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Home My WebLink About7A-E-Cigarettes & Hookah Licensing O� PRIO r t~ U 4646 Dakota Street SE Prior Lake,MN 55372 t-9 WNE9Olt CITY COUNCIL AGENDA REPORT MEETING DATE: APRIL 13, 2015 AGENDA#: 7A PREPARED BY: FRANK BOYLES, CITY MANAGER PRESENTED BY: FRANK BOYLES AGENDA ITEM: PUBLIC HEARING TO CONSIDER ORDINANCE AMENDMENTS RELATED TO LICENSING FOR THE SALE OF E-CIGARETTES AND HOOKAH LOUNGES DISCUSSION: Introduction Present City Code does not regulate e-cigarettes or hookah lounges. This agenda item would have the city council conduct a public hearing to gather input about whether ordinance amendments should be considered regulating E-Cigarettes and Hookah Lounges or further information collected. History In February last year, the City Council first discussed e-cigarettes and hookah lounges. Then in November, the City Attorney's Office prepared a memorandum regarding e-cigarettes and hookah lounges. The memo indicated that there have been increasing concerns about e-cigarettes both because there is no definitive understanding of their health impact nor are they considered tobacco and consequently, they are unregulated. By the same token, hookah lounges have become more popular where customers may sample various tobacco products with little or no regulation. In some of these lounges, police issues have arisen including illegal drugs and interpersonal conflicts. The attached memo from the City Attorney's Office goes into additional discussion. The attorney identified four areas of regulation: 1) licensing, 2) pricing, 3) smoking prohibitions and 4) lounges. Following the November discussion, the City Attorney reviewed these issues with the Community Safety Advisory Committee. (see attached memo). As a result of that discussion, the Committee recommended three actions which are accomplished in the attached ordinances: 1) add e-cigarettes to the currently existing tobacco licensing, 2) add a prohibition against the use of e-cigarettes in all locations where the Minnesota Clean Indoor Air Act prohibits smoking, and 3) prohibit sampling which eliminates hookah lounges. The ordinance amendments are attached in that order. Current Circumstances The three ordinances have been prepared and are attached for information. Pursuant to statutory requirements, we have notified businesses with Phone 952.447.9800 / Fax 952.447.4245/www.cityofpriorlake.com tobacco licenses that these new ordinances will be considered as part of a public hearing this evening. Conclusion The City Council should conduct the public hearing and then determine if it wishes to adopt or pass on the ordinances or direct staff and the City Attorney to make other modifications prior to further consideration. ISSUES: The staff has received little feedback on this topic either from businesses, school administrators, public safety personnel and tobacco licensees. Perhaps they are awaiting tonight's public hearing. There is no requirement for a public hearing, only the requirement that tobacco licensees be notified. Other cities have passed and implemented these ordinances without apparent problems. FINANCIAL The passage of these additional prohibitions to add responsibilities for the IMPACT: police department but the added work created by the ordinance are expected to forestall potentially more significant issues. ALTERNATIVES: Conduct the public hearing and make a: 1) Motion and second to adopt the three ordinances as presented or with amendments. 2) Motion and second directing the staff and city attorney to provide additional information. 3) Motion and second to refrain from adopting any or all of the proposed ordinances and directing staff to prepare additional information as deemed appropriate. RECOMMENDED Alternative#1. MOTION: 2 CITY OF PRIOR LAKE ORDINANCE NO. AN ORDINANCE AMENDING TITLE 3 OF THE PRIOR LAKE CITY CODE BY AMENDING PORTIONS OF SECTION 308 RELATING TO TOBACCO LICENSING. THE CITY COUNCIL OF THE CITY OF PRIOR LAKE, MINNESOTA, ORDAINS: Section 1. City Code Title 3, Section 308, Subsection 308.200 is hereby amended by deleting the definition for "Tobacco-related products" in its entirety and replacing it with the following: Tobacco-related products: Any product containing, made, or derived from tobacco that