REPORT TITLE:
Cigarette Stamp Tax


DESCRIPTION:
Provides that the excise tax on cigarettes shall be imposed and
collected through the use of stamps purchased by licensees, and
affixed to cigarette packages.  Includes provisions for civil and
criminal penalties, and for forfeitures of cigarettes, to be
enforced by the police departments, liquor commissions, the
attorney general, and prosecuting attorneys.  Requires the
Director of Taxation to submit findings and recommendations to
the legislature for the 2006 Session on effectiveness of Act.


 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                        2961
HOUSE OF REPRESENTATIVES                H.B. NO.           
TWENTIETH LEGISLATURE, 2000                                
STATE OF HAWAII                                            
                                                             
________________________________________________________________
________________________________________________________________


                   A  BILL  FOR  AN  ACT

RELATING TO TOBACCO.



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

 1      SECTION 1.  Chapter 245, Hawaii Revised Statutes, is amended
 
 2 by adding a new part to be appropriately designated and to read
 
 3 as follows:
 
 4                 "PART A.  STAMPING OF CIGARETTES
 
 5      §245-A  Payment of tax through use of stamps.(a)  The tax
 
 6 imposed under section 245-3 upon the sale or use of cigarettes
 
 7 shall be paid by licensees through the use of stamps.
 
 8      (b)  The department shall furnish stamps for sale.
 
 9      §245-B  Sales through financial institutions; rules.  The
 
10 department may enter into agreements to permit the sale of stamps
 
11 by designated financial institutions located within the State.  A
 
12 list of financial institutions designated to sell stamps shall be
 
13 made available at the department.  The department may adopt rules
 
14 as necessary for this purpose pursuant to chapter 91.
 
15      §245-C  Designs, specifications, and denominations of
 
16 stamps; affixation; cancellation.  Stamps shall be of such
 
17 designs, specifications, and denominations as may be prescribed
 
18 by the department; provided that these agreements shall be exempt
 
19 from the requirements of chapter 103D.  The department shall
 

 
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 1 adopt rules pursuant to chapter 91, on the method and manner in
 
 2 which stamps are to be affixed to packages of cigarettes, and may
 
 3 provide for the cancellation of stamps.
 
 4      §245-D  Affixation prior to distribution.(a)  Beginning
 
 5 December 15, 2000, a licensee, or designee of a licensee, may
 
 6 apply to the department for stamps as provided in this section.
 
 7      (b)  Beginning January 1, 2001, a licensee or the authorized
 
 8 agent or designee of a licensee, shall affix a stamp to the
 
 9 bottom of each individual package of cigarettes, prior to
 
10 distribution.
 
11      (c)  Beginning April 1, 2001, no individual package of
 
12 cigarettes may be sold or offered for sale to the general public,
 
13 unless affixed with the stamp required under this section.
 
14      (d)  Beginning April 1, 2001, no cigarette package may be
 
15 placed or stored in a vending machine, unless affixed with the
 
16 stamp required under this section.
 
17      §245-E  Approval of department required for transfer of
 
18 stamps.  Unaffixed stamps shall not be sold, exchanged, or in any
 
19 manner transferred by a licensee to another person without prior
 
20 written approval of the department.  Any person who violates this
 
21 section shall be fined not less than $500 and not more than
 
22 $1,000 for each violation.
 

 
 
 
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 1      §245-F  Authority to order purchases for wholesaler or
 
 2 dealer; duration; revocation.  A licensee, in writing, shall
 
 3 authorize those persons who may order purchases of stamps for the
 
 4 licensee at a location where stamps are sold.  The authorization
 
 5 shall continue in effect until written notice of revocation of
 
 6 the authority is delivered at the sales location in the manner
 
 7 prescribed by rules adopted by the department pursuant to chapter
 
 8 91.
 
 9      §245-G  Payment of tax without use of stamps in certain
 
10 transactions; rules.  The department may provide by rule pursuant
 
11 to chapter 91 that the tax imposed by this chapter with respect
 
12 to cigarettes may be paid without the use of stamps in connection
 
13 with a particular type of transaction.
 
14      §245-H  Price; payment; deferred payment purchases.(a)
 
15 Stamps shall be sold to licensees at their denominated values,
 
16 plus a state stamp fee of .2 per cent of the denominated value of
 
17 the stamp to pay for the cost to the State of providing the
 
18 stamps; provided that the department may adopt rules, pursuant to
 
19 chapter 91, to modify the state stamp fee to reflect the actual
 
20 costs incurred by the State in providing the stamps.
 
21      (b)  Payment for stamps shall be made at the time of
 
22 purchase; provided that the department may adopt rules pursuant
 

 
 
 
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 1 to chapter 91 to permit a licensee to defer payments therefor as
 
 2 provided for in section 245-I.
 
 3      §245-I  Application to fix maximum amount and time of
 
 4 deferred-payment purchases; bonding; designation of sales
 
 5 locations.(a)  A licensee may apply to the department to set
 
 6 the maximum amount of deferred-payment purchases of stamps that
 
 7 may remain unpaid by the licensee during the time specified under
 
 8 section 245-J.  Upon receipt of the application and any bond
 
 9 required pursuant to subsection (b), the department shall set the
 
10 amount for deferred-payment purchases.
 
11      (b)  The department may require that a licensee who submits
 
12 an application for deferred-payment purchases of stamps post a
 
13 bond in an amount of up to one hundred per cent of the maximum
 
14 amount of allowed deferred-payment purchases as a condition of
 
15 approval of the application by the department.
 
16      §245-J  Time for payment of deferred-payment purchases;
 
17 manner of payment.  Amounts owing for stamps purchased on the
 
18 deferred-payment basis in any calendar month shall be due and
 
19 payable on or before the last day of the following calendar
 
20 month.  Payment shall be made by a remittance payable to the
 
21 department.
 
22      §245-K  Suspension of privilege to purchase on deferred-
 

 


 

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                                     H.B. NO.           
                                                        
                                                        

 
 1 payment basis or reduction of amount of permissible purchases.
 
 2 The department may suspend, without prior notice, a licensee's
 
 3 privilege to purchase stamps on the deferred-payment basis, or
 
 4 may reduce the amount of deferred-payment purchases allowed the
 
 5 licensee, if:
 
 6      (1)  The licensee fails to promptly pay for stamps when
 
 7           payment is due;
 
 8      (2)  The bond or bonds required of the licensee are
 
 9           canceled, become void, impaired, or unenforceable for
 
10           any reason; or
 
11      (3)  In the opinion of the department, collection of any
 
12           amounts unpaid or due from the licensee under this
 
13           chapter is jeopardized.
 
14      §245-L  Penalty for failure to make timely payment.  A
 
15 licensee who fails to pay any amount owing for the purchase of
 
16 stamps within the time required shall pay a penalty of ten per
 
17 cent of the amount due in addition to the amount due plus
 
18 interest at the rate specified in section 231-39, from the date
 
19 on which the amount became due and payable until the date of
 
20 payment.
 
21      §245-M  Unused stamps.  The department shall adopt rules
 
22 pursuant to chapter 91 for a refund or credit to a licensee in
 

 
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 1 the amount of the denominated values of any unused stamps.
 
 2      §245-N  Cigarettes and tobacco products shipped outside the
 
 3 State for sale or use outside the State; refund or credit of
 
 4 taxes.(a)  The department shall adopt rules pursuant to chapter
 
 5 91 to provide a tobacco tax refund or credit to a licensee who
 
 6 has paid a tobacco tax on the distribution of cigarettes or
 
 7 tobacco products that are shipped to a point outside the State
 
 8 for subsequent sale or use outside the State.
 
 9      (b)  This part shall not apply to cigarettes or tobacco
 
10 products that are distributed in this State to consumers and that
 
11 are subsequently taken outside the State.
 
12      §245-O  Monthly report on distributions of cigarettes and
 
13 tobacco products, and purchases of stamps.(a)  On or before the
 
14 last day of each month, every licensee shall file, on forms
 
15 prescribed by the department, a report of the licensee's
 
16 distributions of cigarettes and purchases of stamps during the
 
17 preceding month, and any other information that the department
 
18 may require to carry out this section.
 
19      (b)  On or before the last day of each month, every licensee
 
20 shall file, on forms prescribed by the department, a report of
 
21 the licensee's distributions of tobacco products and the
 
22 wholesale costs of tobacco products during the preceding month,
 

 
 
 
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 1 and any other information that the department may require to
 
 2 carry out this part.
 
