REPORT TITLE:
Tobacco Product Licensure


DESCRIPTION:
Creates statewide licensure mechanism for retail tobacco sales
that provides for licensing retail tobacco vendors, inspections
and enforcement, adjudication of fines and penalties, training
and education for retail merchants and public awareness of the
State's statute governing the sale of tobacco to minors.

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                        2033 
HOUSE OF REPRESENTATIVES                H.B. NO.           
TWENTIETH LEGISLATURE, 2000                                
STATE OF HAWAII                                            
                                                             
________________________________________________________________
________________________________________________________________


                   A  BILL  FOR  AN  ACT

RELATING TO TOBACCO PRODUCTS.
 


BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

 1      SECTION 1.  Chapter 281, Hawaii Revised Statutes, is amended
 
 2 by adding a new part to be appropriately designated and to read
 
 3 as follows:
 
 4                   "PART    .  TOBACCO PRODUCTS
 
 5      §281-A  Legislative intent and purpose.  The use of tobacco
 
 6 products by Hawaii's youth represents a public health problem of
 
 7 significant magnitude and concern.  The legislature finds that
 
 8 tobacco use by minors in Hawaii is widespread and is increasing.
 
 9 The present law prohibiting the sale of tobacco products to
 
10 minors is not effective by itself in reducing illegal sales to
 
11 minors.  Tobacco industry advertising targets children in order
 
12 to replace the over eleven hundred Hawaii residents who die each
 
13 year as a result of tobacco-related illness.  Of today's smokers,
 
14 ninety per cent began their addictive habit before the age of
 
15 eighteen.  The economic loss created by tobacco use in Hawaii
 
16 represents an ongoing and escalating financial burden borne by
 
17 every business, large and small, and every person, smoker and
 
18 nonsmoker.  These figures also represent a health and economic
 
19 drain created by each new generation of children that begins
 

 
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 1 using tobacco products and becomes addicted to nicotine.  The
 
 2 purposes of this part are to promote, protect, and preserve the
 
 3 health of Hawaii's children by:  (1) reducing youth access to
 
 4 tobacco products; (2) reducing the illegal sale of tobacco
 
 5 products to minors; and (3) increasing compliance with existing
 
 6 laws prohibiting the sale of tobacco products to minors.
 
 7      §281-B  Tobacco licenses, classes.(a)  A tobacco license
 
 8 may be granted by the liquor commission as provided in this
 
 9 section.  For purposes of this section, a tobacco license
 
10 authorizes the importation or sale of tobacco products as defined
 
11 in this chapter and chapter 245.
 
12      (b)  Class 1.  Wholesale tobacco dealer.  A license for the
 
13 sale of tobacco at wholesale authorizes the licensee to import
 
14 and sell only to retail tobacco dealer licensees or  others who
 
15 are authorized by law to resell, but are not required to hold a
 
16 license by law.  Nothing in this subsection shall prevent a
 
17 wholesaler from selling tobacco to post exchanges, ships' service
 
18 stores, Army or Navy officers' clubs, or like organizations
 
19 located on Army or Navy reservations, or to any vessel performing
 
20 a regular water transportation service between any two or more
 
21 ports in the State.
 
22      (c)  Class 2.  Retail tobacco dealer.  A license under this
 
23 class authorizes the dealer to sell tobacco products at retail.
 

 
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 1 The retail tobacco dealer licensee shall be responsible for
 
 2 providing a training program to all employees that shall include
 
 3 training in the laws governing the sale of tobacco, methods for
 
 4 recognizing and handling underage customers, and procedures for
 
 5 proper identification to verify that customers are not underage.
 
 6      (d)  It shall be unlawful for any retail tobacco dealer
 
 7 licensee to purchase or acquire tobacco from any person other
 
 8 than a wholesale tobacco dealer licensed pursuant to this
 
 9 chapter.  It shall be unlawful for any retail tobacco dealer to
 
10 offer or sell tobacco products from vending machines, except that
 
11 the sale of tobacco products from vending machines may be
 
12 permitted in an on-premises liquor licensed establishment
 
13 pursuant to section 328K-7.
 
