HB3319

SECTION 1. Chapter 281, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

"§281- Smoking establishment license fee. Notwithstanding sections 281-16 and 281-17.5, or any other law to the contrary, beginning July 1, 2008, there shall be a smoking establishment license fee for each holder of a restaurant, dispensers', club, or cabaret license if the establishment is a licensed smoking establishment as provided in section 281-31. The smoking establishment license fee shall be collected by the liquor commission for each county, and shall be in addition to other fees required under this chapter. The fee shall be as follows:

(1) $1,000 for the following establishments in which smoking is permitted: class 5 category A standard bars, class 2 category C restaurants, and class 6 clubs;

(2) $2,000 for the following establishments in which smoking is permitted: class 5 category C and category D licenses; and

(3) $3,000 for the following establishments in which smoking is permitted: class 11 cabarets and class 5 category B premises.

Fifty percent of the smoking establishment license fees collected by each commission shall be deposited into the organ and tissue donation special fund established under section 327-5.6. Fifty percent of the smoking establishment license fees collected by each commission shall be deposited into the Hawaii tobacco prevention and control trust fund established under section 328L-5. Each commission may retain a portion, not to exceed ten per cent, of every smoking establishment license fee collected that directly relates to actual costs and expenses of operation and administration of the commission as set forth in this chapter."

SECTION 2. Chapter 328J, Hawaii Revised Statutes, is amended by adding two new sections to be appropriately designated and to read as follows:

"§328J-A Smoking establishment employees; smoke hazard acknowledgment form. All holders of a restaurant, dispensers', club, or cabaret license under which smoking is permitted as provided in section 281-31 are required to inform all employees and prospective employees of the hazards of tobacco smoke. The liquor commission for each county shall proscribe forms that each smoking establishment license holder and each employee of a smoking establishment license holder must sign to acknowledge that the employee has been informed of the hazards of working in a smoking establishment. Forms required under this section shall be filed with the appropriate liquor commission.

§328J-B Smoking establishment signs. Notwithstanding any other provision of this chapter, all holders of a restaurant, dispensers', club, or cabaret license under which smoking is permitted as provided in section 281-31 shall erect a sign no smaller than eleven inches by seventeen inches in dimension, which shall consist of block lettering at least one inch high, with the exact design to be approved by the Hawaii Bar Owners Association, and which shall state as follows: THIS IS A SMOKER FRIENDLY BUSINESS . . . ENTER AT YOUR OWN RISK. All signs required under this section shall be attached to the door of the entrance of every smoking establishment in a clear and conspicuous manner at all times."

SECTION 3. Section 281-31, Hawaii Revised Statutes, is amended to read as follows:

"§281-31 Licenses, classes. (a) Licenses may be granted by the liquor commission as provided in this section.

(b) Class 1. Manufacturers' license. A license for the manufacture of liquor shall authorize the licensee to manufacture the liquor therein specified and to sell it at wholesale in original packages to any person who holds a license to resell it and to sell draught beer or wine manufactured from grapes or other fruits grown in the State in any quantity to any person for private use and consumption. Under this license, no liquor shall be consumed on the premises except as authorized by the commission. Of this class, there shall be the following kinds:

(1) Beer;

(2) Wine;

(3) Alcohol; and

(4) Other specified liquor.

It shall be unlawful for any holder of a manufacturer's license to have any interest whatsoever in the license or licensed premises of any other licensee. This subsection shall not prevent the holder of a beer class manufacturer's license under this chapter or under the law of another jurisdiction from maintaining any interest in the license or licensed premises of a beer and wine class wholesale dealer licensee under this chapter whose wholesaling is limited to beer, other than direct ownership of a beer and wine class wholesale dealer's license, or direct ownership of a partnership share, one or more shares of stock, or similar proprietary stake in the holder of a beer and wine class wholesale dealer's license.

(1) A license under this class shall authorize the licensee to sell liquors specified in this subsection for consumption on the premises; provided that a restaurant licensee, with commission approval, may provide off-premises catering; provided further that the catering activity shall be directly related to the licensee's operation as a restaurant. A licensee under this class shall be issued a license according to the category of establishment the licensee owns or operates. The categories of establishment shall be as follows:

(A) A standard bar; [or]

(B) Premises in which live entertainment or recorded music is provided. Facilities for dancing by the patrons may be permitted as provided by commission rules[.]; or

(C) Establishments as described in (A) or (B) which include an outside area in which smoking is permitted pursuant to commission rules. Smoke from these outside areas shall not infiltrate into areas that are not designated for smoking. A licensee under this category shall be issued a license according to the category of establishment the licensee owns or operates. A smoking establishment license shall be granted upon written request and remittance of the smoking establishment license fee by the owner.

