REPORT TITLE:
Casino gaming/theme park


DESCRIPTION:
Provides for limited casino gaming and a Hawaiian theme park on
Oahu.

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                        
HOUSE OF REPRESENTATIVES                H.B. NO.1329       
TWENTIETH LEGISLATURE, 1999                                
STATE OF HAWAII                                            
                                                             
________________________________________________________________
________________________________________________________________


                   A  BILL  FOR  AN  ACT

RELATING TO ECONOMIC DEVELOPMENT.



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

 1      SECTION 1.  The legislature finds that Hawaii's economy and
 
 2 the well-being of its citizens are threatened by the unstable
 
 3 worldwide economic market.  In particular, Hawaii has been
 
 4 affected by declining visitors from Asia and increasing
 
 5 competition in the global travel and tourism market.
 
 6      As a result of this economic downturn, state and county
 
 7 governments have had to reduce or eliminate various public
 
 8 services.  In fact, the legislature has received a mandate from
 
 9 the electorate to address the significant shortfall of revenue
 
10 that has threatened government services and economic growth.  To
 
11 maintain much needed social programs, guarantee quality
 
12 education, expand economic growth, and compete in the
 
13 increasingly competitive global tourism market, the State should
 
14 pursue various economic opportunities, such as by enacting
 
15 limited casino gaming on Oahu, to address the needs of the State.
 
16      In addition to the development of limited casino gaming, it
 
17 is essential that the State be able to offer a complete
 
18 entertainment package to visitors.  Surveys of visitors to Hawaii
 
19 have strongly indicated their desire to have a Hawaiian theme
 

 
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                                     H.B. NO.1329       
                                                        
                                                        

 
 1 park to visit while on Oahu.  The development of a Hawaiian theme
 
 2 park would celebrate the culture and history of Hawaii while
 
 3 bolstering the tourism industry.  But for the theme park to be
 
 4 economically viable, it needs to be developed in conjunction with
 
 5 limited casino gaming.  Because the State and the city and county
 
 6 of Honolulu agree that future development on Oahu should occur in
 
 7 the Kapolei area, development of a Hawaiian theme park and
 
 8 limited casino gaming should be located in Kapolei.  The
 
 9 legislature believes that casino gaming and a theme park will
 
10 generate construction projects and create employment
 
11 opportunities for the people of Hawaii.
 
12      The State needs to take all prudent steps to ensure the
 
13 current economic crisis does not continue.  To this end, the
 
14 revenue from gaming must be used to encourage emerging and new
 
15 sectors in the State's economy and educate the citizens of the
 
16 State in new technology.  This bill establishes helping
 
17 outstanding pupils education (HOPE) scholarships to provide free
 
18 college education for students who graduate from high school with
 
19 a 3.0 average and maintain a 3.0 average through college.
 
20      The purpose of this Act is to generate economic
 
21 opportunities in the State by providing for limited casino gaming
 
22 on Oahu.
 

 
 
 
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                                     H.B. NO.1329       
                                                        
                                                        

 
 1      SECTION 2.  The Hawaii Revised Statutes is amended by adding
 
 2 a new chapter to be appropriately designated and to read as
 
 3 follows:
 
 4                             "CHAPTER
 
 5                           CASINO GAMING
 
 6           -1  Limited casino gaming authorized.  Limited casino
 
 7 gaming and a system of wagering incorporated thereof, as defined
 
 8 in this chapter, are authorized to the extent that they are
 
 9 carried out in accordance with this chapter.
 
10         -2 Definitions.  As used in this chapter, unless the
 
11 context requires otherwise:
 
12      "Casino facility" means a freestanding, land-based structure
 
13 which may include structures with bars, restaurants, showrooms,
 
14 theaters, or other facilities but does not include any structure
 
15 used for hotel or other transient accommodation lodging purposes.
 
16      "Casino gaming" means the operation of games licensed under
 
17 this chapter including but not limited to baccarat, twenty-one,
 
18 poker, craps, slot machine, video gaming of chance, roulette
 
19 wheel, klondike table, punch-board, faro layout, numbers ticket,
 
20 push car, jar ticket, pull tab, or other game of chance that is
 
21 authorized by the commission as a wagering device.
 

 
 
 
 
 
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 1      "Casino license" means a license to operate and maintain a
 
 2 casino facility or facilities for casino gaming permitted under
 
 3 this chapter.
 
 4      "Commission" means the Hawaii gaming control commission as
 
 5 defined under this chapter.
 
 6      "Department" means the department of budget and finance.
 
 7      "Executive director" means the executive director of the
 
 8 commission.
 
 9      "Gaming facility master development plan" means the master
 
10 plan for a casino facility and a Hawaiian theme park.
 
11      "Gross receipts" means the total of:
 
12      (1)  Cash received as winnings;
 
13      (2)  Cash received in payment for credit extended by a
 
14           licensee to a patron for purposes of gaming; and
 
15      (3)  Compensation received for conducting any game in which
 
16           the licensee is not party to a wager.
 
17 Gross receipts do not include counterfeit money or tokens, coins
 
18 of other countries that are received in gaming devices, cash
 
19 taken in fraudulent acts perpetrated against a licensee for which
 
20 the licensee is not reimbursed, and cash received as entry fees
 
21 for contests or tournaments in which patrons compete for prizes.
 
22      "Individual" means a natural person.
 

 
 
 
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 1      "Occupational license" means a license issued by the
 
 2 commission to a person or entity to perform an occupation which
 
 3 the commission has identified as requiring a license to engage in
 
 4 casino gaming in the State.
 
