Bingo Games; Regulation
Provides for the regulation of bingo. Excludes games using free cards and donated prizes, for which no payment of consideration is made by participants. Establishes the bingo control board within DCCA for administrative purposes. Requires financial reporting. Provides for enforcement and tax on gross receipts.
HOUSE OF REPRESENTATIVES
TWENTY-FIRST LEGISLATURE, 2001
STATE OF HAWAII
A BILL FOR AN ACT
relating to bingo.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
SECTION 1. The Hawaii Revised Statutes is amended by adding a new chapter to be appropriately designated and to read as follows:
PART I. GENERAL PROVISIONS AND DEFINITIONS
§ -1 Purpose. The legislature declares that:
(1) All phases of the conduct of bingo, except bingo games using free cards and donated prizes for which no payment of consideration is made by participants, should be closely controlled by appropriate laws and rules which should be strictly and uniformly enforced throughout this State;
(2) The conduct of bingo and all attendant activities, except bingo games using free cards and donated prizes for which no payment of consideration is made by participants, should be regulated to discourage commercialization of bingo in all forms, including the rental of commercial premises for bingo, and to ensure the maximum use of the profits of bingo exclusively for the lawful purposes specified in this chapter or for the advancement, improvement, or benefit of the licensed organization that conducts the bingo game, under the requirements of this chapter; and
(3) It is a matter of statewide concern to foster and support these lawful purposes and to prevent commercialized gambling, participation by criminal and other undesirable elements, and diversion of funds from the lawful purposes authorized in this chapter.
§ -2 Definitions. As used in this chapter:
"Bingo" means a game in which players pay a consideration in order to participate, in which seventy-five numbered objects are available for selection, and those objects actually selected are selected on a random basis, and in which each player participates by means of cards sold, rented, or used only at the time and place of the game, each card containing five rows of five spaces each, each space printed with a number from 1 to 75, except the central space, which is marked "FREE". Winners are determined and prizes awarded on the basis of possessing a bingo card on which some combination of numbers are printed and conform to the numbered objects selected at random based on a predetermined winning arrangement. "Bingo" as used in this chapter shall not include any game using free cards and donated prizes, if any, for which no payment of consideration is made by participants.
"Bingo occasion" means a single gathering or session at which a series of successive bingo games is played.
"Bingo supplies and equipment" means all cards, boards, sheets, markers, pads, or other supplies, devices, or equipment designed for use in the play of bingo.
"Board" means the bingo control board.
"Department" means the department of commerce and consumer affairs.
"Extra regular card" means a nondisposable card which affords additional opportunities to play in a regular bingo game to be played at a bingo occasion.
"Gross receipts" means total receipts received from the conduct of bingo including, but not limited to, receipts from the sale, rental, or use of regular bingo cards, extra regular cards, special bingo cards, and bingo supplies.
"Lawful purpose" means one or more of the following:
(1) Benefiting persons by enhancing their opportunity for religious or educational advancement, by relieving or protecting them from disease, suffering, or distress, by contributing to their physical well-being, by assisting them in establishing themselves in life as worthy and useful citizens, or by increasing their comprehension of and devotion to the principles upon which this nation was founded;
(2) Initiating, performing, or fostering worthy public works, or enabling or furthering the erection or maintenance of public structures;
(3) Lessening the burdens borne by government, or voluntarily supporting, augmenting, or supplementing services which government would normally render to the people; or
(4) Maintaining, improving, building an addition to, repairing, or retiring the debt on existing buildings and real property used for purposes enumerated in paragraphs (1) to (3).
"Lawful purpose" does not include the erection of a building or acquisition of any real property except as provided in paragraph (4), unless the board specifically authorizes the expenditures after finding that the property will be used exclusively for one or more of the purposes specified in paragraphs (1) to (4), nor does it include any activities consisting of an attempt to influence legislation or participate in any political campaign on behalf of any elected official or person who is or has been a candidate for public office.
"Licensed organization" means an organization licensed under this chapter to conduct bingo.
"Limited period bingo" means the conduct of bingo for a period of not more than four out of five consecutive days in any one year at a festival, bazaar, picnic, carnival, or similar special function conducted by a licensed organization.
"Premises" means any room, hall, enclosure, tent, or outdoor area in which bingo is being played.
