HB1672

SECTION 1. Section 281-1, Hawaii Revised Statutes, is amended by amending the definition of "standard bar" to read as follows:

""Standard bar" means any establishment licensed to sell liquor for consumption on the premises, except:

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

(2) 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

(3) Premises in which employees or entertainers consume nonalcoholic beverages while in the company of patrons or sit with patrons pursuant to commission rules."

SECTION 2. Section 281-17, Hawaii Revised Statutes, is amended to read as follows:

"§281-17 Jurisdiction and powers. (a) The liquor commission, within its own county, shall have the jurisdiction, power, authority, and discretion, subject only to this chapter:

(1) To grant, refuse, suspend, and revoke any license for the manufacture, importation, and sale of liquors;

(2) To take appropriate action against a person who, directly or indirectly, manufactures, sells, or purchases any liquor without being authorized pursuant to this chapter; provided that in counties that have established by charter a liquor control adjudication board, the board shall have the jurisdiction, power, authority, and discretion to hear and determine administrative complaints of the director regarding violations of the liquor laws of the State or of the rules of the liquor commission, and impose penalties for violations thereof as may be provided by law;

(3) To control, supervise, and regulate the manufacture, importation, and sale of liquors by investigation, enforcement, and education; provided that any educational program shall be limited to the commission staff, commissioners, liquor control adjudication board members, and licensees and their employees, and shall be financed through the money collected from the assessment of fines against licensees; provided that fine moneys, not to exceed ten per cent a year of fines accumulated, may be used to fund public liquor-related educational or enforcement programs;

(4) From time to time to make, amend, and repeal rules, not inconsistent with this chapter, as in the judgment of the commission are deemed appropriate for carrying out this chapter and for the efficient administration thereof, and the proper conduct of the business of all licensees, including every matter or thing required to be done or which may be done with the approval or consent, by order, under the direction or supervision of, or as prescribed by the commission; which rules, when adopted as provided in chapter 91 shall have the force and effect of law;

(5) Subject to chapter 76, to appoint and remove an administrator, who may also be appointed an investigator and who shall be responsible for the operations and activities of the staff. The administrator may hire and remove hearing officers, investigators, and clerical or other assistants as its business may from time to time require, prescribe their duties and fix their compensation, and engage the services of experts and persons engaged in the practice of a profession, if deemed expedient[~~. Every investigator, within the scope of the investigator's duties, shall have the powers of a police officer~~];

(6) To limit the number of licenses of any class or kind within the county, or the number of licenses of any class or kind to do business in any given locality, when in the judgment of the commission such limitations are in the public interest;

(7) To prescribe the nature of the proof to be furnished, the notices to be given, and the conditions to be met or observed in case of the issuance of a duplicate license in place of one alleged to have been lost or destroyed, including a requirement of any indemnity deemed appropriate to the case;

(8) To fix the hours between which licensed premises of any class or classes may regularly be open for the transaction of business, which shall be uniform throughout the county as to each class respectively;

(9) To prescribe all forms to be used for the purposes of this chapter not otherwise provided for in this chapter, and the character and manner of keeping of books, records, and accounts to be kept by licensees in any matter pertaining to their business;

(10) To investigate violations of this chapter and, notwithstanding any law to the contrary, violations of the applicable department of health's allowable noise levels, through its investigators or otherwise, to include covert operations, and to report violations to the prosecuting officer for prosecution where appropriate. Investigations of violations of chapter 244D shall be referred to the director of taxation to hear and determine complaints against any licensee;

(11) To prescribe, by rule, the terms, conditions, and circumstances under which persons or any class of persons may be employed by holders of licenses;

(12) To prescribe, by rule, the term of any license or solicitor's and representative's permit authorized by this chapter, the annual or prorated amount, the manner of payment of fees for the licenses and permits, and the amount of filing fees; and

[~~(13)~~ ~~To prescribe, by rule, regulations on dancing in licensed premises; and~~

~~(14)~~] (13) To prescribe, by rule, the circumstances and penalty for the unauthorized manufacturing or selling of any liquor.

(b) Subject only to this chapter, the commission or board and each member thereof shall have the same powers respecting the administering of oaths, compelling the attendance of witnesses and the production of documentary evidence, and examining the witnesses as are possessed by a circuit court, except that the commission or board and each member thereof shall not be bound by the strict legal rules of evidence. In addition, the commission or board shall have the power to require the production of, and to examine any books, papers, and records of any licensee which [~~may~~] pertain to the licensee's business under the license or which [~~may~~] pertain to a matter at a hearing before the commission or board or to an investigation by the commission or board.

