Bill Text: HI HB136 | 2021 | Regular Session | Amended
Bill Title: Relating To Liquor Licenses.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Passed) 2021-06-24 - Act 066, 06/23/2021 (Gov. Msg. No. 1167). [HB136 Detail]
Download: Hawaii-2021-HB136-Amended.html
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HOUSE OF REPRESENTATIVES |
H.B. NO. |
136 |
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THIRTY-FIRST LEGISLATURE, 2021 |
H.D. 1 |
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STATE OF HAWAII |
S.D. 1 |
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A BILL FOR AN ACT
RELATING TO LIQUOR LICENSES.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
SECTION 1. Section 281-41, Hawaii Revised Statutes, is amended as follows:
1. By
amending subsection (e) to read:
"(e) Where a license is held by a partnership,
limited partnership, or limited liability partnership, [or a limited
liability company,] the admission or withdrawal of a partner, limited partner,
or partner of a limited liability partnership[, member of a member-managed
limited liability company, or manager of a manager-managed limited liability
company] shall not be deemed a transfer of the license; provided that the
licensee shall, within thirty days from the date of the admission or withdrawal,
so notify the commission in writing, stating the name of the partner, [member,
or manager,] limited partner, or partner of a limited liability partnership
who has been admitted or withdrawn, and any other information as may be
required by the commission. If the commission
finds that the partner or limited partner for whom notification is required as specified
in this subsection does not meet statutory requirements to hold a license in the
partner's or limited partner's own right pursuant to section 281-45, it may, in
its discretion, revoke the license or suspend the license until the partner or limited
partner is removed or replaced by a partner or limited partner who meets the statutory
requirements to hold a license pursuant to section 281-45."
2. By amending subsections (h) and (i) to read:
"(h) If any licensee without prior approval, approval
of a temporary license, or approval of a management agreement 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 exclusive possession or control of the
business or takes in any partner or associate who would [be unfit or
improper] not meet statutory requirements to hold a license pursuant
to section 281-45, the commission may in its discretion suspend or cancel the
license. For purposes of this subsection,
"management agreement" means a written agreement under which a licensee
allows a manager to manage and operate the licensee's business on behalf of the
licensee.
(i)
If the licensee is a corporation[,] or limited liability company,
a change in ownership of any outstanding capital stock or membership interest
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 voting capital
stock or membership interest or in the case of change in ownership of
any number of shares of the stock or membership interest that results in
the transferee thereof becoming the owner of twenty-five per cent or more of the
outstanding voting capital stock[,] or membership interest, the
corporate or limited liability company licensee shall, within thirty
days of the date of the transfer, apply for the approval of the transfer from
the commission in writing. If the
commission finds that the transferee [is an unfit or improper person] does
not meet statutory requirements to hold a license in the transferee's own
right pursuant to section 281-45, it shall not approve the transfer. If any transfer is made without the 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,]
meets the statutory requirements to hold a license, and if the
commission finds that the transferee [is not a fit and proper person,] does
not meet the statutory requirements to hold a license, until a retransfer
or new transfer of the capital stock or membership interest is made to a
[fit and proper] person who meets the statutory requirements to hold a
license pursuant to section 281-45.
In addition, the corporate or limited liability company licensee,
if not a publicly-traded company, or an entity ultimately solely owned by a publicly‑traded
company, shall, within thirty days from the date of election or admission
of any officer [or], director, manager, or member, notify
the commission in writing of the name, age, and place of residence of the
officer [or], director[.], manager, or member, and any other
information as may be required by the commission. A publicly-traded corporation or limited liability
company, or [an entity] a corporation or limited liability company
ultimately solely owned by a publicly-traded company, shall, within thirty days
from the date of election or admission of any replacement of an officer,
director, manager, or member designated as a primary decision-maker
regarding the purchase and sale of liquor, notify the commission in writing of
the name, age, and place of residence of the officer[.], director, manager,
or member. If the commission finds
that the [transferee,] officer, [or] director, manager, or member
for whom notification is required to be given as specified in this subsection, [is
an unfit or improper person] does not meet statutory requirements to
hold a license in the [transferee's,] officer's, [or] director's,
manager's, or member'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,] the
officer, [or] director, manager, or member is removed or replaced
by a [fit and proper] person who meets statutory requirements to hold
a license pursuant to section 281-45."
3. By amending subsections (k) and (l) to read:
"(k) The conversion of an entity into any other form
of entity or the merger of any entity with any other entity shall not be deemed
a transfer of the license; provided that the licensee, [prior to the date]
within thirty days of the conversion or merger, shall apply for and
secure the approval of the commission without any requirement for publication
of notice. The foregoing shall not preclude
compliance with subsection (e) upon a change in any of the partners [or
members,] or with subsection (i) upon change of any shareholders, officers,
[or] directors, managers, or members of any entity occurring
concurrently with a conversion or merger.
As used in this subsection, "entity" means a corporation, partnership, limited partnership, limited liability partnership, or limited liability company.
(l)
Any officer [or], director, partner, limited partner, manager,
or member not designated as a primary decision-maker shall be prohibited
from coercing, pressuring, or otherwise unduly influencing the decision of a
designated primary decision-maker to engage in any unlawful activity relating
to the purchase and sale of liquor. If
the commission finds that coercion, pressure, or other undue influence has been
placed on a primary decision-maker by any officer [or], director,
manager, or member who is not a designated primary decision-maker, the
commission may in its discretion suspend or cancel the license."
SECTION 2. 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 and not pardoned[,
or to any other person not deemed by the commission to be a fit and
proper person to have a license]; 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 [and], directors, and shareholders of twenty-five
per cent or more of outstanding stock [are fit and proper persons to have a
license;] 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 [entities] corporations or limited liability companies
ultimately solely owned by a publicly-traded company, only the officers [and],
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 3. This Act does not affect rights and duties that matured, penalties that were incurred, and proceedings that were begun before its effective date.
SECTION 4. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.
SECTION 5. This Act shall take effect on January 5, 2022.
Report Title:
Liquor Licensing; Transfer of Licenses; Limited Liability Companies
Description:
Applies liquor licensing provisions related to the transfer of licenses and the denial of licenses to limited liability companies. Effective 1/5/2022. (SD1)
The summary description
of legislation appearing on this page is for informational purposes only and is
not legislation or evidence of legislative intent.
