(July 21, 2009) Strong opposition from the business community and the California Chamber of Commerce has stopped two CalChamber-opposed “job killer” bills that would have severely restricted retailers from growing their businesses by limiting the sale of a legal product in a legal venue.

SB 602 and SB 603 (Padilla; D-Pacoima) would have created a state regulatory framework that would have restricted the ability of retailers to grow their California business to new locations. Together the measures restricted, and in some cases eliminated, the ability to sell tobacco from new retail locations.

SB 602 has been amended to deal with a different subject, and as a result, the CalChamber has removed its opposition to the bill. At this time, CalChamber has no position on the bill. The Assembly Governmental Organization Committee hearing for SB 603 was canceled at the request of the bill’s author and the bill has stopped moving for this year.

The CalChamber will remain alert in case the Legislature attempts to bring back the original language of either bill through a controversial technique called “gut and amend.”

SB 602 unnecessarily changed the criteria for enforcement under the Stop Tobacco Access to Kids Enforcement Act (STAKE Act) for violations. The act is working to deter minors from purchasing tobacco products and paraphernalia.

SB 603 specified that a new license to sell tobacco may not be issued to a retail location that is within 600 feet of an elementary or secondary school and limited the overall number of retail licenses that sell tobacco in areas of over concentrations.

California has significant laws governing the advertisement and sale of tobacco products to minors. It is already illegal to sell tobacco products to minors. Violations are punishable by substantial penalties, including fines and eventual loss of license. CalChamber believes that the suggested changes in SB 603 are punitive and unnecessary.

With California’s unemployment rate reaching 11.2 percent in March, this is not the time to restrict the ability of a California business to grow to new locations, or create uncertainty for retail businesses that create jobs. Moreover, the retail sector in California has lost more than 100,000 jobs since March 2008. Restricting new retail locations does not help the economy, or bring jobs to California. If SB 603 had become law, the 6,000 new retail tobacco licenses issued annually by the state would have been reduced or lost entirely. At this rate, SB 603 could have eliminated 28,000 retailers from the state in less than five years.

SB 602 and SB 603 would have deprived retail business in California of the opportunity to sell a legal product at a new location in the state, even when they are selling the product responsibly. Limits on new retail locations unnecessarily inconvenience adult consumers and potentially promote purchases through untaxed or lower-tax venues, such as Native American territories, and other sources of revenue will be sought by the state to cover the loss.

For more information, visit www.calchamber.com/jobkillers

Staff Contact: Valerie Nera