 5      "Persons" include an individual, association, partnership,
 
 6 estate, trust, corporation, or other legal entity.
 
 7      "Supplier's license" means a license to furnish any
 
 8 equipment, devices, or supplies to a licensed casino gaming
 
 9 operation permitted under this chapter.
 
10         -3 Hawaii gaming control commission.(a)  There is
 
11 established the Hawaii gaming control commission which shall be a
 
12 body corporate and a public instrumentality of the State for the
 
13 purpose of implementing this chapter.  The commission shall be
 
14 placed within the department of budget and finance for
 
15 administrative purposes.
 
16      The commission shall consist of seven members to be
 
17 appointed by the governor with the advice and consent of the
 
18 senate under section 26-34.  Of the seven members, two shall be
 
19 appointed from a list of nominees submitted by the president of
 
20 the senate and two shall be appointed from a list of nominees
 
21 submitted by the speaker of the house of representatives.  All
 
22 appointments to the commission shall be made within sixty days of
 

 
 
 
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 1 the effective date of this Act.  The members shall elect one from
 
 2 among themselves to serve as chairperson of the commission.
 
 3      (b)  No person shall be appointed a member of the commission
 
 4 or continue to be a member of the commission if the person is:
 
 5      (1)  An elected state official;
 
 6      (2)  Licensed by the commission pursuant to this chapter, is
 
 7           an official of, has a financial interest in, or has a
 
 8           financial relationship with, any gaming operation
 
 9           subject to the jurisdiction of this commission pursuant
 
10           to this chapter;
 
11      (3)  Related to any person within the second degree of
 
12           consanguinity or affinity who is licensed by the
 
13           commission pursuant to this chapter; or
 
14      (4)  Has been convicted of, or is under indictment for, a
 
15           felony under the laws of Hawaii, any other state, or
 
16           the United States.
 
17      (c)  The term of office of a board member shall be four
 
18 years.  Vacancies in the board shall be filled for the unexpired
 
19 term in like manner as the original appointments.
 
20      (d)  The governor may remove or suspend any member of the
 
21 commission after due notice and public hearing.  The president of
 
22 the senate or the speaker of the house of representatives may
 

 
 
 
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 1 request that the governor remove or suspend a member of the
 
 2 commission that is nominated by either the president of the
 
 3 senate or the speaker of the house of representatives.  Upon
 
 4 receipt of a request from either the president of the senate or
 
 5 the speaker of the house of representatives, the governor shall
 
 6 remove or suspend the member or members of the commission in
 
 7 question.
 
 8      (e)  Members shall:
 
 9      (1)  Serve part-time;
 
10      (2)  Be paid compensation of $300 for each day in the
 
11           performance of official duties; and
 
12      (3)  Be reimbursed for expenses, including travel expenses,
 
13           incurred in the performance of official duties.
 
14      (f)  Officers of the commission, including the chairperson,
 
15 shall be selected by the members.  The commission, subject to
 
16 chapter 92, shall hold at least one meeting in each quarter of
 
17 the State's fiscal year.  Special meetings may be called by the
 
18 chairperson or any four members upon seventy-two hours written
 
19 notice to each member.  Four members shall constitute a quorum,
 
20 and a majority vote of the members present shall be required for
 
21 any final determination by the commission.  The commission shall
 
22 keep a complete and accurate record of all its meetings.
 

 
 
 
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 1      (g)  Before assuming the duties of office, each member of
 
 2 the commission shall take an oath that the member shall
 
 3 faithfully execute the duties of office according to the laws of
 
 4 the State and shall file and maintain with the director a bond in
 
 5 the sum of $25,000 with good and sufficient sureties.  The cost
 
 6 of any bond for any member of the commission under this section
 
 7 shall be considered a part of the necessary expenses of the
 
 8 commission.
 
 9      (h)  The commission shall appoint a person to serve as the
 
10 executive director of the commission subject to the commission's
 
11 supervision.  The executive director shall:
 
12      (1)  Hold office at the will of the commission;
 
13      (2)  Be exempt from chapters 76 and 77;
 
14      (3)  Devote full time to the duties of the office; and
 
15      (4)  Not hold any other office or employment.
 
16 The executive director shall receive an annual salary at an
 
17 amount set by the commission, and shall be reimbursed for
 
18 expenses actually and necessarily incurred in the performance of
 
19 the executive director's duties.
 
20      (i)  Except as otherwise provided by law, the executive
 
21 director may hire assistants, other officers, and employees, who
 
22 shall be exempt from chapters 76 and 77 and who shall serve at
 

 
 
 
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 1 the will of the executive director, and appoint committees and
 
 2 consultants necessary for the efficient operation of casino
 
 3 gaming; provided that no person shall be hired or appointed under
 
 4 this subsection who is:
 
 5      (1)  An elected state official;
 
 6      (2)  Licensed by the commission pursuant to this chapter, is
 
 7           an official of, has a financial interest in, or has a
 
 8           financial relationship with, any gaming operation
 
 9           subject to the jurisdiction of this commission pursuant
 
10           to this chapter;
 
11      (3)  Related to any person within the second degree of
 
12           consanguinity or affinity who is licensed by the
 
13           commission pursuant to this chapter; or
 
14      (4)  Not of good moral character or has been convicted of,
 
15           or is under indictment for, a felony under the laws of
 
16           Hawaii, any other state, or the United States.
 
17      (j)  The salaries of employees shall be set by the executive
 
18 director.
 
19      (k)  Notwithstanding subsection (h), the commission may
 
20 perform the functions of the executive director and may exercise
 
21 the powers granted to the executive director until              ,
 
22 and shall not be required to appoint an executive director before
 
23 that date.
 

