REPORT TITLE:
Intoxicating Liquor


DESCRIPTION:
Amends exceptions regarding the transfer of liquor licenses.
(SD1)

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                        703
THE SENATE                              S.B. NO.           S.D. 1
TWENTIETH LEGISLATURE, 1999                                
STATE OF HAWAII                                            
                                                             
________________________________________________________________
________________________________________________________________


                   A  BILL  FOR  AN  ACT
RELATING TO INTOXICATING LIQUOR.



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

 1      SECTION 1.  Section 281-41, Hawaii Revised Statutes, is
 
 2 amended to read as follows:
 
 3      "§281-41  Transfer of licenses; notice of change in
 
 4 officers, directors, and stockholders of corporate licenses,
 
 5 partners of a partnership license, and members of a limited
 
 6 liability company license; penalty.  (a)  No license issued under
 
 7 this chapter to an original applicant or to any transferee shall
 
 8 be transferable or be transferred within one year of [such] the
 
 9 issuance or transfer except for good cause shown to the
 
10 satisfaction of the liquor commission.  No license issued under
 
11 this chapter shall be transferable or be transferred except upon
 
12 written application to the commission by the proposed transferee,
 
13 and after prior inspection of the premises, reference to, and
 
14 report by an inspector, and a public hearing held by the
 
15 commission not less than fourteen days after one publication of
 
16 notice thereof, but without sending notice of the hearing by mail
 
17 to persons being the owners or lessees of real estate situated
 
18 within the vicinity of the premises and without the right to such
 
19 owners or lessees to protest the transfer of a license.
 
20 Exceptions are class 5, category of establishments (2) and (4)
 

 
Page 2                                                     703
                                     S.B. NO.           S.D. 1
                                                        
                                                        

 
 1 licensees, and class 11 licensees who must comply with the notice
 
 2 requirements as set forth in section 281-57.  No class 5 or 12
 
 3 license issued to a standard bar as defined in section 281-1,
 
 4 shall be transferable to other than a standard bar, and that
 
 5 [such] the license shall be subject to revocation if the licensed
 
 6 premises is not retained as a standard bar, except upon written
 
 7 application to the commission by the licensee [and/]or the
 
 8 proposed transferee, subject to sections 281-51 to 281-60.
 
 9      Where a license is held by a partnership, the commission
 
10 [may], notwithstanding this section, may transfer the license
 
11 upon the death or withdrawal of a member of the partnership to
 
12 any remaining partner or partners without publication of notice
 
13 and without public hearing.
 
14      Where a license is held by a limited partnership or a
 
15 limited liability company, the admission or withdrawal of a
 
16 limited partner or a member of the limited liability company
 
17 shall not be deemed a transfer of the license held by the
 
18 partnership or limited liability company, but the licensee
 
19 [shall], prior to [such] the admission or withdrawal, shall so
 
20 notify the commission in writing, stating the name of the
 
21 partner, partners, member, or members who have withdrawn, if
 
22 [such] that be the case, and the name, age, and place of
 
23 residence of the partner, partners, member, or members who have
 

 
Page 3                                                     703
                                     S.B. NO.           S.D. 1
                                                        
                                                        

 
 1 been admitted, if that be the case.  If the commission finds a
 
 2 limited partner or a member to be an unfit or improper person to
 
 3 hold a license in the limited partner's or member's own right
 
 4 pursuant to section 281-45, it may revoke the license or suspend
 
 5 the license of the partnership or the limited liability company
 
 6 until the unfit or improper partner or member is removed or
 
 7 replaced.
 
 8      Except as otherwise provided in this section, the same
 
 9 procedure shall be followed in regard to the transfer of a
 
10 license as is prescribed by this chapter for obtaining a license.
 
11 Sections 281-51 to 281-60, except where inconsistent with any
 
12 provision hereof, are hereby made applicable to such transfers.
 
13 The word "applicant", as used in such sections, shall include
 
14 each such proposed transferee, and the words, "application for a
 
15 license or for the renewal of a license", as used in such
 
16 sections, shall include an application for the transfer of a
 
17 license.
 
18      (b)  Upon the hearing, the commission shall consider the
 
19 application and any objections to the granting thereof, and hear
 
20 the parties in interest.  It shall inquire into the propriety of
 
21 each transfer and determine whether the proposed transferee is a
 
22 fit person to hold the license.  It may approve a transfer or
 
23 refuse to approve a transfer, and the refusal by the commission
 

 
Page 4                                                     703
                                     S.B. NO.           S.D. 1
                                                        
                                                        

 
 1 to approve a transfer shall be final and conclusive, unless an
 
 2 appeal is taken as provided in chapter 91.
 
 3      (c)  If any licensee without such approval transfers to any
 
 4 other person the licensee's business for which the licensee's
 
 5 license was issued, either openly or under any undisclosed
 
 6 arrangement whereby any person other than the licensee comes into
 
 7 possession or control of the business, or takes in any partner or
 
 8 associate, the commission [may], in its discretion, may suspend
 
 9 or cancel the license.
 
10      If the licensee is a corporation, a change in ownership of
 
11 any outstanding capital stock shall not be deemed a transfer of a
 
12 license; provided that in the case of a change in ownership of
 
13 twenty-five per cent or more of the stock or in the case of
 
14 change in ownership of any number of shares of the stock which
 
15 results in the transferee thereof becoming the owner of
 
16 twenty-five per cent or more of the outstanding capital stock,
 
17 the corporate licensee [shall], prior to the date of [such] the
 
18 transfer, shall apply for and secure the approval of the transfer
 
19 from the commission in writing.  If the commission finds that the
 
20 proposed transferee is an unfit or improper person to hold a
 
21 license in the proposed transferee's own right pursuant to
 
22 section 281-45, it shall not approve the proposed transfer.  If
 
23 any transfer is made without the prior approval of the
 

 
Page 5                                                     703
                                     S.B. NO.           S.D. 1
                                                        
                                                        

 
 1 commission, the commission [may], in its discretion, may revoke
 
 2 or suspend the license until it determines that the transferee is
 
 3 a fit and proper person, and if the commission finds that the
 
 4 transferee is not a fit and proper person, until a retransfer or
 
 5 new transfer of the capital stock is made to a fit and proper
 
 6 person pursuant to section 281-45.  In addition, the corporate
 
 7 licensee [shall], within thirty days from the date of election of
 
 8 any officer or director, shall notify the commission in writing
 
 9 of the name, age, and place of residence of [such] the officer or
 
10 director.  If the commission finds the transferee, officer, or
 
11 director an unfit or improper person to hold a license in the
 
12 transferee's, officer's, or director's own right pursuant to
 
13 section 281-45, it may in its discretion revoke the license or
 
14 suspend the license until a retransfer or new transfer of such
 
15 capital stock is effected to a fit or proper person pursuant to
 
16 section 281-45 or until the unfit or improper officer or director
 
17 is removed or replaced by a fit and proper person pursuant to
 
18 section 281-45.
 
19      If a licensee closes out the business for which the license
 
20 is held, during the term for which the license was issued, the
 
21 licensee [shall], within five days from the date of closing the
 
22 same, shall give the commission written notice thereof and
 
23 surrender the licensee's license for cancellation."
 

 
Page 6                                                     703
                                     S.B. NO.           S.D. 1
                                                        
                                                        

 
 1      SECTION 2.  Statutory material to be repealed is bracketed.
 
 2 New statutory material is underscored.
 
 3      SECTION 3.  This Act shall take effect upon its approval.