REPORT TITLE:
Cigarette and Tobacco Sales


DESCRIPTION:
Requires wholesale and retail tobacco dealers to obtain licenses
for selling tobacco from the liquor commission.  Prohibits minors
from purchasing cigarettes or tobacco from retail tobacco
dealers.

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                        
THE SENATE                              S.B. NO.           169
TWENTIETH LEGISLATURE, 1999                                
STATE OF HAWAII                                            
                                                             
________________________________________________________________
________________________________________________________________


                   A  BILL  FOR  AN  ACT

RELATING TO CIGARETTES AND TOBACCO PRODUCTS.



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

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

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

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

 
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 1           (B)  For a corporation or joint-stock company, its full
 
 2                name and the names, ages, and respective places of
 
 3                residence of its officers and directors;
 
 4           (C)  For a partnership, the names, ages, and respective
 
 5                places of residence of all the partners; and
 
 6           (D)  For any other association of individuals, the
 
 7                names, ages, and respective places of residence of
 
 8                its officers and members;
 
 9      (2)  A particular description of the place or premises where
 
10           the proposed license is to be exercised, so that the
 
11           exact location and extent thereof may be clearly and
 
12           definitely determined therefrom; provided that if the
 
13           applicant has or intends to have more than one place of
 
14           business dealing with cigarettes or tobacco, a separate
 
15           application shall be made for each place of business;
 
16           provided that no application for a retail tobacco
 
17           dealer license shall be accepted from a person who
 
18           conducts business from a vehicle;
 
19      (3)  The class of license applied for; and
 
20      (4)  Any other matter or information pertinent to the
 
21           subject matter that may be required by the rules of the
 
22           commission.
 
23      (b)  An application for a tobacco license may be granted
 

 
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 1 without notice or hearing by the liquor commission pursuant to
 
 2 commission rules, and those licenses shall be posted in a
 
 3 conspicuous place for public viewing.
 
 4      (c)  A tobacco license shall be valid for a term beginning
 
 5 July 1 through June 30 of the following year and shall be subject
 
 6 to renewal pursuant to commission rules; provided that such
 
 7 licenses shall not be transferable.
 
 8      §281-D  Prohibitions; tobacco.  (a)  At no time under any
 
 9 circumstances may any tobacco licensee or its employees sell or
 
10 furnish any tobacco to:
 
11      (1)  A minor; or
 
12      (2)  Any person over the age of eighteen for distribution to
 
13           or use by a minor.
 
14      (b)  Any person who violates this section or any rule
 
15 adopted by the commission pursuant to this part shall be guilty
 
16 of a violation for each separate offense.  Each occurrence of
 
17 violation shall constitute a separate offense.
 
18      §281-E  Prohibitions involving minors, cigarettes, tobacco;
 
19 liquor commission; penalty.  (a)  No minor shall purchase
 
20 cigarettes or tobacco from a retail tobacco dealer.
 
21      (b)  Subsection (a) does not apply if a person under the age
 
22 of eighteen, with parental authorization, is participating in a
 
23 controlled purchase as part of a law enforcement activity or a
 

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

 
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 1      (b)  Any minor who violates this section shall be subject to
 
 2 the jurisdiction of the family court.  Any person age eighteen or
 
 3 older who violates subsection (a) shall be guilty of a petty
 
 4 misdemeanor.
 
 5      §281-G  Fines collected.  (a)  One-half of all the fines
 
 6 collected pursuant to this part shall be transferred to the
 
 7 liquor commission in the county in which the citation originated.
 
 8      (b)  The moneys transferred pursuant to subsection (a) shall
 
 9 be allocated for the purpose of educating and training retail
 
10 tobacco merchants pursuant to section 281-17(3)."
 
11      SECTION 2.  Title 16, Hawaii Revised Statutes, is amended by
 
12 amending its title to read as follows:
 
13      "TITLE 16.  INTOXICATING LIQUOR, CIGARETTES, AND TOBACCO".
 
