Report Title:

Liquor; Tobacco

Description:

Establishes an alcohol and tobacco regulation division within the department of taxation and transfers county liquor commission functions to the division. Requires cooperation between the department of taxation and the department of the attorney general in enforcement matters. Specifies enforcement powers of the attorney general over liquor law enforcement. Broadens the attorney general's tobacco enforcement special fund to cover liquor enforcement duties. Deposits fees and fines generated under the liquor tax laws, tobacco tax laws, and liquor license laws into the special fund. Establishes license revocation procedures for the tobacco tax license laws similar to those under the liquor commission laws.

HOUSE OF REPRESENTATIVES

H.B. NO.

1772

TWENTY-THIRD LEGISLATURE, 2005

 

STATE OF HAWAII

 


 

A BILL FOR AN ACT

 

RELATING TO LIQUOR AND TOBACCO.

 

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

SECTION 1. The legislature finds that our State's laws relating to the manufacture, sale, and use of alcohol and tobacco have similar objectives and that the State has imposed similar regulatory requirements on each product. The collection of taxes, regulation of sale and manufacture, and enforcement of laws relating to use of these products would be more efficient if one agency were responsible. The legislature finds that it would serve the interests of increasing efficiency, reducing bureaucracy, and enhancing convenience to the public by consolidating the responsibilities of government agencies that now regulate these products into a single regulatory agency that shall be come a separate division within the department of taxation.

The legislature also finds that there is a need to consolidate the regulation of alcohol in order to conform the process. Each of the respective counties has established its own liquor commission that is now responsible for enforcing state laws relating to the manufacture, sale, and use of alcohol. Although the rules adopted by the respective county liquor commissions are intended to implement and enforce the same state laws there exist some differences between the counties regarding the implementation and interpretation of state laws.

The legislature also finds that consolidating the regulation of liquor will result in a substantial savings of moneys. The operations of the respective county liquor commissions are financed through appropriations made from the State's general fund.

The legislature also finds that greater oversight authority is needed in the operations of county liquor commissions. In 2004, eight investigators from the Honolulu liquor commission were indicted and subsequently convicted under federal racketeering laws in connection with crimes committed in the course of performing their official duties.

The legislature further finds that this was not the first time that Honolulu liquor commission investigators have been fired en masse due to illicit behavior in the course of performing their official duties. In 1989 five investigators were fired and five others were suspended without pay after an undercover investigation determined that liquor investigators had solicited money from bar owners.

These lapses in the public trust have been damaging not only to the credibility of the Honolulu liquor commission but also to the public's confidence in all regulatory agencies. Subsequent investigation into the operations of the Honolulu liquor commission underscored the inherent weakness of current state law that requires the counties to establish liquor commissions to implement state law yet does not give the counties the necessary oversight authority needed to oversee their operations.

In forty-nine of fifty states, the regulation of liquor occurs at the state level. This measure will bring Hawaii into conformity with the rest of the nation in its regulation of the manufacture, sale, and use of alcohol.

The legislature has imposed a tax on tobacco products and adopted other regulatory requirements. The responsibility for the collection of that tax and the regulation of tobacco products is with the department of taxation.

The purpose of this Act is to:

(1) Establish an alcohol and tobacco regulation division within the department of taxation;

(2) Abolish the county liquor commissions and liquor control adjudication boards; and

(3) Transfer the functions of those commissions and boards to the alcohol and tobacco regulation division of the department of taxation.

Furthermore, this Act requires cooperation between the department of taxation and the department of the attorney general in enforcement matters relating to the liquor commission functions. In addition, this Act broadens the scope of the tobacco enforcement special fund to cover enforcement activities related to the liquor license and liquor tax license laws. This Act also provides the special fund with additional sources of revenues through the fees and fines collected from the liquor license laws, the liquor tax license laws, and the tobacco tax license laws, and clarifies that the procedures governing tobacco tax license revocations will follow those governing the liquor license revocation procedures.

Part I. Liquor Commission under the Department of Taxation

SECTION 2. Chapter 231, Hawaii Revised Statutes, is amended by adding a new part to be appropriately designated and to read as follows:

"PART . ALCOHOL AND TOBACCO REGULATION DIVISION

§231-   Alcohol and tobacco regulation division. (a) There is established within the department of taxation an alcohol and tobacco regulation division.

(b) The division shall employ such personnel as necessary to promote the effective and efficient conduct of the division's licensing and permitting activities. All employees of the division shall be subject to chapter 76.

(c) The purpose of the division shall be to provide for the effective collection of taxes and issuance of licenses and permits under chapters 244D, 245, and 281.

(d) The division shall include the liquor commission established under chapter 281."

SECTION 3. Section 244D-1, Hawaii Revised Statutes, is amended by amending the definition of "liquor commission" to read as follows:

""Liquor commission" or "commission" means the liquor commission [of each county]."

SECTION 4. Section 244D-3, Hawaii Revised Statutes, is repealed.

["§244D-3 Cooperation between department and liquor commission. The department of taxation and the liquor commission, if the commission exercises its authority under this chapter, shall cooperate in the enforcement of this chapter.

The department shall notify the proper liquor commission of the name and address of every permittee whose permit has been revoked, and any license issued to the permittee under the liquor law thereupon shall be deemed forfeited.

The department may notify the proper liquor commission of the name and address of every person who has failed to file any return required, or to pay any tax prescribed, or to secure a permit, or to perform any other duty or act imposed under this chapter, and such liquor commission shall thereupon suspend any license which may have been issued to any such person under the liquor law until such time as such person complies with this chapter.

The liquor commission, if the commission exercises its authority under this chapter, shall provide to the department the results of any examination the commission has undertaken pursuant to section 244D-10 and shall, upon request, furnish to the department any information in its possession relative to any person having a license issued by it, and its records shall be open to examination of the department."]

SECTION 5. Section 281-1, Hawaii Revised Statutes, is amended as follows:

1. By amending the definition of "commission" to read:

""Commission" means the liquor commission [for the county within which such commission has jurisdiction under this chapter]."

2. By repealing the definition of "county".

[""County" means the county in respect of which each commission has jurisdiction under this chapter; provided that in the county of Kalawao liquor may be sold only by such persons and only under such conditions as may be permitted or prescribed from time to time by the department of health."]

