REPORT TITLE:
Tobacco Product Licensure


DESCRIPTION:
Creates statewide licensure mechanism for retail tobacco sales
that provides for licensing retail tobacco vendors, inspections
and enforcement, adjudication of fines and penalties, training
and education for retail merchants and public awareness of the
State's statute governing the sale of tobacco to minors.  (SD2)

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                        613
THE SENATE                              S.B. NO.           S.D. 2
TWENTIETH LEGISLATURE, 1999                                
STATE OF HAWAII                                            
                                                             
________________________________________________________________
________________________________________________________________


                     A BILL FOR AN ACT
RELATING TO 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 PRODUCTS
 
 5      281-      Legislative intent and purpose.  The use of
 
 6 tobacco products by Hawaii's youth represents a public health
 
 7 problem of significant magnitude and concern.  The legislature
 
 8 finds that tobacco use by minors in Hawaii is widespread and is
 
 9 increasing.  The present law prohibiting the sale of tobacco
 
10 products to minors is not effective by itself to reduce illegal
 
11 sales to minors.  Tobacco industry advertising targets children
 
12 in order to replace the over 1,100 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.  These figures also represent a health and
 
19 economic drain created by each new generation of children who
 
20 begin using tobacco products and become addicted to nicotine.
 

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

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

 
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 1                name and the names of its officers and directors;
 
 2           (C)  For a partnership, the names, ages, and respective
 
 3                places of residence of all the partners; and
 
 4           (D)  For any other association of individuals or other
 
 5                legal entity, the names, ages, and respective
 
 6                places of residence of its officers or members;
 
 7      (2)  A particular description of the place or premises where
 
 8           the proposed license is to be exercised, so that the
 
 9           exact location and extent thereof may be clearly and
 
10           definitely determined therefrom; provided that if the
 
11           applicant has or intends to have more than one place of
 
12           business dealing with cigarettes or tobacco, a separate
 
13           application shall be made for each place of business;
 
14           and provided further that no application for a retail
 
15           tobacco dealer license shall be accepted from a person
 
16           who conducts business from a vehicle;
 
17      (3)  The class of license applied for; and
 
18      (4)  Any other matter of information pertinent to the
 
19           subject matter that may be required by the rules of the
 
20           commission.
 
21      An application for a tobacco license may be granted without
 
22 notice or hearing by the liquor commission pursuant to commission
 
23 rules, and the license shall be posted on the premises of the
 

 
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 1 place identified in the application in a conspicuous place for
 
 2 public viewing.
 
 3      A tobacco license shall be valid for a term beginning July 1
 
 4 through June 30 of the following year and shall be subject to
 
 5 renewal pursuant to commission rules; provided that no license
 
 6 shall be transferable.
 
 7      281-    Prohibitions; tobacco licensee.(a)  At no time
 
 8 under any circumstances shall any tobacco licensee or its
 
 9 employees sell or furnish any tobacco to:
 
10      (1)  A minor; or
 
11      (2)  Any person over the age of eighteen for distribution to
 
12           or use by a minor.
 
13      (b)  Any person who violates this section or any rule
 
14 adopted by the commission pursuant to this part shall be guilty
 
15 of a violation for each separate offense.  Each occurrence of
 
16 violation shall constitute a separate offense.
 
17      281-    Prohibitions involving minors, cigarettes, tobacco;
 
18 liquor commission; penalty.(a)  No minor shall purchase
 
19 cigarettes or tobacco.
 
20      (b)  Subsection (a) shall not apply if a person under the
 
21 age of eighteen, with parental authorization, is participating in
 
22 a controlled purchase as part of a law enforcement activity or a
 
23 study authorized by the department of health to determine the
 

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

 
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 1 subsection (a) shall be guilty of a petty misdemeanor.
 
 2      281-    Fines collected.  (a)  One half of all the fines
 
 3 collected pursuant to this part shall be transferred to the
 
 4 liquor commission for the county in which the citation
 
 5 originated.
 
