REPORT TITLE:
Casino Gaming


DESCRIPTION:
Establishes a state gaming commission; provides for casino
gaming; permits casino gaming in certain counties and districts
defined in the Act.  Prohibits state residents from wagering in
casinos.

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                        
HOUSE OF REPRESENTATIVES                H.B. NO.1601       
TWENTIETH LEGISLATURE, 1999                                
STATE OF HAWAII                                            
                                                             
________________________________________________________________
________________________________________________________________


                   A  BILL  FOR  AN  ACT

RELATING TO GAMING.



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

 1      SECTION 1.  Chapter 46, Hawaii Revised Statutes, is amended
 
 2 by adding a new section to be appropriately designated and to
 
 3 read as follows:
 
 4      "46-    Gaming in counties; conditions.  Any other law to
 
 5 the contrary notwithstanding, casino gaming shall be permitted
 
 6 under chapter     in any "district" and any "county", as those
 
 7 terms are defined in section    -1, that has a licensed gaming
 
 8 facility, and holders of a valid manufacturer's, supplier's, or
 
 9 distributor's license may conduct business in any and all
 
10 counties of the State."
 
11      SECTION 2.  The Hawaii Revised Statutes is amended by adding
 
12 a new chapter to be appropriately designated and to read as
 
13 follows:
 
14                           "CHAPTER    
 
15                        HAWAII GAMING CODE
 
16                    PART I.  GENERAL PROVISIONS
 
17         -1 Title.  This chapter shall be known and may be cited
 
18 as the Hawaii Gaming Code.
 
19         -2 Purpose.  This chapter shall be construed and
 

 
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                                     H.B. NO.1601       
                                                        
                                                        

 
 1 applied to further its underlying purposes, which are as follows:
 
 2      (1)  To promote the growth of the economy of the State of
 
 3           Hawaii and the general welfare of its people;
 
 4      (2)  To allow casino gaming at limited locations and under
 
 5           the terms of this chapter, in order to protect our
 
 6           people and the traditions and environment upon which
 
 7           tourism has depended; and
 
 8      (3)  To ensure honesty and integrity in the operation of
 
 9           casino facilities and casino-related businesses.
 
10         -3  Definitions.  As used in this chapter, unless the
 
11 context requires otherwise:
 
12      "Affiliate" means a person who, directly or indirectly
 
13 through one or more intermediaries, controls, is controlled by,
 
14 or is under the common control with a specified person.
 
15      "Affiliated company" means a subsidiary company, holding
 
16 company, intermediate company, or any other form of business
 
17 organization that controls, is controlled by or is under common
 
18 control with a licensee which is a corporation or limited
 
19 liability company, and is involved in gaming activities in this
 
20 State or involved in the ownership of property in this State upon
 
21 which gaming is conducted.
 
22      "Applicant" means any person who has applied for or is about
 
23 to apply for a state gaming license under this chapter,
 

 
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                                     H.B. NO.1601       
                                                        
                                                        

 
 1 registration or finding of suitability under this chapter, or
 
 2 approval of any act or transaction for which commission approval
 
 3 is required or permitted under this chapter.
 
 4      "Application" means a request for issuance of a state gaming
 
 5 license under this chapter, registration or finding of
 
 6 suitability under this chapter, or approval of any act or
 
 7 transaction for which commission approval is required or
 
 8 permitted under this chapter.
 
 9      "Baccarat commission" means a fee assessed by a licensee on
 
10 cash paid out as a loss to a patron of baccarat to modify the
 
11 odds of the game; or a rate or fee charged by a licensee for the
 
12 right to participate in a baccarat game.
 
13      "Capital lease" means a bailment, lease, or similar
 
14 transaction in which:
 
15      (1)  The lease is in writing;
 
16      (2)  The writing includes the names and addresses of the
 
17           lessor and lessee, the term, amount of rental payments,
 
18           a specific list of the leased equipment, and details of
 
19           any rights which the lessee has to extend the term or
 
20           to acquire the leased equipment during the term or at
 
21           the expiration of the term including any renewals of
 
22           the original term;
 
23      (3)  The lease serves as the functional equivalent of an
 

 
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                                     H.B. NO.1601       
                                                        
                                                        

 
 1           extension of credit by the lessor to the lessee;
 
 2      (4)  The leased equipment was acquired by the lessor
 
 3           specifically for a leasing transaction; and
 
 4      (5)  The lessor is a federal or Hawaii financial institution
 
 5           as defined in section 412:1-109.
 
 6      "Cashless wagering system" means a method of wagering and
 
 7 accounting in which the validity and value of a wagering
 
 8 instrument or wagering credits are determined, monitored, and
 
 9 retained by a computer operated and maintained by the holder of
 
10 an operator's license which maintains a record of each
 
11 transaction involving the wagering instrument or wagering
 
12 credits, exclusive of the game or gaming device on which wagers
 
13 are being made.  The term includes computerized systems which
 
14 facilitate electronic transfers of money directly to or from a
 
15 game or gaming device.
 
16      "Commission" means the Hawaii state gaming commission.
 
17      "Corporate director" means any director of a corporation or
 
18 any person performing similar functions with respect to any
 
19 organization.
 
20      "County" means a county having one or more international
 
21 airport facilities on the effective date of this Act.
 
22      "Department" means the department of budget and finance.
 
23      "Director" means the director of finance.
 

 
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                                     H.B. NO.1601       
                                                        
                                                        

 
 1      "District" means a district as defined in section 4-1, but
 
 2 excluding the Koolauloa, Koolaupoko, Honolulu, North Hilo, South
 
 3 Hilo, Puna, South Kona, and North Kona districts.
 
 4      "Equity security" means any voting stock of a corporation,
 
 5 or similar security; any security convertible, with or without
 
 6 consideration, into such a security, or carrying any warrant or
 
 7 right to subscribe to or purchase such a security; any such
 
 8 warrant or right; or any security having a direct or indirect
 
 9 participation in the profits of the issuer.
 
10      "Executive director" means the executive director of the
 
11 commission.
 
12      "Game" or "gambling game" means any game played with cards,
 
13 dice, equipment, or any mechanical, electromechanical, or
 
14 electronic device or machine for money, property, checks, credit
 
15 or any representative of value, including, without limiting the
 
16 generality of the foregoing, faro, monte, roulette, keno, bingo,
 
17 fan-tan, twenty-one, blackjack, seven-and-a-half, big injun,
 
18 klondike, craps, poker, chuck-a-luck, Chinese chuck-aluck (dai
 
19 shu), wheel of fortune, chemin de fer, baccarat, pai gow, beat
 
20 the banker, panguingui, slot machine, any banking or percentage
 
21 game, or any other game or device approved by the commission, but
 
22 does not include any game played under circumstances that
 
23 constitute "social gambling" as defined in section 712-1231(a).
 

 
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 1      "Gaming" or "gambling" means to deal, operate, carry on,
 
 2 conduct, maintain, or expose for play any game or gambling game
 
 3 or to operate an inter-casino linked system.
 
 4      "Gaming device" means any equipment, or mechanical,
 
 5 electromechanical or electronic contrivance, component, or
 
 6 machine used remotely or directly in connection with gaming or
 
 7 any game which affects the result of a wager by determining win
 
 8 or loss.  The term includes a slot machine, any mechanical,
 
 9 electrical, or other device which may be connected to or used
 
10 with a slot machine to alter the normal criteria of random
 
11 selection or affect the outcome of a game, a system for the
 
12 accounting or management of any game in which the result of the
 
13 wager is determined electronically by using any combination of
 
14 hardware or software for computers, and those combinations of
 
15 components of gaming devices which the commission determines to
 
16 be a machine used directly or remotely in connection with gaming
 
17 or any game which affects the results of a wager by determining a
 
18 win or loss.
 
19      "Gaming facility" means any structure or facility where
 
20 gaming takes place.
 
21      "General partner" means any general partner of a limited
 
22 partnership or any person performing similar functions.
 
23      "Gross revenue" means the total of all cash received as
 

 
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                                     H.B. NO.1601       
                                                        
                                                        

 
 1 winnings; cash received in payment for credit extended by a
 
 2 licensee to a patron for purposes of gaming; and compensation
 
 3 received for conducting any game in which the licensee is not
 
 4 party to a wager, less the total of all cash paid out as losses
 
 5 to patrons, and those amounts paid to fund periodic payments and
 
 6 any other items made deductible as losses by section    -31.  For
 
 7 purposes of this chapter, cash or the value of noncash prizes
 
 8 awarded to patrons in a contest or tournament are not losses,
 
 9 except that losses in a contest or tournament conducted in
 
10 conjunction with an inter-casino linked system may be deducted to
 
11 the extent of the compensation received for the right to
 
12 participate in that contest or tournament.  Gross revenue does
 
13 not include counterfeit facsimiles of money, chips, tokens,
 
14 wagering instruments, or wagering credits; coins of other
 
15 countries which are received in gaming device; any portion of the
 
16 face value of any chip, token, or other representative of value
 
17 won by a licensee from a patron for which the licensee can
 
18 demonstrate that it or its affiliate has not received cash; cash
 
19 taken in fraudulent acts perpetrated against a licensee for which
 
20 the licensee is not reimbursed; cash received as entry fees for
 
21 contests or tournaments in which patrons compete for prizes,
 
22 except for a contest or tournament conducted in conjunction with
 
23 an inter-casino linked system; or uncollected baccarat
 

 
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                                     H.B. NO.1601       
                                                        
                                                        

 
 1 commissions.
 
 2      "Holding company" means any corporation, firm, partnership,
 
 3 limited partnership, limited liability company, trust, or other
 
 4 form of business organization not a natural person which,
 
 5 directly or indirectly owns, has the power or right to control,
 
 6 or holds the power to vote any part of the limited partnership
 
 7 interests or interests in a limited liability company or
 
 8 outstanding voting securities of a corporation which is a
 
 9 licensee or applicant.  In addition to any other reasonable
 
10 meaning of the words used, a holding company "indirectly" has,
 
11 holds, or owns any such power, right, or security, if it does so
 
12 through any interest in a subsidiary or successive subsidiaries,
 
13 however many such subsidiaries may intervene between the holding
 
14 company and the corporation, limited partnership, or limited
 
15 liability company which is a licensee or applicant.
 
16      "Individual" means a natural person.
 
17      "Inter-casino linked system" means a network of
 
18 electronically interfaced similar games which are located at two
 
19 or more licensed gaming facilities.
 
20      "Interest in a limited liability company" means a member's
 
21 share of the profits and losses of a limited liability company
 
22 and the right to receive distributions of the company's assets.
 
23      "Intermediary company" means any corporation, firm,
 

 
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                                     H.B. NO.1601       
                                                        
                                                        

 
 1 partnership, limited partnership, limited liability company,
 
 2 trust, or other form of business organization other than a
 
 3 natural person which is a holding company with respect to a
 
 4 corporation, limited partnership, or limited liability company
 
 5 which is a licensee or applicant; and is a subsidiary with
 
 6 respect to any holding company.
 
 7      "License" or "state gaming license" means a license issued
 
 8 under this chapter.
 
 9      "Licensee" means any person to whom a valid gaming has been
 
10 issued.
 
11      "Licensed gaming facility" means a gaming facility operated
 
12 by a person holding a valid operator's license.
 
13      "Limited liability company" means a limited liability
 
14 company organized and existing pursuant to chapter 428 or similar
 
15 statutory provisions of another state.
 
16      "Limited partner" means any limited partner of a limited
 
17 partnership or any other person having similar rights.
 
18      "Limited partnership" means a partnership formed by two or
 
19 more persons pursuant to chapter 425D, or similar statutory
 
20 provisions of another state, having as members one or more
 
21 general partners and one or more limited partners.
 
22      "Limited partnership interest" means the right of a general
 
23 or limited partner to receive from a limited partnership a share
 

 
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                                     H.B. NO.1601       
                                                        
                                                        

 
 1 of the profits; any other compensation by way of income; or a
 
 2 return of any or all of the contribution to capital of the
 
 3 limited partnership, or the right to exercise any of the rights
 
 4 or powers provided in chapter 425D, whether directly or
 
 5 indirectly.
 
 6      "Manager" means a person elected by the members of a limited
 
 7 liability company to manage the company.
 
 8      "Manufacturer" means a person who:
 
 9      (1)  Manufactures, assembles, programs, or makes
 
10           modifications to a gaming device or cashless wagering
 
11           system; or
 
12      (2)  Designs, controls the design or assembly, or maintains
 
13           a copyright over the design of a mechanism, electronic
 
14           circuit, or computer program which cannot be reasonably
 
15           demonstrated to have any application other than in a
 
16           gaming device or in a cashless wagering system, for use
 
17           or play in this State or for distribution outside of
 
18           this State.
 
19      "Manufacturer's, seller's, or distributor's license" means a
 
20 license issued pursuant to section    -16.
 
21      "Member" means a person who owns an interest in a limited
 
22 liability company.
 
23      "Occupational license" means a license issued by the
 

 
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                                     H.B. NO.1601       
                                                        
                                                        

 
 1 commission to a person or entity to perform an occupation which
 
 2 the commission has identified as requiring a license to engage in
 
 3 casino gaming in Hawaii.
 
 4      "Operator's license" means a license to operate and maintain
 
 5 a gaming facility for casino gaming permitted under this chapter.
 
 6      "Person" includes an individual, corporation, partnership,
 
 7 limited partnership, limited liability company, trust, estate, or
 
 8 other legal entity.
 
 9      "Publicly traded corporation" means:
 
10      (1)  Any corporation or other legal entity except a natural
 
11           person which:
 
12           (A)  Has one or more classes of securities registered
 
13                pursuant to section 12 of the Securities Exchange
 
14                Act of 1934, as amended (15 U.S.C. 781);
 
15           (B)  Is an issuer subject to section 15(d) of the
 
16                Securities Exchange Act of 1934, as amended (15
 
17                U.S.C. 78o); or
 
18           (C)  Has one or more classes of securities exempted
 
19                from the registration requirements of section 5 of
 
20                the Securities Act of 1933, as amended (15 U.S.C.
 
21                77e), solely by reason of an exemption contained
 
22                in section 3(a)10, 3(a)11 or 3(c) of the
 
23                Securities Act of 1933, as amended (15 U.S.C.
 

 
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                                     H.B. NO.1601       
                                                        
                                                        

 
 1                77c(a)(10), 77c(a)(11), and 77c(c),
 
 2                respectively) or 17 C.F.R. 230.251 et seq.; and
 
 3      (2)  Any corporation or other legal entity created under the
 
 4           laws of a foreign country:
 
 5           (A)  Which has one or more classes of securities
 
 6                registered on that country's securities exchange
 
 7                or over-the-counter market; and
 
 8           (B)  Whose activities have been found by the commission
 
 9                to be regulated in a manner which protects the
 
10                investors and the State.
 
11 The term does not include any corporation or other legal entity
 
12 which has securities registered or is an issuer pursuant to
 
13 paragraph (1) solely because it guaranteed a security issued by
 
14 an affiliated company pursuant to a public offering; or is
 
15 considered by the Securities and Exchange Commission to be a co-
 
16 issuer of a public offering of securities pursuant to 17 C.F.R.
 
17 230.140.
 
18      "Race book" means the business of accepting wagers upon the
 
19 outcome of any event held at a track which uses the parimutuel
 
20 system of wagering.
 
