BILL ANALYSIS
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|Hearing Date:June 27, 2005 |Bill No:AB |
| |178 |
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SENATE COMMITTEE ON BUSINESS, PROFESSIONS AND ECONOMIC
DEVELOPMENT
Senator Liz Figueroa, Chair
Bill No: AB 178Author:Koretz
As Amended:June 23, 2005 Fiscal:Yes
SUBJECT: California Cigarette Fire Safety and Firefighter
Protection Act.
SUMMARY: Prohibits the sale of cigarettes that do not meet
specified fire safety standards beginning January 1, 2007;
establishes fire safety certification requirements; and
establishes new civil penalties for violations.
Existing law establishes a statewide licensing and
enforcement program to control the import, distribution,
and sale of tobacco products, under the Cigarette and
Tobacco Products Tax Law which is administered by the Board
of Equalization (BOE).
This bill:
1)Prohibits the sale, offer, or possession for sale of
cigarettes in California after January 1, 2007 that do not
comply with the following requirements:
a) The cigarettes are tested by the manufacturer in
accordance with the American Society of Testing and
Materials (ASTM) Standard E2187-04 or an equivalent
standard, as specified. Specific testing conditions shall
be as follows:
i) Tests are conducted on 10 layers of filter paper.
ii) 40 replicate tests (i.e., 40 cigarettes, equal to
2 average cigarette packs) shall comprise a complete test
trial for each cigarette tested.
iii) The standard for a complete test trial (40
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cigarettes) shall be no more than
25 % of the cigarettes tested in a test trial shall exhibit
full-length burns.
iv) Laboratories conducting the tests shall implement
quality control and quality assurance programs in order
to determine the repeatability of testing results, as
specified.
b) Not more than 25% of the cigarettes result in a
full-length burn in a test trial.
c) The cigarettes are marked on the packaging and case to
indicate compliance with the burn-standard, as specified.
d) The manufacturer has filed a written certification with
the Attorney General (AG) in accordance specifying
compliance with the testing standard for each cigarette, as
specified.
2)Authorizes distributors, wholesalers, or retailers to sell any
inventory of cigarettes existing on January 1, 2007, if it can
establish that California tax stamps were affixed to the
cigarettes before January 1, 2007, or the inventory purchased
before January 1, 2007, is comparable to the inventory
purchased during the same period of 2006.
3)Requires cigarette manufacturers to:
a) Keep on file for three years the cigarette test data and
to provide that information upon request to the AG.
b) Submit to the AG the proposed package marking to
indicate compliance with the standard before the
manufacturer can certify cigarettes.
c) Submit written certification, which shall be good for
three years, to the AG for those cigarettes that have been
tested and meet the prescribed performance standards.
d) Provide to all distributors and wholesalers a copy of
the certification and an adequate number of illustrations
of the cigarette package marking so that the distributors
and wholesalers can, in turn, give to their retailers.
5)Imposes specified civil penalties for violation of this law as
follows:
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a) Any manufacturer, or any other person or entity that
knowingly sells or offers to sell cigarettes other than
through retail sale in violation of these provisions may be
fined up to $10,000.
b) Any retailer, distributor, or wholesaler that knowingly
sells or offers to sell cigarettes in violation of these
provisions, shall be subject to:
i) $500 fine for each sale or offer to sale for 50
packages of cigarettes or less.
ii) $1,000 fine for each sale or offer to sale for more
than 50 packages of cigarettes.
c) Any manufacturer that knowingly makes a false
certification of compliance with the standard may be fined
up to $10,000.
d) Any person violating any other provision of this law may
be fined up to $1,000 for each violation.
e) Any person who knowingly refuses or fails to allow the
FTB to inspect cigarette packing to ensure proper markings
may be fined up to $1,000.
f) It shall be a defense in any action for civil penalties
that a distributor, wholesaler or retailer or any person in
the stream of commerce relied in good faith on the
manufacturer's certificate or marking that the cigarettes
comply with the provisions of this law.
6)Authorizes the AG to bring an action on behalf of the people
of the state to further restrain violation of the law and for
any other relief that may be appropriate. Authorizes the AG
to recover its costs, as specified, of such action.
