RULES AND REGULATIONS OF THE LIQUOR CONTROL COMMISSION

COUNTY OF KAUAI

RULE 1

DEFINITIONS

Rule 1.1. Definitions. Words used in these rules and regulations in the singular include the plural, and vice versa; words of any gender include any other gender. Words defined in Section 281-1, Hawaii Revised Statues, as amended, shall have the same meaning wherever used herein.

"Blue card" means a card issued by the department to a person who is deemed qualified to be a manager of an on premise establishment.

"Department" means the Department of Liquor Control of the County of Kauai, State of Hawaii.

"Director" means the director of the Department of Liquor Control of the County of Kauai, State of Hawaii.

"Manager" means any person who has a valid blue or red card and who is registered as a manager or assistant manager by the licensee.

"Off premises license, licensee, or establishment" means a retail dealer, license, licensee, or business.

"On premises license, licensee, or establishment" means any license, licensee, or business authorized to sell liquor for consumption on the premises.

"Non-standard bar" means an on premise license that is authorized to have dancing by patrons.

"Private party" means a gathering of persons for a special occasion; such as a wedding, an anniversary, a luau, etc., where food and drinks are served.

"Red card" means a card issued by the department to a person who is deemed qualified to be a manager of an off premise establishment.

"White card" means the registration card issued by the department after the department was satisfied that the person who applied for the registration card was using the proper name and was not less that 18 years of age.

RULE 2

RULES OF PRACTICE AND PROCEDURE

Rule 2.1. Methods whereby public may obtain information. The public may obtain information as to matters within the jurisdiction of the commission by inquiring at the office of the County Clerk of the County of Kauai, State of Hawaii, where there are on file all rules of the commission; or at the department. All rules, orders, or opinions of the commission are on file and available for public inspection at said office, copies of compilations of rules and supplements thereto are available to the public at a price to be fixed by the County Council to cover mailing and publication costs.

Such inquiry may be made in person at said office during business hours, or by submitting a request for information in writing to the department.

Rule 2.2. Petition for adoption, amendment, or repeal of rules. (a) Any interested persons may petition the commission requesting the adoption, amendment, or repeal of any rule of the commission.

(b) The petition shall be typewritten and shall include:

(1) A statement of the nature of the petitioner's interest;

(2) A draft or the substance of the proposed rule or amendment or a designation of the provision sought to be repealed; and

(3) An explicit statement of the reasons in support of the proposed rule, amendment, or repeal.

(c) The commission shall within thirty days after the submission of the petition either deny the petition in writing, stating its reasons for such denial, or initiate proceedings in accordance with the Hawaii Administrative Procedure Act for the adoption, amendment, or repeal of the rule, as the case may be.

Rule 2.3. Declaratory ruling by the commission. (a) Any interested person may petition the commission for a declaratory order as to the applicability of any statute, ordinance, or of any rule or order of the commission.

(b) The petition shall be typewritten and shall contain:

(1) The name, address, and telephone number of the petitioner;

(2) A statement of the nature of the petitioner's interest, including reasons for the submission of the petition;

(3) A designation of the specific provision, rule, or order in question;

(4) A complete statement of facts;

(5) A statement of the position or contention of the petitioner; and

(6) A memorandum of authorities, containing a full discussion of the reasons, including any legal authorities, in support of such position or contention.

(d) The commission may for good cause refuse to issue a declaratory ruling. Without limiting the generality of the foregoing, the commission may so refuse where:

(1) The question is speculative or purely hypothetical and does not involve existing facts, or facts which can reasonably be expected to exist in the near future; or

(2) The petitioner's interest is not of the type which would give him standing to maintain an action if he were to seek judicial relief; or

(3) The issuance of the declaratory ruling may adversely affect the interests of the County of Kauai or any of its officers or employees in any litigation which is pending or may reasonably be expected to arise; or

(4) The matter is not within the jurisdiction of the commission.

(e) Where any question of law is involved, the commission may refer the matter to the county attorney. The commission may also obtain the assistance of other agencies, where necessary or desirable.

(f) Upon the disposition of his petition, the petitioner shall be informed in writing thereof by the commission.

(g) Orders disposing of petitions shall have the same status as other commission orders. Orders shall be applicable only to the fact situation alleged in the petition or set forth in the order. They shall not be applicable to a different fact situation or where additional facts not considered in the order exist.

Rule 2.4. Rules of practice. (a) Except as otherwise provided by law, in any proceeding involving an application for the issuance or transfer of a license, or the revocation or suspension of a license, or other disciplinary action by the commission, which by law is required to be determined after an opportunity for a hearing, the following shall apply:

(1) The applicant or licensee shall be notified in writing of the hearing and of his opportunity to be heard. Such notice shall conform to the requirements of the Hawaii Administrative Procedure Act, and shall be sent not less than two calendar days before the date of the hearing in the case of license applications and not less than five calendar days before the date of the hearing in the case of disciplinary actions. Such notice shall be in addition to any notice required by law to be published in a newspaper.

(2) The hearing shall be conducted in conformity with the applicable provisions of the Hawaii Administrative Procedure Act.

(3) The determination shall be subject to such limitations or standards as may be prescribed by law.

(4) If the commission decides in favor of the applicant or licensee, the commission shall promptly notify the applicant or licensee.

(5) If the commission decides against the applicant or licensee, it shall issue an appropriate decision and order. Such decision and order shall be accompanied by separate findings of fact and conclusions of law. The commission shall within a reasonable time send a certified copy of the findings of fact, conclusions of law, decision and order to the applicant or licensee.

(b) Any of the foregoing procedures may be modified or waived by stipulation of the parties and informal disposition may be made of any contested case by stipulation, agreed settlement, consent order, or default.

(c) The department shall adopt rules by which contested case hearings will be conducted. Parties to a contested case hearing shall be provided with such rules ten (10) days prior to the date of the contested case hearing.

(d) Judicial review shall be as provided by law.

