REPORT TITLE:
Shipboard Gaming


DESCRIPTION:
Authorizes shipboard gaming on vessels in state waters.
Establishes the Hawaii gaming board.  Establishes the state
gaming fund, the education special fund, and the gaming addiction
interdiction and education special fund.  (HB2904 HD1)

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                        2904
HOUSE OF REPRESENTATIVES                H.B. NO.           H.D. 1
TWENTIETH LEGISLATURE, 2000                                
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.  Tourism is still the number one industry in
 
 2 Hawaii.  There is no other industry that can readily match its
 
 3 capacity to generate continuing revenue.  But Hawaii's struggle
 
 4 in recent years to remain competitive with other "sun and sand"
 
 5 resort destinations has challenged the legislature to look beyond
 
 6 traditional means to attract mainland and global visitors.  With
 
 7 the new convention facility a reality, it is imperative that
 
 8 Hawaii aggressively compete in the world market.
 
 9      To remain competitive in the international and national
 
10 market place, Hawaii must offer some type of gaming
 
11 entertainment.  Shipboard gaming would create a viable and unique
 
12 visitor experience, while providing thousands of local jobs.  In
 
13 addition, recent studies have shown that shipboard gaming would
 
14 generate hundreds of millions of dollars, thereby expanding the
 
15 State's economy.
 
16      To alleviate concerns that are associated with gaming, it is
 
17 the intent of the legislature that gaming in Hawaii be conducted
 
18 in a strictly controlled environment, subject to stringent
 
19 safeguards.  This Act provides for such safeguards as:
 

 
Page 2                                                     2904
                                     H.B. NO.           H.D. 1
                                                        
                                                        

 
 1      (1)  Providing stringent licensing and eligibility
 
 2           requirements;
 
 3      (2)  Making licensees subject to bonding requirements with
 
 4           the department of business, economic development, and
 
 5           tourism;
 
 6      (3)  Establishing civil and criminal penalties, including
 
 7           forfeiture, for gaming violations;
 
 8      (4)  Stipulating that the books and records of licensed
 
 9           owners are under the purview of the Uniform Information
 
10           Practices Act; and
 
11      (5)  Making shipboard gaming operations subject to
 
12           legislative oversight.
 
13      In providing for the broader economic needs of the State
 
14 through this Act, the legislature finds that the State must also
 
15 prepare for Hawaii's economic future.  A strong, viable economy,
 
16 characterized by diversity, growth, and stability, requires an
 
17 educated workforce.  The legislature further finds that shipboard
 
18 gaming offers a well-timed opportunity to address the educational
 
19 needs of Hawaii's people.  While this Act will create new jobs in
 
20 the immediate future, the legislature believes that the moneys
 
21 generated by this new economic activity should be earmarked to
 
22 educate and prepare Hawaii's children for the future.  Under this
 
23 Act, moneys from gaming will be used to provide a stable source
 
24 of funding for the following educational purposes:
 

 
Page 3                                                     2904
                                     H.B. NO.           H.D. 1
                                                        
                                                        

 
 1      (1)  Support capital improvements and enhancements for
 
 2           educational purposes and programs;
 
 3      (2)  Provide free voluntary pre-kindergarten for four-year-
 
 4           olds;
 
 5      (3)  Provide helping outstanding pupils education (HOPE)
 
 6           scholarships to students who maintain a 3.0 grade point
 
 7           so that they may obtain a free college education in the
 
 8           University of Hawaii system;
 
 9      (4)  Provide teacher HOPE scholarships to teachers to obtain
 
10           advanced degrees in critical fields of study; and
 
11      (5)  Provide increased access to computer and
 
12           telecommunication technology so that students will have
 
13           hands-on experience with computer learning programs.
 
14      The legislature is also cognizant of the social problems
 
15 that can be generated by gaming activities and believes that
 
16 funds generated by gaming should also be provided to those who
 
17 may need counseling and other assistance.  Under this Act, a
 
18 program to assist people with gaming problems will be established
 
19 and funded from moneys from gaming activities.
 
20      While gaming in and of itself is not the panacea for
 
21 Hawaii's economic problems, the legislature believes that
 
22 shipboard gaming will provide Hawaii's people with jobs, generate
 
23 much-needed resources to improve the educational quality of
 
24 Hawaii's schools, and infuse moneys into the state economy.
 

 
Page 4                                                     2904
                                     H.B. NO.           H.D. 1
                                                        
                                                        

 
 1      The purpose of this Act is to enhance Hawaii's economic
 
 2 opportunities through:
 
 3      (1)  Creation of new jobs by establishing a strictly
 
 4           regulated framework for the conduct of legal shipboard
 
 5           gaming in Hawaii; and
 
 6      (2)  Preparation for future economic activities by
 
 7           earmarking almost all of the funds generated from
 
 8           shipboard gaming for educational purposes.
 
 9      SECTION 2.  The Hawaii Revised Statutes is amended by adding
 
10 a new chapter to be appropriately designated and to read as
 
11 follows:
 
12                             "CHAPTER
 
13                         SHIPBOARD GAMING
 
14                    PART I.  GENERAL PROVISIONS
 
15         -1  Legislative intent.  This chapter is intended to
 
16 benefit the people of the State of Hawaii by creating a new
 
17 revenue source, shipboard gaming, that will enhance investment,
 
18 development, and tourism in Hawaii.  As shipboard gaming can be
 
19 successful only if public confidence and trust in the credibility
 
20 and integrity of the gaming operations and the regulatory process
 
21 are maintained, this chapter strictly regulates the facilities,
 
22 persons, associations, and practices related to gaming
 
23 operations.
 

 
Page 5                                                     2904
                                     H.B. NO.           H.D. 1
                                                        
                                                        

 
 1         -2  Shipboard gaming authorized.(a)  Shipboard gaming
 
 2 operations and the system of wagering incorporated therein, as
 
 3 defined in this chapter, are authorized to the extent that they
 
 4 are carried out in accordance with this chapter.
 
 5      (b)  Shipboard gaming may be conducted upon any territorial
 
 6 and archipelagic waters within the State.
 
 7         -3  Definitions.  As used in this chapter unless the
 
 8 context otherwise requires:
 
 9      "Adjusted gross receipts" means the gross receipts less
 
10 winnings paid to wagerers.
 
11      "Board" means the Hawaii gaming board.
 
12      "Department" means the department of business, economic
 
13 development, and tourism.
 
14      "Director" means the director of business, economic
 
15 development, and tourism.
 
16      "Dock" means the location where a gaming ship moors for the
 
17 purpose of embarking passengers for and disembarking passengers
 
18 from a gaming excursion.
 
19      "Gaming excursion" means an outing during which gaming may
 
20 be operated on a ship licensed under this chapter.
 