"Profit" means the gross receipts collected from one or more bingo occasions, less reasonable sums necessarily and actually expended for bingo supplies and equipment, prizes, utilities, license fees, and taxes.
"Regular bingo card" means a nondisposable card issued to a person upon payment of the admission fee which affords a person the opportunity to participate in all regular games played at a bingo occasion.
"Regular bingo game" means a bingo game in which a person, upon payment of an admission, is issued a regular bingo card and may purchase or rent extra regular cards.
"Service organization" includes all of the following:
(1) A labor organization, recognized under section 377-14, whose jurisdiction is limited to a specific geographical area within the State; and
(2) A political party, as defined in section 11-61, except a state committee registered under section 11-194 and organized exclusively for political purposes under whose name candidates appear on a ballot at any election.
"Special bingo card" means a disposable, specially marked bingo card which affords a person the opportunity to participate in a special bingo game to be played at a bingo occasion.
"Special bingo game" means any bingo game which is not a regular bingo game and which is played with special bingo cards.
PART II. BINGO CONTROL BOARD
§ -11 Bingo control board; appointment; bond requirement. (a) There is established within the department for administrative purposes a bingo control board consisting of five members who shall be appointed by the governor in the manner prescribed by section 26-34.
(b) Of the five members, two shall be appointed from a list of nominees submitted by the president of the senate, and two shall be appointed from a list of nominees submitted by the speaker of the house of representatives. The members shall elect one from among them to be the chairperson.
(c) The term of office of a board member shall be four years. Vacancies in the board shall be filled for the unexpired term in like manner as the original appointments.
(d) Each member of the board shall receive $300 for each day the board meets and for each day the member conducts any hearing pursuant to this chapter. Each member shall also be reimbursed for all actual and necessary expenses incurred in the execution of official duties.
(e) No person shall be a member of the board if:
(1) The person or the person’s spouse, child, or parent is an official of, or a person financially interested in, or has a financial relationship with, any gaming operation subject to the jurisdiction of the board; or
(2) The person is not of good moral character or has been convicted of, or is under indictment for, a felony under the laws of Hawaii or any other state, or the United States.
(f) No board member shall hold any other public office. The governor shall remove any member of the board for neglect of duty, misfeasance, malfeasance, or nonfeasance in office.
(g) Before assuming the duties of office, each member of the board shall take an oath that the member shall faithfully execute the duties of office according to the laws of the State and shall file and maintain with the director a bond in the sum of $25,000 with good and sufficient sureties. The cost of any bond for any member of the board under this section shall be considered a part of the necessary expenses of the board.
§ -12 General duties of the board. The board shall:
(1) Hear appeals on denial of licenses by the department;
(2) Conduct hearings on the suspension or revocation of a license for violation of this chapter or any rules adopted under it;
(3) Adopt rules under chapter 91 relating to the issuance, renewal, amendment, suspension, and revocation of bingo and raffle licenses and the conduct of bingo under this chapter;
(4) Approve and establish a standard set of bingo cards comprising a consecutively numbered series and prescribe by rule the manner in which the cards shall be reproduced and distributed to a licensed organization; and
(5) Prescribe appropriate forms necessary to carry out this chapter.
§ -13 Department powers and duties. The department shall:
(1) Issue, renew, and amend licenses to:
(A) Organizations to conduct bingo;
(B) A supervisory member designated by the organization; and
(C) A member designated by the organization who is responsible for the gross receipts;
(2) Have power to temporarily suspend any license;
(3) Make recommendations to the board regarding suspensions and revocations of licenses;
(4) Refer for investigation potential or actual violations of this chapter and rules adopted under it to the prosecuting attorney in the county in which a bingo occasion will be or was held;
(5) Make a continuous study of the operation of this chapter to ascertain if there are defects which jeopardize or threaten to jeopardize the purpose of this chapter; and make a continuous study of the operation and administration of similar laws which may be in effect in other states; and
(6) Recommend to the board the changes in the law of this State as the department determines are necessary to carry out the purposes of this chapter.