 6      (b)  The moneys transferred pursuant to subsection (a) shall
 
 7 be allocated for the purpose of education and training of retail
 
 8 tobacco merchants pursuant to section 281-17(a)(3)."
 
 9      SECTION 2.  Title 16, Hawaii Revised Statutes, is amended by
 
10 amending its title to read as follows:
 
11       "TITLE 16.  INTOXICATING LIQUOR AND TOBACCO PRODUCTS"
 
12      SECTION 3.  Chapter 281, Hawaii Revised Statutes, is amended
 
13 by amending its title to read as follows:
 
14                           "CHAPTER 281
 
15             INTOXICATING LIQUOR AND TOBACCO PRODUCTS"
 
16      SECTION 4.  Section 281-1, Hawaii Revised Statutes, is
 
17 amended by adding four new definitions to be appropriately
 
18 inserted and to read as follows:
 
19      ""Cigarettes" means any roll for smoking made wholly or in
 
20 part of tobacco, irrespective of size or shape and regardless of
 
21 whether the tobacco is flavored, adulterated, or mixed with any
 
22 other ingredient, the wrapper or cover of which is made of paper
 
23 or any other substance or material except tobacco.
 

 
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 1      "Cigarette vending machine" means a self-service device that
 
 2 dispenses cigarettes, cigars, tobacco, or any other product
 
 3 containing tobacco.
 
 4      "Tobacco" or "tobacco products" means products made from
 
 5 tobacco leaves in any form that are prepared or intended for
 
 6 consumption by, or the personal use of, humans, including
 
 7 cigarettes, cigars, and any other substitutes bearing the
 
 8 semblance thereof; cheroots; stogies; periques; granulated, plug
 
 9 cut, crimp cut, ready rubbed, and other smoking tobacco; snuff or
 
10 snuff flour; cavendish; plug and twist tobacco; fine cut and
 
11 other chewing tobaccos; shorts; refuse scraps, clippings,
 
12 cuttings, and sweepings of tobacco, and other kinds and forms of
 
13 tobacco, prepared in a manner as to be suitable for chewing or
 
14 smoking in a pipe or otherwise, or both for chewing and smoking."
 
15      SECTION 5.  Section 281-1, Hawaii Revised Statutes, is
 
16 amended by amending the definitions of "liquor control
 
17 adjudication board", "minor", "retail license", "sell" or "to
 
18 sell", and "seller" to read:
 
19      ""Liquor control adjudication board" or "board" means a
 
20 board established by county charter, within a county, that shall
 
21 have the jurisdiction to hear and determine complaints or
 
22 violations of liquor and tobacco laws and to impose penalties as
 
23 may be provided in this chapter.
 

 
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 1      "Minor" means any person below the age of twenty-one
 
 2 years[.]; provided that, where applicable to tobacco as provided
 
 3 in this chapter, minor means any person under the age of
 
 4 eighteen.
 
 5      "Retail licensee" means any licensee holding a class 2 or
 
 6 class 4 through class 14 license[.] and class 2 license under
 
 7 section 281-   , related to its retail operation.
 
 8      "Sell" or "to sell" includes:  to solicit and receive an
 
 9 order for; to have or keep or offer or expose for sale; to
 
10 deliver for value or in any other way than purely gratuitously;
 
11 to peddle; to keep with intent to sell; to traffic in; and the
 
12 word "sale" includes every act of selling as herein defined.
 
13 Notwithstanding the provisions above, the delivery of liquor or
 
14 tobacco by a licensee's vehicle or the vehicle of a licensee's
 
15 agent shall be deemed delivery for value.
 
16      "Seller" includes the agents and employees of a seller;
 
17 provided that any person shall be deemed to be a seller, who in
 
18 the State, whether acting as agent or representative of a
 
19 nonresident principal or otherwise, solicits the placing of or
 
20 takes, receives, or forwards orders for liquor or tobacco to be
 
21 shipped into the State from any place without the State to be
 
22 delivered to customers, by direct shipment or otherwise."
 
