REPORT TITLE:
Casino Gaming


DESCRIPTION:
Allows casino gaming in a Hawaiian theme park zone & Waikiki
zone; creates HI gaming control commission.  Reserves    % &    %
of state gaming fund for administration & problem gambler
services; remainder goes to general fund.  Provides for an
advisory referendum.

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                        
THE SENATE                              S.B. NO.           2199
TWENTIETH LEGISLATURE, 2000                                
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
 

 
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 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      SECTION 2.  The Hawaii Revised Statutes is amended by adding
 
20 a new chapter to be appropriately designated and to read as
 
21 follows:
 
22                             "CHAPTER
 
23                       LIMITED CASINO GAMING
 

 
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 1      §   -1 Legislative intent.  This chapter is intended to
 
 2 benefit the people of the State of Hawaii by creating a new
 
 3 revenue source, limited casino gaming, that will enhance
 
 4 investment, development, and tourism in Hawaii.  As limited
 
 5 casino gaming can be successful only if public confidence and
 
 6 trust in the credibility and integrity of the gaming operations
 
 7 and the regulatory process is maintained, this chapter strictly
 
 8 regulates the facilities, persons, associations, and practices
 
 9 related to gaming operations.
 
10      §   -2 Limited casino gaming authorized.  Limited casino
 
11 gaming and a system of wagering incorporated thereof, as defined
 
12 in this chapter, are authorized to the extent that they are
 
13 carried out in accordance with this chapter.
 
14      §   -3 Definitions.  As used in this chapter, unless the
 
15 context requires otherwise:
 
16      "Casino facility" means a freestanding, land-based structure
 
17 which may include structures with bars, restaurants, showrooms,
 
18 theaters, or other facilities, but does not include any structure
 
19 used for hotel or other transient accommodation lodging purposes.
 
20      "Casino gaming" means the operation of games licensed under
 
21 this chapter, including but not limited to, baccarat, twenty-one,
 
22 poker, craps, slot machine, video gaming of chance, roulette
 
23 wheel, klondike table, punch-board, faro layout, keno layout,
 

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

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

 
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 1 the effective date of this Act.  The members shall elect one from
 
 2 among them to be the chairperson.  Each member shall have
 
 3 reasonable knowledge of the practice, procedure, and principles
 
 4 of gaming operations.  Each member shall either be a resident of
 
 5 Hawaii or shall certify that the member will become a resident of
 
 6 Hawaii before taking office.  At least one member shall be
 
 7 experienced in law enforcement and criminal investigation, at
 
 8 least one member shall be a certified public accountant
 
 9 experienced in accounting and auditing, and at least one member
 
10 shall be an attorney licensed to practice law in Hawaii.
 
11      (c)  No person shall be appointed a member or continue to be
 
12 a member of the commission if:
 
13      (1)  The person is an elected state official or a public
 
14           employee;
 
15      (2)  The person or the person's spouse, child, or parent is,
 
16           a member of the board of directors of, or a person
 
17           financially interested in, any gaming operation subject
 
18           to the jurisdiction of this commission; or
 
19      (3)  The person is related to any other person within the
 
20           second degree of consanguinity or affinity who is
 
21           licensed by the commission pursuant to this chapter; or
 
22      (4)  The person is not of good moral character or has been
 
23           convicted of, or is under indictment for, a felony
 

 
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 1           under the laws of Hawaii, or any other state, or the
 
 2           United States.
 
 3      (d)  The term of office of a commission member shall be
 
 4 three years, except that the terms of office of the initial
 
 5 members appointed shall be staggered, with one member serving one
 
 6 year, two members serving two years, and two members serving
 
 7 three years.  No member shall serve more than two consecutive
 
 8 three-year terms.  Vacancies in the commission shall be filled
 
 9 for the unexpired term in like manner as the original
 
10 appointments.
 
11      (e)  The governor may remove or suspend any member of the
 
12 commission after due notice and public hearing.  The president of
 
13 the senate or the speaker of the house of representatives may
 
14 request that the governor remove or suspend a member of the
 
15 commission nominated by either the president of the senate or
 
16 speaker of the house of representatives.
 
17      (f)  Members shall:
 
18      (1)  Serve part-time;
 
19      (2)  Be paid compensation of $300 for each day in the
 
20           performance of official duties; and
 
21      (3)  Be reimbursed for expenses, including travel expenses,
 
22           incurred in the performance of official duties.
 