21      "Gaming ship" means a ship or boat that is licensed under
 
22 this chapter of sufficient size to safely, in accordance with
 

 
 
 
Page 6                                                     2904
                                     H.B. NO.           H.D. 1
                                                        
                                                        

 
 1 state, federal, and international law, accommodate no fewer than
 
 2 one hundred persons, to provide gaming activity within the
 
 3 territorial and archipelagic waters of the State.
 
 4      "Gross receipts" means the total amount of money wagered or
 
 5 exchanged for the purchase of chips, tokens, or electronic cards
 
 6 by shipboard gaming patrons.
 
 7      "Occupational license" means a license issued by the board
 
 8 to a person or entity to perform an occupation that the board has
 
 9 identified as requiring a license to engage in shipboard gaming.
 
10      "Shipboard gaming" means the operation of games aboard a
 
11 ship licensed under this chapter, including but not limited to
 
12 baccarat, twenty-one, poker, craps, slot machine, video game of
 
13 chance, roulette wheel, klondike table, punch-board, faro layout,
 
14 keno layout, numbers ticket, push card, jar ticket, pull tab, or
 
15 other game of chance that is authorized by the board as a
 
16 wagering device.
 
17         -4  Conduct of gaming.  Gaming may be conducted by
 
18 licensed owners aboard gaming ships, subject to the following
 
19 standards:
 
20      (1)  Gaming shall be permitted after a vessel departs and
 
21           gaming may continue during subsequent docking and
 
22           reboarding;
 

 
 
 
Page 7                                                     2904
                                     H.B. NO.           H.D. 1
                                                        
                                                        

 
 1      (2)  Gaming excursions shall not exceed five hours for a
 
 2           round trip; provided that the board, by rule, may
 
 3           provide for exceptions for inter-island cruises;
 
 4      (3)  Minimum and maximum wagers on games shall be set by the
 
 5           licensee;
 
 6      (4)  Agents of the board may board and inspect any gaming
 
 7           ship at any time for the purpose of determining
 
 8           compliance with this chapter.  Every gaming ship, if
 
 9           under way and being hailed by a law enforcement officer
 
10           or agent of the board, shall stop immediately and lay
 
11           to;
 
12      (5)  Employees of the board shall have the right to be
 
13           present on the gaming ship or on adjacent facilities
 
14           under the control of the licensee;
 
15      (6)  Gaming equipment and supplies customarily used in
 
16           conducting shipboard gaming shall be purchased or
 
17           leased only from suppliers licensed under this chapter;
 
18      (7)  Persons licensed under this chapter shall permit no
 
19           form of wagering on games except as permitted by this
 
20           chapter;
 
21      (8)  Wagers may be received only from a person present on a
 
22           licensed gaming ship.  No person present on a licensed
 

 
 
 
Page 8                                                     2904
                                     H.B. NO.           H.D. 1
                                                        
                                                        

 
 1           gaming ship shall place or attempt to place a wager on
 
 2           behalf of another person who is not present on the
 
 3           gaming ship;
 
 4      (9)  Wagering shall not be conducted with money or other
 
 5           negotiable currency, except for wagering on slot
 
 6           machines;
 
 7     (10)  A person under age twenty-one shall not be permitted on
 
 8           an area of a gaming ship where gaming is being
 
 9           conducted, except for a person at least eighteen years
 
10           of age who is an employee of the shipboard gaming
 
11           operation.  No employee under age twenty-one shall
 
12           perform any function involved in gaming by the patrons.
 
13           No person under age twenty-one shall be permitted to
 
14           make a wager under this chapter;
 
15     (11)  Gaming excursions shall be permitted only when the
 
16           territorial and archipelagic waters for which the ship
 
17           is licensed are navigable as determined by the board in
 
18           consultation with the U.S. Army Corps of Engineers or
 
19           the U.S. Coast Guard, as appropriate;
 
20     (12)  All tokens, chips, or electronic cards used to make
 
21           wagers shall be purchased from a licensed owner either
 
22           aboard a gaming ship or at an onshore facility that has
 
23           been approved by the board and that is located where
 

 
Page 9                                                     2904
                                     H.B. NO.           H.D. 1
                                                        
                                                        

 
 1           the gaming ship docks.  The tokens, chips, or
 
 2           electronic cards may be purchased by means of an
 
 3           agreement under which the owner extends credit to the
 
 4           patron.  The tokens, chips, or electronic cards may be
 
 5           used while aboard the gaming ship only for the purpose
 
 6           of making wagers on authorized games; and
 
 7     (13)  Gaming shall be conducted in accordance with all rules
 
 8           adopted by the board.
 
 9                     PART II.  ADMINISTRATION
 
10         -5  Hawaii gaming board.  (a)  There is established
 
11 within the department, for administrative purposes only, the
 
12 Hawaii gaming board that shall administer, regulate, and enforce
 
13 the system of shipboard gaming established by this chapter.  Its
 
14 jurisdiction shall extend to every person, association,
 
15 corporation, partnership, and trust involved in shipboard gaming
 
16 operations in the State.
 
17      (b)  The board shall consist of five members to be appointed
 
18 by the governor with the advice and consent of the senate
 
19 pursuant to 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.  The
 
23 members shall elect one from among them to be the chairperson.
 

 
Page 10                                                    2904
                                     H.B. NO.           H.D. 1
                                                        
                                                        

 
 1      (c)  The term of office of a board member shall be four
 
 2 years.  Vacancies in the board shall be filled for the unexpired
 
 3 term in like manner as the original appointments.
 
 4      (d)  Each member of the board shall receive $300 for each
 
 5 day the board meets and for each day the member conducts any
 
 6 hearing pursuant to this chapter.  Each member shall also be
 
 7 reimbursed for all actual and necessary expenses incurred in the
 
 8 execution of official duties.
 
 9      (e)  No person shall be a member of the board if:
 
10      (1)  The person or the person's spouse, child, or parent is,
 
11           an official of, or a person financially interested in,
 
12           or has a financial relationship with, any gaming
 
13           operation subject to the jurisdiction of the board; or
 
14      (2)  The person is not of good moral character or has been
 
15           convicted of, or is under indictment for, a felony
 
16           under the laws of Hawaii or any other state, or the
 
17           United States.
 
18      (f)  No board member shall hold any other public office.
 
19 The governor shall remove any member of the board for neglect of
 
20 duty, misfeasance, malfeasance, or nonfeasance in office.
 
