Proposed changes to & comments on Liquor Collection Rules – 12/10/13

The Liquor Commission hearing on these changes is on Thursday, Dec 12th at 3pm.  Please read our concerns, come to the hearing and testify with us.

Proposed Amendments to

Rules of the Liquor Commission of the City and County of Honolulu (2008)

Note: Material to be repealed is [bracketed].

New material is underscored.

All rule changes & comments under the cut.

§3-81-17.54. Gross Sales Reports.

(f) Licensees who give complimentary drinks shall report the value of those drinks in

their annual gross sales report. If there is no sales price related to the complimentary drink, the licensee shall report the complimentary drink’s

value at four (4) times the amount of liquor purchased.



Is this necessary? Are we recording for our benefit or the auditor”s? If percentages are in line is this unnecessary work for us.


§3-81-20. General Right of Inspection.

Without notice, search warrant, or other legal process, a licensee shall

provide an investigator immediate access to every part of the licensed premises

for the purpose of making an examination or inspection thereof of items related

to the licensee’s compliance with the liquor laws or rules. Except as prohibited

by laws governing confidential or protected information, said examination or inspection shall include, but not be limited to, any books and records of the

licensee kept on the licensed premises which relate to the licensee’s compliance

with the liquor laws or rules. Items discovered during such examination or

inspection shall be used for the purpose of enforcement of the liquor laws or



SUMMARY: The proposed new rule expands on the general right of inspection

authorized by HRS §281-20.


Status of our cameras? Do you interpret that as records?

§3-82-31.8. Recorking.

Unless inconsistent with Chapter 281 of the Hawaii Revised Statutes or the

Rules of the Liquor Commission, any [Class 2 Restaurant, Class 6 Club, Class 11

Cabaret, Class 12 Hotel, Class 14 Brewpub, and Class 15 Condominium Hotel]

licensee engaged in meal service [may] shall allow a patron who has purchased or

brought unto the licensed premises [a bottle of] wine, liquor or beer for

consumption with a meal[,] to remove the partially consumed [bottle of wine] product

from the licensed premises, which shall be recorked or resealed in its original



SUMMARY: The proposed amendment conforms the recorking rule to statutory

changes made to HRS §281-31(t).


Does this present any conflict with existing laws or rules concerning open containers or bringing in items for personal consumption on premise with general licensees and cabarets other than restaurants?  Will it allow each bar to make its own rules on allowing or disallowing the practice?  If so is that put forth anywhere in the rules?



§3-82-38.9. Licensee and Manager in Charge of Premises.

(b) Certificates of registration issued by the Commission shall be valid only for the

licensed premises for which the employee registers and the license number of

the premises shall be printed on the certificate of registration. Employees may

be employed to work at more than one licensed premises; however, a separate

certificate of registration shall be required for each licensed premises.

Certificates of registration for employees, except for dancers, bartenders or

managers shall be valid for four (4) years from the date of issue. For

bartenders or managers, certificates of registration shall be valid for four

(4) years from the date of successful completion of the server training

program required under sub-paragraph (f) of this rule (including passing

the examination).

(c) Persons who apply to the Commission for registration shall present:

(1) Positive identification in the form of either a passport, a laminated driver’s

license with photograph, or other laminated government identification with

a photograph;

(2) Proof of a Social Security number;

(3) A current satisfactory tuberculosis (TB) clearance report.

(d) Each person registered shall be photographed and issued a certificate of

registration which shall be valid until the expiration date indicated thereon or

when recalled, suspended, or revoked by the Commission. The certificate of

registration shall be retained by each employee and not surrendered to or held

by the employer. A processing fee shall be charged for each certificate of

registration issued to cover the cost of materials and processing.

(e) Licensees shall ensure that all employees who are required to register with the

Commission have their certificate of registration for the licensed premises readily

available for inspection while on duty at that licensed premises.

(f) All dispenser, cabaret, restaurant, tour or cruise vessel, annually licensed

transient vessel, hotel, club, brewpub, or condominium hotel licensees shall

employ only bartenders who have successfully completed the server-training

program administered by the Commission, including an examination and

instruction in the following areas:

(1) Identifying and dealing with intoxicated persons,

(2) Reviewing liquor laws and rules, and

(3) Dangers of driving while intoxicated.

In these classes, the licensees shall ensure that individuals currently employed

as a bartender successfully complete the server-training program within ninety

(90) days of publication of these rules. A person may be issued a certificate of

registration as a bartender for the same or another licensed premises and need

not retake the server-training program if that person had successfully completed

the server-training program within the past [two (2)] four (4) years.

SUMMARY: The proposed amendment clarifies the expiration date for registration

cards held by bartenders and managers.


To interpret this clearly, Does it mean managers tests are good for 4 years regardless of the locations where they work.  All Blue cards would expire 4 years after issuance. While training requires a new managers test every 4 years and is valid for all licenses where they work.  Correct?


