Article 4-90

TOBACCO RETAILER LICENSE

Sections:

This Article is intended to set forth a local licensing process for tobacco retailers to ensure compliance with City business standards and practices; encourage responsible retailing of tobacco products; discourage violations of laws related to tobacco products, especially those laws that prohibit or discourage sale or distribution of tobacco products to minors; prohibit sales of electronic smoking products, and, protect the public health, safety, and welfare. This Article does not expand or reduce the degree to which the acts regulated by federal or state law are criminally proscribed or alter the penalties provided by such laws.

(Ord. No. 327, § 1(Att.), 6-17-2015; Ord. No. 357, § 1(Att. 1), 10-17-2018; Ord. No. 375, § 1(Att. 1), 9-162020)

(a) Electronic smoking product means any of the following products:

(1) Any device or delivery system that can be used to deliver nicotine or other chemicals in aerosolized or vaporized form, including but not limited to an e-cigarette, e-cigar, e-pipe, e-hookah, vape pen, electronic vape, vaporizer, or any other product name or description.

(2) Any component, part, or accessory of such a device or delivery system that is used during its operation.

(3) Any flavored or unflavored liquid or substance containing nicotine or other chemicals, whether sold separately or sold in combination with any device

or delivery system that could be used to delivery nicotine or other chemicals in aerosolized or vaporized form.

(4) Any product for use in an electronic smoking device or delivery system whether or not it contains nicotine or tobacco or is derived from nicotine or tobacco.

(5) Electronic smoking products shall not include:

(i) Any battery, battery charger, carrying case, or other accessory not used in the operation of the device if sold separately; or

(ii) Any product that has been approved by the United States Food and Drug Administration for sale as a tobacco cessation product or for other therapeutic purposes where that product is marketed and sold solely for such approved use.

(b) Flavored tobacco product means any tobacco product that imparts a taste or aroma, other than the taste or aroma of tobacco, imparted either prior to or during consumption of a tobacco product or any byproduct produced by the tobacco product, including, but not limited to, tastes or aromas relating to mint, wintergreen, fruit, menthol, chocolate, vanilla, honey, candy, cocoa, dessert, alcoholic beverage, herb, or spice; provided, however, that a tobacco product shall not be determined to be flavored tobacco solely because of the use of additives or flavorings or the provision of ingredient information.

(c) Paraphernalia means cigarette papers or wrappers, pipes, holders of smoking materials of all types, rolling machines, and any other item designed for smoking or for ingestion of tobacco products. Until January 1, 2021 paraphernalia includes electronic smoking products.

(d) Person means any natural person, partnership, cooperative association, private corporation, personal representative, receiver, trustee, assignee, or any other legal entity.

(e) Retailer meansanypersonwhosells,exchanges, or offers to sell or exchange, for any form of consideration, tobacco products or paraphernalia. "Retailing" shall mean the doing of any of these things whether exclusively or in conjunction with any other use. The definition of a retailer is without regard to the quantity of tobacco products or paraphernalia sold, exchanged, or offered for sale or exchange.

(Saratoga Supp. No. 49, 3-22)

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(f) Self-service display means the open display or storage of tobacco products or paraphernalia in a manner that is physically accessible in any way to the direct general public without the assistance of the retailer or employee of the retailer and a direct person-to-person transfer between the purchaser and the retailer or employee of the retailer.

(g) Tobacco product means any substance containing tobacco leaf, including but not limited to cigarettes, cigars, pipe tobacco, hookah tobacco, snuff, chewing tobacco, dipping tobacco, snus, bidis, or any other preparation of tobacco (such as flavored tobacco); and any product or formulation of product containing biologically active amounts of nicotine that is manufactured, sold, offered for sale, or otherwise distributed with the expectation that the product or matter will be introduced into the human body, but does not include any product that has been approved by the United States Food and Drug Administration for sale as a tobacco cessation product or for other therapeutic purposes where that product is marketed and sold solely for such approved use.

(h) Tobacco retailer license is a license issued pursuant to this Article.

