Bill Text: HI HB766 | 2017 | Regular Session | Introduced

Hawaii House Bill 766 (Prior Session Legislation)

Introduced

Bill Title: Related To Shipboard Gaming.

Spectrum: Partisan Bill (Democrat 4-0)

Status: (Introduced - Dead) 2017-01-25 - Referred to JUD, FIN, referral sheet 3 [HB766 Detail]

Download: Hawaii-2017-HB766-Introduced.html

HOUSE OF REPRESENTATIVES	H.B. NO.	766
TWENTY-NINTH LEGISLATURE, 2017
STATE OF HAWAII

A BILL FOR AN ACT

related to shipboard gaming.

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

SECTION 1. The legislature finds that tourism is still the foremost industry in Hawaii in terms of the capacity to generate continuing revenue. But Hawaii's struggle in recent years to remain competitive with other "sun and sand" resort destinations has challenged the legislature to look beyond traditional means to attract mainland and global visitors. It is imperative that Hawaii aggressively compete in the world market in order to, at the very least, maintain its tourism market share.

In order to be competitive in the international market place, Hawaii must offer some type of gaming entertainment. Shipboard gaming would create a viable and unique visitor experience while providing thousands of local jobs. In addition, studies have shown that shipboard gaming would generate hundreds of millions of dollars, thereby expanding the State's economy.

The purpose of this Act is to establish a regulatory framework for the conduct of legal shipboard gaming in Hawaii.

SECTION 2. The Hawaii Revised Statutes is amended by adding a new chapter to be appropriately designated and to read as follows:

"CHAPTER

SHIPBOARD GAMING

§ -1 Legislative intent. This chapter is intended to benefit the people of the State of Hawaii by creating a new revenue source, shipboard gaming, that will enhance investment, development, and tourism in Hawaii. Because shipboard gaming can be successful only if public confidence and trust in the credibility and integrity of the gaming operations and the regulatory process is maintained, this chapter strictly regulates the facilities, persons, associations, and practices related to gaming operations.

§ -2 Shipboard gaming authorized. (a) Shipboard gaming operations and the system of wagering incorporated therein, as defined in this chapter, are authorized to the extent that they are carried out in accordance with this chapter.

(b) Shipboard gaming pursuant to this chapter may be conducted upon any territorial and archipelagic waters within the State.

§ -3 Definitions. As used in this chapter unless the context otherwise requires:

"Adjusted gross receipts" means the gross receipts less winnings paid to wagerers.

"Board" means the Hawaii shipboard gaming board.

"Department" means the department of business, economic development, and tourism.

"Director" means the director of business, economic development, and tourism.

"Dock" means the location where a gaming ship moors for the purpose of embarking passengers for, and disembarking passengers from, a gaming excursion.

"Gaming excursion" means an outing during which gaming may be operated on a ship licensed under this chapter.

"Gaming ship" means a vessel licensed under this chapter that is of sufficient size to safely accommodate, in accordance with state, federal, and international law, no fewer than one thousand persons and shall be able to provide, at minimum, one overnight accommodation per person, for the purpose of gaming activity within the territorial and archipelagic waters of the State.

"Gross receipts" means the total amount of money wagered or exchanged for the purchase of chips, tokens, or electronic cards by shipboard gaming patrons.

"Occupational license" means a license issued by the board to a person or entity to perform an occupation that the board has identified as requiring a license to engage in shipboard gaming in Hawaii.

"Shipboard gaming" means the operation of games aboard a ship licensed under this chapter, including but not limited to, baccarat, twenty-one, poker, craps, slot machine, video game of chance, roulette wheel, klondike table, punch-board, faro layout, keno layout, numbers ticket, push card, jar ticket, pull tab, or other game of chance that is authorized by the board as a wagering device.

§ -4 Hawaii shipboard gaming board; membership; appointment; chairperson. (a) There is established within the department, for administrative purposes only, the Hawaii shipboard gaming board that shall administer, regulate, and enforce the system of shipboard gaming established by this chapter. The board shall have jurisdiction over every person, association, corporation, partnership, and trust involved in shipboard gaming operations in the State.

(b) The board shall consist of three members to be appointed by the governor with the advice and consent of the senate under section 26-34. Of the three members, one shall be appointed from a list of nominees submitted by the president of the senate and one shall be appointed from a list of nominees submitted by the speaker of the house of representatives. The members shall elect a chairperson from the board membership.

(c) The term of office of a board member shall be four years. Vacancies in the board shall be filled for the unexpired term in the same manner as the original appointments.

(d) Each member of the board shall receive $300 for each day the board meets, and for each day the member conducts any hearing pursuant to this chapter. Each member shall also be reimbursed for all actual and necessary expenses incurred in the execution of official duties.