21         -6  Board members; bond requirement.  Before assuming
 
22 the duties of office, each member of the board shall take an oath
 
23 that the member shall faithfully execute the duties of office
 

 
Page 11                                                    2904
                                     H.B. NO.           H.D. 1
                                                        
                                                        

 
 1 according to the laws of the State and shall file and maintain
 
 2 with the director a bond in the sum of $25,000 with good and
 
 3 sufficient sureties.  The cost of any bond for any member of the
 
 4 board under this section shall be considered a part of the
 
 5 necessary expenses of the board.
 
 6         -7  Staff.(a)  The board shall appoint, without regard
 
 7 to chapters 76 and 77, an administrator who shall perform any and
 
 8 all duties that the board shall assign.  The salary of the
 
 9 administrator shall be determined by the board.  The
 
10 administrator shall keep records of all proceedings of the board
 
11 and shall preserve all records, books, documents, and other
 
12 papers belonging to the board or entrusted to its care.  The
 
13 administrator shall devote full time to the duties of the office
 
14 and shall not hold any other office or employment.
 
15      (b)  The board may employ personnel, including personnel
 
16 with law enforcement authority, as may be necessary to carry out
 
17 its duties.  No person shall be employed by the board who is, or
 
18 whose spouse, parent, or child is, an official of, or has a
 
19 financial interest in or financial relationship with, any
 
20 operator engaged in gaming operations within this State.  The
 
21 employment of any employee violating these prohibitions shall be
 
22 terminated.
 

 
 
 
Page 12                                                    2904
                                     H.B. NO.           H.D. 1
                                                        
                                                        

 
 1         -8  Powers of the board.  The board shall have all
 
 2 powers necessary and proper to fully and effectively supervise
 
 3 all shipboard gaming operations, including but not limited to the
 
 4 following:
 
 5      (1)  To determine the types and numbers of shipboard gaming
 
 6           licenses to be permitted and the types and numbers of
 
 7           ships a licensee may own under this chapter; provided
 
 8           that the total number of ships operating under licenses
 
 9           granted pursuant to this chapter shall not exceed four;
 
10      (2)  To adopt standards for the licensing of all persons to
 
11           issue licenses, and to establish and collect fees for
 
12           such licenses;
 
13      (3)  To provide for the collection of all fees and taxes
 
14           imposed pursuant to this chapter;
 
15      (4)  To enter the office, gaming ships, facilities, or other
 
16           places of business of a licensee, where evidence of the
 
17           compliance or noncompliance with this chapter is likely
 
18           to be found;
 
19      (5)  To investigate alleged violations of this chapter and
 
20           to take appropriate disciplinary action against a
 
21           licensee or a holder of an occupational license for a
 
22           violation, or institute appropriate legal action for
 
23           enforcement, or both;
 

 
Page 13                                                    2904
                                     H.B. NO.           H.D. 1
                                                        
                                                        

 
 1      (6)  To be present, through its inspectors and agents, any
 
 2           time gaming operations are conducted on any shipboard
 
 3           for the purpose of certifying the revenue thereof,
 
 4           receiving complaints from the public, and conducting
 
 5           other investigations into the conduct of the shipboard
 
 6           gaming and the maintenance of the equipment as from
 
 7           time to time the board may deem necessary and proper;
 
 8      (7)  To adopt appropriate standards for all gaming ships and
 
 9           facilities, as well as for electronic or mechanical
 
10           gaming devices;
 
11      (8)  To require that the records, including financial or
 
12           other statements of any licensee, be kept in a manner
 
13           as prescribed by the board and that any licensee
 
14           involved in the ownership or management of gaming
 
15           operations submit to the board:
 
16           (A)  An annual balance sheet and profit and loss
 
17                statement;
 
18           (B)  A list of the stockholders or other persons having
 
19                a ten per cent or greater beneficial interest in
 
20                the gaming activities of each licensee; and
 
21           (C)  Any other information the board deems necessary to
 
22                effectively administer this chapter;
 

 
 
 
Page 14                                                    2904
                                     H.B. NO.           H.D. 1
                                                        
                                                        

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

 
Page 15                                                    2904
                                     H.B. NO.           H.D. 1
                                                        
                                                        

 
 1           to tokens, electronic cards, or chips that shall be
 
 2           used only for wagering aboard the gaming ship;
 
 3     (13)  To approve the routes of a gaming ship and the stops a
 
 4           gaming ship may make within the territorial and
 
 5           archipelagic waters of the State;
 
 6     (14)  To suspend, revoke, or restrict licenses, to require
 
 7           the removal of a licensee or an employee of a licensee
 
 8           for a violation of this chapter or a board rule or for
 
 9           engaging in a fraudulent practice;
 
10     (15)  To impose and collect fines of up to $5,000 against
 
11           individuals and up to $10,000 or an amount equal to the
 
12           daily gross receipts, whichever is greater, against
 
13           licensees for each violation of this chapter, a board
 
14           rule or an order of the board, any order of the board,
 
15           or any other action which, in the board's discretion,
 
16           is a detriment or impediment to shipboard gaming
 
17           operations;
 
18     (16)  To hire employees to gather information, conduct
 
19           investigations, and carry out any other tasks
 
20           contemplated under this chapter;
 
21     (17)  To establish minimum levels of insurance to be
 
22           maintained by licensees;
 

 
 
 
Page 16                                                    2904
                                     H.B. NO.           H.D. 1
                                                        
                                                        

 
 1     (18)  To establish, after consultation with the U.S. Army
 
 2           Corps of Engineers or the U.S. Coast Guard, as
 
 3           appropriate, binding emergency orders upon the
 
 4           concurrence of a majority of the members of the board
 
 5           regarding the navigability of the territorial and
 
 6           archipelagic waters of the State in the event of
 
 7           extreme weather conditions, acts of God, or other
 
 8           extreme circumstances;
 
 9     (19)  To delegate the execution of any of its powers for the
 
10           purpose of administering and enforcing this chapter and
 
11           rules adopted under this chapter;
 
12     (20)  To adopt rules under chapter 91 to implement this
 
13           chapter; and
 
14     (21)  To take any other action as may be reasonable or
 
15           appropriate to enforce this chapter and rules adopted
 
16           under this chapter.
 
17        -9   Meetings of the board.  The board shall hold at
 
18 least one meeting each quarter of the State's fiscal year.  In
 
19 addition, special meetings may be called by the chairperson or
 
20 any two board members upon seventy-two hours written notice to
 
21 each member.  All board meetings shall be subject to chapter 92.
 
22 Three members of the board shall constitute a quorum, and a
 
23 majority vote of the members present and constituting a quorum
 

 
Page 17                                                    2904
                                     H.B. NO.           H.D. 1
                                                        
                                                        

 
 1 shall be required for any final determination by the board.  The
 
 2 board shall keep a complete and accurate record of all its
 
 3 meetings.
 