§ -14 Conflict of interest prohibited. No member of the board or employee of the department assigned duties under this chapter shall:
(1) Own, be employed by, or have any pecuniary interest in any business engaged directly or indirectly in the manufacture, distribution, or sale of bingo supplies and equipment, or be the spouse of or related in the first degree of kinship to any person so employed or interested;
(2) Participate in the approval, denial, revocation, or suspension of any application or license for an organization of which the member or employee is an officer, director, shareholder, or member;
(3) Engage in private employment or in a profession or business which conflicts with the performance of the member's or employee's official duties; or
(4) Engage in any business, transaction, or professional activity or incur any obligation of any nature which conflicts with the proper discharge of the member's or employee's official duties.
§ -15 Rules governing expenditure of bingo funds restricted. (a) As used in this section:
"Bar" means premises operating under a license or permit for the retail sale of alcohol beverages for consumption on the premises.
"Restaurant" means any place in which meals are prepared for or served or sold to the public more than once in any week. "Meals" do not include soft drinks, ice cream, milk, milk drinks, ices, or confections.
(b) The board may not adopt any rule which limits the expenditure of bingo funds for installing, maintaining, or improving the heating, plumbing, air conditioning, or electrical systems of an existing building used in whole or in part for any lawful purpose except for that portion of the building consisting of a bar or restaurant.
PART III. LICENSING
§ -21 License to conduct bingo. Prior to applying to a license, an organization shall:
(1) Be incorporated in this State;
(2) Have at least fifteen members in good standing;
(3) Conduct activities within this State in addition to the conduct of bingo;
(4) Be authorized by its constitution, articles, charter, or bylaws to further a lawful purpose in this State;
(5) Have been in existence for five years immediately preceding its application for a license, and shall have had during that five-year period a bona fide membership actively engaged in furthering a lawful purpose; and
(6) Have received and used and shall continue to receive and use, for a lawful purpose, funds derived from sources other than from the conduct of bingo.
§ -22 Bingo license application. Each applicant for a license to conduct bingo shall file with the board an application on a form prescribed by the board. The application shall include:
(1) The name and address of the applicant;
(2) Sufficient facts relating to the incorporation or organization of the applicant to enable the board to determine if the applicant is eligible for a license under this part;
(3) The name and address of each officer of the applicant organization;
(4) The place and date of each bingo occasion proposed to be conducted during the effective period of the license;
(5) The name and address of the owner of the premises in which bingo will be conducted and the approximate capacity of the premises;
(6) The name, date of birth, and address of each supervising member for each bingo occasion who shall be a bona fide and active member of the applicant organization and one or more of whom shall be present and in immediate charge of and responsible for the conduct of bingo games at each bingo occasion;
(7) The name of any licensed organization cosponsoring any bingo occasion;
(8) The name, address, date of birth, and years of membership of a bona fide and active member of the applicant organization who shall be responsible for the proper utilization of the gross receipts derived from the conduct of bingo;
(9) The specific purposes to which the profits from the conduct of bingo are to be devoted; and
(10) Other information which the board deems necessary to administer this chapter.
§ -23 Affidavits, bond, and fees. An application for a license to conduct bingo shall be accompanied by:
(1) A sworn statement of each designated supervising member that the member will be responsible for compliance with this chapter and rules adopted under it for each bingo occasion supervised by the member;
(2) A sworn statement by the member designated as responsible for the proper utilization of gross receipts that no commission, fee, rent, salary, profits, compensation, reward, or recompense will be paid to any person or organization and that all profits will be spent for a lawful purpose or as provided under section -32(b); and
(3) A $10 license fee for each bingo occasion proposed to be conducted; $5 for an annual license for each designated supervising member; and $5 for an annual license for each designated member responsible for the proper utilization of gross receipts. The fees shall be paid to the board which shall deposit them in the state treasury to the credit of the general fund.
§ -24 Department determinations. Upon receipt of an application for a license to conduct bingo, the department shall investigate the qualifications of the applicant and the merits of the application and before issuing a license shall determine that:
(1) The applicant is eligible to be licensed to conduct bingo under section -21;
(2) The supervising members and member responsible for the proper utilization of gross receipts are bona fide and active members of the applicant organization who have never been convicted of a felony or, if convicted, have received a pardon or have been released from parole or probation for at least five years;
(3) The proposed bingo occasions will be conducted in accordance with this chapter and the rules adopted under it;
(4) No commission, fee, rent, salary, profit, compensation, reward, or recompense is or shall be paid or given to any person in connection with the holding, operating, or conducting of any bingo occasion, except rent authorized under section -46 and except expenditures authorized under section -32(b) may be paid;
(5) The premises in which a proposed bingo occasion will be conducted are adequate and suitable for the conduct of bingo and are owned by the applicant, another licensed organization, or the public, or are used by the applicant organization on a regular basis for purposes other than bingo and that no benefits of any kind are proposed to be transferred as rent for the premises, except as permitted under paragraph (4); and
(6) The profits from all bingo games conducted by the applicant organization are proposed to be used as provided under section -32(b) or for a lawful purpose which is a proper objective of the applicant organization.