14      SECTION 3.  Chapter 281, Hawaii Revised Statutes, is amended
 
15 by amending its title to read as follows:
 
16                           "CHAPTER 281
 
17           INTOXICATING LIQUOR, CIGARETTES, AND TOBACCO"
 
18      SECTION 4.  Section 281-1, Hawaii Revised Statutes, is
 
19 amended:
 
20      l.  By adding three new definitions to be appropriately
 
21 inserted and to read as follows:
 
22      ""Cigarettes" means any roll for smoking made wholly or in
 
23 part of tobacco, irrespective of size or shape and regardless of
 

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

 
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 1 violations of liquor and tobacco laws and to impose penalties as
 
 2 may be provided in this chapter."
 
 3      3.  By amending the definition of "minor" to read:
 
 4      ""Minor" means any person below the age of twenty-one
 
 5 years[.]; provided that, where applicable to cigarettes and
 
 6 tobacco as provided in this chapter, a minor shall mean any
 
 7 person under the age of eighteen."
 
 8      4.  By amending the definition of "retail licensee" to read:
 
 9      ""Retail licensee" means any licensee holding a class 2 or
 
10 class 4 through class 14 license[.] and class 2 license under
 
11 section 281-B related to its retail operation."
 
12      5.  By amending the definition of "sell" or "to sell" to
 
13 read: 
 
14      ""Sell" or "to sell" includes to solicit and receive an
 
15 order for; to have or keep or offer or expose for sale; to
 
16 deliver for value or in any other way than purely gratuitously;
 
17 to peddle; to keep with intent to sell; to traffic in; and the
 
18 word "sale" includes every act of selling as herein defined.
 
19 Notwithstanding the provisions above, the delivery of liquor,
 
20 cigarettes, or tobacco by a licensee's vehicle or the vehicle of
 
21 a licensee's agent shall be deemed delivery for value."
 
22      6.  By amending the definition of "seller" to read:
 
23      ""Seller" includes the agents and employees of a seller;
 

 
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 1 provided that any person shall be deemed to be a seller, who in
 
 2 the State, whether acting as agent or representative of a
 
 3 nonresident principal or otherwise, solicits the placing of or
 
 4 takes, receives, or forwards orders for liquor, cigarettes, or
 
 5 tobacco to be shipped into the State from any place without the
 
 6 State to be delivered to customers, by direct shipment or
 
 7 otherwise."
 
 8      SECTION 5.  Section 281-3, Hawaii Revised Statutes, is
 
 9 amended to read as follows:
 
10      "§281-3 Illegal manufacture, importation, or sale of
 
11 liquor[.], cigarettes, and tobacco.  (a)  It shall be unlawful
 
12 for any person [not having] who does not have a valid license to
 
13 manufacture or sell any liquor except as otherwise provided in
 
14 this chapter; provided that the head of any family may produce
 
15 for family use and not for sale an amount of wine not exceeding
 
16 two hundred gallons a year, and an amount of beer not exceeding
 
17 one hundred gallons a year.
 
18      (b)  It shall also be unlawful for any person[, not having]
 
19 who does not have a valid wholesale license or a valid
 
20 manufacturer's (including rectifier's) license, to import any
 
21 liquor from without the State, except as otherwise provided in
 
22 this chapter.  Liquor imported into this State shall come to rest
 
23 at the warehouse of the manufacturer (including rectifier) or the
 

 
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 1 wholesaler importing the liquor, shall be unloaded into [such]
 
 2 the warehouse, and shall be held in [such] the warehouse for at
 
 3 least forty-eight hours before further sale by such manufacturer
 
 4 (including rectifier) or wholesaler.
 
 5      (c)  It shall also be unlawful for any person to label,
 
 6 designate, or sell any liquor using the [word] words  "Hawaii",
 
 7 "Hawaiian", "Aloha State", "50th State", "Kauai", "Maui", "Oahu",
 
 8 or "Honolulu" unless [such] the liquor is wholly or partially
 
 9 manufactured in the State, and all of the primary ingredients are
 
10 wholly rectified or combined in the State of Hawaii in compliance
 
11 with the Bureau of Alcohol, Tobacco and Firearms standards.
 