 4        -10  Annual report.  The board shall file a written
 
 5 annual report with the governor and the legislature on or before
 
 6 sixty days following the close of each fiscal year and such
 
 7 additional reports as the governor or the legislature may
 
 8 request.  The annual report shall include:
 
 9     (A)   A statement of receipts and disbursements by the board;
 
10     (B)   Actions taken by the board; and
 
11     (C)   Any additional information and recommendations that the
 
12           board may deem valuable or which the governor or the
 
13           legislature may request.
 
14        -11  Hearings by the board.(a)  Upon order of the
 
15 board, a board member or a hearings officer designated by the
 
16 board may conduct any hearing provided for under this chapter or
 
17 by rule and may recommend findings and decisions to the board.
 
18 The board member or hearings officer conducting the hearing shall
 
19 have all powers and rights granted to the board in this chapter.
 
20 The record made at the time of the hearing shall be reviewed by
 
21 the board, or a majority thereof, and the findings and decision
 
22 of the majority of the board shall constitute the order of the
 
23 board in that case.
 

 
Page 18                                                    2904
                                     H.B. NO.           H.D. 1
                                                        
                                                        

 
 1     (b)  Any party aggrieved by an action of the board denying,
 
 2 suspending, revoking, restricting, or refusing to renew a license
 
 3 may request a hearing before the board.  A request for a hearing
 
 4 shall be made to the board in writing within five days after
 
 5 service of notice of the action of the board.  Notice of the
 
 6 action of the board shall be served either by personal delivery
 
 7 or by certified mail, postage prepaid, to the aggrieved party.
 
 8 Notice served by certified mail shall be deemed complete on the
 
 9 business day following the date of such mailing.  The board shall
 
10 conduct all requested hearings promptly and in reasonable order.
 
11        -12  Disclosure of records.  (a)  Notwithstanding any law
 
12 to the contrary, the board on written request from any person,
 
13 shall provide information furnished by an applicant or licensee
 
14 concerning the applicant or licensee, or the applicant's or
 
15 licensee's products, services, or gaming enterprises, and
 
16 business holdings, as follows:
 
17      (1)  The name, business address, and business telephone
 
18           number of any applicant or licensee;
 
19      (2)  An identification of any applicant or licensee
 
20           including, if an applicant or licensee is not an
 
21           individual or partnership, the state of incorporation
 
22           or registration, the corporate officers, and the
 
23           identity of all shareholders or participants;
 

 
Page 19                                                    2904
                                     H.B. NO.           H.D. 1
                                                        
                                                        

 
 1      (3)  An identification of any business, including, if
 
 2           applicable, the state of incorporation or registration,
 
 3           in which an applicant or licensee or an applicant's or
 
 4           licensee's spouse or children has an equity interest of
 
 5           more than five per cent.  If an applicant or licensee
 
 6           is a corporation, partnership, or other business
 
 7           entity, the applicant or licensee shall identify any
 
 8           other corporation, partnership, or business entity in
 
 9           which it has an equity interest of five per cent or
 
10           more, including, if applicable, the state of
 
11           incorporation or registration;
 
12      (4)  Whether an applicant or licensee has been convicted,
 
13           pleaded guilty or nolo contendere, or forfeited bail
 
14           concerning any criminal offense under the laws of any
 
15           jurisdiction, either felony or misdemeanor (except for
 
16           traffic violations), including the date, name, and
 
17           location of the court, arresting agency, and
 
18           prosecuting agency, and the case number, the offense,
 
19           the disposition, and the location and length of
 
20           incarceration;
 
21      (5)  Whether an applicant or licensee has had any license or
 
22           certificate issued by a licensing authority in Hawaii
 
23           or any other jurisdiction denied, restricted,
 

 
Page 20                                                    2904
                                     H.B. NO.           H.D. 1
                                                        
                                                        

 
 1           suspended, revoked, or not renewed and a statement
 
 2           describing the facts and circumstances concerning the
 
 3           denial, restriction, suspension, revocation, or
 
 4           nonrenewal, including the licensing authority, the date
 
 5           each such action was taken, and the reason for each
 
 6           action;
 
 7      (6)  Whether an applicant or licensee has ever filed or had
 
 8           filed against it a proceeding in bankruptcy or has ever
 
 9           been involved in any formal process to adjust, defer,
 
10           suspend, or otherwise work out the payment of any debt
 
11           including the date of filing, the name and location of
 
12           the court, and the case and number of the disposition;
 
13      (7)  Whether an applicant or licensee has filed, or been
 
14           served with a complaint or other notice filed with any
 
15           public body, regarding the delinquency in the payment
 
16           of, or a dispute over the filings concerning the
 
17           payment of, any tax required under federal, state, or
 
18           county law, including the amount, type of tax, taxing
 
19           agency, and time periods involved;
 
20      (8)  A statement listing the names and titles of all public
 
21           officials or officers of any unit of government, and
 
22           relatives of the public officials or officers who,
 
23           directly or indirectly, own any financial interest in,
 

 
Page 21                                                    2904
                                     H.B. NO.           H.D. 1
                                                        
                                                        

 
 1           have any beneficial interest in, are the creditors of
 
 2           or hold any debt instrument issued by, or hold or have
 
 3           any interest in any contractual or service relationship
 
 4           with, an applicant or licensee;
 
 5      (9)  Whether an applicant or licensee has made any political
 
 6           contribution, or any loans, donations, or other
 
 7           payments, to any candidate or office holder, within
 
 8           five years from the date of filing the application,
 
 9           including the amount and the method of payment;
 
10     (10)  The name and business telephone number of any attorney
 
11           representing an applicant or licensee in matters before
 
12           the board;
 
13     (11)  A description of any proposed or approved shipboard
 
14           gaming operation, including the type of ship, home dock
 
15           location, expected economic benefit to the community,
 
16           anticipated or actual number of employees, statement
 
17           from an applicant or licensee stating the applicant or
 
18           licensee is in compliance with federal and state
 
19           affirmative action guidelines, projected or actual
 
20           admissions, and projected or actual adjusted gross
 
21           gaming receipts; and
 
22     (12)  A description of the product or service to be supplied
 
23           by an applicant for a supplier's license.
 

 
Page 22                                                    2904
                                     H.B. NO.           H.D. 1
                                                        
                                                        

 
 1     (b)  Notwithstanding any law to the contrary, the board, on
 
 2 written request from any person, shall also provide the following
 
 3 information:
 
 4     (1)   The amount of the wagering tax and admission tax paid
 
 5           daily to the State by the holder of an owner's license;
 
 6     (2)   Whenever the board finds an applicant for an owner's
 
 7           license unsuitable for licensing, a copy of the written
 
 8           letter outlining the reasons for the denial; and
 
 9     (3)   Whenever the board has refused to grant leave for an
 
10           applicant to withdraw an application, a copy of the
 
11           letter outlining the reasons for the refusal.
 