3. By repealing the definition of "elected executive head".

[""Elected executive head" means the mayor of each county or the mayor's duly appointed or elected successor."]

4. By amending the definition of "investigator" to read:

""Investigator" means any investigator of the commission [in each case for the county wherein the commission has jurisdiction]."

5. By repealing the definition of "liquor control adjudication board".

[""Liquor control adjudication board" or "board" means a board established by county charter, within a county, under this chapter that shall have the jurisdiction to hear and determine complaints or violations of liquor laws and to impose penalties as may be provided in this chapter."]

6. By amending the definition of "regulation" to read:

"Regulation" means any regulation prescribed by the commission [with the approval of the elected executive head of the county for carrying out this chapter]."

SECTION 6. Section 281-11, Hawaii Revised Statutes, is amended to read as follows:

"§281-11 [County liquor commissions and liquor control adjudication boards;] Liquor commission; qualifications; compensation. (a) A liquor commission [or liquor control adjudication board,] consisting of not less than five members, at least one of whom shall be from each county, and no more than the minimum required for a quorum of whom shall belong to the same political party at the time of appointment, [may be created for each of the counties.] is established within the department of taxation. The [elected executive head of each county may nominate, and by and with the advice and consent of the legislative body of the county,] governor shall appoint the members of the [commissions and boards.] commission. The [elected executive head of each county, by and with the advice and consent of the legislative body of the county,] governor may remove from office any of the members. The commission [or board] shall designate one of its members as chairperson. Each member shall be a citizen of the United States [and], shall have resided in the county for which appointed for at least three years immediately preceding the date of the member's appointment[.], and shall be confirmed by the Senate.

(b) Upon the expiration of the term of each commissioner [or board member], the commissioner's [or board member's] successor shall be appointed for a term to expire five years from the date of the expiration of the preceding term.

The tenure in office of every commissioner [or board member] shall be for the terms provided and until their successors are duly appointed and qualified.

Any vacancy shall be filled by appointment for the remainder of the unexpired term. No person shall be a member of [any] the commission [or board] who is or becomes engaged, or is directly or indirectly interested in any business for the manufacture or sale of liquor or who advocates or is or becomes a member of, or is identified or connected with, any organization or association which advocates prohibition, or who is an elected officer of the state or county government or who presents oneself as a candidate for election to any public office during the term of the person's appointment hereunder. This provision shall be enforced by the [elected executive head of the county] governor by the removal of the disqualified member whenever such disqualifications shall appear.

(c) The amount of compensation and reasonable expenses for travel and other costs necessarily incident to the discharge of the members' duties shall be established by [each county.] the legislature.

(d) Each member of the commission [or board], before entering upon the duties of the member's office, shall take and subscribe to an oath that the member will faithfully perform such duties according to law, which written oath shall be filed with the [elected executive head of each county.] governor."

SECTION 7. Section 281-11.5, Hawaii Revised Statutes, is amended to read as follows:

"§281-11.5 Liquor commission [and board] attorney. The liquor commission [or liquor control adjudication board may hire attorneys to assist it] shall be assisted by the attorney general in carrying out its administrative functions under this chapter. The assistance [may] shall include providing legal advice and prosecuting and defending legal claims under this chapter or arising in connection with this chapter."

SECTION 8. Section 281-12, Hawaii Revised Statutes, is amended to read as follows:

"§281-12 Commission [and board] office. The [council of each county] director of taxation shall furnish the liquor commission [and the liquor control adjudication board of the county] suitable quarters for its meetings, the transaction of its business, and the keeping of its records. The office of the commission [and board] shall at all times be open for the transaction of its business during its prescribed business hours."

SECTION 9. Section 281-13, Hawaii Revised Statutes, is amended to read as follows:

"§281-13 Meetings. Meetings of the liquor commission [or the liquor control adjudication board] may be held at any time and as often from time to time as the commission [or board] deems necessary for the proper transaction of its business, upon call of the chairperson or by any other two members of the commission [or board]. The administrator shall give notice of the meetings as the commission [or board] may prescribe to the several members, and give any other notice thereof directed by the commission [or board].

A majority of all the members of the commission [or board] shall constitute a quorum for the transaction of business, but the affirmative vote of a majority of all of the members shall be necessary to determine any matter before it."

SECTION 10. Section 281-14, Hawaii Revised Statutes, is amended to read as follows:

"§281-14 Records. The liquor commission [and liquor control adjudication board] shall ensure that complete records are kept of all commission [and board] meetings, proceedings, and acts with reference to all business pertaining to licenses issued, suspended, and revoked, moneys received as license fees and otherwise, and disbursements by the commission [or board] or under its authority. Unless otherwise prohibited by law, these records shall be open for examination by the public. The records may be destroyed as provided in section 46-43."

SECTION 11. Section 281-15, Hawaii Revised Statutes, is amended to read as follows:

"§281-15 Reports, accounts, audit. On or before September 30 of each year the chairperson of the liquor commission shall submit to the [elected executive head of the county] legislature a full report upon the business and operations of the commission during the preceding fiscal year, [which year shall be coterminous with the fiscal year of the county,] with such other matters of information and comment as the [elected executive head] legislature may deem appropriate. [The elected executive head shall furnish copies thereof to the legislative body of the county and to the fiscal officer of the county.]

The accounts of the [commissions for the several counties] commission shall be regularly examined by the [fiscal officer] state auditor who shall report thereon in writing to the [legislative body of the several counties.] legislature."

SECTION 12. 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,] through the department of taxation, shall have the sole jurisdiction, power, authority, and discretion, subject only to this chapter[:] to:

(1) [To grant,] Grant, refuse, suspend, and revoke any licenses for the manufacture, importation, and sale of liquors;

(2) [To take] 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 which 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,] 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 licensees and their employees and shall be financed through the money collected from the assessment of fines against licensees;

(4) [From time to time to make,] Adopt, amend, and repeal such rules, not inconsistent with this chapter, as in the judgment of the commission seem 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 or by order or 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] the commission's business may from time to time require, [to] prescribe their duties, and fix their compensation; [to] 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] Limit the number of licenses of any class or kind within [the] a 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] 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] 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] State as to each class respectively;

(9) [To prescribe] 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] Investigate violations of this chapter, chapter 244D 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 and, where appropriate, the director of taxation to hear and determine complaints against any licensee;

(11) [To prescribe,] 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,] 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,] 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 13. Section 281-17.5, Hawaii Revised Statutes, is amended to read as follows:

"§281-17.5 Fees; justified, method of change, limitation. (a) Any liquor license fee or any increase in an existing liquor license fee sought to be implemented by [any] the commission shall have, as its justification, a direct and proportionate relationship to costs and expenses of the commission in its control, supervision, or regulation of the manufacture, importation, and sale of liquors, or otherwise directly relate to actual costs and expenses of administration of the commission as is set forth in this chapter.

