SB 2911: Beer; Distilled Spirits; Direct Shipping; Manufacturers

A BILL FOR AN ACT

RELATING TO INTOXICATING LIQUOR.

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

     SECTION 1.  The legislature finds that the current system for direct shipment of alcohol is not applied equally across all producers.  Existing law only allows for the direct shipment of wine by wineries but not small breweries and small distilleries.  Allowing the direct shipment of beer and distilled spirits will create equal opportunities for brewers and distillers as those for wineries.

     Accordingly, the purpose of this Act is to:

     (1)  Allow direct shipment of beer and distilled spirits by certain licensees; and

     (2)  Require the liquor commission of each county to adopt rules and regulations.

     SECTION 2.  Chapter 281, Hawaii Revised Statutes, is amended by adding a new section to part III to be appropriately designated and to read as follows:

     "§281-    Direct shipment of beer and distilled spirits by manufacturers.  (a)  Any person holding:

     (1)  A general excise tax license from the department of taxation; and

     (2)  Either:

          (A)  A class 1, class 14, or class 18 license to manufacture beer or distilled spirits under section 281-31; or

          (B)  A license to manufacture beer or distilled spirits issued by another state,

may pay any applicable fees and obtain a direct beer and distilled spirits shipper permit from the liquor commission of the county to which the beer or distilled spirits will be shipped that authorizes the holder to directly ship beer and distilled spirits to persons in the county pursuant to this section.

     (b)  The holder of the direct beer and distilled spirits shipper permit may sell and ship beer and distilled spirits to any person twenty-one years of age or older in the county that issued the permit for personal use only and not for resale, and shall:

     (1)  Ship beer and distilled spirits directly to the person only in containers that are conspicuously labeled with the words:

          "CONTAINS ALCOHOL:  SIGNATURE OF PERSON AGE 21 YEARS OR OLDER REQUIRED FOR DELIVERY.";

     (2)  Require that the carrier of the shipment obtain the signature of any person twenty-one years of age or older before delivering the shipment;

     (3)  Ship not more than twenty-four two and one quarter gallon cases of beer and not more than six nine-liter cases of distilled spirits to any household per year;

     (4)  Report no later than January 31 of each year, to the liquor commission in each county where a direct beer and distilled spirits shipper permit is held, the total amount of beer and distilled spirits shipped to persons in that county during the preceding calendar year;

     (5)  Pay all applicable general excise and gallonage taxes.  For gallonage tax purposes, all beer and distilled spirits sold under a direct beer and distilled spirits shipper permit shall be deemed to be beer and distilled spirits sold in the State; and

     (6)  Be subject to audit by the liquor commission of each county in which a direct beer and distilled spirits shipper permit is held.

     (c)  The holder of a license to manufacture beer or distilled spirits issued by another state may annually renew a direct beer and distilled spirits shipper permit by providing the liquor commission that issued the permit with a copy of the license and paying all required fees.  The holder of a class 1, class 14, or class 18 license under section 281-31 may renew a direct beer and distilled spirits shipper permit concurrently with the applicable license by complying with all applicable laws and paying all required fees.

     (d)  The sale and shipment of beer and distilled spirits directly to a person in the State by a person that does not possess a valid direct beer and distilled spirits shipper permit is prohibited.  Knowingly violating this section is a misdemeanor.

     (e)  The liquor commission in each county shall adopt rules necessary to carry out the intent and purpose of this section; provided that the liquor commission in each county shall ensure that the liquor commission's respective rulemaking actions do not interfere with, or unduly delay, the implementation of this section.

     (f)  For the purposes of this section:

     "Beer" has the same meaning as defined in section 244D-1.

     "Distilled spirits" has the same meaning as defined in section 244D-1."

     SECTION 3.  New statutory material is underscored.

     SECTION 4.  This Act shall take effect on July 1, 2050.

Report Title:

Beer; Distilled Spirits; Direct Shipping; Manufacturers

Description:

Allows direct shipment of beer and distilled spirits by certain licensees.  Requires the liquor commission of each county to adopt rules and regulations.  Effective 7/1/2050.  (SD1)

The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.

A BILL FOR AN ACT

relating to intoxicating liquor.

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

     SECTION 1.  The legislature finds that the current system for direct shipment of alcohol is not applied equally across all producers.  Existing law only allows for the direct shipment of wine by wineries but not small breweries and small distilleries.  Allowing the direct shipment of beer and distilled spirits will create equal opportunities for brewers and distillers with wineries.

     Accordingly, the purpose of this Act is to:

     (1)  Allow direct shipment of beer and distilled spirits by certain licensees; and

     (2)  Require the liquor commission of each county to adopt rules and regulations.

     SECTION 2.  Chapter 281, Hawaii Revised Statutes, is amended by adding a new section to part III to be appropriately designated and to read as follows:

     "§281-    Direct shipment of beer and distilled spirits by manufacturers.  (a)  Any person holding:

     (1)  A general excise tax license from the department of taxation; and

     (2)  Either:

          (A)  A class 1, class 14, or class 18 license to manufacture beer or distilled spirits under section 281-31; or

          (B)  A license to manufacture beer or distilled spirits issued by another state and produces less than one hundred fifty barrels of malt beverages or twenty thousand barrels of distilled spirits,

may pay any applicable fees and obtain a direct beer and distilled spirits shipper permit from the liquor commission of the county in which the beer or distilled spirits is manufactured that authorizes the holder to directly ship beer and distilled spirits to persons in any county of this State; provided that any person who holds a license to manufacture beer or distilled spirits pursuant to paragraph 2(B) may obtain a direct beer and distilled spirits shipper permit from the liquor commission of the county in this State to which the person will be shipping beer or distilled spirits.