 3      §245-P  Counterfeiting stamps.  Any person who:
 
 4      (1)  Falsely or fraudulently makes, forges, alters, reuses,
 
 5           or counterfeits any stamp provided for or authorized
 
 6           under this part;
 
 7      (2)  Causes any stamp to be falsely or fraudulently made,
 
 8           forged, altered, reused, or counterfeited; or
 
 9      (3)  Knowingly and wilfully utters, publishes, passes, or
 
10           tenders as genuine, any false, forged, altered, reused,
 
11           or counterfeited stamp,
 
12 is guilty of a class B felony; provided the person shall be
 
13 subject to:  imprisonment for not less than one year and not more
 
14 than ten years; a maximum fine of $50,000; or both.
 
15      §245-Q  Sale or purchase of packages of cigarettes without
 
16 stamps; fines and penalties.(a)  Beginning April 1, 2001, a
 
17 person who knowingly possesses, keeps, stores, acquires,
 
18 transports, or retains for the purpose of sale, or sells or
 
19 offers to sell, three thousand or more cigarettes with an
 
20 aggregate wholesale price of $250 or more, to which there are not
 
21 affixed the stamps required under this part, regardless of the
 
22 source of, or method of obtaining the cigarettes, is guilty of a
 

 
 
 
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                                     H.B. NO.           
                                                        
                                                        

 
 1 class C felony; provided that:
 
 2      (1)  The person shall be subject to:
 
 3           (A)  Imprisonment for not less than one year and not
 
 4                more than five years;
 
 5           (B)  A maximum fine of not more than $10,000; or
 
 6           (C)  Both; and
 
 7      (2)  A corporation shall be fined not more than $50,000.
 
 8      (b)  Beginning April 1, 2001, a person who knowingly
 
 9 possesses, keeps, stores, acquires, transports, or retains for
 
10 the purpose of sale, or sells or offers to sell, one thousand two
 
11 hundred or more, but not more than two thousand nine hundred
 
12 ninety-nine, cigarettes with an aggregate wholesale value of $100
 
13 or more, but less than $250, to which there are not affixed the
 
14 stamps required under this part, regardless of the source of, or
 
15 method of obtaining the cigarettes, is guilty of a misdemeanor;
 
16 provided that:
 
17      (1)  The person shall be subject to:
 
18           (A)  Imprisonment for not more than one year;
 
19           (B)  A maximum fine of not more than $5,000; or
 
20           (C)  Both; and
 
21      (2)  A corporation shall be fined not more than $25,000.
 
22      (c)  Beginning April 1, 2001, a person who knowingly
 

 
 
 
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                                     H.B. NO.           
                                                        
                                                        

 
 1 violates a provision of this part for which a criminal punishment
 
 2 is not otherwise provided is guilty of a misdemeanor.
 
 3      §245-R  Vending unstamped cigarettes; offense; punishment.
 
 4 Beginning April 1, 2001, a person in possession or control of, or
 
 5 having access to, a cigarette vending machine, who knowingly or
 
 6 wilfully places for sale in the vending machine any cigarettes
 
 7 not contained in packages to which are affixed Hawaii tax stamps,
 
 8 shall be guilty of a class C felony; provided that:
 
 9      (1)  The person shall be subject to:
 
10           (A)  Imprisonment of not less than one year and not
 
11                more than ten years;
 
12           (B)  A maximum fine of not more than $10,000; or
 
13           (C)  Both; and
 
14      (2)  A corporation shall be fined not more than $50,000.
 
15      §245-S  Treatment of unstamped cigarettes.  Beginning
 
16 April 1, 2001, all persons in possession or control of unstamped
 
17 cigarettes shall destroy the unstamped cigarettes or return the
 
18 unstamped cigarettes to the manufacturers.  Failure to comply may
 
19 subject persons in possession or control of unstamped cigarettes
 
20 to the criminal penalties and administrative fines provided for
 
21 in sections 245-Q, 245-R, 245-U, 245-V, 245-W, and 245-X.
 
22      §245-T  Enforcement; injunction; disposition of fines.(a)
 

 
 
 
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                                     H.B. NO.           
                                                        
                                                        

 
 1 Enforcement of this part shall be under the concurrent
 
 2 jurisdiction of the attorney general, liquor commission,
 
 3 prosecuting attorney, and police department.
 
 4      (b)  Notwithstanding the existence of other remedies at law,
 
 5 the attorney general or prosecuting attorney may apply for, and
 
 6 the court may grant, a temporary or permanent injunction
 
 7 restraining any person from violating or continuing to violate
 
 8 this part.  The injunction shall be issued without bond.
 
 9      (c)  Where a police department, working with either the
 
10 attorney general or prosecuting attorney, initiates and conducts
 
11 an investigation resulting in the imposition and collection of a
 
12 criminal fine pursuant to this part, one hundred per cent of the
 
13 fine shall be equally distributed between the police department
 
14 whose officers or employees initiated and conducted the
 
15 investigation, and either the office of the attorney general or
 
16 of the prosecuting attorney, whichever obtained the underlying
 
17 conviction.
 
18      §245-U  Liquor commission hearing, counterfeiting stamps,
 
19 or selling, purchasing, or vending unstamped cigarettes.(a)
 
20 The liquor commission or liquor control adjudication board may
 
21 assess and collect a fine against, or reprimand any person who
 
22 counterfeits Hawaii tax stamps, or sells, purchases, or vends
 

 
 
 
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                                     H.B. NO.           
                                                        
                                                        

 
 1 unstamped cigarettes in violation of this part or of any rule
 
 2 applicable thereto.  Any reprimand or fine imposed by the
 
 3 commission or board pursuant to this section shall be in addition
 
 4 to any other fine that may be imposed by law.  The fine assessed
 
 5 and collected pursuant to this section shall not exceed the sum
 
 6 of $2,000 for each violation.
 
 7      (b)  In every case where proceedings under this section in
 
 8 which a fine may be imposed are conducted, the person subject to
 
 9 those proceedings shall be entitled to notice and hearing in
 
10 conformity with chapter 91.  The person shall be entitled to be
 
11 heard in person or through counsel, and shall be given a full and
 
12 fair opportunity to present facts showing that the alleged cause
 
13 or causes for the proposed action do not exist, or to show any
 
14 other reason why no fine should be imposed.  Testimony taken at
 
15 the hearing shall be under oath and recorded stenographically, or
 
16 by machine.  The parties shall not be bound by strict rules of
 
17 evidence.  At the request of the person subject to the
 
18 proceedings, certified copies of any transcript and of any other
 
19 record made of, or at the hearing, shall be provided upon payment
 
20 by the requester of the costs of providing the certified copies.
 
21      (c)  The notice required by this section shall be served in
 
22 the following manner:
 

 
 
 
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 1      (1)  Written notice of the violation shall be given to the
 
 2           person charged with the violation within a reasonable
 
 3           period of time after the alleged violation is
 
 4           discovered, and the person charged shall be requested
 
 5           to acknowledge receipt of the notice;
 
 6      (2)  If the person charged cannot be found after diligent
 
 7           search, notice may be served by leaving a certified
 
 8           copy of the written notice at the person's dwelling
 
 9           house or usual place of abode with any person of
 
10           suitable age and discretion residing therein;
 
11      (3)  If the person charged cannot be found after diligent
 
12           search, and service cannot be made, then service may be
 
13           made by mailing a certified copy of the written notice
 
14           by way of the United States post office certified mail,
 
15           postage prepaid, and addressed to the person at the
 
16           person's last known residence address; and
 
17      (4)  Where a partnership, corporation, unincorporated
 
18           association, or limited liability company is charged,
 
19           service may be made upon any partner, officer, or
 
20           member thereof.
 
21      §245-V  Seizure and confiscation of unstamped cigarettes.
 
22 The attorney general, liquor commission, prosecuting attorney,
 

 
 
 
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 1 and the police department may seize and confiscate any cigarette,
 
 2 package of cigarettes, or carton of cigarettes that is possessed,
 
 3 kept, stored, acquired, transported, or retained for the purpose
 
 4 of sale, or sold or offered for sale in violation of this part,
 
 5 subject to the requirements of chapter 281.
 