12      (d)  It shall also be unlawful for any person who does not
 
13 have a valid tobacco license to sell any cigarettes or tobacco
 
14 except as otherwise provided in this chapter.
 
15      (e)  It shall also be unlawful for any person who does not
 
16 have a valid wholesale tobacco dealer license to import any
 
17 cigarettes or tobacco from without the State, except as otherwise
 
18 provided in this chapter.
 
19      (f)  A license shall constitute authority for the licensee
 
20 to sell only the liquor, cigarettes, or tobacco thereby
 
21 authorized to be sold by the licensee. 
 
22      (g)  The commission or board may establish minimum standards
 
23 by rule under which the commission or board shall suspend or
 

 
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 1 revoke a license." 
 
 2      SECTION 6.  Section 281-17, Hawaii Revised Statutes, is
 
 3 amended to read as follows:
 
 4      "§281-17  Jurisdiction and powers.  (a)  The liquor
 
 5 commission, within its own county, shall have the sole
 
 6 jurisdiction, power, authority, and discretion, subject only to
 
 7 this chapter[:] to:
 
 8      (1)  [To grant,] Grant, refuse, suspend, and revoke any
 
 9           licenses for the manufacture, importation, and sale of
 
10           liquors[;], cigarettes, or tobacco;
 
11      (2)  [To take] Take appropriate action against a person who,
 
12           directly or indirectly, manufactures or sells any
 
13           liquor, cigarettes, or tobacco without being authorized
 
14           pursuant to this chapter; provided that in counties
 
15           which have established by charter a liquor control
 
16           adjudication board, the board shall have the
 
17           jurisdiction, power, authority, and discretion to hear
 
18           and determine administrative complaints of the director
 
19           regarding violations of the liquor, cigarettes, or
 
20           tobacco laws of the State or of the rules of the liquor
 
21           commission, and impose penalties [[]for[]] violations
 
22           thereof as may be provided by law;
 
23      (3)  [To control,] Control, supervise, and regulate the
 

 
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 1           manufacture, importation, and sale of liquors,
 
 2           cigarettes, or tobacco by investigation, enforcement,
 
 3           and education; provided that [any]:
 
 4           (A)  Any educational program shall be [limited to]
 
 5                coordinated with the department of health, the
 
 6                commission's staff, licensees, and their employees
 
 7                [and];
 
 8           (B)  Liquor education programs shall be financed
 
 9                through the [money] moneys collected from the
 
10                assessment of fines against licensees; and
 
11           (C)  Education related to tobacco licensees may be
 
12                financed through the money collected from the
 
13                assessment of fines against tobacco licensees as
 
14                well as from appropriations out of the general
 
15                revenues of the State corresponding to an increase
 
16                in the cigarette excise tax;
 
17      (4)  From time to time [to], make, amend, and repeal such
 
18           rules, not inconsistent with this chapter, as in the
 
19           judgment of the commission seem appropriate for
 
20           carrying out this chapter and for the efficient
 
21           administration thereof, and the proper conduct of the
 
22           business of all licensees, including every matter or
 
23           thing required to be done or which may be done with the
 

 
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 1           approval or consent or by order or under the direction
 
 2           or supervision of or as prescribed by the commission;
 
 3           which rules, when adopted as provided in chapter 91
 
 4           shall have the force and effect of law;
 
 5      (5)  Subject to chapters 76 and 77, [to] appoint and remove
 
 6           an administrator, who may also be appointed an
 
 7           investigator and who shall be responsible for the
 
 8           operations and activities of the staff.  The
 
 9           administrator may hire and remove [hearing] hearings
 
10           officers, investigators, and clerical or other
 
11           assistants as its business may from time to time
 
12           require, to [prescribe]:
 