23      (g)  Officers of the commission, including the chairperson,
 

 
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 1 shall be selected by the members.  The commission, subject to
 
 2 chapter 92, shall hold at least one meeting in each quarter of
 
 3 the State's fiscal year.  Special meetings may be called by the
 
 4 chairperson or any three members upon seventy-two hours written
 
 5 notice to each member.  Three members shall constitute a quorum,
 
 6 and a majority vote of the members present shall be required for
 
 7 any final determination by the commission.  The commission shall
 
 8 keep a complete and accurate record of all its meetings.
 
 9      (h)  Before assuming the duties of office, each member of
 
10 the commission shall take an oath that the member shall
 
11 faithfully execute the duties of office according to the laws of
 
12 the State and shall file and maintain with the director a bond in
 
13 the sum of $25,000 with good and sufficient sureties.  The cost
 
14 of any bond for any member of the commission under this section
 
15 shall be considered a part of the necessary expenses of the
 
16 commission.
 
17      (i)  The commission shall appoint a person to serve as the
 
18 executive director of the commission subject to the commission's
 
19 supervision.  The executive director shall hold office at the
 
20 will of the commission, shall be exempt from chapters 76 and 77,
 
21 and shall devote full time to the duties of the office and shall
 
22 not hold any other office or employment.  The executive director
 
23 shall receive an annual salary at an amount set by the
 

 
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 1 commission.  The executive director shall be reimbursed for
 
 2 expenses actually and necessarily incurred in the performance of
 
 3 the executive director's duties.
 
 4      (j)  Except as otherwise provided by law, the executive
 
 5 director may hire assistants, other officers, and employees, who
 
 6 shall be exempt from chapters 76 and 77 and who shall serve at
 
 7 the will of the executive director, and appoint committees and
 
 8 consultants necessary for the efficient operation of casino
 
 9 gaming; provided that no person shall be hired or appointed under
 
10 this subsection who is:
 
11      (1)  An elected state official;
 
12      (2)  Licensed by the commission pursuant to this chapter, is
 
13           an official of, has a financial interest in, or has a
 
14           financial relationship with, any gaming operation
 
15           subject to the jurisdiction of this commission pursuant
 
16           to this chapter;
 
17      (3)  Related to any other person within the second degree of
 
18           consanguinity or affinity who is licensed by the
 
19           commission pursuant to this chapter; or
 
20      (4)  Not of good moral character or has been convicted of,
 
21           or is under indictment for, a felony under the laws of
 
22           Hawaii, any other state, or the United States.
 
23      (k)  The salaries of employees shall be set by the executive
 

 
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 1 director.
 
 2      (l)  Notwithstanding subsection (i), the commission may
 
 3 perform the functions of the executive director and may exercise
 
 4 the powers granted to the executive director until           ,
 
 5 and shall not be required to appoint an executive director before
 
 6 that date.
 
 7      (m)  The commission shall adopt rules in accordance with
 
 8 chapter 91, establishing a code of ethics for its employees which
 
 9 shall include, but not be limited to, restrictions on which
 
10 employees shall be prohibited from participating in or wagering
 
11 on any game or gaming operation subject to the jurisdiction of
 
12 the commission.  The code of ethics shall be separate from and in
 
13 addition to any standards of conduct set forth pursuant to
 
14 chapter 84.
 
15      §   -5 Staff.(a)  The executive director shall keep
 
16 records of all proceedings of the commission and shall preserve
 
17 all records, books, documents, and other papers belonging to the
 
18 commission or entrusted to its care relating to casino gaming.
 
19      (b)  The commission may employ any personnel, including
 
20 personnel with law enforcement authority, that may be necessary
 
21 to carry out its duties related to casino gaming.
 