§ -25 Issuance of license to conduct bingo. (a) Within sixty days after the filing of an application for a license to conduct bingo, the department, after making the determinations under section -24, shall either notify the applicant organization in writing why a license is not being issued or issue a license to the applicant organization authorizing it to conduct bingo at the times and places set forth in the license. Except for limited period bingo, an applicant organization shall not be authorized to conduct or cosponsor more than twenty-six bingo occasions in any year or more than five bingo occasions in any month. An applicant organization holding a regular license, in addition, may be issued one limited period bingo license during the twelve-month period from the date of issuance or renewal of that regular license. An applicant organization not holding a regular bingo license may be issued two limited period licenses within a twelve-month period. A license issued under this subsection shall be effective for one year from the first day of the month of the first occasion listed on the license and may be renewed annually, except that an applicant organization may request that the license expire on the first day of any month within the one-year licensure period.
(b) The form of the license shall be prescribed by the board and shall include:
(1) The name and address of the licensed organization;
(2) The name and address of each supervising member of the licensee under whom each bingo occasion is to be conducted;
(3) The place, date, and time when each bingo occasion is to be held;
(4) The specific purposes to which the profits of each bingo occasion will be devoted; and
(5) Other information which the board deems necessary to administer this chapter.
(c) Each license, and all amendments thereto, shall be conspicuously displayed at the place where a bingo occasion is conducted and at all times during the conduct thereof so as to be easily readable by any patron of the bingo occasion.
(d) Within ten days after the issuance of a license to conduct bingo and at least five days prior to the first bingo occasion each year as authorized by the license, or amendments thereto, the department shall send written notice of the issuance, or amendment, of the license to the prosecuting attorney of the county in which any bingo occasion is to be conducted. The notice shall indicate the time, place, and sponsoring licensed organizations for each authorized bingo occasion.
§ -26 Amendment of license to conduct bingo. Upon application by a licensed organization, a license may be amended, if the subject matter of the amendment properly and lawfully could have been included in the original license. An application for an amendment to a license shall be filed and processed in the same manner as an original application. An application for the amendment of a license shall be accompanied by a $3 fee. If any application for amendment seeks approval of additional bingo occasions or designates new supervising members or a member responsible for the proper utilization of gross receipts, the appropriate fee under section -23 also shall be paid. If the department approves an application for an amendment to a license, a copy of the amendment shall be sent to the applicant who shall attach it to the original license.
§ -27 Denial of application; hearing. If the department denies a license to conduct bingo, within ten days after receiving written notification of the denial, an applicant may demand in writing a hearing before the board upon the applicant's qualifications and the merit of the application. At the hearing, the burden of proof shall be on the applicant to establish the applicant's eligibility for a license. If, after the hearing, the board enters an order denying the application, the order shall set forth in detail the reasons for the denial. Upon entry of such an order or upon the expiration of the ten-day period during which a hearing may be demanded, the applicant's license fee shall be refunded less reasonable administrative costs. If the board approves the application, the department shall issue the license within fourteen days after approval.
§ -28 Suspension or revocation. (a) Proceedings to suspend or revoke a license to conduct bingo shall be initiated by the board pursuant to chapter 91. The notice shall state the alleged violations which constitute the grounds for the proceedings. The department may temporarily suspend the license for a period of thirty days while any proceedings are pending, and shall notify the licensee of the dates of the temporary suspension.
(b) The department shall notify an officer or agent of the licensee of the time and place of the hearing by registered mail, return receipt requested, at least fifteen days before the hearing.