 
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                                     H.B. NO.1329       
                                                        
                                                        

 
 1      (l)  The commission shall adopt rules in accordance with
 
 2 chapter 91 establishing a code of ethics for its employees which
 
 3 shall include but not be limited to restrictions on which
 
 4 employees shall be prohibited from participating in or wagering
 
 5 on any game or gaming operation subject to the jurisdiction of
 
 6 the commission.  The code of ethics shall be separate from and in
 
 7 addition to any standards of conduct set forth pursuant to
 
 8 chapter 84.
 
 9        -4  Staff.(a)  The executive director shall keep
 
10 records of all proceedings of the commission and shall preserve
 
11 all records, books, documents, and other papers belonging to the
 
12 commission or entrusted to its care relating to casino gaming.
 
13      (b)  The commission may employ any personnel, including
 
14 personnel with law enforcement authority, that may be necessary
 
15 to carry out its duties related to casino gaming.
 
16        -5  Powers of the commission.  The commission shall have
 
17 all powers necessary to fully and effectively supervise all
 
18 casino gaming operations including but not limited to the
 
19 following:
 
20      (1)  To administer, regulate, and enforce the system of
 
21           casino gaming established by this chapter.  The
 
22           commission's jurisdiction shall extend to every person,
 

 
 
 
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                                     H.B. NO.1329       
                                                        
                                                        

 
 1           association, corporation, partnership, and trust
 
 2           involved in casino gaming operations in a county;
 
 3      (2)  To issue a license to operate a casino facility or
 
 4           casino facilities pursuant to the provisions of this
 
 5           chapter;
 
 6      (3)  To determine the types and numbers of occupational and
 
 7           supplier's licenses to be permitted under this chapter;
 
 8      (4)  To adopt standards for the licensing of all persons
 
 9           under this chapter, to issue licenses, and to establish
 
10           and collect fees for these licenses;
 
11      (5)  To provide for the collection of all taxes imposed
 
12           pursuant to this chapter, and to collect, receive,
 
13           expend, and account for all revenues derived from
 
14           casino gaming within a county;
 
15      (6)  To enter the office, casinos, facilities, or other
 
16           places of business of a licensee, where evidence of the
 
17           compliance or noncompliance with this chapter is likely
 
18           to be found;
 
19      (7)  To investigate alleged violations of this chapter and
 
20           to take appropriate disciplinary action against a
 
21           licensee or a holder of an occupational license for a
 
22           violation, or institute appropriate legal action for
 
23           enforcement, or both;
 

 
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                                     H.B. NO.1329       
                                                        
                                                        

 
 1      (8)  To be present through its inspectors and agents any
 
 2           time casino gaming operations are conducted in any
 
 3           casino for the purpose of certifying the revenue
 
 4           thereof, receiving complaints from the public, and
 
 5           conducting other investigations into the conduct of the
 
 6           casino gaming and the maintenance of the equipment as
 
 7           from time to time the commission may deem necessary and
 
 8           proper;
 
 9      (9)  To adopt appropriate standards for all casino
 
10           facilities as well as for electronic or mechanical
 
11           gaming devices;
 
12     (10)  To require that the records including financial or
 
13           other statement of any licensee under this chapter be
 
14           kept in the manner prescribed by the commission and
 
15           that any licensee involved in the ownership or
 
16           management of casino gaming operations submit to the
 
17           commission an annual balance sheet and profit and loss
 
18           statement, a list of the stockholders or other persons
 
19           having a one per cent or greater beneficial interest in
 
20           the gaming activities of each licensee, and any other
 
21           information the commission deems necessary to
 
22           effectively administer this chapter;
 

 
 
 
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 1     (11)  To conduct hearings, issue subpoenas for the attendance
 
 2           of witnesses and subpoenas duces tecum for the
 
 3           production of books, records, and other pertinent
 
 4           documents, and to administer oaths and affirmations to
 
 5           the witnesses, when, in the judgment of the commission,
 
 6           it is necessary to administer or enforce this chapter;
 
 7     (12)  To prescribe any employment application form to be used
 
 8           by any licensee involved in the ownership or management
 
 9           of casino gaming operations for hiring purposes;
 
10     (13)  To eject or exclude or authorize the ejection or
 
11           exclusion of, any person from casino facilities where
 
12           the person is in violation of this chapter or where the
 
13           person's conduct or reputation is such that the
 
14           person's presence within a casino facility, in the
 
15           opinion of the commission, may call into question the
 
16           honesty and integrity of the casino gaming operation or
 
17           interfere with the orderly conduct thereof; provided
 
18           that the propriety of that ejection or exclusion shall
 
19           be subject to subsequent hearing by the commission;
 
20     (14)  To permit licensees of casino gaming operations to
 
21           utilize a wagering system whereby gainers' money may be
 
22           converted to tokens, electronic cards, or chips, which
 

 
 
 
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                                     H.B. NO.1329       
                                                        
                                                        

 
 1           shall be used only for wagering within the casino
 
 2           facility;
 
 3     (15)  To suspend, revoke, or restrict licenses, to require
 
 4           the removal of a licensee or an employee of a licensee
 
 5           for a violation of this chapter or a commission rule or
 
 6           for engaging in a fraudulent practice;
 
 7     (16)  To impose and collect fines of up to $5,000 against
 
 8           individuals and up to $10,000 or an amount equal to the
 
 9           daily gross receipts, whichever is larger, against
 
10           licensees for each violation of this chapter, any rules
 
11           adopted by the commission, any other of the commission,
 
12           or any other action which, in the commission's
 
13           discretion, is a detriment or impediment to casino
 
14           gaming operations;
 