23      SECTION 6.  Section 281-3, Hawaii Revised Statutes, is
 

 
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 1 amended to read as follows:
 
 2      "281-3  Illegal manufacture, importation, or sale of
 
 3 liquor[.] and tobacco.  (a)  It shall be unlawful for any person
 
 4 not having a valid license to manufacture or sell any liquor
 
 5 except as otherwise provided in this chapter; provided that the
 
 6 head of any family may produce for family use and not for sale an
 
 7 amount of wine not exceeding two hundred gallons a year, and an
 
 8 amount of beer not exceeding one hundred gallons a year.
 
 9      (b)  It shall [also] be unlawful for any person who does not
 
10 have a valid wholesale license or a valid manufacturer's
 
11 (including rectifier's) license, to import any liquor from
 
12 without the State, except as otherwise provided in this chapter.
 
13 Liquor imported into this State shall come to rest at the
 
14 warehouse of the manufacturer (including rectifier) or the
 
15 wholesaler importing the liquor, shall be unloaded into such
 
16 warehouse, and shall be held in such warehouse for at least
 
17 forty-eight hours before further sale by such manufacturer
 
18 (including rectifier) or wholesaler.
 
19      (c)  It shall [also] be unlawful for any person to label,
 
20 designate, or sell any liquor using the [word] words "Hawaii",
 
21 "Hawaiian", "Aloha State", "50th State", "Kauai", "Maui", "Oahu",
 
22 or "Honolulu" unless [such] the liquor is wholly or partially
 
23 manufactured in the State, and all of the primary ingredients are
 

 
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 1 wholly rectified or combined in the State [of Hawaii] in
 
 2 compliance with the Bureau of Alcohol, Tobacco and Firearms
 
 3 standards.
 
 4      (d)  It shall be unlawful for any person who does not have a
 
 5 valid tobacco license to sell any tobacco product except as
 
 6 provided in this chapter.
 
 7      (e)  It shall be unlawful for any person who does not have a
 
 8 valid wholesale tobacco dealer license to import any tobacco
 
 9 product from without the State, except as provided in this
 
10 chapter.
 
11      (f)  A license shall constitute authority for the licensee
 
12 to sell only the liquor or tobacco thereby authorized to be sold
 
13 by the licensee.
 
14      (g)  The commission or board shall establish minimum
 
15 standards by rule under which the commission or board shall
 
16 suspend or revoke a license."
 
17      SECTION 7.  Section 281-17, Hawaii Revised Statutes, is
 
18 amended to read as follows:
 
19      "281-17  Jurisdiction and powers.  (a)  The liquor
 
20 commission, within its own county, shall have the sole
 
21 jurisdiction, power, authority, and discretion, subject only to
 
22 this chapter:
 
23      (1)  To grant, refuse, suspend, and revoke any licenses for
 

 
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 1           the manufacture, importation, and sale of liquors[;] or
 
 2           tobacco;
 
 3      (2)  To take appropriate action against a person who,
 
 4           directly or indirectly, manufactures or sells any
 
 5           liquor or tobacco without being authorized pursuant to
 
 6           this chapter; provided that in counties [which] that
 
 7           have established by charter a liquor control
 
 8           adjudication board, the board shall have the
 
 9           jurisdiction, power, authority, and discretion to hear
 
10           and determine administrative complaints of the director
 
11           regarding violations of the liquor or tobacco laws of
 
12           the State or of the rules of the liquor commission, and
 
13           impose penalties [[]for[]] violations thereof as may be
 
14           provided by law;
 
15      (3)  To control, supervise, and regulate the manufacture,
 
16           importation, and sale of liquors or tobacco by
 
17           investigation, enforcement, and education; provided
 
18 that [any]:
 
19           (A)  Any educational program shall be [limited to]
 
20                coordinated with the department of health, the
 
21                commission's staff, licensees, and their employees
 
22                [and];
 
23           (B)  Liquor education programs shall be financed
 

 
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 1                through the money collected from the assessment of
 
 2                fines against liquor licensees; and
 
 3           (C)  Tobacco education programs shall be financed
 
 4                through the money collected from the assessment of
 
 5                fines against tobacco licensees under section
 
 6                281 -     .
 