21      "Slot machine" means any mechanical, electrical, or other
 
22 device, contrivance or machine which, upon insertion of a coin,
 
23 token, or similar object, or upon payment of any consideration,
 

 
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                                     H.B. NO.1601       
                                                        
                                                        

 
 1 is available to play or operate, the play or operation of which,
 
 2 whether by reason of the skill of the operator in playing a
 
 3 gambling game which is presented for play by the machine, or
 
 4 application of the element of chance, or both, may deliver or
 
 5 entitle the person playing or operating the machine to receive
 
 6 cash, premiums, merchandise, tokens, or any thing of value,
 
 7 whether the payoff is made automatically from the machine or in
 
 8 any other manner.
 
 9      "Subsidiary" means a corporation, any part of whose
 
10 outstanding equity securities are owned, subject to a power or
 
11 right of control; or held with power to vote by a holding company
 
12 or intermediary company; or a firm, partnership, limited
 
13 partnership, limited liability company, trust, or other form of
 
14 business organization not a natural person, any interest in which
 
15 is owned, subject to a power or right of control; or held with
 
16 power to vote by a holding company or intermediary company.
 
17      "Wagering credit" means a representative of value, other
 
18 than a chip, token, or wagering instrument, that is used for
 
19 wagering at a game or gaming device and is obtained by the
 
20 payment of cash or a cash equivalent, the use of a wagering
 
21 instrument or the electronic transfer of money.
 
22      "Wagering instrument" means a representative of value, other
 
23 than a chip or token, that is issued by a licensee and approved
 

 
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                                     H.B. NO.1601       
                                                        
                                                        

 
 1 by the commission for use in a cashless wagering system.
 
 2                 PART II.  STATE GAMING COMMISSION
 
 3         -4 Hawaii state gaming commission.  (a)  There is
 
 4 established the Hawaii state gaming commission which shall be a
 
 5 body corporate and a public instrumentality of the State, for the
 
 6 purpose of implementing this chapter.  The commission shall be
 
 7 placed within the department of budget and finance for
 
 8 administrative purposes.  The commission shall consist of five
 
 9 members who shall be appointed in accordance with this section
 
10 and section 26-34.
 
11      (b)  No person shall be appointed a member of the commission
 
12 or continue to be a member of the commission if the person is:
 
13      (1)  An appointed or elected state or county official;
 
14      (2)  Licensed by the commission pursuant to this chapter, is
 
15           an official of, has a financial interest in, or has a
 
16           financial relationship with, any gaming operation
 
17           subject to the jurisdiction of this commission pursuant
 
18           to this chapter;
 
19      (3)  Related to any other person within the second degree of
 
20           consanguinity or affinity who is licensed by the
 
21           commission pursuant to this chapter; or
 
22      (4)  Not of good moral character or has been convicted of,
 
23           or is under indictment for, a felony under the laws of
 

 
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                                     H.B. NO.1601       
                                                        
                                                        

 
 1           Hawaii or any other state, or the United States.
 
 2      (c)  Each member shall serve a term of five years except
 
 3 that of the initial members, one member shall serve for five
 
 4 years, one member shall serve for four years, one member shall
 
 5 serve for three years, one member shall serve for two years, one
 
 6 member shall serve for one year.  A vacancy on the commission of
 
 7 a seat subject to this subsection shall be filled in accordance
 
 8 with article V, section 6, of the Constitution of the State of
 
 9 Hawaii.
 
10      (d)  Each term of a member of the commission shall commence
 
11 on July 1, and expire on June 30.  No person shall be appointed
 
12 consecutively to more than two terms as a member of the
 
13 commission.  No person shall serve as a member of the commission
 
14 for more than ten consecutive years.
 
15      (e)  Any member of the commission whose term has expired and
 
16 who is not disqualified from membership under subsection (d) may
 
17 continue in office as a holdover member until a successor is
 
18 appointed; provided that a holdover member shall not hold office
 
19 beyond the end of the second regular legislative session
 
20 following the expiration of the member's term of office.
 
21      (f)  The governor may remove or suspend for cause any member
 
22 of the commission after due notice and public hearing.
 
23      (g)  Members shall:
 

 
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                                     H.B. NO.1601       
                                                        
                                                        

 
 1      (1)  Serve part-time;
 
 2      (2)  Be paid compensation of $75 for each day in the
 
 3           performance of official duties; and
 
 4      (3)  Be reimbursed for expenses, including travel expenses,
 
 5           incurred in the performance of official duties.
 
 6      (h)  Officers of the commission, including the chairperson,
 
 7 shall be selected by the members.  The commission, subject to
 
 8 chapter 92, shall hold at least one meeting in each quarter of
 
 9 the State's fiscal year.  Special meetings may be called by the
 
10 chairperson or any four members upon seventy-two hours written
 
11 notice to each member.  Four members shall constitute a quorum,
 
12 and a majority vote of the members present shall be required for
 
13 any final determination by the commission.  The commission shall
 
14 keep a complete and accurate record of all its meetings.
 
15      (i)  Before assuming the duties of office, each member of
 
16 the commission shall take an oath that the member shall
 
17 faithfully execute the duties of office according to the laws of
 
18 the State and shall file and maintain with the director a bond in
 
19 the sum of $25,000 with good and sufficient sureties.  The cost
 
20 of any bond for any member of the commission under this section
 
21 shall be considered a part of the necessary expenses of the
 
22 commission.
 
23      (j)  The commission shall appoint a person to serve as the
 

 
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                                     H.B. NO.1601       
                                                        
                                                        

 
 1 executive director of the commission subject to the commission's
 
 2 supervision.  The executive director shall hold office at the
 
 3 will of the commission and shall be exempt from chapters 76 and
 
 4 77 and shall devote full time to the duties of the office and
 
 5 shall not hold any other office or employment.  The executive
 
 6 director shall receive an annual salary at an amount set by the
 
 7 commission.  The executive director shall be reimbursed for
 
 8 expenses actually and necessarily incurred in the performance of
 
 9 the executive director's duties.
 
10      (k)  Except as otherwise provided by law, the executive
 
11 director may hire assistants, other officers, and employees, who
 
12 shall be exempt from chapters 76 and 77 and who shall serve at
 
13 the will of the executive director; and appoint committees and
 
14 consultants necessary for the efficient operation of casino
 
15 gaming; provided that no person shall be hired or appointed under
 
16 this subsection who is:
 
17      (1)  An elected state or county official;
 
18      (2)  Licensed by the commission pursuant to this chapter, is
 
19           an official of, has a financial interest in, or has a
 
20           financial relationship with, any gaming operation
 
21           subject to the jurisdiction of this commission pursuant
 
22           to this chapter;
 
23      (3)  Related to any other person within the second degree of
 

 
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                                     H.B. NO.1601       
                                                        
                                                        

 
 1           consanguinity or affinity who is licensed by the
 
 2           commission pursuant to this chapter; or
 
 3      (4)  Not of good moral character or has been convicted of,
 
 4           or is under indictment for, a felony under the laws of
 
 5           Hawaii or any other state, or the United States.
 
 6      (l)  The salaries of employees shall be set by the executive
 
 7 director.
 
 8      (m)  Notwithstanding subsection (j), the commission may
 
 9 perform the functions of the executive director and may exercise
 
10 the powers granted to the executive director until            ,
 
11 and shall not be required to appoint an executive director before
 
12 that date.
 
13      (n)  The commission shall adopt rules in accordance with
 
14 chapter 91 establishing a code of ethics for itself and its
 
15 employees which shall include, but not be limited to,
 
16 restrictions on which employees shall be prohibited from
 
17 participating in or wagering on any game or gaming operation
 
18 subject to the jurisdiction of the commission.  The code of
 
19 ethics shall be separate from and in addition to any standards of
 
20 conduct set forth pursuant to chapter 84.
 
21         -5  Staff.(a)  The executive director shall keep
 
22 records of all proceedings of the commission and shall preserve
 
23 all records, books, documents, and other papers belonging to the
 

 
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                                     H.B. NO.1601       
                                                        
                                                        

 
 1 commission or entrusted to its care relating to casino gaming.
 
 2      (b)  The commission may employ any personnel, including
 
 3 personnel with law enforcement authority, that may be necessary
 
 4 to carry out its duties related to casino gaming.  In conducting
 
 5 investigations, the commission may employ the services of police
 
 6 departments with reasonable reimbursement for costs and services
 
 7 received.
 
 8         -6  Powers of the commission.  The commission shall have
 
 9 all powers necessary and proper to fully and effectively
 
10 supervise all casino gaming operations, including the power to:
 
11      (1)  Administer, regulate, and enforce the system of casino
 
12           gaming established by this chapter.  The commission's
 
13           jurisdiction shall extend to every person involved in
 
14           casino gaming operations in a county or in the
 
15           manufacture, sale, or distribution of gaming devices or
 
16           equipment;
 
17      (2)  Determine the types and numbers of licenses to be
 
18           permitted under this chapter, to investigate the
 
19           qualifications of each applicant under this chapter
 
20           before any license is issued or any registration,
 
21           finding of suitability, or approval of acts or
 
22           transactions for which commission approval is required
 
23           or permission is granted, and to set the types and
 

 
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                                     H.B. NO.1601       
                                                        
                                                        

 
 1           amounts of fees, including application fees;
 
 2      (3)  Adopt standards for the licensing of all persons under
 
 3           this chapter, to issue licenses, and to establish and
 
 4           collect fees for these licenses;
 
 5      (4)  Provide for the collection of all taxes imposed
 
 6           pursuant to this chapter; and to collect, receive,
 
 7           expend, and account for all revenues derived from
 
 8           casino gaming within a county;
 
 9      (5)  Inspect and examine all premises wherein gaming is
 
10           conducted or gaming devices or equipment are
 
11           manufactured, sold, distributed, or serviced, to
 
12           inspect all equipment and supplies in, upon, or about
 
13           such premises, to summarily seize and remove from such
 
14           premises and impound any equipment, supplies,
 
15           documents, or records for the purpose of examination
 
16           and inspection, to demand access to and inspect,
 
17           examine, photocopy, and audit all papers, books, and
 
18           records of any applicant or licensee, on its premises,
 
19           or elsewhere as practicable, and in the presence of the
 
20           applicant or licensee, or its agent, regarding the
 
21           gross income produced by any gaming business, and
 
22           require verification of income, and all other matters
 
23           affecting the enforcement of the policy or any of the
 

 
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                                     H.B. NO.1601       
                                                        
                                                        

 
 1           provisions of this chapter, and to demand access to and
 
 2           inspect, examine, photocopy, and audit all papers,
 
 3           books, and records of any affiliate of a licensee whom
 
 4           the commission knows or reasonably suspects is involved
 
 5           in the financing operation, or management of the
 
 6           licensee;
 
 7      (6)  Investigate alleged violations of this chapter and to
 
 8           take appropriate disciplinary action against a licensee
 
 9           or a holder of an occupational license for a violation,
 
10           or institute appropriate legal action for enforcement,
 
11           or both;
 
12      (7)  Be present through its inspectors and agents any time
 
13           casino gaming operations are conducted in any casino
 
14           for the purpose of certifying the revenue thereof,
 
15           receiving complaints from the public, and conducting
 
16           such other investigations into the conduct of the
 
17           casino gaming and the maintenance of the equipment as
 
18           from time to time the commission may deem necessary and
 
19           proper;
 
20      (8)  Adopt appropriate standards for all casino facilities,
 
21           as well as for electronic or mechanical gaming devices;
 
22      (9)  Require that the records, including financial or other
 
23           statements of any licensee under this chapter, be kept
 

 
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                                     H.B. NO.1601       
                                                        
                                                        

 
 1           in the manner prescribed by the commission and that any
 
 2           licensee involved in the ownership or management of
 
 3           casino gaming operations submit to the commission an
 
 4           annual balance sheet and profit and loss statement, and
 
 5           any other information the commission deems necessary in
 
 6           order to effectively administer this chapter;
 
 7     (10)  Conduct hearings, issue subpoenas for the attendance of
 
 8           witnesses and subpoenas duces tecum for the production
 
 9           of books, records, and other pertinent documents, to
 
10           administer oaths and affirmations to the witnesses, and
 
11           to pay such transportation and other expenses of
 
12           witnesses, when, in the judgment of the commission, it
 
13           is necessary to administer or enforce this chapter;
 
14     (11)  Prescribe an employment application form to be used by
 
15           any licensee involved in the ownership or management of
 
16           casino gaming operations for hiring purposes;
 
17     (12)  Eject or exclude or authorize the ejection or exclusion
 
18           of, any person from casino gaming facilities where the
 
19           person is in violation of this chapter or where the
 
20           person's conduct or reputation is such that the
 
21           person's presence within a gaming facility, in the
 
22           opinion of the commission, may call into question the
 
23           honesty and integrity of the casino gaming operation or
 

 
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                                     H.B. NO.1601       
                                                        
                                                        

 
 1           interfere with the orderly conduct thereof; provided
 
 2           that the propriety of that ejection or exclusion shall
 
 3           be subject to subsequent hearing by the commission;
 
 4     (13)  Permit licensees of casino gaming operations to utilize
 
 5           a wagering system whereby cash may be converted to
 
 6           tokens, electronic cards, or chips which shall be used
 
 7           only for wagering within the gaming facility;
 
 8     (14)  Suspend, revoke, or restrict licenses, to require the
 
 9           removal of a licensee or an employee of a licensee for
 
10           a violation of this chapter or a commission rule or for
 
11           engaging in a fraudulent practice;
 
12     (15)  Impose and collect fines of up to $5,000 against
 
13           individuals and up to $10,000 or an amount equal to the
 
14           daily gross revenue, whichever is larger, against
 
15           licensees for each violation of this chapter, any rules
 
16           adopted by the commission, any order of the commission,
 
17           or any other action which, in the commission's
 
18           discretion, is a detriment or impediment to casino
 
19           gaming operations;
 
20     (16)  Hire employees to gather information, conduct
 
21           investigations, and carry out any other tasks
 
22           contemplated under this chapter;
 
23     (17)  Establish minimum levels of insurance to be maintained
 

 
Page 24                                                    
                                     H.B. NO.1601       
                                                        
                                                        

 
 1           by licensees;
 
 2     (18)  Establish a process to facilitate and expedite the
 
 3           approval of the necessary licenses and permits,
 
 4           including its own procedures for the issuance of liquor
 
 5           licenses for any holder of an operator's license under
 
 6           this chapter; provided that all state laws and county
 
 7           ordinances relating to liquor are met;
 
 8     (19)  Delegate the execution of any of its powers for the
 
 9           purpose of administering and enforcing this chapter and
 
10           rules adopted under this chapter;
 
11     (20)  Adopt necessary rules under chapter 91 to implement
 
12           this chapter; and
 
13     (21)  Take any other action as may be reasonable or
 
14           appropriate to enforce this chapter and rules adopted
 
15           under this chapter.
 
16         -7  Rules.(a)  In adopting rules under this chapter,
 
17 the commission shall be exempt from the requirements of public
 
18 notice, public hearing, and gubernatorial approval under chapter
 
19 91; provided, however, that the rules and any amendment thereto
 
20 are adopted in an open meeting of the commission satisfying the
 
21 requirements of chapter 92 and have been made available for
 
22 gubernatorial comment at least thirty days before that meeting.
 
23 The commission shall reasonably facilitate an expedited effort to
 

 
Page 25                                                    
                                     H.B. NO.1601       
                                                        
                                                        

 
 1 equip, staff, and open the casinos initially permitted by section
 
 2    -14(d), including, without limitation, adopting partial or
 
 3 temporary rules and accepting applications for licenses or
 
 4 registration on forms used for equivalent licenses or
 
 5 circumstances in the states of Nevada or New Jersey pending
 
 6 adoption of final rules or forms.  Legal services may be procured
 
 7 to draft or revise rules and forms and to provide legal services
 
 8 in connection with adoption of rules, under section 103D-304.
 