12     (c)  Subject to the above provisions, the board shall not
 
13 disclose any information that would be barred by:
 
14     (1)   Chapter 92F; or
 
15     (2)   The statutes, rules, regulations, or intergovernmental
 
16           agreements of any jurisdiction.
 
17     (d)  The board may assess fees for the copying of government
 
18 records in accordance with section 92-21.
 
19                       PART III.  LICENSING
 
20        -13  Application for owner's license.(a)  A qualified
 
21 person may apply to the board for an owner's license to conduct a
 
22 shipboard gaming operation.  The application shall be made on
 
23 forms provided by the board and shall contain such information as
 
24 the board prescribes, including but not limited to:
 

 
Page 23                                                    2904
                                     H.B. NO.           H.D. 1
                                                        
                                                        

 
 1      (1)  The identity of the ship on which such gaming operation
 
 2           is to be conducted and the exact location where the
 
 3           ship will be docked or anchored off-shore within the
 
 4           territorial and archipelagic waters of the State;
 
 5      (2)  A certification that the ship will be registered under
 
 6           this chapter at all times during which gaming
 
 7           operations are conducted on board;
 
 8      (3)  Detailed information regarding the ownership and
 
 9           management of the applicant; and 
 
10      (4)  Detailed personal information regarding the applicant.
 
11 Information provided on the application shall be used as the
 
12 basis for a thorough background investigation which the board
 
13 shall conduct with respect to each applicant.  An incomplete
 
14 application shall be cause for denial of a license by the board.
 
15      (b)  Applicants shall submit with their application all
 
16 documents, resolutions, and letters of support from the governing
 
17 body that represents the county wherein the licensee will dock or
 
18 anchor off-shore.
 
19      (c)  Each applicant shall disclose the identity of every
 
20 person, association, trust, or corporation having a greater than
 
21 five per cent direct or indirect pecuniary interest in the
 
22 shipboard gaming operation with respect to which the license is
 
23 sought.  If the disclosed entity is a trust, the application
 

 
Page 24                                                    2904
                                     H.B. NO.           H.D. 1
                                                        
                                                        

 
 1 shall disclose the names and addresses of the beneficiaries; if a
 
 2 corporation, the names and addresses of all stockholders and
 
 3 directors; if a partnership, the names and addresses of all
 
 4 partners, both general and limited.
 
 5      (d)  An application fee of $25,000 shall be paid at the time
 
 6 of filing to defray the costs associated with the background
 
 7 investigation conducted by the board, and the search and
 
 8 classification of fingerprints obtained by the board with request
 
 9 to the application.  If the costs of the investigation exceed
 
10 $25,000, the applicant shall pay the additional amount to the
 
11 board.  If the costs of the investigation are less than $25,000,
 
12 the applicant shall receive a refund of the remaining amount.
 
13 All information, records, interviews, reports, statements,
 
14 memoranda, or other data supplied to or used by the board in the
 
15 course of its review or investigation of an application for a
 
16 license shall be privileged, strictly confidential, and used only
 
17 for the purpose of evaluating an applicant.  The information,
 
18 records, interviews, reports, statements, memoranda, or other
 
19 data shall not be admissible as evidence, nor discoverable in any
 
20 action of any kind in any court or before any tribunal, board,
 
21 agency, or person, except for any action deemed necessary by the
 
22 board.
 

 
 
 
Page 25                                                    2904
                                     H.B. NO.           H.D. 1
                                                        
                                                        

 
 1      (e)  The licensed owner shall be the person primarily
 
 2 responsible for the ship itself.  Only one shipboard gaming
 
 3 operation may be authorized by the board on any ship.  The
 
 4 applicant shall identify each ship it intends to use and certify
 
 5 that the ship:
 
 6      (1)  Has the capacity required in this chapter;
 
 7      (2)  Is accessible to persons with disabilities; and
 
 8      (3)  Is fully registered and licensed in accordance with any
 
 9           applicable laws.
 
10      (f)  A person who knowingly makes a false statement on an
 
11 application is guilty of a petty misdemeanor.
 
12         -14  Owner's licenses.(a)  No person shall operate and
 
13 maintain a gaming ship in this State unless the person has first
 
14 obtained an owner's license from the board pursuant to this
 
15 section.  If the board finds that the applicant meets the
 
16 eligibility requirements, the board shall issue an owner's
 
17 license upon payment by the applicant of a $10,000,000 license
 
18 fee for each year of operation; provided that the license shall
 
19 be repealed on December 31, 2008.  An applicant shall not be
 
20 eligible to receive an owner's license if:
 
21      (1)  The person has been convicted of a felony under the
 
22           laws of this State, any other state, or the United
 
23           States;
 

 
Page 26                                                    2904
                                     H.B. NO.           H.D. 1
                                                        
                                                        

 
 1      (2)  The person has been convicted of any violation
 
 2           under part II, chapter 712, or substantially similar
 
 3           laws of another jurisdiction;
 
 4      (3)  The person has submitted an application for a license
 
 5           under this chapter that contains false information;
 
 6      (4)  The person is a member of the board;
 
 7      (5)  A person defined in paragraph (1), (2), (3), or (4) is
 
 8           an officer, director, or managerial employee of the
 
 9           firm or corporation;
 
10      (6)  The firm or corporation employs a person defined in
 
11           paragraph (1), (2), (3), or (4) who participates in the
 
12           management or operation of gaming operations authorized
 
13           under this chapter;
 
14      (7)  The person, firm, or corporation has more than a ten
 
15           per cent ownership interest in any entity holding an
 
16           owner's license issued under this chapter; or
 
17      (8)  A license of the person, firm, or corporation issued
 
18           under this chapter, or a license to own or operate
 
19           gaming facilities in any other jurisdiction, has been
 
20           revoked.
 
21      (b)  In determining whether to grant an owner's license to
 
22 an applicant, the board shall consider:
 

 
 
 
Page 27                                                    2904
                                     H.B. NO.           H.D. 1
                                                        
                                                        

 
 1      (1)  The character, reputation, experience, and financial
 
 2           integrity of the applicants and of any other or
 
 3           separate person that either:
 
 4           (A)  Controls, directly or indirectly, the applicant,
 
 5                or
 
 6           (B)  Is controlled, directly or indirectly, by the
 
 7                applicant or by a person that controls, directly
 
 8                or indirectly, the applicant;
 
 9      (2)  The facilities or proposed facilities for the conduct
 
10           of shipboard gaming;
 
11      (3)  The highest prospective total revenue to be derived by
 
12           the State from the conduct of shipboard gaming;
 
13      (4)  The financial ability of the applicant to purchase and
 
14           maintain adequate liability and casualty insurance;
 
15      (5)  Whether the applicant has adequate capitalization to
 
16           provide and maintain, for the duration of a license, a
 
17           shipboard gaming operation; and
 
18      (6)  The extent to which the applicant exceeds or meets
 
19           other standards for the issuance of an owner's license
 
20           which the board may adopt by rule.
 