 7      (4)  From time to time to make, amend, and repeal such
 
 8           rules, not inconsistent with this chapter, as in the
 
 9           judgment of the commission seem appropriate for
 
10           carrying out this chapter and for the efficient
 
11           administration thereof, and the proper conduct of the
 
12           business of all licensees, including every matter or
 
13           thing required to be done or which may be done with the
 
14           approval or consent or by order or under the direction
 
15           or supervision of or as prescribed by the commission;
 
16           which rules, when adopted as provided in chapter 91,
 
17           shall have the force and effect of law;
 
18      (5)  Subject to chapters 76 and 77, to appoint and remove an
 
19           administrator, who may also be appointed an
 
20           investigator and who shall be responsible for the
 
21           operations and activities of the staff.  The
 
22           administrator may hire and remove hearing officers,
 
23           investigators, and clerical or other assistants as its
 

 
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 1           business may from time to time require, to prescribe
 
 2           their duties, and fix their compensation; to engage the
 
 3           services of experts and persons engaged in the practice
 
 4           of a profession, if deemed expedient.  Every
 
 5           investigator, within the scope of the investigator's
 
 6           duties, shall have the powers of a police officer.  No
 
 7           employee of any commission, aside from exercising the
 
 8           right to vote, shall support, advocate, or aid in the
 
 9           election or defeat of any candidate for public office,
 
10           and upon satisfactory proof of such prohibited activity
 
11           the offender shall be summarily dismissed;
 
12      (6)  To limit the number of licenses of any class or kind
 
13           within the county, or the number of licenses of any
 
14           class or kind to do business in any given locality,
 
15           when in the judgment of the commission such limitations
 
16           are in the public interest;
 
17      (7)  To prescribe the nature of the proof to be furnished,
 
18           the notices to be given, and the conditions to be met
 
19           or observed in case of the issuance of a duplicate
 
20           license in place of one alleged to have been lost or
 
21           destroyed, including a requirement of any indemnity
 
22           deemed appropriate to the case;
 
23      (8)  To fix the hours between which licensed premises of any
 

 
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 1           class or classes may regularly be open for the
 
 2           transaction of business, which shall be uniform
 
 3           throughout the county as to each class respectively;
 
 4      (9)  To prescribe all forms to be used for the purposes of
 
 5           this chapter not otherwise provided for in this
 
 6           chapter, and the character and manner of keeping of
 
 7           books, records, and accounts to be kept by licensees in
 
 8           any matter pertaining to their business;
 
 9     (10)  To investigate violations of this chapter, chapter 244D
 
10           or 245, and, notwithstanding any law to the contrary,
 
11           violations of the applicable department of health's
 
12           allowable noise levels, through its investigators or
 
13           otherwise, to include covert operations, and to report
 
14           violations to the prosecuting officer for prosecution
 
15           and, where appropriate, the director of taxation to
 
16           hear and determine complaints against any licensee;
 
17     (11)  To prescribe, by rule, the terms, conditions, and
 
18           circumstances under which persons or any class of
 
19           persons may be employed by holders of licenses;
 
20     (12)  To prescribe, by rule, the term of any license or
 
21           solicitor's and representative's permit authorized by
 
22           this chapter, the annual or prorated amount, the manner
 
23           of payment of fees for the licenses and permits, and
 

 
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 1           the amount of filing fees; and
 
 2     (13)  To prescribe, by rule, the circumstances and penalty
 
 3           for the unauthorized manufacturing or selling of any
 
 4           liquor[.] or tobacco.
 