15     (17)  To hire employees to gather information, conduct
 
16           investigations, and carry out any other tasks
 
17           contemplated under this chapter;
 
18     (18)  To establish minimum levels of insurance to be
 
19           maintained by licensees;
 
20     (19)  To delegate the execution of any of its powers for the
 
21           purpose of administering and enforcing this chapter and
 
22           rules adopted under this chapter;
 

 
 
 
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                                     H.B. NO.1329       
                                                        
                                                        

 
 1     (20)  To adopt rules pursuant to chapter 91 to implement this
 
 2           chapter; and
 
 3     (21)  To take any other action as may be reasonable or
 
 4           appropriate to enforce this chapter and rules adopted
 
 5           under this chapter.
 
 6         -6 Establishment of gaming zones.(a)  Limited
 
 7 casino gaming shall be permitted only in the gaming zones
 
 8 established pursuant to this chapter.
 
 9      (b)  This chapter authorizes limited casino gaming in the
 
10 following two zones:
 
11      (1)  The Hawaiian theme park gaming zone, which shall
 
12           include the following area:                         .
 
13           Any application for a casino license to operate a
 
14           casino facility in the zone shall include a gaming
 
15           facility master development plan for the casino
 
16           facility and the Hawaiian theme park; and
 
17      (2)  The Waikiki gaming zone, which shall include the
 
18           following area:                                      .
 
19         -7 Application for casino license.(a)  A qualified
 
20 person may apply to the commission for a casino license to
 
21 conduct a casino gaming operation.  The application shall be made
 
22 on forms provided by the commission and shall contain any
 

 
 
 
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                                     H.B. NO.1329       
                                                        
                                                        

 
 1 information that the commission prescribes including but not
 
 2 limited to the exact location of the casino facility or casino
 
 3 facilities, a gaming facility master development plan, detailed
 
 4 information regarding the ownership and management of the
 
 5 applicant, and detailed personal information regarding the
 
 6 applicant.  Information provided on the application shall be used
 
 7 as the basis for a thorough background investigation which the
 
 8 commission shall conduct with respect to each applicant.  An
 
 9 incomplete application shall be cause for denial of a license by
 
10 the commission.  The commission shall make applications available
 
11 within sixty days of its appointment.  The commission shall act
 
12 on any application submitted to it within ninety days of the date
 
13 of submission.
 
14      (b)  Applicants shall submit with their application a plan
 
15 for training Hawaii citizens for jobs that is available at a
 
16 casino facility.  The plan shall take into consideration the need
 
17 to provide training to low-income persons so as to allow such
 
18 persons to qualify for jobs that will be created in the casino
 
19 facilities as a result of implementation of this Act.
 
20      (c)  Each applicant shall disclose the identity of every
 
21 person, association, trust, or corporation having a greater than
 
22 one per cent direct or indirect pecuniary interest in the casino
 

 
 
 
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                                     H.B. NO.1329       
                                                        
                                                        

 
 1 gaming operation with respect to which the license is sought.  If
 
 2 the disclosed entity is a trust, the application shall disclose
 
 3 the names and addresses of the beneficiaries; if a corporation,
 
 4 the names and addresses of all stockholders and directors; if a
 
 5 partnership, the names and addresses of all partners, both
 
 6 general and limited.
 
 7      (d)  An application fee of $50,000 shall be paid at the time
 
 8 of filing to defray the costs associated with the background
 
 9 investigation conducted by the commission, and the search and
 
10 classification of fingerprints obtained by the commission with
 
11 request to the application.  If the costs of the investigation
 
12 exceed $50,000, the applicant shall pay the additional amount to
 
13 the commission.  If the costs of the investigation are less than
 
14 $50,000, the applicant shall receive a refund of the remaining
 
15 amount.  All information, records, interviews, reports,
 
16 statements, memoranda, or other data supplied to or used by the
 
17 commission in the course of its review or investigation of an
 
18 application for a license shall be privileged, strictly
 
19 confidential, and shall be used only for the purpose of
 
20 evaluating an applicant.  The information, records, interviews,
 
21 reports, statements, memoranda, or other data shall not be
 
22 admissible as evidence, nor discoverable in any action of any
 

 
 
 
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                                     H.B. NO.1329       
                                                        
                                                        

 
 1 kind in any court or before any tribunal, commission, agency, or
 
 2 person, except for any action deemed necessary by the commission.
 
 3      (e)  An applicant shall be ineligible to receive an
 
 4 operator's license if:
 
 5      (1)  The person has been convicted of a felony under the
 
 6           laws of this State, any other state, or the United
 
 7           States;
 
 8      (2)  The person has been convicted of any violation under
 
 9           part III, chapter 712, or substantially similar laws of
 
10           another jurisdiction;
 
11      (3)  The person has submitted an application for a license
 
12           under this chapter that contains false information;
 
13      (4)  The person is a member of the commission;
 
14      (5)  The firm or corporation applying for a license employs
 
15           a person described in paragraph (1), (2), (3), or (4)
 
16           who participates in the management or operation of
 
17           gaming operations authorized under this chapter; or
 
18      (6)  A license of the person, firm, or corporation issued
 
19           under this chapter, or a license to own or operate
 
20           gaming facilities in any other jurisdiction, has been
 
21           revoked.
 