(c) The board shall hold a hearing on a suspension or proposed revocation as soon as practicable. The board shall issue, in writing, its findings and decision on suspension or revocation within thirty days after the hearing. A copy of the findings and decision shall be sent immediately to the licensee. If the board suspends or revokes the license, the licensee shall be informed of the effective date of the suspension or revocation. The board's decision under this section shall be subject to judicial review pursuant to section 91-14.
(d) When a license is suspended or revoked by the board, the licensee shall immediately surrender the license to the board. A licensee whose license has been revoked may reapply for a license one year after the effective date of the revocation. If a license has been suspended under subsection (c), the department shall reinstate the license at the end of the period of suspension.
(e) A violation of any applicable law of this State or rule adopted thereunder shall constitute grounds for suspension or revocation.
PART IV. CONDUCT OF BINGO
§ -31 Restrictions on the conduct of bingo. (a) Only a person licensed under section -25 shall conduct bingo.
(b) Bingo shall be played only on premises which are:
(1) Owned by a licensed organization;
(2) Publicly owned;
(3) Owned by another licensed organization;
(4) Used regularly by the licensed organization for a purpose other than bingo, except that a tent that has been rented, borrowed, or donated may be used at a limited period bingo occasion; or
(5) Made available without charge.
(c) Not more than fifty-four occasions of regular bingo may be played at any one building, tent, enclosure, or outdoor area in any calendar year.
(d) Bingo may not be conducted at a place owned, operated, or controlled by a person who has been convicted of having operated a gambling place within the past five years.
(e) Except for limited period bingo, only persons who pay for regular bingo cards may participate as a player in a regular or special bingo game.
(f) Purchase of a regular bingo card shall entitle each player to a place with sufficient room in which to play.
(g) A licensed organization or its members or agents shall accept only cash payment for any bingo card.
§ -32 Profits for lawful purposes or organization benefit. (a) Except as provided under subsection (b), the profits from any bingo game shall be devoted exclusively to a lawful purpose of the licensed organization.
(b) No more than fifteen per cent of the profits from any bingo game may be used for the advancement, improvement, or benefit of the licensed organization that conducts the bingo game.
§ -33 Limitation on prizes. (a) No licensed organization shall award any prize consisting of alcoholic or fermented malt beverages or an interest in real estate or securities.
(b) No bonus or additional prizes shall be awarded on the basis of either a specific arrangement of the numbers or type of card required to win a game. No prize shall be determined on the basis of a specified number of calls.
(c) If any merchandise prize is awarded in a bingo game, its value shall be its current retail price. The current retail price of merchandise prizes donated to a licensed organization shall not be reported as an expenditure in its financial statement of bingo operations. No merchandise prize shall be redeemable or convertible into cash directly or indirectly by the licensed organization.
§ -34 Management and operation of bingo. (a) Only a bona fide and active member of the licensed organization, a bona fide and active member of the auxiliary of the licensed organization or the parent organization, or the spouse of such a member, may participate in the management or operation of a bingo occasion.
(b) No person shall receive remuneration for participating in the management or operation of any bingo game.
§ -35 Minimum age requirement. No person under age eighteen shall:
(1) Play any bingo game conducted by a licensed organization, unless accompanied by that person's parent, guardian, or spouse; or
(2) Conduct or assist in the conduct of bingo.
§ -36 Only certain expenses permitted. No expense may be incurred or amounts paid in connection with the conduct of bingo by a licensed organization, except those reasonably and necessarily expended for bingo supplies and equipment, including blowers, flashboards, tables, chairs, public address systems, bingo cards, markers, filing cabinets, and signs, and for prizes, utilities, license fees and taxes, fees regularly charged by the State or a county for use of a public premise, printing of bingo forms and house rules, repairs to bingo equipment, and rent authorized under section -46.
§ -37 Winners and prizes; same day. Each bingo winner shall be determined and every prize shall be awarded and delivered on the same day on which the bingo occasion is conducted.
§ -38 Bingo cards. (a) Bingo cards shall be printed only on one side.
(b) The licensed organization shall keep an accurate, separate count of the number of regular bingo cards, extra regular cards, and special bingo cards which are sold, rented, or used. The information shall be available for inspection at the close of the bingo occasion.