 9      (b)  Without limiting the general powers conferred upon the
 
10 commission, the rules must include provisions:
 
11      (1)  Prescribing the method and form of application which
 
12           any applicant for a license must follow and complete
 
13           before consideration of the application;
 
14      (2)  Prescribing the information to be furnished by any
 
15           applicant or licensee concerning the applicant's
 
16           antecedents, habits, character, associates, criminal
 
17           record, business activities, and financial affairs,
 
18           past and present;
 
19      (3)  Prescribing the information to be furnished by a
 
20           licensee relating to its employees;
 
21      (4)  Requiring fingerprinting of an applicant or licensee or
 
22           employee or other methods of identification;
 
23      (5)  Prescribing the manner and procedure of all hearings
 

 
Page 26                                                    
                                     H.B. NO.1601       
                                                        
                                                        

 
 1           conducted by the commission or any hearing examiner of
 
 2           the commission, including special rules of evidence
 
 3           applicable thereto and notices thereof;
 
 4      (6)  Requiring any applicant to pay all or any part of the
 
 5           fees and costs of investigation of such applicant as
 
 6           may be determined by the commission;
 
 7      (7)  Prescribing the manner and method of collection and
 
 8           payment of fees and issuance of licenses;
 
 9      (8)  Defining and limiting the area, games, and devices
 
10           permitted, and the method of operation of such games
 
11           and devices for the purposes of this chapter;
 
12      (9)  Prescribing under what conditions the nonpayment of a
 
13           gambling debt by a licensee shall be deemed grounds for
 
14           revocation or suspension of its license;
 
15     (10)  Governing the manufacture, sale, and distribution of
 
16           gaming devices and equipment;
 
17     (11)  Requiring any applicant or licensee to waive any
 
18           privilege with respect to any testimony at any hearing
 
19           or meeting of the commission, except any privilege
 
20           afforded by the constitutions of the United States and
 
21           this State;
 
22     (12)  Prescribing the qualifications of, and the conditions
 
23           under which, attorneys, accountants, and others are
 

 
Page 27                                                    
                                     H.B. NO.1601       
                                                        
                                                        

 
 1           permitted to practice before the commission;
 
 2     (13)  Prescribing the permitted basis for and procedures
 
 3           under which a person may be listed as a person who may
 
 4           be excluded from casino facilities; provided, however,
 
 5           that race, color, creed, national origin, ancestry,
 
 6           sex, or other basis prohibited by state or federal law
 
 7           must not be grounds for placing the name of a person on
 
 8           such list;
 
 9     (14)  Prescribing minimum procedures for adoption by holders
 
10           of an operator's license, which include but are not
 
11           limited to the safeguarding of assets and revenues,
 
12           especially the recording of cash and evidences of
 
13           indebtedness; the provision of reliable records,
 
14           accounts, and reports of transactions, operations, and
 
15           events, including reports to the commission; and
 
16           provision for the adoption of internal audits;
 
17     (15)  Prescribing the manner in which winnings, compensation
 
18           from games and gaming devices, and gross revenue must
 
19           be computed and reported by the holder of an operator's
 
20           license; and
 
21     (16)  Prescribing procedures in connection with
 
22           determinations of suitability of an affiliate of a
 
23           licensee or applicant.
 

 
Page 28                                                    
                                     H.B. NO.1601       
                                                        
                                                        

 
 1         -8  Applications for licenses.(a)  Applications for
 
 2 state gaming licenses shall be made on forms provided by the
 
 3 commission and shall contain any information that the commission
 
 4 prescribes.
 
 5      (b)  An application fee shall be paid at the time of filing
 
 6 to defray the costs associated with the background investigation
 
 7 conducted by the commission, and the search and classification of
 
 8 fingerprints obtained by the commission with request to the
 
 9 application.  Application fees shall be set by the commission for
 
10 each category of license.  If the costs of the investigation
 
11 exceed the scheduled fee, the applicant shall pay the additional
 
12 amount to the commission.  If the costs of the investigation are
 
13 less than the scheduled fee, the applicant, in the discretion of
 
14 the commission, may receive a refund of the remaining amount.
 
15 All information, records, interviews, reports, statements,
 
16 memoranda, or other data supplied to or used by the commission in
 
17 the course of its review or investigation of an application for a
 
18 license shall be privileged, strictly confidential, and shall be
 
19 used only for the purpose as provided in this chapter, including
 
20 evaluation of an applicant or of sharing information with law
 
21 enforcement and with gaming regulatory agencies in other
 
22 jurisdictions.  The information, records, interviews, reports,
 
23 statements, memoranda, or other data shall not be admissible as
 

 
Page 29                                                    
                                     H.B. NO.1601       
                                                        
                                                        

 
 1 evidence, nor discoverable in any action of any kind in any court
 
 2 or before any tribunal, commission, agency, or person, except for
 
 3 any action deemed necessary by the commission.
 
 4        -9 Disclosure of records.(a)  Notwithstanding any
 
 5 other law to the contrary, the commission on written request from
 
 6 any person, shall provide information furnished by an applicant
 
 7 or licensee concerning the applicant or licensee, or the
 
 8 applicant's or licensee's products, services, or gaming
 
 9 enterprises, and business holdings related to casino gaming under
 
10 this chapter, as follows:
 
11      (1)  The name, business address, and business telephone
 
12           number of any applicant or licensee;
 
13      (2)  An identification of any applicant or licensee
 
14           including, if an applicant or licensee is not an
 
15           individual or partnership, the state of incorporation
 
16           or registration, the corporate offices, and the
 
17           identity of all shareholders or participants;
 
18      (3)  An identification of any business, including, if
 
19           applicable, the state of incorporation or registration,
 
20           in which an applicant or licensee or an applicant's or
 
21           licensee's spouse or children has an equity interest of
 
22           more than five per cent.  If an applicant or licensee
 
23           is a corporation, partnership, or other business
 

 
Page 30                                                    
                                     H.B. NO.1601       
                                                        
                                                        

 
 1           entity, the applicant or licensee shall identify any
 
 2           other corporation, partnership, or business entity in
 
 3           which it has an equity interest of five per cent or
 
 4           more, including, if applicable, the state of
 
 5           incorporation or registration;
 
 6      (4)  Whether an applicant or licensee has been indicted,
 
 7           convicted, pleaded guilty or nolo contendere, or
 
 8           forfeited bail concerning any criminal offense under
 
 9           the laws of any jurisdiction, either felony or
 
10           misdemeanor (except for traffic violations), including
 
11           the date, the name, and location of the court,
 
12           arresting agency, and prosecuting agency, the case
 
13           number, the offense, the disposition, and the location
 
14           and length of incarceration;
 
15      (5)  Whether an applicant or licensee has had any license or
 
16           certificate issued by a licensing authority in Hawaii
 
17           or any other jurisdiction denied, restricted,
 
18           suspended, revoked, or not renewed and a statement
 
19           describing the facts and circumstances concerning the
 
20           denial, restriction, suspension, revocation, or
 
21           nonrenewal, including the licensing authority, the date
 
22           each action was taken, and the reason for each action;
 
23      (6)  Whether an applicant or licensee has ever filed or had
 

 
Page 31                                                    
                                     H.B. NO.1601       
                                                        
                                                        

 
 1           filed against it a proceeding in bankruptcy or has ever
 
 2           been involved in any formal process to adjust, defer,
 
 3           suspend, or otherwise work out the payment of any debt
 
 4           including the date of filing, the name and location of
 
 5           the court, and the case and number of the disposition;
 
 6      (7)  Whether an applicant or licensee has filed, or been
 
 7           served with a complaint or other notice filed with any
 
 8           public body, regarding the delinquency in the payment
 
 9           of, or a dispute over the filings concerning the
 
10           payment of, any tax required under federal, state, or
 
11           local law, including the amount, type of tax, the
 
12           taxing agency, and time periods involved;
 
13      (8)  A statement listing the names and titles of all public
 
14           officials or offices of any unit of government, and
 
15           relatives of all public officials or officers who,
 
16           directly or indirectly, own any financial interest in,
 
17           have any beneficial interest in, are the creditors of
 
18           or hold any debt instrument issued by, or hold or have
 
19           any interest in any contractual or service relationship
 
20           with, an applicant or licensee;
 
21      (9)  Whether an applicant or licensee has made, directly or
 
22           indirectly, any political contribution, or any loans,
 
23           donations, or other payments, to any candidate for
 

 
Page 32                                                    
                                     H.B. NO.1601       
                                                        
                                                        

 
 1           public office in this State or any office holder in
 
 2           this State, within five years from the date of filing
 
 3           the application, including the amount and the method of
 
 4           payment;
 
 5     (10)  The name and business telephone number of any attorney
 
 6           representing an applicant or licensee in matters before
 
 7           the commission;
 
 8     (11)  A description of any proposed or approved casino gaming
 
 9           operation, including location of the gaming facility,
 
10           expected economic benefit to the community, anticipated
 
11           or actual number of employees, statement from an
 
12           applicant or licensee, stating the applicant or
 
13           licensee is in compliance with federal and state
 
14           affirmative action guidelines, projected or actual
 
15           admissions, and projected or actual adjusted gross
 
16           gaming receipts; and
 
17     (12)  A description of the product or service to be supplied
 
18           by an applicant for a supplier's license.
 
19      (b)  Notwithstanding any other law to the contrary, the
 
20 commission, on written request from any person, shall also
 
21 provide the following information related to casino gaming under
 
22 this chapter:
 
23      (1)  The amount of the wagering tax paid by the holder of an
 

 
Page 33                                                    
                                     H.B. NO.1601       
                                                        
                                                        

 
 1           operator's license;
 
 2      (2)  Whenever the commission finds an applicant for an
 
 3           operator's license unsuitable for licensing, a copy of
 
 4           the written letter outlining the reasons for the
 
 5           denial; and
 
 6      (3)  Whenever the commission has refused to grant leave for
 
 7           an applicant to withdraw an application, a copy of the
 
 8           letter outlining the reasons for the refusal.
 
 9      (c)  Subject to subsection (b), the commission shall not
 
10 disclose any information the disclosure of which would be barred
 
11 by:
 
12      (1)  Chapter 92F; or
 
13      (2)  The statutes, rules, regulations, or intergovernmental
 
14           agreements of any jurisdiction.
 
15      (d)  The commission may assess fees for the copying of
 
16 information in accordance with chapter 92F.
 
17         -10  Criminal history record information.  Whenever the
 
18 commission is authorized or required by law to consider some
 
19 aspect of criminal history record information for the purpose of
 
20 carrying out its statutory powers and responsibilities, upon
 
21 request from the commission, the Hawaii criminal justice data
 
22 center shall furnish any information contained in its files.
 
23         -11  Hearings by the commission.(a)  Upon order of the
 

 
Page 34                                                    
                                     H.B. NO.1601       
                                                        
                                                        

 
 1 commission, one of the commission members or a hearings officer
 
 2 designated by the commission may conduct any hearing provided for
 
 3 under this chapter related to casino gaming or by commission rule
 
 4 and may recommend findings and decisions to the commission.  The
 
 5 commission member or hearings officer conducting the hearing
 
 6 shall have all powers and rights granted to the commission in
 
 7 this chapter.  The record made at the time of the hearing shall
 
 8 be reviewed by the commission, or a majority thereof, and the
 
 9 findings and decision of the majority of the commission shall
 
10 constitute the order of the commission in that case.
 
11      (b)  Any party aggrieved by an action of the commission
 
12 denying, suspending, revoking, restricting, or refusing to renew
 
13 a license under this chapter may request a hearing before the
 
14 commission.  A request for a hearing must be made to the
 
15 commission in writing within five days after service of notice of
 
16 the action of the commission.  Notice of the action of the
 
17 commission shall be served either by personal delivery or by
 
18 certified mail, postage prepaid, to the aggrieved party.  Notice
 
19 served by certified mail shall be deemed complete on the business
 
20 day following the date of the mailing.  The commission shall
 
21 conduct all requested hearings promptly and in reasonable order.
 
22         -12  Judicial review.  Jurisdiction and venue for the
 
23 judicial review of a final order of the commission relating to
 

 
Page 35                                                    
                                     H.B. NO.1601       
                                                        
                                                        

 
 1 operator's, supplier's, manufacturer's, seller's, distributor's,
 
 2 or occupational licenses shall be vested in the circuit court of
 
 3 the appropriate jurisdiction.  A petition for judicial review of
 
 4 a final order of the commission shall be filed within thirty days
 
 5 after entry of the final order.
 
 6         -13  Annual report.  The commission shall file a written
 
 7 annual report with the governor and the legislature on or before
 
 8 sixty days following the close of each fiscal year and any
 
 9 additional reports that the governor or the legislature may
 
10 request.  The annual report shall include a statement of receipts
 
11 and disbursements related to casino gaming pursuant to this
 
12 chapter, actions taken by the commission, and any additional
 
13 information and recommendations which the commission may deem
 
14 valuable or which the governor or the legislature may request.
 
15                PART III.  LICENSES AND OPERATIONS
 
16         -14  Operator's licenses.(a)  It is unlawful for any
 
17 person to deal, operate, carry on, conduct, or expose for play in
 
18 the State of Hawaii any game, gaming device, inter-casino linked
 
19 system, slot machine, or race book except in a licensed gaming
 
20 facility or to receive, directly or indirectly, any compensation
 
21 or reward or any percentage or share of the money or property
 
22 played, for keeping, running, or carrying on any game, slot
 
23 machine, gaming device, or race book, without first having
 

 
Page 36                                                    
                                     H.B. NO.1601       
                                                        
                                                        

 
 1 procured and maintaining in effect all federal and state licenses
 
 2 as required by statute or rule.  Nothing in this chapter shall be
 
 3 interpreted to prohibit a holder of an operator's license from
 
 4 operating a school for the training of any occupational licensee.
 
 5      (b)  Every person who must be licensed pursuant to this
 
 6 section is subject to sections    -25 and    -26, unless exempted
 
 7 from those provisions by the commission.
 
 8      (c)  The burden of proving one's eligibility and
 
 9 qualification to receive or hold a license under this section is
 
10 at all times on the applicant or licensee.
 
11      (1)  An applicant shall be ineligible to receive an
 
12           operator's license if:
 
13           (A)  The person has been convicted of a felony under
 
14                the laws of this State, any other state, or the
 
15                United States;
 
16           (B)  The person has been convicted of any violation
 
17                under part III, chapter 712, or substantially
 
18                similar laws of another jurisdiction;
 
19           (C)  The person has submitted an application for a
 
20                license under this chapter which contains false
 
21                information;
 
22           (D)  The person is a member of the commission;
 
23           (E)  The person described in subparagraph (A), (B),
 

 
Page 37                                                    
                                     H.B. NO.1601       
                                                        
                                                        

 
 1                (C), or (D) is an officer, director, or managerial
 
 2                employee of the firm or corporation applying for a
 
 3                license;
 
 4           (F)  The firm or corporation applying for a license
 
 5                employs a person described in subparagraph (A),
 
 6                (B), (C), or (D) who participates in the
 
 7                management or operation of gaming operations
 
 8                authorized under this chapter;
 
 9           (G)  A license of the person, firm, or corporation
 
10                issued under this chapter, or a license to own or
 
11                operate gaming facilities in any other
 
12                jurisdiction, has been revoked; or
 
13           (H)  The person is not currently licensed to operate a
 
14                casino in another state, or a subsidiary of such a
 
15                corporation or entity, or a partnership, joint
 
16                venture, or other entity having such corporation
 
17                or entity as a general or joint venture partner or
 
18                participant.
 
