REPORT TITLE:
Casino Gaming


DESCRIPTION:
Allows one licensee to conduct limited casino gaming in a
Hawaiian theme park zone and a Waikiki zone; establishes a gaming
control commission to regulate; establishes a state gaming fund
for all gaming taxes, fees, and fines to be used for
administration and enforcement and educational improvement
purposes.

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                        
THE SENATE                              S.B. NO.           1605
TWENTIETH LEGISLATURE, 1999                                
STATE OF HAWAII                                            
                                                             
________________________________________________________________
________________________________________________________________


                     A BILL FOR AN ACT

RELATING TO LIMITED CASINO GAMING.



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

 1      SECTION 1.  The legislature finds that the economy of Hawaii
 
 2 and the economic well-being of its citizens are severely
 
 3 threatened by the serious world-wide economic crisis.  Hawaii has
 
 4 been especially affected by the impact of the crisis on tourists
 
 5 traveling from the Far East.  In addition, competition to attract
 
 6 tourists to locations all over the world has increased
 
 7 dramatically and Hawaii's tourism industry is facing the worst
 
 8 crisis in its history.
 
 9      As a result of this economic crisis, the ability of the
 
10 State to provide basic services to its citizens has been
 
11 threatened.  The legislature has received a mandate from the
 
12 electorate of the State to address the massive shortfall of
 
13 revenue that is threatening county and state programs and
 
14 economic growth.  In order to maintain much needed social
 
15 programs, guarantee quality education, expand economic growth,
 
16 and compete in the evermore competitive global tourism market,
 
17 the State should address these needs by enacting limited casino
 
18 gaming on the Island of Oahu.
 
19      In addition to the development of limited casino gaming on
 

 
Page 2                                                     
                                     S.B. NO.           1605
                                                        
                                                        

 
 1 the Island of Oahu, it is essential that Hawaii also be able to
 
 2 offer a complete entertainment package to tourists.  Surveys of
 
 3 visitors have strongly indicated a desire to have a Hawaiian
 
 4 theme park to visit while on the Island of Oahu.  The development
 
 5 of a Hawaiian theme park would celebrate the culture and history
 
 6 of Hawaii while at the same time bolstering the important tourism
 
 7 industry in Hawaii.
 
 8      In order for the Hawaiian theme park to be economically
 
 9 viable, it needs to be developed in conjunction with limited
 
10 casino gaming.  Because the State and the city and county of
 
11 Honolulu have agreed that future development on Oahu should occur
 
12 in the Kapolei area, development of the Hawaiian theme park and
 
13 limited casino gaming should occur in that area.
 
14      Casino gaming and the theme park will create both
 
15 construction jobs and permanent jobs for the citizens of Hawaii,
 
16 in addition to stimulating tourism.  The legislature intends that
 
17 these jobs will be subject to collective bargaining and
 
18 prevailing wages.
 
19      The State needs to take all prudent steps to ensure the
 
20 current economic crisis does not reoccur.  To that end, the
 
21 revenue from gaming must be used to encourage new sectors in the
 
22 State's economy and educate the citizens of the State in new
 
23 technology.  This Act establishes HOPE scholarships providing
 

 
Page 3                                                     
                                     S.B. NO.           1605
                                                        
                                                        

 
 1 free college education for any student who graduates from high
 
 2 school with a 3.0 average and maintains a 3.0 average through
 
 3 college.
 
 4      SECTION 2.  The Hawaii Revised Statutes is amended by adding
 
 5 a new chapter to be appropriately designated and to read as
 
 6 follows:
 
 7                             "CHAPTER
 
 8                       LIMITED CASINO GAMING
 
 9         -1 Legislative intent.  This chapter is intended to
 
10 benefit the people of the State of Hawaii by creating a new
 
11 revenue source, limited casino gaming, that will enhance
 
12 investment, development, and tourism in Hawaii.  As limited
 
13 casino gaming can be successful only if public confidence and
 
14 trust in the credibility and integrity of the gaming operations
 
15 and the regulatory process is maintained, this chapter strictly
 
16 regulates the facilities, persons, associations, and practices
 
17 related to gaming operations.
 