(c) Regular bingo cards, extra regular cards, and special bingo cards shall each be assigned a specific price, and the price shall remain the same during a bingo occasion. At any time during a bingo occasion, a card may be changed at no additional cost. Cards shall be sold or rented only on the premises at which bingo is being conducted. A price list shall be posted where the regular bingo cards are distributed, setting forth the price of each type of card. Only the posted price may be charged. The regular bingo cards and the extra regular cards shall be readily distinguishable from each other.
§ -39 Method of play. (a) The method of play in any bingo game and the utilization of bingo equipment and supplies shall be that each player is afforded an equal opportunity to win.
(b) The objects to be drawn shall be essentially the same in size, color, shape, weight, balance, and all other characteristics, so that at all times during the conduct of bingo, each object possesses the capacity for equal agitation with any other object within the receptacle.
(c) All seventy-five objects shall be present in the receptacle at the beginning of each bingo game.
(d) The announcement of all numbers drawn shall be clearly audible to the players present.
(e) When more than one room is used for any one bingo game, the receptacle and caller and any assistant shall be in the room where the greatest number of players are present; and all numbers shall be announced in a manner clearly audible to the players in each room.
(f) Once removed, no object shall be returned to the receptacle until after the conclusion of the game.
(g) Immediately following the calling of each number in a bingo game, the caller shall turn that portion of the object which shows the number and letter to the players.
§ -40 Number arrangement announced; prizes announced and posted. The particular arrangement of numbers required to be covered in order to win and the amount of the prize for each game shall be clearly described and audibly announced to the players immediately before each game. The amount of the prize for each bingo game also shall be posted where the regular bingo cards are distributed.
§ -41 Verification of winner. (a) The numbers appearing on the winning card at the time a winner is determined shall be verified in the immediate presence of at least one disinterested player.
(b) At the time a winner is determined, any player may call for a verification of all numbers and of the objects remaining in the receptacle and not yet drawn. This verification shall be made in the immediate presence of the supervising member and at least one disinterested player.
§ -42 Limit on number of bingo games. Except for limited period bingo, no licensed organization shall conduct more than thirty-five bingo games, including regular and special games, on a single bingo occasion.
§ -43 More than one winner. When more than one player is found to be the winner on the call of the same number in the same bingo game, a cash prize shall be divided equally among the winners. The licensed organization may elect to round off the prize to any amount between the next lower dollar and the next higher dollar. Any licensed organization may elect to set a minimum prize of not exceeding $10 for each winner. When equal division of a merchandize prize is not possible, identical substitute prizes whose aggregate retail value is approximately equal to that of the designated prize may be awarded or a cash prize equal to the retail value may be divided among the winners as provided in this section.
§ -44 Prohibited from playing. No licensed organization shall permit any person who is conducting or assisting in the conduct of bingo on a bingo occasion to participate as a player on that occasion.
§ -45 Bingo caller. No person may act as a caller in the conduct of any game of bingo unless the person:
(1) Has been a member in good standing of the licensed organization, the auxiliary of the licensed organization or the parent organization, or a member of the local unit of the religious organization of which the licensed organization is a member for at least one year immediately preceding the date of the game or is the spouse of such a member; and
(2) Has never been convicted of a felony or, if convicted, has been pardoned or released from probation or parole for at least five years.
§ -46 Rent. Except as provided under section -32, a licensed organization may incur and pay rent in connection with the conduct of bingo only:
(1) If for a tent rented for use at a limited bingo occasion and the rent incurred and paid is reasonable; or
(2) If it does not rent from itself and the rent is for premises used for a bingo occasion and does not exceed an amount equal to ten per cent of the aggregate value of prizes offered at the bingo occasion.
§ -47 Limited period bingo. (a) In this section, "licensee" means a person licensed to conduct limited period bingo.
(b) No licensee shall conduct more than sixty games of limited period bingo on a single bingo occasion. Limited period bingo may be conducted on two bingo occasions in a single day.
(c) No admission fee shall be charged to play limited period bingo.
(d) All other provisions in this chapter relating to regular bingo games shall apply to limited period bingo except as otherwise provided.
§ -48 Special bingo games. In addition to provisions in this chapter relating to regular bingo games, the following provisions shall apply to special bingo games:
(1) All special bingo cards shall be in a form approved by the board; and
(2) Each special bingo card shall be used for one game only and shall be indelibly marked by the player while in use so as to render it void and unusable thereafter.