(e) No person shall be appointed a member of the board or continue to be a member of the board if:

(1) The person or the person's spouse, child, or parent is an official of, or a person financially interested in, or has a financial relationship with, any gaming operation subject to the jurisdiction of the board; or

(2) The person has been convicted of, or is under indictment for, a felony under the laws of Hawaii or any other state, or the United States.

(f) No board member shall hold any other public office. Any member of the board may be removed by the governor for neglect of duty, misfeasance, malfeasance, or nonfeasance in office.

§ -5 Board members; bond requirement. Before assuming the duties of office, each member of the board shall take an oath that the member shall faithfully execute the duties of office according to the laws of the State and shall file and maintain with the director a bond in the sum of $25,000 with good and sufficient sureties. The cost of any bond for any member of the board under this section shall be considered a part of the necessary expenses of the board.

§ -6 Staff. (a) The board shall appoint, without regard to chapter 76, an administrator who shall perform any and all duties that the board shall assign. The salary of the administrator shall be determined by the board. The administrator shall keep records of all proceedings of the board and shall preserve all records, books, documents, and other papers belonging to the board or entrusted to its care. The administrator shall devote full time to the duties of the office and shall not hold any other office or employment.

(b) The board may employ personnel, including personnel with law enforcement authority, as may be necessary to carry out its duties. No person shall be employed by the board who is, or whose spouse, parent, or child is, an official of, or has a financial interest in or financial relation with, any operator engaged in gaming operations within this State. The employment of any employee violating these prohibitions shall be terminated.

§ -7 Powers of the board. The board shall have all powers necessary and proper to fully and effectively supervise all shipboard gaming operations, including but not limited to the following:

(1) To determine the types and numbers of shipboard gaming licenses to be permitted and the types and numbers of ships a licensee may own under this chapter; provided that the total number of ships operating under each owner's license granted under this chapter shall not exceed two;

(2) To adopt standards for the licensing of all persons under this chapter, to issue licenses, and to establish and collect fees for licenses;

(3) To provide for the collection of all fees and taxes imposed pursuant to this chapter;

(4) To enter the office, gaming ships, facilities, or other places of business of a licensee, where evidence of the compliance or noncompliance with this chapter is likely to be found;

(5) To investigate alleged violations of this chapter and to take appropriate disciplinary action against a licensee or a holder of an occupational license for a violation, or institute appropriate legal action for enforcement, or both;

(6) To be present through its inspectors and agents any time gaming operations are conducted on any gaming ship for the purpose of certifying the revenue thereof, receiving complaints from the public, and conducting such other investigations into the conduct of the shipboard gaming and the maintenance of the equipment as from time to time the board may deem necessary and proper;

(7) To adopt appropriate standards for all gaming ships and facilities, as well as for electronic or mechanical gaming devices;

(8) To require that the records of any licensee under this chapter, including financial or other statements, be kept in a manner as prescribed by the board and that any licensee involved in the ownership or management of gaming operations submit to the board an annual balance sheet and profit and loss statement, a list of the stockholders or other persons having a ten per cent or greater beneficial interest in the gaming activities of each licensee, and any other information the board deems necessary in order to effectively administer this chapter;

(9) To conduct hearings, issue subpoenas for the attendance of witnesses and subpoenas duces tecum for the production of books, records, and other pertinent documents, and to administer oaths and affirmations to the witnesses, when, in the judgment of the board, it is necessary to administer or enforce this chapter;

(10) To prescribe an employment application criteria to be used by any licensee involved in the ownership or management of shipboard gaming operations for hiring purposes;

(11) To eject or exclude, or authorize the ejection or exclusion of, any person from shipboard gaming facilities where the person is in violation of this chapter or where the person's conduct or reputation is such that the person's presence within the gaming ship facilities, in the opinion of the board, may call into question the honesty and integrity of the shipboard gaming operation or interfere with the orderly conduct thereof; provided that the propriety of that ejection or exclusion is subject to subsequent hearing by the board;

(12) To permit licensees of gaming operations to utilize a wagering system whereby gamers' money may be converted to tokens, electronic cards, or chips that shall be used only for wagering aboard the gaming ship;

(13) To approve the routes of a gaming ship and the stops a gaming ship may make within the territorial and archipelagic waters of the State;

(14) To suspend, revoke, or restrict licenses, or to require the removal of a licensee or an employee of a licensee, for a violation of this chapter or a board rule or for engaging in a fraudulent practice;

(15) To impose and collect fines of up to $5,000 against individuals and up to $10,000 or an amount equal to the daily gross receipts, whichever is larger, against licensees for each violation of this chapter, any rules adopted by the board, any order of the board, or any other action which, in the board's discretion, is a detriment or impediment to shipboard gaming operations;

(16) To hire employees to gather information, conduct investigations, and carry out any other tasks contemplated under this chapter;

(17) To establish minimum levels of insurance to be maintained by licensees;

(18) To establish, after consultation with the United States Army Corps of Engineers or the United States Coast Guard, whichever is appropriate, binding emergency orders upon the concurrence of a majority of the members of the board regarding the navigability of the territorial and archipelagic waters of the State in the event of extreme weather conditions, acts of God, or other extreme circumstances;

(19) To delegate the execution of any of its powers for the purpose of administering and enforcing this chapter and rules adopted under this chapter;

(20) To adopt necessary rules under chapter 91 to implement this chapter; and

(21) To take any other action as may be reasonable or appropriate to enforce this chapter and rules adopted under this chapter.