Rule 2.5. License application; notice of hearing; affidavits. (a) All applications for new licenses and all notices of public hearing sent and affidavits filed by applicants in connection with such applications, shall be in respective forms prescribed therefor from time to time by the department.

(b) An applicant for a new license or a transfer of license other than a vessel, transient vessel, special, or temporary license shall file as part of its application:

(1) A statement of its financial condition dated within the last twelve months which shall be verified by oath of the applicant as being full, true, and correct, or an audited report of its financial condition which was prepared by a certified public accountant;

(2) Tax clearance from the state department of taxation and the federal internal revenue service;

(3) Personal history of all persons named in the application in the form prescribed by the department;

(4) If the applicant is a partnership, a partnership agreement;

(5) If the applicant is a corporation, the articles of incorporation which has been filed and accepted by the state department of commerce and consumer affairs, and the bylaws; and

(6) Lease or rental agreement, if applicable.

(c) An applicant for a new license other than a vessel, transient vessel, or special license shall also file as part of its application:

(1) A floor plan which shall be drawn to scale and showing the detailed description of the proposed premises;

(2) A map drawn to scale showing all properties within five hundred (500) feet of the proposed premises; which shall also designate all properties within one hundred (100) feet of the proposed premises; and

(3) A list of names and mailing addresses of property owners and lessees of record of the properties within five hundred (500) feet of the proposed premises; which list shall also designate all property owners and lessees of record within one hundred (100) feet of the proposed premises.

(d) An application for transfer of license shall also file as part of its application:

(1) A statement of the price to be paid for the purchase of the licensed business; and

(2) Tax clearances for the transferor from the state department of taxation and the federal internal revenue service.

(e) An applicant for a special license shall file as part of its application:

(1) A floor plan which shall be drawn with measurements and showing the detailed description of the proposed premises;

(2) Tax clearances from the state department of taxation and the federal internal revenue service; and

(3) A roster of all persons, including their ages and addresses, who will be working as manager in charge and liquor handlers.

(f) An applicant for a transfer of a class 5 and class 11 license shall also comply with requirements of Section 281-57 of the Hawaii Revised Statutes.

(g) An applicant for a vessel or transient vessel license shall file as part of its application:

(1) A floor plan of the vessel which shall be drawn to scale and showing the detailed description of the proposed premises; and

(2) Tax clearances from the state department of taxation and the federal internal revenue service.

(h) An applicant for an annual transient vessel license shall also file as part of its application:

(2) Personal history of all persons named in the application in the form prescribed by the department;

(3) If the applicant is a partnership, a partnership agreement;

(4) If the applicant is a corporation, the articles of incorporation which has been filed and accepted by the state department of commerce and consumer affairs, and the bylaws.

(i) All applicants shall comply with all applicable federal, state, and county requirements.

Rule 2.6. Renewal of license. Applications for renewal of licenses, except temporary licenses, shall be submitted no earlier than June 1 and no later than June 30 of each year. Current tax clearances from the state department of taxation and the federal internal revenue service and a deposit to cover the minimum annual fee as prescribed by Rule 4.1 shall be submitted as part of the application.

An application for renewal of a temporary license shall be submitted prior to the expiration date of the license. A deposit to cover the temporary license fee as prescribed by Rule 4.1 shall be deposited as part of the application.

Rule 2.7. Deposit with application. A deposit to cover the cost of publishing the notice of public hearing must accompany all applications for a license.

Rule 2.8. Filing fee with application. A filing fee in the sum of one hundred dollars ($100.00) shall be paid with any application for an initial issuance of a license or for a transfer of a license.

The filing fee shall become a realization of the county where the application is denied or withdrawn.

Rule 2.9. Knowledge of liquor laws, rules and regulations. No license shall be issued or renewed until the commission is satisfied that the applicant is familiar with the liquor laws of Hawaii and with the rules and regulations of the commission.

Rule 2.10. Rehearing on application. An applicant desiring a rehearing after his application has been refused must file a petition with the commission within fifteen days from the date of such refusal.

Rule 2.11. Application for individual permits to receive shipments of liquor. (a) Any unlicensed person who is of legal age to purchase liquor may apply at the department on the form prescribed by the department and with the payment of a permit fee of two dollars and fifty cents ($2.50) or as required by Section 281-33.1(d) of the Hawaii Revised Statutes, whichever is greater, for a permit to receive a shipment of liquor from outside the state, within the limits allowed by Chapter 281, Hawaii Revised Statutes.

(b) The application form shall include the following information:

(1) A description of the liquor as to type, brand or trade name, domestic or imported, and quantity; and

(2) Whether the liquor is an unsolicited gift, unavailable in the state, or part of the applicant's household goods.

Rule 2.12. Application for a permit for trade shows or other exhibitions. (a) Any trade exhibitor or trade organization may apply for a permit to have liquor for display and sampling on a not-for-sale basis at trade exhibitions. The director may permit the exhibitor or organization to receive liquor which is not available in the state from outside the state.

(b) The application for the permit shall include the following information:

(1) The name and address of the applicant;

(2) The location of the trade show;

(3) The dates and hours of the trade show; and

(4) An inventory list of the liquors to be displayed and sampled and the procedure to be used to dispose of any liquor remaining at the end of the function.

(c) Guidelines for sample servings are four ounces for beer, two ounces for wine, and one-half ounce for distilled spirits.

Rule 2.13. Applications for warehousing liquor off the licensed premises. Liquor may be warehoused off the licensed premises within an appropriately zoned area in the county with the written approval of the commission. An application for warehousing off the licensed premises shall include as part of the application:

(1) Floor plan drawn to scale;

(2) Lease agreement, if applicable;

(3) List of all licensed premises which will be using the warehouse, if the applicant holds more than one liquor license; and

(4) Street address and tax map key of warehouse location.