13           (A)  Prescribe their duties, and fix their
 
14                compensation; [to engage]
 
15           (B)  Engage the services of experts and persons engaged
 
16                in the practice of a profession[,];
 
17           if deemed expedient.  Every investigator, within the
 
18           scope of the investigator's duties, shall have the
 
19           powers of a police officer.  No employee of any
 
20           commission, aside from exercising the right to vote,
 
21           shall support, advocate, or aid in the election or
 
22           defeat of any candidate for public office, and upon
 
23           satisfactory proof of such prohibited activity the
 

 
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 1           offender shall be summarily dismissed;
 
 2      (6)  [To limit] Limit the number of licenses of any class or
 
 3           kind within the county, or the number of licenses of
 
 4           any class or kind to do business in any given locality,
 
 5           when in the judgment of the commission such limitations
 
 6           are in the public interest;
 
 7      (7)  [To prescribe] Prescribe the nature of the proof to be
 
 8           furnished, the notices to be given, and the conditions
 
 9           to be met or observed in case of the issuance of a
 
10           duplicate license in place of one alleged to have been
 
11           lost or destroyed, including a requirement of any
 
12           indemnity deemed appropriate to the case;
 
13      (8)  [To fix] Fix the hours between which licensed premises
 
14           of any class or classes may regularly be open for the
 
15           transaction of business, which shall be uniform
 
16           throughout the county as to each class respectively;
 
17      (9)  [To prescribe] Prescribe all forms to be used for the
 
18           purposes of this chapter not otherwise provided for in
 
19           this chapter, and the character and manner of keeping
 
20           of books, records, and accounts to be kept by licensees
 
21           in any matter pertaining to their business;
 
22     (10)  [To investigate] Investigate violations of this
 
23           chapter, chapter 244D, and, notwithstanding any law to
 

 
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 1           the contrary, violations of the applicable department
 
 2           of health's allowable noise levels, through its
 
 3           investigators or otherwise, to include covert
 
 4           operations, and to report violations to the prosecuting
 
 5           officer for prosecution and, where appropriate, the
 
 6           director of taxation to hear and determine complaints
 
 7           against any licensee;
 
 8     (11)  [To prescribe,] Prescribe, by rule, the terms,
 
 9           conditions, and circumstances under which persons or
 
10           any class of persons may be employed by holders of
 
11           licenses;
 
12     (12)  [To prescribe,] Prescribe, by rule, the term of any
 
13           license or solicitor's and representative's permit
 
14           authorized by this chapter, the annual or prorated
 
15           amount, the manner of payment of fees for the licenses
 
16           and permits, and the amount of filing fees; and
 
17     (13)  [To prescribe,] Prescribe, by rule, the circumstances
 
18           and penalty for the unauthorized manufacturing or
 
19           selling of any liquor[.], cigarettes, or tobacco.
 
20      (b)  Subject only to this chapter, the commission or board
 
21 and each member thereof shall have the same powers respecting the
 
22 administering of oaths, compelling the attendance of witnesses
 
23 and the production of documentary evidence, and examining the
 

 
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 1 witnesses as are possessed by a circuit court, except that the
 
 2 commission or board and each member thereof shall not be bound by
 
 3 the strict legal rules of evidence.  In addition, the commission
 
 4 or board shall have the power to require the production of, and
 
 5 to examine any books, papers, and records of any licensee which
 
 6 may pertain to the licensee's business under the license or which
 
 7 may pertain to a matter at a hearing before the commission or
 
 8 board or to an investigation by the commission or board.
 
 9      (c)  The exercise by the commission or board of the power,
 
10 authority, and discretion vested in it pursuant to this chapter
 
11 shall be final and shall not be reviewable by or appealable to
 
12 any court or tribunal, except as otherwise provided in this
 
13 chapter or chapter 91.
 
14      (d)  The legislature declares its intent not to preempt the
 
15 field regulation of the use and sale of tobacco products.
 