14      §281-C  Application; tobacco licenses.(a)  Every
 
15 application for a tobacco license or the renewal of a tobacco
 
16 license shall be in writing and signed by the applicant, by the
 
17 proper officer or officers of a corporation or unincorporated
 
18 association, or by a general partner of a partnership, or other
 
19 official of a legal entity responsible for the application.  The
 
20 application shall be addressed to the liquor commission and shall
 
21 include:
 
22      (1)  (A)  For an individual, the full name, age, and place
 
23                of residence of the applicant;
 

 
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 1           (B)  For a corporation or joint-stock company, its full
 
 2                name and the names of its officers and directors;
 
 3           (C)  For a partnership, the names, ages, and respective
 
 4                places of residence of all the partners; and
 
 5           (D)  For any other association of individuals or other
 
 6                legal entity, the names, ages, and respective
 
 7                places of residence of its officers or members;
 
 8      (2)  A particular description of the place or premises where
 
 9           the proposed license is to be exercised, so that the
 
10           exact location and extent thereof may be clearly and
 
11           definitely determined therefrom; provided that if the
 
12           applicant has or intends to have more than one place of
 
13           business dealing with cigarettes or tobacco, a separate
 
14           application shall be made for each place of business;
 
15           and provided further that no application for a retail
 
16           tobacco dealer license shall be accepted from a person
 
17           who conducts business from a vehicle;
 
18      (3)  The class of license applied for; and
 
19      (4)  Any other information pertinent to the subject matter
 
20           that may be required by the rules of the commission.
 
21      (b)  An application for a tobacco license may be granted
 
22 without notice or hearing by the liquor commission pursuant to
 
23 commission rules.  The license shall be posted on the premises of
 

 
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 1 the place identified in the application in a conspicuous place
 
 2 for public viewing.
 
 3      (c)  A tobacco license shall be valid for a term beginning
 
 4 July 1 through June 30 of the following year and shall be subject
 
 5 to renewal pursuant to commission rules; provided that no license
 
 6 shall be transferable.
 
 7      §281-D  Prohibitions; tobacco licensee.(a)  At no time
 
 8 under any circumstances shall any tobacco licensee or its
 
 9 employees sell or furnish any tobacco to:
 
10      (1)  A minor; or
 
11      (2)  Any person over the age of eighteen for distribution to
 
12           or use by a minor.
 
13      (b)  Any person who violates this section or any rule
 
14 adopted by the commission pursuant to this part shall be guilty
 
15 of a violation for each separate offense.  Each occurrence of
 
16 violation shall constitute a separate offense.
 
17      §281-E  Prohibitions involving minors, cigarettes, tobacco;
 
18 liquor commission; penalty.(a)  No minor shall purchase
 
19 cigarettes or tobacco.
 
20      (b)  Subsection (a) shall not apply if a person under the
 
21 age of eighteen, with parental authorization, is participating in
 
22 a controlled purchase as part of a law enforcement activity or a
 
23 study authorized by the department of health to determine the
 

 
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 1 level of incidence of tobacco sales to minors.
 
 2      (c)  Only a government issued photo identification shall be
 
 3 considered as valid proof of age.
 
 4      (d)  No minor shall possess cigarettes or tobacco under a
 
 5 retail tobacco dealer's license except that custody of cigarettes
 
 6 or tobacco by the minor may be permitted in the course of
 
 7 delivery pursuant to the direction of the minor's employer
 
 8 lawfully engaged in business necessitating the delivery.
 
 9      (e)  No minor shall falsify any identification or use any
 
10 false identification or identification of another person or of a
 
11 fictitious person for the purpose of buying or attempting to buy
 
12 cigarettes or tobacco.
 
13      (f)  No minor shall be permitted to sell cigarettes or
 
14 tobacco.
 
15      (g)  A minor who violates this section shall be subject to
 
16 the jurisdiction of the liquor commission or board who shall be
 
17 authorized to issue citations to those persons for referral and
 
18 disposition by the family court.
 
19      §281-F  Prohibitions involving minors, cigarettes, tobacco;
 
20 public places; penalty.  (a)  No person age eighteen or older
 
21 shall purchase cigarettes or tobacco for use by, or offer or
 
22 distribute cigarettes or tobacco to, a minor.
 