18         -2 Limited casino gaming authorized.  Limited casino
 
19 gaming and a system of wagering incorporated thereof, as defined
 
20 in this chapter, are authorized to the extent that they are
 
21 carried out in accordance with this chapter.
 
22         -3 Definitions.  As used in this chapter, unless the
 
23 context requires otherwise:
 

 
Page 4                                                     
                                     S.B. NO.           1605
                                                        
                                                        

 
 1      "Casino facility" means a freestanding, land-based structure
 
 2 which may include structures with bars, restaurants, showrooms,
 
 3 theaters, or other facilities, but does not include any structure
 
 4 used for hotel or other transient accommodation lodging purposes.
 
 5      "Casino gaming" means the operation of games licensed under
 
 6 this chapter, including but not limited to, baccarat, twenty-one,
 
 7 poker, craps, slot machine, video gaming of chance, roulette
 
 8 wheel, klondike table, punch-board, faro layout, keno layout,
 
 9 numbers ticket, push card, jar ticket, pull tab, or other game of
 
10 chance that is authorized by the commission as a wagering device.
 
11      "Casino license"  means a license to operate and maintain a
 
12 casino facility or casino facilities for casino gaming permitted
 
13 under this chapter.
 
14      "Commission" means the Hawaii gaming control commission.
 
15      "Department" means the department of budget and finance.
 
16      "Executive director" means the executive director of the
 
17 commission.
 
18      "Gaming facility master development plan" means the master
 
19 plan for a casino facility and the Hawaiian theme park.
 
20      "Gross receipts" means the total of:
 
21      (1)  Cash received as winnings;
 
22      (2)  Cash received in payment for credit extended by a
 
23           licensee to a patron for purposes of gaming; and
 

 
Page 5                                                     
                                     S.B. NO.           1605
                                                        
                                                        

 
 1      (3)  Compensation received for conducting any game in which
 
 2           the licensee is not party to a wager.
 
 3 Gross receipts do not include counterfeit money or tokens, coins
 
 4 of other countries which are received in gaming devices, cash
 
 5 taken in fraudulent acts perpetrated against a licensee for which
 
 6 the licensee is not reimbursed, and cash received as entry fees
 
 7 for contests or tournaments in which patrons compete for prizes.
 
 8      "Individual" means a natural person.
 
 9      "Occupational license" means a license issued by the
 
10 commission to a person to perform an occupation which the
 
11 commission has identified as requiring a license to engage in
 
12 casino gaming in Hawaii.
 
13      "Person" includes an individual, association, partnership,
 
14 estate, trust, limited liability company, corporation, or other
 
15 legal entity.
 
16      "Supplier's license" means a license to furnish any
 
17 equipment, devices, or supplies to a licensed casino gaming
 
18 operation permitted under this chapter.
 
19         -4 Hawaii gaming control commission.(a)  There is
 
20 established the Hawaii gaming control commission which shall be a
 
21 body corporate and a public instrumentality of the State, for the
 
22 purpose of implementing this chapter.  The commission shall be
 
23 placed within the department and for administrative purposes.
 

 
Page 6                                                     
                                     S.B. NO.           1605
                                                        
                                                        

 
 1      The commission shall consist of seven members to be
 
 2 appointed by the governor with the advice and consent of the
 
 3 senate under section 26-34.  Of the seven members, two shall be
 
 4 appointed from a list of nominees submitted by the president of
 
 5 the senate, and two shall be appointed from a list of nominees
 
 6 submitted by the speaker of the house of representatives.  All
 
 7 appointments to the commission shall be made within sixty days of
 
 8 the effective date of this Act.  The members shall elect one from
 
 9 among them to be the chairperson.
 
10      (b)  No person shall be appointed a member of the commission
 
11 or continue to be a member of the commission if the person is:
 
12      (1)  An elected state official;
 
13      (2)  Licensed by the commission pursuant to this chapter, is
 
14           an official of, has a financial interest in, or has a
 
15           financial relationship with, any gaming operation
 
16           subject to the jurisdiction of this commission pursuant
 
17           to this chapter;
 
18      (3)  Related to any other person within the second degree of
 
19           consanguinity or affinity who is licensed by the
 
20           commission pursuant to this chapter; or
 
21      (4)  Not of good moral character or has been convicted of,
 
22           or is under indictment for, a felony under the laws of
 
23           Hawaii, or any other state, or the United States.
 

 
Page 7                                                     
                                     S.B. NO.           1605
                                                        
                                                        

 
 1      (c)  The term of office of a commission member shall be four
 
 2 years.  Vacancies in the commission shall be filled for the
 
 3 unexpired term in like manner as the original appointments.
 
