagers are current smokers and nearly 3,000
15 minors begin smoking every day.
16 (5) Among individuals who have ever tried a cigarette,
17 the average age of first trying a cigarette is 14.5 years of
18 age.
19 (6) The American Cancer Society has determined that, of
20 the nation's 50 million smokers, 60% started smoking before
21 they were 14 years of age, and 90% started smoking before
22 they were 20 years of age.
23 (7) Children become addicted to the nicotine in tobacco
24 products very quickly and have as difficult a time quitting
25 as adults.
26 (8) Underage buyers are able to purchase tobacco
27 products from retail outlets about 73% of the time and from
28 vending machines about 96% of the time.
29 (9) Minors spend more than $1 billion nationally on
30 cigarettes and other tobacco products every year.
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1 (10) The Commonwealth will receive approximately $11.2
2 billion over 25 years as the result of the settlement of its
3 lawsuit against the tobacco industry to recover some of the
4 cost of tobacco addiction to the Commonwealth.
5 (11) In local communities that have undertaken vigorous
6 enforcement efforts to reduct tobacco sales to minors, there
7 has been a significant reduction in smoking by young people.
8 The General Assembly declares that the purpose of this act is
9 to:
10 (1) Reduce access to tobacco products for individuals
11 under 21 years of age.
12 (2) Reduce the number of individuals under 21 years of
13 age who become regular cigarette smokers every day.
14 (3) Prevent the deaths and serious health complications
15 that result later in life when people begin to smoke at an
16 early age.
17 (4) Ban the use of vending machines to sell cigarettes
18 in this Commonwealth.
19 (5) Establish a program in this Commonwealth that will
20 meet the standards established by regulations implementing
21 section 1926 of the Public Health Service Act (58 Stat. 682,
22 42 U.S.C. § 201 et seq.) for reducing youth access to tobacco
23 products.
24 (6) Ensure that a portion of the proceeds the
25 Commonwealth will recover from settling its lawsuit against
26 the tobacco industry will be dedicated to effective
27 strategies to prevent illegal tobacco sales to young people.
28 The General Assembly of the Commonwealth of Pennsylvania
29 hereby enacts as follows:
30 Section 1. The definitions of "retailer," "vending machine
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1 operator" and "wholesaler" in section 202-A of the act of April
2 9, 1929 (P.L.343, No.176), known as The Fiscal Code, added July
3 2, 1993 (P.L.250, No.46), are amended and the section is amended
4 by adding a definition to read:
5 Section 202-A. Definitions.--As used in this article--
6 * * *
7 "Retailer" shall mean:
8 (a) Any person who, in the usual course of business,
9 purchases or receives cigarettes from any source whatsoever for
10 the purpose of sale to the ultimate consumer.
11 [(b) Any person who, in the usual course of business, owns,
12 leases or otherwise operates one or more vending machines for
13 the purpose of sale of cigarettes to the ultimate consumer.
14 (c)] (b) Any person who buys, sells, transfers or deals in
15 cigarettes for profit and is not licensed as a cigarette
16 stamping agency or wholesaler under this article.
17 * * *
18 "Tobacco Product" shall mean any tobacco cigarette, cigar,
19 pipe tobacco, smokeless tobacco, snuff or any other form of
20 tobacco which may be utilized for smoking, chewing, inhalation
21 or other manner of ingestion.
22 ["Vending Machine Operator" shall mean any person who places
23 or services one or more cigarette vending machines whether
24 owned, leased or otherwise operated by him at locations from
25 which cigarettes are sold to the ultimate consumer. The owner or
26 tenant of the premises upon which a vending machine is placed
27 shall not be considered a vending machine operator if his sole
28 remuneration therefrom is a flat rental fee or commission based
29 upon the number or value of cigarettes sold from the machine,
30 unless the owner or tenant actually owns the vending machine or
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1 leases the vending machine under an agreement whereby the
2 profits from the sale of the cigarettes directly inure to his
3 benefit.]
