Report Title:

Licensure; Retail Tobacco Sales; Minors; Fines

Description:

Requires license for retail sales of tobacco. Sets license fee of $5,000. Triples fines for sales of tobacco to minors from $500 to $1,500 for a 1st offense.

HOUSE OF REPRESENTATIVES

H.B. NO.

947

TWENTY-THIRD LEGISLATURE, 2005

 

STATE OF HAWAII

 


 

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 three new sections to part I to be appropriately designated and to read as follows:

"§245-A Retail tobacco license. (a) Beginning July 1, 2006, every retailer engaged in the retail sale of cigarettes and other tobacco products, upon which a tax is required to be paid under this chapter, shall obtain a retail tobacco license.

(b) Effective October 1, 2006, it shall be unlawful for any retailer to sell, possess, keep, acquire, distribute, or transport cigarettes or other tobacco products for retail sale unless a retail tobacco license has been issued to the retailer under this section, and the retail tobacco license is in full force and effect.

(c) The retail tobacco license shall be issued by the department upon application thereto, in such form and manner as prescribed by the department, and the payment of a fee of $5,000. Licenses shall be valid for one year, from July 1 to June 30, and renewable annually. Whenever a retail tobacco license is defaced, destroyed, or lost, or the licensee relocates the licensee's business, the department may issue a duplicate retail tobacco license to the licensee for a fee of $1,000 per copy.

(d) A separate retail tobacco license shall be obtained for each place of business owned, controlled, or operated by a retailer. A retailer that owns or controls more than one place of business may submit a single application for more than one retail tobacco license. Each retail tobacco license issued shall clearly describe the place of business where the operation of the business is conducted.

(e) Any entity who operates as a dealer or wholesaler and also sells cigarettes or other tobacco products to consumers at retail shall acquire a separate retail tobacco license.

(f) A retail tobacco license shall be nonassignable and nontransferable from one entity to another entity. A retail tobacco license may be transferred from one business location to another business location after an application has been filed with the department requesting that transfer and the approval of the department as provided in subsection (c).

(g) A retail tobacco license issued under this section shall be displayed in a conspicuous place at all times.

(h) Any sales of cigarettes or tobacco products made through a cigarette or tobacco product vending machine are subject to the terms, conditions, and penalties under this chapter. A retail tobacco license need not be displayed on cigarette or tobacco product vending machines if the retail tobacco license holder is the owner of the cigarette or tobacco product vending machines and the cigarette or tobacco product vending machines are operated in the location described in the retail tobacco license.

(i) No retailer shall purchase any pack of cigarettes without the appropriate tax stamp affixed to the bottom of the pack as required by this chapter.

(j) A vehicle from which cigarettes or tobacco products are sold is considered a place of business and requires a retail tobacco license. Retail tobacco licenses for a vehicle shall be issued bearing a specific motor vehicle identification number and are valid only when physically carried in the vehicle having the corresponding motor vehicle identification number. Retail tobacco licenses for vehicles shall not be moved from one vehicle to another.

(k) A holder of a retail tobacco license shall be subject to the inspection and investigation requirements of this chapter and shall provide the department or the attorney general with any information deemed necessary to verify compliance with the requirements of this chapter.

(l) A licensee shall keep a complete and accurate record of its cigarette or tobacco product inventory. The records shall include a written statement containing the name and address of the licensee's source of its cigarettes and tobacco products, the date of delivery, the quantity, the trade name or brand, and price of the cigarettes and tobacco products. The licensee shall keep, as part of its records, a true copy of all purchase orders, invoices, bills of lading, and other written matters substantiating the purchase or acquisition of the cigarettes and tobacco products at the location where the cigarettes and tobacco products are stored or offered for sale. The records shall be offered for inspection and examination at any time upon demand by the department or the attorney general and shall be preserved for a period of three years, except that:

(1) Specified records may be destroyed if the department and the attorney general both consent to their destruction within the three-year period; and

(2) Either the department or the attorney general may require that specified records be kept longer than a period of three years.

(m) The department may suspend or, after hearing, revoke any retail tobacco license issued under this chapter whenever it finds that the licensee has failed to comply with this chapter or any rule adopted under this chapter. Upon suspending or revoking any retail tobacco license, the department shall request the licensee to immediately surrender any retail tobacco license or duplicate issued, and the licensee shall surrender the same promptly to the department as requested. Whenever the department suspends a retail tobacco license, it shall notify the licensee immediately and afford the licensee a hearing, if desired and if a hearing has not already been afforded. After the hearing, the department shall either rescind its order of suspension or shall continue the suspension or revoke the retail tobacco license, pursuant to subsection (n).