is intended for human consumption, whether chewed, smoked, absorbed, dissolved, inhaled, snorted, sniffed, or ingested by any other means, or any component, part, or accessory of a tobacco product, including, but not limited to, cigarettes; cigars; cheroots; stogies; periques; granulated, plug cut, crimp cut, ready rubbed, and other smoking tobacco; snuff; snuff flour; cavendish; plug and twist tobacco; fine-cut and other chewing tobacco; shorts; refuse scraps, clippings, cuttings and sweepings of tobacco, and other kinds and forms of tobacco. Tobacco-related products excludes any tobacco product that has been approved by the United States Food and Drug Administration for sale as a tobacco cessation product, as a tobacco dependence product, or for other medical purposes, and is being marketed and sold solely for such an approved purpose. Tobacco —related products includes electronic cigarettes defined as any electronic-smoking device that can be used to deliver nicotine or any other substances to the person inhaling from the device, including but not limited to electronic cigarettes, electronic cigars, electronic pipes or any other similar device. Section 2. City Code Title 3, Section 308, Subsection 308.200 is hereby amended by revising the definition for "Vending Machine" by inserting the word "-related" between the words "tobacco" and "products". Section 3. City Code Title 3, Section 308, Subsection 308.301 is hereby amended by deleting the phrase "tobacco, tobacco products, or tobacco-related devices" and replacing it with the phrase "tobacco-related products". Section 4. City Code Title 3, Section 308, Subsection 308.302 is hereby amended by deleting the three uses of the word "ten" and replacing each use with the word "the". Section 5. City Code Title 3, Section 308, Subsection 308.307 is hereby amended by deleting the word "cigarette" and replacing it with the words "tobacco-related product." Section 6. City Code Title 3, Section 308, Subsection 308.600 is hereby amended by deleting the phrase "tobacco, tobacco products, or tobacco-related device" and replacing it with the phrase "tobacco-related products". Section 7. City Code Title 3, Section 308, Subsection 308.802 (5) is hereby amended by inserting the words "-related products" after the word "tobacco". Section 8. This ordinance shall become effective from and after its passage and publication. Passed by the City Council of the City of Prior Lake this Day of , 2014. ATTEST: Frank Boyles, City Manager Kenneth L. Hedberg, Mayor Published in the Prior Lake American on the day of 12014. CITY OF PRIOR LAKE ORDINANCE NO. AN ORDINANCE AMENDING CITY CODE TITLE 8 BY ADDING SECTION 807 RELATING TO E CIGARETTE SMOKING PROHIBITIONS. THE CITY COUNCIL OF THE CITY OF PRIOR LAKE, MINNESOTA, ORDAINS: Section 1. City Code Title 8 is hereby amended by inserting a new Section 807 as follows: SECTION 807 Prior Lake E Cigarette Clean Indoor Air Act 807.100 SMOKING PROHIBITED. It shall be unlawful for any person to light, inhale, or exhale tobacco-related products, as defined in City Code Subsection 308.200, in any location where smoking is prohibited by the Minnesota Clean Indoor Air Act, or for any person to allow the same. 807.200 PENALTY. Violation of this chapter is a misdemeanor. Section 2. This ordinance shall become effective from and after its passage and publication. Passed by the City Council of the City of Prior Lake this Day of , 2014. ATTEST: Frank Boyles, City Manager Kenneth L. Hedberg, Mayor Published in the Prior Lake American on the day of ) 2014. CITY OF PRIOR LAKE ORDINANCE NO. AN ORDINANCE AMENDING CITY CODE TITLE 3 BY AMENDING SUBSECTION 308.600 RELATING TO PROHIBITED ACTS. THE CITY COUNCIL OF THE CITY OF PRIOR LAKE, MINNESOTA, ORDAINS: Section 1. City Code Title 3, Section 308 is hereby amended by deleting Subsection 308.600 in its entirety and replacing it with the following: 308.600: PROHIBITED ACTS. 308.601 Sales Prohibited. (1) No person shall sell, offer for sale, give away, furnish or otherwise deliver any tobacco -related product: a. To any person under the age of eighteen (18); b. By means of any type of vending machine; c. By means of self-service merchandising or any means whereby the customer may have access to such items without having to request the