 5      (b)  Subject only to this chapter, the commission or board
 
 6 and each member thereof shall have the same powers respecting the
 
 7 administering of oaths, compelling the attendance of witnesses
 
 8 and the production of documentary evidence, and examining the
 
 9 witnesses as are possessed by a circuit court, except that the
 
10 commission or board and each member thereof shall not be bound by
 
11 the strict legal rules of evidence.  In addition, the commission
 
12 or board shall have the power to require the production of, and
 
13 to examine any books, papers, and records of any licensee which
 
14 may pertain to the licensee's business under the license or which
 
15 may pertain to a matter at a hearing before the commission or
 
16 board or to an investigation by the commission or board.
 
17      (c)  The exercise by the commission or board of the power,
 
18 authority, and discretion vested in it pursuant to this chapter
 
19 shall be final and shall not be reviewable by or appealable to
 
20 any court or tribunal, except as otherwise provided in this
 
21 chapter or chapter 91.
 
22      (d)  The legislature declares its intent not to preempt the
 
23 field of regulation of the use and sale of tobacco products.
 

 
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 1 Counties may regulate smoking or tobacco use in a manner
 
 2 consistent with this chapter."
 
 3      SECTION 8.  Section 281-17.5, Hawaii Revised Statutes, is
 
 4 amended to read as follows:
 
 5      "281-17.5  Fees; justified, method of change, limitation.
 
 6 (a)  Any liquor or tobacco license fee or any increase in an
 
 7 existing liquor or tobacco license fee sought to be implemented
 
 8 by any commission shall have, as its justification, a direct and
 
 9 proportionate relationship to costs and expenses of the
 
10 commission in its control, supervision, or regulation of the
 
11 manufacture, importation, and sale of liquors, cigarettes, or
 
12 tobacco, or otherwise directly relate to actual costs and
 
13 expenses of administration of the commission as is set forth in
 
14 this chapter.
 
15      (b)  Any such [liquor] license fees or any moneys collected
 
16 or received by any liquor commission under this chapter may only
 
17 be used for costs and expenses directly relating to operational
 
18 and administrative costs actually incurred by the liquor
 
19 commission collecting or receiving such [liquor] license fees or
 
20 moneys.  Such fees or moneys shall not be used for any costs or
 
21 expenses other than those directly relating to its operation and
 
22 administration.
 
23      (c)  Any increase in the [liquor] license fee structure
 

 
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 1 shall only be initiated by the liquor commission seeking the
 
 2 change with the approval of the county's legislative body and
 
 3 mayor.
 
 4      (d)  Any liquor commission seeking a change in [liquor]
 
 5 license fee structure shall notify all licensees under this
 
 6 chapter affected by the change of the proposed change and shall
 
 7 notify each such licensee of the outcome and resolution of the
 
 8 change.
 
 9      (e)  Any liquor commission [which] that currently receives a
 
10 license fee from a licensee in excess of the amount prescribed by
 
11 this section shall immediately revise its [liquor] license fee
 
12 structure to conform with the requirements of this section.  All
 
13 liqour license fees and all tobacco license fees shall be
 
14 maintained in separate accounts.  Any funds in excess of twenty
 
15 per cent of the commission's current budget shall be returned or
 
16 credited annually to existing licensees."
 
17      SECTION 9.  Section 281-20, Hawaii Revised Statutes, is
 
18 amended to read as follows:
 
19      "281-20  General right of inspection.  Any investigator
 
20 [may], at all times, without notice and without any search
 
21 warrant or other legal process, may visit and have immediate
 
22 access to every part of the premises of every liquor and tobacco
 
23 licensee, for the purpose of making any examination or inspection
 

 
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 1 thereof or inquiry into the books and records therein, to
 
 2 ascertain whether all of the conditions of the license and all
 
 3 provisions of this chapter and chapter 244D or 245 are being
 
 4 complied with by the licensee."
 
