REPORT TITLE:
Gaming


DESCRIPTION:
Creates gaming board and provides for regulation.

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                        
THE SENATE                              S.B. NO.           815
TWENTIETH LEGISLATURE, 1999                                
STATE OF HAWAII                                            
                                                             
________________________________________________________________
________________________________________________________________


                   A  BILL  FOR  AN  ACT

RELATING TO GAMING. 


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

 1      SECTION 1.  The Hawaii Revised Statutes is amended by adding
 
 2 a new chapter to be appropriately designated and to read as
 
 3 follows:
 
 4                            "CHAPTER   
 
 5                              GAMING
 
 6      § -1  Shipboard gaming authorized.  Any other law to the
 
 7 contrary notwithstanding, shipboard gaming operations and the
 
 8 system of wagering incorporated therein, as defined in this
 
 9 chapter, are authorized in any county with a population of
 
10 200,000 or more to the extent that they are carried out in
 
11 accordance with this chapter from the effective date of this
 
12 chapter until December 31, 2005.
 
13      Not more than three operator's licenses for gaming ships
 
14 shall be allowed under this section.
 
15      § -2  Definitions.  As used in this chapter unless the
 
16 context otherwise requires:
 
17      "Adjusted gross receipts" means the gross receipts less the
 
18 total of all cash value of items awarded as losses to wagerers
 
19 and those amounts paid to purchase annuities to fund losses paid
 

 
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 1 to wagerers over several years by independent financial
 
 2 institutions.  Deductible losses shall not include gifts, travel
 
 3 expenses, food, refreshments, lodging, or services provided to a
 
 4 person in an effort to encourage patronage at the gaming
 
 5 facility.
 
 6      "Board" means the Hawaii gaming board.
 
 7      "Casino facility" means a freestanding, land-based structure
 
 8 which may include structures with bars, restaurants, showrooms,
 
 9 theaters, or other facilities, but does not include any detached
 
10 structure used for hotel or other transient accommodation lodging
 
11 purposes.
 
12      "Casino gaming" means the operation of games under this
 
13 chapter, including but not limited to, baccarat, twenty-one,
 
14 poker, craps, slot machine, video game of chance, roulette wheel,
 
15 klondike table, pachinko, punch-board, faro layout, keno layout,
 
16 numbers ticket, push card, jar ticket, pull tab, or other game of
 
17 chance that is authorized by the board as a wagering device.
 
18      "County" means a county having a population of at least
 
19 200,000.
 
20      "Department" means the department of business, economic
 
21 development, and tourism.
 
22      "Director" means the director of business, economic
 
23 development, and tourism.
 

 
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                                     S.B. NO.           815
                                                        
                                                        

 
 1      "Dock" means the location where a gaming ship is moored.
 
 2      "Gaming facility" means a gaming ship or a casino facility.
 
 3      "Gaming facility master development plan" means the master
 
 4 plan for a casino facility and related amenities, including
 
 5 recreational facilities.
 
 6      "Gaming ship" means a ship or boat licensed under this
 
 7 chapter to provide shipboard gaming activity, with not less than
 
 8 eight hundred gaming stations.
 
 9      "Gross receipts" means the total of:
 
10      (1)  Cash received as winnings;
 
11      (2)  Cash received in payment for credit extended by a
 
12           licensee to a patron for purposes of gaming; and
 
13      (3)  Compensation received for conducting any game in which
 
14           the licensee is not party to a wager.
 
15 Gross receipts do not include counterfeit money or tokens, coins
 
16 of other countries which are received in gaming devices, cash
 
17 taken in fraudulent acts perpetrated against a licensee for which
 
18 the licensee is not reimbursed, and cash received as entry fees
 
19 for contests or tournaments in which patrons compete for prizes.
 
20      "Occupational license" means a license issued by the board
 
21 to a person or entity to perform an occupation which the board
 
22 has identified as requiring a license to engage in gaming in
 
23 Hawaii.
 

 
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                                     S.B. NO.           815
                                                        
                                                        

 
 1      "Operator's license" means a license to operate and maintain
 
 2 a gaming facility permitted under this chapter.    
 
 3      "Shipboard gaming" means the operation of games aboard a
 
 4 ship licensed under this chapter, including but not limited to,
 
 5 baccarat, twenty-one, poker, craps, slot machine, video game of
 
 6 chance, roulette wheel, klondike table, pachinko, punch-board,
 
 7 faro layout, keno layout, numbers ticket, push card, jar ticket,
 
 8 pull tab, or other game of chance that is authorized by the board
 
 9 as a wagering device.
 
10      "Supplier's license" means a license to furnish any
 
11 equipment, devices, or supplies to a licensed gaming operation
 
12 permitted under this chapter.
 
13      §   -3  Hawaii gaming board.(a)  There is established
 
14 within the department, for administrative purposes only, the
 
15 Hawaii gaming board which shall administer, regulate, and enforce
 
16 the system of gaming established by this chapter.  Its
 
17 jurisdiction shall extend to every person, association,
 
18 corporation, partnership, and trust involved in gaming operations
 
19 in the State.
 
20      (b)  The board shall consist of six members to be appointed
 
21 by the governor with the advice and consent of the senate under
 
22 section 26-34.  Of the six members, two shall be appointed from a
 
23 list submitted by the president of the senate, and two shall be
 

 
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                                     S.B. NO.           815
                                                        
                                                        

 
 1 appointed from a list submitted by the speaker of the house of
 
 2 representatives.  The members shall elect one from among them to
 
 3 be the chairperson.
 
 4      (c)  The term of office of the board members shall be four
 
 5 years, except that the terms of office of the board members
 
 6 initially appointed shall be staggered with three members (one
 
 7 each from the two selected from the senate president's list, the
 
 8 two selected from the house speaker's list, and the two selected
 
 9 solely by the governor) serving four-year terms and three members
 
10 serving two-year terms.  Vacancies in the board shall be filled
 
11 for the unexpired term in like manner as the original
 
12 appointments.
 
13      (d)  Each member of the board shall receive $300 for each
 
14 day the board meets and for each day the member conducts any
 
15 hearing pursuant to this chapter.  Each member shall also be
 
16 reimbursed for all actual and necessary expenses incurred in the
 
17 execution of official duties.
 
