HB1155

PART I

SECTION 1. This Act shall be known and may be cited as the Kona Coffee Blend Protection Act.

PART II

SECTION 2. (a) The department of agriculture shall apply for a geographical indication, or a similar intellectual property registration, with the United States Patent and Trademark Office for the term "Kona Coffee Blend"; provided that the use of the intellectual property registration shall be reserved for the use by roasted or instant coffee consisting of a blend of one or more coffees grown in the Kona district and coffee not grown in the Kona district and where the amount of coffee grown in the Kona district is at least fifteen per cent of the blend by weight.

(b) As used in this section, "Kona district" has the same meaning as in section 237- , Hawaii Revised Statutes.

SECTION 3. There is appropriated out of the general revenues of the State of Hawaii the sum of $ or so much thereof as may be necessary for fiscal year 2021-2022 for the department of agriculture to apply to register a geographical indication mark on behalf of coffee farmers as provided in section 2 of this Act; provided that the State's general fund shall be reimbursed for the amount appropriated in this section as provided in section 4 of this Act.

The sum appropriated shall be expended by the department of agriculture for the purposes of this Act.

PART III

SECTION 4. Chapter 237, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

"§237- Kona coffee farmers; surcharge to reimburse state funds. (a) In addition to the tax imposed by section 237-13 or any other provision in this chapter, there is levied and shall be assessed and collected a Kona coffee surcharge equivalent to per cent of the gross proceeds of the sale of cherry coffee, parchment coffee, or green coffee beans grown in the Kona district of the island of Hawaii.

(b) With respect to the surcharge established by this section, all provisions of this chapter shall apply and the director of taxation shall have all the rights and powers provided under this chapter.

(c) The director of taxation shall revise the general excise tax forms to provide for the clear and separate designation of the imposition and payment of the surcharge established by this section.

(d) The director of taxation shall begin to collect the surcharge authorized by this section beginning January 1, 2022, and shall continue to collect the surcharge until the close of the taxable year in which the director of finance certifies to the department of taxation that enough revenue has been collected pursuant to the surcharge authorized by this section to reimburse all moneys appropriated from the general fund by section 3 of Act , Session Laws of Hawaii 2021, plus interest at the rate of two per cent per year, compounded monthly.

(e) As used in this section:

"Cherry coffee" means an agricultural commodity comprising the unprocessed fruit of a coffee plant.

"Green coffee beans" means coffee beans that have been processed from cherry coffee by removing the pulp, the adhering mucilage, and the hull.

"Kona district" means the geographic region of Kona, as defined by the department of agriculture by rules adopted under section 147-22.

"Parchment" means the portion of the fruit of the coffee plant consisting of the hull, from which the pulp has been removed, and the enclosed seed.

"Parchment coffee" means an agricultural commodity comprising parchment."

PART IV

SECTION 5. Section 486-120.6, Hawaii Revised Statutes, is amended as follows:

1. By amending subsection (c) to read:

"(c) It shall be a violation of this section to:

(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~~] fifteen 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) Use the term "Kona Coffee Blend" in a manner that violates federal law if that term is registered as a geographical indication or other certification mark with the United States Patent and Trademark Office; or

(11) 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."

2. By amending subsection (e) to read:

"(e) For the purpose of this section:

"Certification mark" has the same meaning as contained in title 15 United States Code section 1127.

"Geographical indication" means a geographical indication as defined in the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS), Annex 1C of the Marrakesh Agreement Establishing the World Trade Organization.

"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."

PART V

SECTION 6. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 7. This Act shall take effect on July 1, 2021.

INTRODUCED BY:	_____________________________

HOUSE OF REPRESENTATIVES	H.B. NO.	1155
THIRTY-FIRST LEGISLATURE, 2021
STATE OF HAWAII