21      (c)  Each applicant shall submit with the application, on
 
22 forms provided by the board, two sets of the applicant's
 
23 fingerprints.
 

 
Page 28                                                    2904
                                     H.B. NO.           H.D. 1
                                                        
                                                        

 
 1      (d)  In the application for an owner's license, the
 
 2 applicant shall specify the dock at which the gaming ship will be
 
 3 based and the area within the territorial and archipelagic waters
 
 4 of the State on which the gaming ship will operate.  In
 
 5 determining the territorial and archipelagic waters upon which
 
 6 gaming ships will operate with licenses, the board shall consider
 
 7 the economic benefit that shipboard gaming confers on the State
 
 8 and shall seek to ensure that all counties of the State share in
 
 9 the economic benefits of shipboard gaming.
 
10      Notwithstanding any law to the contrary, all berthing
 
11 permits issued for gaming ships of persons who meet and comply
 
12 with the license requirements under this chapter, shall be valid
 
13 until December 31, 2008, unless revoked or suspended for any
 
14 violation under this chapter.
 
15      (e)  In granting licenses, the board shall give favorable
 
16 consideration to applicants who have operated nongaming ships in
 
17 Hawaii prior to the effective date of this Act.  The board shall
 
18 also give favorable consideration to applicants presenting plans
 
19 which provide for significant economic development and applicants
 
20 licensed in other United States jurisdictions. The board shall
 
21 review all applications for owner's licenses, and shall inform
 
22 each applicant of the board's decision.
 

 
 
 
Page 29                                                    2904
                                     H.B. NO.           H.D. 1
                                                        
                                                        

 
 1      (f)  The board may revoke the owner's license if a licensee
 
 2 fails to begin regular shipboard gaming excursions within twelve
 
 3 months of receipt of the board's approval of the application upon
 
 4 a finding by the board that license revocation is in the best
 
 5 interest of the State.
 
 6      (g)  The board may authorize a licensee to own and operate
 
 7 one gaming ship per owner's license.
 
 8      (h)  The board shall establish a process to facilitate and
 
 9 expedite the approval of the necessary licenses and permits.  The
 
10 board may establish its own procedures for the issuance of liquor
 
11 licenses for any holder of an owner's license under this chapter;
 
12 provided that all state laws and county ordinances relating to
 
13 liquor are met.
 
14      (i)  Nothing in this chapter shall be interpreted to
 
15 prohibit a licensed owner from operating a school for the
 
16 training of any occupational licensee.
 
17         -15  Bond of licensee.  Before an owner's license is
 
18 issued, the licensee shall file a bond in the sum of $200,000
 
19 with the department.  The bond shall be used to guarantee that
 
20 the licensee faithfully makes the payments, keeps books and
 
21 records, makes reports, and conducts games of chance in
 
22 conformity with this chapter and the rules adopted by the board.
 

 
 
 
Page 30                                                    2904
                                     H.B. NO.           H.D. 1
                                                        
                                                        

 
 1 The bond shall not be canceled by a surety on less than thirty
 
 2 days notice in writing to the board.  If a bond is canceled and
 
 3 the licensee fails to file a new bond with the board in the
 
 4 required amount on or before the effective date of cancellation,
 
 5 the licensee's license shall be revoked.  The total and aggregate
 
 6 liability of the surety on the bond shall be limited to the
 
 7 amount specified in the bond.
 
 8         -16  Supplier's licenses.(a)  No person shall furnish
 
 9 any equipment, devices, or supplies to a licensed shipboard
 
10 gaming operation unless the person has first obtained a
 
11 supplier's license pursuant to this section.  The board may issue
 
12 a supplier's license to any person, firm, or corporation who pays
 
13 a nonrefundable application fee of $50,000 upon a determination
 
14 by the board that the applicant is eligible for a supplier's
 
15 license and upon payment by the applicant of a $1,000 license
 
16 fee.  Supplier's licenses shall be renewable annually upon
 
17 payment of the $1,000 annual license fee and a determination by
 
18 the board that the licensee continues to meet all of the
 
19 requirements of this chapter.
 
20      (b)  The holder of a supplier's license may sell or lease,
 
21 or contract to sell or lease, gaming equipment and supplies to
 
22 any licensee involved in the ownership or management of gaming
 
23 operations.
 

 
Page 31                                                    2904
                                     H.B. NO.           H.D. 1
                                                        
                                                        

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

 
Page 32                                                    2904
                                     H.B. NO.           H.D. 1
                                                        
                                                        

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

 
Page 33                                                    2904
                                     H.B. NO.           H.D. 1
                                                        
                                                        

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

 
Page 34                                                    2904
                                     H.B. NO.           H.D. 1
                                                        
                                                        

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

 
Page 35                                                    2904
                                     H.B. NO.           H.D. 1
                                                        
                                                        

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

 
 
 
Page 36                                                    2904
                                     H.B. NO.           H.D. 1
                                                        
                                                        

 
 1                    PART IV.  FISCAL OVERSIGHT
 
 2        -18  Collection of amounts owing under credit agreements.
 
 3 Notwithstanding any law to the contrary, a licensed owner who
 
 4 extends credit to a shipboard gaming patron may institute a cause
 
 5 of action to collect any amounts due and owing under the
 
 6 extension of credit, as well as the owner's costs, expenses, and
 
 7 reasonable attorney's fees incurred in collection; provided that
 
 8 all collections activity be subject to state and federal fair
 
 9 debt collection practices.
 
10        -19  Wagering tax; rate; distribution.  A tax at the rate
 
11 of twelve per cent shall be assessed, levied, collected, and paid
 
12 on the adjusted gross receipts received from games authorized
 
13 under this chapter; provided that $83,333,333 in adjusted gross
 
14 receipts shall be excluded per year.  The tax imposed by this
 
15 section shall be paid by the licensed owner to the board on the
 
16 last day of each month that the wagers were made and shall be
 
17 deposited into the state gaming fund pursuant to section    -22.
 
18 The wagering tax imposed by this section shall be in lieu of all
 
19 other state taxes on gross or adjusted gross receipts, except
 
20 income taxes, including taxes levied under chapters 237 and 239.
 