(b) Any [such] liquor license fees or any moneys collected or received by [any] the liquor commission under this chapter may only be used for costs and expenses directly relating to operational and administrative costs actually incurred by the liquor commission collecting or receiving [such] those liquor license fees or moneys. [Such] The fees or moneys shall not be used for any costs or expenses other than those directly relating to its operation and administration.

(c) [Any increase in the liquor license fee structure shall only be initiated by the liquor commission seeking the change with the approval of the county's legislative body and mayor.

(d) Any] If the liquor commission [seeking] seeks a change in liquor license fee structure, the liquor commission shall notify all licensees under this chapter affected by the change of the proposed change and shall notify each [such] affected licensee of the outcome and resolution of the change.

[(e) Any] (d) If the liquor commission [which] currently receives a license fee from a licensee in excess of the amount prescribed by this section, the liquor commission shall immediately revise its liquor license fee structure to conform with the requirements of this section. Any funds in excess of twenty per cent of the commission's current budget shall be returned or credited annually to existing licensees."

SECTION 14. Section 281-19, Hawaii Revised Statutes, is amended to read as follows:

"§281-19 Hearings, attendance, examinations. If any person subpoenaed as a witness to attend before the liquor commission [or liquor control adjudication board], or to produce any books, papers, or records called for by the process of the commission [or board], fails or refuses to respond thereto, or refuses to answer questions propounded by any member of the commission [or board] or its counsel material to the matter pending before the commission [or board], the circuit court of the circuit within which the licensed premises involved are situated, upon request of the commission [or board], shall have power to compel obedience to any process of the commission [or board] and require the witness to answer questions put to the witness, and to punish, as a contempt of the court, any refusal to comply therewith without good cause shown therefor.

False swearing by any witness before the commission [or board], shall constitute perjury and be punished as such, and whenever the commission [or board] is satisfied that a witness has sworn falsely in any hearing or investigation before the commission [or board], it shall report the same to the prosecuting officer for prosecution."

SECTION 15. Section 281-21, Hawaii Revised Statutes, is amended to read as follows:

"§281-21 Service of subpoenas by investigators, police officers, or other law enforcement officers; witnesses' fees. Any investigator, police officer, or other law enforcement officer may serve any subpoena issued by the liquor commission [or liquor control adjudication board].

Every witness attending or testifying at any hearing of the commission [or board] in response to a subpoena issued by it shall be paid as provided for in section 621-7. If a witness is subpoenaed by direction of the commission [or board], the witness' fees shall be paid out of any funds which may be set aside for the expenses of the commission [or board] and, if the witness is subpoenaed on behalf of any interested party, the witness' fees shall be paid by that party."

SECTION 16. Section 281-31, Hawaii Revised Statutes, is amended as follows:

1. By amending subsection (d) to read:

"(d) Class 3. Wholesale dealers' licenses. A license for the sale of liquors at wholesale shall authorize the licensee to import and sell only to licensees or to others who are by law authorized to resell but are not by law required to hold a license, the liquors therein specified in quantities not less than five gallons at one time if sold from or in bulk containers or not less than one gallon if bottled goods; provided that samples of liquor may be sold back to the manufacturer. The license may authorize the licensee to sell draught beer in quantities not less than five gallons at one time to any person for private use and consumption if the licensee files an affidavit with the commission that there is not a class 4 retail dealers licensee available to sell the wholesalers brand of draught beer. Under the license no liquor shall be consumed on the premises except as authorized by the commission. Of this class, there shall be the following kinds:

(1) General (includes all liquors except alcohol);

(2) Beer and wine; and

(3) Alcohol.

[If any wholesale dealer solicits or takes any orders in any county other than that where the dealer's place of business is located, the orders may be filled only by shipment direct from the county in which the wholesale dealer has the dealer's license.] Nothing in this subsection shall prevent a wholesaler from selling liquors to post exchanges, ships service stores, army or navy officers' clubs, or similar organizations located on army or navy reservations, or to any vessel other than vessels performing a regular water transportation service between any two or more ports in the State, or to aviation companies who operate an aerial transportation enterprise as a common carrier, under chapter 269, engaged in regular flight passenger services between any two or more airports in the State for use on aircraft, or aviation companies engaged in transpacific flight operations for use on aircraft outside the jurisdiction of the State."

2. By amending subsection (h) to read:

"(h) Class 7. Vessel licenses. A general license may be granted to the owner of any vessel performing a regular water transportation passenger service between any two or more ports in the State for the sale of liquor (other than alcohol) on board the vessel while in the waters of the State; provided the sales are made only while the vessel is en route and only for consumption by passengers on board. [If the vessel has a home port in the State, the license shall be issuable in the county in which the home port is situated; provided that if the licensee's home port is not situated in this State, the license shall be issuable in the city and county of Honolulu.] 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."

3. By amending subsection (j) to read:

"(j) Class 9. Tour or cruise vessel licenses. 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. If the vessel has a home port in the State, the license shall be issuable in the county wherein the home port is situated; provided that if the licensee's home port is not situated in this State, the license shall be issuable in the city and county of Honolulu.] 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."

4. By amending subsection (n) to read:

"(n) Class 13. Caterer license. A general license may be granted to any licensee who serves food as part of their operation for the sale of liquor (other than alcohol) while performing food catering functions.

No catering service for the sale of liquor shall be performed off the licensee's premises, unless prior written notice of the service has been delivered to the office of the liquor commission [of the county concerned]. The notice shall state the date, time, and location of the proposed event and shall include a written statement signed by the owner or representative of the property that the function will be subject to the liquor laws and to inspection by investigators."

