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sr-092810-13eDate: September 28, 2010 13- ~ To: Mayor and City Council From: Kathryn Vernez, Assistant to the City Manager for Government Relations Subject: AB 1060 (De La Torre) Introduction This report reviews AB 1060 (De La Torre). The legislation would prohibit all off-sale liquor licensees from selling alcoholic beverages using aself-service checkout system. It is seen by proponents as an additional safeguard against alcohol sales to youth and is aimed at ensuring purchases are made with proper identification checks. Opponents argue that it is redundant because existing State of California Department of Alcoholic Beverage Control (ABC) requirements are in place. While it may have an incremental beneficial effect, staff is neutral on the measure and defers to Council. Discussion Attachment A is an overview of AB 1060. The legislation would prohibit all off-sale liquor licensees from selling alcoholic beverages using aself-service checkout system. It is seen by proponents as an additional safeguard against alcohol sales to youth and is aimed at ensuring purchases are made with proper identification checks. Arguments in favor point to the current ease of purchase of alcohol, the possibility of "gaming" existing self-service check-out technology, and the problem of youth drinking as a social and safety issue. Supporters include the California State Sheriffs Association, City of Los Angeles, and Mothers Against Drunk Driving. According to the California State Sheriff's Association, the measure helps prevent the purchase of alcoholic beverages by minors, avoids the additional purchase of alcoholic beverages by already inebriated customers, and cracks down on alcohol theft. 1 The measure is viewed by opponents as unnecessary since self-service checkout stations have clock-out or "freeze" mechanism to preclude the purchase of alcoholic beverages without a clerk's intervention to verify age of the buyer. The bill is opposed by the California Grocers Association, among others. City staff reviewed the measure with a view to existing law. A current ABC licensee already has the requirement to verify the age of people purchasing alcohol, whether or not the purchase is automated. In this way the bill is redundant with existing requirements. However, conducting all alcohol sales with a cashier is similar to what is required for cigarettes, spray paints, and some over the counter drugs, so there may be some incremental beneficial effect to reducing the purchase of alcohol by minors. Summary This bill would limit all off-sale liquor licensees to selling alcoholic beverages at registers with cashiers. It is redundant with existing law. However, there may be some benefit to restricting alcohol sales in the same manner as cigarettes, spray paint, and some over the counter drug sales. Prepared by: Kathryn Vernez, Assistant to the City Manager for Government Relations Attachment A: Overview of AB 1060 2 sy SHAW/YODERiANTWIH, INC. LE6 [SLATIVE ADVOCACY ASSOCIATION MANAGEMENT Date: September 16, 2010 To: Kate Vernez, Assistant to the City Manager, Community & Government Relations, City of Santa Monica Tiro Jackman, Chief of Police, City of Santa Monica From: Joshua W. Shaw, Partner Shaw 1 Yoder / Antwih, Inc. Re: AI3 1060 (De La Torre) This memo provides an overview of AB 1060 (De La Torre) regarding the selling of alcoholic beverages from self-service check out systems. Background AB ] 060 (De LaTorre) would prohibit off-sale licensees (licenses that allow for the consumption of alcohol off the premise) from selling alcoholic beverages using a self=service checkout system. This bill proceeded through the legislative process during 2009 and ultimately passed the Senate Floor in the final days of the legislative session in 2010 and crirrently sitting on the Governor's desk, awaiting his action (i.e. veto or signature). The bill was heard in the following committees: Assembly Governmental Organization Committee-passed I I-3 Assembly Appropriations Committee-passed 12-4 Assembly Floor- passed 50-27 (Brownley voting Aye) Senate Governmental Organizational Committee- failed first passage, reconsideration was granted. The bill then passed 8-0. Senate Appropriations Committee -passed 7-4 Senate Floor-passed 23-12 (Pavleyvoting Aye) Arguments in Sup_pgrt The bill is supported by the following organizations: California Council on Alcohol Policy California State Sheriffs' Association Consumer i~ederation of California Los Angeles, City of Marin Institute Mothers Against Drunk Driving Peace Officers Research Association of California Pueblo Y Salud. Ina Sutter/Yuba Friday Night Live -Youth Development Organization Proponents emphasize that the state has a responsibility to regulate the retail sale of alcohol and as a society we must do everything we can to prevent youth access to alcohol. Proponents believe that preventing youth access by restricting alcohol sales through unsupervised self-service retail sales is good public policy. As Belt=service checkout kiosks become more widely used throughout the state, the threat "fz I: e 16_x-1b.