(2) If a licensee under class 2 desires to change the category of establishment the licensee owns or operates, the licensee shall apply for a new license applicable to the category of the licensee's establishment[[].[]]

(3) Notwithstanding subsection (2), a smoking establishment license may be canceled at the owner's request at any time, and the owner shall be issued a new license under category A or B under which smoking is not permitted. The owner shall not have to reapply for a license, and any subsequent fees for a smoking establishment license shall be forfeit.

[~~(3)~~] (4) For each category of class 2 licenses, there shall be the following kinds:

(A) General (includes all liquors except alcohol);

(B) Beer and wine; and

Any licensee holding a different class of license on June 19, 1990, and who would otherwise come within this class of license shall not be required to apply for a new license.

(d) Class 3. Wholesale dealers' license. A license for the sale of liquors at wholesale shall authorize the licensee to import and sell only to licensees or to others who are by law authorized to resell but are not by law required to hold a license, the liquors therein specified in quantities not less than five gallons at one time if sold from or in bulk containers or not less than one gallon if bottled goods; provided that samples of liquor may be sold back to the manufacturer. The license may authorize the licensee to sell draught beer in quantities not less than five gallons at one time to any person for private use and consumption if the licensee files an affidavit with the commission that there is not a class 4 retail dealers licensee available to sell the wholesalers brand of draught beer. Under the license, no liquor shall be consumed on the premises except as authorized by the commission. Of this class, there shall be the following kinds:

(1) General (includes all liquors except alcohol);

(2) Beer and wine; and

(3) Alcohol.

If any wholesale dealer solicits or takes any orders in any county other than that where the dealer's place of business is located, the orders may be filled only by shipment direct from the county in which the wholesale dealer has the dealer's license. Nothing in this subsection shall prevent a wholesaler from selling liquors to post exchanges, ships service stores, army or navy officers' clubs, or similar organizations located on army or navy reservations, or to any vessel other than vessels performing a regular water transportation service between any two or more ports in the State, or to aviation companies who operate an aerial transportation enterprise as a common carrier, under chapter 269, engaged in regular flight passenger services between any two or more airports in the State for use on aircraft, or aviation companies engaged in transpacific flight operations for use on aircraft outside the jurisdiction of the State.

(e) Class 4. Retail dealers' license. A license to sell liquors at retail or to class 10 licenses shall authorize the licensee to sell the liquors therein specified in their original packages. Under the license, no liquor shall be consumed on the premises except as authorized by the commission. Of this class, there shall be the following kinds:

(1) General (includes all liquors except alcohol);

(2) Beer and wine; and

(3) Alcohol.

(f) Class 5. Dispensers' license.

(1) A license under this class shall authorize the licensee to sell liquors specified in this subsection for consumption on the premises. A licensee under this class shall be issued a license according to the category of establishment the licensee owns or operates. The categories of establishments shall be as follows:

(A) A standard bar;

(B) Premises in which a person performs or entertains unclothed or in attire restricted to use by entertainers pursuant to commission rules;

(C) Premises in which live entertainment or recorded music is provided; provided that facilities for dancing by the patrons may be permitted as provided by commission rules; [or]

(D) Premises in which employees or entertainers are compensated to sit with patrons, regardless of whether the employees or entertainers are consuming nonalcoholic beverages while in the company of the patrons pursuant to commission rules[.]; or

(E) Establishments as described in (A), (B), (C), or (D) in which smoking is permitted pursuant to commission rules. A license under this category shall authorize the licensee to sell liquor for consumption in enclosed premises in which smoking, as defined in section 328J-1, is allowed. Smoke from these premises shall not infiltrate into areas that are not designated for smoking. A licensee under this category shall be issued a license according to the category of establishment the licensee owns or operates. A smoking establishment license shall be granted upon written request and remittance of the smoking establishment license fee by the owner.

(2) If a licensee under class 5 desires to change the category of establishment the licensee owns or operates, the licensee shall apply for a new license applicable to the category of the licensee's establishment.

(3) Notwithstanding subsection (2), a smoking establishment license may be canceled at the owner's request at any time, and the owner shall be issued a new license under category A, B, C, or D under which smoking is not permitted. The owner shall not have to reapply for a license, and any subsequent fees for a smoking establishment license shall be forfeit.