     (b)  The holder of the direct beer and distilled spirits shipper permit may sell and ship beer and distilled spirits to any person twenty-one years of age or older in any county of the State for personal use only and not for resale, and shall:

     (1)  Ship beer and distilled spirits directly to the person only in containers that are conspicuously labeled with the words:

          "CONTAINS ALCOHOL:  SIGNATURE OF PERSON AGE 21 YEARS OR OLDER REQUIRED FOR DELIVERY.";

     (2)  Require that the carrier of the shipment obtain the signature of any person twenty-one years of age or older before delivering the shipment;

     (3)  Ship not more than twenty-four two and one quarter gallon cases of beer and not more than six nine-liter cases of distilled spirits to any household per year;

     (4)  Report no later than January 31 of each year, to the liquor commission in each county in which a direct beer and distilled spirits shipment was made, the total amount of beer and distilled spirits shipped to persons in that county during the preceding calendar year;

     (5)  Pay all applicable general excise and gallonage taxes.  For gallonage tax purposes, all beer and distilled spirits sold under a direct beer and distilled spirits shipper permit shall be deemed to be beer and distilled spirits sold in the State; and

     (6)  Be subject to audit by the liquor commission of each county in which a direct beer and distilled spirits shipment has been made.

     (c)  The holder of a license to manufacture beer or distilled spirits issued by another state may annually renew a direct beer and distilled spirits shipper permit by providing to the liquor commission that issued the permit a copy of the license and paying all required fees.  The holder of a class 1, class 14, or class 18 license to manufacture beer or distilled spirits under section 281-31 may renew a direct beer and distilled spirits shipper permit concurrently with the applicable license by complying with all applicable laws and paying all required fees.

     (d)  The sale and shipment of beer and distilled spirits directly to a person in the State by a person that does not possess a valid direct beer and distilled spirits shipper permit is prohibited.  Knowingly violating this section is a misdemeanor.

     (e)  The liquor commission in each county shall adopt rules necessary to carry out the intent and purpose of this section; provided that the liquor commission in each county shall ensure that that liquor commission's respective rulemaking actions do not interfere with, or unduly delay, the implementation of this section.

     (f)  For the purposes of this section:

     "Beer" has the same meaning as defined in section 244D-1.

     "Distilled spirits" has the same meaning as in section 244D-1."

     SECTION 3.  New statutory material is underscored.

     SECTION 4.  This Act shall take effect upon its approval.

Report Title:

Beer; Distilled Spirits; Direct Shipping; Manufacturers

Description:

Allows direct shipment of beer and distilled spirits by certain licensees.  Requires the liquor commission of each county to adopt rules and regulations.

The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.

STAND. COM. REP. NO. 2311

Honolulu, Hawaii

RE:     S.B. No. 2911

        S.D. 1

Honorable Ronald D. Kouchi

President of the Senate

Thirty-Third State Legislature

Regular Session of 2026

State of Hawaii

Sir:

     Your Committees on Commerce and Consumer Protection and Energy and Intergovernmental Affairs, to which was referred S.B. No. 2911 entitled:

"A BILL FOR AN ACT RELATING TO INTOXICATING LIQUOR,"

beg leave to report as follows:

     The purpose and intent of this measure is to:

     (1)  Allow direct shipment of beer and distilled spirits by certain licensees; and

     (2)  Require the liquor commission of each county to adopt rules and regulations.

     Your Committees received testimony in support of this measure from the Mayor of the County of Kauaʻi, Brewers Association, Maui Chamber of Commerce, Lanikai Brewing Company LLC, Maui Brewing Co., Beer Lab Hawaii, Grassroot Institute of Hawaii, Hawaiʻi Farm Bureau, Maui Wine, and Kauaʻi Island Brewing Co.

     Your Committees received testimony in opposition to this measure from the Hawaii Food Industry Association, ABC Stores, Hawaii Liquor Wholesalers Association, Wine and Spirits Wholesalers of America, Distilled Spirits Council of the United States, and National Beer Wholesalers Association.

     Your Committees received comments on this measure from the Department of the Attorney General.

     Your Committees find that breweries and distilleries in the State are prohibited from directly shipping their products to consumers, both within the State and to consumers in other states.  This measure would support local businesses and provide wider choice to consumers through fairer competition by enabling breweries and distilleries to ship directly to consumers similar to the privileges already granted to wineries.

     Your Committees have amended this measure by:

     (1)  Deleting language that would have imposed manufacturing volume restrictions on persons out-of-state applying for a direct beer and distilled spirits shipper permit;

     (2)  Deleting language that would have required licensure in the county of manufacture;

     (3)  Inserting language that requires licensure and reporting in the shipping destination county;

     (4)  Inserting an effective date of July 1, 2050, to encourage further discussion; and

     (5)  Making technical, nonsubstantive amendments for the purposes of clarity and consistency.

     As affirmed by the records of votes of the members of your Committees on Commerce and Consumer Protection and Energy and Intergovernmental Affairs that are attached to this report, your Committees are in accord with the intent and purpose of S.B. No. 2911, as amended herein, and recommend that it pass Second Reading in the form attached hereto as S.B. No. 2911, S.D. 1, and be referred to your Committee on Judiciary.

Respectfully submitted on behalf of the members of the Committees on Commerce and Consumer Protection and Energy and Intergovernmental Affairs,