18      (e)  No person shall be appointed a member of the board or
 
19 continue to be a member of the board if:
 
20      (1)  The person or the person's spouse, child, or parent is
 
21           an official of, or a person financially interested in,
 
22           or has a financial relationship with, any gaming
 
23           operation subject to the jurisdiction of the board, or
 

 
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 1      (2)  The person is not of good moral character or has been
 
 2           convicted of, or is under indictment for, a felony
 
 3           under the laws of Hawaii or any other state, or the
 
 4           United States.
 
 5      (f)  No board member shall hold any other public office.
 
 6 Any member of the board may be removed by the governor for
 
 7 neglect of duty, misfeasance, malfeasance, or nonfeasance in
 
 8 office.
 
 9      §   -4  Board members; bond requirement.  Before assuming
 
10 the duties of office, each member of the board shall take an oath
 
11 that the member shall faithfully execute the duties of office
 
12 according to the laws of the State and shall file and maintain
 
13 with the director a bond in the sum of $25,000 with good and
 
14 sufficient sureties.  The cost of any bond for any member of the
 
15 board under this section shall be considered a part of the
 
16 necessary expenses of the board.
 
17      §   -5  Staff.(a)  The board shall appoint, without regard
 
18 to chapters 76 and 77, an administrator who shall perform any and
 
19 all duties that the board shall assign.  The salary of the
 
20 administrator shall be determined by the board.  The
 
21 administrator shall keep records of all proceedings of the board
 
22 and shall preserve all records, books, documents, and other
 
23 papers belonging to the board or entrusted to its care.  The
 

 
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 1 administrator shall devote full time to the duties of the office
 
 2 and shall not hold any other office or employment.
 
 3      (b)  The board may employ personnel, including personnel
 
 4 with law enforcement authority, that may be necessary to carry
 
 5 out its duties.  No person shall be employed by the board who is,
 
 6 or whose spouse, parent or child is, an official of, or has a
 
 7 financial interest in or financial relation with, any operator
 
 8 engaged in gaming operations within the State.  Any employee
 
 9 violating these prohibitions shall be subject to termination of
 
10 employment.
 
11      §   -6  Powers of the board.  The board shall have all
 
12 powers necessary and proper to fully and effectively supervise
 
13 all gaming operations, including, but not limited to the
 
14 following:
 
15      (1)  To determine the types and numbers of operator's
 
16           licenses to be permitted under this chapter; provided
 
17           that the total number of gaming ships operating under
 
18           licenses granted under this chapter shall not exceed
 
19           three;
 
20      (2)  To adopt standards for the licensing of all persons
 
21           under this chapter, to issue licenses, and to establish
 
22           and collect fees for such licenses;
 
23      (3)  To provide for the collection of all fees and taxes
 
24           imposed pursuant to this chapter;
 

 
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 1      (4)  To enter the office, gaming ships, facilities, or other
 
 2           places of business of a licensee, where evidence of the
 
 3           compliance or noncompliance with this chapter is likely
 
 4           to be found;
 
 5      (5)  To investigate alleged violations of this chapter and
 
 6           to take appropriate disciplinary action against a
 
 7           licensee or a holder of an occupational license for a
 
 8           violation, or institute appropriate legal action for
 
 9           enforcement, or both;
 
10      (6)  To be present through its inspectors and agents any
 
11           time gaming operations are conducted for the purpose of
 
12           certifying the revenue thereof, receiving complaints
 
13           from the public, and conducting such other
 
14           investigations into the conduct of the gaming and the
 
15           maintenance of the equipment as from time to time the
 
16           board may deem necessary and proper;
 
17      (7)  To require that the records, including financial or
 
18           other statements of any licensee under this chapter, be
 
19           kept in a manner prescribed by the board and that any
 
20           licensee involved in the ownership or management of
 
21           gaming operations submit to the board an annual balance
 
22           sheet and profit and loss statement, a list of the
 
23           stockholders or other persons having a ten per cent or
 

 
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                                     S.B. NO.           815
                                                        
                                                        

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

 
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                                     S.B. NO.           815
                                                        
                                                        

 
 1     (11)  To permit licensees of gaming operations to utilize a
 
 2           wagering system whereby gamers' money may be converted
 
 3           to tokens, electronic cards, or chips which shall be
 
 4           used only for wagering in the gaming facility;
 
 5     (12)  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 board rule or for
 
 8           engaging in a fraudulent practice;
 
 9     (13)  To impose and collect fines against licensees for each
 
10           violation of this chapter, any rules adopted by the
 
11           board, any order of the board, or any action which in
 
12           the board's discretion, is a detriment or impediment to
 
13           gaming operations;
 
14     (14)  To hire employees to gather information, conduct
 
15           investigations, and carry out any other tasks
 
16           contemplated under this chapter;
 
17     (15)  To establish minimum levels of insurance to be
 
18           maintained by licensees;
 
19     (16)  To delegate the execution of any of its powers for the
 
20           purpose of administering and enforcing this chapter and
 
21           rules adopted under this chapter;
 
22     (17)  To adopt necessary rules under chapter 91 to implement
 
23           this chapter; and
 

 
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                                     S.B. NO.           815
                                                        
                                                        

 
 1     (18)  To take any other action as may be reasonable or
 
 2           appropriate to enforce this chapter and rules adopted
 
 3           under this chapter.
 
 4      §   -7  Meetings of the board.  The board shall hold at
 
 5 least one meeting each quarter of the State's fiscal year.  In
 
 6 addition, special meetings may be called by the chairperson or
 
 7 any two board members upon seventy-two hours written notice to
 
 8 each member.  All board meetings shall be subject to chapter 92.
 
 9 Three members of the board shall constitute quorum, and a
 
10 majority vote of the members present and constituting a quorum
 
11 shall be required for any final determination by the board.  The
 
12 board shall keep a complete and accurate record of all its
 
13 meetings.
 