[~~(3)~~] (4) For each category of class 5 licenses, there shall be the following kinds:

(A) General (includes all liquors except alcohol);

(B) Beer and wine; and

(g) Class 6. Club license. A club license shall be general only (but excluding alcohol) and shall authorize the licensee to sell liquors to members of the club and to guests of the club enjoying the privileges of membership, for consumption only on the premises kept and operated by the club; provided that the license shall also authorize any club member to keep in the member's private locker on the premises a reasonable quantity of liquor, if owned by the member, for the member's own personal use and not to be sold and that may be consumed only on the premises.

Holders of a club license may provide areas in which smoking is permitted as provided by commission rules. Smoke from these areas shall not infiltrate into areas that are not designated for smoking. The license shall be granted upon written request and remittance of the smoking establishment license fee by the owner. A smoking establishment license may be canceled at the owner's request at any time, and the owner shall be issued a new club license under which smoking is not permitted. The owner shall not have to reapply for a license, and any subsequent fees for a smoking establishment license shall be forfeit.

(h) Class 7. Vessel license. A general license may be granted to the owner of any vessel performing a regular water transportation passenger service between any two or more ports in the State for the sale of liquor (other than alcohol) on board the vessel while in the waters of the State; provided the sales are made only while the vessel is en route and only for consumption by passengers on board. If the vessel has a home port in the State, the license shall be issuable in the county in which the home port is situated; provided that if the licensee's home port is not situated in this State, the license shall be issuable in the city and county of Honolulu. If, on any vessel for which no license has been obtained under this chapter, any liquor is sold or served within three miles of the shore of any island of the State, it shall constitute a violation of this chapter.

(i) Class 8. Transient vessel license. A general license may be granted to the owner of any vessel that does not fall within class 7 for the sale of liquor (other than alcohol) on board the vessel while in any port of the State. Sales shall be made only for consumption by passengers and their guests on board the vessel. The license shall be issuable in each county where the sales are to be made; provided that the application for the license may be made by any agent representing the owner.

(j) Class 9. Tour or cruise vessel license. A general license may be granted to the owner of any tour or cruise vessel for the sale of liquor (other than alcohol) on board the vessel while in the waters of the State; provided that sales be made only for consumption by passengers on board while the vessel is in operation outside the port or dock of any island of the State, unless otherwise approved by the county where the license has been issued. If the vessel has a home port in the State, the license shall be issuable in the county wherein the home port is situated; provided that if the licensee's home port is not situated in this State, the license shall be issuable in the city and county of Honolulu. If, on any vessel for which no license has been obtained under this chapter, any liquor is sold or served within three miles of the shore of any island of the State, it shall constitute a violation of this chapter.

(k) Class 10. Special license. A special license may be granted for the sale of liquor for a period not to exceed three days on any occasion and under any conditions as may be approved by the commission. Of this class, there shall be the following kinds:

(1) General (includes all liquors except alcohol);

(2) Beer and wine; and

(3) Beer.

Under this license, the liquors therein specified shall be consumed on the premises.

(l) Class 11. Cabaret license. A cabaret license shall be general only (but excluding alcohol) and shall authorize the sale of liquors for consumption on the premises. This license shall be issued only for premises where food is served, facilities for dancing by the patrons are provided, including a dance floor, and live or amplified recorded music or professional entertainment, except professional entertainment by a person who performs or entertains unclothed, is provided for the patrons; provided that professional entertainment by persons who perform or entertain unclothed shall be authorized by:

(1) A cabaret license for premises where professional entertainment by persons who perform or entertain unclothed was presented on a regular and consistent basis immediately prior to June 15, 1990; or

(2) A cabaret license that, pursuant to rules adopted by the liquor commission, permits professional entertainment by persons who perform or entertain unclothed.

A cabaret license under paragraph (1) or (2) authorizing professional entertainment by persons who perform or entertain unclothed shall be transferable through June 30, 2000. A cabaret license under paragraph (1) or (2) authorizing professional entertainment by persons who perform or entertain unclothed shall not be transferable after June 30, 2000, except when the transferee obtains approval from the liquor commission, and pursuant to rules adopted by the commission. Notwithstanding any rule of the liquor commission to the contrary, cabarets in resort areas may be opened for the transaction of business until 4 a.m. throughout the entire week.

Holders of a cabaret license may provide areas in which smoking is permitted as provided by commission rules. Smoke from these areas shall not infiltrate into areas that are not designated for smoking. The license shall be granted upon written request and remittance of the smoking establishment license fee by the owner. Notwithstanding any other provision herein, a smoking establishment license may be canceled at the owner's request at any time, and the owner shall be issued a new cabaret license under which smoking is not permitted. The owner shall not have to reapply for a license, and any subsequent fees for a smoking establishment license shall be forfeit.