5. By amending subsection (q) to read:

"(q) Any provision to the contrary notwithstanding, at the discretion of the [county] liquor commission, permission may be granted to a bona fide hotel, restaurant, or club licensed under class 2, class 6, class 11, class 12, or class 14 to allow a patron to remove from the licensed premises any portion of wine that was purchased for consumption with a meal; provided that it is recorked or resealed in its original container. This subsection applies only to a valid holder of a class 2, class 6, class 11, class 12, or class 14 license engaged in meal service."

SECTION 17. Section 281-39, Hawaii Revised Statutes, is amended to read as follows:

"§281-39 Place of business; exception; solicitors' and representatives' permits. A license issued under this chapter shall authorize the doing of the business licensed only at the place described in the license, which shall be known as the licensed premises, except in case of a removal with the prior written consent of the liquor commission indorsed on the license, or outside warehousing which may be located off the licensed premises with prior written consent of the liquor commission. No change of premises under any issued license shall be allowed unless the doing of business on the new premises is authorized in the same manner as provided by this chapter for approval of any original premises; provided that the holder of any manufacturer's license or a wholesale dealer's license issued by the commission of any county may, through authorized solicitors or representatives, solicit and take orders for direct shipment for liquor in permitted quantities in any other county.

Any person desiring to act as the authorized solicitor or representative of a manufacturer or wholesale dealer [in any county] shall [make application] apply to the commission [of such county in which the person proposes to act for a permit to act as such].

The application shall state the name of the applicant, the applicant's age, residence, and place of business, the name and address of the manufacturer or wholesale dealer the applicant represents and shall be accompanied by a statement from the manufacturer or wholesale dealer to the effect that the applicant has been appointed as its solicitor or representative. All sales and all orders taken for liquor by any such solicitor or representative shall be subject to the rules and regulations of the commission [for the county within which the sales are made or orders taken].

No such solicitor or representative shall be permitted to have, own, or control any liquor for sale."

SECTION 18. Section 281-39.5, Hawaii Revised Statutes, is amended by amending subsection (a) to read as follows:

"(a) The liquor commission [or agency of each county] may deny or restrict the issuance of a liquor license for on-site sale and consumption by the drink to any applicant whose establishment is or would be located within five hundred feet of a public or private elementary, intermediate, or high school, or public playground utilized extensively by minors, as determined by the liquor commission [of each county]; provided that the liquor commission [or agency of each county] shall deny the issuance of a liquor license if forty per cent of the:

(1) Registered voters for the area within five hundred feet of the nearest point of the premises for which the license is asked; or

(2) Owners and lessees of record of real estate and owners of record of shares in a cooperative apartment within five hundred feet of the nearest point of the premises for which the license is asked;

have duly filed or caused to be filed their protests against granting the license. The distance of five hundred feet shall be measured from the boundary of the school or public playground to the boundary of the applicant's premises. Public or private beaches, and public or private day care centers located in or adjacent to commercial areas shall not be deemed schools or public playgrounds for purposes of this section. [The provisions of this] This section shall not apply to establishments located within areas designated by the appropriate counties for resort purposes, or to hotel liquor license applicants."

SECTION 19. Section 281-41, Hawaii Revised Statutes, is amended to read as follows:

"§281-41 Transfer of licenses; notice of change in officers, directors, and stockholders of corporate licenses, partners of a partnership license, and members of a limited liability company license; penalty. (a) No license issued under this chapter to an original applicant or to any transferee shall be transferable or be transferred within one year of the issuance or transfer, except for good cause shown to the satisfaction of the liquor commission. No license issued under this chapter shall be transferable or be transferred except upon written application to the commission by the proposed transferee, and after prior inspection of the premises, reference to, and report by an inspector, and a public hearing held by the commission not less than fourteen days after one publication of notice thereof, but without sending notice of the hearing by mail to persons being the owners or lessees of real estate situated within the vicinity of the premises and without the right to the owners or lessees to protest the transfer of a license. Exceptions are class 5 and 11 licensees who must comply with the notice requirements as set forth in section 281-57.

(b) No class 5 or 12 license issued to a standard bar, as defined in section 281-1, shall be transferable to other than a standard bar and that such license shall be subject to revocation if the licensed premises is not retained as a standard bar except upon written application to the commission by the licensee or the proposed transferee, subject to sections 281-51 to 281-60.

[(c) A county may increase the requirements for transfers of class 5, category (2) and (4), and class 11 licenses by ordinance designating one or more areas within the county as special liquor districts and specifying the requirements applicable to transfers of any of these licenses within each district.

(d) For the purpose of this section, "special liquor district" means an area designated by a county for restoration, reservation, historic preservation, redevelopment, rejuvenation, or residential protection, in which development is guided to protect or enhance the physical and visual aspects of the area for the benefit of the community as a whole.]

(e)] (c) Where a license is held by a partnership, the commission [may], notwithstanding this section, may transfer the license upon the death or withdrawal of a member of the partnership to any remaining partner or partners without publication of notice and without public hearing.

[(f)] (d) Where a license is held by a limited partnership or a limited liability company, the admission or withdrawal of a limited partner or a member of the limited liability company shall not be deemed a transfer of the license held by the partnership or limited liability company, but the licensee [shall], prior to such admission or withdrawal, shall so notify the commission in writing, stating the name of the partner, partners, member, or members who have withdrawn, if such be the case, and the name, age, and place of residence of the partner, partners, member, or members who have been admitted, if that be the case. If the commission finds a limited partner or a member to be an unfit or improper person to hold a license in the limited partner's or member's own right pursuant to section 281-45, it may revoke the license or suspend the license of the partnership or the limited liability company until the unfit or improper partner or member is removed or replaced.

[(g)] (e) Except as otherwise provided in this section, the same procedure shall be followed in regard to the transfer of a license as is prescribed by this chapter for obtaining a license. Sections 281-51 to 281-60, except where inconsistent with any provision hereof, are hereby made applicable to such transfers. The word "applicant", as used in such sections, shall include each such proposed transferee, and the words, "application for a license or for the renewal of a license", as used in such sections, shall include an application for the transfer of a license.