 
 
 
 
 
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                                     H.B. NO.1329       
                                                        
                                                        

 
 1         -8  Criteria for award of a casino license.(a)  The
 
 2 legislature declares its intent to impose the following
 
 3 limitations on the award of casino licenses by the commission:
 
 4      (1)  No more than one casino facility shall be permitted in
 
 5           the Hawaiian theme park gaming zone.  No more than one
 
 6           casino facility shall be permitted in the Waikiki
 
 7           gaming zone; and
 
 8      (2)  The commission shall award one license to operate both
 
 9           the casino facility in the Hawaiian theme park gaming
 
10           zone and the casino facility in the Waikiki gaming
 
11           zone.
 
12      (b)  The commission shall issue a license to operate a
 
13 casino facility or casino facilities to the applicant who best
 
14 meets all of the following criteria:
 
15      (1)  The applicant is a Hawaiian corporation organized under
 
16           the laws of the State of Hawaii prior to January 1,
 
17           1999;
 
18      (2)  The applicant has submitted the best plan for the
 
19           casino facility to be located in the Waikiki gaming
 
20           zone, which shall have the most positive effect on
 
21           increasing tourism;
 

 
 
 
 
 
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                                     H.B. NO.1329       
                                                        
                                                        

 
 1      (3)  The applicant has shown economic resources of at least
 
 2           $            so as to demonstrate to the commission
 
 3           that the applicant has the financial ability to
 
 4           construct the casino to be located in the Waikiki
 
 5           gaming zone;
 
 6      (4)  The applicant has submitted the best gaming facility
 
 7           master development plan for the Hawaiian theme park and
 
 8           the casino facility to be located in the Hawaiian theme
 
 9           park zone so as to best facilitate entertainment and
 
10           gaming at this location;
 
11      (5)  The applicant has shown economic resources of at least
 
12           $            so as to be able to demonstrate to the
 
13           commission that the applicant has the financial ability
 
14           to construct the Hawaiian theme park and the casino
 
15           facility to be located in the Hawaiian theme park zone;
 
16           and
 
17      (6)  The applicant has made significant contributions to the
 
18           development of gaming within the State by actively
 
19           promoting and significantly supporting state gaming
 
20           legislation.  Significant support of state legislation
 
21           shall include direct communication with Hawaii
 
22           residents who will be the ultimate beneficiaries of
 

 
 
 
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                                     H.B. NO.1329       
                                                        
                                                        

 
 1           increased tourism and income produced by the
 
 2           introduction of limited gaming on the island of Oahu.
 
 3           Direct communication with Hawaii residents shall
 
 4           include the use of telephone, mail, mass media, and
 
 5           direct contact.
 
 6      (c)  To demonstrate financial ability pursuant to
 
 7 subsections (b)(3) and (b)(5), the applicant may include the
 
 8 economic resources of the person or persons who will actually
 
 9 operate the casino facility or facilities.
 
10      (d)  Each applicant shall submit with the application, on
 
11 forms provided by the commission, two sets of the applicant's
 
12 fingerprints.
 
13      (e)  The commission may revoke the license if the licensee
 
14 fails to begin regular casino gaming operations within twelve
 
15 months of receipt of the commission's approval of the application
 
16 or twelve months after a certificate of occupancy for the casino
 
17 facility is first issued, whichever is later, upon a finding by
 
18 the commission that license revocation is in the best interest of
 
19 the State.
 
20      (f)  The commission shall establish a process to facilitate
 
21 and expedite the approval of the necessary licenses and permits.
 
22 The commission may establish its own procedures for the issuance
 

 
 
 
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                                     H.B. NO.1329       
                                                        
                                                        

 
 1 of liquor licenses for any holder of an operator's license under
 
 2 this chapter; provided that all state laws and county ordinances
 
 3 relating to liquor are met.
 
 4      (g)  Nothing in this chapter shall be interpreted to
 
 5 prohibit a licensed owner from operating a school for the
 
 6 training of any occupation licensee.
 
 7         -9 Bond of licensee.  Before a casino license is
 
 8 issued, the licensee shall file a bond in the sum of $200,000
 
 9 with the department.  The bond shall be used to guarantee that
 
10 the licensee faithfully makes the payments, keeps books and
 
11 records, makes reports, and conducts games of chance in
 
12 conformity with this chapter and rules adopted by the commission.
 
13 The bond shall not be canceled by a surety on less than thirty
 
14 days notice in writing to the commission.  If a bond is canceled
 
15 and the licensee fails to file a new bond with the commission in
 
16 the required amount on or before the effective date of
 
17 cancellation, the licensee's license shall be revoked.  The total
 
18 and aggregate liability of the surety on the bond shall be
 
19 limited to the amount specified in the bond.
 
20         -10  Supplier's licenses.(a)  No person shall
 
21 furnish any equipment, devices, or supplies to a licensed casino
 
22 gaming operation under this chapter unless the person has first
 

 
 
 
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                                     H.B. NO.1329       
                                                        
                                                        

 
 1 obtained a supplier's license pursuant to this section.  The
 
 2 commission may issue a supplier's license to any person, firm, or
 
 3 corporation who pays a nonrefundable application fee as set by
 
 4 the commission upon a determination by the commission that the
 
 5 applicant is eligible for a supplier's license and upon payment
 
 6 by the applicant of a $5,000 license fee.  Supplier's licenses
 
 7 shall be renewable annually upon payment of the $5,000 annual
 
 8 license fee and a determination by the commission that the
 
 9 licensee continues to meet all of the requirements of this
 
10 chapter.
 
11      (b)  The holder of a supplier's license may sell or lease,
 
12 or contract to sell or lease, gaming equipment and supplies to
 
13 any licensee involved in the ownership or management of casino
 
14 gaming operations.
 
