Report Title:
Tax stamps; escrow fund compliance; smoking; vending machines.
Description:
Makes the cigarette stamp tax permanent; amends inspection, forfeiture, and enforcement provisions; requires payment into or proof of compliance with escrow fund statute prior to receiving tax stamp; provides expanded authority to AG to enforce compliance with escrow fund statute; provides state regulation of smoking in indoor and outdoor areas of restaurants; provides owner discretion to prohibit smoking in bars; prohibits smoking in state or county owned or controlled athletic facilities; makes conforming amendments to signage; prohibits sales of cigarettes from vending machines in bars and cabarets admitting those 21 and over until June 30, 2003; after July 1, 2003 prohibits sales of cigarettes from vending machines within the State.(SD1)
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HOUSE OF REPRESENTATIVES |
H.B. NO. |
2429 |
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TWENTY-FIRST LEGISLATURE, 2002 |
H.D. 1 |
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STATE OF HAWAII |
S.D. 1 |
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A BILL FOR AN ACT
RELATING TO TOBACCO.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
SECTION 1. Chapter 245, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:
"§245- Compliance with escrow fund statute. (a) No person may affix, or cause to be affixed, a stamp to an individual package of cigarettes under section 245-22, or pay the tax levied under section 245-3(a)(2) on a tobacco product defined as a cigarette under section 675-2(d), unless the tobacco product manufacturer that made or sold such cigarettes is a participating manufacturer as defined in section 675-3(a) or has made all escrow payments required by section 675-3(b)(1).
(b) Not later than July 1, 2002, the attorney general shall develop a list, to be posted on the attorney general’s website, including all tobacco product manufacturers that are participating manufacturers as defined in section 675-3(a) , or have made all escrow payments required by section 675-3(b)(1), and all brand families (and only brand families) of such manufacturers that are identified under subsection (c) . The attorney general shall update the list as necessary. A person shall not be liable for a violation of subsection (a) if the brand family is included in the list described in this subsection at the time the stamp is affixed or the tax paid.
(c) In order to be included on the list described in subsection (b) , a tobacco product manufacturer must submit to the attorney general a certification, under penalty of perjury, that it is a participating manufacturer as defined in section 675-3(a), or has made all escrow payments required by section 675-3(b)(1); and a list of all brand families (and only brand families) that are to be counted in calculating its annual payments under the Master Settlement Agreement or its escrow payments under section 675-3(b)(1), whichever is applicable to the manufacturer. A participating manufacturer shall list its brand families in the unit volume and shares determined pursuant to subsections II(z) and (mm) of and Exhibit E to the Master Settlement Agreement. A manufacturer may update the list as necessary.
(d) A person is guilty of a class C felony for each instance in which the person has affixed a stamp to a package of cigarettes, or paid the tax levied under section 245-3(a)(2) on a tobacco product defined as a cigarette under section 675-2(d), in violation of subsection (a). In addition to or in lieu of any other civil or criminal penalty provided by law, the department, upon a finding that a licensee under this chapter has violated subsection (a), may revoke or suspend the license or licenses of such licensee pursuant to procedures complying with chapter 91, and may impose on the licensee a civil penalty in an amount not to exceed the greater of five hundred per cent of the retail value of the cigarettes involved or $5,000.
(e) Any cigarettes or tobacco products defined as cigarettes under section 675-2(d) that are stamped, or for which tax is paid, in violation of subsection (a) shall be deemed contraband and are subject to seizure, confiscation, nd forfeiture by the attorney general and the police departments of each of the counties. The forfeiture of any cigarettes or tobacco products defined as cigarettes under section 675-2(d) under this subsection may be enforced pursuant to chapter 712A by an appropriate administrative or judicial proceeding. Any such cigarettes or tobacco products forfeited as provided in this subsection shall be ordered destroyed. For purposes of this subsection, cigarettes and tobacco products defined as cigarettes under section 675-2(d) that are stamped, or for which tax is paid, in violation of subsection (a) shall be deemed contraband whether the violation of subsection (a) is knowing or otherwise.