19      (2)  In determining whether to grant an operator's license
 
20           to an applicant, the commission shall consider, among
 
21           other things, the following qualifications:
 
22           (A)  The character, reputation, experience, and
 
23                financial integrity of the applicant and of any
 

 
Page 38                                                    
                                     H.B. NO.1601       
                                                        
                                                        

 
 1                other or separate person that either controls,
 
 2                directly or indirectly, the applicant, or is
 
 3                controlled, directly or indirectly, by the
 
 4                applicant or by a person who controls, directly or
 
 5                indirectly, the applicant;
 
 6           (B)  The financial ability of the applicant to purchase
 
 7                and maintain adequate liability and casualty
 
 8                insurance;
 
 9           (C)  Whether the applicant has adequate capitalization
 
10                to provide and maintain, for the duration of a
 
11                license, a casino gaming operation; and
 
12           (D)  The extent to which the applicant exceeds or meets
 
13                other standards for the issuance of an operator's
 
14                license which the commission may adopt by rule.
 
15      (d)  Only two licensed gaming facilities shall be permitted
 
16 under this chapter.  The two initial gaming facilities shall be
 
17 located in districts of separate counties.  For purposes of the
 
18 two initial gaming facilities, the operation of a gaming facility
 
19 shall be deemed a use consistent with any urban land use
 
20 classification and with any resort zoning existing as of the date
 
21 of enactment of this chapter; provided, however, that the two
 
22 initial gaming facilities may also be located in areas
 
23 redesignated as urban or rezoned resort after the effective date
 

 
Page 39                                                    
                                     H.B. NO.1601       
                                                        
                                                        

 
 1 of this Act, unless otherwise provided by state law.  The
 
 2 foregoing limitation on the number of gaming facilities shall
 
 3 apply until:
 
 4      (1)  The two initial gaming facilities have been in
 
 5           continuous operation for at least sixty months;
 
 6      (2)  The commission has determined that the market can
 
 7           reasonably support additional licensed casino
 
 8           facilities; and
 
 9      (3)  The increase in the number of authorized gaming
 
10           facilities has been approved by amendment of this
 
11           chapter.
 
12      (e)  The commission may revoke the operator's license if a
 
13 licensee fails to begin regular casino gaming operations within
 
14 twelve months of issuance of the operator's license or twelve
 
15 months after a certificate of occupancy for the gaming facility
 
16 is first issued, whichever is later, upon a finding by the
 
17 commission that license revocation is in the best interest of the
 
18 State and the county in which casino gaming is authorized.
 
19      (f)  Before an operator's license may be issued, the
 
20 applicant shall pay a licensing fee of $1,000,000 per gaming
 
21 facility.  The license shall be renewable annually, upon payment
 
22 of an annual fee of $50,000.
 
23         -15  Bond of licensee.  Before an operator's license is
 

 
Page 40                                                    
                                     H.B. NO.1601       
                                                        
                                                        

 
 1 issued, the licensee shall file a bond in the sum of $200,000
 
 2 with the department.  The bond shall be used to guarantee that
 
 3 the licensee faithfully makes the payments, keeps books and
 
 4 records, makes reports, and conducts games of chance in
 
 5 conformity with this chapter and the rules adopted by the
 
 6 commission.  The bond shall not be canceled by a surety on less
 
 7 than thirty days notice in writing to the commission.  If a bond
 
 8 is canceled and the licensee fails to file a new bond with the
 
 9 commission in the required amount on or before the effective date
 
10 of cancellation, the licensee's license shall be revoked.  The
 
11 total and aggregate liability of the surety on the bond shall be
 
12 limited to the amount specified in the bond.
 
13         -16  Manufacturer's, seller's, and distributor's
 
14 licenses.(a)  It is unlawful for any person, either as owner,
 
15 lessee or employee, whether for hire or not, to operate, carry
 
16 on, conduct or maintain any form of manufacturing, selling, or
 
17 distribution of any gaming device or cashless wagering system for
 
18 use or play in the State or for distribution outside of the State
 
19 without first procuring and maintaining all required federal and
 
20 state licenses, except as follows:
 
21      (1)  A lessor who specifically acquires equipment for a
 
22           capital lease is not required to be licensed under this
 
23           section;
 

 
Page 41                                                    
                                     H.B. NO.1601       
                                                        
                                                        

 
 1      (2)  The holder of a state gaming license or the holding
 
 2           company of a corporation, partnership, limited
 
 3           partnership, limited liability company or other
 
 4           business organization holding a license, within two
 
 5           years after cessation of business or upon specific
 
 6           approval by the commission, may dispose of by sale in a
 
 7           manner approved by the commission, any or all of its
 
 8           gaming devices, including slot machines, and cashless
 
 9           wagering systems, without a distributor's license.  In
 
10           cases of bankruptcy of a state gaming licensee or
 
11           foreclosure of a lien by a bank or other person holding
 
12           a security interest for which gaming devices are
 
13           security in whole or in part for the lien, the
 
14           commission may authorize the disposition of the gaming
 
15           devices without requiring a distributor's license; and
 
16      (3)  Upon approval by the commission, a gaming device owned
 
17           by a law enforcement agency, a court of law, or a
 
18           gaming device repair school licensed by the commission
 
19           on post-secondary education, may be disposed of by
 
20           sale, in a manner approved by the commission, without a
 
21           distributor's license.  An application for approval
 
22           must be submitted to the commission in the manner
 
23           prescribed by the chairperson.
 

 
Page 42                                                    
                                     H.B. NO.1601       
                                                        
                                                        

 
 1      (b)  Any person whom the commission determines is a suitable
 
 2 person to receive a license under the provisions of this section
 
 3 may be issued a manufacturer's, seller's, or distributor's
 
 4 license.  The burden of proving one's eligibility and
 
 5 qualification to receive or hold such a license is at all times
 
 6 on the applicant or licensee.  A person, firm, or corporation
 
 7 shall be ineligible to receive a supplier's license if:
 
 8      (1)  The person has been convicted of a felony under the
 
 9           laws of this State, any other state, or the United
 
10           States;
 
11      (2)  The person has been convicted of any violation under
 
12           part III, chapter 712, or substantially similar laws of
 
13           another jurisdiction;
 
14      (3)  The person has submitted an application for a license
 
15           under this chapter which contains false information;
 
16      (4)  The person is a member of the commission;
 
17      (5)  The firm or corporation is one in which a person
 
18           defined in paragraph (1), (2), (3), or (4) is an
 
19           officer, director, or managerial employee;
 
20      (6)  The firm or corporation employs a person defined in
 
21           paragraph (1), (2), (3), or (4) who participates in the
 
22           management or operation of casino gaming authorized
 
23           under this chapter; or
 

 
Page 43                                                    
                                     H.B. NO.1601       
                                                        
                                                        

 
 1      (7)  The license of the person, firm, or corporation issued
 
 2           under this chapter, or a license to own or operate
 
 3           casino gaming facilities in any other jurisdiction, has
 
 4           been revoked.
 
 5      (c)  Every person who must be licensed pursuant to this
 
 6 section is subject to sections    -25 and    -26, unless exempted
 
 7 from those provisions by the commission.
 
 8      (d)  For a period of thirty-six months from the effective
 
 9 date of this Act and provided that the commission has not made a
 
10 finding of unsuitability, anyone holding a valid license in the
 
11 states of Nevada or New Jersey to engage in the manufacture,
 
12 sale, or distribution of gaming devices shall be exempt from this
 
13 section for purposes of supplying and servicing a licensed gaming
 
14 facility; provided, however, that the commission may require such
 
15 persons to register with the commission.
 
16      (e)  No gaming device shall be manufactured, sold, or
 
17 distributed in this State unless it conforms to standards adopted
 
18 by rules of the commission or to standards adopted in Nevada or
 
19 New Jersey.
 
20      (f)  All persons who manufacture, sell, or distribute gaming
 
21 devices in the State shall:
 
22      (1)  Furnish to the commission a list of all equipment,
 
23           devices, and supplies offered for sale or lease in
 

 
Page 44                                                    
                                     H.B. NO.1601       
                                                        
                                                        

 
 1           connection with casino games authorized under this
 
 2           chapter;
 
 3      (2)  Keep books and records for the furnishing of equipment,
 
 4           devices, and supplies to gaming facilities in the State
 
 5           separate and distinct from any other business that the
 
 6           supplier might operate;
 
 7      (3)  File a quarterly return with the commission listing all
 
 8           sales and leases in or from the State;
 
 9      (4)  Permanently affix its name to all its products; and
 
10      (5)  File an annual report listing its inventories of gaming
 
11           devices and components in the State.
 
12         -17  Effect of determination that manufacturer or
 
13 distributor is unsuitable to hold license.  If the commission
 
14 determines that a manufacturer or distributor is unsuitable to
 
15 receive or hold a license:
 
16      (1)  No new gaming device or associated equipment
 
17           manufactured by the manufacturer or distributed by the
 
18           distributor may be approved;
 
19      (2)  Any previously approved device or associated equipment
 
20           manufactured by the manufacturer or distributed by the
 
21           distributor shall be subject to revocation of approval
 
22           if the reasons for the denial of the license also apply
 
23           to that device or associated equipment;
 

 
Page 45                                                    
                                     H.B. NO.1601       
                                                        
                                                        

 
 1      (3)  No new device or associated equipment manufactured by
 
 2           the manufacturer or distributed by the distributor may
 
 3           be sold, transferred, or offered for use or play in the
 
 4           State;
 
 5      (4)  Any association or agreement between the manufacturer
 
 6           or distributor and a licensee must be terminated,
 
 7           unless otherwise provided by the commission.  An
 
 8           agreement between such a manufacturer or distributor of
 
 9           gaming devices or associated equipment and a licensee
 
10           shall be deemed to include a provision for its
 
11           termination without liability on the part of the
 
12           licensee upon a finding by the commission that the
 
13           manufacturer is unsuitable to be associated with a
 
14           gaming enterprise.  Failure to include that condition
 
15           in the agreement is not a defense in any action brought
 
16           pursuant to this section to terminate the agreement;
 
17           and
 
18      (5)  Failure of a licensee to terminate any association or
 
19           agreement with a manufacturer or distributor of gaming
 
20           devices or associated equipment after receiving notice
 
21           of:
 
22           (A)  A determination of unsuitability;
 
23           (B)  The denial of a license; or
 

 
Page 46                                                    
                                     H.B. NO.1601       
                                                        
                                                        

 
 1           (C)  Failure to file a timely application for a
 
 2                license;
 
 3 is an unsuitable method of operation.
 
 4         -18  Finding of suitability for manufacturer or
 
 5 distributor of associated equipment.(a)  A manufacturer or
 
 6 distributor of associated equipment who sells, transfers, or
 
 7 offers the associated equipment for use or play in the State may
 
 8 be required by the commission, upon recommendation of the
 
 9 commission, to file an application for a finding of suitability
 
10 to be a manufacturer or distributor of associated equipment.
 
11      (b)  Any person who is directly or indirectly involved in
 
12 the sale, transfer, or offering for use or play in the State of
 
13 such associated equipment who is not otherwise required to be
 
14 licensed as a manufacturer or distributor may be required by the
 
15 commission, upon recommendation of the commission, to file an
 
16 application for a finding of suitability to be a manufacturer or
 
17 distributor of associated equipment.
 
18      (c)  If an application for a finding of suitability is not
 
19 submitted to the commission within thirty days after demand by
 
20 the commission, it may pursue any remedy or combination of
 
21 remedies provided in this chapter.
 
22         -19  Inspection of gaming device, associated equipment,
 
23 and cashless wagering systems; fee.(a)  The commission may
 

 
Page 47                                                    
                                     H.B. NO.1601       
                                                        
                                                        

 
 1 inspect every gaming device which is manufactured, sold, or
 
 2 distributed for use in this State, before the gaming device is
 
 3 put into play, and in this State for use outside this State,
 
 4 before the gaming device is shipped out of this State.
 
 5      (b)  The commission may inspect every gaming device which is
 
 6 offered for play within this State by a licensee.
 
 7      (c)  The commission may inspect all associated equipment and
 
 8 every cashless wagering system which is manufactured, sold, or
 
 9 distributed for use in this State before the equipment or system
 
10 is installed or used by a licensee and at any time while the
 
11 licensee is using the equipment or system.
 
12      (d)  In addition to all other fees and charges imposed by
 
13 this chapter, the commission may determine, charge, and collect
 
14 an inspection fee from each manufacturer, seller, or distributor
 
15 which must not exceed the actual cost of inspection and
 
16 investigation.
 
17         -20  State gaming license required where equipment,
 
18 services, or property delivered or furnished for gaming interest
 
19 or revenue; exemptions.(a)  Except as otherwise provided in
 
20 subsections (b) and (c), it is unlawful for any person to:
 
21      (1)  Lend, let, lease, or otherwise deliver or furnish any
 
22           equipment of any gambling game, including any slot
 
23           machine, for any interest, percentage or share of the
 

 
Page 48                                                    
                                     H.B. NO.1601       
                                                        
                                                        

 
 1           money or property played, under guise of any agreement
 
 2           whatever, without having first procured a state gaming
 
 3           license;
 
 4      (2)  Lend, let, lease, or otherwise deliver or furnish,
 
 5           except by a bona fide sale or capital lease, any slot
 
 6           machine under guise of any agreement whereby any
 
 7           consideration is paid or is payable for the right to
 
 8           possess or use that slot machine, whether the
 
 9           consideration is measured by a percentage of the
 
10           revenue derived from the machine or by a fixed fee or
 
11           otherwise, without having first procured a state gaming
 
12           license for the slot machine; or
 
13      (3)  Furnish services or property, real or personal, on the
 
14           basis of a contract, lease, or license, pursuant to
 
15           which that person receives payments based on earnings
 
16           or profits from any gambling game, including any slot
 
17           machine, without having first procured a state gaming
 
18           license.
 
19      (b)  Subsection (a) shall not apply to any person:
 
20      (1)  Whose payments are a fixed sum determined in advance on
 
21           a bona fide basis for the furnishing of services or
 
22           property other than a slot machine;
 
23      (2)  Who furnishes services or property under a bona fide
 

 
Page 49                                                    
                                     H.B. NO.1601       
                                                        
                                                        

 
 1           rental agreement or security agreement for gaming
 
 2           equipment;
 
 3      (3)  That is a wholly owned subsidiary of a corporation,
 
 4           limited partnership, or limited liability company
 
 5           holding a state gaming license; or a holding company or
 
 6           intermediary company, or publicly traded corporation,
 
 7           that has registered pursuant to section    -26 and
 
 8           which has fully complied with the laws applicable to
 
 9           it; or
 
10      (4)  Who is licensed as a distributor and who rents or
 
11           leases any equipment of any gambling game including any
 
12           slot machine, under a bona fide agreement where the
 
13           payments are a fixed sum determined in advance and not
 
14           determined as a percentage of the revenue derived from
 
15           the equipment or slot machine.
 
16      Receipts or rentals or charges for real property, personal
 
17 property, or services do not lose their character as payments of
 
18 a fixed sum or as bona fide because of provisions in a contract,
 
19 lease, or license for adjustments in charges, rentals, or fees on
 
20 account of changes in taxes or assessments, escalations in the
 
21 cost-of-living index, expansions or improvement of facilities, or
 
22 changes in services supplied.  Receipts of rentals or charges
 
23 based on percentage between a corporate licensee or a licensee
 

 
Page 50                                                    
                                     H.B. NO.1601       
                                                        
                                                        

 
 1 who is a limited partnership or limited liability company and the
 
 2 entities enumerated in subsection (b)(3) are permitted under this
 
 3 subsection.
 