21        -20  Licensees; records; reports; supervision.(a)  A
 
22 licensed owner shall keep books and records to clearly show:
 
23      (1)  The daily number of admissions and the amount of
 
24           admission tax payable each day;
 

 
Page 37                                                    2904
                                     H.B. NO.           H.D. 1
                                                        
                                                        

 
 1      (2)  The total amount of gross receipts; and
 
 2      (3)  The total amount of the adjusted gross receipts.
 
 3      (b)  The licensed owner shall furnish to the board reports
 
 4 and information as the board may require with respect to its
 
 5 activities on forms designed and supplied for such purpose by the
 
 6 board.
 
 7      (c)  The books and records kept by a licensed owner are
 
 8 government records and the examination, publication, and
 
 9 dissemination of the books and records shall be subject to
 
10 chapter 92F.
 
11         -21  Audit of licensee operations.  Within ninety days
 
12 after the end of each quarter of each fiscal year, the licensed
 
13 owner shall transmit to the board an audit of the financial
 
14 transactions and condition of the licensee's total operations.
 
15 All audits shall be conducted by certified public accountants
 
16 selected by the board.  Each certified public accountant shall be
 
17 registered and licensed to practice in this State.  The
 
18 compensation for each certified public accountant shall be paid
 
19 directly by the licensed owner to the certified public
 
20 accountant.
 
21                         PART V.  FUNDING
 
22         -22  The state gaming fund; disposition of taxes
 
23 collected.(a)  There is established within the state treasury
 
24 the state gaming fund, into which shall be deposited all fees,
 

 
Page 38                                                    2904
                                     H.B. NO.           H.D. 1
                                                        
                                                        

 
 1 taxes, and fines collected under this chapter, which shall be
 
 2 used for purposes of this chapter.  Of the total moneys collected
 
 3 under this chapter each quarter:
 
 4      (1)  Two per cent shall be used for the administration and
 
 5           enforcement of this chapter;
 
 6      (2)  Ninety-six per cent shall be deposited into the
 
 7           education special fund; and
 
 8      (3)  Two per cent shall be deposited into the gaming
 
 9           addiction interdiction and education special fund.
 
10      (b)  In addition to the annual report required under section
 
11    -10, the board shall submit to the legislature prior to the
 
12 convening of each regular session, a comprehensive financial
 
13 report detailing:
 
14      (1)  The revenues collected from the taxes, fees, and fines
 
15           imposed under this chapter;
 
16      (2)  The amounts allocable to administrative and enforcement
 
17           costs; and
 
18      (3)  The education special fund and the gaming addiction
 
19           interdiction and education special fund.
 
20        -23  Education special fund.(a)  There is created in
 
21 the state treasury a special fund to be designated as the
 
22 education special fund into which shall be deposited ninety-six
 
23 per cent of the total moneys collected under the state gaming
 

 
Page 39                                                    2904
                                     H.B. NO.           H.D. 1
                                                        
                                                        

 
 1 fund each quarter.  The moneys shall be used for purposes
 
 2 relating to the improvement of education in the State.
 
 3      (b)  The revenues generated by gaming shall be used to
 
 4 augment, but not supplant, existing resources for educational
 
 5 purposes.
 
 6      (c)  Funds for education shall be used to:
 
 7      (1)  Support capital improvements and enhancements for
 
 8           educational purposes and programs;
 
 9      (2)  Provide free voluntary pre-kindergarten for four-year-
 
10           olds;
 
11      (3)  Provide helping outstanding pupils education (HOPE)
 
12           scholarships to students who maintain a 3.0 grade point
 
13           so that they may obtain a free college education in the
 
14           University of Hawaii system;
 
15      (4)  Provide teacher HOPE scholarships to teachers to obtain
 
16           advanced degrees in critical fields of study; and
 
17      (5)  Provide increased access to computer and
 
18           telecommunication technology so that students will have
 
19           hands-on experience with computer learning programs.
 
20      (d)  The scholarships authorized under subsection (c) and
 
21 financed by gaming shall be administered by the department of
 
22 education under rules adopted pursuant to chapter 91.
 

 
 
 
Page 40                                                    2904
                                     H.B. NO.           H.D. 1
                                                        
                                                        

 
 1        -24  Gaming addiction interdiction and education special
 
 2 fund.  There is created in the state treasury a special fund to
 
 3 be designated as the gaming addiction interdiction and education
 
 4 special fund into which shall be deposited two per cent of the
 
 5 total moneys collected under the state gaming fund each quarter.
 
 6 The moneys shall be used to treat and rehabilitate persons
 
 7 addicted to gaming, and educate the public about the consequences
 
 8 of gaming addictions.
 
 9         -25  Admission fee.  The board shall require the owners
 
10 of each gaming ship to charge the public a fee of $10 per person
 
11 for admission to a gaming ship.  All fees collected under this
 
12 section shall be deposited into the state gaming fund.
 
13                       PART VI.  ENFORCEMENT
 
14         -26  Prohibited activities; penalty.(a)  A person is
 
15 guilty of a misdemeanor for any of the following:
 
16      (1)  Intentionally operating a gaming ship where wagering is
 
17           used or to be used without a license issued by the
 
18           board;
 
19      (2)  Intentionally operating a gaming ship where wagering is
 
20           permitted other than in the manner authorized under
 
21           this chapter;
 
22      (3)  Knowingly permitting a person under twenty-one years to
 
23           make a wager; or
 

 
Page 41                                                    2904
                                     H.B. NO.           H.D. 1
                                                        
                                                        

 
 1      (4)  Knowingly violating section    -4(12).
 
 2      (b)  A person wagering or accepting a wager at any location
 
 3 outside the gaming ship shall be subject to the penalties in
 
 4 sections 712-1220 to 712-1230.
 
 5      (c)  A person shall be barred for life from gaming ships
 
 6 under the jurisdiction of the board, if the person commits a
 
 7 class C felony and does any of the following:
 
 8      (1)  Offers, promises, or gives anything of value or benefit
 
 9           to a person who is connected with a gaming ship owner
 
10           including but not limited to an officer or employee of
 
11           a licensed owner or holder of an occupational license
 
12           pursuant to an agreement or arrangement or with the
 
13           intent that the promise or thing of value or benefit
 
14           will influence the actions of the person to whom the
 
15           offer, promise, or gift was made in order to affect or
 
16           attempt to affect the outcome of a gaming activity or
 
17           to influence official action of a member of the board;
 
18      (2)  Solicits or knowingly accepts or receives a promise of
 
19           anything of value or benefit while the person is
 
20           connected with a gaming ship including but not limited
 
21           to an officer or employee of a licensed owner, or
 
22           holder of an occupational license, pursuant to an
 
23           understanding or arrangement or with the intent that
 

 
Page 42                                                    2904
                                     H.B. NO.           H.D. 1
                                                        
                                                        

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

 
Page 43                                                    2904
                                     H.B. NO.           H.D. 1
                                                        
                                                        

 
 1      (8)  Uses counterfeit chips or tokens in a gaming activity;
 
 2           or
 
 3      (9)  Possesses any key or device designed for the purpose of
 
 4           opening, entering, or affecting the operation of a
 
 5           gaming activity, drop box, or an electronic or
 
 6           mechanical device connected with the gaming activity or
 
 7           for removing coins, tokens, chips, or other contents of
 
 8           a gaming activity.  This paragraph does not apply to a
 
 9           gaming licensee or employee of a gaming licensee acting
 
10           in furtherance of the employee's employment.
 