Rule 2.14. Application and cost for a duplicate license. (a) A license that has been lost, destroyed, or mutilated will be replaced upon application from the licensee. A licensee shall submit an affidavit stating the cause of the loss, destruction, or mutilation of the license when applying for a duplicate license.

(b) A duplicate license shall be issued at no cost to the licensee if the director is satisfied that the license was lost, destroyed, or mutilated by circumstances beyond the control of the licensee.

(c) A fee of twenty-five dollars ($25.00) will be charged for a duplicate license to replace a license that was lost, destroyed, or mutilated because of negligence on the part of the licensee.

Rule 2.15. Authority vested to the director. (a) In the event that any licensee or any person submits a written application for a permit or renewal of an existing license or permit and the application cannot be brought before the commission at a regular meeting prior to the date of the event or function, the director may approve the application provided that all other applicable requirements of the liquor laws and the commission's rules and regulations have been met.

(b) The director may issue a notice of violation hearing to any licensee for any violation of the commission's rules and regulations or the liquor laws.

(c) When all applicable requirements of the liquor laws and the commission's rules and regulations have been met, the director shall have the authority to issue, suspend or revoke the following permits and issue the following licenses:

Permits for: All games, game machines; karaoke machines; temporary increase or decrease of premises; alteration of premises.

Licenses: Special license, transient vessel license.

Rule 2.16. Emergency rules and regulations. In the event of a national, statewide, or local emergency, the commission may adopt emergency rules and regulations, with the approval of the Mayor, for the protection of life and/or property. All emergency rules and regulations shall be scheduled for public hearing at the earliest possible date.

If the commission is unable to hold a meeting to meet the emergency, the Mayor may authorize the director to act for the commission.

Rule 2.17. One day special license. (a) Notwithstanding any other rule to the contrary, the director may issue two one-day special licenses of any class and kind within a twelve month period at no cost to any nonprofit organization for a fundraising event from which no member is entitled to or takes, directly or indirectly, any share of the profits therefrom. Issuance of such license shall not exempt the licensee from any other provision of the liquor laws.

An applicant for this free one day special license shall file an application in duplicate on the form prescribed by the department.

(b) The director may issue a one day special license to any applicant if the event for the license is to occur prior to a commission meeting.

RULE 3

RULES OF GENERAL APPLICATIONS

Rule 3.1. Posting of license and availability of rules and regulations. The liquor license shall be conspicuously posted on the licensed premises. Every licensee shall have a copy of the rules and regulations of the commission available at all times on the licensed premises for examination by employees and customers. Licensees and employees shall familiarize themselves with said rules and regulations.

Rule 3.2. Alteration of premises. A licensee shall obtain approval from the commission prior to making any substantial physical alteration, such as adding or removing walls, changes in entrances and/or exits, relocating wet bars, changing floor levels, etc., to its licensed premises.

Rule 3.3. Unauthorized liquor. The possession of any liquor by a licensee on any licensed premises,

other than that authorized by the license, is prohibited. The finding of such unauthorized liquor on the licensed premises will be considered prima facie evidence of illegal possession thereof by the licensee.

Rule 3.4. Surrender of license. The holder of any license must immediately surrender its license to the commission upon suspension or revocation thereof, or within five days after closing his business if it be otherwise discontinued.

Rule 3.5. Free goods prohibited, exception. No licensee shall directly or indirectly offer, furnish, deliver, or give away any free goods, gratuities, gifts, prizes, coupons, premiums, or other article or thing of value to a consumer which is tied in to the sale of liquor, except "pupus" offered in on premises establishments and advertising specialties which are available to all consumers are exempt from this provision.

Rule 3.6. Advertisements, posters, and signs, exception. (a) No licensee shall, directly or indirectly, cause obscene, lewd, or immoral matter to be shown, displayed or distributed either on or from the premises.

(b) No licensee, except manufacturers and wholesale dealers, shall advertise liquor by brand name on exterior or window signs. All exterior signs shall conform with the county sign ordinance.

(c) For the purpose of this rule, a "window sign" means a sign that advertises liquor that is available in the state by brand name, installed within two feet of a window of a licensed premises, visible from the exterior of the premises and intended to be displayed for more than thirty days.

Rule 3.7. Attire and conduct of persons within a licensed premises, exception. No licensee shall at any time:

(1) Employ or use any person or permit any person to remain in or upon the licensed premises while such person is unclothed or in such attire, costume, or clothing as to expose to view any portion of the female breast below the top of the areole or any portion of the pubic hair, anus, cleft of the buttocks, vulva, or genitals, except as provided by Rule 8.5; or

(2) Permit any person to perform or simulate sexual acts in its licensed premises.

Rule 3.8. Sales to persons below the legal age to purchase liquor prohibited. No licensee shall sell or furnish any liquor to any person who is below the legal age to purchase liquor nor accept any payment, including the signing of any charge slip, from any person who is below the legal age to purchase liquor for any liquor sold.

Rule 3.9. Warehousing of liquor off the licensed premises. (a) Any licensee with warehousing off his licensed premises shall keep within the warehouse invoices for all liquor received at the warehouse, and a record of all liquor distributed from the warehouse. All records shall be kept for no less than three years.

(b) Any liquor distributed from the warehouse must be delivered directly to the licensed premises of the licensee.

(c) If a warehouse building is used by more than one licensee, each licensee's space shall be separated with permanent partitions.

Rule 3.10. Pool buying. The agent of a pool buying agreement shall file a copy of the agreement with the department prior to exercising the agreement. The agreement shall include the names and license numbers of all licensees who are to participate in the pool buying agreement, the name of the licensee who is to be the agent, and the address of the delivery location.

A pool buying agreement shall expire on June 30 of each year or upon the addition of a new party to the agreement, whichever occurs first.

The agent shall inform the department of the date of transaction made under the pool buying agreement prior to the transaction date. Each pool buying transaction shall be completed on the day transacted; which means that all members of the pool must take possession and pay for their merchandise on the day that the agent receives the liquor at his premises.