 4      (d)  The governor may remove or suspend any member of the
 
 5 commission after due notice and public hearing.  The president of
 
 6 the senate or the speaker of the house of representatives may
 
 7 request that the governor remove or suspend a member of the
 
 8 commission nominated by either the president of the senate or
 
 9 speaker of the house of representatives.
 
10      (e)  Members shall:
 
11      (1)  Serve part-time;
 
12      (2)  Be paid compensation of $300 for each day in the
 
13           performance of official duties; and
 
14      (3)  Be reimbursed for expenses, including travel expenses,
 
15           incurred in the performance of official duties.
 
16      (f)  Officers of the commission, including the chairperson,
 
17 shall be selected by the members.  The commission, subject to
 
18 chapter 92, shall hold at least one meeting in each quarter of
 
19 the State's fiscal year.  Special meetings may be called by the
 
20 chairperson or any four members upon seventy-two hours written
 
21 notice to each member.  Four members shall constitute a quorum,
 
22 and a majority vote of the members present shall be required for
 
23 any final determination by the commission.  The commission shall
 

 
Page 8                                                     
                                     S.B. NO.           1605
                                                        
                                                        

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

 
Page 9                                                     
                                     S.B. NO.           1605
                                                        
                                                        

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

 
Page 10                                                    
                                     S.B. NO.           1605
                                                        
                                                        

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

 
Page 11                                                    
                                     S.B. NO.           1605
                                                        
                                                        

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

 
Page 12                                                    
                                     S.B. NO.           1605
                                                        
                                                        

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

 
Page 13                                                    
                                     S.B. NO.           1605
                                                        
                                                        

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

 
Page 14                                                    
                                     S.B. NO.           1605
                                                        
                                                        

 
 1           or for engaging in a fraudulent practice;
 
 2     (16)  To impose and collect fines of up to $5,000 against
 
 3           individuals and up to $10,000 or an amount equal to the
 
 4           daily gross receipts, whichever is larger, against
 
 5           licensees for each violation of this chapter, any rules
 
 6           adopted by the commission, any order of the commission,
 
 7           or any other action which, in the commission's
 
 8           discretion, is a detriment or impediment to casino
 
 9           gaming operations;
 
10     (17)  To hire employees to gather information, conduct
 
11           investigations, and carry out any other tasks
 
12           contemplated under this chapter;
 
13     (18)  To establish minimum levels of insurance to be
 
14           maintained by licensees;
 
15     (19)  To delegate the execution of any of its powers for the
 
16           purpose of administering and enforcing this chapter and
 
17           rules adopted under this chapter;
 
18     (20)  To adopt necessary rules under chapter 91 to implement
 
19           this chapter; and
 
20     (21)  To take any other action that may be reasonable or
 
21           appropriate to enforce this chapter and rules adopted
 
22           under this chapter.
 
23         -7 Establishment of gaming zones.(a)  Limited casino
 

 
Page 15                                                    
                                     S.B. NO.           1605
                                                        
                                                        

 
 1 gaming shall be permitted only in the gaming zones established
 
 2 pursuant to this chapter.
 
 3      (b)  This chapter authorizes limited casino gaming in the
 
 4 following two zones:
 
 5      (1)  The Hawaiian theme park gaming zone which shall include
 
 6           the following area:
 
 7 
 
 8           Any application for a casino license to operate a
 
 9           casino facility in this zone shall include a gaming
 
10           facility master development plan for the casino
 
11           facility and the Hawaiian theme park; and
 
12      (2)  The Waikiki gaming zone which shall include the
 
13           following area:  
 
14 
 
15         -8 Application for casino license.(a)  A qualified
 
16 person may apply to the commission for a casino license to
 
17 conduct a casino gaming operation.  The application shall be made
 
18 on forms provided by the commission and shall contain any
 
19 information that the commission prescribes, including but not
 
20 limited to:
 
21      (1)  The exact location of the casino facility or casino
 
22           facilities;
 
23      (2)  A gaming facility master development plan;
 

 
Page 16                                                    
                                     S.B. NO.           1605
                                                        
                                                        

 
 1      (3)  Detailed information regarding the ownership and
 
 2           management of the applicant; and
 
 3      (4)  Detailed personal information regarding the applicant.
 