22      §   -6 Powers of the commission.  The commission shall have
 
23 all powers necessary and proper to fully and effectively
 

 
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 1 supervise all casino gaming operations, including, but not
 
 2 limited to, the following:
 
 3      (1)  Administer, regulate, and enforce the system of casino
 
 4           gaming established by this chapter.  The commission's
 
 5           jurisdiction shall extend to every person, association,
 
 6           corporation, partnership, and trust involved in casino
 
 7           gaming operations in a county;
 
 8      (2)  To issue a license to operate a casino facility or
 
 9           casino facilities pursuant to this chapter;
 
10      (3)  To determine the types and numbers of occupational and
 
11           supplier's licenses to be permitted under this chapter;
 
12      (4)  To adopt standards for the licensing of all persons
 
13           under this chapter, to issue licenses, and to establish
 
14           and collect fees for these licenses;
 
15      (5)  To provide for the collection of all taxes imposed
 
16           pursuant to this chapter; and to collect, receive,
 
17           expend, and account for all revenues derived from
 
18           casino gaming within a county;
 
19      (6)  To enter the office, casinos, facilities, or other
 
20           places of business of a licensee, where evidence of the
 
21           compliance or noncompliance with this chapter is likely
 
22           to be found;
 
23      (7)  To investigate alleged violations of this chapter and
 

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

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

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

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

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

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

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

 
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 1      (1)  No more than one casino facility shall be permitted in
 
 2           the Hawaiian theme park gaming zone.  No more than one
 
 3           casino facility shall be permitted in the Waikiki
 
 4           gaming zone; and
 
 5      (2)  The commission shall award one license to operate both
 
 6           the casino facility in the Hawaiian theme park gaming
 
 7           zone and the casino facility in the Waikiki gaming
 
 8           zone.
 
 9      (b)  The commission shall issue a license to operate a
 
10 casino facility or casino facilities to the applicant who best
 
11 meets all of the following criteria:
 
12      (1)  The applicant is a Hawaii corporation organized under
 
13           the laws of Hawaii prior to January 1, 1999;
 
14      (2)  The applicant has submitted the best plan for the
 
15           casino facility to be located in the Waikiki gaming
 
16           zone which will have the most positive effect on
 
17           increasing tourism;
 
18      (3)  The applicant has shown economic resources of at least
 
19                      million dollars so as to be able to
 
20           demonstrate to the commission that the applicant has
 
21           the financial ability to construct the casino to be
 
22           located in the Waikiki gaming zone;
 
23      (4)  The applicant has submitted the best gaming facility
 

 
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 1           master development plan for the Hawaiian theme park and
 
 2           the casino facility to be located in the Hawaiian theme
 
 3           park zone so as to best facilitate entertainment and
 
 4           gaming at this location;
 
 5      (5)  The applicant has shown economic resources of at least
 
 6                      million dollars so as to be able to
 
 7           demonstrate to the commission that the applicant has
 
 8           the financial ability to construct the Hawaiian theme
 
 9           park and the casino facility to be located in the
 
10           Hawaiian theme park zone; and
 
11      (6)  The applicant has made significant contributions to the
 
12           development of gaming within the State by actively
 
13           promoting and significantly supporting state gaming
 
14           legislation.  Significant support of state legislation
 
15           shall include direct communication with Hawaii
 
16           residents who will be the ultimate beneficiaries of
 
17           increased tourism and income produced by the
 
18           introduction of limited gaming on the island of Oahu.
 
19           Direct communication with Hawaii residents shall
 
20           include the use of telephone, mail, mass media, and
 
21           direct contact.
 
22      (c)  In order to demonstrate financial ability pursuant to
 
23 subsection (b)(3) and (5), the applicant may include the economic
 

 
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 1 resources of the person or persons who will actually operate the
 
 2 casino facility or facilities.
 
 3      (d)  The commission may revoke the license if the licensee
 
 4 fails to begin regular casino gaming operations within twelve
 
 5 months of receipt of the commission's approval of the application
 
 6 or twelve months after a certificate of occupancy for the casino
 
 7 facility is first issued, whichever is later, upon a finding by
 
 8 the commission that license revocation is in the best interest of
 
 9 the State.
 
10      (e)  The commission shall establish a process to facilitate
 
11 and expedite the approval of the necessary licenses and permits.
 
12 The commission may establish its own procedures for the issuance
 
13 of liquor licenses for any holder of an operator's license under
 
14 this chapter; provided that all state laws and county ordinances
 
15 relating to liquor are met.
 
16      (f)  Nothing in this chapter shall be interpreted to
 
17 prohibit a licensed owner from operating a school for the
 
18 training of any occupational licensee.
 