item from the license holder, their agents or employees. All tobacco related products shall be stored behind a counter or other area not freely accessible to customers. d. By any other means, or to any other person, prohibited by Federal, State or other local law, ordinance provision, or other regulation. (2) Exception. A license holder who operates an establishment that sells only tobacco- related products is exempt from the self-service merchandising provision if the license holder prohibits anyone under eighteen (18) year of age from entering the establishment, unless accompanied by a parent, and the license holder conspicuously displays a notice prohibiting persons under eighteen (18) years of age from entering the establishment unless accompanied by a parent. 308.601 Sampling Prohibited. Smoking for the purposes of sampling tobacco- related products is prohibited. It shall be unlawful for any person to light, inhale, or exhale tobacco-related products within the indoor area of any establishment licensed under this Subsection, or for any person to allow the same Section 8. This ordinance shall become effective from and after its passage and publication. Passed by the City Council of the City of Prior Lake this Day of , 2014. ATTEST: Frank Boyles, City Manager Kenneth L. Hedberg, Mayor Published in the Prior Lake American on the day of , 2014. GREGERSON, ROSOW, JOHNSON & NILAN, LTD. ATTORNEYS AT LAW DAVID H.GREGERSON* 650 THIRD AVENUE SOUTH ROBERT I.LANG(1922-2012) RICHARD F.ROSOW+ SUITE 1600 ROGER A.PAULY(RETIRED) MARK J.JOHNSON*t JOSEPH A.NILAN*t MINNEAPOLIS,MINNESOTA 55402-4337 #Also admitted in Illinois DANIEL R.GREGERSON* TELEPHONE:(612)338-0755 *Also admitted in Wisconsin JOSHUA A.DOROTHYt FAX:(612)349-6718 tAlso admitted in North Dakota EMERIC J.DWYER W W W.GRJN.COM +MSBA Board Certified Real Property Specialist SARAH E.SCHWARZHOFF DANIEL A.ELLERBROCK# JENNIFER M.SPALDING Writer's Direct Dial: 612-436-7472 T.JAMES POWER MARGARET L.EVAVOLD Writer's E-mail: sschWarzhofN_ig rjn.com MEMORANDUM To: Prior Lake City Council From: Richard Rosow, Sarah Schwarzhoff Date: November 6, 2014 Re: Sampling, E Cigarettes, Hookah Lounges At the Council meeting on February 10, 2014 the City Council considered several matters related to e cigarettes and hookah lounges. E cigarettes have surged in popularity but information and regulation have lagged behind. Therefore many cities have taken action to regulate e cigarettes. In addition, several neighboring cities have had issues related to hookah lounges. A hookah lounge is an establishment run much like a bar or cafd where patrons share shisha (flavored tobacco) or other similar products from a communal hookah or nargile or where patrons are served individual hookah pipes, that are smoked on site. As with e cigarettes there is very little existing regulation relating to hookah lounges. Generally there are 4 areas of regulation relating tobacco, e cigarettes and hookah (1) licensing; (2)pricing; (3) smoking prohibitions; and (4) lounges. Licensing Many cities have incorporated e cigarettes into tobacco licensing. This requires that retailers obtain a tobacco license and follow all of the existing tobacco licensing regulations in order to sell e cigarettes. If the City desires to license e cigarette retailers it can do so by incorporating e cigarettes into the definition of"tobacco-related products"in the existing licensing ordinance. Pricing Brooklyn Center and St. Paul are the only cities in the state as of this time that have addressed pricing of any type of tobacco. Both cities focused on the pricing of"little cigars", which are generally priced low and are often flavored. Opponents of little cigars argue that they are directed at teenagers. The pricing regulations follow a 2013 MN survey which identified high usage of little cigars by teenagers. Brooklyn Center set a minimum price for little cigars if they are sold in less than a six pack. The regulation is incorporated into the licensing ordinance. St. Paul voted on August 27, 2014 to prohibit the sale of single cigars for less than $2.10. Tobacco shops and corporations have suggested they may sue to try to block the regulations. Smoking Prohibition When we discussed smoking prohibitions in February, the Council was not inclined