 6      §245-W  Arrest; abetters.  The owner, keeper, and any person
 
 7 having custody of any cigarette, package of cigarettes, or carton
 
 8 of cigarettes seized as provided in section 245-V, may be
 
 9 arrested without necessity of warrant and brought before the
 
10 district court of the circuit in which the seizure occurred.  If
 
11 the owner or keeper of the cigarette, package of cigarettes, or
 
12 carton of cigarettes seized is unknown to the police officer
 
13 making the seizure, or if no person is found in apparent
 
14 possession or custody of them, the police officer may arrest and
 
15 bring before the court the owner or occupant of the building,
 
16 place, or premises, or the driver, operator, owner, or other
 
17 person in charge of the conveyance in which the cigarette,
 
18 package of cigarettes, or carton of cigarettes is found, if the
 
19 person is known or can be ascertained.  Any person who has
 
20 knowingly engaged in, aided, assisted, or abetted the obtaining,
 
21 keeping, or sale of any cigarette, package of cigarettes, or
 
22 carton of cigarettes seized as provided in section 245-V, or has
 

 
 
 
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 1 been privy thereto, or has knowingly permitted the use of any
 
 2 place, building, premises, or conveyance for that unlawful
 
 3 purpose, shall be guilty of a misdemeanor.
 
 4      §245-X  Forfeitures; disposition.(a)  Any cigarette,
 
 5 package of cigarettes, or carton of cigarettes unlawfully
 
 6 possessed, kept, stored, acquired, transported, or retained for
 
 7 the purpose of sale, or sold or offered for sale, in violation of
 
 8 this part, may be ordered forfeited pursuant to chapter 281 by an
 
 9 appropriate administrative or judicial proceeding. 
 
10      (b)  Any cigarette, package of cigarettes, or carton of
 
11 cigarettes forfeited pursuant to this section shall be sold to a
 
12 licensed wholesaler or dealer.
 
13      (c)  All proceeds from the sale of any cigarette, package of
 
14 cigarettes, or carton of cigarettes forfeited as provided in this
 
15 section, after payment of expenses of administration and sale,
 
16 shall be distributed equally between:
 
17      (1)  Either the county police department or county liquor
 
18           commission whose officers, investigators, or employees
 
19           initiated and conducted an investigation resulting in
 
20           the forfeiture and sale of cigarettes pursuant to this
 
21           section; and
 
22      (2)  The attorney general or prosecuting attorney who
 

 
 
 
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 1           instituted the action producing the forfeiture.
 
 2      (d)  Money distributed to the attorney general, liquor
 
 3 commission, police department, or prosecuting attorney shall be
 
 4 used for law enforcement purposes, and shall complement but not
 
 5 supplant the funds regularly appropriated for those purposes.
 
 6      §245-Y  Appeals.  A claimant of a cigarette, package of
 
 7 cigarettes, or carton of cigarettes forfeited pursuant to section
 
 8 245-X, may appeal the forfeiture in the same manner as appeals
 
 9 are allowed in other cases governed by chapter 281.  If the
 
10 claimant fails to appear, or to diligently prosecute the appeal,
 
11 or fails to secure a reversal of the judgment in the appellate
 
12 court, the judgment appealed from shall be carried out.
 
13      §245-Z  Claims.  If the owner or possessor of any cigarette,
 
14 package of cigarettes, or carton of cigarettes seized under this
 
15 part appears and makes claim to the item, the owner or possessor
 
16 shall file with the court before whom the proceedings are
 
17 pending, a claim in writing, setting forth the claimant's
 
18 interest therein, and the reason why the items claimed should not
 
19 be forfeited.  The claimant shall also give bond in favor of the
 
20 State, sufficient in amount and sureties, as required by the
 
21 court, and conditioned so that if the claim is diligently
 
22 prosecuted and decided against the claimant, the claimant shall
 

 
 
 
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                                     H.B. NO.           
                                                        
                                                        

 
 1 pay the costs of the proceedings conducted to resolve the claim.
 
 2 If the judgment is against the claimant, the cigarette, package
 
 3 of cigarettes, carton of cigarettes, and all containers thereof
 
 4 shall be forfeited and shall be disposed of as provided in
 
 5 section 245-X.
 
 6      §245-AA  Prosecutions not to exclude other remedies
 
 7 affecting goods.  The criminal penalties and administrative fines
 
 8 authorized under this part shall be in addition to any
 
 9 forfeitures imposed pursuant to section 245-X."
 
10      SECTION 2.  Chapter 281, Hawaii Revised Statutes, is amended
 
11 by adding a new part to be appropriately designated and to read
 
12 as follows:
 
13                   "PART    .  TOBACCO PRODUCTS
 
14      §281-A  Legislative intent and purpose.  The use of tobacco
 
15 products by Hawaii's youth represents a public health problem of
 
16 significant magnitude and concern.  The legislature finds that
 
17 tobacco use by minors in Hawaii is widespread and is increasing.
 
18 The present law prohibiting the sale of tobacco products to
 
19 minors is not effective by itself in reducing illegal sales to
 
20 minors.  Tobacco industry advertising targets children in order
 
21 to replace the over eleven hundred Hawaii residents who die each
 
22 year as a result of tobacco-related illness.  Of today's smokers,
 

 
 
 
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                                     H.B. NO.           
                                                        
                                                        

 
 1 ninety per cent began their addictive habit before the age of
 
 2 eighteen.  The economic loss created by tobacco use in Hawaii
 
 3 represents an ongoing and escalating financial burden borne by
 
 4 every business, large and small, and every person, smoker and
 
 5 nonsmoker.  These figures also represent a health and economic
 
 6 drain created by each new generation of children that begins
 
 7 using tobacco products and becomes addicted to nicotine.  The
 
 8 purposes of this part are to promote, protect, and preserve the
 
 9 health of Hawaii's children by:  (1) reducing youth access to
 
10 tobacco products; (2) reducing the illegal sale of tobacco
 
11 products to minors; and (3) increasing compliance with existing
 
12 laws prohibiting the sale of tobacco products to minors.
 
13      §281-B  Tobacco licenses, classes.(a)  A tobacco license
 
14 may be granted by the liquor commission as provided in this
 
15 section.  For purposes of this section, a tobacco license
 
16 authorizes the importation or sale of tobacco products as defined
 
17 in this chapter and chapter 245.
 
18      (b)  Class 1.  Wholesale tobacco dealer.  A license for the
 
19 sale of tobacco at wholesale authorizes the licensee to import
 
20 and sell only to retail tobacco dealer licensees or  others who
 
21 are authorized by law to resell, but are not required to hold a
 
22 license by law.  Nothing in this subsection shall prevent a
 

 
 
 
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 1 wholesaler from selling tobacco to post exchanges, ships' service
 
 2 stores, Army or Navy officers' clubs, or like organizations
 
 3 located on Army or Navy reservations, or to any vessel performing
 
 4 a regular water transportation service between any two or more
 
 5 ports in the State.
 
 6      (c)  Class 2.  Retail tobacco dealer.  A license under this
 
 7 class authorizes the dealer to sell tobacco products at retail.
 
 8 The retail tobacco dealer licensee shall be responsible for
 
 9 providing a training program to all employees that shall include
 
10 training in the laws governing the sale of tobacco, methods for
 
11 recognizing and handling underage customers, and procedures for
 
12 proper identification to verify that customers are not underage.
 
13      (d)  It shall be unlawful for any retail tobacco dealer
 
14 licensee to purchase or acquire tobacco from any person other
 
15 than a wholesale tobacco dealer licensed pursuant to this
 
16 chapter.  It shall be unlawful for any retail tobacco dealer to
 
17 offer or sell tobacco products from vending machines, except that
 
18 the sale of tobacco products from vending machines may be
 
19 permitted in an on-premises liquor licensed establishment
 
20 pursuant to section 328K-7.
 
21      §281-C  Application; tobacco licenses.(a)  Every
 
22 application for a tobacco license or the renewal of a tobacco
 

 
 
 
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 1 license shall be in writing and signed by the applicant, by the
 
 2 proper officer or officers of a corporation or unincorporated
 
 3 association, or by a general partner of a partnership, or other
 
 4 official of a legal entity responsible for the application.  The
 
 5 application shall be addressed to the liquor commission and shall
 
 6 include:
 
 7      (1)  (A)  For an individual, the full name, age, and place
 
 8                of residence of the applicant;
 
 9           (B)  For a corporation or joint-stock company, its full
 
10                name and the names of its officers and directors;
 
11           (C)  For a partnership, the names, ages, and respective
 
12                places of residence of all the partners; and
 
13           (D)  For any other association of individuals or other
 
14                legal entity, the names, ages, and respective
 
15                places of residence of its officers or members;
 
16      (2)  A particular description of the place or premises where
 
17           the proposed license is to be exercised, so that the
 
18           exact location and extent thereof may be clearly and
 
19           definitely determined therefrom; provided that if the
 
20           applicant has or intends to have more than one place of
 
21           business dealing with cigarettes or tobacco, a separate
 
22           application shall be made for each place of business;
 

 
 
 
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 1           and provided further that no application for a retail
 
 2           tobacco dealer license shall be accepted from a person
 
 3           who conducts business from a vehicle;
 
 4      (3)  The class of license applied for; and
 
 5      (4)  Any other information pertinent to the subject matter
 
 6           that may be required by the rules of the commission.
 