 4      (c)  The commission, upon the issuance of its approval or a
 
 5 finding of suitability, may exempt a holding company from the
 
 6 licensing requirements of subsection (a).
 
 7      (d)  The commission may require any person exempted by
 
 8 subsection (a)(1) or subsection (b) to provide such information
 
 9 as it may require to perform its investigative duties.
 
10      (e)  The commission may require a finding of suitability or
 
11 the licensing of any person who:
 
12      (1)  Owns any interest in the premises of a licensed
 
13           establishment or owns any interest in real property
 
14           used by a licensed establishment whether the person
 
15           leases the property directly to the licensee or through
 
16           an intermediary;
 
17      (2)  Repairs, rebuilds, or modifies any gaming device; or
 
18      (3)  Manufactures or distributes chips or gaming tokens for
 
19           use in this State;
 
20      (f)  If the commission finds a person described in
 
21 subsection (e) unsuitable, a licensee shall not enter into any
 
22 contract or agreement with that person without the prior approval
 
23 of the commission.  Any other agreement between the licensee and
 

 
Page 51                                                    
                                     H.B. NO.1601       
                                                        
                                                        

 
 1 that person must be terminated upon receipt of notice of the
 
 2 action by the commission.  Any agreement between a licensee and a
 
 3 person described in subsection (e) shall be deemed to include a
 
 4 provision for its termination without liability on the part of
 
 5 the licensee upon a finding by the commission that the person is
 
 6 unsuitable.  Failure expressly to include that condition in the
 
 7 agreement is not a defense in any action brought pursuant to this
 
 8 section to terminate the agreement.  If the application is not
 
 9 presented to the commission within thirty days after demand, the
 
10 commission may pursue any remedy or combination of remedies
 
11 provided in this chapter.
 
12        -21  Licensing of certain persons having significant
 
13 influence over gaming operation of licensee; remuneration,
 
14 contracts and employment prohibited for certain unsuitable or
 
15 unlicensed persons.(a)  Except for persons associated with
 
16 licensed corporations, limited partnerships, or limited liability
 
17 companies and required to be licensed pursuant to this section,
 
18 each employee, agent, guardian, personal representative, lender
 
19 or holder of indebtedness of a gaming licensee who, in the
 
20 opinion of the commission, has the power to exercise a
 
21 significant influence over the licensee's operation of a gaming
 
22 facility may be required to apply for a license.
 
23      (b)  A person required to be licensed pursuant to subsection
 

 
Page 52                                                    
                                     H.B. NO.1601       
                                                        
                                                        

 
 1 (a) shall apply for a license within thirty days after the
 
 2 commission requests the person to do so.
 
 3      (c)  If an employee required to be licensed under subsection
 
 4 (a) does not apply for a license within thirty days after being
 
 5 requested to do so by the commission, and the commission makes a
 
 6 finding of unsuitability for that reason; is denied a license; or
 
 7 has the employee's license revoked by the commission, the
 
 8 licensee by whom the employee is employed shall terminate the
 
 9 employment in any capacity in which the employee was required to
 
10 be licensed and shall not permit that employee to exercise a
 
11 significant influence over the operation of the gaming facility
 
12 upon being notified by registered or certified mail of that
 
13 action.
 
14      (d)  A gaming licensee or an affiliate of the licensee shall
 
15 not pay to a person whose employment has been terminated pursuant
 
16 to subsection (c) any remuneration for any service performed in
 
17 any capacity in which the person is required to be licensed,
 
18 except for amounts due for services rendered before the date of
 
19 receipt of notice of the action by the commission.  Any contract
 
20 or agreement for personal services or for the conduct of any
 
21 activity at the licensed gaming facility between a gaming
 
22 licensee or an affiliate of the licensee and a person terminated
 
23 pursuant to subsection (c) is subject to termination.  Every such
 

 
Page 53                                                    
                                     H.B. NO.1601       
                                                        
                                                        

 
 1 agreement shall be deemed to include a provision for its
 
 2 termination without liability on the part of the licensee or
 
 3 registered holding company upon a finding by the commission that
 
 4 the person is unsuitable to be associated with a gaming
 
 5 enterprise.  Failure expressly to include that condition in the
 
 6 agreement is not a defense in any action brought pursuant to this
 
 7 section to terminate the agreement.
 
 8      (e)  A gaming licensee or an affiliate of the licensee,
 
 9 without the prior approval of the commission, shall not enter
 
10 into any contract or agreement with a person who is found
 
11 unsuitable or who is denied a license or whose license is revoked
 
12 by the commission or with any business enterprise under the
 
13 control of that person after the date of receipt of notice of the
 
14 action by the commission.  Every contract or agreement for
 
15 personal services to a gaming licensee or an affiliate or for the
 
16 conduct of any activity at a licensed gaming facility shall be
 
17 deemed to include a provision for its termination without
 
18 liability on the part of the licensee or registered holding
 
19 company upon a finding by the commission that the person is
 
20 unsuitable to be associated with a gaming enterprise.  Failure
 
21 expressly to include such a condition in the agreement is not a
 
22 defense in any action brought pursuant to this section to
 
23 terminate the agreement.
 

 
Page 54                                                    
                                     H.B. NO.1601       
                                                        
                                                        

 
 1      (f)  A gaming licensee or an affiliate of the licensee shall
 
 2 not employ any person in a capacity for which the person is
 
 3 required to be licensed, if the person has been found unsuitable
 
 4 or denied a license, or whose license has been revoked by the
 
 5 commission, after the date of receipt of notice of the action by
 
 6 the commission, without prior approval of the commission.
 
 7         -22  Suitability or licensing of certain persons
 
 8 furnishing services or property or doing business with gaming
 
 9 licensee; termination of association.(a)  The commission may
 
10 determine the suitability, or may require the licensing of any
 
11 person who furnishes services or property to a state gaming
 
12 licensee under any arrangement, pursuant to which the person
 
13 receives payments based on earnings, profits or receipts from
 
14 gaming.  The commission may require any such person to comply
 
15 with the requirements of this chapter and with the regulations of
 
16 the commission.  If the commission determines that any such
 
17 person is unsuitable, it may require the arrangement to be
 
18 terminated.
 
19      (b)  If the premises of a licensed gaming facility are
 
20 directly or indirectly owned or under the control of the licensee
 
21 therein, or of any person controlling, controlled by, or under
 
22 common control with the licensee, the commission, upon
 
23 recommendation of the commission, may require the application of
 

 
Page 55                                                    
                                     H.B. NO.1601       
                                                        
                                                        

 
 1 any person for a determination of suitability to be associated
 
 2 with a gaming enterprise, if the person:
 
 3      (1)  Does business on the premises of the licensed gaming
 
 4           facility;
 
 5      (2)  Is an independent agent or does business with a
 
 6           licensed gaming facility as a ticket purveyor, a tour
 
 7           operator, the operator of a bus program, or as the
 
 8           operator of any other type of casino travel program or
 
 9           promotion; or
 
10      (3)  Provides any goods or services to the licensed gaming
 
11           facility for a compensation which the commission finds
 
12           to be grossly disproportionate to the value of the
 
13           goods or services.
 
14      (c)  If the commission determines that the person is
 
15 unsuitable to be associated with a gaming enterprise, the
 
16 association must be terminated.  Any agreement which entitles a
 
17 business other than gaming to be conducted on the premises, or
 
18 entitles a person other than gaming to conduct business with the
 
19 licensed gaming facility as set forth in subsection (b)(2) or (3)
 
20 is subject to termination upon a finding of unsuitability of the
 
21 person associated therewith.  Every such agreement must be deemed
 
22 to include a provision for its termination without liability on
 
23 the part of the licensee upon a finding by the commission that
 

 
Page 56                                                    
                                     H.B. NO.1601       
                                                        
                                                        

 
 1 the person associated therewith is unsuitable to be associated
 
 2 with a gaming enterprise.  Failure expressly to include that
 
 3 condition in the agreement is not a defense in any action brought
 
 4 pursuant to this section to terminate the agreement.  If the
 
 5 application is not presented to the commission within thirty days
 
 6 following demand or the unsuitable association is not terminated,
 
 7 the commission may pursue any remedy or combination of remedies
 
 8 provided in this chapter.
 
 9         -23  Qualifications for license or finding of
 
10 suitability.(a)  Any person who the commission determines is
 
11 qualified to receive a license or be found suitable under the
 
12 provisions of this chapter may be issued a state gaming license
 
13 or found suitable, as appropriate.  The applicant shall have the
 
14 burden of proving the applicant is qualified to receive any
 
15 license or the applicant should be found suitable.
 
16      (b)  An application to receive a license or be found
 
17 suitable must not be granted unless the commission is satisfied
 
18 that the applicant is:
 
19      (1)  A person of good character, honesty, and integrity;
 
20      (2)  A person whose prior activities, criminal record, if
 
21           any, reputation, habits, and associations do not pose a
 
22           threat to the public interest of this State or to the
 
23           effective regulation and control of gaming or
 

 
Page 57                                                    
                                     H.B. NO.1601       
                                                        
                                                        

 
 1           charitable lotteries, or create or enhance the dangers
 
 2           of unsuitable, unfair or illegal practices, methods and
 
 3           activities in the conduct of gaming or charitable
 
 4           lotteries or in the carrying on of the business and
 
 5           financial arrangements incidental thereto; and
 
 6      (3)  In all other respects qualified to be licensed or found
 
 7           suitable consistently with the declared policy of the
 
 8           State.
 
 9      (c)  An application to receive a license or be found
 
10 suitable constitutes a request for a determination of the
 
11 applicant's general character, integrity, and ability to
 
12 participate or engage in, or be associated with gaming or the
 
13 operation of a charitable lottery, as appropriate.  Any written
 
14 or oral statement made in the course of an official proceeding of
 
15 the commission by any member thereof or any witness testifying
 
16 under oath which is relevant to the purpose of the proceeding is
 
17 absolutely privileged and does not impose liability for
 
18 defamation or constitute a ground for recovery in any civil
 
19 action.
 
20      (d)  The commission, in its discretion, may grant a license
 
21 to a publicly traded corporation, any other corporation, a
 
22 limited partnership, or a limited liability company that has
 
23 complied with sections    -25 and    -26.
 

 
Page 58                                                    
                                     H.B. NO.1601       
                                                        
                                                        

 
 1      (e)  No limited partnership, except one whose sole limited
 
 2 partner is a publicly traded corporation which has registered
 
 3 with the commission, or a limited liability company, or business
 
 4 trust, or organization, or other association of a quasi-corporate
 
 5 character is eligible to receive or hold any license under this
 
 6 chapter unless all persons having any direct or indirect interest
 
 7 therein of any nature whatever, whether financial,
 
 8 administrative, policymaking, or supervisory, are individually
 
 9 qualified to be licensed under the provisions of this chapter.
 
10      (f)  The commission, by rule, may limit the number of
 
11 persons who may be financially interested and the nature of their
 
12 interest in any corporation, other than a publicly traded
 
13 corporation, limited partnership, limited liability company, or
 
14 other organization or association licensed under this chapter;
 
15 and establish such other qualifications for licenses as it, in
 
16 its discretion, may deem to be in the public interest and
 
17 consistent with the purposes of this chapter.
 
18         -24  Restrictions on person denied license or found
 
19 unsuitable.(a)  A person who has had the person's application
 
20 for a license denied or who has been found unsuitable by the
 
21 commission:
 
22      (1)  Is not entitled to profit from the person's investment
 
23           in a corporation other than a publicly traded
 

 
Page 59                                                    
                                     H.B. NO.1601       
                                                        
                                                        

 
 1           corporation, partnership, limited partnership, limited
 
 2           liability company, or joint venture, which has applied
 
 3           for or been granted a license;
 
 4      (2)  Shall not retain the person's interest in a
 
 5           corporation, partnership, limited partnership, limited
 
 6           liability company, or joint venture beyond that period
 
 7           prescribed by the commission; and
 
 8      (3)  Shall not accept more for the person's interest in a
 
 9           corporation, partnership, limited partnership, limited
 
10           liability company, or joint venture than the person
 
11           paid for it or the market value on the date of the
 
12           denial of the license or the finding of unsuitability.
 
13      (b)  The commission may proceed pursuant to section
 
14     -37(b) to enforce subsection (a).
 
15         -25  Individual licensing of officers and directors of
 
16 corporations, partners, members, managers, and other persons.
 
17 (a)  The following persons shall be licensed individually,
 
18 according to this chapter:
 
19      (1)  All officers and directors of a corporation, other than
 
20           a publicly traded corporation, general partners and
 
21           limited partners of a limited partnership, or members,
 
22           transferees of a member's interest in a limited
 
23           liability company and managers of a limited liability
 

 
Page 60                                                    
                                     H.B. NO.1601       
                                                        
                                                        

 
 1           company which is a licensee or applicant; and
 
 2      (2)  Any shareholders, lenders, holders of evidence of
 
 3           indebtedness, underwriters, key executives, agents, or
 
 4           employees of the corporation, limited partnership, or
 
 5           limited liability company of a licensee or applicant,
 
 6           who, in the judgment of the commission should in the
 
 7           public interest be licensed.
 
 8      (b)  The following persons must be found suitable therefor
 
 9 and may be required to be licensed by the commission:
 
10      (1)  Each officer, employee, director, partner, principal,
 
11           manager, member, trustee, or direct or beneficial owner
 
12           of any interest in any holding company or intermediary
 
13           company, who the commission determines is or is to
 
14           become engaged in the administration or supervision of,
 
15           or any other significant involvement with, the
 
16           activities of a licensee or applicant; and
 
17      (2)  Each officer, director, and employee of a publicly
 
18           traded corporation who the commission determines is or
 
19           is to become actively and directly engaged in the
 
20           administration or supervision of, or any other
 
21           significant involvement with, the gaming activities of
 
22           the corporation, or any of its affiliated or
 
23           intermediary companies.
 

 
Page 61                                                    
                                     H.B. NO.1601       
                                                        
                                                        

 
 1      (c)  A publicly traded corporation which is a general
 
 2 partner, limited partner, or member of a limited liability
 
 3 company is not required to be licensed, but shall comply with
 
 4 section    -26(g).
 
 5      (d)  If a person who must be licensed or found suitable
 
 6 fails to apply for a license or a finding of suitability in a
 
 7 timely fashion, is denied a license or not found suitable by the
 
 8 commission, or if the license or the finding of suitability is
 
 9 revoked after appropriate findings by the commission, the person
 
10 shall be terminated from employment or immediately removed from
 
11 any position in the administration or supervision of, or any
 
12 other significant involvement with, the activities of a licensee.
 
13 If such person's license or finding of suitability has been
 
14 suspended by the commission, the person shall be immediately
 
15 terminated or suspended from performing any duties in
 
16 administration or supervision of the activities of the licensee
 
17 and from any other significant involvement therewith.
 