15      (c)  Casino gaming supplies and equipment shall not be
 
16 distributed unless supplies and equipment conform to standards
 
17 adopted by rules of the commission.
 
18      (d)  A person, firm, or corporation shall be ineligible to
 
19 receive a supplier's license if:
 
20      (1)  The person has been convicted of a felony under the
 
21           laws of this State, any other state, or the United
 
22           States;
 

 
 
 
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                                     H.B. NO.1329       
                                                        
                                                        

 
 1      (2)  The person has been convicted of any violation under
 
 2           chapter III, chapter 712, or substantially similar laws
 
 3           of another jurisdiction;
 
 4      (3)  The person has submitted an application for a license
 
 5           under this chapter that contains false information;
 
 6      (4)  The person is a member of the commission;
 
 7      (5)  The firm or corporation is one in which a person
 
 8           defined in paragraph (1), (2), (3), or (4) is an
 
 9           officer, director, or managerial employee;
 
10      (6)  The firm or corporation employs a person defined in
 
11           paragraph (1), (2), (3), or (4) who participates in the
 
12           management or operation of casino gaming authorized
 
13           under this chapter; or
 
14      (7)  The license of the person, firm, or corporation issued
 
15           under this chapter, or a license to own or operate
 
16           casino gaming facilities in any other jurisdiction, has
 
17           been revoked.
 
18      (e)  A supplier shall:
 
19      (1)  Furnish to the commission a list of all equipment,
 
20           devices, and supplies offered for sale or lease in
 
21           connection with casino games authorized under this
 
22           chapter;
 

 
 
 
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 1      (2)  Keep books and records for the furnishing of equipment,
 
 2           devices, and supplies to gaming casino operations
 
 3           separate and distinct from any other business that the
 
 4           supplier might operate;
 
 5      (3)  File a quarterly return with the commission listing all
 
 6           sales and leases;
 
 7      (4)  Permanently affix its name to all its equipment,
 
 8           devices, and supplies, for casino gaming operations;
 
 9           and
 
10      (5)  File an annual report listing its inventories of casino
 
11           gaming equipment, devices, and supplies.
 
12      (f)  Any person who knowingly makes a false statement on an
 
13 application is guilty of a petty misdemeanor.
 
14      (g)  Any casino gaming equipment, devices, or supplies
 
15 provided by any license supplier may either be repaired in the
 
16 casino facility or be removed from the casino facility to a
 
17 facility owned by the holder of an operator's license for repair.
 
18 Any supplier's equipment, devices, and supplies that are used by
 
19 any person in an unauthorized gaming operation shall be forfeited
 
20 to the county.
 
21         -11  Occupational licenses.(a)  The commission may
 
22 issue an occupational license to an applicant upon the payment of
 

 
 
 
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                                     H.B. NO.1329       
                                                        
                                                        

 
 1 a nonrefundable application fee as set by the commission, upon a
 
 2 determination by the commission that the applicant is eligible
 
 3 for an occupational license, and upon payment of an annual
 
 4 license fee in an amount set by the commission.  To be eligible
 
 5 for an occupational license, an applicant shall:
 
 6      (1)  Be at least twenty-one years of age if the applicant
 
 7           will perform any function involved in casino gaming by
 
 8           patrons.  Any applicant seeking an occupational license
 
 9           for a nongaming function shall be at least eighteen
 
10           years of age;
 
11      (2)  Not have been convicted of a felony offense, or a
 
12           similar statute of any other jurisdiction, or a crime
 
13           involving dishonesty or moral turpitude;
 
14      (3)  Have demonstrated a level of skill or knowledge that
 
15           the commission determines to be necessary to operate
 
16           casino games in a casino facility; and
 
17      (4)  Have met standards for the holding of an occupational
 
18           license as provided in rules adopted by the commission,
 
19           including background inquiries and other requirements
 
20           similar to those for an operator's license.
 
21      (b)  Each application for an occupational license shall be
 
22 on forms prescribed by the commission and shall contain all
 

 
 
 
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                                     H.B. NO.1329       
                                                        
                                                        

 
 1 information required by the commission.  The applicant shall set
 
 2 forth in the application whether the applicant:
 
 3      (1)  Has been issued prior gaming-related licenses in any
 
 4           jurisdiction;
 
 5      (2)  Has been licensed in any other jurisdiction under any
 
 6           other name, and if so, the name and the applicant's age
 
 7           at the time; or
 
 8      (3)  Whether or not a permit or license issued to the
 
 9           applicant in any other jurisdiction has been suspended,
 
10           restricted, or revoked, and if so, for what period of
 
11           time.
 
12      (c)  Each applicant shall submit with the application two
 
13 sets of the applicant's fingerprints.  The commission shall
 
14 charge each applicant a fee to defray the costs associated with
 
15 the search and classification of fingerprints obtained by the
 
16 commission with respect to the application.
 
17      (d)  The commission may refuse an occupational license to
 
18 any person:
 
19      (1)  Who is unqualified to perform the duties required of
 
20           the applicant;
 
21      (2)  Who fails to disclose or states falsely any information
 
22           called for in the application;
 

 
 
 
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                                     H.B. NO.1329       
                                                        
                                                        

 
 1      (3)  Who has been found guilty of a violation of this
 
 2           chapter or whose prior casino gaming related license or
 
 3           application therefor has been suspended, restricted,
 
 4           revoked, or denied for just cause in any other
 
 5           jurisdiction; or
 
 6      (4)  For any other just cause.
 