§ -49 Penalties. (a) Any person convicted of violating section -31(a) or (b), -32, -33, -34, or -42 shall be guilty of a misdemeanor, but shall be subject to a maximum term of imprisonment of nine months, or a maximum fine of $10,000, or both.
(b) Any person convicted of violating any other provision of this chapter shall be guilty of a petty misdemeanor, but shall be subject to a maximum term of imprisonment of ninety days, or a maximum fine of $5,000, or both.
(c) The attorney general or the prosecuting attorney of the county where the violation occurs may commence an action in the name of the State to recover a civil forfeiture to the State of not more than $10,000 for the violation of any provision of this chapter.
(d) The attorney general, the board, or the prosecuting attorney of a county in which an actual or potential violation occurs, after informing the attorney general, may commence an action in the circuit court in the name of the State to restrain any violation of any provision of this chapter. The court, prior to entry of final judgment, may make such an order or judgment as necessary to restore to any person any pecuniary loss suffered because of the acts or practices involved in the violation, provided proof thereof is submitted to the court. The attorney general may subpoena persons, require the production of books and other documents, and request the board to exercise its authority to aid in the investigation of alleged violations of this section.
PART V. REPORTS AND FINANCIAL STATEMENTS
§ -61 Report of bingo operations. (a) Within fifteen days after the conclusion of each bingo occasion, each licensed organization shall execute and file a report of bingo operations on a form prescribed by the board. The licensed organization shall retain a copy of the report for its permanent records. The report shall include:
(1) The name and address of each supervising member and each member responsible for the proper utilization of gross receipts;
(2) The date, hour, and address of the bingo occasion;
(3) The number of games played;
(4) An itemized statement of the gross receipts from the bingo occasion, including gross receipts from sales of regular bingo cards, extra regular cards, special game cards, and sale of supplies;
(5) An itemized statement of expenditures, including amounts paid for prizes, bingo supplies and equipment, license fees, and other expenses;
(6) An itemized statement of expenditures, if any, made by the licensed organization under section -32(b);
(7) A statement showing the balance in the licensed organization's bingo account and bingo savings accounts and other deposits into or adjustments in the accounts since the last filing date; and
(8) The name of the depository and the title and number of the account.
(b) The report shall be signed by the member responsible for the proper utilization of gross receipts for the bingo occasion.
(c) If no bingo games are held on a date when a license authorizes them to be held, a report to that effect shall be filed with the board.
§ -62 Reports improperly filed. (a) The department may refuse to renew a license of an organization found to be delinquent in filing its financial statement or found to have filed an incomplete statement of bingo operations.
(b) If a licensed organization fails to file a financial statement of bingo operations within five days after notification by the department of the delinquency, the department may suspend the license, pending the filing of the financial statement.
(c) If the financial statement filed by a licensed organization is not fully, accurately, and truthfully completed, the department may refuse to renew a license or may suspend a license until such time as a statement in proper form has been filed.
§ -63 Unlawful purpose; reimbursement and waiver. If a financial audit of a licensed organization shows that bingo funds were disbursed for a purpose which is not a lawful purpose and the department requests that the licensed organization reimburse the appropriate bingo account in an amount equal to the amount so disbursed, the licensed organization may appeal the request to the board. The board may waive or reduce the amount of any reimbursement if the licensed organization presents evidence satisfactory to the board that the licensed organization acted in good faith and by mistake or inadvertently in so disbursing the funds.
§ -64 Financial report to membership. (a) At least once a year, each licensed organization shall report the following information in writing to its membership regarding the bingo occasions which it has conducted:
(1) The number of bingo occasions conducted;
(2) The gross receipts;
(3) The amount of prizes paid;
(4) The net profit or loss;
(5) The disposition of profits;
(6) Any interest earned on profits deposited in interest- bearing accounts; and
(7) A summary of expenses incurred.
(b) The information reported under subsection (a) shall be incorporated into the minutes or records of each licensed organization. If a licensed organization is an auxiliary or affiliate of a parent organization, a copy of the written report shall be filed with the executive officer of the parent organization and incorporated into its minutes. A copy of the financial report to the membership shall be mailed to the board within sixty days after the close of an organization's annual accounting period.