 4 Information provided on the application shall be used as the
 
 5 basis for a thorough background investigation, which the
 
 6 commission shall conduct with respect to each applicant.  An
 
 7 incomplete application shall be cause for denial of a license by
 
 8 the commission.  The commission shall make applications available
 
 9 within sixty days of its appointment.  The commission shall act
 
10 on any application submitted to it within ninety days of the date
 
11 of submission.
 
12      (b)  Applicants shall submit with their application a plan
 
13 for training Hawaii citizens for jobs that would be available at
 
14 a casino facility.  The plan shall take into consideration the
 
15 need to provide training to low-income persons, so as to allow
 
16 such persons to qualify for jobs that will be created in the
 
17 casino facilities as a result of implementation of this Act.
 
18      (c)  Each applicant shall disclose the identity of every
 
19 person having a greater than one per cent direct or indirect
 
20 pecuniary interest in the casino gaming operation with respect to
 
21 which the license is sought.  If the disclosed person is a trust,
 
22 the application shall disclose the names and addresses of the
 
23 beneficiaries; if a corporation, the names and addresses of all
 

 
Page 17                                                    
                                     S.B. NO.           1605
                                                        
                                                        

 
 1 stockholders and directors; if a partnership, the names and
 
 2 addresses of all partners, both general and limited.
 
 3      (d)  An application fee of $50,000 shall be paid at the time
 
 4 of filing to defray the costs association with the background
 
 5 investigation conducted by the commission, and the search and
 
 6 classification of fingerprints obtained by the commission with
 
 7 regard to the application.  If the costs of the investigation
 
 8 exceed $50,000, the applicant shall pay the additional amount to
 
 9 the commission.  If the costs of the investigation are less than
 
10 $50,000, the applicant shall receive a refund of the remaining
 
11 amount.  All information, records, interviews, reports,
 
12 statements, memoranda, or other data supplied to or used by the
 
13 commission in the course of its review or investigation of an
 
14 application for a license shall be privileged, strictly
 
15 confidential, and shall be used only for the purpose of
 
16 evaluating an applicant.  The information, records, interviews,
 
17 reports, statements, memoranda, or other data shall not be
 
18 admissible as evidence, nor discoverable in any action of any
 
19 kind in any court or before any tribunal, commission, agency, or
 
20 person, except for any action deemed necessary by the commission.
 
21      (e)  An applicant shall be ineligible to receive an
 
22 operator's license if:
 
23      (1)  The person has been convicted of a felony under the
 

 
Page 18                                                    
                                     S.B. NO.           1605
                                                        
                                                        

 
 1           laws of this State, any other state, or the United
 
 2           States;
 
 3      (2)  The person has been convicted of any violation under
 
 4           part III, chapter 712, or substantially similar laws of
 
 5           another jurisdiction;
 
 6      (3)  The person has submitted an application for a license
 
 7           under this chapter, which contains false information;
 
 8      (4)  The person is a member of the commission;
 
 9      (5)  The person applying for a license employs an individual
 
10           described in paragraph (1), (2), (3), or (4) who
 
11           participates in the management or operation of gaming
 
12           operations authorized under this chapter; or
 
13      (6)  A license of the person issued under this chapter, or a
 
14           license to own or operate gaming facilities in any
 
15           other jurisdiction, has been revoked.
 
16         -9 Criteria for award of a casino license.(a)  The
 
17 legislature declares its intent to impose the following
 
18 limitations on the awarding of casino licenses by the commission:
 
19      (1)  No more than one casino facility shall be permitted in
 
20           the Hawaiian theme park gaming zone.  No more than one
 
21           casino facility shall be permitted in the Waikiki
 
22           gaming zone; and
 
23      (2)  The commission shall award one license to operate both
 

 
Page 19                                                    
                                     S.B. NO.           1605
                                                        
                                                        

 
 1           the casino facility in the Hawaiian theme park gaming
 
 2           zone and the casino facility in the Waikiki gaming
 
 3           zone.
 