19      §   -10  Bond of licensee.  Before a casino license is
 
20 issued, the licensee shall file a bond in the sum of $200,000
 
21 with the department.  The bond shall be used to guarantee that
 
22 the licensee faithfully makes the payments, keeps books and
 
23 records, makes reports, and conducts games of chance in
 

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

 
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 1 any licensee involved in the ownership or management of casino
 
 2 gaming operations.
 
 3      (c)  Casino gaming supplies and equipment shall not be
 
 4 distributed unless supplies and equipment conform to standards
 
 5 adopted by rules of the commission.
 
 6      (d)  A person shall be ineligible to receive a supplier's
 
 7 license if:
 
 8      (1)  The person has been convicted of a felony under the
 
 9           laws of this State, any other state, or the United
 
10           States;
 
11      (2)  The person has been convicted of any violation under
 
12           chapter III, chapter 712, or substantially similar laws
 
13           of another jurisdiction;
 
14      (3)  The person has submitted an application for a license
 
15           under this chapter, which contains false information;
 
16      (4)  The person is a member of the commission;
 
17      (5)  The person is one in which an individual defined in
 
18           paragraph (1), (2), (3), or (4) is an officer,
 
19           director, or management employee;
 
20      (6)  The person employs an individual defined in paragraph
 
21           (1), (2), (3), or (4) who participates in the
 
22           management or operation of casino gaming authorized
 
23           under this chapter; or
 

 
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                                     S.B. NO.           2199
                                                        
                                                        

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

 
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                                     S.B. NO.           2199
                                                        
                                                        

 
 1 facility owned by the holder of an operator's license for repair.
 
 2 Any supplier's equipment, devices, and supplies that are used by
 
 3 any person in an unauthorized gaming operation shall be forfeited
 
 4 to the county.
 
 5      §   -12  Occupational licenses.(a)  The commission may
 
 6 issue an occupational license to an applicant upon the payment of
 
 7 a nonrefundable application fee as set by the commission, upon a
 
 8 determination by the commission that the applicant is eligible
 
 9 for an occupational license, and upon payment of an annual
 
10 license fee in an amount set by the commission.  To be eligible
 
11 for an occupational license, an applicant shall:
 
12      (1)  Be at least twenty-one years of age if the applicant
 
13           will perform any function involved in casino gaming by
 
14           patrons.  Any applicant seeking an occupational license
 
15           for nongaming function shall be at least eighteen years
 
16           of age;
 
17      (2)  Not have been convicted of a felony offense, or a
 
18           similar statute of any other jurisdiction, or a crime
 
19           involving dishonesty or moral turpitude;
 
20      (3)  Have demonstrated a level of skill or knowledge that
 
21           the commission determines to be necessary in order to
 
22           operate casino games in a casino facility; and
 
23      (4)  Have met standards for the holding of an occupational
 

 
Page 26                                                    
                                     S.B. NO.           2199
                                                        
                                                        

 
 1           license as provided in rules adopted by the commission,
 
 2           including background inquiries and other requirements
 
 3           similar to those for an operator's license.
 
 4      (b)  Each application for an occupational license shall be
 
 5 on forms prescribed by the commission and shall contain all
 
 6 information required by the commission.  The applicant shall set
 
 7 forth in the application whether the applicant:
 
 8      (1)  Has been issued prior casino gaming related licenses in
 
 9           any jurisdiction;
 
10      (2)  Has been licensed in any other jurisdiction under any
 
11           other name, and, if so, the name and the applicant's
 
12           age at the time; or
 
13      (3)  Whether or not a permit or license issued to the
 
14           applicant in any other jurisdiction has been suspended,
 
15           restricted, or revoked and, if so, for what period for
 
16           time.
 
17      (c)  Each applicant shall submit with the application two
 
18 sets of the applicant's fingerprints.  The commission shall
 
19 charge each applicant a fee to defray the costs associated with
 
20 the search and classification of fingerprints obtained by the
 
21 commission with respect to the application.
 
22      (d)  The commission may refuse an occupational license to
 
23 any individual:
 

 
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                                     S.B. NO.           2199
                                                        
                                                        

 
 1      (1)  Who is unqualified to perform the duties required of
 
 2           the applicant;
 
 3      (2)  Who fails to disclose or states falsely any information
 
 4           called for in the application;
 
 5      (3)  Who has been found guilty of a violation of this
 
 6           chapter or whose prior casino gaming related license or
 
 7           application therefor has been suspended, restricted,
 
 8           revoked, or denied for just cause in any other
 
 9           jurisdiction; or
 
10      (4)  For any other just cause.
 