The agent shall provide a list to the wholesaler and/or manufacturer of all members of the pool buying agreement and a list of purchases to be made by each member.

The wholesaler and/or manufacturer shall prepare separate invoices for each member of the pool buying agreement.

Rule 3.11. Waiving of rights to a violation hearing. A licensee who is cited by the commission as having violated any one of the following rules:

(1) Rule 3.1. Posting of license and availability of rules and regulations;

(2) Rule 3.2. Alteration of premises;

(3) Rule 3.6. Advertisements, posters, and signs, exception;

(4) Rule 4.4. Quarterly gross liquor sales report;

(5) Rule 7.9. Manager and bar employee registration;

(6) Rule 7.10. A person below the age of eighteen years working or entertaining in a licensed premises;

(7) Rule 7.11. Bar employee records;

(8) Rule 7.14. Fight and disturbance reports;

(9) Rule 9.1. Membership list of club; and

(10) Rule 10.3. Manager registration.

may waive its right to a hearing and admit to the charge prior to the hearing without appearing before the commission.

For the first violation of any one of the above-mentioned rules, the licensee shall pay a penalty of fifty dollars ($50.00) to the department at the time that the licensee admits to the charge.

For the second violation within a twelve-month period, whether the violation is of the same rule or any other rule mentioned above, the licensee shall pay a penalty of one hundred dollars ($100.00) to the department at the time that the licensee admits to the charge.

The licensee may not waive its right to a hearing pursuant to this rule and shall be required to appear before the commission where the licensee has committed more than two rule violations of the commission's rules within the previous twelve-month period.

Rule 3.12. Commission orders. All licensees shall comply with all lawful orders of the commission.

Rule 3.13. Contests and prizes, prohibitions. (a) No licensee shall promote or permit any contests which involves the consumption of liquor.

(b) No licensee shall at any time give any liquor as a prize for any contest.

Rule 3.14 Suspension or revocation of blue card or red card. The Commission may at any time for good cause suspend or revoke a blue card or red card.

RULE 4

LICENSE FEES, GROSS SALES REPORTS

Rule 4.1. License fees. The fees for licenses of the several classes and kinds as described in Section 281-31, Hawaii Revised Statutes, as amended, shall be as follows, the same being per annum except where otherwise specified:

Class Kind Fees

1. Manufacturers (a) Beer $ 408

(including (b) Wine $ 408

rectifiers) (c) Alcohol $ 204

(d) Other Liquors $ 648

2. Restaurant (a) General $ 480 plus 1% of all liquor sales over $70,000 or $7,500, whichever is less.

(b) Beer & Wine $ 180 plus 1% of all liquor sales over $40,000 or $5,500, whichever is less.

3. Wholesale (a) General $1,200

dealer (b) Beer & Wine $ 324

4. Retail dealer (a) General $ 480 plus 1% of all liquor sales over $70,000 or $6,000, whichever is less.

(b) Beer & Wine $ 180 plus 1% of all liquor sales over $40,000 or $4,800, whichever is less.

Class Kind Fees

5. Dispenser (a) General $ 480 plus 1% of all liquor sales over $70,000 or $7,500, whichever is less.

(b) Beer & Wine $ 180 plus 1% of all liquor sales over $40,000 or $5,500, whichever is less.

6. Club $ 240 plus 1% of all liquor sales over $40,000 or $4,800, whichever is less.

7. Vessel $ 240

8. Transient Vessel, per day $ 33

Transient Vessel, per year $ 900

9. Tour or Cruise Vessel $ 240 plus 1% of all liquor sales over $40,000 or $7,000, whichever is less.

10. Special, (a) General $ 33

per day (b) Beer & Wine $ 24

11. Cabaret $ 600 plus 1% of all liquor sales over $85,000 or $12,000, which- ever is less.

12. Hotel $ 900 plus 1% of all liquor sales over $130,000 or $23,000, which- ever is less.

13. Caterer $ 120 plus any percentage fee as may be required based on total sales as reported under the dispenser license.

Class Kind Fees

14. Brewpub $ 900 plus 1% of all retail sales over $70,000 or $7,500, whichever is less.

The fee for a temporary license of any class and kind shall be sixty dollars ($60.00) for an initial period of one hundred twenty days or any fraction thereof, and an additional sixty dollars ($60.00) for a renewal of not more than sixty days of the license.

Rule 4.2. License fees; when due; how computed. (a) The fee for any license to be renewed, except temporary licenses, shall be due and payable prior to July 1 of each year. The fee for any new license issued shall be due and payable on commencing the business thereunder. The fee for a license issued effective July 1 shall be the annual minimum fee as prescribed by Rule 4.1. The fee paid for a license issued on any other date shall be computed proportionally, based on the minimum annual fee as prescribed by Rule 4.1, from the first day of the month in which the business commenced to the expiration date.

(b) The fees as prescribed by Rule 4.1 for class 8 and 10 and temporary licenses shall be due and payable on the effective date of the licenses and shall be for the entire period of the licenses.

Rule 4.3. Fees for solicitors' and representatives' permits. The fees for solicitors' and representatives' permits shall be for twelve calendar months, including the month the permits are issued, and shall be in the following amounts: General-$180.00; Beer & Wine-$90.00; and Alcohol-$5.00.

Rule 4.4. Quarterly gross liquor sales reports. (a) All restaurant, retail dealer, dispenser, club, tour or cruise vessel, hotel, and cabaret licensees shall submit quarterly reports of their gross liquor sales. A brewpub licensee shall submit quarterly reports of its gross liquor sales of all liquor sold for consumption in its premises. A holder of a caterer license shall report its gross liquor sales as part of the sale of its dispenser license. These quarterly reports shall be submitted no later than the last day of January, April, and October for the previous three months' sales. The report for the quarter of April, May, June shall be submitted as part of the annual report. The gross sales reported may be rounded off to the nearest dollar. Gross sales of liquor under a temporary license shall be included as part of the sale of the transferee.