 4      (b)  The commission shall issue a license to operate a
 
 5 casino facility or casino facilities to the applicant who best
 
 6 meets all of the following criteria:
 
 7      (1)  The applicant is a Hawaii corporation organized under
 
 8           the laws of Hawaii prior to January 1, 1999;
 
 9      (2)  The applicant has submitted the best plan for the
 
10           casino facility to be located in the Waikiki gaming
 
11           zone which will have the most positive effect on
 
12           increasing tourism;
 
13      (3)  The applicant has shown economic resources of at least
 
14                      million dollars so as to be able to
 
15           demonstrate to the commission that the applicant has
 
16           the financial ability to construct the casino to be
 
17           located in the Waikiki gaming zone;
 
18      (4)  The applicant has submitted the best gaming facility
 
19           master development plan for the Hawaiian theme park and
 
20           the casino facility to be located in the Hawaiian theme
 
21           park zone so as to best facilitate entertainment and
 
22           gaming at this location;
 
23      (5)  The applicant has shown economic resources of at least
 

 
Page 20                                                    
                                     S.B. NO.           1605
                                                        
                                                        

 
 1                      million dollars so as to be able to
 
 2           demonstrate to the commission that the applicant has
 
 3           the financial ability to construct the Hawaiian theme
 
 4           park and the casino facility to be located in the
 
 5           Hawaiian theme park zone; and
 
 6      (6)  The applicant has made significant contributions to the
 
 7           development of gaming within the State by actively
 
 8           promoting and significantly supporting state gaming
 
 9           legislation.  Significant support of state legislation
 
10           shall include direct communication with Hawaii
 
11           residents who will be the ultimate beneficiaries of
 
12           increased tourism and income produced by the
 
13           introduction of limited gaming on the island of Oahu.
 
14           Direct communication with Hawaii residents shall
 
15           include the use of telephone, mail, mass media, and
 
16           direct contact.
 
17      (c)  In order to demonstrate financial ability pursuant to
 
18 subsection (b)(3) and (5), the applicant may include the economic
 
19 resources of the person or persons who will actually operate the
 
20 casino facility or facilities.
 
21      (d)  The commission may revoke the license if the licensee
 
22 fails to begin regular casino gaming operations within twelve
 
23 months of receipt of the commission's approval of the application
 

 
Page 21                                                    
                                     S.B. NO.           1605
                                                        
                                                        

 
 1 or twelve months after a certificate of occupancy for the casino
 
 2 facility is first issued, whichever is later, upon a finding by
 
 3 the commission that license revocation is in the best interest of
 
 4 the State.
 
 5      (e)  The commission shall establish a process to facilitate
 
 6 and expedite the approval of the necessary licenses and permits.
 
 7 The commission may establish its own procedures for the issuance
 
 8 of liquor licenses for any holder of an operator's license under
 
 9 this chapter; provided that all state laws and county ordinances
 
10 relating to liquor are met.
 
11      (f)  Nothing in this chapter shall be interpreted to
 
12 prohibit a licensed owner from operating a school for the
 
13 training of any occupational licensee.
 
14         -10  Bond of licensee.  Before a casino license is
 
15 issued, the licensee shall file a bond in the sum of $200,000
 
16 with the department.  The bond shall be used to guarantee that
 
17 the licensee faithfully makes the payments, keeps books and
 
18 records, makes reports, and conducts games of chance in
 
19 conformity with this chapter and the rules adopted by the
 
20 commission.  The bond shall not be canceled by a surety on less
 
21 than thirty days notice in writing to the commission.  If a bond
 
22 is canceled and the licensee fails to file a new bond with the
 
23 commission in the required amount, on or before the effective
 

 
Page 22                                                    
                                     S.B. NO.           1605
                                                        
                                                        

 
 1 date of cancellation, the licensee's license shall be revoked.
 
 2 The total and aggregate liability of the surety on the bond shall
 
 3 be limited to the amount specified in the bond.
 