7)Requires all wholesalers or retailers to permit the BOE to
inspect cigarette packaging to ensure compliance with the
marking requirement. Imposes a civil penalty for refusing to
allow an inspection.
8)Authorizes BOE to seize cigarettes to which tax stamps or
metered impressions are affixed but the cigarettes are in
violation the law.
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9)Specifies that any cigarettes that have been sold or offered
for sale that do not comply with the required performance
standard shall be deemed contraband and subject to seizure and
disposal
10) Establishes the Cigarette Fire Safety and Firefighter
Protection Fund in the State Treasury and provides that moneys
from civil penalties deposited into the fund, upon
appropriation by the Legislature, shall be made available to
BOE to offset minor administrative costs for inspecting,
seizing, and disposing of cigarettes.
11) Becomes inapplicable if federal fire safety standards for
cigarettes that preempt this act are enacted and take effect
subsequent to the effective date and BOE so notifies the
Secretary of State.
FISCAL EFFECT: Unknown. This bill has been keyed fiscal
by Legislative Counsel. The Assembly Appropriations
Committee analysis, dated May 18, 2005, cited costs,
however the bill has been significantly amended since that
time, and the Assembly Third Reading File analysis stated
unknown fiscal costs.
COMMENTS:
1.Purpose. This bill is sponsored by the Trauma Foundation
at San Francisco General Hospital (sponsor). That Author
states that the bill would require that only
self-extinguishing cigarettes be sold in California,
beginning January 2007. The purpose of AB 178 is to
reduce the incidence of fires caused by careless smoking.
According to the Author, the bill would establish a fire
safe cigarette program in California that mirrors the
statutory and regulatory requirements in effect in New
York. It would prohibit, beginning January 1, 2007, the
sale of cigarettes in California that do not meet the
standards established by the American Society of Testing
and Materials (ASTM) protocol for measuring the ignition
strength of cigarettes. It requires the manufacturers to
certify that cigarettes meet California's standards and
creates new civil penalties for violations.
The Author states that how cigarette manufactures comply
with the standard is by making the cigarette paper
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slightly thicker in two or three concentric bands
approximately inch apart along the tobacco column.
These bands have been referred to as "speed bumps" and
cause extinguishment if the cigarette is not smoked by
restricting oxygen to the burning ember when the
cigarette is not being smoked.
2.Background. According to the National Fire Protection
Association , smoking materials are the leading cause of
fire deaths and the third leading cause of fire-related
injuries in the United States. Each year approximately
1,000 resulted in 830 civilian deaths, 1,770 civilian
injuries and $386 million in direct property damage.
Trash, mattresses and bedding, and upholstered furniture
are the items most commonly ignited in smoking-material
home fires. The risk of dying in a residential structure
fire caused by smoking materials rises with age. 40% of
fatal smoking-material-fire victims were age 65 or older,
compared to their 12% share of the population. Older
adults (age 65 and over) are less likely to smoke than
younger adults. Therefore, their high rates of
smoking-material fire deaths per million people are even
more noteworthy.
3.Related Legislation. SB 2070 (Schiff, 2000) would have
required the State Fire Marshal, in consultation with the
State Department of Health Services (DHS) and the Bureau
of Home Furnishings (BHF) in the Department of Consumer
Affairs (DCA), to adopt fire safety standards for
cigarettes sold, offered for sale, or manufactured in
this state, by January 1, 2002. The bill died without
hearing in the Assembly Governmental Organization
Committee.
AB 2200 (Migden, 1998) would have required the Bureau of
Home Furnishings and Thermal Insulation, on or before
June 1, 1999, to adopt fire safety standards for
cigarettes sold, offered for sale, or manufactured in the
state, that limit the risk that the cigarettes will
ignite upholstered furniture or mattresses. The bill
would have prohibited, on and after January 1, 2000, the
manufacture, distribution, or sale of any cigarette that
fails to comply with the fire safety performance
standards adopted by the Bureau of Home Furnishings and
Thermal Insulation. Required each violation of those
provisions to be subject to a civil penalty not to exceed
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$10,000. The bill was never set for a policy hearing.