-tti ~6 fax: 916.-1-16 4318 1415 L StreaL Suite 200 Sacramento. CA 9581-1 of the technology abuse continues to grow. "Ihe potential For abuse by minors to purchase alcohol at self- checkout poses a greater risk by bypassing the simple face-to-face transaction. Arguments in Opposition The bill is opposed by the following organizations: California Grocers Association California Retailers Association Department of Finanee NCR Opponents disagree with the findings of this bill and argue that self-service checkout stations have a lock- out or "freeze" mechanism to preclude any customer from purchasing alcoholic beverages without clerk intervention to verify age and finalize the pw~chase. The Governor has until September 30°i to act on AB 1060 (De La T'orre). I ~ ---G September 14, 2010 Council Meeting: September 14, 2010 Santa Monica; California CITY CLERK'S OFFICE -MEMORANDUM To: City Council From: Councilmember McKeown Date: September 14, 2010 13-F: Request of Councilmember McKeown that the City of Santa Monica support the signing by the Governor of AB 1060, a bill already passed by the California Legislature which would prohibifithe sale of alcoholic beverages using self-serve. checkout systems; and convey to the Governor our desire that he sign AB 1060 into law without delay. 1~'~ 1 .September 14, 2010 13-F September 14, 2010 DIGEST This bill prohibits off-sale licensees from selling alcoholic beverages using aself-service checkout system. ANALYSIS Existing law establishes the Department of Alcoholic Beverage Control (ABC) and grants it exclusive authority to administer the provisions of the ABC Act in accordance with Taws enacted by the Legislature. This involves licensing individuals and businesses associated with the manufacture, importation and sale of alcoholic beverages in this state and the collection of license fees or occupation taxes for this purpose. Existing law provides that the ABC may place reasonable conditions upon any licensee in certain situations, including, but not limited to, the following: where grounds exist for the denial of an application for a license or where a protest against the issuance of a license has been filed; where findings are made by the ABC which would justify suspension or revocation of the license, and imposition of the conditions is reasonably related to those findings; where findings are made by the ABC that the licensee has failed to correct objectionable conditions within a reasonable period of time. Furthermore, existing law provides that the ABC may suspend or revoke a license for failure to take reasonable steps to correct objectionable conditions, as described. Existing law states that every person who sells, furnishes, gives, or causes to be sold, furnished, or given away, any alcoholic beverage to any person under the age of 21 years is guilty of a misdemeanor. Existing law provides that except as provided by law, any person who violates existing law by furnishing an alcoholic beverage, or causing an alcoholic beverage to be furnished; to a minor shall be punished by a fine of $1000, no part of which shall be suspended, and-the person shall be required to perform not less than 24 hours of community service during hours when the person is not employed and is not attending school. Existing law defines an "on-sale" license as authorizing the sale of all types of alcoholic beverages: namely, beer, wine and distilled spirits, for consumption on the premises (such as at a restaurant or bar). An "off-sale" license authorizes the sale of all types of alcoholic beverages for consumption off the premises in original, sealed containers. This bill: 1. Finds and declares that allowing customers to purchase alcoholic beverages through self-service checkouts facilitates the purchase of alcoholic beverages by minors; permits intoxicated customers to purchase additional alcoholic beverages; and, allows for greater theft of alcoholic beverages, thereby depriving the state of tax revenues. 