16 Counties may regulate smoking or tobacco use in a manner not
 
17 inconsistent with this chapter."
 
18      SECTION 7.  Section 281-17.5, Hawaii Revised Statutes, is
 
19 amended to read as follows:
 
20      "§281-17.5  Fees; justified, method of change, limitation.
 
21 (a)  Any liquor or tobacco license fee or any increase in an
 
22 existing liquor or tobacco license fee sought to be implemented
 
23 by any commission shall have, as its justification, a direct and
 

 
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 1 proportionate relationship to costs and expenses of the
 
 2 commission in its control, supervision, or regulation of the
 
 3 manufacture, importation, and sale of liquors, cigarettes, or
 
 4 tobacco, or otherwise directly relate to actual costs and
 
 5 expenses of administration of the commission as is set forth in
 
 6 this chapter.
 
 7      (b)  Any such [liquor] license fees or any moneys collected
 
 8 or received by any liquor commission under this chapter may only
 
 9 be used for costs and expenses directly relating to operational
 
10 and administrative costs actually incurred by the liquor
 
11 commission collecting or receiving such [liquor] license fees or
 
12 moneys.  Such fees or moneys shall not be used for any costs or
 
13 expenses other than those directly relating to its operation and
 
14 administration.
 
15      (c)  Any increase in the [liquor] license fee structure
 
16 shall only be initiated by the liquor commission seeking the
 
17 change with the approval of the county's legislative body and
 
18 mayor.
 
19      (d)  Any liquor commission seeking a change in [liquor] the
 
20 license fee structure shall notify all licensees under this
 
21 chapter affected by the change, of the proposed change and shall
 
22 notify each such licensee of the outcome and resolution of the
 
23 change.
 

 
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 1      (e)  Any liquor commission which currently receives a
 
 2 license fee from a licensee in excess of the amount prescribed by
 
 3 this section shall immediately revise its [liquor] license fee
 
 4 structure to conform with the requirements of this section.  Any
 
 5 funds in excess of twenty per cent of the commission's current
 
 6 budget shall be returned or credited annually to existing
 
 7 licensees."
 
 8      SECTION 8.  Section 281-20, Hawaii Revised Statutes, is
 
 9 amended to read as follows:
 
10      "§281-20  General right of inspection.  Any investigator
 
11 [may,] at all times, without notice and without any search
 
12 warrant or other legal process, may visit and have immediate
 
13 access to every part of the premises of every liquor and tobacco
 
14 licensee, for the purpose of making any examination or inspection
 
15 thereof or inquiry into the books and records therein, to
 
16 ascertain whether all of the conditions of the license and all
 
17 provisions of this chapter and chapter 244D are being complied
 
18 with by the licensee." 
 
19      SECTION 9.  Section 281-79, Hawaii Revised Statutes, is
 
20 amended to read as follows:
 
21      "§281-79  Entry for examination; obstructing liquor
 
22 commission operations; penalty.  (a)  Every investigator shall,
 
23 and any officer having police power may, at all reasonable times,
 

 
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 1 and at any time whatsoever if there is any reasonable ground for
 
 2 suspicion that the conditions of any liquor or tobacco license
 
 3 are being violated, without warrant enter into and upon any
 
 4 licensed premises and inspect the same and every part thereof,
 
 5 and any books or records therein, to ascertain whether or not all
 
 6 conditions of the license and all provisions of this chapter and
 
 7 chapter 244D are being complied with by the licensee.
 
 8      (b)  If any investigator or officer, or any person called by
 
 9 the investigator or officer to the investigator's or officer's
 
10 aid, is threatened with the use of violence, force, or physical
 
11 interference or obstacle, or is hindered, obstructed, or
 
12 prevented by any licensee, the licensee's employees, or any other
 
13 person from entering into any such premises, or whenever any
 
14 investigator or officer is by any licensee, the licensee's
 
15 employees, or any other person opposed, obstructed, or molested
 
16 in the performance of the officer's duty in any respect, the
 
17 licensee, the licensee's employee, or any other person shall be
 
18 fined not more than $2,000 or imprisoned not more than one year,
 
19 or both.
 