 7      (e)  The commission may suspend, revoke, or restrict any
 
 8 occupation licensee:
 
 9      (1)  For any violation of this chapter;
 
10      (2)  For any violation of the rules of the commission;
 
11      (3)  For any cause which, if known to the commission, would
 
12           have disqualified the applicant from receiving a
 
13           license;
 
14      (4)  For default in the payment of any obligation or debt
 
15           due to the State or the county; or
 
16      (5)  For any other just cause.
 
17      (f)  A person who knowingly makes a false statement on an
 
18 application is guilty of a petty misdemeanor.
 
19      (g)  Any license issued pursuant to this section shall be
 
20 valid for a period of one year from the date of issuance and
 
21 shall be renewable annually upon payment of the annual license
 
22 fee and a determination by the commission that the licensee
 
23 continues to meet all of the requirements of this chapter.
 

 
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                                     H.B. NO.1329       
                                                        
                                                        

 
 1      (h)  Any training provided for occupational licenses may be
 
 2 conducted either in a licensed casino facility or at a school
 
 3 with which a licensed owner has entered into an agreement.
 
 4         -12  Annual report.  The commission shall file a
 
 5 written annual report with the governor and the legislature on or
 
 6 at least sixty days prior to the close of each fiscal year and
 
 7 any additional reports that the governor or the legislature may
 
 8 request.  The annual report shall include but not be limited to:
 
 9      (1)  A statement of receipts and disbursements related to
 
10           casino gaming pursuant to this chapter;
 
11      (2)  Actions taken by the commission; and
 
12      (3)  Any additional information and recommendations that the
 
13           commission may deem valuable or which the governor or
 
14           the legislature may request.
 
15         -13  Hearings by the commission.(a)  Upon order of
 
16 the commission, one of the commission members or a hearings
 
17 officer designated by the commission may conduct any hearing
 
18 provided for under this chapter related to casino gaming or by
 
19 commission rule and may recommend findings and decisions to the
 
20 commission.  The commission member or hearings officer conducting
 
21 the hearing shall have all powers and rights granted to the
 
22 commission in this chapter.  The record made at the time of the
 

 
 
 
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                                     H.B. NO.1329       
                                                        
                                                        

 
 1 hearing shall be reviewed by the commission, or a majority
 
 2 thereof, and the findings and decisions of the majority of the
 
 3 commission shall constitute the order of the commission in that
 
 4 case.
 
 5      (b)  Any party aggrieved by an action of the commission
 
 6 denying, suspending, revoking, restricting, or refusing to renew
 
 7 a license under this chapter may request a hearing before the
 
 8 commission.  A request for a hearing must be made to the
 
 9 commission in writing within five days after service of notice of
 
10 the action of the commission.  Notice of the actions of the
 
11 commission shall be served either by personal delivery or by
 
12 certified mail, postage prepaid, to the aggrieved party.  Notice
 
13 served by certified mail shall be deemed complete on the business
 
14 day following the date of the mailing.  The commission shall
 
15 conduct all requested hearing promptly and in reasonable order.
 
16         -14  Conduct of casino gaming.  Casino gaming may be
 
17 conducted by a licensed operator, subject to the following
 
18 standards:
 
19      (1)  Minimum and maximum wagers on games shall be set by the
 
20           licensee;
 
21      (2)  Agents of the commission may enter and inspect any
 
22           casino facility at any time for the purpose of
 
23           determining compliance with this chapter;
 

 
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                                     H.B. NO.1329       
                                                        
                                                        

 
 1      (3)  Employees of the commission shall have the right to be
 
 2           present in a casino facility or on adjacent facilities
 
 3           under the control of the licensee;
 
 4      (4)  Gaming equipment and supplies customarily used in
 
 5           conducting casino gaming must be purchased or leased
 
 6           only from suppliers licensed under this chapter;
 
 7      (5)  Persons licensed under this chapter shall permit no
 
 8           form of wagering on games except as permitted by this
 
 9           chapter;
 
10      (6)  Wagers may be received only from a person present in a
 
11           licensed casino facility.  No person present in a
 
12           licensed casino facility shall place or attempt to
 
13           place a wager on behalf of another person who is not
 
14           present in the casino facility;
 
15      (7)  Wagering shall not be conducted with money or other
 
16           negotiable currency, except for wagering on slot
 
17           machines;
 
18      (8)  A person under age twenty-one shall not be permitted in
 
19           an area of a casino facility where casino gaming is
 
20           being conducted, except for a person at least eighteen
 
21           years of age who is an employee of the casino facility.
 
22           No employee under age twenty-one shall perform any
 

 
 
 
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                                     H.B. NO.1329       
                                                        
                                                        

 
 1           function involved in casino gaming by patrons.  No
 
 2           person under age twenty-one shall be permitted to make
 
 3           a wager under this chapter;
 
 4      (9)  All tokens, chips, or electronic cards used to make
 
 5           wagers must be purchased from a licensed owner within
 
 6           the casino facility.  The tokens, chips, or electronic
 
 7           cards may be purchased by means of an agreement under
 
 8           which the owner extends credit to the patron.  The
 
 9           tokens, chips, or electronic cards may be used while
 
10           within a casino facility only for the purpose of making
 
11           wagers on authorized games; and
 
12     (10)  In addition to the above, casino gaming must be
 
13           conducted in accordance with all rules adopted by the
 
14           commission.
 