[The exercise by the commission or board of the power, authority, and discretion vested in it pursuant to this chapter shall be final and shall not be reviewable by or appealable to any court or tribunal, except as otherwise provided in this chapter or chapter 91.]"

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

1. By amending subsection (c) to read:

"(c) Class 2. Restaurant license.

(1) A license under this class shall authorize the licensee to sell liquor specified in this subsection for consumption on the premises; provided that a restaurant licensee, with commission approval, may provide off-premises catering of food and liquor; provided further that the catering activity shall be directly related to the licensee's operation as a restaurant. A license under this class shall also authorize the licensee to sell beer, malt beverages, or cider for off-premises consumption; provided that the licensee has the appropriate kind of license pursuant to paragraph (3); provided further that the beer, malt beverage, or cider is sold in a securely sealed or covered glass, ceramic, or metal container that is sold to or provided by the patron, and each sealed or covered glass, ceramic, or metal container does not exceed a maximum capacity of one-half gallon. 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.~~]

(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) Of this class, there shall be the following kinds:

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

(B) Beer and wine; and

(4) A new class 2 license may be issued prior to an establishment commencing operation. An application for a new class 2 license shall include a certification by the applicant that the applicant intends to and shall derive no less than thirty per cent of the establishment's gross revenue from the sale of foods.

Notwithstanding section 281-57, the commission may approve at one public hearing and without notice the change to a class 2 restaurant license of a licensee holding a class 5 dispenser license who meets the requirements of a class 2 license."

2. By amending subsections (f) and (g) to read:

"(f) Class 5. Dispenser license.

(1) A license under this class shall authorize the licensee to sell liquor 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; or

(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].

(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) Of this class, there shall be the following kinds:

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

(B) Beer and wine; and

(g) Class 6. Club license. A club license shall be general only but shall exclude alcohol and shall authorize the licensee to sell liquor 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 owned by the member for the member's own personal use and not to be sold that may be consumed only on the premises. A club licensee shall be authorized to host charitable functions that are open to the general public only pursuant to commission rules.

The categories of establishment shall be as follows:

(1) A standard bar; or

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

3. By amending subsection (i) to read:

"(i) 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. The license shall be issuable in the county where the home port of the vessel is situated. 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.

The categories of establishment shall be as follows:

(1) A standard bar; or

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

4. By amending subsections (k) and (l) to read:

"(k) Class 11. Cabaret license. A cabaret license shall be general only but shall exclude alcohol and shall authorize the sale of liquor for consumption on the premises. A cabaret license shall be issued only for premises where [~~food is served,~~] facilities for dancing by the patrons including a dance floor are provided[,] 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 upon approval by 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. [A cabaret license shall not be issued for any premises located within an apartment mixed use subprecinct within a special improvement or special district in which the economy is primarily based on tourism.]

(l) 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 liquor except alcohol for consumption on the premises; provided that a hotel licensee, with commission approval, may provide off-premises catering of food and liquor if the catering activity is directly related to the licensee's food service.

Procedures such as room service, self-service no-host minibars or similar service in guest rooms, and service at 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 who would otherwise qualify for a class 15 license may apply to the liquor commission of the county 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. On 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."

5. By amending subsections (n) and (o) to read:

"(n) Class 14. Brewpub license. A brewpub licensee:

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

(2) May sell malt beverages manufactured by the licensee in brewery-sealed packages to class 3 wholesale dealer licensees pursuant to conditions imposed by the county by ordinance or rule;

(3) May sell intoxicating liquor purchased from a class 3 wholesale dealer licensee to consumers for consumption on the licensee's premises. 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~~];

(4) May, subject to federal labeling and bottling requirements, sell malt beverages manufactured on the licensee's premises to consumers in brewery-sealed kegs and recyclable or reusable containers and sell malt beverages manufactured on the licensee's premises or purchased from a class 1 manufacturer licensee, a class 3 wholesale dealer licensee, a class 14 brewpub licensee, or a class 18 small craft producer pub licensee to consumers in growlers for off-premises consumption; provided that for purposes of this paragraph, "growler" means a recyclable or reusable container that does not exceed one gallon and is securely sealed on the licensee's premises;

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

(6) May, subject to federal labeling and bottling requirements, 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 dispenser licensees, class 6 club licensees, class 8 transient vessel licensees, class 9 tour or cruise vessel licensees, class 10 special licensees, class 11 cabaret licensees, class 12 hotel licensees, class 13 caterer licensees, class 14 brewpub licensees, class 15 condominium hotel licensees, class 18 small craft producer pub licensees, and consumers pursuant to conditions imposed by county ordinances or rules governing class 1 manufacturer licensees and class 3 wholesale dealer licensees;