(Ord. No. 327, § 1(Att.), 6-17-2015; Ord. No. 341, § 1(Att. A), 8-17-2016; Ord. No. 357, § 1(Att. 1), 10-172018; Ord. No. 375, § 1(Att. 1), 9-16-2020; Ord. No. 387, § 1(Exh. A), 1-19-2022, eff. 5-1-2022)

It shall be unlawful for any person to act as a retailer in the City of Saratoga without first obtaining and maintaining a valid tobacco retailer license pursuant to this Article for each location at which the activity is to occur.

(Ord. No. 327, § 1(Att.), 6-17-2015; Ord. No. 341, § 1(Att. A), 8-17-2016; Ord. No. 357, § 1(Att. 1), 10-172018; Ord. No. 375, § 1(Att. 1), 9-16-2020)

(a) Lawful business operation. It shall be a violation of this Article for any retailer to violate any local, state, or federal law applicable to tobacco products, electronic smoking devices, or the retailing of such products.

(b) Location. Retailing activities shall be conducted at a fixed location and within an enclosed area of a commercial premises accessible to the general public during the hours of business operation. No

tobacco retailers established after September 16, 2016, shall be granted a tobacco retailer license for a location which is: within five hundred feet of a site occupied by another tobacco retailer; within one thousand feet of a site occupied by a public or private elementary, middle, or high school; or within one thousand feet of a site occupied by a City park. All distances shall be measured in a straight line from the point on the parcel boundary of the proposed tobacco retailer location nearest to the subject use (i.e. existing tobacco retailer, school, or park) to the nearest point on the parcel boundary of the subject use. Notwithstanding the foregoing, a tobacco retailer license may be issued for use of a location for which a tobacco retailer license was in effect prior to September 16, 2016 and may be renewed thereafter unless it expires due to non-renewal or is revoked in accordance with section 4-90.070 of this Code.

(c) Pharmacies. No retailer permit may be issued to authorize retailing activities at any location where the profession of pharmacy is practiced by a pharmacist licensed by the State of California in accordance with the Business and Professions Code and where prescription drugs are offered for sale regardless of whether other retail goods in addition to prescription pharmaceuticals are offered for sale.

(d) Display of license. Each tobacco retailer license shall be prominently displayed in a publicly visible place at the licensed location.

(e) License nontransferable. A tobacco retailer license may not be transferred from one person to another or from one location to another. Whenever a new person obtains possession of a ten percent or greater interest in the stock, assets, or income of a business (other than a security interest for the repayment of debt) for which a tobacco retailer license has been issued, a new license shall be required.

(f) False and misleading advertising prohibited. A retailer either without a valid tobacco retailer license or with a suspended license shall not display any tobacco products or paraphernalia nor display any advertisement that promotes the sale or distribution of such products from the retailer's location or that could lead a reasonable consumer to believe that tobacco products or paraphernalia can be obtained at that location.

(g) Minimum age for purchase. No retailer shall sell, give, or otherwise transfer tobacco product or paraphernalia to a person under the minimum age for purchase as set by State law.

(Saratoga Supp. No. 49, 3-22)

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(h) Positive identification required. No retailer shall sell, give, or otherwise transfer tobacco product or paraphernalia to another person who appears to be under thirty years of age without first examining the customer's identification to confirm that the customer is at least the minimum age for purchase as set by State law.

(i) Minimum age for engaging in tobacco sales. No retailer may allow a person under the minimum age for purchase as set by State law of tobacco products to sell, give, or otherwise transfer to customers tobacco product or paraphernalia.

(j) Limitation on storefront advertising. Storefront advertising shall comply with Article 15-30 of this Code and all advertising and signage shall be placed and maintained in a manner that ensures that law enforcement personnel have a clear and unobstructed view of the interior of the premises, including the area in which the cash registers are maintained, from the exterior public sidewalk or entrance to the establishment. However, this shall not apply to an establishment where there are no windows or where existing windows are located at a height that preclude view of the interior of the premises by a person standing outside the premises.

(k) Vendingmachinesprohibited. Notobaccoproduct or paraphernalia shall be sold, offered for sale, or distributed to the public from a vending machine or appliance,oranyothercoin-ortoken-operatedmechanical device designed or used for vending purposes, including, but not limited to, machines or devices that use remote control locking mechanisms.

(l) Self-service displays prohibited. No tobacco product or paraphernalia shall be sold, offered for sale, or distributed to the public from a self-service display.