14      §   -8  Annual report.(a)  The board shall submit an
 
15 annual report to the governor and the legislature not less than
 
16 twenty days prior to the convening of each regular session of the
 
17 legislature.  The annual report shall include:
 
18      (1)  A statement of receipts and disbursements by the board;
 
19      (2)  Actions taken by the board;
 
20      (3)  Revenues collected from the taxes, fees, and fines
 
21           imposed under this chapter;
 
22      (4)  Amounts allocable to administrative and enforcement
 
23           costs; and
 

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

 
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                                     S.B. NO.           815
                                                        
                                                        

 
 1      §   -10  Disclosure of records.(a)  Notwithstanding any
 
 2 other law to the contrary, the board on written request from any
 
 3 person, shall provide information furnished by an applicant or
 
 4 licensee concerning the applicant or licensee, or the applicant's
 
 5 or licensee's products, services, or gaming enterprises, and
 
 6 business holdings, as follows:
 
 7      (1)  The name, business address, and business telephone
 
 8           number of any applicant or licensee;
 
 9      (2)  An identification of any applicant or licensee
 
10           including, if an applicant or licensee is not an
 
11           individual or partnership, the state of incorporation
 
12           or registration, the corporate officers, and the
 
13           identity of all shareholders or participants;
 
14      (3)  An identification of any business, including, if
 
15           applicable, the state of incorporation or registration,
 
16           in which an applicant or licensee or an applicant's or
 
17           licensee's spouse or children has an equity interest of
 
18           more than five per cent.  If an applicant or licensee
 
19           is a corporation, limited liability company,
 
20           partnership, or other business entity, the applicant or
 
21           licensee shall identify any other corporation,
 
22           partnership, or business entity in which it has an
 
23           equity interest of five per cent or more, including, if
 
24           applicable, the state of incorporation or registration;
 

 
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                                     S.B. NO.           815
                                                        
                                                        

 
 1      (4)  Whether an applicant or licensee has been indicted,
 
 2           convicted, pleaded guilty or nolo contendere, or
 
 3           forfeited bail concerning any criminal offense under
 
 4           the laws of any jurisdiction, either felony or
 
 5           misdemeanor (except for traffic violations), including
 
 6           the date, the name, and location of the court,
 
 7           arresting agency, and prosecuting agency, the case
 
 8           number, the offense, the disposition, and the location
 
 9           and length of incarceration;
 
10      (5)  A statement listing the names and titles of all public
 
11           officials or officers of any unit of government, and
 
12           relatives of public officials or officers who, directly
 
13           or indirectly, own any financial interest in, have any
 
14           beneficial interest in, are the creditors of or hold
 
15           any debt instrument issued by, or hold or have any
 
16           interest in any contractual or service relationship
 
17           with, an applicant or licensee;
 
18      (6)  Whether an applicant or licensee has made, directly or
 
19           indirectly, any political contribution, or any loans,
 
20           donations, or other payments, to any candidate or
 
21           office holder, within five years from the date of
 
22           filing the application, including the amount and the
 
23           method of payment;
 

 
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                                     S.B. NO.           815
                                                        
                                                        

 
 1      (7)  The name and business telephone number of any attorney
 
 2           representing an applicant or licensee in matters before
 
 3           the board;
 
 4      (8)  A description of any proposed or approved gaming
 
 5           operation, expected economic benefit to the community,
 
 6           anticipated or actual number of employees, statement
 
 7           from an applicant or licensee stating the applicant or
 
 8           licensee is in compliance with federal and state
 
 9           affirmative action guidelines, projected or actual
 
10           admissions, and projected or actual adjusted gross
 
11           gaming receipts; and
 
12      (9)  A description of the product or service to be supplied
 
13           by an applicant for a supplier's license.
 
14      (b)  Notwithstanding any provision of law to the contrary,
 
15 the board, on written request from any person, shall also provide
 
16 the following information:
 
17      (1)  The amount of the wagering tax and admission tax paid
 
18           daily to the State by the holder of an owner's license;
 
19      (2)  Whenever the board finds an applicant for an owner's
 
20           license unsuitable for licensing, a copy of the written
 
21           letter outlining the reasons for the denial; and
 
22      (3)  Whenever the board has refused to grant leave for an
 
23           applicant to withdraw an application, a copy of the
 
24           letter outlining the reasons for the refusal.
 

 
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                                     S.B. NO.           815
                                                        
                                                        

 
 1      (c)  Subject to the above provisions, the board shall not
 
 2 disclose any information which would be barred by:
 
 3      (1)  Chapter 92F; or
 
 4      (2)  The statutes, rules, regulations, or intergovernmental
 
 5           agreements of any jurisdiction.
 
 6      (d)  The board may assess fees for the copying of
 
 7 information in accordance with chapter 92F.
 
 8      §   -11  Application for operator's license.(a)  A
 
 9 qualified person may apply to the board for an operator's license
 
10 to conduct a gaming operation.  The application shall be made on
 
11 forms provided by the board and shall contain any information
 
12 that the board prescribes, including but not limited to:
 
13      (1)  The exact location of the gaming facility;
 
14      (2)  A gaming facility master development plan if the
 
15           facility has not been used or constructed for gaming
 
16           under this chapter;
 
17      (3)  Detailed information regarding the ownership and
 
18           management of the applicant; and
 
19      (4)  Detailed personal information regarding the applicant.
 
20 Information provided on the application shall be used as the
 
21 basis for a thorough background investigation, which the board
 
22 shall conduct with respect to each applicant.  An incomplete
 
23 application shall be cause for denial of a license by the board.
 
24      (b)  Each applicant shall disclose the identity of every
 
25 person, association, trust, limited liability company, or
 

 
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                                     S.B. NO.           815
                                                        
                                                        

 
 1 corporation having a greater than one per cent direct or indirect
 
 2 pecuniary interest in the gaming operation with respect to which
 
 3 the license is sought.  If the disclosed entity is a trust, the
 
 4 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      (c)  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 board, and the search and
 
11 classification of fingerprints obtained by the board with request
 
12 to the application.  If the costs of the investigation exceed
 
13 $50,000, the applicant shall pay the additional amount to the
 
14 board.  If the costs of the investigation are less than $50,000,
 
15 the applicant shall receive a refund of the remaining amount.
 
16 All information, records, interviews, reports, statements,
 
17 memoranda, or other data supplied to or used by the board in the
 
18 course of its review or investigation of an application for a
 
19 license shall be privileged, strictly confidential, and shall be
 
20 used only for the purpose of evaluating an applicant.  The
 
21 information, records, interviews, reports, statements, memoranda,
 
22 or other data shall not be admissible as evidence, nor
 
23 discoverable in any action of any kind in any court or before any
 

 
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                                     S.B. NO.           815
                                                        
                                                        

 
 1 tribunal, board, agency, or person, except for any action deemed
 
 2 necessary by the board.
 