(b) Persons issued special licenses shall report their gross sales and any other information required by the commission within three days after the expiration of the license.

(c) All licensees who are required to submit gross sales reports to the department shall keep within the State of Hawaii a set of books or records which shows all income, purchases, and expenses of their liquor licensed business. These books and records, including but not limited to daily sales records, employee time sheets, and invoices, shall be made available for inspection and/or auditing by the department within forty-eight (48) hours from the time the licensee is notified by the department.

Rule 4.5. Annual declaration of gross liquor sales and additional fees on gross liquor sales, penalty. All licensees who are required to file quarterly gross liquor sales reports shall file an annual declaration of gross liquor sales for the fiscal year ending June 30 and shall pay an additional fee due based on gross sales within thirty-one (31) days after the expiration of the license.

The sales reported on the annual report form may be rounded off to the nearest dollar. If the due date for the report and payment of additional fee falls on a Saturday, Sunday, or holiday, the report and additional fee payable shall be due and payable on the first working day after the Saturday, Sunday, or holiday.

In case of revocation or cancellation of a license, the additional fee chargeable against the licensee shall become due and payable forthwith.

In case of transfer of a license, the licensee who holds the license on the expiration day of the license or on the day of cancellation or revocation shall pay any additional fee that may have accrued against the license during the full term of the license.

If the total additional fee due and payable is less than one dollar ($1.00), the additional fee need not be paid. If an overpayment of less than one dollar ($1.00) is made by the licensee, the commission shall not refund the overpayment.

If the annual declaration of gross liquor sales and/or payment of any additional fee due is not received by the commission on or before the due date, the licensee shall pay a penalty of twenty five dollars ($25.00) or ten percent (10%) of any additional fee due, whichever is greater but not more than five hundred dollars ($500.00). If an inaccurate annual declaration of gross liquor sales is filed and the error is not corrected by the due date, the report shall be considered as being filed after the due date. The commission may impose further penalties for each and every day of late filing and/or late payment of any additional fee due.

RULE 5

TERM OF LICENSE AND PERMIT

Rule 5.1. Terms of licenses and permits. (a) Every license issued, except classes 8 and 10 and temporary licenses, shall expire at 12:00 midnight on June 30 next succeeding its issue.

(b) Transient vessel, special, temporary licenses, and solicitors' and representatives' permits shall expire at 12:00 midnight on the expiration day of the licenses.

(c) All liquor licenses not exercised within one hundred eighty (180) days of approval by the commission shall, except for good cause, become void.

(d) A licensee who applies for a license to change its class or category of license shall exercise the new license within seven (7) days of approval by the commission or it will become void.

RULE 6

HOURS OF BUSINESS

Rule 6.1. Hours during which licensed premises may be open for transaction of business are as follows:

(a) Dispenser, restaurant, brewpub, club, tour or cruise vessel, vessel, and special: Every day from 6:00 a.m. to 2:00 a.m. the following day.

(b) Cabaret, hotel, and transient vessel: Every day from 6:00 a.m. to 4:00 a.m. the following day. Exception: Cabaret in a location zoned other than resort shall be from 6:00 a.m. to 2:00 a.m. the following day.

(d) Wholesale dealers and manufacturers: Every day from 6:00 a.m. to 11:00 p.m.

(e) Caterer: Every day from 6:00 a.m. to 12:00 midnight.

Rule 6.2. Sales, service, or consumption before or after hours of business, exception. There shall be no sale, service, or consumption of liquor on or within any licensed premises before or after hours established by the commission, except that employees who were on duty at the legal closing time in on premises establishments may consume liquor immediately after closing with the permission of the licensee if no other person is in the liquor service area of the premises.

RULE 7

RELATING TO ON PREMISES ESTABLISHMENTS

Rule 7.1. Number of drinks per person and liquor content of drinks, exception. (a) The stacking of liquor for consumption by patrons is prohibited. For the purpose of this rule, a beer served with a straight or unmixed drink shall be considered to be one drink. Also, for the purpose of this rule, the word "stacking" is defined as two full drinks at one time or more than two drinks at one time to a customer.

(b) A drink consisting of one or more kinds of liquor and water or any other mix which is served, sold, or offered for sale by any on premises licensee, or prepared for such purpose, shall contain not less than one fluid ounce of liquor; except when selling a specialty drink which requires less than one ounce of liquor; in which case the licensee shall present to the patron purchasing the drink a recipe or have in plain view of the patron ordering the drink a menu which specifies the amount of liquor in the drink. When liquor is poured into a service glass by the licensee or an employee, the drink shall be presumed to have been prepared for service or sale, notwithstanding the fact that the mix or water has not been added.

Rule 7.2. Sanitary conditions. (a) All licensed premises, including all furnishings, equipment, and paraphernalia within the premises, shall be kept in a strictly clean and sanitary condition, and all drinking glasses must be uncracked and effectively sterilized.

(b) Adequate toilet facilities for both males and females must be installed inside all on premises establishments, except special license establishments; provided that where there is not sufficient space in the premises, such facilities may be installed outside, adjoining the premises, under conditions set by the commission. Special license establishments shall have toilet facilities as may be required by the commission.

Rule 7.3. Draught beer. Draught beer sold or served shall be freshly drawn. The selling and serving of stale or slop beer is prohibited.

Rule 7.4. Condition of premises. (a) The main entrance of an on premises establishment must be kept unlocked whenever there is any non-employee or any employee who was not on duty at the closing time in the premises. Entrance to booths must be open and unobstructed, and all parts of the premises must be well and properly lighted.

(b) An on premises establishment shall be constructed in such a way that the sound from the licensed premises shall not disturb the nearby residents with unreasonable noise nor shall it exceed the following noise levels in decibels (dBA) for more than ten percent of the time within any 20-minute period at the boundary line of the complainant which is closest to the licensed premises.