11      (e)  The commission may suspend, revoke, or restrict any
 
12 occupational licensee:
 
13      (1)  For any violation of this chapter;
 
14      (2)  For any violation of the rules of the commission;
 
15      (3)  For any cause which, if known to the commission, would
 
16           have disqualified the applicant from receiving a
 
17           license;
 
18      (4)  For default in the payment of any obligation or debt
 
19           due to the State or the county; or
 
20      (5)  For any other just cause.
 
21      (f)  Any individual who knowingly makes a false statement on
 
22 an application is guilty of a petty misdemeanor.
 
23      (g)  Any license issued pursuant to this section shall be
 

 
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                                     S.B. NO.           2199
                                                        
                                                        

 
 1 valid for a period of one year from the date of issuance and
 
 2 shall be renewable annually upon payment of the annual license
 
 3 fee and a determination by the commission that the licensee
 
 4 continues to meet all of the requirements of this chapter.
 
 5      (h)  Any training provided for occupational licenses may be
 
 6 conducted either in a licensed casino facility or at a school
 
 7 with which a licensed owner has entered into an agreement.
 
 8      §   -13  Annual report.  The commission shall file a written
 
 9 annual report with the governor and the legislature on or before
 
10 sixty days following the close of each fiscal year and any
 
11 additional reports that the governor or the legislature may
 
12 request.  The annual report shall include a statement of receipts
 
13 and disbursements related to casino gaming pursuant to this
 
14 chapter, actions taken by the commission, and any additional
 
15 information and recommendations that the commission may deem
 
16 valuable or which the governor or the legislature may request.
 
17      §   -14  Hearings by the commission.(a)  Upon order of the
 
18 commission, a commission member or hearings officer designated by
 
19 the commission may conduct any hearing provided for under this
 
20 chapter related to casino gaming, or by commission rule, and may
 
21 recommend findings and decisions to the commission.  The
 
22 commission member or hearings officer conducting the hearing
 
23 shall have all powers and rights granted to the commission in
 

 
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                                     S.B. NO.           2199
                                                        
                                                        

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

 
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                                     S.B. NO.           2199
                                                        
                                                        

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

 
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                                     S.B. NO.           2199
                                                        
                                                        

 
 1           patrons; and provided further that no person under age
 
 2           twenty-one shall be permitted to make a wager under
 
 3           this chapter;
 
 4      (9)  All tokens, chips, or electronic cards used to make
 
 5           wagers must be purchased from a licensed owner within
 
 6           the casino facility.  The tokens, chips, or electronic
 
 7           cards may be purchased by means of an agreement under
 
 8           which the owner extends credit to the patron.  The
 
 9           tokens, chips, or electronic cards may be used while
 
10           within a casino facility only for the purpose of making
 
11           wagers on authorized games; and
 
12     (10)  In addition to the above, casino gaming must be
 
13           conducted in accordance with all rules adopted by the
 
14           commission.
 
15      §   -16  Collection of amounts owing under credit
 
16 agreements.  Notwithstanding any other law to the contrary, a
 
17 licensee who extends credit to a casino gaming patron shall be
 
18 expressly authorized to institute a cause of action to collect
 
19 any amounts due and owning under the extension of credit, as well
 
20 as the operator's costs, expenses, and reasonable attorney's fees
 
21 incurred in collection.
 
22      §   -17  Wagering tax; rate; distribution.  A tax shall be
 
23 imposed on the gross receipts received from casino gaming
 

 
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                                     S.B. NO.           2199
                                                        
                                                        

 
 1 authorized under this chapter at the rate of ten per cent.
 
 2      §   -18  The state gaming fund; disposition of taxes
 
 3 collected.(a)  There is established within the state treasury
 
 4 the state gaming fund, into which shall be deposited all fees,
 
 5 taxes, and fines collected under this chapter, which shall be
 
 6 used for:
 
 7      (1)  Expenses incurred for the administration and
 
 8           enforcement of this chapter, not to exceed      per
 
 9           cent of all deposits per year; and
 
10      (2)  Services and programs to be administered by the
 
11           commission, not to exceed      per cent of all deposits
 
12           per year, for problem gamblers.
 