 3      (d)  The licensed operator shall be the person primarily
 
 4 responsible for the gaming facility itself.  The applicant shall
 
 5 identify the gaming facility it intends to use and certify that
 
 6 the facility:
 
 7      (1)  Has the capacity of       persons; and
 
 8      (2)  Is accessible to persons with disabilities.
 
 9      (e)  A person who knowingly makes a false statement on an
 
10 application is guilty of a petty misdemeanor.
 
11      §   -12  Operator's licenses; term; fee.(a)  No person
 
12 shall operate and maintain a gaming facility in this State unless
 
13 the person has first obtained an operator's license from the
 
14 board pursuant to this section.  If the board finds that the
 
15 applicant meets the eligibility requirements, the board shall
 
16 issue an operator's license within ninety days upon payment by
 
17 the applicant of an annual fee of $25,000.  Licenses initially
 
18 issued for shipboard gaming shall be valid until December 31,
 
19 2005, as long as the board determines that the licensee continues
 
20 to meet all of the requirements of this chapter.
 
21      (b)  No person shall operate and maintain a casino facility
 
22 for casino gaming unless the person has first obtained an
 
23 operator's license from the board pursuant to this section.  An
 

 
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                                     S.B. NO.           815
                                                        
                                                        

 
 1 operator's license shall be valid only for the casino facility
 
 2 described in the license.
 
 3      If the casino facility was not used or constructed by a
 
 4 previous operator licensed under this chapter, the recipient of
 
 5 the operator's license shall be required to implement a gaming
 
 6 facility master development plan, which shall entail an
 
 7 expenditure of at least $          , including all development
 
 8 expenditures for construction of casino and related facilities
 
 9 and amenities and any other development infrastructure (including
 
10 on and off site development improvements), and expenditures for
 
11 any improvements exacted as a condition to any governmental
 
12 approval, action, or permit, but excluding the costs of
 
13 acquiring, subdividing, or rezoning land (other than land
 
14 required to satisfy governmental exactions) and prior development
 
15 expenditures for existing improvements to real property.  To
 
16 secure this commitment, the holder of an operator's license shall
 
17 file a financial guarantee bond in the sum of $              with
 
18 the department in favor of the county for which the operator's
 
19 license is issued.
 
20      The casino facility may be on the same parcel, contiguous
 
21 parcels, or noncontiguous parcels from the rest of the facilities
 
22 described in the gaming facility master development plan.
 
23 Transient accommodation lodging shall not be permitted within the
 
24 casino facility.
 

 
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                                     S.B. NO.           815
                                                        
                                                        

 
 1      An operator's license is issued to the operator and not to
 
 2 the casino facility.  The board may authorize a licensed operator
 
 3 to own and operate only one casino facility in any one county per
 
 4 operator's license.
 
 5      Not more than three operator's licenses for casino
 
 6 facilities shall be allowed in any county that has satisfied the
 
 7 requirements of section 46-  .
 
 8      (c)  The board shall establish a process to facilitate and
 
 9 expedite the approval of the necessary licenses and permits.
 
10      (d)  An applicant is ineligible to receive an owner's
 
11 license if:
 
12      (1)  The person has been convicted of a felony under the
 
13           laws of this State, any other state, or the United
 
14           States;
 
15      (2)  The person has been convicted of any violation under
 
16           part III, chapter 712, or substantially similar laws of
 
17           another jurisdiction;
 
18      (3)  The person has submitted an application for a license
 
19           under this chapter which contains false information;
 
20      (4)  The person is a member of the board;
 
21      (5)  A person described in paragraph (1), (2), (3), or (4)
 
22           is an officer, director, member, or managerial employee
 
23           of a firm, limited liability company, or corporation
 
24           applying for a license;
 

 
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                                     S.B. NO.           815
                                                        
                                                        

 
 1      (6)  The firm, limited liability company, or corporation
 
 2           employs a person described in paragraph (1), (2), (3),
 
 3           or (4) who participates in the management or operation
 
 4           of gaming operations authorized under this chapter; or
 
 5      (7)  A license of the person, firm, limited liability
 
 6           company, or corporation issued under this chapter, or a
 
 7           license to own or operate gaming facilities in any
 
 8           other jurisdiction, has been revoked.
 
 9      (e)  In determining whether to grant an operator's license
 
10 to an applicant, the board shall consider:
 
11      (1)  The character, reputation, experience, and financial
 
12           integrity of the applicants and of any other or
 
13           separate person that either:
 
14           (A)  Controls, directly or indirectly, the applicant,
 
15                or
 
16           (B)  Is controlled, directly or indirectly, by the
 
17                applicant or by a person who controls, directly or
 
18                indirectly, the applicant;
 
19      (2)  The facilities or proposed facilities for the conduct
 
20           of gaming;
 
21      (3)  The highest prospective total revenue to be derived by
 
22           the State from the conduct of gaming;
 
23      (4)  The financial ability of the applicant to purchase and
 
24           maintain adequate liability and casualty insurance;
 

 
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                                     S.B. NO.           815
                                                        
                                                        

 
 1      (5)  Whether the applicant has adequate capitalization to
 
 2           provide and maintain, for the duration of a license, a
 
 3           gaming operation; and
 
 4      (6)  The extent to which the applicant exceeds or meets
 
 5           other standards for the issuance of an operator's
 
 6           license which the board may adopt by rule.
 
 7      (f)  Each applicant shall submit with the application, on
 
 8 forms provided by the board, two sets of the applicant's
 
 9 fingerprints.
 
10      (g)  In the application for an operator's license for a
 
11 gaming ship, the applicant shall specify the dock at which the
 
12 gaming ship will be moored.
 
13      (h)  The board may revoke the operator's license for a
 
14 gaming ship if the licensee fails to begin regular shipboard
 
15 gaming operations within six months of receipt of the board's
 
16 approval of the application upon a finding by the board that
 
17 license revocation is in the best interest of the State.
 
18      (i)  Nothing in this chapter shall be interpreted to
 
19 prohibit a licensed owner from operating a school for the
 
20 training of any occupational licensee.
 