(m) Flavored tobacco products prohibited. No flavored tobacco product shall be sold, offered for sale, or possessed with intent to sell or offer for sale.

(n) Electronic smoking products prohibited. Beginning January 1, 2021 no electronic smoking products shall be sold, offered for sale, or possessed with intent to sell or offer for sale.

(o) Limited, conditional privilege. Nothing in this Article shall be construed to grant any person obtaining and maintaining a tobacco retailer license any sta-

tus or right other than the limited, conditional privilege to act as a retailer at the location in the City identified on the face of the license.

(Ord. No. 327, § 1(Att.), 6-17-2015; Ord. No. 341, § 1(Att. A), 8-17-2016; Ord. No. 357, § 1(Att. 1), 10-172018; Ord. No. 375, § 1(Att. 1), 9-16-2020)

(a) All applications for a tobacco retailer license shall be submitted to the Director of Finance and Administrative Services on a form supplied by the City of Saratoga.

(b) Any person holding a tobacco retailer license shall inform the City in writing of any change in the information submitted on an application for such license within fourteen calendar days of a change.

(c) Allinformationspecifiedinanapplicationshall be subject to disclosure under the California Public Records Act or any other applicable law.

(d) It is the responsibility of each retailer to be informed of all laws applicable to retailing, including those laws affecting the issuance of a tobacco retailer license. No retailer may rely on the issuance of a tobacco retailer license as a determination by the City that the retailer has complied with all laws applicable to retailing. A tobacco retailer license issued contrary to this Article, to any other law, or on the basis of false or misleading information supplied by a retailer shall be revoked.

(Ord. No. 327, § 1(Att.), 6-17-2015; Ord. No. 357, § 1(Att. 1), 10-17-2018)

Editor’s note— Ord. No. 327, § 1(Att.), adopted June 17, 2015, set forth two sections designated 7-90.040. At the editor's discretion, the second such section, pertaining to application procedure, has been redesignated 4-90.045.

(a) Upon receipt of a complete application for a tobacco retailer license and the application and license fees, the Director of Finance and Administrative Services shall issue a license, unless substantial evidence demonstrates that one or more of the following bases for denial exist:

(1) The information presented in the application is inaccurate or false.

(2) The application seeks authorization for retailing by a person to whom this Article prohibits issuance of a tobacco retailer license.

(Saratoga Supp. No. 49, 3-22)

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(3) The application seeks authorization for retailing at a location or in some other manner that is prohibited pursuant to this Article or that is unlawful pursuant to any other law.

(b) A tobacco retailer license shall be revoked if the Director of Finance and Administrative Services finds that one or more of the bases for denial of a license under this section existed at the time the application was made or at any time before the license was issued. Such a revocation shall be without prejudice to the filing of a new license application.

(c) A decision to deny issuance of a tobacco retailer license or to revoke such a license that has been wrongly issued may be appealed pursuant to Section 4-90.100 of this Article.

(Ord. No. 327, § 1(Att.), 6-17-2015; Ord. No. 341, § 1(Att. A), 8-17-2016; Ord. No. 357, § 1(Att. 1), 10-172018)

(a) Term of license. The term of a tobacco retailer license is one year. A license is invalid thirty days after the expiration date of the license.

(b) Renewal of license. The Director of Finance and Administrative Services shall renew a valid tobacco retailer license upon timely payment of the annual license fee. A license may not be renewed more than ninety days after its expiration.

(c) Issuance of license after revocation or expiration of license. To apply for a new tobacco retailer license more than ninety days after expiration of a tobacco retailer license or following revocation of a tobacco retailer license that was wrongly issued, a retailer must submit a complete application for a license, along with the application fee and annual license fee.

(d) Fee for new licenses and renewals. The fees to apply for and issue or renew a tobacco retailer license shall be established from time to time by resolution of the City Council. The fees shall be calculated so as to recover any amount up to the cost of administration of this Article, including, for example, issuing a license, administering the program, and monitoring compliance. Fees shall not exceed the cost of the program authorized by this Article. Fees are nonrefundable ex-

cept as may be required by law. A retailer license may not be issued or renewed until full payment of any applicable fees is made.

(Ord. No. 327, § 1(Att.), 6-17-2015; Ord. No. 341, § 1(Att. A), 8-17-2016; Ord. No. 357, § 1(Att. 1), 10-172018)

(a) Any peace officer may enforce the penal provisions of this Article. The City Manager may designate any number of additional persons to monitor compliance with this Article.