25. Restrictions or Conditions on Licenses.

(a) Pursuant to HRS Section 281-61(b), the Commission may, at any time, fine,

suspend, revoke, or place restrictions or conditions on any license issued under

HRS 281 and the Rules of the Commission for the purpose of preventing

activities within the licensed premises, or adjacent areas under the licensee’s

control that are potentially injurious to the health, safety, and welfare of the

public. Such adjacent areas include areas such as, but not limited to, stages,

entertainment areas, lanais, and parking areas.

(b) The Commission may place such restrictions or conditions on any license issued

pursuant to HRS 281 or these Rules (i) at the time the license is initially issued or

transferred or (ii) at any other time upon petition of the Administrator to the

Commission and after notice and hearing in accordance with HRS 281 and these


(c) Licensee shall comply with any restrictions or conditions placed on the license by

the Commission pursuant to this Rule.


SUMMARY: The proposed amendment expands the time when restrictions or

conditions may be placed upon a license, to include at the time of license transfer.


A question here of the rules intent.  Do the restrictions then always remain with the license or may remain with the license?  Are those restrictions instituted against the licensee or the license?  Is there any legal conflict here regarding constitutional rights? Is there the potential to remove prior restrictions?


 §3-82-38.26. Bottle Service for On-Premise Consumption.

Service of wine or distilled spirits in its original container is permitted at

premises licensed for on-premise consumption. The seal of the original

container shall be broken at the time of service.


SUMMARY: The proposed new rule permits bottle service at on-premise consumption

licensed premises.


Is Bottle service available for all general dispensers and cabarets and other classes of licenses?  How will a licensee know if he is allowed the practice?  Would he request it or would I be the rule in general?


§3-82-41.4. Management or Operating Agreements.

Licensee shall apply for and secure approval for any management or

operating agreement from the Commission, in writing, prior to such agreement

taking effect, subject to the following conditions:

(a) The agreement shall be restricted to permitting the operator to manage and

operate the licensed premises on behalf of the licensee, and the licensee

shall remain responsible for and maintain exclusive control of the licensed


(b) The agreement shall be for the entire licensed premises, unless otherwise

approved by the Commission.

(c) If the agreement is effected without the prior approval of the Commission,

the Commission may in its discretion revoke or suspend the license, or

assess and collect a penalty, or reprimand the licensee.

(d) In conjunction with its request for approval, the licensee shall submit an

executed copy of the agreement, and can be subject to submittal of any or

all documents required under Rule §3-83-53.1, and shall be subject to a

hearing before the Commission.

(e) If the Commission finds that any proposed person or any principal of the

agreement is an unfit or improper person to hold a liquor license in the

person’s or principal’s own right pursuant to Section 281-45, Hawaii

Revised Statutes, it shall not approve the agreement.

The term “management agreement” or “operating agreement” shall include

any agreement, verbal or written, where through such agreement the licensee

allows an operator to manage and operate the licensed premises on behalf of the



SUMMARY: The proposed new rule establishes a procedure for Commission review

and approval of management or operating agreements.


This all appears reasonable and would most likely have a fair opinion from our industry as long as it remains a timely process.  For all of the operators time is indeed money and has its prohibitive costs so we just ask  that there be no increase in time to process such requests? Would that be an administrative decision or a commission decision?


§3-83-53.1. License Applications; Notice of Hearing; Affidavits.

(xv)      A description detailing the kind of business that the applicant

proposes to operate. For applications for transferred restaurant

licenses, a financial report of gross revenue for the year

preceding the application demonstrating that at least thirty percent of the establishment’s gross revenue was derived

from the sale of foods. For applications for new restaurant

licenses if not previously operated as an establishment

serving meals to patrons for compensation, a business plan

demonstrating the applicant’s ability to meet the minimum

gross revenue from the sale of foods required of restaurant



SUMMARY: The proposed amendment requires restaurant license applicants to

establish their ability to meet the requirement that at least 30 percent of gross revenue

will come from the sale of foods.


This is a more measured determination of the prior proposed rule but once again there is an onus to predict the future and that is not what anyone can truly know.  This brings the question, is there that much difference in the class of general dispenser and restaurant?  Should there be a different class based  on food sales?  What is the motivation to have a restaurant class of license?  Is it to be more restrictive or to limit certain activities?  What would the LC like to see here?


§3-83-61.1. Renewal of Existing License.

(h) For licensees who are corporations, limited partnerships, limited liability

companies, or limited liability partnerships, failure to maintain the business

entity’s good standing in the state of its organization. In this regard,

business entity licensees shall submit with their license renewal

documents a certificate of good standing from the state of its organization

that is not more than 60 days old to establish compliance with this



SUMMARY: The proposed amendment requires a business entity licensee to establish

continued good standing in the state of its organization at the time of license renewal.


I know this is not a difficult issue but it is one more step being created so our only objection would be that it does create more paper work.  That said who will be doing this the licensee or the LC in checking the website? Can it be done online or must one apply in personto receive a certificate?  Is it more specific to out of state entities?