[(h)] (f) Upon the hearing, the commission shall consider the application and any objections to the granting thereof and hear the parties in interest. It shall inquire into the propriety of each transfer and determine whether the proposed transferee is a fit person to hold the license. It may approve a transfer or refuse to approve a transfer and the refusal by the commission to approve a transfer shall be final and conclusive, unless an appeal is taken as provided in chapter 91.

[(i)] (g) If any licensee without such approval transfers to any other person the licensee's business for which the licensee's license was issued, either openly or under any undisclosed arrangement, whereby any person, other than the licensee, comes into possession or control of the business or takes in any partner or associate, the commission may in its discretion suspend or cancel the license.

[(j)] (h) If the licensee is a corporation, a change in ownership of any outstanding capital stock shall not be deemed a transfer of a license; provided that in the case of a change in ownership of twenty-five per cent or more of the stock or in the case of change in ownership of any number of shares of the stock that results in the transferee thereof becoming the owner of twenty-five per cent or more of the outstanding capital stock, the corporate licensee shall, prior to the date of the transfer, apply for and secure the approval of the transfer from the commission in writing. If the commission finds that the proposed transferee is an unfit or improper person to hold a license in the proposed transferee's own right pursuant to section 281-45, it shall not approve the proposed transfer. If any transfer is made without the prior approval of the commission, the commission may in its discretion revoke or suspend the license until it determines that the transferee is a fit and proper person, and if the commission finds that the transferee is not a fit and proper person, until a retransfer or new transfer of the capital stock is made to a fit and proper person pursuant to section 281-45. In addition, the corporate licensee shall, within thirty days from the date of election of any officer or director, notify the commission in writing of the name, age, and place of residence of the officer or director. If the commission finds the transferee, officer, or director an unfit or improper person to hold a license in the transferee's, officer's, or director's own right pursuant to section 281-45, it may in its discretion revoke the license or suspend the license until a retransfer or new transfer of the capital stock is effected to a fit or proper person pursuant to section 281-45 or until the unfit or improper transferee, officer, or director is removed or replaced by a fit and proper person pursuant to section 281-45.

[(k)] (i) If a licensee closes out the business for which the license is held, during the term for which the license was issued, the licensee [shall], within five days from the date of closing the same, shall give the commission written notice thereof and surrender the licensee's license for cancellation."

SECTION 20. Section 281-53.5, Hawaii Revised Statutes, is amended by amending its title and subsection (a) to read as follows:

"[[]§281-53.5[] County liquor commissions; criminal] Criminal history record check. (a) The [respective county] liquor [commissions] commission may request a criminal history record check of an applicant for a liquor license in accordance with section 846-2.7. The criminal history record check, at a minimum, shall require the applicant to disclose whether:

(1) The applicant has been convicted in any jurisdiction of a crime that would tend to indicate the applicant may be unsuited for obtaining a liquor license; and

(2) The judgment of conviction has not been vacated.

For the purpose of this section, the criminal history disclosure made by the applicant may be verified by the liquor commission by means of information obtained through the Hawaii criminal justice data center. The applicant shall provide the Hawaii criminal justice data center with personal identifying information which shall include but not be limited to the applicant's name, social security number, date of birth, and gender. This information shall be secured only for the purpose of conducting the criminal history record check authorized by this section."

SECTION 21. Section 281-61, Hawaii Revised Statutes, is amended by amending subsection (a) to read as follows:

"(a) Other than for good cause, the renewal of an existing license shall be granted upon the filing of an application; provided that if:

(1) Complaints from the public;

(2) Reports from the commission's investigators; or

(3) Adjudications of the commission [or the liquor control adjudication board],

indicate that noise created by patrons departing from the premises disturbs residents on the street or of the neighborhood in which the premises are located, or that noise from the premises or adjacent related outdoor areas under the licensee's control such as parking lots or lanais exceed standards contained in state or county noise codes and intrudes into nearby residential units, the commission may withhold the issuance of a renewed license until corrective measures meeting the commission's approval are taken."

SECTION 22. Section 281-71, Hawaii Revised Statutes, is amended to read as follows:

"§281-71 Posting of license. Every license issued and in effect under this chapter shall at all times be conspicuously posted and exposed to view, convenient for inspection, on the licensed premises. For failure thereof the license may be suspended or revoked by the liquor commission [or liquor control adjudication board]."

SECTION 23. Section 281-91, Hawaii Revised Statutes, is amended to read as follows:

"§281-91 Revocation or suspension of license; hearing. (a) The liquor commission [or liquor control adjudication board] may revoke any license at any time issued, or suspend the right of the licensee to use the licensee's license, or assess and collect a penalty, or reprimand the licensee, either for the violation of any condition of the license or of any provisions of this chapter or of any rule [or regulation] applicable thereto, or upon the conviction in a court of law of the licensee of any violation of this chapter or of any other law relative to the licensee's license or the proper exercise thereof, or of any violation of law in any other respect on account whereof the commission or board may deem the licensee to be an unfit or improper person to hold a license, or for any other cause deemed sufficient by the commission or board.

(b) In every case where it is proposed to revoke or suspend the exercise of any license or assess and collect a penalty for any cause other than a conviction at law of the licensee as above specified, the licensee shall be entitled to notice and hearing in conformity with chapter 91, the notice to be given at least five days before the hearing, except that any special license shall be subject to summary revocation for any violation of or evidence of intent to violate the proper exercise thereof, without hearing before the commission [or board].

At the hearing, before final action is taken by the commission [or board], the licensee shall be entitled to be heard in person or through counsel and shall be given a full and fair opportunity to present any facts showing that the alleged cause or causes for the proposed action do not exist, or any reasons why no penalty should be imposed. The testimony taken at the hearing shall be under oath and recorded stenographically, or by machine, but the parties shall not be bound by the strict rules of evidence; certified copies of any transcript and of any other record made of or at the hearing shall be furnished to the licensee upon the licensee's request and at the licensee's expense.

(c) Any order of revocation, suspension, fine, or reprimand imposed by the commission [or board] upon the licensee shall be in addition to any penalty that might be imposed upon the licensee upon the licensee's conviction at law for any violation of this chapter. No licensee shall be subject to both the penalty assessed and collected by the commission [or board] and to revocation or suspension of license. The amount of penalty assessed and collected by the commission [or board] from any licensee for any particular offense shall not exceed the sum of $2,000.