21      §   -13  Bond of licensee.  Before an operator's license is
 
22 issued, the licensee shall file a bond in the sum of $200,000
 
23 with the department.  The bond shall be used to guarantee that
 

 
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                                     S.B. NO.           815
                                                        
                                                        

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

 
Page 24                                                    
                                     S.B. NO.           815
                                                        
                                                        

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

 
Page 25                                                    
                                     S.B. NO.           815
                                                        
                                                        

 
 1      (7)  The license of the person, firm, limited liability
 
 2           company, or corporation issued under this chapter, or a
 
 3           license to own or operate gaming facilities in any
 
 4           other jurisdiction, has been revoked.
 
 5      (e)  A supplier shall:
 
 6      (1)  Furnish to the board a list of all equipment, devices,
 
 7           and supplies offered for sale or lease in connection
 
 8           with games authorized under this chapter;
 
 9      (2)  Keep books and records for the furnishing of equipment,
 
10           devices, and supplies to gaming operations separate and
 
11           distinct from any other business that the supplier
 
12           might operate;
 
13      (3)  File a quarterly return with the board listing all
 
14           sales and leases;
 
15      (4)  Permanently affix its name to all its equipment,
 
16           devices, and supplies for gaming operations; and
 
17      (5)  File an annual report listing the inventories of gaming
 
18           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 gaming equipment, devices, or supplies provided by
 
22 any licensed supplier may either be repaired in the gaming
 
23 facility or removed from the gaming facility to a facility owned
 

 
Page 26                                                    
                                     S.B. NO.           815
                                                        
                                                        

 
 1 by the holder of an operator's license for repair.  Any
 
 2 supplier's equipment, devices, and supplies which are used by any
 
 3 person in an unauthorized gaming operation shall be forfeited to
 
 4 the State.
 
 5      §   -15  Occupational licenses.(a)  The board may issue an
 
 6 occupational license to an applicant upon the payment of a
 
 7 nonrefundable application fee as set by the board, upon a
 
 8 determination by the board that the applicant is eligible for an
 
 9 occupational license, and upon payment of an annual license fee
 
10 in an amount set by the board.  To be eligible for an
 
11 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 gaming by
 
14           patrons.  Any applicant seeking an occupational license
 
15           for a nongaming function shall be at least eighteen
 
16           years 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 which
 
21           the board determines to be necessary in order to
 
22           operate gaming in a gaming facility; and
 
23      (4)  Have met standards for the holding of an occupational
 
24           license as provided in rules adopted by the board,
 

 
Page 27                                                    
                                     S.B. NO.           815
                                                        
                                                        

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

 
Page 28                                                    
                                     S.B. NO.           815
                                                        
                                                        

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

 
Page 29                                                    
                                     S.B. NO.           815
                                                        
                                                        

 
 1      (h)  Any training provided for occupational licensees may be
 
 2 conducted either in a licensed gaming facility or at a school
 
 3 with which a licensed operator has entered into as agreement.
 
 4      §   -16  Conduct of gaming.  Gaming may be conducted by
 
 5 licensed owners in a gaming facility, subject to the following
 
 6 standards:
 
 7      (1)  Minimum and maximum wagers on games shall be set by the
 
 8           licensee;
 
 9      (2)  Agents of the board may enter and inspect any gaming
 
10           facility at any time for the purpose of determining
 
11           compliance with this chapter;
 
12      (3)  Employees of the board shall have the right to be
 
13           present in any gaming facilities under the control of
 
14           the licensee;
 
15      (4)  Gaming equipment and supplies customarily used in
 
16           conducting gaming shall be purchased or leased only
 
17           from suppliers licensed under this chapter;
 
18      (5)  Persons licensed under this chapter shall permit no
 
19           form of wagering on games except as permitted by this
 
20           chapter;
 
21      (6)  Wagers may be received only from a person present in a
 
22           licensed gaming facility.  No person present in a
 
23           licensed gaming facility shall place or attempt to
 

 
Page 30                                                    
                                     S.B. NO.           815
                                                        
                                                        

 
 1           place a wager on behalf of another person who is not
 
 2           present in the gaming facility;
 
 3      (7)  Wagering shall not be conducted with money or other
 
 4           negotiable currency, except for wagering on slot
 
 5           machines;
 
 6      (8)  A person under age twenty-one shall not be permitted in
 
 7           an area of a gaming facility where gaming is being
 
 8           conducted, except for a person at least eighteen years
 
 9           of age who is an employee of the gaming operation.  No
 
10           employee under age twenty-one shall perform any
 
11           function involved in gaming by the patrons.  No person
 
12           under age twenty-one shall be permitted to make a wager
 
13           under this chapter;
 
14      (9)  All tokens, chips, or electronic cards used to make
 
15           wagers shall be purchased from a licensed operator in a
 
16           gaming facility.  The tokens, chips, or electronic
 
17           cards may be purchased by means of an agreement under
 
18           which the owner extends credit to the patron.  The
 
19           tokens, chips, or electronic cards may be used while in
 
20           the gaming facility only for the purpose of making
 
21           wagers on authorized games; and
 
22     (10)  In addition to the above, gaming must be conducted in
 
23           accordance with all rules adopted by the board.
 

 
Page 31                                                    
                                     S.B. NO.           815
                                                        
                                                        

 
 1      §   -17  Collection of amounts owing under credit
 
 2 agreements.  Notwithstanding any other law to the contrary, a
 
 3 licensed owner who extends credit to a gaming patron is expressly
 
 4 authorized to institute a cause of action to collect any amounts
 
 5 due and owing under the extension of credit, as well as the
 
 6 owner's costs, expenses, and reasonable attorney's fees incurred
 
 7 in collection.
 
 8      §   -18  Admission fee.(a)  Each licensed operator shall
 
 9 collect from each person admitted to gaming facilities authorized
 
10 under this chapter an admission fee at the rate of $      per
 
11 person admitted.  This admission fee is imposed upon the licensed
 
12 operator of the gaming facility:
 
13      (1)  If tickets are issued which are good for more than one
 
14           admission, the admission fee shall be paid for each
 
15           person using the ticket at the time of admission for
 
16           which the ticket is used;
 
17      (2)  If free passes or complimentary admission tickets are
 
18           issued, the licensee shall pay the same fee upon these
 
19           passes or complimentary tickets as if they were sold at
 
20           the regular and usual admission rate;
 
21      (3)  The operator's licensee may issue admission-free passes
 
22           to actual and necessary officials and employees of the
 
23           licensee or other persons actually working in the
 
24           gaming facility; and
 

 
Page 32                                                    
                                     S.B. NO.           815
                                                        
                                                        

 
 1      (4)  The number and issuance of admission-free passes are
 
 2           subject to the rules of the board, and a list of all
 
 3           persons to whom such passes are issued shall be filed
 
 4           with the board.
 