4 "Wholesaler" shall mean and include:
5 (a) Any person who, in the usual course of business,
6 purchases cigarettes from a cigarette stamping agent or other
7 wholesaler and receives, stores, sells and distributes within
8 this Commonwealth at least seventy-five per centum of all such
9 cigarettes purchased by him or her to retail dealers or
10 wholesale dealers or any combination who shall buy the
11 cigarettes from him or her for the purpose of resale to the
12 ultimate consumer: Provided, That such person maintains an
13 established place of business for the receiving, storage and
14 distribution of cigarettes.
15 [(b) Any person who is engaged in the business of
16 distributing cigarettes through vending machines to the ultimate
17 consumer by means of placing the cigarette vending machines,
18 owned or leased by him, in various outlets within this
19 Commonwealth and who pays to the owner or lessee of the premises
20 a commission or rental for the use of the premises: Provided,
21 That such vending machine operator shall operate at least ten
22 vending machines: Provided further, That the vending machine
23 operator meets all the other requirements for licensing of
24 wholesalers under this article, including maintaining an
25 established place of business for the receiving, storage and
26 distribution of cigarettes.]
27 (c) Any person, including a franchisee, who owns and
28 operates no less than five retail outlets in this Commonwealth,
29 having one hundred per centum common ownership, who purchases
30 cigarettes from a cigarette stamping agency or another
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1 wholesaler for resale to the ultimate consumer: Provided, That
2 such person maintains complete and accurate records of all
3 purchases and sales in his or her main office and also in the
4 retail outlet.
5 Section 2. Section 209-A of the act, added July 2, 1993
6 (P.L.250, No.46), is amended to read:
7 Section 209-A. Transfer of Licenses.--The department may
8 permit a dealer, under such conditions as the department may
9 impose by regulation, to transfer a license from one location to
10 another [or from one cigarette vending machine to another].
11 Section 3. Section 213-A of the act is repealed.
12 Section 4. Section 228-A of the act, added July 2, 1993
13 (P.L.250, No.46), is amended to read:
14 Section 228-A. Sales Without License.--(a) Any dealer or
15 other person who shall, without being the holder of a proper
16 unexpired dealer's license [or vending machine license properly
17 affixed as required by this article], engage in the business of
18 purchasing, selling, stamping, distributing or in any other
19 manner directly or indirectly engaging in the business of
20 dealing with cigarettes for profit shall be in violation of this
21 article and, upon conviction in a summary proceeding, shall be
22 sentenced to pay a fine of not less than two hundred fifty
23 dollars ($250) nor more than one thousand dollars ($1,000),
24 costs of prosecution or to suffer imprisonment for a term of not
25 more than thirty days, or both, at the discretion of the court.
26 (b) Open display of cigarettes in any manner shall be prima
27 facie evidence that the person displaying such cigarettes is
28 directly or indirectly engaging in the business of dealing with
29 cigarettes for profit.
30 Section 5. The act is amended by adding sections to read:
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1 Section 229.1-A. Sales to Minors; Vending Machines
2 Prohibited.--(a) A person who holds a license issued under
3 section 203-A may not:
4 (1) Have an employe under twenty-one years of age whose
5 employment responsibilities include sales of cigarettes and
6 other tobacco products.
7 (2) Sell, offer to sell or permit to be sold, distribute,
8 offer to distribute or permit to be distributed any cigarettes
9 or other tobacco products to any individual under twenty-one
10 years of age.
11 (3) Sell, offer to sell or permit to be sold, distribute,
12 offer to distribute or permit to be distributed any cigarettes
13 or other tobacco products to any person, other than an
14 individual who appears without reasonable doubt to be twenty-one
15 years of age or older, who does not present a driver's license
16 or other generally accepted means of identification that
17 describes the individual as twenty-one years of age or older,
18 contains a likeness of the individual and appears on its face to
19 be valid, any cigarettes or other tobacco products.