11      (d)  An action to prosecute any crime occurring during a
 
12 gaming excursion shall be tried in the county of the dock at
 
13 which the gaming ship is based.
 
14         -27  Forfeiture of property.(a)  Except as provided in
 
15 subsection (b), any gaming ship used for the conduct of gaming in
 
16 violation of section    -4, shall be subject to section 712-
 
17 1222.5.  Every gaming device found on a ship operating games in
 
18 violation of this chapter shall be subject to seizure,
 
19 confiscation, and destruction.
 
20      (b)  It is not a violation of this chapter for a ship or
 
21 other watercraft that is licensed for gaming by a foreign nation
 
22 or another state or territory of the United States to dock on the
 
23 shores of this State if the State has granted permission for
 

 
Page 44                                                    2904
                                     H.B. NO.           H.D. 1
                                                        
                                                        

 
 1 docking; provided no gaming is conducted on the ship or other
 
 2 watercraft while it is docked on the shores of this State or
 
 3 traversing in the territorial and archipelagic waters of the
 
 4 State.  No gaming device shall be subject to seizure,
 
 5 confiscation, or destruction if the gaming device is located on
 
 6 such a ship or other watercraft.
 
 7         -28  Prohibited activities; civil penalties.  Any person
 
 8 who conducts a gaming operation without first obtaining a license
 
 9 to do so, or who continues to conduct such games after revocation
 
10 of the person's license, or any licensee who conducts or allows
 
11 to be conducted any unauthorized games on a ship where it is
 
12 authorized to conduct its shipboard gaming operation, in addition
 
13 to other penalties provided, shall be subject to a civil penalty
 
14 equal to the amount of gross receipts derived from wagering on
 
15 the games, whether unauthorized or authorized, conducted on that
 
16 day as well as confiscation and forfeiture of all gaming
 
17 equipment used in the conduct of unauthorized games.
 
18         -29  Criminal history record information.  Whenever the
 
19 board is authorized or required by law to consider some aspect of
 
20 criminal history record information for the purpose of carrying
 
21 out its statutory powers and responsibilities, upon request from
 
22 the board, the Hawaii criminal justice data center shall furnish
 
23 such information contained in its files.
 

 
Page 45                                                    2904
                                     H.B. NO.           H.D. 1
                                                        
                                                        

 
 1         -30  Judicial review.  Jurisdiction and venue for the
 
 2 judicial review of a final order of the board relating to
 
 3 owner's, supplier's, occupational, shuttle service, or special
 
 4 event licenses shall be vested in the circuit court of the
 
 5 appropriate jurisdiction.  A petition for judicial review of a
 
 6 final order of the board shall be filed within thirty days after
 
 7 entry of the final order.
 
 8         -31  Legislative oversight.(a)  Beginning with the
 
 9 second fiscal year after gaming activities commence, the auditor
 
10 shall conduct a biennial financial and social assessment of
 
11 shipboard gaming operations.  In conducting the assessment, the
 
12 auditor shall identify the financial impacts of shipboard gaming
 
13 on the state economy and the social impacts of gaming upon the
 
14 community.  The auditor shall submit a report of findings and
 
15 recommendations to the legislature prior to the convening of the
 
16 next regular session after the biennial assessment is completed.
 
17      (b)  Beginning with the second fiscal year after gaming
 
18 activities commence, the auditor shall conduct a program and
 
19 financial audit of the Hawaii gaming board.  Thereafter, the
 
20 auditor shall conduct a program and financial audit every four
 
21 years after the first audit is completed."
 
22      SECTION 3.  Section 36-30, Hawaii Revised Statutes, is
 
23 amended by amending subsection (a) to read as follows:
 

 
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 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;
 

 
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 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     (23)  State gaming fund under section    -22;
 
15     (24)  Education special fund under section    -23; and
 
16     (25)  Gaming addiction interdiction and education special
 
17           fund under section   -24;
 
18 shall be responsible for its pro rata share of the administrative
 
19 expenses incurred by the department responsible for the
 
20 operations supported by the special fund concerned.
 
21      SECTION 4.  Section 712-1222.5, Hawaii Revised Statutes, is
 
22 amended by amending subsection (3) to read as follows:
 

 
 
 
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 1      "(3)  This section shall not apply to gambling activity
 
 2 [conducted] during travel from foreign nations or another state
 
 3 or territory of the United States to the point of first entry
 
 4 into state waters or during travel to foreign nations or another
 
 5 state or territory of the United States from the point of final
 
 6 exit from state waters; provided that nothing herein shall
 
 7 preclude prosecution for any offense under this part.
 
 8      Except as specifically provided in chapter    , this part
 
 9 shall not apply to gaming activity authorized on ships licensed
 
10 under chapter    ."
 
11      SECTION 5.  If any person commences a proceeding in any
 
12 court of competent jurisdiction to extend any provision of this
 
13 Act to allow shipboard gaming as defined in this Act on any land,
 
14 on or in any building, structure, or improvement attached to or
 
15 on land within the jurisdiction of the State, or if any person
 
16 contests, challenges, or defends against any prosecution or claim
 
17 that no provision of this Act allows shipboard gaming as defined
 
18 in this Act on any land, on or in any building, structure, or
 
19 improvement attached to or on land within the jurisdiction of the
 
20 State, the commencement of the proceeding, prosecution, or claim
 
21 shall be deemed to be public notice that this Act shall be
 
22 repealed on the date that a court of competent jurisdiction
 

 
 
 
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 1 issues a final order that would allow shipboard gaming on land,
 
 2 on or in any building, structure, or improvement attached to or
 
 3 on land.
 
 4      This Act shall be repealed on the date that a court of
 
 5 competent jurisdiction issues a final order that would allow
 
 6 shipboard gaming on land, on or in any building, structure, or
 
 7 improvement attached to or on land.
 
 8      SECTION 6.  Statutory material to be repealed is bracketed.
 
 9 New statutory material is underscored.
 
10      SECTION 7.  This Act shall take effect upon its approval and
 
11 shall be repealed on December 31, 2008.