(c) A licensee who applies for [an] a permanent increase in the area of the licensed

premises where the increase sought is equal to or greater than 50 percent of the

current area licensed shall give notice of said application to the chair of the

neighborhood board in which the licensee’s licensed premises is located, in

writing and delivered by certified mail, return receipt requested.

(d) Alterations, changes, or increases to a condominium hotel licensee’s premises

which are within (i) condominium hotel guest rooms or (ii) areas that only provide

access to and from the portion or portions of the licensed premises in which

alcoholic beverages will be served and condominium hotel guest rooms, are

exempt from the requirements and restrictions of this Rule.

(e) After granting an increase in the area of the existing licensed premises of a

licensee, the licensee shall request and pass a final inspection of the

premises by Commission staff before the licensee is authorized to occupy

and use the granted addition.


SUMMARY [(c)]: The proposed amendment specifies that the neighborhood board

notification is applicable only to permanent extensions of the licensed premises.

SUMMARY [(e)]: The proposed amendment adds a final inspection requirement before

a licensee may occupy and use a granted addition to the licensed premises.


Grant of an increase and inspection will be done administratively and timely we assume?


§3-84-72.2. Premises Lighting; Doors.

Street or primary entrances to licensed premises shall be kept unlocked during

all times that [non-employees] any person other than an on-duty employee is on

the premises. Entrances to booths shall be open and unobstructed. The interior and

exterior of the licensed premises shall be well and properly lighted.


SUMMARY: The proposed amendment conforms the designated individuals to the

definition of “customer”.



Is it possible to clarify this to include contractors as well as on duty employees, that might include entertainers or contracted service people, repairmen etc. any of who may have a legitimate reason to being there and having the doors locked.


§3-84-78.01. Conduct of Employees.

(f) No employee while on duty shall engage in violent, quarrelsome,

disorderly, lewd, immoral, or unlawful conduct on the premises.


SUMMARY: The proposed amendment applies the conduct prohibition in HRS §281-

78(b)(6) to employees.


By making this a rule you will open every location up to a lawsuit as every one of these behaviors is interpretive.  If you are physically struck by rule you could not respond.  If there is an altercation no force may be used to control it thus endangering the remainder of your customers.  Intent is understood here but this is the most problematic section of the rules that endangers the licensee’s future existence.  Are you disciplining the employee or are you punishing the licensee if such occurs? Is this a huge expansion of the law’s provisions?  Is there a better way of achieving what is desired here? Is this a mandatory good behavior clause that is being asked of your worst offenders and yet may jeopardize all operators?


§3-84-78.06. Solicitation of Business Outside of Premises.

No licensee authorized to sell liquor for consumption on the premises, shall solicit

business [immediately outside or in the vicinity] within a twenty feet radius of the

licensed premises.


SUMMARY: The proposed amendment provides an objective measurement for

determining where a licensee may solicit business outside of the licensed premises.


Please make a clear definition of Solicitation along with the defined area.




§3-84-78.52. Stacking of Drinks.

The stacking of liquor by the licensee for consumption by customers is

prohibited. “Stacking” is defined as having more than two standard servings of

drinks before a customer at any one time. A standard serving means a drink

containing distilled spirits in a container not to exceed sixteen ounces, or six

ounces of wine, or twenty-two ounces of beer; provided that a serving in excess

of these amounts shall be limited to one per customer. A multiple-serving

container, not to exceed sixty ounces, may be served to two or more persons


[No customer shall be permitted to have, for consumption, more than one drink at

a time, except that a beer may be served with a straight or unmixed serving of

liquor. This rule shall not apply to Commission approved authorized

“showroom” facilities which may serve the “minimum” drinks at the same time to

lessen disturbance to the show, or at auditoriums, theaters, concert halls, arenas,

stadiums and convention halls where a walk-up, concession system of service is

employed and there is no tableside or seating service provided by wait help. In

these concession-serviced facilities, a customer may purchase a maximum of two

drinks at a time.]


At last call, multiple-serving container service or any drink exceeding a

single standard serving shall be prohibited.


SUMMARY: The proposed amendment clarifies and modernizes this rule to comport

with standard volumes and industry practices.



This issue has been the most contentious issue in every serving venue.  This is the fairest attempt to clarify the stacking rule in a very long time. It puts a more legitimate definition of the standard servings involved. It still deserves more clarity from the LC end as how it will be interpreted.  Can someone have two 22 oz beers or two servings of wine in front of them?  How about service and delivering only when someone is below half way? At the stadium can someone now purchase two drinks to deliver? Lets try to make it crystal clear on these matters?





§3-85-91.12. Licenses Under Safekeeping.

Any license held in safekeeping by the Commission shall be considered an active

license and the licensee must continue to comply with all Liquor Commission laws and

rules unless otherwise directed by the Commission. Any license held in safekeeping

beyond June 30 of a license year must receive Commission approval to remain in

safekeeping and as otherwise directed by the Commission.


SUMMARY: The proposed amendment specifies that licenses held in safekeeping

beyond June 30 must receive Commission approval.



Is there a uniform method to request such a process before the commission from the license holder, the landlord or other parties in the process of seeking transfer or sale of the property?


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