 4         -11  Supplier's licenses.(a)  No person shall furnish
 
 5 any equipment, devices, or supplies to a licensed casino gaming
 
 6 operation under this chapter unless the person has first obtained
 
 7 a supplier's license pursuant to this section.  The commission
 
 8 may issue a supplier's license to any person, firm, or
 
 9 corporation that pays a nonrefundable application fee as set by
 
10 the commission, upon a determination by the commission that the
 
11 applicant is eligible for a supplier's license, and upon payment
 
12 by the applicant of a $5,000 license fee.  Supplier's licenses
 
13 shall be renewable annually upon payment of the $5,000 annual
 
14 license fee and a determination by the commission that the
 
15 licensee continues to meet all of the requirements of this
 
16 chapter.
 
17      (b)  The holder of a supplier's license may sell or lease,
 
18 or contract to sell or lease, gaming equipment and supplies to
 
19 any licensee involved in the ownership or management of casino
 
20 gaming operations.
 
21      (c)  Casino gaming supplies and equipment shall not be
 
22 distributed unless supplies and equipment conform to standards
 
23 adopted by rules of the commission.
 

 
Page 23                                                    
                                     S.B. NO.           1605
                                                        
                                                        

 
 1      (d)  A person shall be ineligible to receive a supplier's
 
 2 license if:
 
 3      (1)  The person has been convicted of a felony under the
 
 4           laws of this State, any other state, or the United
 
 5           States;
 
 6      (2)  The person has been convicted of any violation under
 
 7           chapter III, chapter 712, or substantially similar laws
 
 8           of another jurisdiction;
 
 9      (3)  The person has submitted an application for a license
 
10           under this chapter, which contains false information;
 
11      (4)  The person is a member of the commission;
 
12      (5)  The person is one in which an individual defined in
 
13           paragraph (1), (2), (3), or (4) is an officer,
 
14           director, or management employee;
 
15      (6)  The person employs an individual defined in paragraph
 
16           (1), (2), (3), or (4) who participates in the
 
17           management or operation of casino gaming authorized
 
18           under this chapter; or
 
19      (7)  The license of the person issued under this chapter, or
 
20           a license to own or operate casino gaming facilities in
 
21           any other jurisdiction, has been revoked.
 
22      (e)  A supplier shall:
 
23      (1)  Furnish to the commission a list of all equipment,
 

 
Page 24                                                    
                                     S.B. NO.           1605
                                                        
                                                        

 
 1           devices, and supplies offered for sale or lease in
 
 2           connection with casino gaming operations authorized
 
 3           under this chapter;
 
 4      (2)  Keep books and records for the furnishing of equipment,
 
 5           devices, and supplies of casino gaming operations
 
 6           separate and distinct from any other business that the
 
 7           supplier might operate;
 
 8      (3)  File a quarterly return with the commission listing all
 
 9           sales and leases;
 
10      (4)  Permanently affix its name to all its equipment,
 
11           devices, and supplies for casino gaming operations; and
 
12      (5)  File an annual report listing its inventories of casino
 
13           gaming equipment, devices, and supplies.
 
14      (f)  Any person who knowingly makes a false statement on an
 
15 application is guilty of a petty misdemeanor.
 
16      (g)  Any casino gaming equipment, devices, or supplies
 
17 provided by any licensed supplier may either be repaired in the
 
18 casino facility or be removed from the casino facility to a
 
19 facility owned by the holder of an operator's license for repair.
 
20 Any supplier's equipment, devices, and supplies that are used by
 
21 any person in an unauthorized gaming operation shall be forfeited
 
22 to the county.
 
23          -12  Occupational licenses.(a)  The commission may
 

 
Page 25                                                    
                                     S.B. NO.           1605
                                                        
                                                        

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

 
Page 26                                                    
                                     S.B. NO.           1605
                                                        
                                                        

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

 
Page 27                                                    
                                     S.B. NO.           1605
                                                        
                                                        

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

 
Page 28                                                    
                                     S.B. NO.           1605
                                                        
                                                        

 
 1 conducted either in a licensed casino facility or at a school
 
 2 with which a licensed owner has entered into an agreement.
 