4.Related New York Legislation. This bill substantially
mirrors legislation enacted in 2000, in the State of New
York which requires the Department of State's Office of
Fire Prevention and Control to adopt standards for fire
safe cigarettes by January 2003. The New York law became
effective on June 28, 2004, which only allowed cigarettes
that met the fire safe standards to be legally sold in
the state.
The New York standards set a minimum performance
requirement for cigarettes which are to be tested in
accordance with the American Society of Testing Materials
(E2187-02b). The standard requires a lit cigarette to be
placed on 10 layers of filter paper in a draft-free
environment and then observed to determine whether or not
the cigarette burns its full length. A cigarette brand
is in compliance if 75% or more of two packs (40
cigarettes) tested, self-extinguish.
The New York statute also requires the Office of Fire
Prevention and Control, in conjunction with the New York
Department of Health, to consider whether cigarettes
manufactured in accordance with the new standards result
in increased health risks to consumers. The Department
of Health examined the issue and advised that cigarettes
complying with the fire safety standards were not
expected to significantly change the inherently high
risks associated with cigarette smoking
5.Harvard Study. A study released in January 2005 by the
Harvard School of Public Health titled, "The Effect of
the New York State Cigarette Fire Safety Standard on
Ignition Propensity, Smoke Toxicity, and the Consumer
Market," compared smoke component make-up in reduced
ignition propensity (RIP) cigarettes sold in New York,
versus non-RIP cigarettes sold elsewhere. The study
found only slight increases of selected toxic components
in some brands of cigarettes. The report concluded that
there is no evidence that small increases in one or more
toxins affect the already highly toxic nature of
cigarette smoke.
The Harvard study additionally found that RIP cigarettes
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were found to be acceptable to consumers and did not
result in any higher costs in the price or reduction in
excise tax payments to the state. The study further
found that five cigarette brands of the major cigarette
manufacturers (representing 54% of market share) were in
compliance with the New York Standard.
Self-extinguishing rates of 90% or more were observed in
four of the five New York brands, and a 70%
self-extinguishing rate was observed on New York brands
(which is slightly out of compliance). By contrast, in
Massachusetts and California, 2% or less,
self-extinguished in each of the same five brands tested.
6.Arguments in Support. National Fire Protection
Association (NFPA) writes in support of the bill that in
the mid-1980's, NFPA research predicted that
reduced-ignition cigarettes would eliminate three out of
four cigarette fire deaths. NFPA states: "If we had
acted then we could have saved about 15,000 lives by
now."
The Chief of Burns for Shriners Hospitals for Children,
Northern CA, states that the hospital sees many patients
arrive because of cigarettes that failed to extinguish.
It is a common scenario for the patient to fall asleep
while smoking, wherein the cigarette falls on the couch
or floor and the victim awakes while the house is on
fire.
In addressing the issue of whether consumers are paying
more for cigarettes in New York and whether there has
been a decline in state tax revenues, proponents argue
that The Harvard study found the average pre-tax (excise
and sales tax) price per pack did not differ by brand
type or store type (convenience stores, gas stations, and
pharmacies), but was slightly higher in neighboring
Boston, MA, where there is no fire safety standard for
cigarettes ($3.27) than in Albany, NY ($3.12), where the
NY Standard has been in effect. Furthermore, cigarette
sales have not declined with statistical significance in
the first seven months since implementation of the
Standard. Thus, proponents state, NY state tax revenues
have remained the same pre- and post-Iaw , although there
are standard month-to-month fluctuations.
7.Arguments in Opposition. R. J. Reynolds Tobacco Company
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(RJRTC) argues in opposition that although RJRTC agrees
with the goal of this bill, to reduce fires caused by
careless smoking, the bill would require the state to
adopt a regulatory standard whose effectiveness has been
expressly questioned as a result of extensive federal
studies, and for which no safety benefits have been
reported to date by the one state that has tried such an
approach. RJRTC argues that California has already
succeeded in reducing careless smoking fires by its
upholstered furniture fire standards and fire safety
programs, to as low as any law or regulation can
realistically hope to achieve. In 2002, the last year
for which the State Fire Marshal has reported data,
California experienced one careless smoking fatality, and
the regulatory standard the bill is aimed at, upholstered
furniture, has not reported any fatalities since 1996.