23      (b)  Any person age eighteen or older who violates
 

 
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 1 subsection (a) shall be guilty of a petty misdemeanor.
 
 2      §281-G  Fines collected.(a)  One half of all the fines
 
 3 collected pursuant to this part shall be transferred to the
 
 4 liquor commission for the county in which the citation
 
 5 originated.
 
 6      (b)  The moneys transferred pursuant to subsection (a) shall
 
 7 be allocated for the purpose of education and training of retail
 
 8 tobacco merchants pursuant to section 281-17(a)(3)."
 
 9      SECTION 2.  Title 16, Hawaii Revised Statutes, is amended by
 
10 amending its title to read as follows:
 
11       "TITLE 16.  INTOXICATING LIQUOR AND TOBACCO PRODUCTS"
 
12      SECTION 3.  Chapter 281, Hawaii Revised Statutes, is amended
 
13 by amending its title to read as follows:
 
14                           "CHAPTER 281
 
15             INTOXICATING LIQUOR AND TOBACCO PRODUCTS"
 
16      SECTION 4.  Section 281-1, Hawaii Revised Statutes, is
 
17 amended by:
 
18      1.  Adding three new definitions to be appropriately
 
19 inserted and to read as follows:
 
20      ""Cigarettes" means any roll for smoking made wholly or in
 
21 part of tobacco, irrespective of size or shape and regardless of
 
22 whether the tobacco is flavored, adulterated, or mixed with any
 
23 other ingredient, the wrapper or cover of which is made of paper
 

 
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 1 or any other substance or material except tobacco.
 
 2      "Cigarette vending machine" means a self-service device that
 
 3 dispenses cigarettes, cigars, tobacco, or any other product
 
 4 containing tobacco.
 
 5      "Tobacco" or "tobacco products" means products made from
 
 6 tobacco leaves in any form that are prepared or intended for
 
 7 consumption by, or the personal use of, humans, including
 
 8 cigarettes, cigars, and any other substitutes bearing the
 
 9 semblance thereof; cheroots; stogies; periques; granulated, plug
 
10 cut, crimp cut, ready rubbed, and other smoking tobacco; snuff or
 
11 snuff flour; cavendish; plug and twist tobacco; fine cut and
 
12 other chewing tobaccos; shorts; refuse scraps, clippings,
 
13 cuttings, and sweepings of tobacco, and other kinds and forms of
 
14 tobacco, prepared in a manner as to be suitable for chewing or
 
15 smoking in a pipe or otherwise, or both for chewing and smoking."
 
16      2.  By amending the definition of "liquor control
 
17 adjudication board" to read:
 
18      ""Liquor control adjudication board" or "board" means a
 
19 board established by county charter, within a county, that shall
 
20 have the jurisdiction to hear and determine complaints or
 
21 violations of liquor and tobacco laws and to impose penalties as
 
22 may be provided in this chapter."
 
23      3.  By amending the definition of "minor" to read:
 

 
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 1      ""Minor" means any person below the age of twenty-one
 
 2 years[.]; provided that, where applicable to tobacco as provided
 
 3 in this chapter, minor means any person under the age of
 
 4 eighteen."
 
 5      4.  By amending the definition of "retail license", "sell"
 
 6 or "to sell", and "seller" to read:
 
 7      ""Retail licensee" means any licensee holding a class 2 or
 
 8 class 4 through class 14 license[.] and class 2 license under
 
 9 section 281-B, related to its retail operation.
 
10      "Sell" or "to sell" includes:  to solicit and receive an
 
11 order for; to have or keep or offer or expose for sale; to
 
12 deliver for value or in any other way than purely gratuitously;
 
13 to peddle; to keep with intent to sell; to traffic in; and the
 
14 word "sale" includes every act of selling as [herein] defined[.]
 
15 in this chapter.  Notwithstanding the provisions above, the
 
16 delivery of liquor or tobacco by a licensee's vehicle or the
 
17 vehicle of a licensee's agent shall be deemed delivery for value.
 