 5      (b)  The fee imposed under subsection (a) shall be collected
 
 6 by the board.  Fifty per cent of the fees collected shall be to
 
 7 non-profit organizations selected by the licensee, and the county
 
 8 in which the admission fee is imposed shall receive fifty per
 
 9 cent to be used for law enforcement programs.
 
10      (c)   The licensed operator shall pay the entire admission
 
11 fees collected to the board on a daily basis.  Failure to submit
 
12 either the payment within the specified time may result in
 
13 suspension or revocation of the operator's license.
 
14      §   -19  Wagering tax; rate; distribution.(a)  A tax shall
 
15 be imposed on the adjusted gross receipts received from gaming
 
16 authorized under this chapter at the rate of     per cent of
 
17 which the board shall retain one-half of one per cent, but not
 
18 less than $1,000,000, to cover the expenses of the board's
 
19 operations.  The State shall receive two-thirds of the remaining
 
20 balance of the tax, and the county in which the wagering tax is
 
21 imposed shall receive one-third.  The wagering tax imposed by
 
22 this section shall be in lieu of all other state taxes on gross
 
23 or adjusted gross receipts, except income taxes, including taxes
 
24 levied under chapters 237 and 239.
 

 
Page 33                                                    
                                     S.B. NO.           815
                                                        
                                                        

 
 1      (b)  The tax imposed by this section shall be paid by the
 
 2 licensed operator to the commission no less frequently than
 
 3 monthly by the fifteenth day of the following month.  If the
 
 4 amount of wagering tax required to be reported and paid pursuant
 
 5 to this section is later determined to be greater or less than
 
 6 the amount actually reported and paid by the licensee, the board
 
 7 shall:
 
 8      (1)  Assess and collect the additional wagering tax
 
 9           determined to be due, with interest thereon until paid;
 
10           or
 
11      (2)  Refund any overpayment, with interest thereon, to the
 
12           licensee.
 
13 Interest shall be computed, until paid, at the rate of one per
 
14 cent per month from the first day of the first month following
 
15 either the due date of the additional wagering tax or the date of
 
16 overpayment.
 
17      §   -20  Licenses; records; reports; supervision.(a)  A
 
18 licensed shall keep books and records so as to clearly show:
 
19      (1)  The daily number of admissions and the amount of
 
20           admission tax payable each day;
 
21      (2)  The total amount of gross receipts; and
 
22      (3)  The total amount of the adjusted gross receipts.
 

 
 
 
Page 34                                                    
                                     S.B. NO.           815
                                                        
                                                        

 
 1      (b)  The licensed operator shall furnish to the board
 
 2 reports and information that the board may require with respect
 
 3 to its activities on forms designed and supplied for that purpose
 
 4 by the board.
 
 5      (c)  The books and records kept by a licensed operator are
 
 6 public records and the examination, publication, and
 
 7 dissemination of the books and records shall be subject to
 
 8 chapter 92F.
 
 9      §   -21  Audit of licensee operations.  Within ninety days
 
10 after the end of each quarter of each fiscal year, the licensed
 
11 operator shall transmit to the board an audit of the financial
 
12 transactions and condition of the licensee's total operations.
 
13 All audits shall be conducted by certified public accountants
 
14 selected by the board.  Each certified public accountant shall be
 
15 registered and licensed to practice in this State.  The
 
16 compensation for each certified public accountant shall be paid
 
17 directly by the licensed operator to the certified public
 
18 accountant.
 
19      §   -22  Judicial review.  Jurisdiction and venue for the
 
20 judicial review of a final order of the board relating to
 
21 operator's, supplier's, or occupational licenses is vested in the
 
22 circuit court of the appropriate jurisdiction.  A petition for
 
23 judicial review of a final order of the board must filed within
 
24 thirty days after entry of the final order.
 

 
Page 35                                                    
                                     S.B. NO.           815
                                                        
                                                        

 
 1      §   -23  Offenses; penalty.(a)  A person is guilty of a
 
 2 misdemeanor for any of the following:
 
 3      (1)  Operating a gaming facility where wagering is used or
 
 4           to be used without a license issued by the board;
 
 5      (2)  Operating a gaming facility where wagering is permitted
 
 6           other than in the manner authorized under this chapter;
 
 7           or
 
 8      (3)  Permitting a person under twenty-one years of age to
 
 9           make a wager.
 
10      (b)  A person wagering or accepting a wager at any location
 
11 outside a gaming facility is subject to the penalties in sections
 
12 712-1220 to 712-1230.
 
13      (c)  A person commits a class C felony and, in addition,
 
14 shall be barred for life from gaming facilities under the
 
15 jurisdiction of the board, if the person does any of the
 
16 following:
 
17      (1)  Offers, promises, or gives anything of value or benefit
 
18           to a person who is connected with a gaming facility
 
19           operator including, but not limited to, an officer or
 
20           employee of a licensed operator or holder of an
 
21           occupational license pursuant to an agreement or
 
22           arrangement or with the intent that the promise or
 
23           thing of value or benefit will influence the actions of
 

 
Page 36                                                    
                                     S.B. NO.           815
                                                        
                                                        

 
 1           the person to whom the offer, promise, or gift was made
 
 2           in order to affect or attempt to affect the outcome of
 
 3           a gaming activity or to influence official action of a
 
 4           member or employees of the board, or employees in the
 
 5           department of the attorney general or state or county
 
 6           public safety officers who have direct authority over
 
 7           regulation or investigation of any licensee or
 
 8           applicant;
 
 9      (2)  Solicits or knowingly accepts or receives a promise of
 
10           anything of value or benefit while the person is
 
11           connected with a gaming facility including, but not
 
12           limited to, an officer or employee of a licensed
 
13           operator, or holder of an occupational license,
 
14           pursuant to an understanding or arrangement or with the
 
15           intent that the promise or thing of value or benefit
 
16           will influence the actions of the person to affect or
 
17           attempt to affect the outcome of a gaming activity, or
 
18           to influence official action of a member or employees
 
19           of the board, or employees in the department of the
 
20           attorney general or state or county public safety
 
21           officers who have direct authority over the regulation
 
22           or investigation of any licensee or applicant.
 