to extend tobacco smoking prohibitions to e cigarettes. The Council preferred to leave such broad issues to the legislature. The legislature has prohibited some use of e cigarettes but it is not co-extensive with tobacco prohibitions. The City can act to extend e cigarette smoking prohibitions if it chooses to do so. MN Clean Indoor Air Act Prohibits Tobacco Smoking in: • Bars, restaurants, and private clubs • Office and industrial workplaces • Retail stores • Common areas of rental apartment buildings, hotels and motels • Public transportation, including taxis • Work vehicles, if more than one person is present • Home offices with one or more on-site employees, or used as a place to meet or deal with customers—during work hours • Public and private educational facilities • Auditoriums, arenas and meeting rooms • Day care premises • Health care facilities and clinics The MN Legislature has prohibited E Cigarette use in: • Licensed day care, including family home daycare during hours of operation • Health care facilities and clinics • Buildings owned or operated by the state of Minnesota • Buildings owned or operated by cities,counties,townships,and other political subdivisions • Facilities owned by Minnesota State Colleges and Universities and the University of Minnesota • Buildings and vehicles owned or operated by public school districts • Facilities licensed by Minnesota Department of Human Services • Facilities that are licensed by the Minnesota Department of Health and also subject to federal licensing requirements Several Cities have taken some action on use of e cigarettes: • Eden Prairie — prohibits use of a cigarettes in all areas where MN Clean indoor air act prohibits smoking • Duluth—prohibits use of e cigarettes in all areas where MN Clean indoor air act prohibits smoking, plus several additional local locations • Mankato —prohibits e cigarette use in all public places and places of work including bars and restaurants. • Rochester has made several "zones" smoke free including medical, bus, and library. • Savage—prohibits use of e cigarettes in all areas where MN Clean indoor air act prohibits smoking Lounges At the Council meeting in February the Council adopted a moratorium on hookah, e cigarette and related lounges. The MN Clean Indoor Air Act excepts "sampling" from the its prohibitions against smoking. Sampling is not defined. Tobacco shops and hookah lounges have used this exception for sampling in a broad manner to permit smoking in retail locations. These establishments are generally licensed as tobacco retail shops and treat all smoking within the shop as "sampling". This has led to issues in neighboring cities where the city ordinances are not sufficient to address this lounge type of use. The moratorium adopted by the Council prohibited the establishment of any such lounge in the City to allow the City time to study the issue. In order to assist the City in determining what if any regulations to impose, we have reviewed various MN cities to review what approaches have been taken in regards to hookah and e cigarette lounges. There are four major approaches. 1. The City may prohibit all indoor smoking including sampling. This would prohibit all sampling in all businesses that sell tobacco including lounges and tobacco shops. The City could apply this prohibition only to tobacco, only to e cigarettes or to both. Cities who have taken this approach generally place a prohibition against sampling in the tobacco licensing code. • Roseville—prohibits all indoor smoking • Faribault—prohibits all sampling • Shoreview—prohibits all smoking in indoor tobacco shops • Hopkins—prohibits all smoking in retail establishments • St. Louis Park—prohibits sampling in tobacco shops • St Anthony— Licensing includes all types of tobacco and hookah; prohibits all sampling and use in all retail stores (does not call out e cigarettes but if they contain tobacco they would be covered) • Arden Hills—no smoking in retail stores, sampling prohibited • Oakdale - no smoking in retail stores, sampling prohibited • Shakopee—no smoking in retail stores, except for sampling of electronic delivery devices (e cigarettes) • Eden Prairie—adopted a moratorium on e cigarette sampling, no action taken yet • Savage—no smoking in retail stores, sampling