 3          -13  Annual report.  The commission shall file a
 
 4 written annual report with the governor and the legislature on or
 
 5 before sixty days following the close of each fiscal year and any
 
 6 additional reports that the governor or the legislature may
 
 7 request.  The annual report shall include a statement of receipts
 
 8 and disbursements related to casino gaming pursuant to this
 
 9 chapter, actions taken by the commission, and any additional
 
10 information and recommendations that the commission may deem
 
11 valuable or which the governor or the legislature may request.
 
12          -14  Hearings by the commission.(a)  Upon order of
 
13 the commission, a commission member or hearings officer
 
14 designated by the commission may conduct any hearing provided for
 
15 under this chapter related to casino gaming, or by commission
 
16 rule, and may recommend findings and decisions to the commission.
 
17 The commission member or hearings officer conducting the hearing
 
18 shall have all powers and rights granted to the commission in
 
19 this chapter.  The record made at the time of the hearing shall
 
20 be reviewed by the commission, or a majority thereof, and the
 
21 findings and decision of the majority of the commission shall
 
22 constitute the order of the commission in that case.
 
23      (b)  Any party aggrieved by an action of the commission
 

 
Page 29                                                    
                                     S.B. NO.           1605
                                                        
                                                        

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

 
Page 30                                                    
                                     S.B. NO.           1605
                                                        
                                                        

 
 1           only from suppliers licensed under this chapter;
 
 2      (5)  Persons licensed under this chapter shall permit no
 
 3           form of wagering on games except as permitted by this
 
 4           chapter;
 
 5      (6)  Wagers may be received only from a person present in a
 
 6           licensed casino facility; provided that no person
 
 7           present in a licensed casino facility shall place or
 
 8           attempt to place a wager on behalf of another person
 
 9           who is not present in the casino facility;
 
10      (7)  Wagering shall not be conducted with money or other
 
11           negotiable currency, except for wagering on slot
 
12           machines;
 
13      (8)  A person under age twenty-one shall not be permitted in
 
14           an area of a casino facility where casino gaming is
 
15           being conducted, except for a person at least eighteen
 
16           years of age who is an employee of the casino facility;
 
17           provided that no employee under age twenty-one shall
 
18           perform any function involved in casino gaming by
 
19           patrons; and provided further that no person under age
 
20           twenty-one shall be permitted to make a wager under
 
21           this chapter;
 
22      (9)  All tokens, chips, or electronic cards used to make
 
23           wagers must be purchased from a licensed owner within
 

 
Page 31                                                    
                                     S.B. NO.           1605
                                                        
                                                        

 
 1           the casino facility.  The tokens, chips, or electronic
 
 2           cards may be purchased by means of an agreement under
 
 3           which the owner extends credit to the patron.  The
 
 4           tokens, chips, or electronic cards may be used while
 
 5           within a casino facility only for the purpose of making
 
 6           wagers on authorized games; and
 
 7     (10)  In addition to the above, casino gaming must be
 
 8           conducted in accordance with all rules adopted by the
 
 9           commission.
 
10          -16  Collection of amounts owing under credit
 
11 agreements.  Notwithstanding any other law to the contrary, a
 
12 licensee who extends credit to a casino gaming patron shall be
 
13 expressly authorized to institute a cause of action to collect
 
14 any amounts due and owning under the extension of credit, as well
 
15 as the operator's costs, expenses, and reasonable attorney's fees
 
16 incurred in collection.
 
17          -17  Wagering tax; rate; distribution.  A tax shall be
 
18 imposed on the gross receipts received from casino gaming
 
19 authorized under this chapter at the rate of ten per cent.
 
20          -18  The state gaming fund; disposition of taxes
 
21 collected.(a)  There is established within the state treasury
 
22 the state gaming fund, into which shall be deposited all fees,
 
23 taxes, and fines collected under this chapter, which shall be
 

 
Page 32                                                    
                                     S.B. NO.           1605
                                                        
                                                        

 
 1 used for expenses incurred for the administration and enforcement
 
 2 of this chapter, except as provided in subsection (b).
 
 3      (b)  All amounts exceeding         per cent of the total
 
 4 collections each quarter shall be distributed as follows:  fifty
 
 5 per cent shall be deposited in                     , and fifty
 
 6 per cent shall be deposited in an education improvement account.
 