13-F z September 14, 2010 13-F September 14, 2010 2. Prohibits off-sale licensees from selling alcoholic beverages using a point-of-sale system with limited or no assistance from an employee of the licensee. 3. Defines "point-of-sale" system to mean any computer or electronic system used by a retail establishment such as, but not limited to, Universal Product Code scanners, price lookup codes, or an electronic price lookup system as a means for determining the price of the item being purchased by a consumer. Comments According to the author's office, this bill takes a precautionary step and precludes the possibility of underage drinking abuses occurring due to the usage of aself-service checkout kiosk, the passive supervision associated with these stations makes them vulnerable to manipulation. By forcing alcohol purchases to be made through aface-to-face transaction from beginning to end, the state of California can ensure that the necessary age verification steps are being taken to keep alcohol out of the hands of minors. The author's office emphasizes that requiring retailers to conduct all of their alcohol sales in a face-to-face transaction with a cashier is not difficult and points out that it is currently required for cigarettes, spray paints, and some over the counter drugs. Additionally, the author's office references a recent study on the self- checkout system conducted by law students in the Community Economic Development Clinic at UCLA, as proof of the problems associated with selling alcohol through aself-checkout system. The study grew out of the Clinic's work with the Los Angeles Alliance for a New Economy which focuses on researching trends in the grocery industry and their impact on economic development in low-income communities. This particular study was conducted. over two weeks in April with participants ranging in age from 21 to 41. Participants visited five different grocery store chains with self-checkout machines: Albertsons, Ralph's, Fresh & Easy, Superior, and the Market by Vons. In total, participants conducted 97 visits to 34 grocery stores with self-checkout machines in Los Angeles and Orange counties. The study drew the falling conclusion: "evidence of inadequate staffing, inconsistent monitoring, and technological failures documented in the study suggest that self-checkout machines may increase the risk of illegal purchases of alcohol, thereby harming public health." SUPPORT (Verified 9/10109) California Council on Alcohol Policy Consumer Federation of California Los Angeles, City of Marin Institute Mothers Against Drunk Driving 13-F 3 September 14, 2010 13-F September 14, 2010 Peace Officers Research Association of California Peace Officers Research Association of California Pueblo Y Salud, Inc. Sutter/Yuba Friday Night Live -Youth Development Organization OPPOSITION (Verified 9/10109) California Grocers Association California Retailers Association Department of Finance NCR ARGUMENTS IN SUPPORT: Proponents note that the predominant problem among youth is alcohol consumption and that sound alcohol policies such as this bill can prevent and reduce alcohol-related problems. Proponents reference the California State Attorney General's "California Student Surve~r" which found that 36 percent of 9th grade and nearly half (48 percent) of 11t grade students report that alcohol is very easy to obtain. The survey also discovered that teens who binge drink (consume five or more drinks in a row within the past 30 days) constitute almost half of 9th graders who report .any drinking. Additionally, the survey found that by 11th grade nearly two-thirds of the teens who drink report binge drinking. Proponents emphasize that the state has a responsibility to regulate the retail sale of alcohol and as a society we must do everything we can to prevent youth access to alcohol. Proponents believe that preventing youth access by restricting alcohol sales through unsupervised self-service retail sales is good public policy. ARGUMENTS IN OPPOSITION: Opponents disagree with the findings of this bill and argue that self-service checkout stations have alock-out or "freeze" mechanism to preclude any customer from purchasing alcoholic beverages without clerk intervention to verify age and finalize the purchase. Opponents state