10 p.m. to

7 a.m. 7 a.m. the

Zoning Districts to 10 p.m. following day

Residential (R-1 to R-6) 55 dBA 45 dBA

Open (O) 55 dBA 45 dBA

Residential (R10 & R20) 60 dBA 50 dBA

Resort (RR10 & RR20) 60 dBA 50 dBA

Commercial (Neighborhood

and General) 60 dBA 50 dBA

Agricultural 70 dBA 70 dBA

Industrial (Limited and

General) 70 dBA 70 dBA

Where the allowable noise level between two adjacent zoning districts differ, the lower allowable noise level shall be used. This rule shall be enforced if a complaint of noise from the premises is received by the department from any resident or property owner with rental units within the area.

Rule 7.5. Music, dancing, and entertainment, exception. (a) In any on premises establishment, radios, television sets, jukeboxes, and any other system of providing recorded background music in the premises may be installed and operated without

commission approval, provided that the sound does not disturb the neighborhood. Programs that are not offensive to common propriety and programs that are rated G or PG may be shown within the premises.

(b) Impromptu entertainment which is unpaid and unscheduled entertainment by a person who is not less than eighteen years of age is permitted without commission approval if said entertainment is not offensive to common propriety and the sound does not disturb the neighborhood.

(c) Any and all games and other forms of entertainment provided by management, such as music, shows, and game machines are prohibited except where and when specifically permitted by the commission in writing.

(d) Any license that was classified as a category 3 license on June 19, 1990, shall be classified as category 3 with dancing premises.

(e) A premises which did not have a permit to have dancing but was permitted to have live entertainment in its premises on June 19, 1990, shall be considered a category 3 without dancing premises.

(f) A standard bar or a category 3 without dancing premises that wishes to have dancing in its premises as part of its normal operations shall be subject to Section 281-51 to 281-60 of the Hawaii Revised Statutes.

(g) In premises where dancing by customers is permitted, the licensee shall provide a clearly designated dance floor of not less than one hundred fifty (150) square feet suitable for ballroom dancing. The designated area may be utilized for other purposes when not used for dancing. However, when used for dancing, the designated area must be totally cleared of all obstructions and utilized only for dancing.

(h) Paragraph (c) above to the contrary notwithstanding, no permit shall be required by a hotel licensee for live entertainment, games, movies, etc., if the entertainment, games, movies, etc., are not offensive to common propriety.

Rule 7.6. Repealed.

Rule 7.7. Clearing of tables at closing time. Any and all vessels containing liquor shall be removed from all areas of the licensed premises which is open to the public no later than the legal closing time for liquor sales, except as permitted by Rule 6.2.

Rule 7.8. Manager on duty, qualifications. (a) A person who is not less than twenty-one years of age and who is duly registered by the licensee as manager and approved by the commission must be in active charge of any on premises establishment at all times when there is anyone who is not an employee in the premises.

(b) To become eligible for approval as a manager, the applicant shall take a written or oral test in the English language covering all applicable laws relating to liquor and the rules and regulations of the commission and receive a score of eighty-five percent (85%) or more correct. Upon successful completion of the test; presentation of proper identification, showing the applicant's date of birth; and commission review of eligibility and approval; the applicant shall be issued a blue card. Any blue card issued on or after April 15, 1983 shall be valid for a period of five years from the date of issuance. Any blue card issued prior to April 15, 1983 shall remain valid until the holder, on or after April 15, 1983, changes his place of employment and is registered as a manager by the licensee of his new place of employment. The commission may require the

applicant to appear before the commission for a personal interview and evaluation as to eligibility prior to granting final approval of the applicant as a manager.

Rule 7.9. Manager and bar employee registration. (a) Each licensee is strictly accountable for the conduct of all employees, including management personnel, in the licensed premises.

(b) An on premises licensee shall notify the commission of the employment of a manager prior to his employment by delivering or mailing a notice of employment of such person to the department. A manager must have a valid blue card prior to his employment as manager. A person does not qualify as a manager unless he is registered as a manager by the licensee.

(c) Any employee whose duties include the sale of liquor is required to have a white or blue card issued by the department. An employee who does not have a white card or a blue card shall obtain a white card within fifteen days from the date of employment. To obtain a white card, a person must personally appear at the department with adequate identification documents showing his date of birth. A lost card will be replaced by the department upon application of the employee. Any employee who does not obtain a white card within fifteen days from the date of his employment shall be terminated.

(d) The commission may require the licensee to suspend or terminate the employment of any employee for good and sufficient reason. Good and sufficient reason shall include but not be limited to conviction for an offense against the public health and morals as set out in the Hawaii Penal Code.

(e) Every on premises licensee shall submit a list of all its employees whose duties include the sale of liquor, including management personnel, to the department no later than July 31 of each year on the forms provided by the department.

Rule 7.10. A person below the age of eighteen years working or entertaining in a licensed premises. (a) An on premises licensee shall submit application forms to the department for any person who is below the age of eighteen years, including the licensee's own child, who is to work as an entertainer, waiter, busboy, janitor, etc., where such person's principal duties involve working within the licensed premises prior to the start of such person's employment.

(b) The licensee must comply with all of the requirements of the Child Labor Laws of the State of Hawaii prior to the employment of such person.

(1) a person below the age of eighteen years may entertain at a private party without the licensee submitting application forms to the commission if the host is not the licensee; and

(2) persons below the age of eighteen years as a nonprofit group may perform in a hotel licensed premises for one performance only in any twelve-month period without the licensee submitting application forms to the commission if the performance is arranged by a school as defined by Section 297-1 of the Hawaii Revised Statutes and to include an accredited university or college, or religious organization, or a bona fide nonprofit corporation which is registered with the state department of commerce and consumer affairs.

Rule 7.11. Bar employee records. An on premises licensee shall have available at all times in the licensed premises a current record showing all bar employees, including management personnel, who are on duty.