15         -15  Collection of amounts owning under credit
 
16 agreements.  Notwithstanding any other law to the contrary, a
 
17 licensee who extends credit to a casino gaming patron shall be
 
18 expressly authorized to institute a cause of action to collect
 
19 any amounts due and owning under the extension of credit, as well
 
20 as the operator's costs, expenses, and reasonable attorney's fees
 
21 incurred in collection.
 

 
 
 
 
 
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                                     H.B. NO.1329       
                                                        
                                                        

 
 1         -16  Wagering tax; rate; distribution.  A tax shall be
 
 2 imposed on the gross receipts received from casino gaming
 
 3 authorized under this chapter at the rate of ten per cent.
 
 4         -17  The state gaming fund; disposition of taxes
 
 5 collected.(a)  There is established within the state treasury
 
 6 the state gaming fund, into which shall be deposited all fees,
 
 7 taxes, and fines collected under this chapter which shall be used
 
 8 for expenses incurred for the administration and enforcement of
 
 9 this chapter.  All amounts exceeding    per cent of the total
 
10 collections each quarter shall be distributed as follows:
 
11      (1)  Fifty per cent shall be deposited in the       fund;
 
12           and
 
13      (2)  Fifty per cent shall be deposited to the credit of a
 
14           separate account in the general fund to be appropriated
 
15           for purposes relating to the improvement of education
 
16           in the State.
 
17      (b)  These funds shall be used to:
 
18      (1)  Support capital improvements and enhancements for
 
19           educational purposes and programs;
 
20      (2)  Provide free voluntary pre-kindergarten for four-year-
 
21           olds;
 

 
 
 
 
 
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                                     H.B. NO.1329       
                                                        
                                                        

 
 1      (3)  Provide helping outstanding pupils education (HOPE)
 
 2           scholarships to students who maintain a 3.0 grade point
 
 3           so that they may obtain a free college education;
 
 4      (4)  Provide teacher HOPE scholarships to teachers to obtain
 
 5           advanced degrees in critical fields of study; and
 
 6      (5)  Provide increased access to computer and
 
 7           telecommunication technology so that students will have
 
 8           hands-on experience with computer learning programs.
 
 9      (c)  The scholarships authorized under subsection (a) and
 
10 financed by gaming shall be administered by the department of
 
11 education under rules adopted pursuant to chapter 91.
 
12      (d)  The revenues generated by gaming shall be used to
 
13 augment, but not supplant, existing resources for educational
 
14 purposes.
 
15         -18  Legislative oversight.(a)  Beginning with the
 
16 fiscal year ending June 30, 2000, the auditor shall conduct a
 
17 biennial financial and social assessment of gaming operations.
 
18 In conducting the assessment, the auditor shall identify the
 
19 financial impacts of gaming on the state economy and the social
 
20 impacts of gaming upon the community.  The auditor shall submit a
 
21 report of the findings and recommendations to the legislature no
 
22 later than twenty days prior to the convening of the next regular
 
23 session after the biennial assessment is completed.
 

 
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                                     H.B. NO.1329       
                                                        
                                                        

 
 1      (b)  Beginning with the fiscal year ending June 30, 1999,
 
 2 the auditor shall conduct a program and financial audit of the
 
 3 Hawaii gaming commission.  Thereafter, the auditor shall conduct
 
 4 a program and financial audit every four years after the first
 
 5 audit is completed."
 
 6     SECTION 3.  Section 36-30, Hawaii Revised Statutes, is
 
 7 amended by amending subsection (a) to read as follows:
 
 8     "(a)  Each special fund, except the:
 
 9     (1)   Transportation use special fund established by section
 
10           261D-1;
 
11     (2)   Special summer school and intersession fund under
 
12           section 302A-1310;
 
13     (3)   School cafeteria special funds of the department of
 
14           education;
 
15     (4)   Special funds of the University of Hawaii;
 
16     (5)   State educational facilities improvement special fund;
 
17     (6)   Special funds established by section 206E-6;
 
18     (7)   Aloha Tower fund created by section 206J-17;
 
19     (8)   Domestic violence prevention special fund under section
 
20           321-1.3;
 
21     (9)   Spouse and child abuse special account under section
 
22           346-7.5;
 

 
 
 
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                                     H.B. NO.1329       
                                                        
                                                        

 
 1    (10)   Spouse and child abuse special account under section
 
 2           601-3.6;
 
 3    (11)   Funds of the employees' retirement system created by
 
 4           section 88-109;
 
 5    (12)   Unemployment compensation fund established under
 
 6           section 383-121;
 
 7    (13)   Hawaii hurricane relief fund established under chapter
 
 8           431P;
 
 9    (14)   Convention center capital special fund established
 
10           under section 206X-10.5 and the convention center
 
11           operations special fund established under section 206X-
 
12           10.6;
 
13    (15)   Hawaii health systems corporation special funds; [and]
 
14    (16)   Tourism special fund established under section
 
15           [[]201B-11[]]; and
 
16    (17)   State gaming fund established under section    -17;
 
17 shall be responsible for its pro rata share of the administrative
 
18 expenses incurred by the department responsible for the
 
19 operations supported by the special fund concerned."
 
20      SECTION 4.  Statutory material to be repealed is bracketed.
 
21 New statutory material is underscored.
 

 
 
 
 
 
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                                     H.B. NO.1329       
                                                        
                                                        

 
 1      SECTION 5.  This Act shall take effect upon its approval;
 
 2 provided that the amendments made to section 36-30 by section 3
 
 3 of this Act shall not be repealed when that section is reenacted
 
 4 on July 1, 2000, pursuant to section 13 of Act 216, Session Laws
 
 5 of Hawaii 1997.
 
 6 
 
 7                           INTRODUCED BY:  _______________________