18         -26  Eligibility of limited partnerships, limited
 
19 liability companies, corporations, holding companies and
 
20 intermediaries, and publicly traded corporations; required
 
21 information.(a)  In order to be eligible to receive a state
 
22 gaming license, an entity, such as a limited partnership, limited
 
23 liability company, or corporation, other than a publicly traded
 

 
Page 62                                                    
                                     H.B. NO.1601       
                                                        
                                                        

 
 1 corporation, shall:
 
 2      (1)  Be formed under the laws of this State; provided,
 
 3           however, in the case of a corporation, it may be either
 
 4           a wholly or partially owned subsidiary of a corporation
 
 5           which is incorporated under the laws of another state
 
 6           or incorporated in another state, if all persons having
 
 7           any direct or indirect interest of any nature in the
 
 8           corporation are licensed as required by section    -25;
 
 9      (2)  Maintain an office of the entity on the licensed
 
10           premises;
 
11      (3)  Comply with all of the requirements of the laws of this
 
12           State pertaining to limited partnerships, limited
 
13           liability companies, or corporations, as the case may
 
14           be; and
 
15      (4)  Maintain a ledger in the principal office of the entity
 
16           in this State, which must:
 
17           (A)  At all times reflect the ownership of every class
 
18                of security issued by the corporation or of all
 
19                interests in the limited partnership or limited
 
20                liability company; and
 
21           (B)  Be available for inspection by the board,
 
22                commission and their authorized agents, at all
 
23                reasonable times without notice.
 

 
Page 63                                                    
                                     H.B. NO.1601       
                                                        
                                                        

 
 1      (b)  An entity, such as a limited partnership, limited
 
 2 liability company, or corporation, other than a publicly traded
 
 3 corporation, which applies for a state gaming license, shall
 
 4 register with the commission and provide the following
 
 5 information to the commission:
 
 6      (1)  The organization, financial structure, and nature of
 
 7           the business to be operated, including the names,
 
 8           personal history, and fingerprints of all officers,
 
 9           directors, general partners, manager, member, and key
 
10           employees, and the names, addresses, and interest of
 
11           each limited partner or number of shares held by all
 
12           stockholders;
 
13      (2)  The rights and privileges acquired by the holders of
 
14           different classes of authorized securities, including
 
15           debentures, in the case of a corporation, or the
 
16           rights, privileges, and relative priorities of limited
 
17           partners or members as to the return of contributions
 
18           to capital, and the right to receive income or
 
19           distribution of profits;
 
20      (3)  The terms on which securities, limited partnership
 
21           interests, or interests in the limited liability
 
22           company are to be offered;
 
23      (4)  The terms and conditions of all outstanding loans,
 

 
Page 64                                                    
                                     H.B. NO.1601       
                                                        
                                                        

 
 1           mortgages, security agreements, pledges, or  any other
 
 2           indebtedness or security device;
 
 3      (5)  The extent of holding in the entity of any equity or
 
 4           other interest of all officers, directors, and
 
 5           underwriters, and their remuneration as compensation
 
 6           for services, in the form of salary, wages, fees or
 
 7           otherwise;
 
 8      (6)  Remuneration to persons other than directors and
 
 9           officers, general partners, or managers exceeding
 
10           $30,000 a year;
 
11      (7)  Balance sheets for at least three preceding fiscal
 
12           years, or, if the entity has not been in existence for
 
13           a period of three years, balance sheets from the time
 
14           of its incorporation.  All balance sheets shall be
 
15           certified by independent public accountants certified
 
16           or registered in the State;
 
17      (8)  Profit and loss statements for at least the three
 
18           preceding fiscal years, or, if the entity has not been
 
19           in existence for a period of three years, profit and
 
20           loss statements from the time of its formation.  All
 
21           profit and loss statements shall be certified by
 
22           independent public accountants certified or registered
 
23           in the State; and
 

 
Page 65                                                    
                                     H.B. NO.1601       
                                                        
                                                        

 
 1      (9)  Any further financial data which the commission may
 
 2           deem necessary or appropriate for the protection of the
 
 3           State, or licensed gaming, or both.
 
 4      (c)  If a corporation, partnership, limited partnership,
 
 5 limited liability company or other business organization applying
 
 6 for or holding a license is or becomes a subsidiary, each holding
 
 7 company and each intermediary company with respect thereto, other
 
 8 than a publicly traded corporation that has been exempt by the
 
 9 commission, must:
 
10      (1)  Qualify to do business in the State of Hawaii;
 
11      (2)  If it is a corporation, register with the commission
 
12           and furnish to the commission:
 
13           (A)  A complete list of all stockholders when it first
 
14                registers, and annually thereafter, within thirty
 
15                days after the annual meeting of the stockholders
 
16                of the corporation, showing the number of shares
 
17                held by each;
 
18           (B)  The names of all corporate officers within thirty
 
19                days of their appointment; and
 
20           (C)  The names of all members of the board of directors
 
21                within thirty days of their election.
 
22      (d)  If the holding company or intermediary referred to in
 
23 subsection (c) is a firm, partnership, trust, or other form of
 

 
Page 66                                                    
                                     H.B. NO.1601       
                                                        
                                                        

 
 1 business organization, it must register with the commission and
 
 2 furnish such analogous information as the commission may
 
 3 prescribe.
 
 4      (e)  If a corporation, partnership, limited partnership,
 
 5 limited liability company or other business organization applying
 
 6 for or holding a license is or becomes a subsidiary, each holding
 
 7 company and intermediary company, other than a publicly traded
 
 8 corporation that has been exempt by the commission, shall furnish
 
 9 the commission the following information:
 
10      (1)  The organization, financial structure, and nature of
 
11           the business it operates;
 
12      (2)  The terms, position, rights, and privileges of the
 
13           different classes of securities outstanding;
 
14      (3)  The terms on which its securities are to be, and during
 
15           the preceding three years have been, offered to the
 
16           public or otherwise;
 
17      (4)  The terms and conditions of all outstanding loans,
 
18           mortgages, trust deeds, pledges or any other
 
19           indebtedness or security device pertaining to the
 
20           gaming licensee;
 
21      (5)  The extent of the security holding or other interest in
 
22           the holding company or intermediary company of all
 
23           officers, employees, directors, underwriters, partners,
 

 
Page 67                                                    
                                     H.B. NO.1601       
                                                        
                                                        

 
 1           principals, managers, members, trustees or any direct
 
 2           or beneficial owner, and any remuneration as
 
 3           compensation for their services, in the form of salary,
 
 4           wages, fees, or by contract, pertaining to the gaming
 
 5           licensee;
 
 6      (6)  Remuneration to other than directors and officers
 
 7           exceeding $40,000 a year;
 
 8      (7)  Bonus and profit-sharing arrangements;
 
 9      (8)  Management and service contracts;
 
10      (9)  Options existing or to be created in respect of their
 
11           securities or other interests;
 
12     (10)  Balance sheets, certified by independent certified
 
13           public accountants, for not more than the three
 
14           preceding fiscal years, or, if the holding company or
 
15           intermediary company has not been in existence more
 
16           than three years, balance sheets from the time of its
 
17           establishment;
 
18     (11)  Profit and loss statements, certified by independent
 
19           certified public accountants, for not more than the
 
20           three preceding fiscal years, or, if the holding
 
21           company or intermediary company has not been in
 
22           existence more than three years, profit and loss
 
23           statements from the time of its establishment; and
 

 
Page 68                                                    
                                     H.B. NO.1601       
                                                        
                                                        

 
 1     (12)  Any further financial statements which the commission
 
 2           may deem necessary or appropriate for the protection of
 
 3           the State of Hawaii, licensed gambling, or both.
 
 4      (f)  The commission may in its discretion exempt a publicly
 
 5 traded corporation from the requirements of subsections (a) to
 
 6 (e).
 
 7      (g)  If a corporation, partnership, limited partnership,
 
 8 limited liability company or other business organization applying
 
 9 for or holding a state gaming license is or becomes owned in
 
10 whole or in part or controlled by a publicly traded corporation,
 
11 or if a publicly traded corporation applies for or holds a state
 
12 gaming license and has been exempt by the commission from the
 
13 requirements of subsection (e), the publicly traded corporation
 
14 shall:
 
15      (1)  Maintain a ledger in the principal office of its
 
16           subsidiary which is licensed to conduct gaming in this
 
17           State, which must:
 
18           (A)  Reflect the ownership of record of each
 
19                outstanding share of any class of equity security
 
20                issued by the publicly traded corporation.  The
 
21                ledger may initially consist of a copy of its
 
22                latest list of equity security holders and
 
23                thereafter be maintained by adding a copy of such
 

 
Page 69                                                    
                                     H.B. NO.1601       
                                                        
                                                        

 
 1                material as it regularly receives from the
 
 2                transfer agent for its equity securities of any
 
 3                class which are outstanding; and
 
 4           (B)  Be available for inspection by the commission and
 
 5                its authorized agents at all reasonable times
 
 6                without notice;
 
 7      (2)  Register with the commission and provide the following
 
 8           information:
 
 9           (A)  The organization, financial structure, and nature
 
10                of the business of the publicly traded
 
11                corporation, including the names of all officers,
 
12                directors, and any employees actively and directly
 
13                engaged in the administration or supervision of
 
14                the activities of the gaming licensee, and the
 
15                names, addresses, and number of shares held of
 
16                record by holders of its equity securities;
 
17           (B)  The rights and privileges accorded the holders of
 
18                different classes of its authorized equity
 
19                securities;
 
20           (C)  The terms on which its equity securities are to
 
21                be, and during the preceding three years have
 
22                been, offered by the corporation to the public or
 
23                otherwise initially issued by it;
 

 
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                                     H.B. NO.1601       
                                                        
                                                        

 
 1           (D)  The terms and conditions of all its outstanding
 
 2                loans, mortgages, trust deeds, pledges or any
 
 3                other indebtedness or security device, directly
 
 4                relating to the gaming activities of the gaming
 
 5                licensee;
 
 6           (E)  The extent of the equity security holdings of
 
 7                record in the publicly traded corporation of all
 
 8                officers, directors, underwriters, and persons
 
 9                owning of record equity securities of any class of
 
10                the publicly traded corporation, and any payment
 
11                received by any such person from the publicly
 
12                traded corporation for each of its three preceding
 
13                fiscal years for any reason whatsoever;
 
14           (F)  Remuneration exceeding $40,000 a year to persons
 
15                other than directors and officers who are actively
 
16                and directly engaged in the administration or
 
17                supervision of the gaming activities of the gaming
 
18                licensee;
 
19           (G)  Bonus and profit-sharing arrangements of the
 
20                publicly traded corporation directly or indirectly
 
21                relating to the gaming activities of the gaming
 
22                licensee;
 
23           (H)  Management and service contracts of the publicly
 

 
Page 71                                                    
                                     H.B. NO.1601       
                                                        
                                                        

 
 1                traded corporation directly or indirectly relating
 
 2                to the gaming activities of the gaming licensee;
 
 3           (I)  Options existing or from time to time created in
 
 4                respect of its equity securities;
 
 5           (J)  Balance sheets, certified by independent public
 
 6                accountants, for at least the three preceding
 
 7                fiscal years, or if the publicly traded
 
 8                corporation has not been incorporated for a period
 
 9                of three years, balance sheets from the time of
 
10                its incorporation.  These balance sheets may be
 
11                those filed by it with or furnished by it to the
 
12                Securities and Exchange Commission;
 
13           (K)  Profit and loss statements, certified by
 
14                independent certified public accountants, for at
 
15                least the three preceding fiscal years, or, if the
 
16                publicly traded corporation has not been
 
17                incorporated for a period of three years, profit
 
18                and loss statements from the time of its
 
19                incorporation.  These profit and loss statements
 
20                may be those filed by it with or furnished by it
 
21                to the Securities and Exchange Commission; and
 
22           (L)  Any further information within the knowledge or
 
23                control of the publicly traded corporation which
 

 
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                                     H.B. NO.1601       
                                                        
                                                        

 
 1                the commission may deem necessary or appropriate
 
 2                for the protection of this State, or licensed
 
 3                gambling, or both.  The commission, in its
 
 4                discretion, may make such investigation of the
 
 5                publicly traded corporation or any of its
 
 6                officers, directors, security holders or other
 
 7                persons associated therewith as it deems
 
 8                necessary;
 
 9      (3)  Apply for an order of registration from the commission
 
10           which must set forth a description of the publicly
 
11           traded corporation's affiliated companies and
 
12           intermediary companies, and the various gaming licenses
 
13           and approvals obtained by those entities.  The
 
14           commission may issue an order of registration upon
 
15           receipt of a proper application.  If the information
 
16           set forth in an order of registration changes, the
 
17           publicly traded corporation shall apply for and the
 
18           commission may issue amendments to and revisions of the
 
19           order of registration to reflect the changes; and
 
20      (4)  If the publicly traded corporation is a foreign
 
21           corporation, qualify to do business in this State.
 
22      (g)  The commission may adopt rules that generally or
 
23 selectively impose on any publicly traded corporation any
 

 
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                                     H.B. NO.1601       
                                                        
                                                        

 
 1 requirement not inconsistent with law which it may deem necessary
 
 2 in the public interest.  Without limiting the generality of the
 
 3 preceding sentence, any such requirement may deal with the same
 
 4 subject matter as, but be more stringent than, the requirements
 
 5 imposed by subsections (a) to (f) and section    -25.
 
 6      (h)  After licensing pursuant to section    -25 in
 
 7 connection with a partnership or limited partnership which holds
 
 8 or applies for a state gaming license, the licensee shall report
 
 9 to the commission in writing any change in personnel who have
 
10 been designated by the commission as key executives and furnish
 
11 the commission with an annual profit and loss statement and an
 
12 annual balance sheet.  The commission may require that the
 
13 licensee furnish the commission with a copy of its federal income
 
14 tax return within thirty days after the return is filed with the
 
15 federal government.
 
16         -27  Prior commission approval of disposition of
 
17 securities by corporations other than publicly traded
 
18 corporations and interests in limited partnerships and limited
 
19 liability companies; restrictions on unsuitable persons.(a)  No
 
20 person may become a holder or transferee of any security issued
 
21 by a corporation, other than a publicly traded corporation, or
 
22 interest as a general partner or limited partner in a limited
 
23 partnership, or as a member or manager of a limited liability
 

 
Page 74                                                    
                                     H.B. NO.1601       
                                                        
                                                        

 
 1 company which holds or has applied for a license without first
 
 2 securing the required approval of the commission.
 
 3      (b)  If at any time the commission finds that an owner of
 
 4 any security issued by a corporation, other than a publicly
 
 5 traded corporation, or interest as a general partner or limited
 
 6 partner in a limited partnership, or as a member or manager of a
 
 7 limited liability company which holds or has applied for a
 
 8 license or any person owning, controlling, or voting any class of
 
 9 security of, or interest in, a holding company or intermediary
 
10 company is unsuitable to continue to be connected with a
 
11 licensee, the commission shall immediately notify the holder of
 
12 the security or the limited partnership or limited liability
 
13 company:
 
14      (1)  The owner of the security shall offer and the issuing
 
15           entity shall purchase the security so offered, for cash
 
16           at fair market value.  In the case of a limited
 
17           partnership or limited liability company, the company
 
18           shall return to the unsuitable owner, in cash, the
 
19           amount of the owner's capital account as reflected in
 
20           the books of the company.  The purchase or return of
 
21           capital shall occur within ten days of notice from the
 
22           commission;
 
23      (2)  Beginning upon the date when the commission serves
 

 
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                                     H.B. NO.1601       
                                                        
                                                        

 
 1           notice of a determination of unsuitability, it is
 
 2           unlawful for the unsuitable owner or member:
 
 3           (A)  To receive any dividend or interest upon any such
 
 4                security or any share of the distribution of
 
 5                profits or interest of the partnership or company;
 
 6           (B)  To exercise, directly or through any trustee or
 
 7                nominee, any voting right conferred by such
 
 8                security or interest in the partnership or
 
 9                company; or
 
10           (C)  To receive any remuneration in any form from the
 
11                corporation, partnership, or company, for services
 
12                rendered or otherwise.
 