(n) The department may suspend, revoke, or decline to renew a retail tobacco license for good cause. Good cause may include instances where a licensee has:

(1) Submitted a false or fraudulent application or provided a false statement in an application;

(2) Possessed or displayed a false or fraudulent retail tobacco license; or

(3) Violated any state or federal law pertaining to the sale, acquisition, possession, or distribution of cigarettes or tobacco products.

(o) Any cigarette, package of cigarettes, carton of cigarettes, container of cigarettes, tobacco product, package of tobacco products, or any container of tobacco products unlawfully sold, possessed, kept, stored, acquired, distributed, or transported in violation of this section may be seized and ordered forfeited pursuant to chapter 712A.

§245-B Unlawful tobacco retailing in the first degree. (a) A person or entity commits the offense of unlawful tobacco retailing in the first degree if the person or entity is not a licensee under section 245-A and, for the purposes of retail sale, knowingly sells, possesses, keeps, stores, acquires, distributes, or transports five thousand or more cigarettes.

(b) Unlawful tobacco retailing in the first degree is a class C felony.

§245-C Unlawful tobacco retailing in the second degree. (a) A person or entity commits the offense of unlawful tobacco retailing in the second degree if the person or entity is not a licensee under section 245-A and, for the purposes of retail sale, knowingly sells, possesses, keeps, stores, acquires, distributes, or transports fewer than five thousand cigarettes or any tobacco products.

(b) Unlawful tobacco retailing in the second degree is a misdemeanor."

SECTION 2. Section 245-1, Hawaii Revised Statutes, is amended by adding six new definitions to be appropriately inserted and to read as follows:

""Business location" or "place of business" means, for the purposes of sections 245-A, 245-B, and 245-C, the entire premises occupied by a retail tobacco license applicant or an entity required to hold a retail tobacco license under this chapter and shall include any store, stand, outlet, vehicle, cart, location, or structure from which cigarettes or tobacco products are sold or distributed to a consumer.

"Consumer" means a person who acquires or possesses a cigarette or a tobacco product for personal consumption and not for resale or distribution.

"Retail tobacco license" means a license granted under this chapter, that authorizes an entity to engage in the business of retail sale of cigarettes and tobacco products to consumers.

"Retail sale" or "tobacco retailing" means the practice of selling cigarettes or tobacco products to consumers and includes the sale of cigarettes or tobacco through a vending machine.

"Retail tobacco license holder" means an entity that has been issued a retail tobacco license under this chapter.

"Retailer" means an entity who engages in the practice of selling cigarettes or tobacco products to consumers and includes the owner of a cigarette or tobacco product vending machine."

SECTION 3. Section 245-1, Hawaii Revised Statutes, is amended by amending the definitions of "license" and "licensee" to read as follows:

""License" means a license granted under this chapter[,] that authorizes the holder to engage in the business of a wholesaler or dealer of cigarettes or tobacco products in the State. For purposes of any action brought pursuant to section 231-35, the term "license" shall include a retail tobacco license granted under this chapter.

"Licensee" means the holder of a license granted under this chapter. For the purposes of sections 245-A, 245-B, and 245-C, "licensee" means the holder of a retail tobacco license in accordance with this chapter."

SECTION 4. Section 709-908, Hawaii Revised Statutes, is amended by amending subsection (4) to read as follows:

"(4) Any person who violates subsection (1) or (2), or both, shall be fined [$500] $1,500 for the first offense. Any subsequent offenses shall subject the person to a fine not less than [$500] $1,500 nor more than $[2,000.] $6,000. Any minor under eighteen years of age who violates subsection (3) shall be fined [$10] $30 for the first offense. Any subsequent offense shall subject the violator to a fine of [$50,] $150 no part of which shall be suspended, or the person shall be required to perform not less than forty-eight hours nor more than seventy-two hours of community service during hours when the person is not employed and is not attending school."

SECTION 5. In codifying the new sections added by section 1 of this Act, the revisor of statutes shall substitute appropriate section numbers for the letters used in designating the new sections in this Act.

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

SECTION 7. This Act shall take effect upon its approval; provided that sections 1, 2, and 3 shall take effect on July 1, 2006.

INTRODUCED BY:

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