 5      SECTION 10.  Section 281-79, Hawaii Revised Statutes, is
 
 6 amended to read as follows:
 
 7      "281-79  Entry for examination; obstructing liquor
 
 8 commission operations; penalty.  (a)  Every investigator shall,
 
 9 and any officer having police power may, at all reasonable times,
 
10 and at any time whatsoever if there is any reasonable ground for
 
11 suspicion that the conditions of any liquor or tobacco license
 
12 are being violated, without warrant, enter into and upon any
 
13 licensed premises and inspect the [same] premises and every part
 
14 thereof, and any books or records therein, to ascertain whether
 
15 [or not] all conditions of the license and all provisions of this
 
16 chapter and chapter 244D or 245 are being complied with by the
 
17 licensee.
 
18      (b)  If any investigator or officer, or any person called by
 
19 the investigator or officer to the investigator's or officer's
 
20 aid, is threatened with the use of violence, force, or physical
 
21 interference or obstacle, or is hindered, obstructed, or
 
22 prevented by any licensee, the licensee's employees, or any other
 
23 person from entering into any such premises, or whenever any
 

 
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 1 investigator or officer is by any licensee, the licensee's
 
 2 employees, or any other person opposed, obstructed, or molested
 
 3 in the performance of the officer's duty in any respect, the
 
 4 licensee, the licensee's employee, or any other person shall be
 
 5 fined not more than $2,000 or imprisoned not more than one year,
 
 6 or both.
 
 7      (c)  Whenever any investigator or officer, having demanded
 
 8 admittance into any licensed premises and declared the
 
 9 investigator's or officer's name and office, is not admitted by
 
10 the licensee or the person in charge of the premises, it shall be
 
11 lawful for the investigator or officer to forcibly and in any
 
12 manner to break into and enter the premises."
 
13      SECTION 11.  Section 281-97, Hawaii Revised Statutes, is
 
14 amended to read as follows:
 
15      "281-97  When sale without license authorized.  (a)  In
 
16 case a liquor or tobacco license is revoked [or], canceled, or
 
17 not renewed, the licensee [may], with the permission of and upon
 
18 the conditions set by the liquor commission, may sell
 
19 intoxicating liquors or tobacco then in the licensee's possession
 
20 within sixty days, or within such additional time allowed by the
 
21 commission, unless under this chapter the same are seized or
 
22 forfeited.
 
23      (b)  Any bank, trust company, or financial institution
 

 
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 1 owning or possessing intoxicating liquor or tobacco which was
 
 2 acquired by the bank, trust company, or financial institution in
 
 3 the ordinary course of its business, may sell the intoxicating
 
 4 liquor or tobacco with the permission of and upon conditions set
 
 5 by the commission.
 
 6      (c)  Any person acting as personal representative[,] or
 
 7 guardian of a licensee's estate, or any receiver, assignee for
 
 8 benefit of creditors, or trustee in bankruptcy, may sell the
 
 9 stock of intoxicating liquor or tobacco with the permission of
 
10 and upon conditions set by the commission, except as otherwise
 
11 provided in this chapter.
 
12      (d)  Any insurance company, or any common carrier acting as
 
13 an insurer for losses to persons shipping intoxicating liquor[,]
 
14 or tobacco, may take possession of and sell the intoxicating
 
15 liquor[,] or tobacco, the containers of which have been damaged
 
16 by fire or otherwise, with the permission of and upon conditions
 
17 set by the commission.
 
18      (e)  Any person in possession of a stock of lawfully
 
19 acquired intoxicating liquor or tobacco under a foreclosure
 
20 proceeding, proceedings for enforcement of a lien, civil
 
21 execution, or under any other proceeding or process, may sell
 
22 such intoxicating liquor or tobacco with the permission of and
 
23 upon conditions set by the commission."
 