20      (c)  Whenever any investigator or officer, having demanded
 
21 admittance into any licensed premises and declared the
 
22 investigator's or officer's name and office, is not admitted by
 
23 the licensee or the person in charge of the premises, it shall be
 

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

 
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 1 as otherwise 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 cigarettes, or tobacco, may take possession of and sell the
 
 5 intoxicating liquor, cigarettes, or tobacco, the containers of
 
 6 which have been damaged by fire or otherwise, with the permission
 
 7 of and upon conditions set by the commission.
 
 8      (e)  Any person in possession of a stock of lawfully
 
 9 acquired intoxicating liquor, cigarettes, or tobacco under a
 
10 foreclosure proceeding, proceedings for enforcement of a lien,
 
11 civil execution, or under any other proceeding or process, may
 
12 sell [such] the intoxicating liquor, cigarettes, or tobacco with
 
13 the permission of and upon conditions set by the commission."
 
14      SECTION 11.  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, cigarettes, or
 
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." 
 
23      SECTION 12.   Section 281-101.4, Hawaii Revised Statutes, is
 

 
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                                     S.B. NO.           169
                                                        
                                                        

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

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

 
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                                     S.B. NO.           169
                                                        
                                                        

 
 1 copy thereof at the person's dwelling house or usual place of
 
 2 abode with some person of suitable age and discretion residing
 
 3 therein; and if the person cannot be found after diligent search,
 
 4 and service cannot be made, then service may be made by
 
 5 depositing another certified copy thereof in the certified mail
 
 6 of the United States post office, postage prepaid, addressed to
 
 7 the person at the person's last known residence address;
 
 8 provided, that in the case of a partnership, corporation,
 
 9 unincorporated association, or limited liability company, service
 
10 may be made upon any partner, officer, or member  thereof."
 
11      SECTION 13.  There is appropriated out of the general
 
12 revenues of the State of Hawaii the sum of $500,000 to the
 
13 counties and the department of health for fiscal year 1999-2000
 
14 to assist the counties in implementing this Act and the State in
 
15 complying with federal requirements under the Synar amendment to
 
16 reduce illegal sales of tobacco to minors.  
 
17      1.   For the city and county of Honolulu, $245,000 or 49 per
 
18           cent of the total appropriation;
 
19      2.   For the county of Kauai, $32,000, or 6.4 per cent of
 
20           the total appropriation;
 
21      3.   For the county of Maui, $67,000, or 13.4 per cent of
 
22           the total appropriation;
 
23      4.   For the county of Hawaii, $56,000, or 11.2 per cent of
 

 
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                                     S.B. NO.           169
                                                        
                                                        

 
 1           the total appropriation; and
 
 2      5.   For the department of health, $100,000, or 20 per cent
 
 3           of the total appropriation. 
 
 4      Appropriations for future years shall be determined on the
 
 5 basis of the proportion of tobacco permittees for each county
 
 6 with the department of health share remaining constant at twenty
 
 7 per cent.
 
 8      SECTION 14.  The sums appropriated shall be expended by the
 
 9 counties and the department of health for the purposes of this
 
10 Act. 
 
11      SECTION 15.  In codifying the new part added to chapter 281,
 
12 Hawaii Revised Statutes, by section 1 of this Act, the revisor of
 
13 statutes shall substitute appropriate section numbers for the
 
14 letters used in the designation of the new sections in this Act.
 
15      SECTION 16.  The sums appropriated shall constitute the
 
16 State's share of the cost of mandated programs under article
 
17 VIII, section 5 of the state constitution.
 
18      SECTION 17.  Statutory material to be repealed is bracketed.
 
19 New statutory material is underscored.
 
20      SECTION 18.  This Act shall take effect on July 1, 1999.
 
21 
 
22                           INTRODUCED BY:  _______________________