(b) The City shall not enforce any law establishing a minimum age for tobacco product, paraphernalia, or electronic smoking product purchases against a person who otherwise might be in violation of such law because of the person's age if the violation occurs when:

(1) Thepurchaser(hereinafterreferredtoas"youth decoy") is participating in a compliance check supervised by a peace officer or designated official of the City;

(2) The youth decoy is acting as an agent of a person designated by the City to monitor compliance with this Article; or

(3) The youth decoy is participating in a compliance check funded in part, either directly or independently through subcontracting, by the County or the State of California.

(c) Any violation of this Article is hereby declared to be a public nuisance.

(d) Causing, permitting, aiding, abetting, or concealing a violation of any provision of this Article shall also constitute a violation of this Article.

(e) For purpose of this Article, each day on which a tobacco product, paraphernalia, flavored tobacco product, or electronic smoking product is offered for sale in violation of this Article constitutes a separate violation.

(f) Violations of this Article shall be subject to issuance of administrative citations pursuant to Article 3-30 and suspended from holding or receiving a tobacco retailer license as follows:

(1) First citation within twenty-four months. For up to sixty calendar days from the date of the administrative citation issuance, no tobacco retailer license shall be issued and any existing license shall be suspended.

(Saratoga Supp. No. 47, 1-21)

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(2) Second or subsequent citations within twentyfour months. For up to twenty-four months from the date of the administrative citation issuance, no tobacco retailer license shall be issued and any existing license shall be revoked.

(g) Notwithstanding any other provisions of this Article, prior violations of this Article at a location shall continue to be counted against a location and license ineligibility and suspension periods shall continue to apply to a location unless:

(1) One hundred percent of the interest in the stock, assets, or income of the business, other than security interest for the repayment of debt, has been transferred to one or more new owners; and

(2) The City is provided clear and convincing evidence that the transfer was pursuant to an arm's length transaction in good faith between two or more informed and willing parties, neither of which is under any compulsion to participate in the transaction. A sale between relatives, related companies or partners, or a sale for which a significant purpose is to avoid the effect of the violations of this Article is not an arm's length transaction.

if it is the sort of evidence on which responsible persons are accustomed to rely on in the conduct of serious affairs.

(c) City Manager's decision. All parties shall be given written notice of the City Manager's decision within fifteen business days of the hearing. The decision of the City Manager shall be supported by the weight of the evidence. The decision of the City Manager shall be final and shall not be subject to appeal to the City Council.

(d) Appellant's failure to appear at hearing. Failure of the appellant to appear at a hearing shall be considered a withdrawal of the request for a hearing and the decision being appealed shall remain in effect. (Ord. No. 327, § 1(Att.), 6-17-2015; Ord. No. 357, § 1(Att. 1), 10-17-2018)

(Ord. No. 327, § 1(Att.), 6-17-2015; Ord. No. 341, § 1(Att. A), 8-17-2016; Ord. No. 357, § 1(Att. 1), 10-172018; Ord. No. 375, § 1(Att. 1), 9-16-2020)

(a) Request for hearing. A decision to deny issuance of a tobacco retailer license or to revoke a tobacco retailer license that has been wrongly issued may be appealed to the City Manager, subject to the following requirements and procedures.

(1) All appeals must be submitted in writing to the City Clerk no later than fifteen calendar days after receipt of notice of the appealed action. If such an appeal is made, it shall stay enforcement of the appealed action.

(2) No later than fifteen calendar days after receipt of the appeal, the City Manager shall set an appeal hearing at the earliest practicable time. The City Clerk shall give notice of the hearing to the parties at least ten calendar days before the date of the hearing.

(b) Conduct of hearing. Hearings pursuant to this Article shall be conducted pursuant to procedures adopted by the City Manager. Strict rules of evidence shall not apply. Any relevant evidence may be admitted

(Saratoga Supp. No. 47, 1-21)

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a period of thirty consecutive calendar days or less counting portions of calendar days as full days. Any such person so occupying space in a hotel shall be deemed to be a transient until the period of thirty days has expired. In determining whether a person is a transient, uninterrupted periods of time extending both prior and subsequent to the effective date of this Article may be considered.