13      (c)  Every security issued by a corporation, other than a
 
14 publicly traded corporation, the certificate of limited
 
15 partnership of any limited partnership, and the articles of
 
16 organization of any limited liability company which holds a
 
17 gaming license, must bear a statement of the restrictions imposed
 
18 by this section.
 
19         -28  Occupational licenses.(a)  The commission may
 
20 issue an occupational license to an applicant upon the payment of
 
21 a nonrefundable application fee as set by the commission, upon a
 
22 determination by the commission that the applicant is eligible
 
23 for an occupational license, and upon payment of an annual
 

 
Page 76                                                    
                                     H.B. NO.1601       
                                                        
                                                        

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

 
Page 77                                                    
                                     H.B. NO.1601       
                                                        
                                                        

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

 
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                                     H.B. NO.1601       
                                                        
                                                        

 
 1      (4)  For any other just cause.
 
 2      (e)  The commission may suspend, revoke, or restrict any
 
 3 occupational licensee:
 
 4      (1)  For any violation of this chapter;
 
 5      (2)  For any violation of the rules of the commission;
 
 6      (3)  For any cause which, if known to the commission, would
 
 7           have disqualified the applicant from receiving a
 
 8           license;
 
 9      (4)  For default in the payment of any obligation or debt
 
10           due to the State or the county; or
 
11      (5)  For any other just cause.
 
12      (f)  A person who knowingly makes a false statement on an
 
13 application is guilty of a petty misdemeanor.
 
14      (g)  Any license issued pursuant to this section shall be
 
15 valid for a period of one year from the date of issuance and
 
16 shall be renewable annually upon payment of the annual license
 
17 fee and a determination by the commission that the licensee
 
18 continues to meet all of the requirements of this chapter.
 
19      (h)  Any training provided for occupational licensees may be
 
20 conducted either in a licensed gaming facility or at a school
 
21 with which a licensed owner has entered into an agreement.
 
22         -29  Conduct of casino gaming.  Casino gaming may be
 
23 conducted by a licensed operator, subject to the following
 

 
Page 79                                                    
                                     H.B. NO.1601       
                                                        
                                                        

 
 1 standards:
 
 2      (1)  Minimum and maximum wagers on games shall be set by the
 
 3           licensee;
 
 4      (2)  Agents of the commission may enter and inspect any
 
 5           gaming facility at any time for the purpose of
 
 6           determining compliance with this chapter;
 
 7      (3)  Employees of the commission shall have the right to be
 
 8           present in a gaming facility or on adjacent facilities
 
 9           under the control of the licensee;
 
10      (4)  Gaming equipment and supplies customarily used in
 
11           conducting casino gaming must be purchased or leased
 
12           only from persons properly licensed or exempt from
 
13           licensing under this chapter;
 
14      (5)  Persons licensed under this chapter shall permit no
 
15           form of wagering on games except as permitted by this
 
16           chapter;
 
17      (6)  Wagers may be received only from a person present in a
 
18           licensed gaming facility.  No person present in a
 
19           licensed gaming facility shall place or attempt to
 
20           place a wager on behalf of another person who is not
 
21           present in the gaming facility;
 
22      (7)  Wagering shall not be conducted with money or other
 
23           negotiable currency, except for wagering on slot
 

 
Page 80                                                    
                                     H.B. NO.1601       
                                                        
                                                        

 
 1           machines;
 
 2      (8)  A person under age twenty-one shall not be permitted in
 
 3           an area of a gaming facility where casino gaming is
 
 4           being conducted, except for a person at least eighteen
 
 5           years of age who is an employee of the gaming facility.
 
 6           No employee under age twenty-one shall perform any
 
 7           function involved in casino gaming by patrons.  No
 
 8           person who is a resident of this State or under age
 
 9           twenty-one shall be permitted to make a wager under
 
10           this chapter.  The casino operator may conclusively
 
11           rely on the patron's passport, driver's license, state
 
12           identification, or such other evidence of residence or
 
13           age allowed by rules adopted by the commission, to
 
14           comply with the requirements of this paragraph;
 
15      (9)  All tokens, chips, or electronic cards used to make
 
16           wagers must be purchased from a licensed owner within
 
17           the gaming facility.  The tokens, chips, or electronic
 
18           cards may be purchased by means of an agreement under
 
19           which the owner extends credit to the patron.  The
 
20           tokens, chips, or electronic cards may be used while
 
21           within a gaming facility only for the purpose of making
 
22           wagers on authorized games;
 
23     (10)  The holder of an operator's license may exclude any
 

 
Page 81                                                    
                                     H.B. NO.1601       
                                                        
                                                        

 
 1           person from the licensed gaming facility, or limit the
 
 2           person's play, provided that such action is not on the
 
 3           basis of race, sex, ethnicity, alienage, place of
 
 4           origin, color, or creed or any other basis prohibited
 
 5           by law; and
 
 6     (11)  In addition to the above, casino gaming must be
 
 7           conducted in accordance with all rules adopted by the
 
 8           commission.
 
 9         -30  Collection of amounts owing under credit
 
10 agreements.  Notwithstanding any other law to the contrary, a
 
11 licensed operator who extends credit to a casino gaming patron
 
12 shall be expressly authorized to institute a cause of action to
 
13 collect any amounts due and owing under the extension of credit,
 
14 as well as the operator's costs, expenses, and reasonable
 
15 attorney's fees incurred in collection.
 
16         -31  Computation of gross revenue and items which may be
 
17 deducted.(a)  In calculating gross revenue, any prizes,
 
18 premiums, drawings, benefits, or tickets that are redeemable for
 
19 money or merchandise or other promotional allowance, except money
 
20 or tokens paid at face value directly to a patron as the result
 
21 of a specific wager, must not be deducted as losses from winnings
 
22 at any game except a slot machine.
 
23      (b)  In calculating gross revenue, the amount of cash paid
 

 
Page 82                                                    
                                     H.B. NO.1601       
                                                        
                                                        

 
 1 to fund periodic payments may be deducted as losses from winnings
 
 2 for any game.
 
 3      (c)  In calculating gross revenue from slot machines, keno,
 
 4 and bingo, the actual cost to the licensee of any personal
 
 5 property distributed to a patron as the result of a specific
 
 6 legitimate wager may be deducted as a loss, but not travel
 
 7 expenses, food, refreshments, lodging, or services.
 
 8      (d)  In calculating gross revenue from bingo, a licensee who
 
 9 provides a patron with additional play at bingo as the result of
 
10 an initial wager may deduct as losses from winnings all money or
 
11 tokens paid directly to that patron as a result of such
 
12 additional play.
 
13      (e)  In calculating gross revenue, a licensee may deduct its
 
14 pro rata share of a payout from a game played in an inter-casino
 
15 linked system except for a payout made in conjunction with a card
 
16 game.  The amount of the deduction must be determined based upon
 
17 the written agreement among the licensed gaming facilities
 
18 participating in the inter-casino linked system and the operator
 
19 of the system.  All cash prizes and the value of noncash prizes
 
20 awarded during a contest or tournament conducted in conjunction
 
21 with an inter-casino linked system are also deductible on a pro
 
22 rata basis to the extent of the compensation received for the
 
23 right to participate in that contest or tournament.  The
 

 
Page 83                                                    
                                     H.B. NO.1601       
                                                        
                                                        

 
 1 deductions may be taken only by those participating licensed
 
 2 gaming facilities that held an active gaming license at any time
 
 3 during the month in which the payout was awarded.
 
 4         -32  Wagering tax; rate; distribution.(a)  A tax shall
 
 5 be imposed on the gross revenues received from casino gaming
 
 6 authorized under this chapter at the rate of sixteen per cent.
 
 7 The commission shall retain one-sixteenth of those wagering tax
 
 8 revenues, but not less than $1,000,000, to cover the expenses of
 
 9 the commission's operations including any programs that the
 
10 commission may initiate, including employment training programs
 
11 throughout the State.  The balance of the wagering tax going to
 
12 the State shall be used only for initiating educational programs
 
13 and thereafter funding them, and not for administrative costs.
 
14 The wagering tax imposed by this section shall be in lieu of all
 
15 other state or municipal taxes on gross or adjusted gross
 
16 receipts or revenues, except income taxes, including taxes levied
 
17 under chapters 237 and 239, and shall not be increased, if at
 
18 all, until the two initial gaming facilities have been in
 
19 continuous operation for at least sixty months.
 
20      (b)  The tax imposed by this section shall be paid by the
 
21 licensed operator to the commission no less frequently than
 
22 monthly by the fifteenth day of the following month.  If the
 
23 amount of the wagering tax required to be reported and paid
 

 
Page 84                                                    
                                     H.B. NO.1601       
                                                        
                                                        

 
 1 pursuant to this section is later determined to be greater or
 
 2 less than the amount actually reported and paid by the licensee,
 
 3 the chairperson of the commission shall:
 
 4      (1)  Assess and collect the additional wagering tax
 
 5           determined to be due, with interest thereon until paid;
 
 6           or
 
 7      (2)  Refund any overpayment, with interest thereon, to the
 
 8           licensee.  Interest must be computed, until paid, at
 
 9           the rate of one per cent per month from the first day
 
10           of the first month following either the due date of the
 
11           additional wagering tax or the date of overpayment.
 
12         -33  Licensees; records; reports; supervision.(a)  A
 
13 licensed operator shall keep books and records related to casino
 
14 gaming permitted under this chapter so as to clearly show the
 
15 total amount of gross revenue.
 
16      (b)  The licensed operator shall furnish to the commission
 
17 reports and information that the commission may require with
 
18 respect to the operator's activities on forms designed and
 
19 supplied for the purpose by the commission.
 
20      (c)  The books and records kept by a licensed operator shall
 
21 be public records and the examination, publication, and
 
22 dissemination of the books and records shall be subject to
 
23 chapter 92F.
 

 
Page 85                                                    
                                     H.B. NO.1601       
                                                        
                                                        

 
 1         -34  Audit of licensee operations.  Within ninety days
 
 2 after the end of each quarter of each fiscal year, the licensed
 
 3 operator shall transmit to the commission an audit of the
 
 4 financial transactions and condition of the licensee's total
 
 5 operations.  All audits shall be conducted by certified public
 
 6 accountants selected by the commission.  Each certified public
 
 7 accountant shall be registered and licensed to practice in this
 
 8 State.  Compensation for each certified public accountant shall
 
 9 be paid directly by the licensed operator to the certified public
 
10 accountant.
 
11         -35  Offenses; penalty.(a)  A person is guilty of a
 
12 misdemeanor for any of the following:
 
13      (1)  Operating a gaming facility where wagering is used or
 
14           to be used without a license issued by the commission;
 
15      (2)  Operating a gaming facility where wagering is permitted
 
16           other than in the manner authorized under this chapter;
 
17      (3)  Permitting a person who is a resident of this State or
 
18           under twenty-one years of age to make a wager;
 
19      (4)  Knowingly making a false statement on an application;
 
20           or
 
21      (5)  Placing a wager under this chapter while a resident of
 
22           this State.
 
23      (b)  A person wagering or accepting a wager at any location
 

 
Page 86                                                    
                                     H.B. NO.1601       
                                                        
                                                        

 
 1 outside the gaming facility shall be subject to the penalties in
 
 2 sections 712-1220 to 712-1230.
 
 3      (c)  A person commits a class C felony and, in addition,
 
 4 shall be barred for life from casino facilities under the
 
 5 jurisdiction of the commission, if the person does any of the
 
 6 following:
 
 7      (1)  Offers, promises, or gives anything of value or benefit
 
 8           to a person who is connected with a gaming facility
 
 9           owner including, but not limited to, an officer or
 
10           employee of a licensed operator or holder of an
 
11           occupational license pursuant to an agreement or
 
12           arrangement or with the intent that the promise or
 
13           thing of value or benefit will influence the actions of
 
14           the person to whom the offer, promise, or gift was made
 
15           in order to affect or attempt to affect the outcome of
 
16           a gaming activity or to influence official action of
 
17           the executive director, a member or employees of the
 
18           commission, or employees in the department of the
 
19           attorney general or state or county public safety
 
20           officers who have direct authority over the regulation
 
21           or investigation of any licensee or applicant;
 
22      (2)  Solicits or knowingly accepts or receives a promise of
 
23           anything of value or benefit while the person is
 

 
Page 87                                                    
                                     H.B. NO.1601       
                                                        
                                                        

 
 1           connected with a gaming facility including, but not
 
 2           limited to, an officer or employee of a licensed
 
 3           operator or holder of an occupational license, pursuant
 
 4           to an understanding or arrangement or with the intent
 
 5           that the promise or thing of value or benefit will
 
 6           influence the actions of the person to affect or
 
 7           attempt to affect the outcome of a gaming activity, or
 
 8           to influence official action of the executive director,
 
 9           a member or employees of the commission, or employees
 
10           in the department of the attorney general or state or
 
11           county public safety officers who have direct authority
 
12           over the regulation or investigation of any licensee or
 
13           applicant;
 
14      (3)  Uses or possesses with the intent to use a device
 
15           (excluding, however, books or literature describing a
 
16           strategy of pay) to assist:
 
17           (A)  In projecting the outcome of a casino game;
 
18           (B)  In keeping track of the cards played in a casino
 
19                game;
 
20           (C)  In analyzing the probability of the occurrence of
 
21                an event relating to the gaming activity; and
 
22           (D)  In analyzing the strategy for playing or betting
 
23                to be used in a casino game except as permitted by
 

 
Page 88                                                    
                                     H.B. NO.1601       
                                                        
                                                        

 
 1                the commission;
 
 2      (4)  Cheats at a gaming activity;
 
 3      (5)  Manufactures, sells, or distributes any cards, chips,
 
 4           dice, game, or device which is intended to be used to
 
 5           violate this chapter;
 
 6      (6)  Alters or misrepresents the outcome of a gaming
 
 7           activity on which wagers have been made after the
 
 8           outcome is made sure, but before it is revealed to the
 
 9           players;
 
10      (7)  Places a bet after acquiring knowledge, not available
 
11           to all players, of the outcome of the gaming activity
 
12           which is the subject of the bet or to aid a person in
 
13           acquiring the knowledge for the purpose of placing a
 
14           bet contingent on that outcome;
 
15      (8)  Claims, collects, or takes, or attempts to claim,
 
16           collect, or take, money or anything of value in or from
 
17           the games, with intent to defraud, without having made
 
18           a wager contingent on winning a gaming activity, or
 
19           claims, collects, or takes an amount of money or thing
 
20           of value of greater value than the amount won;
 
21      (9)  Uses counterfeit chips or tokens in a gaming activity;
 
22           or
 
23     (10)  Possesses any key or device designed for the purpose of
 

 
Page 89                                                    
                                     H.B. NO.1601       
                                                        
                                                        

 
 1           opening, entering, or affecting the operation of a
 
 2           gaming device, drop box, or an electronic or mechanical
 
 3           device connected with the gaming activity, or for
 
 4           removing coins, tokens, chips, or other contents of a
 
 5           gaming devise.  This paragraph shall not apply to a
 
 6           gaming licensee or employee of a gaming licensee acting
 
 7           in furtherance of the employee's employment.
 
 8      (d)  The possession of more than one of the devices
 
 9 described in subsection (c)(3), (5), or (10), raises a rebuttable
 
10 presumption that the possessor intended to use the devices for
 
11 cheating.
 