(7) May conduct the activities under paragraphs (1) to (6) at locations other than the licensee's primary manufacturing premises; provided that:

(A) The manufacturing takes place in Hawaii;

(B) Each of the other locations:

(i) Operates within the State under the same trade name for the premises; and

(ii) Is properly licensed within the county of its operation as a class 1 manufacturer licensee, class 2 restaurant licensee, class 4 retail dealer licensee, class 5 dispenser licensee, class 12 hotel licensee, class 14 brewpub licensee, or class 18 small craft producer pub licensee;

(C) The county liquor commission of the county in which the licensee satellite is located shall have jurisdiction of the satellite; and

(D) All requirements of the license class of the location shall be in effect as required by the county liquor commission for the satellite licensed premises; and

(8) May allow minors, who are accompanied by a parent or legal guardian of legal drinking age, on the licensee's premises.

(o) 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 liquor 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 license.

Any licensee who would otherwise meet the criteria for the condominium hotel license class but holds a different class of license may be required to apply for a condominium hotel license."

6. By amending subsection (r) to read:

"(r) Class 18. Small craft producer pub license. A small craft producer pub licensee:

(1) Shall manufacture not more than:

(A) Seventy thousand barrels of malt beverages;

(B) Twenty thousand barrels of wine; or

provided that for purposes of this paragraph, "barrel" means a container not exceeding thirty-one gallons or wine gallons of liquor;

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

(3) May sell malt beverages, wine, or alcohol manufactured by the licensee in producer-sealed packages to class 3 wholesale dealer licensees pursuant to conditions imposed by the county by ordinance or rule;

(4) May sell intoxicating liquor purchased from a class 3 wholesale dealer licensee to consumers for consumption on the licensee's premises. 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, subject to federal labeling and bottling requirements, sell malt beverages manufactured on the licensee's premises to consumers in producer-sealed kegs and recyclable or reusable containers and sell malt beverages manufactured on the licensee's premises or purchased from a class 1 manufacturer licensee, a class 3 wholesale dealer licensee, a class 14 brewpub licensee, or a class 18 small craft producer pub licensee to consumers in growlers for off-premises consumption; provided that for purposes of this paragraph, "growler" means a recyclable or reusable container that does not exceed one gallon, which shall be securely sealed;

(6) May, subject to federal labeling and bottling requirements, sell wine or alcohol manufactured on the licensee's premises in recyclable containers provided by the licensee or by the consumer which do not exceed:

(A) One gallon per container for wine; and

(B) One liter for alcohol; and

are securely sealed on the licensee's premises to consumers for off-premises consumption;

(7) Shall comply with all requirements pertaining to class 4 retail dealer licensees when engaging in the retail sale of malt beverages, wine, and alcohol;

(8) May, subject to federal labeling and bottling requirements, sell malt beverages, wine, and alcohol manufactured on the licensee's premises in producer-sealed containers directly to class 2 restaurant licensees, class 3 wholesale dealer licensees, class 4 retail dealer licensees, class 5 dispenser licensees, class 6 club licensees, class 8 transient vessel licensees, class 9 tour or cruise vessel licensees, class 10 special licensees, class 11 cabaret licensees, class 12 hotel licensees, class 13 caterer licensees, class 14 brewpub licensees, class 15 condominium hotel licensees, class 18 small craft producer pub licensees, and consumers pursuant to conditions imposed by county ordinances or rules governing class 1 manufacturer licensees and class 3 wholesale dealer licensees;

(9) May conduct the activities under paragraphs (1) to (8) at locations other than the licensee's premises; provided that:

(A) The manufacturing takes place in Hawaii;

(B) Each of the other locations:

(i) Operates within the State under the same trade name for the premises; and

(C) The county liquor commission of the county in which the licensee satellite is located shall have jurisdiction of the satellite; and

(D) All requirements of the license class of the location shall be in effect as required by the county liquor commission for the satellite licensed premises; and

(10) May allow minors, who are accompanied by a parent or legal guardian of legal drinking age, on the licensee's premises."

SECTION 4. Section 281-45, Hawaii Revised Statutes, is amended to read as follows:

"§281-45 No license issued, when. No license shall be issued under this chapter:

(1) To any minor or to any person who has been convicted of a felony within the preceding ten years and not pardoned; provided that the commission may grant a license under this chapter to a corporation or limited liability company that has been convicted of a felony where the commission finds that the corporation's officers, directors, and shareholders of twenty-five per cent or more of outstanding stock meet the statutory requirements to hold a license;

