SB2913 HD1.DOC

SECTION 1. Hawaii-grown coffee is recognized for its high quality and aromatic flavor. Hawaii-grown coffee is held to a set of quality standards that makes it one of the most expensive coffees in the world.

The 2011 Statistics of Hawaii Agriculture estimated the value of Hawaii-grown coffee at $31,540,000, and it was ranked fifth of the top twenty agriculture commodities in the State.

To protect the Hawaii coffee industry, stricter enforcement of labeling restrictions based on the quality of coffee being sold is critical to prevent further counterfeiting of Hawaii's recognized high quality coffee.

SECTION 2. Section 486-32, Hawaii Revised Statutes, is amended to read as follows:

"§486-32 Offenses and penalties. (a) Criminal. [~~Any~~] Except as provided under section 486-120.6, any person who performs any one of the acts enumerated in this subsection shall be guilty of a misdemeanor:

(1) Use or have in possession a device or measure or measurement standard which has been altered to facilitate fraud;

(2) Counterfeit, or remove from any measure or measurement standard, any tag, seal, or mark placed thereon by the appropriate authority; or

(3) Manipulate in any manner the representation of the quantity of any commodity, thing, or service furnished, delivered, or provided to the unjust enrichment of the person.

(b) Civil. [~~Any~~] Except as provided under section 486-120.6, any person who performs any one of the acts enumerated in this subsection shall be fined not more than $2,000 for each separate offense:

(1) Use, or have in possession for use in commerce an incorrect device, measure, or measurement standard;

(2) Dispose of any rejected or condemned measure or measurement standard in a manner contrary to law or rule;

(3) Sell, or offer or expose for sale, less than the quantity the person represents of any commodity, thing, or service;

(4) Keep for the purpose of sale, advertise, or offer or expose for sale, or sell any commodity, thing, or service in a condition or manner contrary to law or rule;

(5) Fail to submit a weighing or measuring device for inspection and testing at a time and place specified by the administrator; or

(6) Violate any provision of this chapter or any rules adopted under it for which a specific penalty has not been prescribed."

SECTION 3. Section 486-120.6, Hawaii Revised Statutes, is amended to read as follows:

"§486-120.6 Hawaii-grown roasted or instant coffee; labeling requirements[.]; penalties. (a) In addition to all other labeling requirements, the identity statement used for labeling or advertising roasted or instant coffee produced in whole or in part from Hawaii-grown green coffee beans shall meet the following requirements:

(1) For roasted or instant coffee that contains one hundred per cent Hawaii-grown coffee by weight the identity statement shall consist of either:

(A) The geographic origin of the Hawaii-grown coffee, in coffee consisting of beans from only one geographic origin, followed by the word "Coffee"; provided that the geographic origin may be immediately preceded by the term "100%"; or

(B) The per cent coffee by weight of one of the Hawaii-grown coffees, used in coffee consisting of beans from several geographic origins, followed by the geographic origin of the weight-specified coffee and the terms "Coffee" and "All Hawaiian";

(2) For roasted or instant coffee consisting of a blend of one or more Hawaii-grown coffees and coffee not grown in Hawaii, the per cent coffee by weight of one of the Hawaii-grown coffees used in the blend, followed by the geographic origin of the weight-specified coffee and the term "Coffee Blend"; and

(3) Each word or character in the identity statement shall be of the same type size and shall be contiguous. The smallest letter or character of the identity statement on packages of sixteen ounces or less net weight shall be at least one and one-half times the type size required under federal law for the statement of net weight or three-sixteenths of an inch in height, whichever is smaller. The smallest letter or character of the identity statement on packages of greater than sixteen ounces net weight shall be at least one and one-half times the type size required under federal law for the statement of net weight. The identity statement shall be conspicuously displayed without any intervening material in a position above the statement of net weight. Upper and lower case letters may be used interchangeably in the identity statement.

(b) A listing of the geographic origins of the various Hawaii-grown coffees and the regional origins of the various coffees not grown in Hawaii that are included in a blend may be shown on the label. If used, this list shall consist of the term "Contains:", followed by, in descending order of per cent by weight and separated by commas, the respective geographic origin or regional origin of the various coffees in the blend that the manufacturer chooses to list. Each geographic origin or regional origin may be preceded by the per cent of coffee by weight represented by that geographic origin or regional origin, expressed as a number followed by the per cent sign. The type size used for this list shall not exceed half that of the identity statement. This list shall appear below the identity statement, if included on the front panel of the label.