12         -36  Violations involving improper influence.(a)  The
 
13 following individuals shall be prohibited from knowingly
 
14 accepting a gift or political contribution from the persons
 
15 listed in subsection (b):
 
16      (1)  The current or former executive director; or
 
17      (2)  Current or former members of:
 
18           (A)  The commission;
 
19           (B)  Employees of the commission; and
 
20           (C)  Employees working:
 
21                (i)  In the department of the attorney general; or
 
22               (ii)  As state or county public safety officers;
 
23                     who have direct authority over the regulation
 

 
Page 90                                                    
                                     H.B. NO.1601       
                                                        
                                                        

 
 1                     or investigation of any licensee or
 
 2                     applicant; and
 
 3 provided that, in the case of individuals who are no longer
 
 4 serving in the capacities described above, this subsection and
 
 5 subsection (b) shall apply before the second anniversary of the
 
 6 date of termination of service.
 
 7      (b)  The following persons shall be prohibited from
 
 8 knowingly making a gift or political contribution to the
 
 9 individuals listed in subsection (a):
 
10      (1)  A person that has a significant financial interest in
 
11           any gaming facility or operation licensed or applied
 
12           for under this chapter;
 
13      (2)  A person related within the second degree of
 
14           consanguinity or affinity to a person who has a
 
15           significant financial interest in any gaming facility
 
16           or operation licensed or applied for under this
 
17           chapter;
 
18      (3)  A person that owns more than a ten per cent interest in
 
19           an entity that has a significant financial interest in
 
20           any gaming facility or operation licensed or applied
 
21           for under this chapter; or
 
22      (4)  A political committee that is directly established,
 
23           administered, or controlled, in whole or in part, by a
 

 
Page 91                                                    
                                     H.B. NO.1601       
                                                        
                                                        

 
 1           person that has a significant financial interest in any
 
 2           gaming facility or operation licensed or applied for
 
 3           under this chapter.
 
 4      (c)  No individuals enumerated in subsection (a) may:
 
 5      (1)  For compensation, represent a person that has made or
 
 6           intends to make a bid to operate any gaming facility or
 
 7           operation licensed or applied for under this chapter
 
 8           before the commission;
 
 9      (2)  Represent any person or receive compensation for
 
10           services rendered on behalf of any person regarding a
 
11           particular matter in which the former officer or
 
12           employee participated during the period of service or
 
13           employment with the office, either through personal
 
14           involvement or because the matter was within the scope
 
15           of the officer's or employee's official responsibility;
 
16      (3)  For compensation, communicate directly with a member of
 
17           the legislative branch to influence legislation on
 
18           behalf of a person that has a significant financial
 
19           interest in any gaming facility or operation licensed
 
20           or applied for under this chapter;
 
21      (4)  Be employed in any form by any licensee or applicant
 
22           listed in subsection (b); provided that any person
 
23           related to the persons listed in subsection (a) within
 

 
Page 92                                                    
                                     H.B. NO.1601       
                                                        
                                                        

 
 1           the second degree of consanguinity or affinity may be
 
 2           employed, but shall make a written disclosure of this
 
 3           relationship to the commission and include a job
 
 4           description for which the person is being employed; or
 
 5      (5)  Obtain a direct ownership interest in any gaming
 
 6           facility or operation licensed or applied for under
 
 7           this chapter; provided that this paragraph shall also
 
 8           apply to persons related to the persons listed in
 
 9           subsection (a) within the second degree of
 
10           consanguinity or affinity; and
 
11 provided that, in the case of individuals who are no longer
 
12 serving in the capacities described above, this subsection shall
 
13 apply before the second anniversary of the date of termination of
 
14 service.
 
15      (d)  A person who violates subsection (a) or (b) commits a
 
16 misdemeanor.  A person who violates subsection (c) commits a
 
17 class C felony.  Upon conviction of any violation of this
 
18 section, the person shall immediately forfeit the person's office
 
19 or employment without regard to chapter 76, 77, 78, or 89, or any
 
20 collective bargaining agreement.  Any provision of any collective
 
21 bargaining agreement in conflict with this subsection is void as
 
22 against public policy.
 
23      (e)  As used in this section:
 

 
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 1      "Direct ownership interest" means any financial interest,
 
 2 equitable interest, beneficial interest, or ownership control
 
 3 held by the persons enumerated in subsection (a) or the person's
 
 4 family member related within the second degree of consanguinity
 
 5 or affinity, in any gaming facility or operation licensed or
 
 6 applied for under this chapter; provided that a direct ownership
 
 7 interest shall not include any equity interest purchased at fair
 
 8 market value or equity interest received as consideration for
 
 9 goods and services provided at fair market value of less than one
 
10 per cent of the total outstanding shares of stock of any publicly
 
11 traded corporation or certificates of partnership of any limited
 
12 partnership which is listed on a regulated stock exchange or
 
13 automated quotation system.
 
14      "Gift" includes a gratuity, tip, meal, or other thing of
 
15 value for which the recipient does not compensate the person
 
16 making the gift.
 
17      "Participated" means to have taken action as an officer or
 
18 employee through decision, approval, disapproval, recommendation,
 
19 giving advice, or similar action.
 
20      "Particular matter" includes an investigation, an
 
21 application, a request for a ruling or determination, a license
 
22 proceeding, rulemaking, a contract, a controversy, a claim, a
 
23 charge, an accusation, an arrest, or a judicial or other
 

 
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 1 proceeding.
 
 2      "Person that has a significant financial interest in any
 
 3 gaming facility or operation licensed under this chapter" means:
 
 4      (1)  A person that manufactures, distributes, sells, or
 
 5           produces casino equipment, devices, supplies, services,
 
 6           or advertising; or
 
 7      (2)  A person that has, or intends to apply for any casino
 
 8           license permitted in this chapter in the preceding two
 
 9           years.
 
10         -37  Prohibited activities; civil penalties;
 
11 enforcement.(a)  Any person who conducts a casino gaming
 
12 operation without first obtaining a license to do so, or who
 
13 continues to conduct such games after revocation of the person's
 
14 license, or any licensee who conducts or allows to be conducted
 
15 any unauthorized casino games in a gaming facility where it is
 
16 authorized to conduct its casino gaming operation, in addition to
 
17 other penalties provided, shall be subject to a civil penalty
 
18 equal to the amount of gross revenue derived from wagering on the
 
19 games, whether unauthorized or authorized, conducted on that day
 
20 as well as confiscation and forfeiture of all gaming equipment
 
21 used in the conduct of unauthorized games.
 
22      (b)  The commission shall initiate proceedings or actions
 
23 appropriate to enforce this chapter and may request the attorney
 

 
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 1 general to prosecute any violation of this chapter.
 
 2         -38  Exemption from federal laws prohibiting gaming
 
 3 devices.  The transportation of gambling devices into a county in
 
 4 which casino gaming is permitted and through other counties of
 
 5 the State shall be exempt from Title 15 United States Code
 
 6 section 1172.  This exemption shall only apply to gambling
 
 7 devices that have satisfied the registration, record keeping, and
 
 8 labeling requirements of Title 15 United States Code section
 
 9 1173-74 before entry into the State.
 
10         -39  Legislative oversight.(a)  The auditor shall
 
11 conduct financial and social assessments of casino gaming
 
12 operations.  An assessment shall be made two years after the
 
13 opening of the casino facilities authorized by this chapter and
 
14 every five years thereafter.  In conducting an assessment, the
 
15 auditor shall identify the financial impacts of casino gaming on
 
16 the state economy and the social impacts of gaming upon the
 
17 community.  The auditor shall submit a report of findings and
 
18 recommendations to the legislature prior to the convening of the
 
19 next regular session after an assessment is completed.
 
20      (b)  Initially, the auditor shall conduct a program and
 
21 financial audit of the Hawaii state gaming commission.
 
22 Thereafter, the auditor shall conduct a program and financial
 
23 audit every four years after the first audit is completed."
 

 
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 1      SECTION 3.  Chapter 712, Hawaii Revised Statutes, is amended
 
 2 by adding a new section to part III to be appropriately
 
 3 designated and to read as follows:
 
 4      "712-    Casino gaming; exempted.  This part shall not
 
 5 apply to casino gaming as authorized by chapter."
 
 6      SECTION 4.  Section 237-24, Hawaii Revised Statutes, is
 
 7 amended to read as follows:
 
 8      "237-24  Amounts not taxable.  This chapter shall not apply
 
 9 to the following amounts:
 
10      (1)  Amounts received under life insurance policies and
 
11           contracts paid by reason of the death of the insured;
 
12      (2)  Amounts received (other than amounts paid by reason of
 
13           death of the insured) under life insurance, endowment,
 
14           or annuity contracts, either during the term or at
 
15           maturity or upon surrender of the contract;
 
16      (3)  Amounts received under any accident insurance or health
 
17           insurance policy or contract or under workers'
 
18           compensation acts or employers' liability acts, as
 
19           compensation for personal injuries, death, or sickness,
 
20           including also the amount of any damages or other
 
21           compensation received, whether as a result of action or
 
22           by private agreement between the parties on account of
 
23           the personal injuries, death, or sickness;
 

 
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 1      (4)  The value of all property of every kind and sort
 
 2           acquired by gift, bequest, or devise, and the value of
 
 3           all property acquired by descent or inheritance;
 
 4      (5)  Amounts received by any person as compensatory damages
 
 5           for any tort injury to the person, or to the person's
 
 6           character reputation, or received as compensatory
 
 7           damages for any tort injury to or destruction of
 
 8           property, whether as the result of action or by private
 
 9           agreement between the parties (provided that amounts
 
10           received as punitive damages for tort injury or breach
 
11           of contract injury shall be included in gross income);
 
12      (6)  Amounts received as salaries or wages for services
 
13           rendered by an employee to an employer;
 
14      (7)  Amounts received as alimony and other similar payments
 
15           and settlements;
 
16      (8)  Amounts collected by distributors as fuel taxes on
 
17           "liquid fuel" imposed by chapter 243, and the amounts
 
18           collected by such distributors as a fuel tax imposed by
 
19           any Act of the Congress of the United States;
 
20      (9)  Taxes on liquor imposed by chapter 244D on dealers
 
21           holding permits under that chapter;
 
22     (10)  The amounts of taxes on cigarettes and tobacco products
 
23           imposed by chapter 245 on wholesalers or dealers
 

 
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 1           holding licenses under that chapter and selling the
 
 2           products at wholesale;
 
 3     (11)  Federal excise taxes imposed on articles sold at retail
 
 4           and collected from the purchasers thereof and paid to
 
 5           the federal government by the retailer;
 
 6     (12)  The amounts of federal taxes under chapter 37 of the
 
 7           Internal Revenue Code, or similar federal taxes,
 
 8           imposed on sugar manufactured in the State, paid by the
 
 9           manufacturer to the federal government;
 
10     (13)  An amount up to, but not in excess of, $2,000 a year of
 
11           gross income received by any blind, deaf, or totally
 
12           disabled person engaging, or continuing, in any
 
13           business, trade, activity, occupation, or calling
 
14           within the State;
 
15     (14)  Amounts received by a producer of sugarcane from the
 
16           manufacturer to whom the producer sells the sugarcane,
 
17           where:
 
18           (A)  The producer is an independent cane farmer, so
 
19                classed by the Secretary of Agriculture under the
 
20                Sugar Act of 1948 (61 Stat. 922, Chapter 519) as
 
21                the Act may be amended or supplemented;
 
22           (B)  The value or gross proceeds of sale of the sugar,
 
23                and other products manufactured from the
 

 
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                                     H.B. NO.1601       
                                                        
                                                        

 
 1                sugarcane, is included in the measure of the tax
 
 2                levied on the manufacturer under section 237-13(1)
 
 3                or 237-13(2);
 
 4           (C)  The producer's gross proceeds of sales are
 
 5                dependent upon the actual value of the products
 
 6                manufactured therefrom or the average value of all
 
 7                similar products manufactured by the manufacturer;
 
 8                and
 
 9           (D)  The producer's gross proceeds of sales are reduced
 
10                by reason of the tax on the value or sale of the
 
11                manufactured products;
 
12     (15)  Money paid by the State or eleemosynary child-placing
 
13           organizations to foster parents for their care of
 
14           children in foster homes; and
 
15     (16)  Amounts received by a cooperative housing corporation
 
16           from its shareholders in reimbursement of funds paid by
 
17           such corporation for lease rental, real property taxes,
 
18           and other expenses of operating and maintaining the
 
19           cooperative land and improvements; provided that such a
 
20           cooperative corporation is a corporation:
 
21           (A)  Having one and only one class of stock
 
22                outstanding;
 
23           (B)  Each of the stockholders of which is entitled
 

 
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                                     H.B. NO.1601       
                                                        
                                                        

 
 1                solely by reason of the stockholder's ownership of
 
 2                stock in the corporation, to occupy for dwelling
 
 3                purposes a house, or an apartment in a building
 
 4                owned or leased by the corporation; and
 
 5           (C)  No stockholder of which is entitled (either
 
 6                conditionally or unconditionally) to receive any
 
 7                distribution not out of earnings and profits of
 
 8                the corporation except in a complete or partial
 
 9                liquidation of the corporation[.]; and
 
10     (17)  Amounts received as gross revenue from casino gaming.
 
11           The term "gross revenue" shall have the meaning as
 
12           defined in section     -3."
 
13      SECTION 5.  Section 28-8.3, Hawaii Revised Statutes, is
 
14 amended by amending subsection (a) to read as follows:
 
15      "(a)  No department of the State other than the attorney
 
16 general may employ or retain any attorney, by contract or
 
17 otherwise, for the purpose of representing the State or the
 
18 department in any litigation, rendering legal counsel to the
 
19 department, or drafting legal documents for the department;
 
20 provided that the foregoing provision shall not apply to the
 
21 employment or retention of attorneys:
 
22      (1)  By the public utilities commission, the labor and
 
23           industrial relations appeals board, and the Hawaii
 

 
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                                     H.B. NO.1601       
                                                        
                                                        

 
 1           labor relations board;
 
 2      (2)  By any court or judicial or legislative office of the
 
 3           State;
 
 4      (3)  By the legislative reference bureau;
 
 5      (4)  By any compilation commission that may be constituted
 
 6           from time to time;
 
 7      (5)  By the real estate commission for any action involving
 
 8           the real estate recovery fund;
 
 9      (6)  By the contractors license board for any action
 
10           involving the contractors recovery fund;
 
11      (7)  By the trustees for any action involving the travel
 
12           agency recovery fund;
 
13      (8)  By the office of Hawaiian affairs;
 
14      (9)  By the department of commerce and consumer affairs for
 
15           the enforcement of violations of chapters 480 and 485;
 
16     (10)  As grand jury counsel;
 
17     (11)  By the Hawaiian home lands trust individual claims
 
18           review panel;
 
19     (12)  By the Hawaii health systems corporation or any of its
 
20           facilities;
 
21     (13)  By the auditor;
 
22     (14)  By the office of ombudsman;
 
23     (15)  By the insurance division;
 

 
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 1     (16)  By the University of Hawaii; [or]
 
 2     (17)  By a department, in the event the attorney general, for
 
 3           reasons deemed by the attorney general good and
 
 4           sufficient, declines, to employ or retain an attorney
 
 5           for a department; provided that the governor thereupon
 
 6           waives the provision of this section[.]; or
 
 7     (18)  By the Hawaii state gaming commission."
 
 8      SECTION 6.  Statutory material to be repealed is bracketed.
 
 9 New statutory material is underscored.
 
10      SECTION 7.  This Act shall take effect upon its approval.
 
11 
 
12                           INTRODUCED BY:  _______________________