(d) Whenever the service of any order or notice shall be required by this section, the service shall be made in the following manner: in the case of any violation based upon the personal observation of any investigator, a written notice of the violation shall be given to the licensee or the licensee's registered manager in active charge of the premises, or by serving a certified copy of the notice or order upon the holder of the license wherever the holder may be found in the circuit wherein the holder is licensed, or, if the holder cannot be found after diligent search, by leaving a certified copy thereof at the holder's dwelling house or usual place of abode with some person of suitable age and discretion residing therein; and if the holder of the license cannot be found after diligent search, and service cannot be made, then service may be made by posting a certified copy of the notice or order in a conspicuous place on the licensed premises and depositing another certified copy thereof in the certified mail of the United States [post office,] Postal Service, postage prepaid, addressed to the holder of the license at the holder's last known residence address; provided that in the case of a partnership, corporation, unincorporated association, or limited liability company, service may be made upon any partner, officer, or member thereof."

SECTION 24. Section 281-92, Hawaii Revised Statutes, is amended to read as follows:

"§281-92 Appeals. Any licensee aggrieved by any order assessing, or providing for the collection of, a penalty or by any order suspending or revoking any license may appeal therefrom in the manner provided in chapter 91 to the circuit court of the circuit in which the liquor commission [or liquor control adjudication board] making the order has jurisdiction and the judgment of the court shall be subject to review by the supreme court subject to chapter 602."

SECTION 25. Act 202, Session Laws of Hawaii 2004, is amended by amending section 35 to read as follows:

"SECTION 35. Section 281-92, Hawaii Revised Statutes, is amended to read as follows:

"§281-92 Appeals. Any licensee aggrieved by any order assessing or providing for the collection of a penalty, or by any order suspending or revoking any license, may appeal therefrom in the manner provided in chapter 91 to the circuit court of the circuit in which the liquor commission [or liquor control adjudication board] making the order has jurisdiction and the judgment of the court shall be subject to review, subject to chapter 602, in the manner provided for civil appeals from the circuit courts.""

SECTION 26. Section 281-94, Hawaii Revised Statutes, is amended to read as follows:

"§281-94 Forfeiture of fee paid. If any license is revoked and canceled by the liquor commission [or liquor control adjudication board], the fee paid for the license shall be forfeited to the county as respects the unexpired portion of the fee paid for the license."

SECTION 27. Section 281-101.4, Hawaii Revised Statutes, is amended to read as follows:

"§281-101.4 Hearing, illegal manufacture, importation, or sale of liquor. (a) The liquor commission [or liquor control adjudication board] may assess and collect a penalty, or reprimand a person for not having a valid license to manufacture or sell any liquor in violation of this chapter or of any rule [or regulation] applicable thereto.

(b) In every case where the administrator elects to conduct proceedings under this section where it is proposed to assess and collect a penalty from a person for not having a valid license to manufacture or sell any liquor in violation of this chapter or of any rule or regulation applicable thereto, that person shall be entitled to notice and hearing in conformity with chapter 91.

At the hearing, before final action is taken by the commission [or board], the person shall be entitled to be heard in person or through counsel and shall be given a full and fair opportunity to present facts showing that the alleged cause or causes for the proposed action do not exist, or any reason why no penalty should be imposed. The testimony taken at the hearing shall be under oath and recorded stenographically, or by machine, but the parties shall not be bound by the strict rules of evidence; certified copies of any transcript and of any other record made of or at the hearing shall be furnished to a person upon that person's request and at that person's expense.

(c) Any order, reprimand, or penalty imposed by the commission [or board] upon a person for not having a valid license to manufacture or sell any liquor in violation of this chapter or of any rule [or regulation] applicable thereto shall be in addition to any penalty that might be imposed upon that person's conviction in a court of law for any violation of this chapter. The amount of penalty assessed and collected by the commission [or board] from any person under this section for not having a valid license to manufacture or sell any liquor shall not exceed the sum of $2,000 for each charge.

(d) Whenever the service of any order or notice shall be required by this section, the service shall be made in the following manner: in the case of any violation based upon the personal observation of any investigator, a written notice of the violation shall be given to the person charged with a violation within a reasonable period of time after the alleged violation occurred, the person charged shall be requested to acknowledge receipt of the alleged violation, or, if the person cannot be found after diligent search, by leaving a certified copy thereof at the person's dwelling house or usual place of abode with some person of suitable age and discretion residing therein; and if the person cannot be found after diligent search, and service cannot be made, then service may be made by depositing another certified copy thereof in the certified mail of the United States [post office,] Postal Service, postage prepaid, addressed to the person at the person's last known residence address; provided, that in the case of a partnership, corporation, unincorporated association, or limited liability company, service may be made upon any partner, officer, or member thereof."

SECTION 28. Section 281-102.5, Hawaii Revised Statutes, is amended by amending subsection (c) to read as follows:

"(c) The commission [or board] shall revoke for a period of not less than six months the license of any manufacturer, rectifier, wholesaler, retailer, or other licensee who violates, directly or indirectly, the provisions of this section. The penalty prescribed in this section is cumulative and in addition to any other penalties prescribed in this chapter."

SECTION 29. Section 281-106, Hawaii Revised Statutes, is amended to read as follows:

"§281-106 Prosecutions not to exclude other remedies affecting license or goods. The provisions in this chapter for the imposition upon any licensee of the penalties by fine or imprisonment for any violation of this chapter or of any rule or regulation made hereunder having the force of law shall be in addition to and independent of any other right of the liquor commission [or the liquor control adjudication board] under this chapter to effect a suspension or revocation of the license of the licensee and shall also be in addition to and independent of any proceeding to effect the forfeiture of any liquor or other property belonging to the licensee as contemplated by this chapter."

Part II. Cooperation in Enforcement by the Attorney General

SECTION 30. Chapter 281, Hawaii Revised Statutes, is amended by adding a new section to part I to be appropriately designated and to read as follows:

"§281- Cooperation between the department of taxation and the attorney general; attorney general's enforcement powers. (a) The department of taxation and the attorney general shall cooperate in the enforcement of this chapter.

(b) The attorney general shall have concurrent jurisdiction to investigate violations of this chapter and chapter 244D, through its investigators or otherwise, to include covert operations, and to prosecute suspected violations. The attorney general may also seek assistance in the enforcement of this chapter from other law enforcement agencies.