(f) The department may require licensees that affix stamps to individual packages of cigarettes under section 245-22 or that pay the tax levied under section 245-3(a)(2) on tobacco products defined as cigarettes under section 675-2(d), to submit such information as is necessary to enable the attorney general to determine whether a tobacco product manufacturer has made the escrow payments required by section 675-3(b)(1). In addition to any information required to be submitted to the attorney general under section 486P-2, the attorney general may require tobacco product manufacturers to submit any information that the attorney general may determine is necessary to enable the attorney general to determine whether a manufacturer has made the escrow payments required by section 675-3(b)(1).
(g) The attorney general shall require each tobacco product manufacturer subject to the requirements of section 675-3(b)(1) to appoint a registered agent for service of process in the State and identify such registered agent to the attorney general. The attorney general shall require each tobacco product manufacturer subject to the requirements of section 675-3(b)(1) to certify, under penalty of perjury, that all escrow payments required by section 675-3(b)(1) have been made by all other tobacco product manufacturers that previously made or sold brand families identified under subsection (c) or brand styles included within such brand families; provided that if the brand family or brand style was not made or sold by the manufacturer making the certification before July 1, 2002, the manufacturer shall be required only to identify a predecessor manufacturer or manufacturers. The attorney general may require each tobacco product manufacturer to make the escrow payments required by section 675-3(b)(1) in quarterly installments during the year in which the sales covered by such payments are made.
(h) Any tobacco product manufacturer that falsely represents to any person any information specified in subsection (c), or that falsely represents that it is a participating manufacturer as defined in 675-3(a); that it or any other person has made all escrow payments required by section 675-3(b)(1), if applicable to the manufacturer; or that it has made any installment payments or appointed the registered agent required by subsection (g), if applicable to the manufacturer, shall be shall be deemed guilty of a class C felony for each such false representation.
(i) The department and the attorney general may enter into a written agreement authorizing the exchange of information reasonably necessary to the enforcement and administration of this section.
(j) For purposes of this section, the term "cigarette" has the same meaning as under section 675-2(d)."
SECTION 2. Section 245-9, Hawaii Revised Statutes, is amended to read as follows:
"§245-9 Inspection. (a) The department and the attorney general may examine all records, including tax returns and reports under section 245-31, required to be kept or filed under this chapter, and books, papers, and records of any person engaged in the business of wholesaling or dealing cigarettes and tobacco products, to verify the accuracy of the payment of the taxes imposed by this chapter. Every person in possession of any books, papers, and records, and the person's agents and employees, are directed and required to give the department and the attorney general the means, facilities, and opportunities for the examinations.
(b) The department and the attorney general may inspect the operations, premises, and storage areas of any entity engaged in the sale of cigarettes, or the contents of a specific vending machine, during regular business hours. This inspection shall include inspection of all statements, books, papers, and records in whatever format, including electronic format, pertaining to the acquisition, possession, transportation, sale, or use of packages of cigarettes and tobacco products other than cigarettes, to verify the accuracy of the payment of taxes imposed by this chapter, and of the contents of cartons and shipping or storage containers to ascertain that all individual packages of cigarettes have an affixed stamp of proper denomination as required by this chapter. This inspection may also verify that all stamps were produced under the authority of the department. Every entity in possession of any books, papers, and records, and the entity's agents and employees, are directed and required to give the department and the attorney general the means, facilities, and opportunities for the examinations. For purposes of this chapter "entity" means one or more individuals, a company, corporation, a partnership, an association, or any other type of legal entity.
(c) If the department or the attorney general has reasonable cause to believe and does believe that cigarettes, stamps, or counterfeit stamps are being acquired, possessed, transported, kept, sold, or offered for sale in violation of this chapter, the department or the attorney general may investigate or search the vehicle or premises in which the cigarettes, stamps, or counterfeit stamps are believed to be located. If cigarettes, stamps, or counterfeit stamps are found in a vehicle, premises, or vending machine in violation of this chapter the cigarettes, vending machine, vehicle, stamps, counterfeit stamps, or other tangible personal property containing those cigarettes, stamps, or counterfeit stamps and any books and records in possession of the entity in control or possession of the cigarettes, stamps, or counterfeit stamps may be seized by the department or the attorney general and are subject to forfeiture as provided in this chapter and chapter 712A.
(d) For purposes of this chapter:
"Counterfeit stamp" means any stamp that is not printed, manufactured, distributed, or made by authority of the department.