§ -65 Expenditure of bingo funds after cessation of bingo. A licensed organization which has ceased to conduct bingo for any reason and has unexpended bingo funds shall disburse those funds in any of the following ways:
(1) For a lawful purpose or as provided under section -32(b) within one year after the cessation of the conduct of bingo; or
(2) In accordance with a plan of expenditure approved in advance by the board.
PART VI. ENFORCEMENT
§ -71 Duties of the attorney general. (a) Whenever the attorney general files with a circuit court a statement that the attorney general believes that a violation of this chapter has occurred, the court shall issue a subpoena for any person requested or named by the attorney general. Mileage and witness fees need not be paid in advance, but only verified claims for mileage and fees which are approved by the attorney general shall be paid out of the state treasury.
(b) Testimony from persons subpoenaed under subsection (a) shall be taken by a stenographic reporter and transcribed and read to or by the witness and subscribed to by the witness, unless the parties represented stipulate upon the record that the reading of the transcript of the testimony to or by the witness and the witness' signature thereto are waived and that the transcript may be used with like force and effect as if read and subscribed by the witness. The attendance of the witness for the purpose of reading and subscribing to the transcript may be compelled in the same manner that the witness' attendance to be examined may be compelled.
§ -72 Violations a public nuisance. A violation of this chapter constitutes a public nuisance and may be enjoined or abated in like manner as other public nuisances, irrespective of any criminal prosecution which may be or is commenced based on the same acts.
§ -73 Inspection for enforcement. Any peace officer or prosecuting attorney, within their respective jurisdictions, or an authorized employee of the department, at all reasonable hours, may enter the premises where a bingo occasion is being conducted and examine the books, papers, and records of the licensed organization to determine if all proper taxes or fees imposed have been paid. Any refusal to permit an examination of the premises by the licensed organization, its agent or employee, or the person in charge of the premises to which the bingo license relates, constitutes sufficient grounds for the suspension or revocation of a license, and is punishable under section -49(b). In addition, the refusal constitutes sufficient grounds for any peace officer or other persons authorized under this section within their respective jurisdictions or authority to employ whatever reasonable action is necessary to conduct inspections permitted by this section.
PART VII. GROSS RECEIPTS TAX
§ -81 Tax on gross receipts. All gross receipts of any licensed organization which are derived from the conduct of bingo shall be subject to chapter 237 and taxed as provided in section 237-13(9)."
SECTION 2. Section 237-23, Hawaii Revised Statutes, is amended to read as follows:
"(b) The exemptions enumerated in subsection (a)(3) to (6) shall apply only:
(1) To those persons who shall have registered with the department of taxation by filing a written application for registration in such form as the department shall prescribe, shall have paid the registration fee of $20, and shall have had the exemption allowed by the department or by a court or tribunal of competent jurisdiction upon appeal from any assessment resulting from disallowance of the exemption by the department; and
(2) To activities from which no profit inures to the benefit of any private stockholder or individual, except for death or other benefits to the members of fraternal societies; and
(3) To the fraternal, religious, charitable, scientific, educational, communal, or social welfare activities of such persons, or to the activities of such hospitals, infirmaries, and sanitaria as such, and not to any activity the primary purpose of which is to produce income even though the income is to be used for or in furtherance of the exempt activities of such persons[
.]; provided that this exemption shall not apply to the conduct of bingo licensed under chapter ____."
SECTION 3. Section 712-1220, Hawaii Revised Statutes, is amended by amending the definition of "gambling" to read:
"(4) "Gambling". A person engages in gambling if [
he] that person stakes or risks something of value upon the outcome of a contest of chance or a future contingent event not under [ his] that person's control or influence, upon an agreement or understanding that [ he] that person or someone else will receive something of value in the event of a certain outcome. Gambling does not include bona fide business transactions valid under the law of contracts, including but not limited to contracts for the purchase or sale at a future date of securities or commodities, and agreements to compensate for loss caused by the happening of chance, including but not limited to contracts of indemnity or guaranty and life, health, or accident insurance. Gambling does not include the conduct of bingo licensed under chapter ."
SECTION 4. This Act does not affect rights and duties that matured, penalties that were incurred, and proceedings that were begun, before its effective date.
SECTION 5. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.
SECTION 6. This Act shall take effect on July 1, 2001.