18      "Seller" includes the agents and employees of a seller;
 
19 provided that any person shall be deemed to be a seller, who in
 
20 the State, whether acting as agent or representative of a
 
21 nonresident principal or otherwise, solicits the placing of or
 
22 takes, receives, or forwards orders for liquor or tobacco to be
 
23 shipped into the State from any place without the State to be
 

 
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 1 delivered to customers, by direct shipment or otherwise."
 
 2      SECTION 5.  Section 281-3, Hawaii Revised Statutes, is
 
 3 amended to read as follows:
 
 4      "§281-3  Illegal manufacture, importation, or sale of
 
 5 liquor[.] and tobacco.  (a)  It shall be unlawful for any person
 
 6 not having a valid license to manufacture or sell any liquor
 
 7 except as otherwise provided in this chapter; provided that the
 
 8 head of any family may produce for family use and not for sale an
 
 9 amount of wine not exceeding two hundred gallons a year, and an
 
10 amount of beer not exceeding one hundred gallons a year.
 
11      (b)  It shall [also] be unlawful for any person [not having]
 
12 who does not have a valid wholesale license or a valid
 
13 manufacturer's (including rectifier's) license, to import any
 
14 liquor from without the State, except as otherwise provided in
 
15 this chapter.  Liquor imported into this State shall come to rest
 
16 at the warehouse of the manufacturer (including rectifier) or the
 
17 wholesaler importing the liquor, shall be unloaded into [such]
 
18 the warehouse, and shall be held in [such] the warehouse for at
 
19 least forty-eight hours before further sale by [such] the
 
20 manufacturer (including rectifier) or wholesaler.
 
21      (c)  It shall [also] be unlawful for any person to label,
 
22 designate, or sell any liquor using the [word] words "Hawaii",
 
23 "Hawaiian", "Aloha State", "50th State", "Kauai", "Maui", "Oahu",
 

 
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 1 or "Honolulu" unless [such] the liquor is wholly or partially
 
 2 manufactured in the State, and all of the primary ingredients are
 
 3 wholly rectified or combined in the State [of Hawaii] in
 
 4 compliance with the Bureau of Alcohol, Tobacco and Firearms
 
 5 standards.
 
 6      (d)  It shall be unlawful for any person who does not have a
 
 7 valid retail tobacco dealer license to sell any tobacco product
 
 8 at retail except as provided in this chapter.
 
 9      (e)  It shall be unlawful for any person who does not have a
 
10 valid wholesale tobacco dealer license to import any tobacco
 
11 product from without the State, and sell to retail tobacco dealer
 
12 licensees except as provided in this chapter.
 
13      (f)  A license shall constitute authority for the licensee
 
14 to sell only the liquor or tobacco thereby authorized to be sold
 
15 by the licensee.
 
16      (g)  The commission or board shall establish minimum
 
17 standards by rule under which the commission or board shall
 
18 suspend or revoke a license."
 
19      SECTION 6.  Section 281-17, Hawaii Revised Statutes, is
 
20 amended to read as follows:
 
21      "§281-17  Jurisdiction and powers.  (a)  The liquor
 
22 commission, within its own county, shall have the sole
 
23 jurisdiction, power, authority, and discretion, subject only to
 

 
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 1 this chapter:
 
 2      (1)  To grant, refuse, suspend, and revoke any licenses for
 
 3           the manufacture, importation, and sale of liquors[;] or
 
 4           the importation and sale of tobacco;
 
 5      (2)  To take appropriate action against a person who,
 
 6           directly or indirectly, manufactures or sells any
 
 7           liquor or imports or sells tobacco without being
 
 8           authorized pursuant to this chapter; provided that in
 
 9           counties [which] that  have established by charter a
 
10           liquor control adjudication board, the board shall have
 
11           the jurisdiction, power, authority, and discretion to
 
12           hear and determine administrative complaints of the
 
13           director regarding violations of the liquor or tobacco
 
14           laws of the State or of the rules of the liquor
 
15           commission, and impose penalties [[]for[]] violations
 
16           thereof as may be provided by law;
 
17      (3)  To control, supervise, and regulate the manufacture,
 
18           importation, and sale of liquors or the importation and
 
19           sale of tobacco by investigation, enforcement, and
 
20           education; provided that [any]:
 
21           (A)  Any educational program shall be [limited to]
 
22                coordinated with the department of health, the
 
23                commission's staff, licensees, and their employees
 

 
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 1                [and];
 
 2           (B)  Liquor education programs shall be financed
 
 3                through the money collected from the assessment of
 
 4                fines against liquor licensees; and
 
 5           (C)  Tobacco education programs shall be financed
 
 6                through the money collected from the assessment of
 
 7                fines against tobacco licensees under section
 
 8                281-G.
 