 7      (b)  An application for a tobacco license may be granted
 
 8 without notice or hearing by the liquor commission pursuant to
 
 9 commission rules.  The license shall be posted on the premises of
 
10 the place identified in the application in a conspicuous place
 
11 for public viewing.
 
12      (c)  A tobacco license shall be valid for a term beginning
 
13 July 1 through June 30 of the following year and shall be subject
 
14 to renewal pursuant to commission rules; provided that no license
 
15 shall be transferable.
 
16      §281-D  Prohibitions; tobacco licensee.(a)  At no time
 
17 under any circumstances shall any tobacco licensee or its
 
18 employees sell or furnish any tobacco to:
 
19      (1)  A minor; or
 
20      (2)  Any person over the age of eighteen for distribution to
 
21           or use by a minor.
 
22      (b)  Any person who violates this section or any rule
 

 
 
 
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                                     H.B. NO.           
                                                        
                                                        

 
 1 adopted by the commission pursuant to this part shall be guilty
 
 2 of a violation for each separate offense.  Each occurrence of
 
 3 violation shall constitute a separate offense.
 
 4      §281-E  Prohibitions involving minors, cigarettes, tobacco;
 
 5 liquor commission; penalty.(a)  No minor shall purchase
 
 6 cigarettes or tobacco.
 
 7      (b)  Subsection (a) shall not apply if a person under the
 
 8 age of eighteen, with parental authorization, is participating in
 
 9 a controlled purchase as part of a law enforcement activity or a
 
10 study authorized by the department of health to determine the
 
11 level of incidence of tobacco sales to minors.
 
12      (c)  Only a government issued photo identification shall be
 
13 considered as valid proof of age.
 
14      (d)  No minor shall possess cigarettes or tobacco under a
 
15 retail tobacco dealer's license except that custody of cigarettes
 
16 or tobacco by the minor may be permitted in the course of
 
17 delivery pursuant to the direction of the minor's employer
 
18 lawfully engaged in business necessitating the delivery.
 
19      (e)  No minor shall falsify any identification or use any
 
20 false identification or identification of another person or of a
 
21 fictitious person for the purpose of buying or attempting to buy
 
22 cigarettes or tobacco.
 

 
 
 
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 1      (f)  No minor shall be permitted to sell cigarettes or
 
 2 tobacco.
 
 3      (g)  A minor who violates this section shall be subject to
 
 4 the jurisdiction of the liquor commission or board who shall be
 
 5 authorized to issue citations to those persons for referral and
 
 6 disposition by the family court.
 
 7      §281-F  Prohibitions involving minors, cigarettes, tobacco;
 
 8 public places; penalty.  (a)  No person age eighteen or older
 
 9 shall purchase cigarettes or tobacco for use by, or offer or
 
10 distribute cigarettes or tobacco to, a minor.
 
11      (b)  Any person age eighteen or older who violates
 
12 subsection (a) shall be guilty of a petty misdemeanor.
 
13      §281-G  Fines collected.(a)  One half of all the fines
 
14 collected pursuant to this part shall be transferred to the
 
15 liquor commission for the county in which the citation
 
16 originated.
 
17      (b)  The moneys transferred pursuant to subsection (a) shall
 
18 be allocated for the purpose of education and training of retail
 
19 tobacco merchants pursuant to section 281-17(a)(3)."
 
20      SECTION 3.  Chapter 245, Hawaii Revised Statutes, is amended
 
21 by adding a new part to be appropriately designated and to read
 
22 as follows:
 

 
 
 
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                                     H.B. NO.           
                                                        
                                                        

 
 1             "PART B.   EXPORT AND FOREIGN CIGARETTES
 
 2      §245-A Sale of export cigarettes prohibited.  It shall be
 
 3 unlawful for a person to sell or distribute in the State, or to
 
 4 acquire, hold, own, possess, or transport for sale or
 
 5 distribution in the State, or to import or cause to be imported
 
 6 into the State for sale or distribution in the State any of the
 
 7 following:
 
 8      (1)  Cigarettes the package of which bears any statement,
 
 9           label, stamp, sticker, or notice indicating that the
 
10           manufacturer did not intend the cigarettes to be sold,
 
11           distributed, or used in the United States, including,
 
12           but not limited to, labels stating "for export only",
 
13           "U.S. tax-exempt", for "use outside U.S.", or similar
 
14           wording;
 
15      (2)  Cigarettes the package of which does not comply with
 
16           all requirements imposed by federal law regarding
 
17           warnings and other information on packages of
 
18           cigarettes manufactured, packaged, or imported for
 
19           sale, distribution, or use in the United States,
 
20           including, but not limited to, the specific warning
 
21           labels specified in the Federal Cigarette Labeling and
 
22           Advertising Act, 15 U.S.C. 1333;
 
23      (3)  Cigarettes the package of which does not comply with
 

 
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                                     H.B. NO.           
                                                        
                                                        

 
 1           all federal trademark and copyright laws;
 
 2      (4)  Cigarettes imported into the United States on or after
 
 3           January 1, 2000, in violation of 26 U.S.C. 5754 or any
 
 4           other federal law or regulation;
 
 5      (5)  Cigarettes that the person otherwise knows or has
 
 6           reason to know the manufacturer did not intend to be
 
 7           sold, distributed, or used in the United States; or
 
 8      (6)  Cigarettes for which there has not been submitted to
 
 9           the Secretary of the United States Department of Health
 
10           and Human Services the list of the ingredients added to
 
11           tobacco in the manufacture of such cigarettes required
 
12           by the Federal Cigarette Labeling and Advertising Act,
 
13           15 U.S.C. 1335a.
 
14      §245-B Alteration of packaging prohibited.  It shall be
 
15 unlawful for any person to alter the package of any cigarettes,
 
16 prior to sale or distribution to remove, conceal, or obscure:
 
17      (1)  Any statement, label, stamp, sticker, or notice
 
18           indicating that the manufacturer did not intend the
 
19           cigarettes to be sold, distributed, or used in the
 
20           United States, including, but not limited to, labels
 
21           stating "for export only", "U.S. tax-exempt", "for use
 
22           outside U.S.", or similar wording; or
 

 
 
 
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                                     H.B. NO.           
                                                        
                                                        

 
 1      (2)  Any health warning that is not specified in or does not
 
 2           conform with the requirements of the Federal Cigarette
 
 3           Labeling and Advertising Act, 15 U.S.C. 1333.
 
 4      §245-C Affixing of cigarette tax stamps to export
 
 5 cigarettes or altered packages prohibited.  It shall be unlawful
 
 6 for any person to affix any cigarette tax stamp required under
 
 7 this chapter to the package of any cigarettes described in
 
 8 section 245-A or to any package altered in violation of section
 
 9 245-B.
 
10      §245-D Documentation of foreign cigarettes.  On the first
 
11 business day of each month, each person licensed to affix any
 
12 cigarette tax stamp under this chapter shall file with the
 
13 department of taxation all of the following for all cigarettes
 
14 imported into the United States to which such person has affixed
 
15 a cigarette tax stamp in the preceding month:
 
16      (1)  A copy of a permit issued pursuant to the Internal
 
17           Revenue Code, 26 U.S.C. 5713, to the person importing
 
18           such cigarettes into the United States permitting the
 
19           person to import those cigarettes;
 
20      (2)  A copy of the United States Customs Service form
 
21           containing, with respect to such cigarettes, the
 
22           internal revenue tax information required by the United
 

 
 
 
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                                     H.B. NO.           
                                                        
                                                        

 
 1           States Bureau of Alcohol, Tobacco and Firearms;
 
 2      (3)  A statement, signed by the person under penalty of
 
 3           perjury, which shall be treated as confidential by the
 
 4           department of taxation, and which shall be exempt from
 
 5           disclosure under chapter 92F, identifying the brand and
 
 6           brand styles of all such cigarettes, the quantity of
 
 7           each brand style of such cigarettes, the supplier of
 
 8           the cigarettes and the person or persons, if any, to
 
 9           whom the cigarettes have been conveyed for resale; and
 
10      (4)  A statement, signed under penalty of perjury by an
 
11           officer of the manufacturer or importer of such
 
12           cigarettes, certifying that the manufacturer or
 
13           importer has complied with:
 
14           (A)  The package health warning and ingredient
 
15                reporting requirements of the Federal Cigarette
 
16                Labeling and Advertising Act, 15 U.S.C. 1333 and
 
17                1335a, with respect to such cigarettes; and
 
18           (B)  Chapter 675, including a statement of whether the
 
19                manufacturer is or is not a participating
 
20                manufacturer within the meaning of section 675-3.
 