For the privilege of occupancy in any hotel in the City, each transient is subject to and shall pay a tax in the amount of ten percent of the rent charged by the operator. The tax constitutes a debt owed by the transient to the City which is extinguished only by payment to the operator or to the City. The transient shall pay the tax to the operator of the hotel at the time the rent is paid. If the rent is paid in installments, a proportionate share of the tax shall be paid with each installment. The unpaid tax shall be due upon the transient's ceasing to occupy space in the hotel. If for any reason the tax due is not paid to the operator of the hotel, the Tax Administrator may require that such tax be paid directly to the Tax Administrator. (Amended by Ord. 71.124 § 1, 1993)

No tax shall be imposed upon:

(a) Any person as to whom, or any occupancy as to which, it is beyond the power of the City to impose the tax herein provided;

(b) Any officer or employee of the Federal or State Government, or any political subdivision thereof, when on official business;

(c) Any officer or employee of a foreign government who is exempt by reason of express provision of federal law or international treaty.

No exemption shall be granted except under a claim therefor made at the time rent is collected and under penalty of perjury upon a form prescribed by the Tax Administrator.

Each operator shall collect the tax imposed by this Article to the same extent and at the same time as the rent is collected from every transient. The amount of tax shall be separately stated from the amount of rent charged, and each transient shall receive a receipt for payment from the operator. No operator of a hotel

shall advertise or state in any manner, whether directly or indirectly, that the tax or any part thereof will be assumed or absorbed by the operator, or that it will not be added to the rent, or that, if added, any part will be refunded except in the manner hereinafter provided.

Within thirty days after the effective date of this Article, or within thirty days after commencing business, whichever is later, each operator of any hotel in the City renting occupancy to transients shall register the hotel with the Tax Administrator and obtain from him a "Transient Occupancy Registration Certificate" to be at all times posted in a conspicuous place on the premises. The certificate shall, among other things, state the following:

• (a) The name of the operator;

• (b) The address of the hotel;

(c) The date upon which the certificate was issued;

(d) "This Transient Occupancy Registration Certificate signifies that the person named on the face hereof has fulfilled the requirements of the Uniform Transient Occupancy Tax Ordinance by registering with the Tax Administrator for the purpose of collecting from transients the Transient Occupancy Tax and remitting said tax to the Tax Administrator. This certificate does not authorize any person to conduct any unlawful business or to conduct any lawful business in any unlawful manner, nor to operate a hotel without strictly complying with all applicable laws, including but not limited to those requiring a permit from any board, commission, department or office of the City of Saratoga. This certificate does not constitute a permit."

Each operator shall, on or before the last day of the month following the close of each calendar quarter, or at the close of any shorter reporting period which may be established by the Tax Administrator, make a return to the Tax Administrator, on forms provided by him, of the total rents charged and received and the amount of tax collected for transient occupancies. All records, returns and payments submitted by each operator shall be treated as confidential by the Tax Administrator and all persons having an administrative duty under this Article and shall not be released except upon order of a court of competent jurisdiction or to an officer or agent of the United States, the State of California, the County

(Saratoga Supp. No. 49, 3-22)

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of Santa Clara or the City of Saratoga for official use only. At the time the return is filed, the full amount of tax collected shall be remitted to the Tax Administrator. The Tax Administrator may establish shorter reporting periods for any certificate holder if he deems it necessary in order to insure collection of the tax and he may require further information in the return. Returns and payments are due immediately upon cessation of business for any reason. All taxes collected by operators pursuant to this Article shall be held in trust for the account of the City until payment thereof is made to the Tax Administrator.

(Ord. No. 383, § 1(Exh. A, § 7), 11-17-2021)

(a) Original delinquency. Any operator who fails to remit any tax imposed by this Article within the time required shall pay a penalty of ten percent of the amount of the tax.

(b) Continued delinquency. Any operator who fails to pay any delinquent remittance on or before a period of thirty days following the date on which the remittance first became delinquent shall pay a second delinquency penalty of ten percent of the amount of the tax in addition to the ten percent penalty first imposed.

(c) Fraud. If the Tax Administrator determines that the nonpayment of any remittance under this Article is due to fraud, a penalty of twenty-five percent of the amount of the tax shall be added thereto in addition to the penalties stated in subsections (a) and (b) of this Section.