 9      (4)  From time to time to make, amend, and repeal [such]
 
10           rules[,] not inconsistent with this chapter, as in[A
 
11           the judgment of the commission seem appropriate for
 
12           carrying out this chapter and for the efficient
 
13           administration thereof, and the proper conduct of the
 
14           business of all licensees, including every matter or
 
15           thing required to be done or which may be done with the
 
16           approval or consent or by order or under the direction
 
17           or supervision of or as prescribed by the commission;
 
18           which rules, when adopted as provided in chapter 91,
 
19           shall have the force and effect of law;
 
20      (5)  Subject to chapters 76 and 77, to appoint and remove an
 
21           administrator, who may also be appointed an
 
22           investigator and who shall be responsible for the
 
23           operations and activities of the staff.  The
 

 
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 1           administrator may hire and remove hearing officers,
 
 2           investigators, and clerical or other assistants as its
 
 3           business may from time to time require, to prescribe
 
 4           their duties, and fix their compensation; to engage the
 
 5           services of experts and persons engaged in the practice
 
 6           of a profession, if deemed expedient.  Every
 
 7           investigator, within the scope of the investigator's
 
 8           duties, shall have the powers of a police officer.  No
 
 9           employee of any commission, aside from exercising the
 
10           right to vote, shall support, advocate, or aid in the
 
11           election or defeat of any candidate for public office,
 
12           and upon satisfactory proof of such prohibited activity
 
13           the offender shall be summarily dismissed;
 
14      (6)  To limit the number of licenses of any class or kind
 
15           within the county, or the number of licenses of any
 
16           class or kind to do business in any given locality,
 
17           when in the judgment of the commission such limitations
 
18           are in the public interest;
 
19      (7)  To prescribe the nature of the proof to be furnished,
 
20           the notices to be given, and the conditions to be met
 
21           or observed in case of the issuance of a duplicate
 
22           license in place of one alleged to have been lost or
 
23           destroyed, including a requirement of any indemnity
 

 
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 1           deemed appropriate to the case;
 
 2      (8)  To fix the hours between which licensed premises of any
 
 3           class or classes may regularly be open for the
 
 4           transaction of business, which shall be uniform
 
 5           throughout the county as to each class respectively;
 
 6      (9)  To prescribe all forms to be used for the purposes of
 
 7           this chapter not otherwise provided for in this
 
 8           chapter, and the character and manner of keeping of
 
 9           books, records, and accounts to be kept by licensees in
 
10           any matter pertaining to their business;
 
11     (10)  To investigate violations of this chapter, chapter 244D
 
12           or 245, and, notwithstanding any law to the contrary,
 
13           violations of the applicable department of health's
 
14           allowable noise levels, through its investigators or
 
15           otherwise, to include covert operations, and to report
 
16           violations to the prosecuting officer for prosecution
 
17           and, where appropriate, the director of taxation to
 
18           hear and determine complaints against any licensee;
 
19     (11)  To prescribe, by rule, the terms, conditions, and
 
20           circumstances under which persons or any class of
 
21           persons may be employed by holders of licenses;
 
22     (12)  To prescribe, by rule, the term of any license or
 
23           solicitor's and representative's permit authorized by
 

 
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 1           this chapter, the annual or prorated amount, the manner
 
 2           of payment of fees for the licenses and permits, and
 
 3           the amount of filing fees; and
 
 4     (13)  To prescribe, by rule, the circumstances and penalty
 
 5           for the unauthorized manufacturing or selling of any
 
 6           liquor[.] or the unauthorized importation or sale of
 
 7           any tobacco.
 