 
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 1      SECTION 12.  Section 281-101, Hawaii Revised Statutes, is
 
 2 amended to read as follows:
 
 3      "281-101  Manufacture or sale without license; penalty.  If
 
 4 any person, acting in person or by or through any agent, servant,
 
 5 or employee, manufactures or sells any liquor[,] or tobacco,
 
 6 either directly or indirectly, or upon any pretense or by any
 
 7 subterfuge, except as authorized pursuant to this chapter, the
 
 8 person shall be fined not more than $2,000 or imprisoned not more
 
 9 than one year, or both."
 
10      SECTION 13.  Section 281-101.4, Hawaii Revised Statutes, is
 
11 amended to read as follows:
 
12      "281-101.4  Hearing, illegal manufacture, importation, or
 
13 sale of liquor[.] or tobacco.  (a)  The liquor commission or the
 
14 liquor control adjudication board may assess and collect a
 
15 penalty, or reprimand a person for not having a valid license to
 
16 manufacture or sell any liquor or tobacco in violation of this
 
17 chapter or of any rule [or regulation] applicable thereto.
 
18      (b)  In every case where the administrator elects to conduct
 
19 proceedings under this section where it is proposed to assess and
 
20 collect a penalty from a person for not having a valid license to
 
21 manufacture or sell any liquor or tobacco in violation of this
 
22 chapter or of any rule [or regulation] applicable thereto, that
 
23 person shall be entitled to notice and hearing in conformity with
 

 
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 1 chapter 91.
 
 2      (c)  At the hearing, before final action is taken by the
 
 3 commission or board, the person shall be entitled to be heard in
 
 4 person or through counsel and shall be given a full and fair
 
 5 opportunity to present facts showing that the alleged cause or
 
 6 causes for the proposed action do not exist, or any reason why no
 
 7 penalty should be imposed.  The testimony taken at the hearing
 
 8 shall be under oath and recorded stenographically, or by machine,
 
 9 but the parties shall not be bound by the strict rules of
 
10 evidence; certified copies of any transcript and of any other
 
11 record made of or at the hearing shall be furnished to a person
 
12 upon that person's request and at that person's expense.
 
13      (d)  Any order, reprimand, or penalty imposed by the
 
14 commission or board upon a person for not having a valid license
 
15 to manufacture or sell any liquor or tobacco in violation of this
 
16 chapter or of any rule [or regulation] applicable thereto shall
 
17 be in addition to any penalty that might be imposed upon that
 
18 person's conviction in a court of law for any violation of this
 
19 chapter.  The amount of penalty assessed and collected by the
 
20 commission or board from any person under this section for not
 
21 having a valid license to manufacture or sell any liquor or
 
22 tobacco shall not exceed the sum of $2,000 for each charge.
 
23      (e)  Whenever the service of any order or notice shall be
 

 
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 1 required by this section the service shall be made in the
 
 2 following manner:  in the case of any violation based upon the
 
 3 personal observation of any investigator, a written notice of the
 
 4 violation shall be given to the person charged with a violation
 
 5 within a reasonable period of time after the alleged violation
 
 6 occurred, the person charged shall be requested to acknowledge
 
 7 receipt of the alleged violation, or, if the person cannot be
 
 8 found after diligent search, by leaving a certified copy thereof
 
 9 at the person's dwelling house or usual place of abode with some
 
10 person of suitable age and discretion residing therein[; and if].
 
11 If the person cannot be found after diligent search, and service
 
12 cannot be made, then service may be made by depositing another
 
13 certified copy thereof in the certified mail of the United States
 
14 post office, postage prepaid, addressed to the person at the
 
15 person's last known residence address; provided[,] that in the
 
16 case of a partnership, corporation, unincorporated association,
 
17 or limited liability company, service may be made upon any
 
18 partner, officer, or member thereof."
 
19      SECTION 14.  This Act does not affect rights and duties that
 
20 matured, penalties that were incurred, and proceedings that were
 
21 begun, before its effective date.
 
22      SECTION 15.  Statutory material to be repealed is bracketed.
 
23 New statutory material is underscored.
 

 
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 1      SECTION 16.  This Act shall take effect on July 1, 2000.