prohibited 2. The City may limit lounges by prohibiting all indoor smoking and sampling unless the person purchases the item at the retail store at the time of the smoking or sampling. This would prohibit lounges unless the person bought an item each time. This limits the use of lounges as it can become expensive for a person to purchase an item each time they enter the lounge. Again,this could be applied to only tobacco, only e cigarettes or both. • Minneapolis — licensing includes all types of tobacco, prohibits sampling in a tobacco products shop licensed under the code except for a bona fide sale of a smoking device; prohibits providing an indoor seating area for a fee or other consideration 3. The City may permit lounges(tobacco,e cigarette or both)but regulate them through licensing. The City can either amend its tobacco licensing ordinance or adopt a new ordinance which includes regulations specifically directed at this lounge type of use. • Burnsville—Imposes regulations on shops that allow sampling—size, ventilation etc. 4. The City may take no action,which will permit the continuation of both tobacco and e cigarette sampling and lounges with no regulation. • Many cities have not taken any action on hookah or e cigarette lounges. These cities may have determined that the lounges do not need regulation,they may be waiting for the State to take action, or they may not have had any issues at this point. • Eden Prairie—adopted a moratorium on lounges, no action taken yet Frank Boyles From: Sarah Schwarzhoff < Sent: Wednesday, November 26,2014 2:47 PM To: Frank Boyles Cc: Diane Johnson Subject: FW: E Cigarettes/Hookah Attachments: 2014 1106- Memo to Council re Hookah Lounges.doc;2014 1118 -Ordinance Licensing.doc; 2014 1118-Ordinance E Cigarette Clean Air Act.doc;2014 1118- Ordinance Sampling.doc.docx Frank: Below is what I sent out. Once we notice the license holders we can get this on the Council agenda. Let me know if you have any questions or want to discuss this I am around all afternoon on my cell at otherwise I will give you a call Monday. Have a great Thanksgiving! Frank and Randy: CSAC met last week to discuss e cigarettes and hookah. Attached is the memo which we discussed. As a result of the meeting CSAC recommended three actions: (1)adding e cigarettes to the currently existing tobacco licensing; (2) adding a prohibition against use of e cigarettes everywhere the MN Clean Indoor Air Act prohibits smoking; and(3)prohibiting all sampling which results in the prohibition of all lounges. Attached are three ordinances enacting these provisions. The licensing ordinance adds e cigarettes to the City's definition of"tobacco-related products". It also includes housekeeping provisions for the remainder of the section relating to the term"tobacco-related products." The clean indoor act ordinances adds a new section prohibiting use of e cigarettes to the police regulations. The sampling ordinance renumbers 308.600 to include the sampling prohibition along with the currently existing prohibited sales. The ordinances are similar to what both Eden Prairie and Savage adopted except modified for Prior Lake's Code. I drafted them as three separate ordinances to allow the Council to address and adopt each one individually. Let me know if anyone has any comments, questions or revisions. We do need to notice all tobacco license holders of the meeting at which the Council will discuss these ordinances. Once we know what meeting that will be we should send the notice. Sarah Schwarzhoff Gregerson, Rosow, Johnson& Nilan, LTD. 650 Third Ave South, Suite 1600 Minneapolis, MN 55402 612-436-7472 (Direct) 612-338-0755(Main) 612-349-6718 (Fax) Email: sschwarzhoff(d,)grin.com www..qrin.com The information contained in this transmission may contain privileged and confidential information. It is intended only for the use of the person named above. If you are not the intended recipient, you are hereby notified that any review, dissemination, distribution or duplication of this communication is strictly prohibited. If you are not the intended recipient, please contact the sender by reply email and destroy all copies of the original message. From: Frank Boyles[mailto:FBoyles@CityofPRIORLAKE.com] Sent:Thursday, November 06,201411:39 AM 1