 8      (b)  Subject only to this chapter, the commission or board
 
 9 and each member thereof shall have the same powers respecting the
 
10 administering of oaths, compelling the attendance of witnesses
 
11 and the production of documentary evidence, and examining the
 
12 witnesses as are possessed by a circuit court, except that the
 
13 commission or board and each member thereof shall not be bound by
 
14 the strict legal rules of evidence.  In addition, the commission
 
15 or board shall have the power to require the production of, and
 
16 to examine any books, papers, and records of any licensee [which]
 
17 that may pertain to the licensee's business under the license or
 
18 [which] that may pertain to a matter at a hearing before the
 
19 commission or board or to an investigation by the commission or
 
20 board.
 
21      (c)  The exercise by the commission or board of the power,
 
22 authority, and discretion vested in it pursuant to this chapter
 
23 shall be final and shall not be reviewable by or appealable to
 

 
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 1 any court or tribunal, except as otherwise provided in this
 
 2 chapter or chapter 91.
 
 3      (d)  The legislature declares its intent not to preempt the
 
 4 field of regulation of the use and sale of tobacco products.
 
 5 Counties may regulate smoking or tobacco use in a manner
 
 6 consistent with this chapter."
 
 7      SECTION 7.  Section 281-17.5, Hawaii Revised Statutes, is
 
 8 amended to read as follows:
 
 9      "§281-17.5  Fees; justified, method of change, limitation.
 
10 (a)  Any liquor or tobacco license fee or any increase in an
 
11 existing liquor or tobacco license fee sought to be implemented
 
12 by any commission shall have, as its justification, a direct and
 
13 proportionate relationship to costs and expenses of the
 
14 commission in its control, supervision, or regulation of the
 
15 manufacture, importation, and sale of liquors, or the importation
 
16 and sale of cigarettes or tobacco, or otherwise directly relate
 
17 to actual costs and expenses of administration of the commission
 
18 as is set forth in this chapter.
 
19      (b)  Any such [liquor] license fees or any moneys collected
 
20 or received by any liquor commission under this chapter may only
 
21 be used for costs and expenses directly relating to operational
 
22 and administrative costs actually incurred by the liquor
 
23 commission collecting or receiving [such liquor] license fees or
 

 
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 1 moneys.  [Such] The fees or moneys shall not be used for any
 
 2 costs or expenses other than those directly relating to its
 
 3 operation and administration.
 
 4      (c)  Any increase in the [liquor] license fee structure
 
 5 shall only be initiated by the liquor commission seeking the
 
 6 change with the approval of the county's legislative body and
 
 7 mayor.
 
 8      (d)  Any liquor commission seeking a change in [liquor]
 
 9 license fee structure shall notify all licensees under this
 
10 chapter affected by [the change of] the proposed change and shall
 
11 notify each [such] licensee of the outcome and resolution of the
 
12 change.
 
13      (e)  Any liquor commission [which] that currently receives a
 
14 license fee from a licensee in excess of the amount prescribed by
 
15 this section shall immediately revise its [liquor] license fee
 
16 structure to conform with the requirements of this section.  All
 
17 liquor license fees and all tobacco license fees shall be
 
18 maintained in separate accounts.  Any funds in excess of twenty
 
19 per cent of the commission's current budget shall be returned or
 
20 credited annually to existing licensees."
 
21      SECTION 8.  Section 281-20, Hawaii Revised Statutes, is
 
22 amended to read as follows:
 
23      "§281-20  General right of inspection.  Any investigator
 

 
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 1 [may], at all times, without notice and without any search
 
 2 warrant or other legal process, may visit and have immediate
 
 3 access to every part of the premises of every liquor and tobacco
 
 4 licensee, for the purpose of making any examination or inspection
 
 5 thereof or inquiry into the books and records therein, to
 
 6 ascertain whether all of the conditions of the license and all
 
 7 provisions of this chapter and chapter 244D or 245 are being
 
 8 complied with by the licensee."
 