(c) The attorney general may apply for a temporary or permanent injunction restraining any person from violating or continuing to violate this chapter. The injunction shall be issued without bond.

(d) Where the attorney general initiates and conducts an investigation resulting in the imposition and collection of a criminal fine pursuant to this chapter, one hundred per cent of the fine shall be distributed to the attorney general to be deposited to the credit of the department of the attorney general's tobacco enforcement special fund; provided that if the attorney general engages the prosecuting attorney for the investigation or prosecution, or both, resulting in the imposition and collection of a criminal fine under this chapter, the fine shall be shared equally between the attorney general and the prosecuting attorney."

SECTION 31. Section 281-104, Hawaii Revised Statutes, is amended to read as follows:

"§281-104 Investigators, employees, counsel for. Whenever any investigator or other employee of the liquor commission shall be prosecuted for any crime or sued in any civil cause for acts done in the performance of the investigator's or employee's duty as such investigator or employee, the investigator or employee shall be represented and defended (1) in any such criminal proceeding by an attorney to be employed and paid by the commission and (2) in any such civil cause [by the corporation counsel or county attorney, of the county in which the investigator or employee is serving or if permitted under the appropriate county charter,] by an outside attorney to be employed and paid for by the commission."

SECTION 32. Section 281-105, Hawaii Revised Statutes, is amended to read as follows:

"§281-105 Determination whether acts were in scope of duty. The determination of whether the acts of an investigator or other employee of the liquor commission, when the investigator or other employee is being prosecuted or sued, were done in the performance of the investigator's or other employee's duty, so as to entitle the investigator or other employee to be represented by [the county attorney or corporation counsel of the county or city and county of the commission in question, or by] an attorney employed and paid by the commission shall be made by the [commission of the county after consultation with the county attorney or corporation counsel who may make a recommendation to the commission in respect thereof if the county attorney or corporation counsel so desires,] director of taxation, and such determination shall be conclusive for such purpose only."

Part III. Tobacco and Liquor Enforcement Special Fund

SECTION 33. Section 28-15, Hawaii Revised Statutes, is amended to read as follows:

"§28-15 Tobacco and liquor enforcement special fund. (a) There is established in the state treasury the tobacco and liquor enforcement special fund, into which shall be deposited [the]:

(1) The tobacco settlement moneys as provided by section 328L-2(a)[, the];

(2) The allocated portion of the stamp fee designated to pay for the cost of enforcing the cigarette tax stamp as provided by section 245-26[, and fines];

(3) Fines as provided for by section 245-41[.];

(4) License fees as provided for by section 245-2;

(5) Permit fees as provided for by section 244D-2;

(6) Penalties as provided for by section 244D-16; and

(7) Fees and other moneys collected or received as provided for by section 281-16.

(b) The tobacco and liquor enforcement special fund shall be administered by the department of the attorney general and shall be used for administering, operating, monitoring, and ensuring compliance with and enforcement of:

(1) The Master Settlement Agreement as defined in chapter 675 and any other statutes or programs relating to that agreement;

(2) Chapter 675;

(3) Tobacco prevention programs;

(4) The cigarette tax stamp as defined in chapter 245 and any other statutes or programs relating to that chapter;

(5) Chapter 245;

(6) Chapter 486P and any other statutes or programs relating to that chapter; [and]

(7) Chapter 244D;

(8) Chapter 281; and

[(7)] (9) Any other requirement deemed necessary to carry out the purposes of the fund.

(c) All unencumbered and unexpended moneys in excess of [$500,000] $         remaining on balance in the tobacco enforcement special fund at the close of June 30 of each year shall lapse to the credit of the state general fund.

(d) The department of the attorney general shall submit a report to the legislature, no later than twenty days prior to the convening of each regular session, providing an accounting of the receipts and expenditures of the fund."

SECTION 34. Section 244D-17, Hawaii Revised Statutes, is amended to read as follows:

"[[]§244D-17[]] Disposition of revenues. All moneys collected pursuant to this chapter shall be paid into the state treasury as state realizations, to be kept and accounted for as provided by law[.]; provided that permit fees under section 244D-2(c) and penalties under section 244D-16(b) shall be deposited into the tobacco and liquor enforcement special fund created under section 28-15."

SECTION 35. Section 245-15, Hawaii Revised Statutes, is amended to read as follows:

"§245-15 Disposition of revenues. All moneys collected pursuant to this chapter shall be paid into the state treasury as state realizations to be kept and accounted for as provided by law[.]; provided that license fees under section 245-2 shall be deposited into the tobacco and liquor enforcement special fund created under section 28-15."

SECTION 36. Section 281-16, Hawaii Revised Statutes, is amended to read as follows:

"§281-16 [County liquor] Liquor commission [and liquor control adjudication board] funds; disposition of realization; payment of expenses. All fees and other moneys collected or received by [each] the liquor commission [or liquor control adjudication board] under this chapter shall be paid not less than weekly into the [general fund of the respective county or a special fund as provided by ordinance.] tobacco and liquor enforcement special fund created under section 28-15. All expenses of the commission [or board], including any expenses and compensation of its members and expenses and salaries of its subordinates, shall be paid in the manner provided by [ordinance.] law."

SECTION 37. Section 281-54, Hawaii Revised Statutes, is amended to read as follows:

"§281-54 Filing fees with application. A filing fee in such amount as shall be established by the [respective] liquor commission shall be paid with any application for an initial issuance of a license or for a transfer of a license.

Where a license is granted, the filing fee deposited with the application shall become part payment of the fee required for such license. Where an application is denied or withdrawn, the filing fee paid shall become a realization of the [county.] State and shall be deposited into the tobacco and liquor enforcement special fund created under section 28-15."

SECTION 38. Section 281-94, Hawaii Revised Statutes, is amended to read as follows:

"§281-94 Forfeiture of fee paid. If any license is revoked and canceled by the liquor commission [or liquor control adjudication board], the fee paid for the license shall be forfeited to the [county] State as respects the unexpired portion of the fee paid for the license."