RJRTC notes that New York has had less than a year
operating under its new law, and it is too early to tell
the exact consequences of the law in terms of
effectiveness or financial consequences to the state.
Finally, RJRTC argues that since cigarettes are a
nationwide product, any regulation of cigarette design
should be done on the federal level in a uniform
nationwide basis, in the same way that cigarette health
warnings are handled instead of a patchwork of state
regulations.
California Manufacturers and Technology Association (CMTA)
argues in opposition that the demand for specialized
paper which would be required to meet the burn extinguish
standard, could slow cigarette deliveries to the state
and encourage smokers to find non-compliant cigarettes in
other locations. CMTA believes the potential for loss of
sate tax revenue due to cross border purchasing and
increase counterfeiting could easily reach into the
millions of dollars.
8.Recommended Amendments.
a. Correcting Amendment. The legislative intent
language states in part that cigarettes claim 1,000
lives and cause nearly 2,500 injuries and four billion
dollars ($4,000,000,000) in societal costs for deaths,
injuries, and property damage. The National Fire
Protection Association's report, "The Smoking-Material
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Fire Problem" released in November 2004 cites that in
2001, smoking-material structure fires resulted in 830
civilian deaths, 1,770 civilian injuries and $386
million in direct property damage.
Committee staff recommends that the legislative intent
language be amended to more accurately reflect data in
the National Fire Protection Association's report.
Amendment 1
On page 2, line 4 strike out "2,500" strike out
lines 5 and 6 and insert:
"2,000 injuries and nearly 400 million in direct
property damage."
b. Conforming Amendment. The bill requires that the
manufacturer must keep the standards compliance
testing data on file for three years, and shall send
it to the AG upon request. However, the bill also
requires each certified cigarette to be recertified
every three years. Since the certification would take
place at the beginning of the three year period, it
would reasonably follow that for enforcement purposes,
the data should be kept on file for at least three
years after the cigarettes are recertified; in other
words, after the certification expires. Therefore,
the certification data should be kept on file until
three years after the certification expires.
Committee staff recommends amending the bill to require
the testing data be kept on file by the manufacturer
for three years after recertification of the
cigarettes .
Amendment 2
On page 6, line 33, after "years" insert:
"after the recertification required by subdivision (c)
of Section 14953"
NOTE : Double-referral to Judiciary Committee
SUPPORT AND OPPOSITION:
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Support:
Trauma Foundation, San Francisco General Hospital (sponsor)
Alameda County Fire Department
Alameda County Sheriff's Office
American Academy of Pediatrics, California District
American Heart Association (AHA)
American Lung Association of California
California Alliance for Consumer Protection
California Center for Public Health Advocacy (CCPHA)
California Chapter of the American College of Emergency
Physicians
California Fire Chiefs Association
California State Firefighters' Association (CSFA)
California Insurance Commissioner, John Garamendi
California Professional Firefighters (CPF)
California Public Interest Research Group (CALPIRG)
City of Oakland, Fire Chief, Daniel D. Farell
Consumer Federation of California
Fire Districts Association of California
National Fire Protection Association (NFPA)
Nationwide Insurance Company
Newark Fire Department
Orange County Burn Association
Phoenix Society for Burn Survivors
Personal Insurance Federation of California
Shriners Hospitals for Children, Northern CA, Chief of Burns,
David G. Greenhalgh
UCI Regional Burn Center
Lily Chatterjee, Burn Survivor
Howard Taekman, M.D., John Muir Trauma Center
M. Margaret Knudson, M.D., Professor of Surgery, University of
California, San Francisco
William Schecter, M.D., San Francisco General Hospital
Opposition:
R. J. Reynolds Tobacco Company
California Manufacturers and Technology Association
Consultant: G.V. Ayers
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