13      (b)  All remaining amounts shall be deposited quarterly into
 
14 the general fund.
 
15      §   -19  Legislative oversight.(a)  Beginning with the
 
16 fiscal year ending June 30, 2002, the auditor shall conduct a
 
17 biennial financial and social assessment of gaming operations.
 
18 In conducting the assessment, the auditor shall identify the
 
19 financial impacts of gaming on the state economy and the social
 
20 impacts of gaming upon the community.  The auditor shall submit a
 
21 report of findings and recommendations to the legislature prior
 
22 to the convening of the next regular session after the biennial
 
23 assessment is completed.
 

 
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                                     S.B. NO.           2199
                                                        
                                                        

 
 1      (b)  Beginning with the fiscal year ending June 30, 2001,
 
 2 the auditor shall conduct a program and financial audit of the
 
 3 Hawaii gaming control commission.  Thereafter, the auditor shall
 
 4 conduct a program and financial audit every four years after the
 
 5 first audit is completed."
 
 6      SECTION 3.  Section 36-27, Hawaii Revised Statutes, is
 
 7 amended to read as follows:
 
 8      "§36-27  Transfers from special funds for central service
 
 9 expenses.  [Except as provided in this section, and
 
10 notwithstanding any other law to the contrary, from] From time to
 
11 time, the director of finance, for the purpose of defraying the
 
12 prorated estimate of central service expenses of government in
 
13 relation to all special funds, except the:
 
14      (1)  Special summer school and intersession fund under
 
15           section 302A-1310;
 
16      (2)  School cafeteria special funds of the department of
 
17           education;
 
18      (3)  Special funds of the University of Hawaii;
 
19      (4)  State educational facilities improvement special fund;
 
20      (5)  Convention center capital and operations special fund
 
21           under section 206X-10.5;
 
22      (6)  Special funds established by section 206E-6;
 
23      (7)  Housing loan program revenue bond special fund;
 

 
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                                     S.B. NO.           2199
                                                        
                                                        

 
 1      (8)  Housing project bond special fund;
 
 2      (9)  Aloha Tower fund created by section 206J-17;
 
 3     (10)  Domestic violence prevention special fund under section
 
 4           321-1.3;
 
 5     (11)  Spouse and child abuse special account under section
 
 6           346-7.5;
 
 7     (12)  Spouse and child abuse special account under section
 
 8           601-3.6;
 
 9     (13)  Funds of the employees' retirement system created by
 
10           section 88-109;
 
11     (14)  Unemployment compensation fund established under
 
12           section 383-121;
 
13     (15)  Hawaii hurricane relief fund established under chapter
 
14           431P;
 
15     (16)  Hawaii health systems corporation special funds;
 
16     (17)  Boiler and elevator safety revolving fund established
 
17           under section 397-5.5;
 
18     (18)  Tourism special fund established under section 201B-11;
 
19     (19)  Department of commerce and consumer affairs' special
 
20           funds;
 
21     (20)  Compliance resolution fund established under section
 
22           26-9;
 
23     (21)  Universal service fund established under chapter 269;
 

 
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                                     S.B. NO.           2199
                                                        
                                                        

 
 1     (22)  Integrated tax information management systems special
 
 2           fund under section 231-3.2;
 
 3     (23)  Insurance regulation fund under section 431:2-215;
 
 4     (24)  Hawaii tobacco settlement special fund under section
 
 5           328L-2; [and]
 
 6     (25)  Emergency budget and reserve fund under section 328L-3;
 
 7           and
 
 8     (26)  The state gaming fund under section    -18;
 
 9 shall deduct five per cent of all receipts of all other special
 
10 funds, which deduction shall be transferred to the general fund
 
11 of the State and become general realizations of the State.  All
 
12 officers of the State and other persons having power to allocate
 
13 or disburse any special funds shall cooperate with the director
 
14 in effecting these transfers.  To determine the proper revenue
 
15 base upon which the central service assessment is to be
 
16 calculated, the director shall adopt rules pursuant to chapter 91
 
17 for the purpose of suspending or limiting the application of the
 
18 central service assessment of any fund.  No later than twenty
 
19 days prior to the convening of each regular session of the
 
20 legislature, the director shall report all central service
 
21 assessments made during the preceding fiscal year."
 