Part IV. Cigarette Tax License Revocation Procedures

SECTION 39. Chapter 245, Hawaii Revised Statutes, is amended by adding four new sections to part I to be appropriately designated and to read as follows:

"§245-A Revocation or suspension of license; hearing. (a) The department may revoke any license at any time issued, or suspend the right of the licensee to use the licensee's license, or assess and collect a penalty, or reprimand the licensee, either for the violation of any condition of the license or of any provisions of this chapter or of any rule applicable thereto, or upon the conviction in a court of law of the licensee of any violation of this chapter or of any other law relative to the licensee's license or the proper exercise thereof, or of any violation of law in any other respect on account whereof the department may deem the licensee to be an unfit or improper person to hold a license, or for any other cause deemed sufficient by the department.

(b) In every case where it is proposed to revoke or suspend the exercise of any license or assess and collect a penalty for any cause other than a conviction at law of the licensee as above specified, the licensee shall be entitled to notice and hearing in conformity with chapter 91, the notice to be given at least five days before the hearing.

At the hearing, before final action is taken by the department, the licensee shall be entitled to be heard in person or through counsel and shall be given a full and fair opportunity to present any facts showing that the alleged cause or causes for the proposed action do not exist, or any reasons why no penalty should be imposed. The testimony taken at the hearing shall be under oath and recorded stenographically, or by machine, but the parties shall not be bound by the strict rules of evidence; certified copies of any transcript and of any other record made of or at the hearing shall be furnished to the licensee upon the licensee's request and at the licensee's expense.

(c) Any order of revocation, suspension, fine, or reprimand imposed by the department upon the licensee shall be in addition to any penalty that might be imposed upon the licensee upon the licensee's conviction at law for any violation of this chapter. No licensee shall be subject to both the penalty assessed and collected by the department and to revocation or suspension of license. The amount of penalty assessed and collected by the department from any licensee for any particular offense shall not exceed the sum of $2,000.

(d) Whenever the service of any order or notice shall be required by this section, the service shall be made in the following manner: in the case of any violation based upon the personal observation of any investigator, a written notice of the violation shall be given to the licensee, or by serving a certified copy of the notice or order upon the holder of the license wherever the holder may be found in the circuit wherein the holder is licensed, or, if the holder cannot be found after diligent search, by leaving a certified copy thereof at the holder's dwelling house or usual place of abode with some person of suitable age and discretion residing therein; and if the holder of the license cannot be found after diligent search, and service cannot be made, then service may be made by depositing a certified copy in the certified mail of the United States Postal Service, postage prepaid, addressed to the holder of the license at the holder's last known residence address; provided that in the case of a partnership, corporation, unincorporated association, or limited liability company, service may be made upon any partner, officer, or member thereof.

§245-B Appeals. Any licensee aggrieved by any order assessing or providing for the collection of a penalty, or by any order suspending or revoking any license, may appeal therefrom in the manner provided in chapter 91 to the circuit court and the judgment of the court shall be subject to review, subject to chapter 602, in the manner provided for civil appeals from the circuit courts.

§245-C Reports to the attorney general. When the revocation or suspension of any license is by reason of any violation of law the department shall report the facts to the attorney general for prosecution.

§245-D Forfeiture of fee paid. If any license is revoked and canceled by the department, the fee paid for the license shall be forfeited to the county as respects the unexpired portion of the fee paid for the license."

Part IV.

SECTION 40. All rights, powers, functions, and duties of the county liquor commissions or liquor control adjudication boards are transferred to the department of taxation.

All officers and employees whose functions are transferred by this Act shall be transferred with their functions and shall continue to perform their regular duties upon their transfer, subject to the state personnel laws and this Act.

No officer or employee of the State having tenure shall suffer any loss of salary, seniority, prior service credit, vacation, sick leave, or other employee benefit or privilege as a consequence of this Act, and such officer or employee may be transferred or appointed to a civil service position without the necessity of examination; provided that the officer or employee possesses the minimum qualifications for the position to which transferred or appointed; and provided that subsequent changes in status may be made pursuant to applicable civil service and compensation laws.

An officer or employee of the State who does not have tenure and who may be transferred or appointed to a civil service position as a consequence of this Act shall become a civil service employee without the loss of salary, seniority, prior service credit, vacation, sick leave, or other employee benefits or privileges and without the necessity of examination; provided that such officer or employee possesses the minimum qualifications for the position to which transferred or appointed.

If an office or position held by an officer or employee having tenure is abolished, the officer or employee shall not thereby be separated from public employment, but shall remain in the employment of the State with the same pay and classification and shall be transferred to some other office or position for which the officer or employee is eligible under the personnel laws of the State as determined by the head of the department or the governor.

SECTION 41. All appropriations, records, equipment, machines, files, supplies, contracts, books, papers, documents, maps, and other personal property heretofore made, used, acquired, or held by the county liquor commissions or liquor control adjudication boards relating to the functions transferred to the department of taxation shall be transferred with the functions to which they relate.

SECTION 42. All rules, policies, procedures, guidelines, and other material adopted or developed by the respective county liquor commissions or liquor control adjudication boards, as the case may be, to implement provisions of the Hawaii Revised Statutes which are reenacted or made applicable to the department of taxation by this Act, shall remain in full force and effect in the county for which adopted until amended or repealed by the department of taxation pursuant to chapter 91, Hawaii Revised Statutes. In the interim, every reference to the liquor commissions or liquor control adjudication boards of any county, in those rules, policies, procedures, guidelines, and other material is amended to refer to the department of taxation, or director of taxation, as appropriate.

SECTION 43. All deeds, leases, contracts, loans, agreements, permits, or other documents executed or entered into by or on behalf of the respective county liquor commission or liquor control adjudication boards, as the case may be, pursuant to the provisions of the Hawaii Revised Statutes, which are reenacted or made applicable to the department of taxation by this Act, shall remain in full force and effect. Effective July 1, 2006, every reference to the liquor commission or liquor control adjudication board of any county shall be construed as a reference to the department of taxation, or the director of taxation as appropriate.

SECTION 44. In codifying the new sections in Part IV 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 45. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 46. This Act shall take effect on July 1, 2006; provided that the amendments made to section 245-15, Hawaii Revised Statutes, by this Act shall not be repealed when section 245-15, Hawaii Revised Statutes, is reenacted pursuant to section 20(2) of Act 249, Session Laws of Hawaii 2000.

INTRODUCED BY:

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