(2) To a corporation the officers and directors of which, or any of them, would be disqualified under paragraph (1) from obtaining the license individually, or a stockholder of which, owning or controlling twenty-five per cent or more of the outstanding capital stock, or to a general partnership, limited partnership, limited liability partnership, or limited liability company whose partner or member holding twenty-five per cent or more interest of which, or any of them would be disqualified under paragraph (1) from obtaining the license individually; provided that for publicly-traded corporations and limited liability companies or corporations or limited liability companies ultimately solely owned by a publicly-traded company, only the officers, directors, managers, or members designated as primary decision-makers shall be considered to determine disqualification under paragraph (1);

(3) Unless the applicant for a license or a renewal of a license, or in the case of a transfer of a license, both the transferor and the transferee, present to the issuing agency a tax clearance certificate from the department of taxation showing that the applicant or the transferor and transferee do not owe the state government any delinquent taxes, penalties, or interest; or that the applicant, or in the case of a transfer of a license, the transferor or transferee, has entered into an installment plan agreement with the department of taxation for the payment of delinquent taxes in installments and that the applicant is or the transferor or transferee is, in the case of a transfer of a license, complying with the installment plan agreement; provided that when the applicant or the transferor or transferee, in the case of a transfer of a license, is validly challenging a tax assessment, penalty, or other proceeding that prevents the issuance of a signed certificate from the appropriate federal or state tax agency, the commission shall issue a license that is valid for the period of time necessary to resolve the challenge;

(4) To an applicant for a class 2, class 4 except for convenience minimarts, class 5, class 6, class 11, class 12, class 13, class 14, class 15, class 17, or class 18 license unless the applicant for issuance of a license or renewal of a license, or in the case of a transfer of a license, both the transferor and the transferee, present to the issuing agency proof of liquor liability insurance coverage in an amount of $1,000,000; or

(5) To any applicant who has had any liquor license revoked less than two years previous to the date of the application for any like or other license under this chapter." SECTION 5. Section 281-47, Hawaii Revised Statutes, is amended to read as follows:

"§281-47 Standard bar; music and dancing available. Any standard bar establishment may provide facilities for dancing by patrons, including a dance floor and live or recorded music[, if the establishment is located in a commercial district and obtains the approval of the commission to provide such services on a one time trial basis not to exceed ninety days; provided that the music and dancing shall be allowed only during the trial period]."

SECTION 6. Section 281-79, Hawaii Revised Statutes, is amended to read as follows:

"§281-79 Entry for examination[~~; obstructing liquor commission operations;~~ ~~penalty~~]. Every investigator shall, and any officer having police power may, at all reasonable times, and at any time whatsoever if there is any reasonable ground for suspicion that the conditions of any license are being violated, without warrant enter into and upon any licensed premises and inspect the same and every part thereof, and any books or records therein, to ascertain whether or not all conditions of the license and all provisions of this chapter are being complied with by the licensee.

[If any investigator or officer, or any person called by the investigator or officer to the investigator's or officer's aid, is threatened with the use of violence, force, or physical interference or obstacle, or is hindered, obstructed, or prevented by any licensee, the licensee's employees, or any other person from entering into the premises, or whenever any investigator or officer is by any licensee, the licensee's employees, or any other person opposed, obstructed, or molested in the performance of the officer's duty in any respect, the licensee, the licensee's employee, or any other person shall be fined not more than $2,000 or imprisoned not more than one year, or both.

Whenever any investigator or officer, having demanded admittance into any licensed premises and declared the investigator's or officer's name and office, is not admitted by the licensee or the person in charge of the premises, it shall be lawful for the investigator or officer to forcibly and in any manner to break into and enter the premises.]"

SECTION 7. Section 281-80, Hawaii Revised Statutes, is amended to read as follows:

"§281-80 Arrest. Any [~~investigator or~~] police officer who observes any violation by any person of this chapter or of any rule or regulation of the liquor commission, may forthwith arrest the person without a warrant. Whenever any violation of this chapter or of the regulations of the commission occurs in the presence of any licensee, or any [~~investigator or~~] police officer, upon request of the licensee the police officer [~~or investigator~~] may assist the licensee in arresting any patron for violation thereof."

SECTION 8. Section 281-20, Hawaii Revised Statutes, is repealed.

["~~§281-20 General right of inspection.~~ Any investigator may, at all times, without notice and without any search warrant or other legal process, visit and have immediate access to every part of the premises of every licensee for the purpose of making any examination or inspection thereof or inquiry into the books and records therein, to ascertain whether all of the conditions of the license and all provisions of this chapter are being complied with by the licensee."]

SECTION 9. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 10. This Act shall take effect on July 1, 2024.

INTRODUCED BY:	_____________________________

HOUSE OF REPRESENTATIVES	H.B. NO.	1672
THIRTY-SECOND LEGISLATURE, 2024
STATE OF HAWAII