 9      SECTION 9.  Section 281-79, Hawaii Revised Statutes, is
 
10 amended to read as follows:
 
11      "§281-79  Entry for examination; obstructing liquor
 
12 commission operations; penalty.  (a)  Every investigator shall,
 
13 and any officer having police power may, at all reasonable times,
 
14 and at any time whatsoever if there is any reasonable ground for
 
15 suspicion that the conditions of any liquor or tobacco license
 
16 are being violated, without warrant, enter into and upon any
 
17 licensed premises and inspect the [same] premises and every part
 
18 thereof, and any books or records therein, to ascertain whether
 
19 [or not] all conditions of the license and all provisions of this
 
20 chapter and chapter 244D or 245 are being complied with by the
 
21 licensee.
 
22      (b)  If any investigator or officer, or any person called by
 
23 the investigator or officer to the investigator's or officer's
 

 
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 1 aid, is threatened with the use of violence, force, or physical
 
 2 interference or obstacle, or is hindered, obstructed, or
 
 3 prevented by any licensee, the licensee's employees, or any other
 
 4 person from entering into [any such] the premises, or whenever
 
 5 any investigator or officer is [by any licensee, the licensee's
 
 6 employees, or any other person opposed,] obstructed[,] or
 
 7 molested in the performance of the officer's duty in any
 
 8 respect[,] by any licensee, the licensee's employees, or any
 
 9 other person, the licensee, the licensee's employee, or any other
 
10 person shall be fined not more than $2,000 or imprisoned not more
 
11 than one year, or both.
 
12      (c)  Whenever any investigator or officer, having demanded
 
13 admittance into any licensed premises and declared the
 
14 investigator's or officer's name and office, is not admitted by
 
15 the licensee or the person in charge of the premises, it shall be
 
16 lawful for the investigator or officer to forcibly and in any
 
17 manner to break into and enter the premises."
 
18      SECTION 10.  Section 281-97, Hawaii Revised Statutes, is
 
19 amended to read as follows:
 
20      "§281-97  When sale without license authorized.  (a)  In
 
21 case a liquor or tobacco license is revoked [or], canceled, or
 
22 not renewed, the licensee [may], with the permission of and upon
 
23 the conditions set by the liquor commission, may sell
 

 
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                                     H.B. NO.           
                                                        
                                                        

 
 1 intoxicating liquors or tobacco then in the licensee's possession
 
 2 within sixty days, or within such additional time allowed by the
 
 3 commission, unless under this chapter the same are seized or
 
 4 forfeited.
 
 5      (b)  Any bank, trust company, or financial institution
 
 6 owning or possessing intoxicating liquor [which] or tobacco that
 
 7 was acquired by the bank, trust company, or financial institution
 
 8 in the ordinary course of its business, may sell the intoxicating
 
 9 liquor or tobacco with the permission of and upon conditions set
 
10 by the commission.
 
11      (c)  Any person acting as personal representative[,] or
 
12 guardian of a licensee's estate, or any receiver, assignee for
 
13 benefit of creditors, or trustee in bankruptcy, may sell the
 
14 stock of intoxicating liquor or tobacco with the permission of
 
15 and upon conditions set by the commission, except as otherwise
 
16 provided in this chapter.
 
17      (d)  Any insurance company, or any common carrier acting as
 
18 an insurer for losses to persons shipping intoxicating liquor[,]
 
19 or tobacco, may take possession of and sell the intoxicating
 
20 liquor[,] or tobacco, the containers of which have been damaged
 
21 by fire or otherwise, with the permission of and upon conditions
 
22 set by the commission.
 
23      (e)  Any person in possession of a stock of lawfully
 

 
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 1 acquired intoxicating liquor or tobacco under a foreclosure
 
 2 proceeding, proceedings for enforcement of a lien, civil
 
 3 execution, or under any other proceeding or process, may sell
 
 4 such intoxicating liquor or tobacco with the permission of and
 
 5 upon conditions set by the commission."
 
 6      SECTION 11.  Section 281-101, Hawaii Revised Statutes, is
 
 7 amended to read as follows:
 
 8      "§281-101  Manufacture or sale without license; penalty.  If
 
 9 any person, acting in person or by or through any agent, servant,
 
10 or employee, manufactures or sells any liquor[,] or sells any
 
11 tobacco, either directly or indirectly, or upon any pretense or
 
12 by any subterfuge, except as authorized pursuant to this chapter,
 
13 the person shall be fined not more than $2,000 or imprisoned not
 
14 more than one year, or both."
 