21      §245-E Illegal sale or export of foreign cigarettes;
 
22 revocation or suspension of license; civil penalties.  The
 

 
 
 
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                                     H.B. NO.           
                                                        
                                                        

 
 1 director of taxation may revoke or suspend the license of any
 
 2 licensee pursuant to rules adopted under chapter 91, and impose
 
 3 on the licensee a civil penalty in an amount not to exceed the
 
 4 greater of five times the retail value of the cigarettes involved
 
 5 or $5,000, upon finding a violation by such licensee of this part
 
 6 or any implementing rule prescribed by the director.
 
 7      §245-F Criminal penalties for illegal sale or export of
 
 8 foreign cigarettes.  Any person who knowingly violates section
 
 9 245-A, 245-B, or 245-C shall be guilty of a class C felony, and
 
10 upon conviction thereof, shall be fined not more than $10,000,
 
11 and may be imprisoned not less than one year and not more than
 
12 five years, or both; provided that a corporation shall be fined
 
13 not more than $50,000.
 
14      §245-G Confiscation and seizure of illegal sale or export
 
15 of foreign cigarettes.  The attorney general and the police
 
16 departments of each of the counties may seize and confiscate any
 
17 cigarette, package of cigarettes, or carton of cigarettes which
 
18 is possessed, kept, stored, or retained for the purpose of sale,
 
19 or sold or offered for sale in violation of this part, subject to
 
20 the requirements of chapter 281.
 
21      §245-H Forfeiture.  The forfeiture of any cigarette,
 
22 package of cigarettes, or carton of cigarettes unlawfully
 

 
 
 
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                                     H.B. NO.           
                                                        
                                                        

 
 1 possessed, or kept, stored, or retained for the purpose of sale,
 
 2 or sold or offered for sale, in violation of this part, may be
 
 3 enforced pursuant to chapter 712A by an appropriate
 
 4 administrative or judicial proceeding.  Any cigarette, package of
 
 5 cigarettes, or carton of cigarettes forfeited as provided in this
 
 6 section shall be ordered destroyed.
 
 7      §245-I  Unfair trade practices.  Any violation of this part
 
 8 shall constitute an unfair method of competition and unfair and
 
 9 deceptive acts or practices in the conduct of any trade of
 
10 commerce under section 480-2 and shall be subject to a civil
 
11 penalty as provided in section 480-3.1.  Each package of
 
12 cigarettes sold in violation of this part shall constitute a
 
13 separate violation.
 
14      §245-J  Deceptive cigarette sales.  The importation or
 
15 reimportation of cigarettes into the United States for sale or
 
16 distribution under any trade name, trade dress, or trademark that
 
17 is the same as, or is confusingly similar to, any trade name,
 
18 trade dress, or trademark used for cigarettes manufactured in the
 
19 United States for sale or distribution in the United States shall
 
20 be deemed to violate section 481A-3.
 
21      §245-K  Enforcement.(a)  Enforcement of this part shall be
 
22 under the concurrent jurisdiction of the attorney general, the
 

 
 
 
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                                     H.B. NO.           
                                                        
                                                        

 
 1 prosecuting attorneys or deputy prosecuting attorneys of the
 
 2 various counties, and the police departments of the various
 
 3 counties.
 
 4      (b)  In addition to any other remedy provided by law,
 
 5 including enforcement as provided in subsection (a), any person
 
 6 may bring an action for appropriate injunctive or other equitable
 
 7 relief for a violation of this part and for damages sustained by
 
 8 the person, and, if the judgment is for the plaintiff, the
 
 9 plaintiff shall be awarded a sum not less than $1,000 or
 
10 threefold damages by the plaintiff sustained, whichever sum is
 
11 the greater, and reasonable attorneys fees together with the
 
12 costs of suit.
 
13      §245-L  Applicability.  This part shall not apply to:
 
14      (1)  Cigarettes allowed to be imported or brought into the
 
15           United States for personal use free of federal tax or
 
16           duty or voluntarily abandoned to the U.S. Secretary of
 
17           Treasury at the time of entry; or
 
18      (2)  Cigarettes sold or intended to be sold as duty-free
 
19           merchandise by a duty-free sales enterprise in
 
20           accordance with the provisions of 19 U.S.C. 1555(b) and
 
21           any implementing regulations; provided, however, that
 
22           this part shall apply to any such cigarettes that are
 

 
 
 
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                                     H.B. NO.           
                                                        
                                                        

 
 1           brought back into the customs territory for resale
 
 2           within the customs territory.
 
 3      §245-M  Penalties cumulative.  The penalties provided in
 
 4 this part are in addition to any other penalties imposed under
 
 5 other law."
 
 6      SECTION 4.  Section 245-1, Hawaii Revised Statutes, is
 
 7 amended by adding nine new definitions to be appropriately
 
 8 inserted and to read as follows:
 
 9      ""Attorney general" means the attorney general or deputy
 
10 attorneys general of the State.
 
11      ""Importer" means "importer" as that term is defined in 26
 
12 U.S.C. 5702(1).
 
13      "Department" means the department of taxation.
 
14      "License" means any license granted under this chapter.
 
15      "Licensee" means a holder of a license granted under this
 
16 chapter.
 
17      "Liquor commission" means the liquor commission of each of
 
18 the respective counties.
 
19      "Liquor control adjudication board" or "board" means a board
 
20 established by county charter, within a county, that shall have
 
21 the jurisdiction to hear and determine complaints or violations
 
22 of chapter 281 and to impose penalties as may be provided in
 

 
 
 
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                                     H.B. NO.           
                                                        
                                                        

 
 1 chapter 281.
 
 2      "Package" means "package" as that term is defined in 15
 
 3 U.S.C. 1332(4)."
 
 4      "Police department" means the police department of each of
 
 5 the respective counties.
 
 6      "Prosecuting attorney" means the prosecuting attorney or
 
 7 deputy prosecuting attorneys of each of the respective counties.
 
 8      "Stamp" means a stamp printed, manufactured, or made by
 
 9 authority of the department, as provided in this chapter, which
 
10 is issued, sold, or circulated by the department, and by the use
 
11 of which the tax levied under this chapter is paid."
 
12      SECTION 5.  Sections 245-1 to 245-15, Hawaii Revised
 
13 Statutes, are designated as "PART I.  GENERAL PROVISIONS".
 
14      SECTION 6.  Section 245-3, Hawaii Revised Statutes, is
 
15 amended by amending the title and subsection (a) to read as
 
16 follows:
 
17      "§245-3  Taxes[; limitations].(a)  Every licensee
 
18 wholesaler, or dealer, in addition to any other taxes provided by
 
19 law, shall pay for the privilege of conducting business and other
 
20 activities in the State an:
 
21      (1)  Excise tax equal to[:
 
22           (A)  4.00 cents for each cigarette sold, used, or
 

 
 
 
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                                     H.B. NO.           
                                                        
                                                        

 
 1                possessed by the wholesaler or dealer, after
 
 2                August 31, 1997; and
 
 3           (B)] 5.00 cents for each cigarette sold, used, or
 
 4                possessed by a licensee, wholesaler, or dealer
 
 5                after June 30, 1998,
 
 6           whether or not sold at wholesale, or if not sold then
 
 7           at the same rate upon the use by the licensee,
 
 8           wholesaler, or dealer; and
 
 9      (2)  Excise tax equal to forty per cent of the wholesale
 
10           price of each article or item of tobacco products sold
 
11           by the licensee, wholesaler, or dealer, whether or not
 
12           sold at wholesale, or if not sold then at the same rate
 
13           upon the use by the licensee, wholesaler, or dealer.
 
