Liquor Licenses

Prohibits the holders of a manufacturer's or wholesale dealers'
licenses to hold any interest in a retail license; deems lawful
for the same holders to hold an interest in licenses other than
retail licenses.  (SD1)

THE SENATE                              S.B. NO.           S.D. 1
TWENTIETH LEGISLATURE, 1999                                
STATE OF HAWAII                                            

                   A  BILL  FOR  AN  ACT



 1      SECTION 1.  Section 281-31, Hawaii Revised Statutes, is
 2 amended as follows:
 3      1.  By amending subsection (b) to read:
 4      "(b)  Class 1.  Manufacturers' licenses.  A license for the
 5 manufacture of liquor shall authorize the licensee to manufacture
 6 the liquor therein specified and to sell the same at wholesale in
 7 original packages to any person who holds a license to resell the
 8 same, and to sell draught beer or wine manufactured from grapes
 9 or other fruits grown in the State in any quantity to any person
10 for private use and consumption.  Under this license no liquor
11 shall be consumed on the premises except as authorized by the
12 commission.  Of this class, there shall be the following kinds:
13      (1)  Beer;
14      (2)  Wine;
15      (3)  Alcohol; and
16      (4)  Other specified liquor.
17 It shall be unlawful for any holder of a manufacturer's license
18 to have any interest whatsoever in the license or licensed
19 premises of [any other licensee.] a retail licensee."

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 1      2.  By amending subsection (d) to read:
 2      "(d)  Class 3.  Wholesale dealers' licenses.  A license for
 3 the sale of liquors at wholesale shall authorize the licensee to
 4 import and sell only to licensees or to others who are by law
 5 authorized to resell but are not by law required to hold a
 6 license, the liquors therein specified in quantities not less
 7 than five gallons at one time if sold from or in bulk containers
 8 or not less than one gallon if bottled goods; provided that
 9 samples of liquor may be sold back to the manufacturer.  The
10 license may authorize the licensee to sell draught beer in
11 quantities not less than five gallons at one time to any person
12 for private use and consumption if the licensee files an
13 affidavit with the commission that there is not a class 4 retail
14 dealers licensee available to sell the wholesalers brand of
15 draught beer.  Under the license no liquor shall be consumed on
16 the premises except as authorized by the commission.  Of this
17 class, there shall be the following kinds:
18      (1)  General (includes all liquors except alcohol);
19      (2)  Beer and wine; and
20      (3)  Alcohol.
21 If any wholesale dealer solicits or takes any orders in any
22 county other than that where the dealer's place of business is
23 located, the orders may be filled only by shipment direct from

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 1 the county in which the wholesale dealer has the dealer's
 2 license.  Nothing in this subsection shall prevent a wholesaler
 3 from selling liquors to post exchanges, ships service stores,
 4 army or navy officers' clubs, or like organizations located on
 5 army or navy reservations, or to any vessel other than vessels
 6 performing a regular water transportation service between any two
 7 or more ports in the State, or to aviation companies who operate
 8 an aerial transportation enterprise as a common carrier, under
 9 chapter 269, engaged in regular flight passenger services between
10 any two or more airports in the State for use on aircraft, or
11 aviation companies engaged in transpacific flight operations for
12 use on aircraft outside the jurisdiction of the State.
13      It shall be unlawful for any holder of a wholesale dealers'
14 license to have any interest whatsoever in the license or
15 licensed premises of a retail licensee."
16      SECTION 2.  Section 281-42, Hawaii Revised Statutes, is
17 amended to read as follows:
18      "281-42  Manufacturers and wholesale dealers, special
19 restrictions.(a)  It shall be unlawful for any person holding a
20 manufacturer's license or a wholesale dealer's license to induce
21 the purchases of a retail licensee by:
22      (1)  Acquiring or holding any interest in any license of a
23           retail licensee;

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                                     S.B. NO.           S.D. 1

 1      (2)  Acquiring any interest in the real or personal property
 2           owned, occupied, or used by a retail licensee in the
 3           conduct of its business, unless the holding of such
 4           interest is permitted under the regulations of the
 5           liquor commission or statement thereof has been filed
 6           with the commission and has not been disapproved by it;
 7      (3)  Furnishing, giving, renting, lending, or selling to a
 8           retail licensee any equipment, fixtures, signs,
 9           supplies, money, services or other thing of value,
10           subject to the exceptions contained in Subpart D of the
11           "tied house" regulations of the Bureau of Alcohol,
12           Tobacco and Firearms of the United States Treasury
13           Department, 27 Code of Federal Regulations Part 6
14           (1988) as the same may change from time to time;
15      (4)  Paying or crediting a retail licensee for any
16           advertising, display or distribution service, whether
17           or not the advertising, display, or distribution
18           service received is commensurate with the amount paid
19           by the retail licensee; provided that this paragraph
20           shall not prohibit representatives of manufacturers and
21           wholesalers from creating and maintaining displays and
22           point of purchase sales materials, or from stocking
23           shelves and cold boxes;

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 1      (5)  Guaranteeing any loan or the repayment of any financial
 2           obligation of a retail licensee;
 3      (6)  Extending credit to the retail licensee for a period of
 4           time in excess of thirty days from the date of invoice;
 5      (7)  Requiring a retail licensee to take and dispose of any
 6           quota of liquor; or
 7      (8)  Requiring a retail licensee to purchase one product in
 8           order to purchase another product.  This includes
 9           combination sales if one or more products may be
10           purchased only in combination with other products and
11           not individually, provided that a manufacturer or
12           wholesale dealer is not prohibited from selling at a
13           special combination price, two or more kinds or brands
14           of products to a retail licensee, if (A) the retail
15           licensee has an option of purchasing either product at
16           the usual price, and (B) the retail licensee is not
17           required to purchase any product it does not want.
18      (b)  It shall be unlawful for any person holding a
19 manufacturer's or wholesale dealer's license:
20      (1)  To sell any liquor at wholesale prices without
21           invoicing the vendee's license number, except where the
22           vendee, although authorized to resell, is not required
23           by law to hold a license, in which case the invoice

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 1           shall fully indicate the vendee's identity; or
 2      (2)  To sell any liquor, except for cash or by receiving
 3           payment in advance of delivery, to any retail licensee
 4           who has not paid in full for all previous purchases of
 5           liquor from such manufacturer or wholesaler by the
 6           expiration of the thirtieth day from the date of the
 7           invoice for such liquor.
 8      (c)  It shall be deemed to be inconsistent with this
 9 chapter, for the courts or the liquor commission to declare as
10 unlawful or to otherwise prohibit any manufacturer or wholesale
11 dealer, whether within or without the State, from holding any
12 interest in a license other than that of a retail licensee.
13      [(c)] (d)  In construing subsection (a), the courts and the
14 liquor commission shall follow the rules, regulations, and
15 decisions of the Bureau of Alcohol, Tobacco and Firearms of the
16 United States Treasury Department and the federal courts in
17 interpreting section 5(b) of the Federal Alcohol Administration
18 Act, as the same may be changed from time to time."
19      SECTION 3.  Statutory material to be repealed is bracketed.
20 New statutory material is underscored.
21      SECTION 4.  This Act shall take effect upon its approval.