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UPDATE: Liquor Commission Rules Draw Ire of Nonprofits

Kula resident Harlan Hughes, a participant in non profit events serving liquor for over 30 years testifies before the Liquor Commission as representatives of nonprofit organizations listen. MAUIWatch/Susan Hales.

Update as of 6 p.m. Wednesday, August 9.

Following the executive session, the Maui Liquor Commission accepted a motion to review both their own proposed amendments to the rules regulating one-day liquor sales at nonprofit fundraisers and the version submitted by Yuki Lei Suigimura.

The material included in these two draft versions will be published for public notice on Sunday and will be on the commission’s agenda for its September meeting.

In other action later in the day, they also accepted the amended version of the checklist of requirements that nonprofits must meet prior to applying for the one-day special use “Class 10” license.

Original story published at 3:59 p.m.

The room was packed and the mood was tense as the Maui Liquor Commission heard testimony on Wednesday, primarily from nonprofit organizations in opposition to rule changes regarding the “Class 10” special permit, which allows them to serve alcohol at one-day fundraising events.

Although these permits have been granted for decades without incident, recent changes made by the Liquor Commission propose to add many new conditions to what in the past has been a relatively simple and routine process.

The new rules are now a topic of urgent concern as the nonprofits seek to eliminate the changes, which would require fingerprinting, criminal background checks, disclosure of social security numbers, and work history dating back to age of 18 and other burdensome regulations for staff, board members and volunteers in order to obtain a one-day permit.

Though there has been some attempt to reach a compromise, virtually all the representatives who testified said the regulations, even as modified, would place a heavy burden on them. Duplicate requirements they have already met either at the federal or state level that are covered by their insurance are not really necessary, they say, and most critically of all, will force them to take time, staff, and resources away from their core mission of providing services and programs. They also said these regulations discourage volunteers from participating due to their invasive nature and add an unnecessary layer of bureaucracy to their resources that are already stretched thin.

More than one speaker pointed out that the commissioners, who make and enforce the liquor policy and regulations, are not subject to any similar requirements and are seemingly able to do their important jobs based on “trust.” But, it was noted, the same “trust” was lacking when it came to the many organizations who serve the Maui community.

Yuki Lei Sugimura in particular was outspoken in her quest to have the changes dropped. A former volunteer for the late Sen. Daniel Inouye, she wondered aloud if the commission would insist on fingerprinting the Hawai`i Senator, saying that the idea was preposterous on the face of it.

In addition to objecting to the changes in the rules, the representatives of the nonprofit groups also objected to the “checklist” of required actions which required consultation and clearance from a wide variety of local, state, and federal agencies on every subject from tax exemption to zoning, wastewater, public works, and health, as well as a site plan, floor plan, and payment of fees to liquor control that varied from $10 to $25 per day, depending on the nature of the event, and charges $42.00 per person and event for fingerprinting.

Only Maui Makes it Hard for Non Profits

Joe Kent, Research Director of the Grass Roots Institute in Honolulu provided MAUIWatch with links to the regulations for nonprofit organizations in other counties.

The Big Island, Oahu and Kauai have rules which are much less complicated and burdensome than those proposed for Maui.

Hawaii County has modest rules for non-profits.

Kauai County gives a one day special license, and all that is required is this one form and $100.

Honolulu County has no fees required for non-profits (Pg. 26 of this document). Oahu non-profits must go through the modest steps on this form and fill this out.

Maui is the only county in the state proposing draconian rules requiring fingerprinting and background checks for special liquor licenses for non-profits. The other counties have modest rules, such as listing event or tax information on a single form.

They also found the actual requirements themselves ambiguous, and privately, they objected to the fact that they could not download the applications online, but had to make an appointment to come in and meet with staff, and that the process for obtaining one-day licenses might require multiple meetings in order to comply.

Those who spoke rejected the commission’s proposed modified rules, which had been scaled back, and now called for the fingerprinting/background check of the executive director and one board member.

All who expressed an opinion preferred Sugimura’s proposal, which explicitly stated that “special license applications shall not require personal history statements, criminal history background check, or other governmental clearances,” to the commission’s own version. The Sugimura memo listed nine conditions applicants must fulfill, including being at least 21 years old, not be an interested party to the application, and could not apply if a license had been revoked within two years prior to the date of the application.

Five of the nine commissioners were present at today’s meeting held in the Liquor Commission’s conference room in Wailuku. They were Acting Chair Dana Souza, Roy Umeno, Dawn Bicoy, Brenda Lee, and Nane Aluli.

Absent were Chairman Robert Tanaka, Darren Lopez, Leon Bolosan, and Nicole DeRego.

Wednesday’s meeting followed a court hearing Tuesday before Second Circuit Court Judge Rhonda Loo. Judge Loo ruled in favor of the county in a legal action that challenged the validity of these and other rules recently adopted (and later changed due to public outcry).

The action brought by the Committee for Responsible Liquor Control, headed by Kihei resident Madge Schaefer, alleged insufficient public notice and abuse of the commission’s rulemaking authority. The judge decided that the commission acted within its scope of authority and referred the group back to today’s Liquor Commission session.

This is the third time in as many months that the Liquor Commissioner’s chambers have been filled with angry citizens demanding rollbacks of changes. In earlier meetings, the changes were deemed far too generous, such as 24/7 liquor sales.

Maui Academy of Performing Arts spokesperson Peggy Harmon noted that its long running Garden Party, which has always featured some form of food and wine tasting, now finds its 2017 version of this event, scheduled for Oct. 1, in jeopardy due to uncertainty about the rules.

Any decision on creating new rules would require 30 days notice to implement, which means it could be enacted as early as September.

Attorney Ed Kushi, Jr., representing the commission, suggested to them that they deal with the issues relating to the checklist at today’s session and give public notice no later than Sunday, Aug. 13 that they intend to take up the rule changes in September.

But even that suggestion had people in the room clenching their teeth, as they are part of the organizations facing tight deadlines for upcoming events and cannot wait til September for answers.

Following the open session, the commission adjourned shortly before noon to go into executive session. There were many frowns and worried faces as the door to the meeting room closed so the commission members could talk it over among themselves and with staff and legal advisors.

As for the management, Department of Liquor Control Director Glenn Mukai declined to comment on any of the testimony, rules, or matters being heard before the commission. He did acknowledge that even though he was a relatively new hire, becoming head of the department in April, he is subject to a regular performance review by the commission, but did not know when that review would be scheduled.

Asked, given the comedy of errors in recent months, if he expected to resign, he answered, “No.”




About Susan Halas

Susan Halas is a Senior Political Contributor at MAUIWatch. She has followed Hawaii politics since 1976 when she moved to the Valley Isle. She was formerly a staff writer for the Maui News as well as other local print and digital publications.

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