14      Where the tax imposed has been paid on cigarettes or tobacco
 
15 products which thereafter become the subject of a casualty loss
 
16 deduction allowable under chapter 235, the tax paid shall be
 
17 refunded or credited to the account of the licensee, wholesaler,
 
18 or dealer.  [In applying the tax, the tax shall be applied
 
19 against the latest of the activities of selling, using, or
 
20 possessing.  The tax shall be imposed at the time of the last of
 
21 the following activities to occur:  the sale; the use; or the
 
22 possession of cigarettes or tobacco products.] The tax shall be
 

 
 
 
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                                     H.B. NO.           
                                                        
                                                        

 
 1 applied to cigarettes through the use of stamps."
 
 2      SECTION 7.  Section 245-5, Hawaii Revised Statutes, is
 
 3 amended to read as follows:
 
 4      "§245-5  Returns.  Every licensee, wholesaler, or dealer, on
 
 5 or before the last day of each month, shall file with the
 
 6 department [of taxation] a return showing the cigarettes and
 
 7 tobacco products sold, possessed, or used by the licensee,
 
 8 wholesaler, or dealer during the preceding calendar month and of
 
 9 the taxes chargeable against the taxpayer in accordance with this
 
10 chapter.  The form of the return shall be prescribed by the
 
11 department and shall [contain such information including a]
 
12 include:
 
13      (1)  A separate statement of the number and wholesale price
 
14           of cigarettes[,];
 
15      (2)  The amount of stamps purchased and used; [and the]
 
16      (3)  The wholesale price of tobacco products, sold,
 
17           possessed, or used[, as it]; and
 
18      (4)  Any other information that the department may deem
 
19           necessary,
 
20 for the proper administration of this chapter."
 
21      SECTION 8.  Section 245-6, Hawaii Revised Statutes, is
 
22 amended to read as follows:
 

 
 
 
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                                     H.B. NO.           
                                                        
                                                        

 
 1      "§245-6  Payment of taxes; penalties.  At the time of the
 
 2 filing of the return required under section 245-5 and within the
 
 3 time prescribed therefor, each licensee, wholesaler, or dealer
 
 4 shall pay to the department [of taxation] the taxes imposed by
 
 5 this chapter, required to be shown by the return[.], including
 
 6 the unpaid amount of taxes imposed by this chapter.
 
 7      Penalties and interest shall be added to and become a part
 
 8 of the taxes, when and as provided by section 231-39."
 
 9      SECTION 9.  Section 245-8, Hawaii Revised Statutes, is
 
10 amended by amending subsection (a) to read as follows:
 
11      "(a)  Every licensee, wholesaler, and dealer shall keep a
 
12 record of [every]:
 
13      (1)  Every sale or use of cigarettes and tobacco products by
 
14           the licensee, wholesaler, or dealer[, the];
 
15      (2)  The number and wholesale price of cigarettes[, and
 
16           the];
 
17      (3)  The wholesale price of tobacco products, sold,
 
18           possessed, or used[, and of the];
 
19      (4)  The taxes payable [thereon,] on tobacco products sold,
 
20           possessed, or used, if any[,]; and
 
21      (5)  The amounts of stamps purchased and used,
 
22 in such form as the department [of taxation] may prescribe.  The
 

 
 
 
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                                     H.B. NO.           
                                                        
                                                        

 
 1 records shall be offered for inspection and examination at any
 
 2 time upon demand by the department and shall be preserved for a
 
 3 period of five years, except that the department, in writing, may
 
 4 consent to their destruction within the five-year period or may
 
 5 require that they be kept longer.  The department, by rule, may
 
 6 require the licensee, wholesaler, or dealer to keep such other
 
 7 records as it may deem necessary for the proper enforcement of
 
 8 this chapter."
 
 9      SECTION 10.  Section 245-15, Hawaii Revised Statutes, is
 
10 amended to read as follows:
 
11      "§245-15  Disposition of revenues.  All moneys collected
 
12 pursuant to this chapter shall be paid into the state treasury as
 
13 state realizations to be kept and accounted for as provided by
 
14 law[.], except for the amounts designated by sections 245-T,
 
15 245-U, and 245-X, for distribution to the liquor commission, the
 
16 police department, or the prosecuting attorney."
 
17      SECTION 11.  Section 281-17, Hawaii Revised Statutes, is
 
18 amended to read as follows:
 
19      "§281-17  Jurisdiction and powers.  The liquor commission,
 
20 within its own county, shall have the sole jurisdiction, power,
 
21 authority, and discretion, subject only to this chapter[:] and
 
22 chapter 245:
 

 
 
 
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                                     H.B. NO.           
                                                        
                                                        

 
 1      (1)  To grant, refuse, suspend, and revoke any licenses for
 
 2           the manufacture, importation, and sale of liquors;
 
 3      (2)  To take appropriate action against a person who,
 
 4           directly or indirectly, manufactures or sells any
 
 5           liquor without being authorized pursuant to this
 
 6           chapter; provided that in counties which have
 
 7           established by charter a liquor control adjudication
 
 8           board, the board shall have the jurisdiction, power,
 
 9           authority, and discretion to hear and determine
 
10           administrative complaints of the director regarding
 
11           violations of the liquor laws of the State or of the
 
12           rules of the liquor commission, and impose penalties
 
13           [[]for[]] violations thereof as may be provided by law;
 
14      (3)  To take appropriate action against a person who
 
15           counterfeits stamps, or sells, purchases, or vends
 
16           unstamped cigarette packages in violation of chapter
 
17           245 or any rule thereof;
 
18     [(3)] (4)  To control, supervise, and regulate the
 
19           manufacture, importation, and sale of liquors by
 
20           investigation, enforcement, and education; provided
 
21           that any educational program shall be limited to
 
22           licensees and their employees and shall be financed
 

 
 
 
Page 37                                                    2961
                                     H.B. NO.           
                                                        
                                                        

 
 1           through the money collected from the assessment of
 
 2           fines against licensees;
 
 3     [(4)] (5)  From time to time to make, amend, and repeal such
 
 4           rules, not inconsistent with this chapter, as in the
 
 5           judgment of the commission seem appropriate for
 
 6           carrying out this chapter and for the efficient
 
 7           administration thereof, and the proper conduct of the
 
 8           business of all licensees, including every matter or
 
 9           thing required to be done or which may be done with the
 
10           approval or consent or by order or under the direction
 
11           or supervision of or as prescribed by the commission;
 
12           which rules, when adopted as provided in chapter 91
 
13           shall have the force and effect of law;
 
14     [(5)] (6)  Subject to chapters 76 and 77, to appoint and
 
15           remove an administrator, who may also be appointed an
 
16           investigator and who shall be responsible for the
 
17           operations and activities of the staff.  The
 
18           administrator may hire and remove hearing officers,
 
19           investigators, and clerical or other assistants as its
 
20           business may from time to time require, to prescribe
 
21           their duties, and fix their compensation; to engage the
 
22           services of experts and persons engaged in the practice
 

 
 
 
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                                     H.B. NO.           
                                                        
                                                        

 
 1           of a profession, if deemed expedient.  Every
 
 2           investigator, within the scope of the investigator's
 
 3           duties, shall have the powers of a police officer.  No
 
 4           employee of any commission, aside from exercising the
 
 5           right to vote, shall support, advocate, or aid in the
 
 6           election or defeat of any candidate for public office,
 
 7           and upon satisfactory proof of such prohibited activity
 
 8           the offender shall be summarily dismissed;
 
 9     [(6)] (7)  To limit the number of licenses of any class or
 
10           kind within the county, or the number of licenses of
 
11           any class or kind to do business in any given locality,
 
12           when in the judgment of the commission such limitations
 
13           are in the public interest;
 
14     [(7)] (8)  To prescribe the nature of the proof to be
 
15           furnished, the notices to be given, and the conditions
 
16           to be met or observed in case of the issuance of a
 
17           duplicate license in place of one alleged to have been
 
18           lost or destroyed, including a requirement of any
 
19           indemnity deemed appropriate to the case;
 
20     [(8)] (9)  To fix the hours between which licensed premises
 
21           of any class or classes may regularly be open for the
 
22           transaction of business, which shall be uniform
 

 
 
 
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                                     H.B. NO.           
                                                        
                                                        

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

 
 
 
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                                     H.B. NO.           
                                                        
                                                        

 
 1           of payment of fees for the licenses and permits, and
 
 2           the amount of filing fees; and
 
 3    [(13)] (14)  To prescribe, by rule, the circumstances and
 
 4           penalty for the unauthorized manufacturing or selling
 
 5           of any liquor.
 