that "assisted checkout stations are overseen by clerks who must abide by California state law governing the sale of alcoholic beverages. The clerks must either ask for identification from individuals seeking to purchase alcoholic beverages or make a determination that the customer is above the age of 21 and 'override' the system by keying in their clerk or-other code in order to complete the transaction." Opponents note that studies consistently show that most of the time, minors obtain alcohol from persons of legal age, not by purchasing or stealing it themselves. Opponents report that findings of the latest U.S. Substance Abuse & 13-F 4 September 14, 2010 13-F September 14, 2010 Mental Health Services Administration National Survey on Drug Use & Health show that: Among underage drinkers, just 8.2 percent purchased the alcohol themselves while nearly 22 percent gave money to someone of legal age to purchase it. Among underage drinkers who did not pay for the alcohol, the most common source was an unrelated person aged 21 or older (37.2 percent).. In addition, adult family members provided it 19.5 percent of the time. 13-F 5 September 14, 2010 ~'1tEAS aay offii~isi position of the City ~€ zvles, regalatiox~s az pQkici~s propased to or l go~ernmerltul body or aS~y mgt have first b the Citytt5urtciIwi#i the cancurrcnae ~f the 7 '~I~~A, a Z Natianal Survey aced I3r people hetwn ~a ages cf l2 20 repot d ' _ "~. Studies also show th2~t minors thra at much earlier ages..27ie California Student mivcars are dritEking as early as'7'~' by ,be 'su 9elI~GneGK~LtL WHE.~tEA.S, the thousands al drutf droving deaths and acei glues us the rpoasiiz#y to gr~tect o youth aad eom~nun FI~REt1~, Assembly $il3 ll?6(3 ~e I sell ~ls~hclie beverages at regs#ezs with identification ~s always Chlred and #hat dig in ~alifbn~ia. Ably Bill f()+ made wz#h s. e-ttk-face tran.~ctio~ wtt identileicatit~n sud ~n that a c,~usto IVt}W, '~'I~'RF.p'tJR~„ Bl4 I'1' I~,OL the adoption ofthis Resaluti€~n; ~e +Irity A,ssemialy Bill li}fs4 I.a "i`c+rre} aid a del~.y, tnc~ittis several ~r STA'EECAPI~Ot PO BOX 3L28A9 SAGRAd'1E14T0; CA 9A2A9-0050 ~46J3'R4-2(150 FAXI916}315-21513 OtiTRICT OFFICE 872A GARFiE3D AYE, SUREtOC. SOUiH GATE CA 90280 ley 9z~ tzaa FAX (562)922-6670 WEBStiE W1nV 3SltI.q.QW(tlEY2{OIR Assembly Bi111060 Assemblymember Hector De La Torre Alcohol Teen Drinking Prevention OOMM13'fEES CHAIR. AGCOUNTAHItfiX.AND ASIM~(STRATNE:REVIE W BUDGE( HEALTH HOUSING AN6 CChiMUN{7Y aEVEtoPn~Nr 3UBCOMMtTFEES'. BUDGET SUBGOMMtTTEE f:.t HFALiHANEY HUMAN SERVICES BUOGE~ SUBCOMMlTfEE #S STATE AOMINISTRAT4ON MEMBER CAl7EQRN IA CUEYllRAL AND. HhsTGRIGAt EN64WW1ENfi Summarv Assembly Bill 1060 will limit all off-sale liquor licenses to sell alcoholic beverages at registers with cashiers. This bill will insure that proper identification is always checked and that an additional safeguard is taken to combat underage drinking in California. AB 1060 will ensure that all alcohol purchases are made with aface-to-face transaction with a cashier who can check proper identification Backeround A 2006 National Survey on Drug Use and Health found that 28% of young people between the ages of 12-20 reported drinking alcohol, and 19% reported binge drinking. Studies also show that minors throughout the state are being exposed to alcohol at much earlier ages. The California Student Survey from 2005-2006 shows that some minors are drinking as early as the 7`" grade. As self-service checkout kiosks become more widely used throughout the state, the threat of the technology abuse continues to grow'. The potential for abuse by minors to purchase alcohol at self-checkout poses a greater risk by bypassing the simple face-to-face transaction. Like any machine self' checkout does not know the age of the person purchasing an item. Requiring alcohol retailers to conduct all of their alcohol sales in a face-to-face transaction with a cashier would not be difficult - we currently require it for cigarettes, spray paints, and some over the counter drugs. 6Phether scanning a soda and bagging a beer, or scanning aone-litter water bottle and bagging a wine bottle, or just simply not scanning the alcohol, the exposzere of abuse and illegal purchasing is just too high. Our youth has over history proved clever in fording ways to circumvent our laws. The thousands of DUI deaths and accidents in California alone gives us the responsibility to protect our youth. Reference Resolution No. 10534 (CCS).