(1) Use the identity statement specified in subsection (a)(1)(A) or similar terms in labeling or advertising unless the package of roasted or instant coffee contains one hundred per cent coffee from that one geographic origin;

(2) Use a geographic origin in labeling or advertising, including in conjunction with a coffee style or in any other manner, if the roasted or instant coffee contains less than ten per cent coffee by weight from that geographic origin;

(3) Use a geographic origin in advertising roasted or instant coffee, including advertising in conjunction with a coffee style or in any other manner, without disclosing the percentage of coffee used from that geographic origin as described in subsection (a)(1)(B) and (a)(2);

(4) Use a geographic origin in labeling or advertising roasted or instant coffee, including in conjunction with a coffee style or in any other manner, if the green coffee beans used in that roasted or instant coffee do not meet the grade standard requirements of rules adopted under chapter 147;

(5) Misrepresent, on a label or in advertising of a roasted or instant coffee, the per cent coffee by weight of any coffee from a geographic origin or regional origin;

(6) Use the term "All Hawaiian" on a label or in advertising of a roasted or instant coffee if the roasted or instant coffee is not produced entirely from green coffee beans produced in geographic origins defined in this chapter;

(7) Use a geographic origin on the front label panel of a package of roasted or instant coffee other than in the trademark or in the identity statement as authorized in subsection (a)(1) and (2) unless one hundred per cent of the roasted or instant coffee contained in the package is from that geographic origin;

(8) Use more than one trademark on a package of roasted or instant coffee unless one hundred per cent of the roasted or instant coffee contained in the package is from that geographic origin specified by the trademark;

(9) Use a trademark that begins with the name of a geographic origin on a package of roasted or instant coffee unless one hundred per cent of the roasted or instant coffee contained in the package comes from that geographic origin or the trademark ends with words that indicate a business entity; or

(10) Print the identity statement required by subsection (a) in a smaller font than that used for a trademark that includes the name of a geographic origin pursuant to paragraph (7) and in a location other than the front label panel of a package of roasted or instant coffee.

(d) Any person convicted of a violation of this section for less than one hundred pounds of Hawaii-grown roasted or instant coffee shall be fined not more than:

(1) $1,000 for a first violation;

(2) $5,000 for a second violation; and

(3) $10,000 for a third violation;

provided that any violation occurring more than ten years from the next preceding violation shall be deemed to be a first violation; provided further that any person who is convicted of a fourth or subsequent violation within ten years of having been penalized successively under paragraphs (1), (2), and (3), shall be fined not more than $25,000.

Any person who is convicted of violating the requirements of this section for one hundred pounds or more of Hawaii-grown roasted or instant coffee shall be subject to the same penalty under section 708-871.5.

[~~(d)~~] (e) Roasters, manufacturers, or other persons who package roasted or instant coffee covered by this section shall maintain, for a period of two years, records on the volume and geographic origin or regional origin of coffees purchased and sold and any other records required by the department for the purpose of enforcing this section. Authorized employees of the department shall have access to these records during normal business hours.

[~~(e)~~] (f) For the purpose of this section:

"Geographic origin" means the geographic regions in which Hawaii-grown green coffee beans are produced, as defined in rules adopted under chapter 147; provided that the term "Hawaiian" may be substituted for the geographic origin "Hawaii".

"Per cent coffee by weight" means the percentage calculated by dividing the weight in pounds of roasted green coffee beans of one geographic or regional origin used in a production run of roasted or instant coffee, by the total weight in pounds of the roasted green coffee beans used in that production run of roasted or instant coffee, and multiplying the quotient by one hundred."

SECTION 4. This Act does not affect rights and duties that matured, penalties that were incurred, and proceedings that were begun before its effective date.

SECTION 5. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 6. This Act shall take effect on July 1, 2112.

THE SENATE	S.B. NO.	2913
TWENTY-SEVENTH LEGISLATURE, 2014		S.D. 1
STATE OF HAWAII		H.D. 1