 6      Subject only to this chapter, the commission or board and
 
 7 each member thereof shall have the same powers respecting the
 
 8 administering of oaths, compelling the attendance of witnesses
 
 9 and the production of documentary evidence, and examining the
 
10 witnesses as are possessed by a circuit court, except that the
 
11 commission or board and each member thereof shall not be bound by
 
12 the strict legal rules of evidence.  In addition, the commission
 
13 or board shall have the power to require the production of, and
 
14 to examine any books, papers, and records of any [licensee]
 
15 person licensed under this chapter or chapter 245, which may
 
16 pertain to the licensee's business under the license or which may
 
17 pertain to a matter at a hearing before the commission or board
 
18 or to an investigation by the commission or board.
 
19      The exercise by the commission or board of the power,
 
20 authority, and discretion vested in it pursuant to this chapter
 
21 shall be final and shall not be reviewable by or appealable to
 
22 any court or tribunal, except as otherwise provided in this
 

 
 
 
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                                     H.B. NO.           
                                                        
                                                        

 
 1 chapter or chapter 91."
 
 2      SECTION 12.  Title 16, Hawaii Revised Statutes, is amended
 
 3 by amending its title to read as follows:
 
 4       "TITLE 16.  INTOXICATING LIQUOR AND TOBACCO PRODUCTS"
 
 5      SECTION 13.  Chapter 281, Hawaii Revised Statutes, is
 
 6 amended by amending its title to read as follows:
 
 7                           "CHAPTER 281
 
 8             INTOXICATING LIQUOR AND TOBACCO PRODUCTS"
 
 9      SECTION 14.  Section 281-1, Hawaii Revised Statutes, is
 
10 amended by:
 
11      1.  Adding three new definitions to be appropriately
 
12 inserted and to read as follows:
 
13      ""Cigarettes" means any roll for smoking made wholly or in
 
14 part of tobacco, irrespective of size or shape and regardless of
 
15 whether the tobacco is flavored, adulterated, or mixed with any
 
16 other ingredient, the wrapper or cover of which is made of paper
 
17 or any other substance or material except tobacco.
 
18      "Cigarette vending machine" means a self-service device that
 
19 dispenses cigarettes, cigars, tobacco, or any other product
 
20 containing tobacco.
 
21      "Tobacco" or "tobacco products" means products made from
 
22 tobacco leaves in any form that are prepared or intended for
 

 
 
 
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                                     H.B. NO.           
                                                        
                                                        

 
 1 consumption by, or the personal use of, humans, including
 
 2 cigarettes, cigars, and any other substitutes bearing the
 
 3 semblance thereof; cheroots; stogies; periques; granulated, plug
 
 4 cut, crimp cut, ready rubbed, and other smoking tobacco; snuff or
 
 5 snuff flour; cavendish; plug and twist tobacco; fine cut and
 
 6 other chewing tobaccos; shorts; refuse scraps, clippings,
 
 7 cuttings, and sweepings of tobacco, and other kinds and forms of
 
 8 tobacco, prepared in a manner as to be suitable for chewing or
 
 9 smoking in a pipe or otherwise, or both for chewing and smoking."
 
10      2.  By amending the definition of "liquor control
 
11 adjudication board" to read:
 
12      ""Liquor control adjudication board" or "board" means a
 
13 board established by county charter, within a county, that shall
 
14 have the jurisdiction to hear and determine complaints or
 
15 violations of liquor and tobacco laws and to impose penalties as
 
16 may be provided in this chapter."
 
17      3.  By amending the definition of "minor" to read:
 
18      ""Minor" means any person below the age of twenty-one
 
19 years[.]; provided that, where applicable to tobacco as provided
 
20 in this chapter, minor means any person under the age of
 
21 eighteen."
 
22      4.  By amending the definition of "retail license", "sell"
 

 
 
 
Page 43                                                    2961
                                     H.B. NO.           
                                                        
                                                        

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

 


 

Page 44                                                    2961
                                     H.B. NO.           
                                                        
                                                        

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

 
Page 45                                                    2961
                                     H.B. NO.           
                                                        
                                                        

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

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

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

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

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

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

 
 
 
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 1 or received by any liquor commission under this chapter may only
 
 2 be used for costs and expenses directly relating to operational
 
 3 and administrative costs actually incurred by the liquor
 
 4 commission collecting or receiving [such liquor] license fees or
 
 5 moneys.  [Such] The fees or moneys shall not be used for any
 
 6 costs or expenses other than those directly relating to its
 
 7 operation and administration.
 
 8      (c)  Any increase in the [liquor] license fee structure
 
 9 shall only be initiated by the liquor commission seeking the
 
10 change with the approval of the county's legislative body and
 
11 mayor.
 
12      (d)  Any liquor commission seeking a change in [liquor]
 
13 license fee structure shall notify all licensees under this
 
14 chapter affected by [the change of] the proposed change and shall
 
15 notify each [such] licensee of the outcome and resolution of the
 
16 change.
 
17      (e)  Any liquor commission [which] that currently receives a
 
18 license fee from a licensee in excess of the amount prescribed by
 
19 this section shall immediately revise its [liquor] license fee
 
20 structure to conform with the requirements of this section.  All
 
21 liquor license fees and all tobacco license fees shall be
 
22 maintained in separate accounts.  Any funds in excess of twenty
 

 
 
 
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 1 per cent of the commission's current budget shall be returned or
 
 2 credited annually to existing licensees."
 
 3      SECTION 18.  Section 281-20, Hawaii Revised Statutes, is
 
 4 amended to read as follows:
 
 5      "§281-20  General right of inspection.  Any investigator
 
 6 [may], at all times, without notice and without any search
 
 7 warrant or other legal process, may visit and have immediate
 
 8 access to every part of the premises of every liquor and tobacco
 
 9 licensee, for the purpose of making any examination or inspection
 
10 thereof or inquiry into the books and records therein, to
 
11 ascertain whether all of the conditions of the license and all
 
12 provisions of this chapter and chapter 244D or 245 are being
 
13 complied with by the licensee."
 
14      SECTION 19.  Section 281-79, Hawaii Revised Statutes, is
 
15 amended to read as follows:
 
16      "§281-79  Entry for examination; obstructing liquor
 
17 commission operations; penalty.  (a)  Every investigator shall,
 
18 and any officer having police power may, at all reasonable times,
 
19 and at any time whatsoever if there is any reasonable ground for
 
20 suspicion that the conditions of any liquor or tobacco license
 
21 are being violated, without warrant, enter into and upon any
 
22 licensed premises and inspect the [same] premises and every part
 

 
 
 
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 1 thereof, and any books or records therein, to ascertain whether
 
 2 [or not] all conditions of the license and all provisions of this
 
 3 chapter and chapter 244D or 245 are being complied with by the
 
 4 licensee.
 
 5      (b)  If any investigator or officer, or any person called by
 
 6 the investigator or officer to the investigator's or officer's
 
 7 aid, is threatened with the use of violence, force, or physical
 
 8 interference or obstacle, or is hindered, obstructed, or
 
 9 prevented by any licensee, the licensee's employees, or any other
 
10 person from entering into [any such] the premises, or whenever
 
11 any investigator or officer is [by any licensee, the licensee's
 
12 employees, or any other person opposed,] obstructed[,] or
 
13 molested in the performance of the officer's duty in any
 
14 respect[,] by any licensee, the licensee's employees, or any
 
15 other person, the licensee, the licensee's employee, or any other
 
16 person shall be fined not more than $2,000 or imprisoned not more
 
17 than one year, or both.
 
18      (c)  Whenever any investigator or officer, having demanded
 
19 admittance into any licensed premises and declared the
 
20 investigator's or officer's name and office, is not admitted by
 
21 the licensee or the person in charge of the premises, it shall be
 
22 lawful for the investigator or officer to forcibly and in any
 

 
 
 
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 1 manner to break into and enter the premises."
 
 2      SECTION 20.  Section 281-97, Hawaii Revised Statutes, is
 
 3 amended to read as follows:
 
 4      "§281-97  When sale without license authorized.  (a)  In
 
 5 case a liquor or tobacco license is revoked [or], canceled, or
 
 6 not renewed, the licensee [may], with the permission of and upon
 
 7 the conditions set by the liquor commission, may sell
 
 8 intoxicating liquors or tobacco then in the licensee's possession
 
 9 within sixty days, or within such additional time allowed by the
 
10 commission, unless under this chapter the same are seized or
 
11 forfeited.
 
12      (b)  Any bank, trust company, or financial institution
 
13 owning or possessing intoxicating liquor [which] or tobacco that
 
14 was acquired by the bank, trust company, or financial institution
 
15 in the ordinary course of its business, may sell the intoxicating
 
16 liquor or tobacco with the permission of and upon conditions set
 
17 by the commission.
 