23      (3)  Uses or possesses with the intent to use a devise to
 
24           assist:
 

 
Page 37                                                    
                                     S.B. NO.           815
                                                        
                                                        

 
 1           (A)  In projecting the outcome of the game;
 
 2           (B)  In keeping track of the cards played;
 
 3           (C)  In analyzing the probability of the occurrence of
 
 4                an event relating to the gaming activity; and
 
 5           (D)  In analyzing the strategy for playing or betting
 
 6                to be used in the game except as permitted by the
 
 7                board;
 
 8      (4)  Cheats at a gaming activity;
 
 9      (5)  Manufacturers, sells, or distributes any cards, chips,
 
10           dice, game, or device which is intended to be used to
 
11           violate this chapter;
 
12      (6)  Alters or misrepresents the outcome of a gaming
 
13           activity on which wagers have been made after the
 
14           outcome is made sure but before it is revealed to the
 
15           players;
 
16      (7)  Places a bet after acquiring knowledge, not available
 
17           to all players, of the outcome of the gaming activity
 
18           that is subject to the bet, or to aid a person in
 
19           acquiring the knowledge for the purpose of placing a
 
20           bet contingent on that outcome;
 
21      (8)  Claims, collects, or takes, or attempts to claim,
 
22           collect, or take, money or anything of value in or from
 
23           the games, with intent to defraud, without having made
 

 
Page 38                                                    
                                     S.B. NO.           815
                                                        
                                                        

 
 1           a wager contingent on winning a gaming activity, or
 
 2           claims, collects, or takes an amount of money or thing
 
 3           of value of greater value than the amount won;
 
 4      (9)  Uses counterfeit chips or tokens in a gaming activity;
 
 5           or
 
 6     (10)  Possesses any key or device designed for the purpose of
 
 7           opening, entering, or affecting the operation of a
 
 8           gaming activity, drop box, or an electronic or
 
 9           mechanical device connected with the gaming activity or
 
10           for removing coins, tokens, chips, or other contents of
 
11           a gaming device.  This paragraph does not apply to a
 
12           gaming licensee or employee of a gaming licensee acting
 
13           in furtherance of the employee's employment.
 
14      (d)  The possession of more than one of the devices
 
15 described in subsection (c)(3), (5), or (10) raises a rebuttable
 
16 presumption that the possessor intended to use the device for
 
17 cheating.
 
18      §   -24  Prohibited activities; civil penalties.  Any person
 
19 who conducts a gaming operation without first obtaining a license
 
20 to do so, or who continues to conduct gaming operations after
 
21 revocation of the person's license, or any licensee who conducts
 
22 or allows to be conducted any unauthorized games in a gaming
 
23 facility where it is authorized to conduct its gaming operation,
 

 
Page 39                                                    
                                     S.B. NO.           815
                                                        
                                                        

 
 1 in addition to other penalties provided, shall be subject to a
 
 2 civil penalty equal to the amount of gross receipts derived from
 
 3 wagering on the games, whether unauthorized or authorized,
 
 4 conducted on that day as well as confiscation and forfeiture of
 
 5 all gaming equipment used in the conduct of unauthorized games.
 
 6      §   -25  Criminal history record information.  Whenever the
 
 7 board is authorized or required by law to consider some aspect of
 
 8 criminal history record information for the purpose of carrying
 
 9 out its statutory powers and responsibilities, upon request from
 
10 the board, the Hawaii criminal justice data center shall furnish
 
11 any information contained in its files.
 
12      §   -26  Exemption from federal laws prohibiting gaming
 
13 devices.  The transportation of gambling devices into a county in
 
14 which gaming is permitted and through other counties of the State
 
15 shall be exempt from the provisions of Title 15 United States
 
16 Code section 1172.  This exemption shall only apply to gambling
 
17 devices that have satisfied the registration, record keeping, and
 
18 labeling requirements of Title 15 United States Code section
 
19 1173-74 before entry into the State.
 
20      §   -27  Legislative oversight.(a)  The auditor shall
 
21 conduct a biennial financial and social assessment of gaming
 
22 operations.  In conducting the assessment, the auditor shall
 
23 identify the financial impacts of gaming on the state economy and
 

 
Page 40                                                    
                                     S.B. NO.           815
                                                        
                                                        

 
 1 the social impacts of gaming upon the community.  The auditor
 
 2 shall submit a report of findings and recommendations to the
 
 3 legislature prior to the convening of the next regular session
 
 4 after the biennial assessment is completed.
 
 5      (b)  Initially, the auditor shall conduct a program and
 
 6 financial audit of the Hawaii gaming board.  Thereafter, the
 
 7 auditor shall conduct a program and financial audit every four
 
 8 years after the first audit is completed."
 
 9      SECTION 2.  Chapter 46, Hawaii Revised Statutes, is amended
 
10 by adding a new section to be appropriately designated and to
 
11 read as follows:
 
12      "§46-     Gaming in counties; conditions.  Any other law to
 
13 the contrary notwithstanding, upon approval of a majority of
 
14 voters of a county defined in section   -2 voting in the next
 
15 general election or in a special election after the effective
 
16 date of Act   , Session Laws of Hawaii 1999, casino gaming as
 
17 authorized by chapter    shall operate and apply in that county."
 
18      SECTION 3.  Chapter 712, Hawaii Revised Statutes, is amended
 
19 by adding a new section to part III to be appropriately
 
20 designated and to read as follows:
 
21      "§712-     Casino gaming; exempted.  This part shall not
 
22 apply to gaming as authorized by chapter    ."
 