22      SECTION 4.  Section 36-30, Hawaii Revised Statutes, is
 
23 amended by amending subsection (a) to read as follows:
 

 
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                                     S.B. NO.           2199
                                                        
                                                        

 
 1      "(a)  Each special fund, except the:
 
 2      (1)  Transportation use special fund established by section
 
 3           261D-1;
 
 4      (2)  Special summer school and intersession fund under
 
 5           section 302A-1310;
 
 6      (3)  School cafeteria special funds of the department of
 
 7           education;
 
 8      (4)  Special funds of the University of Hawaii;
 
 9      (5)  State educational facilities improvement special fund;
 
10      (6)  Special funds established by section 206E-6;
 
11      (7)  Aloha Tower fund created by section 206J-17;
 
12      (8)  Domestic violence prevention special fund under section
 
13           321-1.3;
 
14      (9)  Spouse and child abuse special account under section
 
15           346-7.5;
 
16     (10)  Spouse and child abuse special account under section
 
17           601-3.6;
 
18     (11)  Funds of the employees' retirement system created by
 
19           section 88-109;
 
20     (12)  Unemployment compensation fund established under
 
21           section 383-121;
 
22     (13)  Hawaii hurricane relief fund established under chapter
 
23           431P;
 

 
Page 37                                                    
                                     S.B. NO.           2199
                                                        
                                                        

 
 1     (14)  Convention center capital and operations special fund
 
 2           established under section 206X-10.5;
 
 3     (15)  Hawaii health systems corporation special funds;
 
 4     (16)  Tourism special fund established under section 201B-11;
 
 5     (17)  Compliance resolution fund established under section
 
 6           26-9;
 
 7     (18)  Universal service fund established under chapter 269;
 
 8     (19)  Integrated tax information management systems special
 
 9           fund;
 
10     (20)  Insurance regulation fund under section 431:2-215;
 
11     (21)  Hawaii tobacco settlement special fund under section
 
12           328L-2; [and]
 
13     (22)  Emergency and budget reserve fund under section 328L-3;
 
14           and
 
15     (23)  State gaming fund under section    -18;
 
16 shall be responsible for its pro rata share of the administrative
 
17 expenses incurred by the department responsible for the
 
18 operations supported by the special fund concerned."
 
19      SECTION 5.  At the 2000 general election there shall be an
 
20 advisory referendum on the question of Hawaii's need for
 
21 legalized casino gambling.  The chief election officer of the
 
22 State shall submit the following question to the electorate with
 
23 instructions as follows:
 

 
Page 38                                                    
                                     S.B. NO.           2199
                                                        
                                                        

 
 1      1.   The proposal shall read:  "Shall the State of Hawaii
 
 2           allow legalized casino gambling?"
 
 3      The chief election officer shall publish a notice of the
 
 4 referendum proposal and descriptive information concerning casino
 
 5 gambling, in a newspaper of general circulation in the State at
 
 6 least thirty days before the date of the referendum.  The notice
 
 7 of the referendum shall also be available at all public libraries
 
 8 in the State and the office of the county clerk of each county.
 
 9      The ballot shall print the question and the question shall
 
10 have designated spaces to mark YES or NO.  The proposal shall be
 
11 considered approved only if approved by a majority of all the
 
12 votes tallied upon the question, this majority constituting more
 
13 than fifty per cent of the total votes cast at the election.
 
14      SECTION 6.  Statutory material to be repealed is bracketed.
 
15 New statutory material is underscored.
 
16      SECTION 7.  This Act shall take effect upon its approval;
 
17 provided that:
 
18      (1)  Sections 1 to 4 of this Act shall be inoperative until
 
19           such time as the chief elections officer of the State
 
20           certifies that the electorate has approved the proposal
 
21           in the advisory referendum provided for in section 5 of
 
22           this Act, at which time, sections 1 to 4 of this Act
 
23           shall become operative; and
 

 
Page 39                                                    
                                     S.B. NO.           2199
                                                        
                                                        

 
 1      (2)  This Act shall be repealed on January 1, 2001, if
 
 2           sections 1 to 4 of this Act have not become operative
 
 3           by that date.
 
 4 
 
 5                           INTRODUCED BY:  _______________________