(m) Class 12. Hotel license. A license to sell liquor in a hotel shall authorize the licensee to provide entertainment and dancing on the hotel premises and to sell all liquors, except alcohol, for consumption on the premises; provided that a hotel licensee, with commission approval, may provide off-premises catering, if the catering activity is directly related to the licensee's operation as a hotel.

Procedures such as room service, self-service (no-host), minibars or similar service in guest rooms, and service at private parties in areas that are the property of and contiguous to the hotel, are permitted with commission approval.

Any licensee who would otherwise fall within the hotel license class but holds a different class of license may be required to apply for a hotel license.

If the licensee applies for a change of classification prior to July 30, 1992, the licensee shall not be subject to the requirements of sections 281-52, 281-54, and 281-57 through 281‑59.

Any licensee holding a class 12 license on [[]May 1, 2007,[]] and who would otherwise come within this class of license may apply to the liquor commission in which the licensee is seeking a change in liquor license for a change to a class 15 license; provided that the licensee shall not be subject to the requirements of section 281-54 and sections 281-57 to 281-60.

If a licensee holding a class 12 license on [[]May 1, 2007,[]] applies for a change to a class 15 license, the respective liquor commission shall hold a public hearing upon notice, and upon the day of hearing, or any adjournment thereof, the liquor commission shall consider the application, accept all written or oral testimony for or against the application, and render its decision granting or refusing the application. If the application is denied, the class 12 license shall continue in effect in accordance with law.

(n) Class 13. Caterer license. A general license may be granted to any licensee who serves food as part of their operation for the sale of liquor (other than alcohol) while performing food catering functions.

No catering service for the sale of liquor shall be performed off the licensee's premises, unless prior written notice of the service has been delivered to the office of the liquor commission of the county concerned. The notice shall state the date, time, and location of the proposed event and shall include a written statement signed by the owner or representative of the property that the function will be subject to the liquor laws and to inspection by investigators.

(o) Class 14. Brewpub license. A brewpub licensee:

(1) Shall manufacture not more than ten thousand barrels of malt beverages on the licensee's premises during the license year;

(2) May sell malt beverages manufactured on the licensee's premises for consumption on the premises;

(3) May sell malt beverages manufactured by the licensee in brewery-sealed packages to class 3, wholesale dealer licensees pursuant to conditions imposed by county planning and public works departments;

(4) May sell intoxicating liquor, purchased from a class 1, manufacturer licensee, or a class 3, wholesale dealer's licensee, to consumers for consumption on the licensee's premises; provided that the premises is owned and operated by the licensee. The categories of establishments shall be as follows:

(A) A standard bar; or

(B) Premises in which live entertainment or recorded music is provided. Facilities for dancing by the patrons may be permitted as provided by commission rules;

(5) May sell malt beverages manufactured on the licensee's premises to consumers in brewery-sealed kegs and growlers for off-premises consumption; provided that for purposes of this paragraph, "growler" means a glass container, not to exceed one half-gallon, which may be securely sealed;

(6) May sell malt beverages manufactured on the licensee's premises to consumers, in recyclable containers that may be provided by the licensee or by the consumer, not to exceed one gallon per container, which are securely sealed on the licensee's premises, for off-premises consumption;

(7) Shall comply with all regulations pertaining to class 4 retail licensees when engaging in the retail sale of malt beverages;

(8) May sell malt beverages manufactured on the licensee's premises in brewery-sealed containers directly to class 2 restaurant licensees, class 3 wholesale dealer licensees, class 4 retail dealer licensees, class 5 dispensers' licensees, class 6 club licensees, class 7, 8, and 9 vessel licensees, transient vessel licensees, tour or cruise vessel licensees, class 10 special licensees, class 11 cabaret licensees, class 12 hotel licensees, class 13 caterer licensees, and class 15 condominium hotel license, pursuant to conditions imposed by county planning and public works departments and regulations governing class 3 wholesale dealers licensees; and

(9) May conduct the activities described in paragraphs (1) through (8) at one location other than the licensee's premises; provided that the manufacturing takes place in Hawaii; and provided further the other location is properly licensed by the same ownership.

(p) Class 15. Condominium hotel license. A license to sell liquor in a condominium hotel shall authorize the licensee to provide entertainment and dancing on the condominium hotel premises and to sell all liquors, except alcohol, for consumption on the premises; provided that a condominium hotel licensee, with commission approval, may provide off-premises catering; provided further that the catering activity is directly related to the licensee's operation as a condominium hotel.

Procedures such as room service, self-service (no-host), minibars or similar service in apartments, and service at private parties in areas that are the property of and contiguous to the condominium hotel, are permitted with commission approval.