"Vehicle" means a motor vehicle, airplane, motorcycle, motorboat, or other motor-propelled vehicle."
SECTION 3. Section 245-41, Hawaii Revised Statutes, is amended by amending subsection (a) to read as follows:
"(a) Enforcement of this part shall be under the jurisdiction of the attorney general. The attorney general may seek assistance in the enforcement of this part from other law enforcement agencies."
SECTION 4. Act 249, Session Laws of Hawaii 2000, is amended by amending section 20 to read as follows:
"SECTION 20. This Act shall take effect upon its approval; provided that[:
(1) Sections] sections 15 and 16 shall take effect on July 1, 2000[; and
(2) On June 30, 2006, this Act shall be repealed and sections 245-1, 245-3, 245-5, 245-6, 245-7(b) and (c), 245-8(a), 245-9, 245-15, 712A-5(1), and 712A-16(1), Hawaii Revised Statutes, shall be reenacted in the form in which they read on the day before the approval of this Act]."
SECTION 5. Section 328K-1, Hawaii Revised Statutes, is amended as follows:
1. By adding two new definitions to be appropriately inserted and to read:
""Indoor dining area" means a dining area located in a building, other than an outdoor seating area.
"Outdoor seating area" means a dining area of a restaurant, whether roofed or not, that either:
(1) Is not enclosed from the floor to the ceiling on any side; or
(2) Is enclosed from the floor to the ceiling on no more than two sides."
2. By amending the definition of "bar" to read:
""Bar" means a place devoted to the serving of alcoholic beverages for on-site consumption by patrons and where the service of meals or food is only incidental to the consumption of such beverages. A food service establishment may contain a bar, but the term bar shall not include the dining area of a food service establishment."
3. By amending the definition of "dining area" to read:
""Dining area" means a location within a restaurant or food service establishment where meals are served[.], other than a bar where the service of meals or food is only incidental to the consumption of alcoholic beverages."
4. By amending the definition of "restaurant" to read:
""Restaurant" means any retail eating establishment where meals or food are served or provided for on-site consumption by seated patrons that is authorized by the department of health to operate as a food service establishment, except:
(1) Any food service establishment with a seating capacity of fifty or fewer patrons;
(2) Any food service establishment while it is being used solely for private parties or gatherings;
(3) Any enclosed room of a food service establishment or a banquet room [used] solely for private parties or gatherings;
(4) Any private food service establishment or club in which only members or their guests are permitted;
[(5) Any seating area completely outside the building housing the food service establishment; or
(6)] (5) Bars."
SECTION 6. Section 328K-2, Hawaii Revised Statutes, is amended to read as follows:
"§328K-2 Prohibition in certain places open to the public. Except as otherwise provided in this part, smoking shall be prohibited in the following places within the State:
(1) Elevators in buildings open to and used by the public, including elevators in apartment and other multi-unit residential buildings;
(2) Semiprivate rooms, wards, waiting rooms, lobbies, and public hallways of public and private health care facilities, including, but not limited to, hospitals, clinics, and physicians' and dentists' offices. Smoking shall be permitted in a private room or in a semiprivate room when there is no objection by any patient occupying such room;
(3) Restaurants.
(A) [All restaurants shall provide nonsmoking areas which are reasonably proportionate to the preference of the users and so located as to obtain the maximum effect of existing physical barriers and ventilation systems, and seating arrangements, to minimize the toxic effect of smoke in adjacent nonsmoking areas; provided no fixed structural or other physical modifications of the restaurant shall be required; and] Smoking shall be prohibited in all indoor dining areas of restaurants;
(B) The proprietor or other person in charge of a restaurant containing an outdoor seating area may permit smoking in the outdoor seating area, but shall provide nonsmoking areas within the outdoor seating area which are reasonably proportionate to the preference of the users and so located as to obtain the maximum effect of existing physical barriers and ventilation systems, and seating arrangements, to minimize the toxic effect of smoke in adjacent nonsmoking areas; provided that no fixed structural or other physical modifications of the restaurant shall be required.