Rule 7.12. Employees drinking on duty and entertaining patrons prohibited. In an on premises establishment, no employee, while on duty and within the premises, shall consume liquor or sit or dance with or play games with patrons. This restriction shall not apply to the overall manager who is in active charge of the premises if he does not work at selling or serving liquor.

For the purpose of this rule, "while on duty" shall mean from the time an employee starts work on any day until the employee is through for that day. It shall include any time during a split shift, a meal break and a rest break.

Rule 7.13. A person below the age of eighteen years in an on premises establishment prohibited, exceptions. (a) A person below the age of eighteen years is not permitted in an on premises establishment where liquor sales account for eighty-five percent (85%) or more of the total revenues of the establishment, excluding revenues from coin operated machines or when there is a show that exposes to view the female breast below the top of the areole, or a strip tease show, or a show that is offensive to common propriety.

The revenue figures for the immediate past calendar month shall be used to determine if a licensed premises is qualified to have persons below the age of eighteen years in its premises. A new licensee or a licensee who changes its operation to include

sales of other merchandise shall be automatically qualified to permit persons below the age of eighteen years in its premises during its first month of operation.

(b) A minor below the age of 18 years shall not be permitted in any area of any licensed premises where liquor is served after 12 o'clock midnight. This paragraph shall not apply to such minor who is attending a private party with a parent or a guardian.

Rule 7.14. Fight and disturbance reports. An on premises licensee shall report all fights and disturbances, on the forms provided by the department, that occur in his licensed premises. The report shall be submitted to the department within seven days from the time of the incident.

For the purpose of this rule, the word "disturbance" shall mean any incident of quarrelsome behavior that causes the licensee, his employees, or police officers to evict a person from the premises or to request a person to leave the premises.

Rule 7.15. Review by patron of charge slip for liquor purchased. Any on premises licensee who does not collect payment for each drink as it is served shall upon request, inform the patron the amount owing each time liquor is served.

Rule 7.16. Practices that promote excessive consumption of liquor prohibited. (a) Licensees shall use good judgment in serving liquor to patrons to prevent excessive consumption of liquor by patrons.

(b) No alcoholic beverage shall be sold unless the consuming patron consents to accept said beverage prior to service.

(c) Prices charged for alcoholic beverages at 6:00 p.m. or at opening time if the premises opens after 6:00 p.m. or any price increase thereafter shall not be reduced during the rest of that business day.

(d) No licensee shall sell to any person an unlimited quantity of liquor during any set period of time for a fixed price. This paragraph shall not apply to private parties or public functions such as luaus, brunches, or other similar events where liquor service is incidental to food service.

RULE 8

RELATING TO CABARET AND HOTEL LICENSES

Rule 8.1. Minimum requirements of cabaret license. A cabaret establishment shall have hot meals which are cooked within the premises available to patrons from the time the premises is open for business to midnight. A covered dance floor of not less than one hundred fifty (150) square feet suitable for dancing and clearly designated for such purpose or professional entertainment shall be provided for the benefit of the patrons. Neither a paid person who operates a system of recorded music nor a paid person who serves as a master of ceremonies shall be considered a professional entertainer. The commission reserves the right to regulate and control professional entertainment in cabarets. The licensee will be strictly accountable for the conduct of all entertainers in the licensed premises.

Rule 8.2. Cabaret license not issued, when. No application for a new cabaret license which is to be located in an area which is not a resort zoned area shall be approved if there is any property with a residence on it within 500 feet of the proposed premises.

Rule 8.3. Minimum requirements of hotel license. Minimum requirements for hotel license shall be an establishment consisting of one or more buildings which contain (1) at least forty rooms in which sleeping accommodations are provided and offered for adequate pay to transients or permanent guests; and (2) a suitable and adequate kitchen and dining room where at least one meal is prepared and served daily to hotel guests and other customers.

Rule 8.4. Catering privilege. A hotel licensee may provide off premises catering between 6:00 a.m. and 12:00 midnight daily for the sale of liquor while performing food catering functions, subject to Rules 12.2 to 12.4.

Rule 8.5. Strip shows, exotic dancers. Rule 3.7 to the contrary notwithstanding, cabaret and non-standard hotel licensed premises may allow scheduled entertainers whose breasts and/or buttocks are exposed to view to perform, if they perform on a stage that is not less than twelve inches above the immediate floor level and not less than six feet from the nearest patron but at no time under any circumstances shall an entertainer expose his or her genitals, pubic hair, or anus, or perform or simulate sexual acts in the licensed premises. The licensee shall submit the names of all entertainers who are to perform to the department not less than twenty-four hours prior to their performance and the licensee shall not permit any nude impromptu entertainment under this rule.

Rule 8.6. Mini bars in guest rooms. A hotel licensed premises may provide a mini bar in a guest room which is stocked with liquor whenever the room is occupied by a person who is twenty-one years of age or older.

Rule 8.7. Recognizable security person. Every cabaret and hotel licensee shall have a recognizable security person within the premises to prevent anyone from selling, distributing, or using illegal drugs within the premises where liquor is being sold during the time the premises is open for business after

2:00 a.m.

RULE 9

RELATING TO THE CLUB LICENSE

Rule 9.1. Membership list of club. Each licensed club shall keep a complete list of its members, which list shall at all times be conspicuously posted and exposed to view, convenient for inspection on the licensed premises.

Rule 9.2. Guest-card privileges of club. Any individual enjoying guest-card privileges of a club and to whom liquors may be sold must be a bona fide guest of the club; provided, however, that no person who is a legal resident of the county of Kauai shall be deemed to be a guest enjoying the privileges of the membership of a club. Each club shall keep records as to registration of all such bona fide guests, which records shall be produced whenever required by the commission, or by any member thereof, or by any investigator. Guest-card privileges extended to such guest shall be limited, in each case, to not more than four weeks within any twelve consecutive months.