 7 The funds in the education improvement account shall be used to:
 
 8      (1)  Support capital improvements and enhancements for
 
 9           educational purposes and programs;
 
10      (2)  Provide free voluntary pre-kindergarten for
 
11           four-year-olds;
 
12      (3)  Provide Helping Outstanding Pupils Education (HOPE)
 
13           scholarships to students who maintain a 3.0 grade point
 
14           so that they may obtain a free college education;
 
15      (4)  Provide teacher HOPE scholarships to teachers to obtain
 
16           advanced degrees in critical fields of study; and
 
17      (5)  Provide increased access to computer and
 
18           telecommunication technology so that students will have
 
19           hands-on experience with computer learning programs.
 
20      (c)  The scholarships authorized under subsection (b) and
 
21 financed by the state gaming fund education improvement account
 
22 shall be administered by the department of education under rules
 
23 adopted pursuant to chapter 91.
 

 
Page 33                                                    
                                     S.B. NO.           1605
                                                        
                                                        

 
 1      (d)  The revenues generated by gaming shall be used to
 
 2 augment and not supplant, existing resources for educational
 
 3 purposes.
 
 4          -19  Legislative oversight.(a)  Beginning with the
 
 5 fiscal year ending June 30, 2000, the auditor shall conduct a
 
 6 biennial financial and social assessment of gaming operations.
 
 7 In conducting the assessment, the auditor shall identify the
 
 8 financial impacts of gaming on the state economy and the social
 
 9 impacts of gaming upon the community.  The auditor shall submit a
 
10 report of findings and recommendations to the legislature prior
 
11 to the convening of the next regular session after the biennial
 
12 assessment is completed.
 
13      (b)  Beginning with the fiscal year ending June 30, 1999,
 
14 the auditor shall conduct a program and financial audit of the
 
15 Hawaii gaming control commission.  Thereafter, the auditor shall
 
16 conduct a program and financial audit every four years after the
 
17 first audit is completed."
 
18      SECTION 3.  Section 36-30, Hawaii Revised Statutes, is
 
19 amended by amending subsection (a) to read as follows:
 
20      "(a)  Each special fund, except the:
 
21      (1)  Transportation use special fund established by section
 
22           261D-1;
 
23      (2)  Special summer school and intersession fund under
 

 
Page 34                                                    
                                     S.B. NO.           1605
                                                        
                                                        

 
 1           section 302A-1310;
 
 2      (3)  School cafeteria special funds of the department of
 
 3           education;
 
 4      (4)  Special funds of the University of Hawaii;
 
 5      (5)  State educational facilities improvement special fund;
 
 6      (6)  Special funds established by section 206E-6;
 
 7      (7)  Aloha Tower fund created by section 206J-17;
 
 8      (8)  Domestic violence prevention special fund under section
 
 9           321-1.3;
 
10      (9)  Spouse and child abuse special account under section
 
11           346-7.5;
 
12     (10)  Spouse and child abuse special account under section
 
13           601-3.6;
 
14     (11)  Funds of the employees' retirement system created by
 
15           section 88-109;
 
16     (12)  Unemployment compensation fund established under
 
17           section 383-121;
 
18     (13)  Hawaii hurricane relief fund established under chapter
 
19           431P;
 
20     (14)  Convention center capital special fund established
 
21           under section 206X-10.5 and the convention center
 
22           operations special fund established under section
 
23           206X-10.6;
 

 
Page 35                                                    
                                     S.B. NO.           1605
                                                        
                                                        

 
 1     (15)  Hawaii health systems corporation special funds; [and]
 
 2     (16)  Tourism special fund established under section
 
 3           [[]201B-11[]]; and
 
 4     (17)  State gaming fund under section    -18.
 
 5 shall be responsible for its pro rata share of the administrative
 
 6 expenses incurred by the department responsible for the
 
 7 operations supported by the special fund concerned."
 
 8      SECTION 4.  Statutory material to be repealed is bracketed.
 
 9 New statutory material is underscored.
 
10      SECTION 5.  This Act shall take effect upon its approval.
 
11 
 
12                              INTRODUCED BY:______________________