[(B)] (C) Nothing in this paragraph shall prevent a proprietor or person in charge of a facility from designating the entire restaurant as a nonsmoking area. Owners or proprietors of bars or restaurants may expand or contract the size of designated nonsmoking areas to meet the requirements of their patrons;
(4) Any room which is used primarily for exhibiting any motion picture, stage drama, dance, musical performance, or other similar performance during the time that the room is open to the public for such performance;
(5) Museums, libraries, and galleries;
(6) The following facilities or areas in state or county owned or controlled buildings:
(A) Meeting or conference rooms;
(B) Auditorium or sports areas that are enclosed;
(C) Community centers where persons may gather for meetings, parties, or any other purpose where the area is enclosed;
(D) Waiting areas, baggage claim areas, and check-in counters within buildings in all state airports; and
(E) All areas open to the public, including service counters and reception or waiting areas;
(7) Except as otherwise provided in this section, all areas open to the public in the following business establishments:
(A) Banks;
(B) Credit unions;
(C) Financial services loan companies;
(D) Retail stores; and
(E) Savings and loan associations;
(8) Any restroom open to the public;
(9) Taxicabs, when carrying nonsmoking passengers;
(10) Cruise ships. The dining area of all cruise ships shall include a nonsmoking area which is reasonably proportionate to the preference of the users and so located as to obtain the maximum effect of existing physical barriers and ventilation systems, and seating arrangements, to minimize the toxic effect of smoke; provided no fixed structural or other physical modifications of the cruise ship shall be required. This paragraph shall not apply to any cruise ship that does not serve any food or meals during its course of operation, or where the service of food is only incidental to the consumption of alcoholic beverages; [and]
(11) All state or county owned or controlled athletic facilities during any period of time that such facilities are used for organized sporting events by persons under the age of eighteen years; and
[(11)] (12) Notwithstanding the exceptions stated in section 328K-3, any area open to the public which has been designated by the person having control of the area as a nonsmoking area and marked with a "no smoking" sign."
SECTION 7. Section 328K-4, Hawaii Revised Statutes, is amended to read as follows:
"[[]§328K-4[]] Signs. (a) Clearly legible signs which include the words "Smoking Prohibited by Law" with letters of not less than one inch in height shall be conspicuously posted by the persons having control of such places open to the public where smoking is prohibited.
(b) "SMOKING PROHIBITED BY LAW" signs shall be posted in areas adjacent to smoking areas so that a clear delineation exists.
[(c) In the case of any restaurant designated as a smoking area in its entirety, the restaurant owner or manager shall post a sign stating, "This entire establishment is a SMOKING area," or a similar statement. The sign shall be posted conspicuously at all entrances normally used by the public.
(d)] (c) Restaurants with an outdoor seating area in which smoking is permitted, with controlled seating, where patrons do not seat themselves, may place a sign at the dining area entry which indicates the availability of [smoking and] nonsmoking areas and outdoor seating areas in which smoking is permitted upon request in lieu of the posting requirements of this section.
[(e)] (d) Alternate means of notification may be employed."
SECTION 8. Section 328K-21, Hawaii Revised Statutes, is amended to read as follows:
"[[]§328K-21[]] Cigarette sales from vending machines and by lunch wagons prohibited. (a) The sale or distribution at no charge of cigarettes by the following methods is prohibited:
(1) From cigarette vending machines unless the vending machine is located in a bar[,] or cabaret[, or any establishment] for which the minimum age for admission is [eighteen;] twenty-one; or
(2) From a lunch wagon engaging in any sales activity within one thousand feet of any public or private elementary or secondary school grounds.
(b) Violations of subsection (a), including placement of a cigarette vending machine in a location other than a bar, cabaret, or any establishment for which the minimum age for admission is [eighteen,] twenty-one, are subject to a fine of up to $1,000 per day for each violation.
(c) Beginning July 1, 2003, sales or distribution at no charge of cigarettes from a cigarette vending machine or lunch wagon are prohibited within the State.
(d) As used in this section:
"Cigarette vending machine" means a self-service device that dispenses cigarettes, cigars, tobacco, or any other product containing tobacco.
"Lunch wagon" means a mobile vehicle designed and constructed to transport food and from which food is sold to the general public and includes, but is not limited to manapua trucks.
"Sell" or "sale" means to solicit and receive an order for; to have, keep, offer, or expose for sale; to deliver for value or in any other manner than purely gratuitously; to peddle; to keep with intent to sell; or to traffic in."
SECTION 10. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.
SECTION 11. This Act shall take effect on July 1, 2002.