18      (c)  Any person acting as personal representative[,] or
 
19 guardian of a licensee's estate, or any receiver, assignee for
 
20 benefit of creditors, or trustee in bankruptcy, may sell the
 
21 stock of intoxicating liquor or tobacco with the permission of
 
22 and upon conditions set by the commission, except as otherwise
 

 
 
 
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 1 provided in this chapter.
 
 2      (d)  Any insurance company, or any common carrier acting as
 
 3 an insurer for losses to persons shipping intoxicating liquor[,]
 
 4 or tobacco, may take possession of and sell the intoxicating
 
 5 liquor[,] or tobacco, the containers of which have been damaged
 
 6 by fire or otherwise, with the permission of and upon conditions
 
 7 set by the commission.
 
 8      (e)  Any person in possession of a stock of lawfully
 
 9 acquired intoxicating liquor or tobacco under a foreclosure
 
10 proceeding, proceedings for enforcement of a lien, civil
 
11 execution, or under any other proceeding or process, may sell
 
12 such intoxicating liquor or tobacco with the permission of and
 
13 upon conditions set by the commission."
 
14      SECTION 21.  Section 281-101, Hawaii Revised Statutes, is
 
15 amended to read as follows:
 
16      "§281-101  Manufacture or sale without license; penalty.  If
 
17 any person, acting in person or by or through any agent, servant,
 
18 or employee, manufactures or sells any liquor[,] or sells any
 
19 tobacco, either directly or indirectly, or upon any pretense or
 
20 by any subterfuge, except as authorized pursuant to this chapter,
 
21 the person shall be fined not more than $2,000 or imprisoned not
 
22 more than one year, or both."
 

 
 
 
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 1      SECTION 22.  Section 281-101.4, Hawaii Revised Statutes, is
 
 2 amended to read as follows:
 
 3      "§281-101.4  Hearing, illegal manufacture, importation, or
 
 4 sale of liquor[.] or tobacco.  (a)  The liquor commission or
 
 5 liquor control adjudication board may assess and collect a
 
 6 penalty, or reprimand a person for not having a valid license to
 
 7 manufacture or sell any liquor or to sell any tobacco in
 
 8 violation of this chapter or of any rule [or regulation]
 
 9 applicable thereto.
 
10      (b)  In every case where the administrator elects to conduct
 
11 proceedings under this section where it is proposed to assess and
 
12 collect a penalty from a person for not having a valid license to
 
13 manufacture or sell any liquor or to sell any tobacco in
 
14 violation of this chapter or of any rule [or regulation]
 
15 applicable thereto, that person shall be entitled to notice and
 
16 hearing in conformity with chapter 91.
 
17      (c)  At the hearing, before final action is taken by the
 
18 commission or board, the person shall be entitled to be heard in
 
19 person or through counsel and shall be given a full and fair
 
20 opportunity to present facts showing that the alleged cause or
 
21 causes for the proposed action do not exist, or any reason why no
 
22 penalty should be imposed.  The testimony taken at the hearing
 

 
 
 
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 1 shall be under oath and recorded stenographically, or by machine,
 
 2 but the parties shall not be bound by the strict rules of
 
 3 evidence; certified copies of any transcript and of any other
 
 4 record made of or at the hearing shall be furnished to a person
 
 5 upon that person's request and at that person's expense.
 
 6      (d)  Any order, reprimand, or penalty imposed by the
 
 7 commission or board upon a person for not having a valid license
 
 8 to manufacture or sell any liquor or to sell any tobacco in
 
 9 violation of this chapter or of any rule [or regulation]
 
10 applicable thereto shall be in addition to any penalty that might
 
11 be imposed upon that person's conviction in a court of law for
 
12 any violation of this chapter.  The amount of penalty assessed
 
13 and collected by the commission or board from any person under
 
14 this section for not having a valid license to manufacture or
 
15 sell any liquor or to sell any tobacco shall not exceed the sum
 
16 of $2,000 for each charge.
 
17      (e)  Whenever the service of any order or notice [shall be]
 
18 is required by this section the service shall be made in the
 
19 following manner[:  in the case of any].  If a violation is based
 
20 upon the personal observation of any investigator, a written
 
21 notice of the violation shall be given to the person charged with
 
22 a violation within a reasonable period of time after the alleged
 

 
 
 
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 1 violation occurred[, the].  The person charged shall be requested
 
 2 to acknowledge receipt of the notice of alleged violation, or, if
 
 3 the person cannot be found after diligent search, by leaving a
 
 4 certified copy thereof at the person's dwelling house or usual
 
 5 place of abode with some person of suitable age and discretion
 
 6 residing therein[; and if].  If the person cannot be found after
 
 7 diligent search, and service cannot be made, then service may be
 
 8 made by depositing another certified copy thereof in the
 
 9 certified mail of the United States post office, postage prepaid,
 
10 addressed to the person at the person's last known residence
 
11 address; provided[,] that in the case of a partnership,
 
12 corporation, unincorporated association, or limited liability
 
13 company, service may be made upon any partner, officer, or member
 
14 thereof."
 
15      SECTION 23.  There is appropriated out of the general
 
16 revenues of the State of Hawaii the sum of $35,000, or so much
 
17 thereof as may be necessary, for fiscal year 2000-2001, for
 
18 start-up costs for implementing the cigarette stamp tax system,
 
19 including a one year supply of stamps and stamp cylinders.
 
20      The sum appropriated shall be expended by the department of
 
21 taxation for purposes of this Act.
 
22      SECTION 24.  There is appropriated out of the general
 

 
 
 
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 1 revenues of the State of Hawaii the sum of $405,500, or so much
 
 2 thereof as may be necessary, for fiscal year 2000-2001, to be
 
 3 apportioned to the following county liquor commissions:
 
 4      Honolulu                             $220,500
 
 5      Hawaii                                 49,500
 
 6      Maui                                  110,000
 
 7      Kauai                                  24,500
 
 8      There is appropriated out of the general revenues of the
 
 9 State of Hawaii the sum of $591,500, or so much thereof as may be
 
10 necessary, for fiscal year 2002-2003 to be apportioned to the
 
11 following county liquor commissions:
 
12      Honolulu                             $350,500
 
13      Hawaii                                 58,500
 
14      Maui                                  133,500
 
15      Kauai                                  49,000
 
16      The sums appropriated shall be expended by the respective
 
17 liquor commissions of each county for the purposes of this Act.
 
18      SECTION 25.  The director of taxation shall submit findings
 
19 and recommendations to the legislature twenty days prior to the
 
20 regular session of 2006 as to the effectiveness of this Act in
 
21 reducing the loss of cigarette tax revenue to the State from
 
22 illegal sales of untaxed cigarettes.  The director of taxation
 
23 may submit an interim report to the legislature on any findings
 

 
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 1 relating to the effectiveness of this Act before 2006.
 
 2      SECTION 26.  The county liquor commission for each of the
 
 3 counties of Honolulu, Hawaii, Maui, and Kauai shall report to the
 
 4 legislature no later than twenty days before the convening of
 
 5 each of the regular sessions of 2002 and 2003 on their respective
 
 6 activities relating to this Act, including expenses, fines, and
 
 7 penalties collected, and forfeitures.
 
 8      SECTION 27.  This Act does not affect the rights and duties
 
 9 that matured, penalties that were incurred, and proceedings that
 
10 were begun, before its effective date.
 
11      SECTION 28.  In codifying the new part added to chapter 245,
 
12 Hawaii Revised Statutes, by sections 1, 2, and 3 of this Act, the
 
13 revisor of statutes shall substitute appropriate section numbers
 
14 for the letters used in designating the new sections in this Act.
 
15      SECTION 29.  Statutory material to be repealed is bracketed.
 
16 New statutory material is underscored.
 
17      SECTION 30.  This Act shall take effect upon its approval;
 
18 provided that:
 
19      (1)  Sections 23 and 24 shall take effect on July 1, 2000;
 
20      (2)  On June 30, 2006, this Act shall be repealed and
 
21           sections 245-1, 245-3, 245-5, 245-6, 245-8, 245-15, and
 

 
 
 
 
 
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                                     H.B. NO.           
                                                        
                                                        

 
 1           281-17, Hawaii Revised Statutes, shall be reenacted in
 
 2           the form in which they read on the day before the
 
 3           approval of this Act.
 
 4 
 
 5                           INTRODUCED BY:  _______________________