(d) Interest. In addition to the penalties imposed, any operator who fails to remit any tax imposed by this Article shall pay interest at the rate of one and one-half percent per month or fraction thereof on the amount of the tax, exclusive of penalties, from the date on which the remittance first became delinquent until paid.

(e) Penalties merged with tax. Every penalty imposed and such interest as accrues under the provisions of this Section shall become a part of the tax herein required to be paid.

(a) Assessment of estimated tax. If any operator fails or refuses to collect the tax and to make, within the time provided in this Article, any report and remittance of the tax or any portion thereof required by this

Article, the Tax Administrator shall proceed in such manner as he may deem best to obtain facts and information on which to base his estimate of the tax due. As soon as the Tax Administrator procures such facts and information as he is able to obtain upon which to base the assessment of any tax imposed by this Article and payable by any operator who has failed or refused to collect the same and to make such report and remittance, he shall proceed to determine and assess against such operator the tax, interest and penalties provided for by this Article.

(b) Notice of assessment; hearing; determination of tax. The Tax Administrator shall give a notice of the amount so assessed by serving it personally or by depositing it in the United States mail, postage prepaid, addressed to the operator at his last known address. Such operator may within ten days after the serving or mailing of such notice make application in writing to the Tax Administrator for a hearing on the amount assessed. If the application by the operator for a hearing is not made within the time prescribed, the tax, interest and penalties, if any, determined by the Tax Administrator shall become final and conclusive and immediately due and payable. If such application is made, the Tax Administrator shall give not less than five days' written notice in the manner prescribed herein for the operator to appear at a time and place fixed in the notice and show cause as to why the amount specified therein should not be fixed for such tax, interest and penalties. After such hearing, the Tax Administrator shall determine the proper tax to be remitted and shall thereafter give written notice to the operator in the manner prescribed herein of such determination and the amount of such tax, interest and penalties. The amount determined to be due shall be paid in full within ten days after notice of such determination is given to the operator, unless an appeal is taken as provided in Section 5-25.100.

Any operator aggrieved by any decision of the Tax Administrator with respect to the amount of any tax, interest or penalties imposed under this Article, may appeal such decision to the City Council in accordance with the procedure set forth in Section 2-05.030 of this Code.

It shall be the duty of every operator liable for the collection and payment to the City of any tax imposed

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(Saratoga Supp. No. 49, 3-22)

5-25.150

by this Article to keep and preserve, for a period of three years, all records as may be necessary to determine the amount of such tax, which records the Tax Administrator shall have the right to inspect at all reasonable times.

register as required herein, or to furnish any return required to be made, or who fails or refuses to furnish a supplemental return or other data required by the Tax Administrator, or who renders a false or fraudulent return or claim, is guilty of a misdemeanor, punishable as provided in Chapter 3 of this Code.

(a) Whenever the amount of any tax, interest or penalty has been overpaid or paid more than once or has been erroneously or illegally collected or received by the City under this Article, it may be refunded in accordance with Section 2-50.010 of this Code.

(b) An operator may claim a refund or take as credit against taxes collected and remitted the amount overpaid, paid more than once or erroneously or illegally collected or received when it is established to the satisfaction of the Tax Administrator that the person from whom the tax has been collected was not a transient; provided, however, that neither a refund nor a credit shall be allowed unless the person who paid the tax has submitted a written claim to the operator in the form prescribed in Section 2-50.010 of this Code, and the amount of the tax so collected has either been refunded to the person who paid the tax or credited to rent subsequently payable by such person to the operator. (Amended by Ord. 71-162 § 4, 1996)

Any tax required to be paid by any transient under the provisions of this Article shall be deemed a debt owed by the transient to the City. Any such tax collected by an operator which has not been remitted to the City shall be deemed a debt owed by the operator to the City. Any person owing money to the City under the provisions of this Article shall be liable to an action brought in the name of the City for the recovery of such amount.

The proceeds derived from the transient occupancy tax shall be deposited in the City's general fund and shall be expended for general operating expenses incurred by the City or for capital improvements or such other legal uses and purposes as determined by the City Council.

Any operator or other person who violates any of the provisions of this Article or who fails or refuses to

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