15      SECTION 12.  Section 281-101.4, Hawaii Revised Statutes, is
 
16 amended to read as follows:
 
17      "§281-101.4  Hearing, illegal manufacture, importation, or
 
18 sale of liquor[.] or tobacco.  (a)  The liquor commission or
 
19 liquor control adjudication board may assess and collect a
 
20 penalty, or reprimand a person for not having a valid license to
 
21 manufacture or sell any liquor or to sell any tobacco in
 
22 violation of this chapter or of any rule [or regulation]
 
23 applicable thereto.
 

 
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 1      (b)  In every case where the administrator elects to conduct
 
 2 proceedings under this section where it is proposed to assess and
 
 3 collect a penalty from a person for not having a valid license to
 
 4 manufacture or sell any liquor or to sell any tobacco in
 
 5 violation of this chapter or of any rule [or regulation]
 
 6 applicable thereto, that person shall be entitled to notice and
 
 7 hearing in conformity with chapter 91.
 
 8      (c)  At the hearing, before final action is taken by the
 
 9 commission or board, the person shall be entitled to be heard in
 
10 person or through counsel and shall be given a full and fair
 
11 opportunity to present facts showing that the alleged cause or
 
12 causes for the proposed action do not exist, or any reason why no
 
13 penalty should be imposed.  The testimony taken at the hearing
 
14 shall be under oath and recorded stenographically, or by machine,
 
15 but the parties shall not be bound by the strict rules of
 
16 evidence; certified copies of any transcript and of any other
 
17 record made of or at the hearing shall be furnished to a person
 
18 upon that person's request and at that person's expense.
 
19      (d)  Any order, reprimand, or penalty imposed by the
 
20 commission or board upon a person for not having a valid license
 
21 to manufacture or sell any liquor or to sell any tobacco in
 
22 violation of this chapter or of any rule [or regulation]
 
23 applicable thereto shall be in addition to any penalty that might
 

 
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 1 be imposed upon that person's conviction in a court of law for
 
 2 any violation of this chapter.  The amount of penalty assessed
 
 3 and collected by the commission or board from any person under
 
 4 this section for not having a valid license to manufacture or
 
 5 sell any liquor or to sell any tobacco shall not exceed the sum
 
 6 of $2,000 for each charge.
 
 7      (e)  Whenever the service of any order or notice [shall be]
 
 8 is required by this section the service shall be made in the
 
 9 following manner[:  in the case of any].  If a violation is based
 
10 upon the personal observation of any investigator, a written
 
11 notice of the violation shall be given to the person charged with
 
12 a violation within a reasonable period of time after the alleged
 
13 violation occurred[, the].  The person charged shall be requested
 
14 to acknowledge receipt of the notice of alleged violation, or, if
 
15 the person cannot be found after diligent search, by leaving a
 
16 certified copy thereof at the person's dwelling house or usual
 
17 place of abode with some person of suitable age and discretion
 
18 residing therein[; and if].  If the person cannot be found after
 
19 diligent search, and service cannot be made, then service may be
 
20 made by depositing another certified copy thereof in the
 
21 certified mail of the United States post office, postage prepaid,
 
22 addressed to the person at the person's last known residence
 
23 address; provided[,] that in the case of a partnership,
 

 
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 1 corporation, unincorporated association, or limited liability
 
 2 company, service may be made upon any partner, officer, or member
 
 3 thereof."
 
 4      SECTION 13.  This Act does not affect rights and duties that
 
 5 matured, penalties that were incurred, and proceedings that were
 
 6 begun, before its effective date.
 
 7      SECTION 14.  In codifying the new part added to chapter 281,
 
 8 Hawaii Revised Statutes, by section 1 of this Act, the revisor of
 
 9 statutes shall substitute appropriate section numbers for the
 
10 letters used in the new sections' designations in this Act.
 
11      SECTION 15.  Statutory material to be repealed is bracketed.
 
12 New statutory material is underscored.
 
13      SECTION 16.  This Act shall take effect on July 1, 2001.
 
14 
 
15                           INTRODUCED BY:  _______________________