A condominium hotel licensee shall not sell liquor in the manner authorized by a class 4 retail dealer's license.

(q) It shall be unlawful for any retail licensee, except a class 10 licensee, to purchase, acquire, or sell liquor from any person other than a wholesaler licensed pursuant to this chapter, except as otherwise provided in this section.

(r) Any provision to the contrary notwithstanding, at the discretion of the county liquor commission, permission may be granted to a bona fide hotel, restaurant, or club licensed under class 2, class 6, class 11, class 12, class 14, or class 15 to allow a patron to remove from the licensed premises any portion of wine that was purchased for consumption with a meal; provided that it is recorked or resealed in its original container. This subsection applies only to a valid holder of a class 2, class 6, class 11, class 12, class 14, or class 15 license engaged in meal service.

(s) Sections 281-57 to 281-60 shall not apply to classes 7 through 10 and 13."

SECTION 4. Section 327-5.6, Hawaii Revised Statutes, is amended to read as follows:

"[[]§327-5.6 Organ and tissue education special fund.[]] There is established in the state treasury the [[]organ and tissue education special fund[]]. Moneys collected under [~~section~~] sections 286-109.7 and 281- shall be deposited into the fund. The fund shall be administered and distributed by the department of health and shall be used exclusively for public education programs and activities on organ, tissue, and eye donation."

SECTION 5. Section 328J-1, Hawaii Revised Statutes, is amended by amending the definitions of "Bar" and "Restaurant" to read as follows:

""Bar" means an establishment that is devoted to the serving of alcoholic beverages for consumption by guests on the premises regardless of whether food is served, including but not limited to taverns, cocktail lounges, and cabarets, including outdoor areas of bars[.]; provided that establishments with a smoking establishment license issued under section 281-31 shall not be included.

"Restaurant" means an eating establishment, including but not limited to coffee shops, cafeterias, sandwich stands, and private and public school cafeterias, which gives or offers for sale food to the public, guests, or employees, as well as kitchens and catering facilities in which food is prepared on the premises for serving elsewhere[.]; provided that outdoor areas of establishments operating with a smoking establishment license issued under section 281-31 shall not be included. The term "restaurant" includes a bar area within the restaurant and is limited to the outdoor areas of restaurants."

SECTION 6. Section 328J-7, Hawaii Revised Statutes, is amended to read as follows:

"[[]§328J‑7[]] Exceptions. Notwithstanding any other provision of this chapter to the contrary, the following areas shall be exempt from the provisions of sections 328J‑3, 328J‑4, and 328J‑5:

(1) Private residences, except when used as a licensed child care, adult day care, or health care facility;

(2) Hotel and motel rooms that are rented to guests and are designated as smoking rooms; provided that not more than twenty per cent of rooms rented to guests in a hotel or motel may be so designated. All smoking rooms on the same floor shall be contiguous and smoke from these rooms shall not infiltrate into areas where smoking is prohibited under this chapter. The status of rooms as smoking or nonsmoking may not be changed, except to add additional nonsmoking rooms;

(3) Retail tobacco stores; provided that smoke from these places shall not infiltrate into areas where smoking is prohibited under this chapter;

(4) Establishments in which smoking is permitted pursuant to a smoking establishment license issued under section 281-31;

[~~(4)~~] (5) Private and semiprivate rooms in nursing homes and long-term care facilities that are occupied by one or more persons, all of whom are smokers and have requested in writing to be placed in a room where smoking is permitted; provided that smoke from these places shall not infiltrate into areas where smoking is prohibited under this chapter;

[~~(5)~~] (6) Outdoor areas of places of employment except those covered by the provisions of sections 328J‑3 and 328J‑5;

[~~(6)~~] (7) All areas covered by this chapter when smoking is part of a production being filmed; and

[~~(7)~~] (8) State correctional facilities."

SECTION 7. Section 328L-5, Hawaii Revised Statutes, is amended by amending subsection (e) to read as follows:

"(e) The assets of the Hawaii tobacco prevention and control trust fund shall consist of:

(1) Moneys appropriated under section 328L-2(b)(3);

(2) Moneys appropriated to the Hawaii tobacco prevention and control trust fund by the state, county, or federal government;

(3) Moneys collected from the smoking establishment license fee under section 281- ;

[~~(3)~~] (4) Private contributions of cash or property; and

[~~(4)~~] (5) Income and capital gains earned by the trust fund."

SECTION 8. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 9. This Act shall take effect on July 1, 2008.

INTRODUCED BY:	_____________________________

HOUSE OF REPRESENTATIVES	H.B. NO.	3319
TWENTY-FOURTH LEGISLATURE, 2008
STATE OF HAWAII