20 (4) Fail to post in a conspicuous location, at or near the
21 location where a sales transaction for cigarettes or other
22 tobacco products occurs, a sign that states that the retailer is
23 prohibited by law to make cigarette or tobacco product sales to
24 individuals under twenty-one years of age and includes a toll-
25 free telephone number that individuals can call to report
26 illegal sales to individuals under twenty-one years of age. In
27 addition, a sign shall be posted that states the Surgeon
28 General's warning on the use of cigarettes which is required to
29 be printed on all packages of cigarettes.
30 (5) Fail to locate all cigarettes and tobacco products in
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1 such a place so that only a store employe has access to the
2 cigarettes and tobacco products and assists the customer by
3 supplying the product and the customer does not take possession
4 of the product until the sales transaction is completed.
5 (6) Sell, offer to sell or permit to be sold, distribute,
6 offer to distribute or permit to be distributed any cigarettes
7 or other tobacco products in any form other than an original
8 factory-wrapped package.
9 (b) A person who holds a license under this article may not
10 maintain a cigarette vending machine.
11 Section 229.2-A. Civil Penalties and License Suspension.--
12 (a) Any person who violates a requirement of section 229.1-A
13 shall be subject to:
14 (1) A civil penalty of three hundred dollars ($300) for the
15 first violation within a two-year period.
16 (2) A civil penalty of five hundred dollars ($500) for the
17 second violation within a two-year period.
18 (3) A civil penalty of one thousand dollars ($1,000) for the
19 third and all subsequent violations within a two-year period.
20 (b) Any person who holds a license under this article shall
21 have that license suspended for a period of:
22 (1) Seven days if a civil penalty has been imposed under
23 subsection (a) for the second violation within a two-year
24 period.
25 (2) One to six months if a civil penalty has been imposed
26 under subsection (a) for the third violation within a two-year
27 period.
28 (3) Nine to eighteen months if a civil penalty has been
29 imposed under subsection (a) for the fourth or subsequent
30 violations within a two-year period.
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1 Section 229.3-A. Enforcement by Qualified Local Agencies.--
2 (a) The department shall contract with qualified local agencies
3 to assure compliance with section 229.1-A. The department shall
4 enter into sufficient numbers of contracts so that no less than
5 sixty per centum of retailers fall under the jurisdiction of a
6 qualified local agency in the first year after the effective
7 date of this section, eighty per centum of retailers fall under
8 the jurisdiction of a qualified local agency in the second year
9 after the effective date of this section, and one hundred per
10 centum of retailers fall under the jurisdiction of a qualified
11 local agency in the third year and all subsequent years after
12 the effective date of this section.
13 (b) Qualified local agencies shall:
14 (1) Conduct unannounced random inspections and unannounced
15 targeted inspections directed toward retailers who have a
16 history of prior violations or are located where they are more
17 likely to be frequented by individuals under twenty-one years of
18 age, such that no less than one hundred per centum of all
19 retailers in the qualified local agency's jurisdiction are
20 inspected annually.
21 (2) In at least fifty per centum of the unannounced
22 inspections, use decoy operations wherein individuals sixteen
23 years of age or older and under twenty-one years of age, under
24 the supervision of adults employed by the qualified local
25 agency, attempt to purchase tobacco products.
26 (3) Report monthly to the department on the results of the
27 inspections.
28 (c) Employes of a qualified local agency shall have
29 authority to issue citations for violations of section 229.1-A.
30 However, in no event shall individuals sixteen years of age or
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1 older and under twenty-one years of age who participate in decoy
2 operations under clause (2) of subsection (b) be permitted to
3 issue citations. Any licensee upon whom a civil penalty is
4 imposed under this section shall have the right of appeal to the
5 department in accordance with 2 Pa.C.S. (relating to
6 administrative law and procedure).
7 (d) For purposes of this section, the term "qualified local
8 agency" means any county or municipal health department or
9 private nonprofit corporation with experience in youth health
10 education and promotion or tobacco use prevention and education.
11 Section 6. This act shall take effect in 60 days.
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