RULE 10

RELATING TO MANUFACTURERS, WHOLESALERS, AND RETAILERS

Rule 10.1. Retail dealer licensed premises. If the retail dealer licensed premises are open to the public during the hours when the sale of liquor is prohibited, the licensee shall post conspicuous signs about all areas displaying liquor giving notice that the sale of liquor is prohibited.

Rule 10.2. Manager on duty, qualifications. (a) A person who is not less than twenty-one years of age and who is duly registered by the licensee as a manager and approved by the commission must be in active charge of any off premise establishment at all times that liquor can be legally sold.

(b) To become eligible for approval as a manager, the applicant shall take a written or oral test in the English language covering all applicable laws relating to liquor and the rules and regulations of the commission and receive a score of eighty-five percent (85%) or more correct. Upon successful completion of the test; presentation of proper identification, showing the applicant's date of birth; and commission review of eligibility and approval; the applicant shall be issued a red card. Any red card issued shall be valid for a period of five years from the date of issuance. The commission may require the applicant to appear before the commission for a personal interview and evaluation as to eligibility prior to granting final approval of the applicant as a manager.

Rule 10.3. Manager registration. (a) An off premises licensee shall notify the commission of the employment of a manager prior to employing the individual by delivering or mailing a notice of employment of such person to the department. A manager must have a valid red card prior to employment as manager. A person does not qualify as a manager unless the individual is registered as a manager by the licensee.

(b) Every off premises licensee shall submit a list of all its managers to the department no later than July 31 of each year on the forms provided by the department.

Rule 10.4. Prohibition against peddling, exception. Except as specifically allowed herein, peddling in any sense is strictly prohibited. Before removing liquor from licensed premises for delivery to a customer under a manufacturer's or wholesale or retail dealer's license, the licensee must have received a bona fide and specific order therefor. Provided, however, duly licensed wholesale dealers may, without a bona fide and specific order therefor, remove beer from licensed premises to delivery vehicles for the purpose of selling said beer directly to persons who may lawfully sell liquor at retail in their original package or dispense liquor for consumption on the premises.

Rule 10.5. Record keeping by wholesalers. All wholesale dealers shall keep a separate and distinct book account, wherein shall be entered the name of the licensee, license number, place of business, the day, month, and year in which the sale was made and the quantity of liquor sold to each licensee, and shall, upon the specific request therefor, submit to the commission a list of such sales data as may be required from time to time.

RULE 11

RELATING TO RESTAURANT LICENSE

Rule 11.1 Minimum requirements for a restaurant license. A restaurant license may be issued to an establishment which is regularly used and kept open for the serving of meals to patrons for compensation and which has suitable kitchen facilities connected therewith, containing the necessary equipment and supplies for cooking an assortment of foods which may be required for ordinary meals. Additionally, at least thirty per cent of the establishment's gross revenues must derive from the sale of foods.

Rule 11.2. Catering privilege. A restaurant licensee may provide off premises catering between 6:00 a.m. and 12:00 midnight daily for the sale of liquor authorized by its license while performing food catering functions, subject to Rules 12.2. to 12.4.

Rule 11.3. Categories of license. A restaurant license shall be either category 1 or category 2, a premises in which live entertainment or recorded music is provided. A category 2 premises shall be further described as a premises with dancing or a premises without dancing. A licensee who wishes to change from one category to a different category will be required to apply for a new license.

Rule 11.4. Change to a restaurant license. A license of a different class which was in existence on the effective date of this amendment which qualifies for a restaurant class license may be issued a restaurant category 1 or 2 license by the commission. The category assigned will be according to the permitted activities of the license to be changed.

RULE 12

RELATING TO CATERER LICENSE

Rule 12.1. Minimum requirements for a caterer license. A caterer license may be issued to any cabaret or dispenser general licensee who serves food as part of its operation and generates at least 30% of its gross revenue from the sale of foods for the sale of liquor while performing food catering function.

Rule 12.2. Notification of catering function. The licensee shall notify the department of all catering functions that will be held away from the licensee's premises at least five days prior to the function on the form provided by the department. The notification shall include a written statement from the owner or representative of the property that such function will be subject to the liquor laws and the inspection by investigators.

Rule 12.3. Location of catering function, restrictions. (a) The commission may deny the use of any specific location for catering functions for good cause as stated in paragraph (c) below.

(b) The licensee may provide catering service to any location if the property owner is not compensated for the use of the property and there is no charge to anyone to attend the function.

(c) If the property owner of the location for the catering event is compensated for the use of the property or if the caterer is the property owner or if there is a charge for anyone to attend the function, the property must be zoned resort or commercial or be a government facility where liquor may be sold. The property may be used for catering functions as long as the department does not receive any complaints, such as noise, dust, traffic, etc., about the catering functions.

Rule 12.4. No host bar prohibited. The caterer shall not at any catered function which is held away from its licensed premises open or operate a no host bar. A no host bar means a bar where each person who orders a drink is charged for the drink.

RULE 13

SEVERABILITY

Rule 13.1. Severability. If any provision of these rules and regulations or the application thereof to any person or circumstances is held invalid, the invalidity shall not affect other provisions or applications of the rules which can be given effect without the invalid provision or application, and to this end the provisions of these rules and regulations are declared to be severable.

RULE 1

DEFINITIONS

RULE 2

RULES OF PRACTICE AND PROCEDURE

RULE 3

RULES OF GENERAL APPLICATIONS

RULE 4

LICENSE FEES, GROSS SALES REPORTS

RULE 5

TERM OF LICENSE AND PERMIT

RULE 6

HOURS OF BUSINESS

RULE 7

RELATING TO ON PREMISES ESTABLISHMENTS

RULE 8

RELATING TO CABARET AND HOTEL LICENSES

RULE 9

RULE 10

RELATING TO MANUFACTURERS, WHOLESALERS, AND RETAILERS

RULE 11

RELATING TO RESTAURANT LICENSE

RULE 12

SEVERABILITY

INDEX ON RULES AND REGULATIONS