23      SECTION 4.  Section 237-24, Hawaii Revised Statutes, is
 
24 amended to read as follows:
 

 
Page 41                                                    
                                     S.B. NO.           815
                                                        
                                                        

 
 1      "§237-24  Amounts not taxable.  This chapter shall not apply
 
 2 to the following amounts:
 
 3      (1)  Amounts received under life insurance policies and
 
 4           contracts paid by reason of the death of the insured;
 
 5      (2)  Amounts received (other than amounts paid by reason of
 
 6           death of the insured) under life insurance, endowment,
 
 7           or annuity contracts, either during the term or at
 
 8           maturity or upon surrender of the contract;
 
 9      (3)  Amounts received under any accident insurance or health
 
10           insurance policy or contract or under workers'
 
11           compensation acts or employers' liability acts, as
 
12           compensation for personal injuries, death, or sickness,
 
13           including also the amount of any damages or other
 
14           compensation received, whether as a result of action or
 
15           by private agreement between the parties on account of
 
16           the personal injuries, death, or sickness;
 
17      (4)  The value of all property of every kind and sort
 
18           acquired by gift, bequest, or devise, and the value of
 
19           all property acquired by descent or inheritance;
 
20      (5)  Amounts received by any person as compensatory damages
 
21           for any tort injury to the person, or to the person's
 
22           character reputation, or received as compensatory
 
23           damages for any tort injury to or destruction of
 

 
Page 42                                                    
                                     S.B. NO.           815
                                                        
                                                        

 
 1           property, whether as the result of action or by private
 
 2           agreement between the parties (provided that amounts
 
 3           received as punitive damages for tort injury or breach
 
 4           of contract injury shall be included in gross income);
 
 5      (6)  Amounts received as salaries or wages for services
 
 6           rendered by an employee to an employer;
 
 7      (7)  Amounts received as alimony and other similar payments
 
 8           and settlements;
 
 9      (8)  Amounts collected by distributors as fuel taxes on
 
10           "liquid fuel" imposed by chapter 243, and the amounts
 
11           collected by such distributors as a fuel tax imposed by
 
12           any Act of the Congress of the United States;
 
13      (9)  Taxes on liquor imposed by chapter 244D on dealers
 
14           holding permits under that chapter;
 
15     (10)  The amounts of taxes on cigarettes and tobacco products
 
16           imposed by chapter 245 on wholesalers or dealers
 
17           holding licenses under that chapter and selling the
 
18           products at wholesale;
 
19     (11)  Federal excise taxes imposed on articles sold at retail
 
20           and collected from the purchasers thereof and paid to
 
21           the federal government by the retailer;
 
22     (12)  The amounts of federal taxes under chapter 37 of the
 
23           Internal Revenue Code, or similar federal taxes,
 

 
Page 43                                                    
                                     S.B. NO.           815
                                                        
                                                        

 
 1           imposed on sugar manufactured in the State, paid by the
 
 2           manufacturer to the federal government;
 
 3     (13)  An amount up to, but not in excess of, $2,000 a year of
 
 4           gross income received by any blind, deaf, or totally
 
 5           disabled person engaging, or continuing, in any
 
 6           business, trade, activity, occupation, or calling
 
 7           within the State;
 
 8     (14)  Amounts received by a producer of sugarcane from the
 
 9           manufacturer to whom the producer sells the sugarcane,
 
10           where:
 
11           (A)  The producer is an independent cane farmer, so
 
12                classed by the Secretary of Agriculture under the
 
13                Sugar Act of 1948 (61 Stat. 922, Chapter 519) as
 
14                the Act may be amended or supplemented;
 
15           (B)  The value or gross proceeds of sale of the sugar,
 
16                and other products manufactured from the
 
17                sugarcane, is included in the measure of the tax
 
18                levied on the manufacturer under section 237-13(1)
 
19                or 237-13(2);
 
20           (C)  The producer's gross proceeds of sales are
 
21                dependent upon the actual value of the products
 
22                manufactured therefrom or the average value of all
 
23                similar products manufactured by the manufacturer;
 
24                and
 

 
Page 44                                                    
                                     S.B. NO.           815
                                                        
                                                        

 
 1           (D)  The producer's gross proceeds of sales are reduced
 
 2                by reason of the tax on the value or sale of the
 
 3                manufactured products;
 
 4     (15)  Money paid by the State or eleemosynary child-placing
 
 5           organizations to foster parents for their care of
 
 6           children in foster homes; [and]
 
 7     (16)  Amounts received by a cooperative housing corporation
 
 8           from its shareholders in reimbursement of funds paid by
 
 9           such corporation for lease rental, real property taxes,
 
10           and other expenses of operating and maintaining the
 
11           cooperative land and improvements; provided that such a
 
12           cooperative corporation is a corporation:
 
13           (A)  Having one and only one class of stock
 
14                outstanding;
 
15           (B)  Each of the stockholders of which is entitled
 
16                solely by reason of the stockholder's ownership of
 
17                stock in the corporation, to occupy for dwelling
 
18                purposes a house, or an apartment in a building
 
19                owned or leased by the corporation; and
 
20           (C)  No stockholder of which is entitled (either
 
21                conditionally or unconditionally) to receive any
 
22                distribution not out of earnings and profits of
 
23                the corporation except in a complete or partial
 
24                liquidation of the corporation[.]; and
 

 
Page 45                                                    
                                     S.B. NO.           815
                                                        
                                                        

 
 1     (17)  Amounts received as gross receipts from gaming.  The
 
 2           term "gross receipts" shall have the meaning as defined
 
 3           in section    -2."
 
 4      SECTION 5.  Statutory material to be repealed is bracketed.
 
 5 New statutory material is underscored.
 
 6      SECTION 6.  This Act shall take effect upon its approval
 
 7 provided that the provisions of section 1 of this Act, as they
 
 8 apply to casino gaming, shall not be operative or applicable in a
 
 9 particular county unless a majority of voters of that county vote
 
10 to approve casino gaming at the next general election or in a
 
11 special election held after the effective date of this Act,
 
12 pursuant to section 2 of this Act.  An election on whether the
 
13 provisions of section 1 of this Act, as they apply to casino
 
14 gaming, shall be operative and applicable in a particular county
 
15 shall take place in all counties defined in section 1 of this Act
 
16 at the next general election or in a special election held after
 
17 the effective date of this Act.
 
18      SECTION 7.  This Act shall be repealed on December 31, 2005,
 
19 if all counties defined in section 1 of this Act fail to approve
 
20 casino gaming under sections 2 and 6 of this Act as of that date.
 
21 
 
22                           INTRODUCED BY:  _______________________