§ -8 Meetings of the board. The board shall hold at least one meeting each quarter of the State's fiscal year. In addition, special meetings may be called by the chairperson or any two board members upon seventy-two hours written notice to each member. All regular board meetings shall be subject to chapter 92. Three members of the board shall constitute a quorum, and a majority vote of the members present and constituting a quorum shall be required for any final determination by the board. The board shall keep a complete and accurate record of all its meetings.

§ -9 Annual report. The board shall file a written annual report with the governor and the legislature on or before sixty days following the close of each fiscal year and make any additional reports as the governor or the legislature may request. The annual report shall include a statement of receipts and disbursements by the board, actions taken by the board, and any additional information and recommendations that the board may deem valuable or that the governor or the legislature may request.

§ -10 Hearings by the board. (a) Upon order of the board, one of the board members or a hearings officer designated by the board may conduct any hearing provided for under this chapter or by board rule and may recommend findings and decisions to the board. The board member or hearings officer conducting the hearing shall have all powers and rights granted to the board in this chapter. The record made at the time of the hearing shall be reviewed by the board, or a majority thereof, and the findings and decision of the majority of the board shall constitute the order of the board in that case.

(b) Any party aggrieved by an action of the board denying, suspending, revoking, restricting, or refusing to renew a license may request a hearing before the board. A request for a hearing shall be made to the board in writing within five days after service of notice of the action of the board. Notice of the action of the board shall be served either by personal delivery or by certified mail, postage prepaid, to the aggrieved party. Notice served by certified mail shall be deemed complete on the business day following the date of the mailing. The board shall conduct all requested hearings as required by chapter 91.

§ -11 Disclosure of records. (a) Notwithstanding any other law to the contrary, the board, on written request from any person, shall provide information furnished by an applicant or licensee under this chapter concerning the applicant or licensee, or the applicant's or licensee's products, services, or gaming enterprises, and business holdings, as follows:

(1) The name, business address, and business telephone number of any applicant or licensee;

(2) An identification of any applicant or licensee including, if an applicant or licensee is not an individual or partnership, the state of incorporation or registration, the corporate officers, and the identity of all shareholders or participants;

(3) An identification of any business, including, if applicable, the state of incorporation or registration, in which an applicant or licensee or an applicant's or licensee's spouse or children has an equity interest of more than five per cent. If an applicant or licensee is a corporation, partnership, or other business entity, the applicant or licensee shall identify any other corporation, partnership, or business entity in which it has an equity interest of five per cent or more, including, if applicable, the state of incorporation or registration;

(4) Whether an applicant or licensee has been convicted, pleaded guilty or nolo contendere, or forfeited bail concerning any criminal offense under the laws of any jurisdiction, either felony or misdemeanor but excluding traffic violations, including the date; the name and location of the court, arresting agency, and prosecuting agency; the case number, offense, and disposition; and the location and length of any incarceration;

(5) Whether an applicant or licensee has had any license or certificate issued by a licensing authority in Hawaii or any other jurisdiction denied, restricted, suspended, revoked, or not renewed and a statement describing the facts and circumstances concerning the denial, restriction, suspension, revocation, or nonrenewal, including the licensing authority, the date each action was taken, and the reason for each action;

(6) Whether an applicant or licensee has ever filed or had filed against it a proceeding in bankruptcy or has ever been involved in any formal process to adjust, defer, suspend, or otherwise work out the payment of any debt including the date of filing, the name and location of the court, and the case and number of the disposition;

(7) Whether an applicant or licensee has filed or been served with a complaint, or other notice filed with any public body, regarding the delinquency in the payment of, or a dispute over the filings concerning the payment of, any tax required under federal, state, or county law, including the amount, type of tax, the taxing agency, and time periods involved;

(8) A statement listing the names and titles of all public officials or officers of any unit of government and relatives of those public officials or officers who, directly or indirectly, own any financial interest in, have any beneficial interest in, are the creditors of or hold any debt instrument issued by, or hold or have any interest in any contractual or service relationship with, an applicant or licensee;

(9) Whether an applicant or licensee has made any political contribution or any loans, donations, or other payments to any candidate for public office or public office holder, within five years from the date of filing the application, including the amount and the method of payment;

(10) The name and business telephone number of any attorney representing an applicant or licensee in matters before the board;

(11) A description of any proposed or approved shipboard gaming operation, including the type of ship, home dock location, expected economic benefit to the community, anticipated or actual number of employees, statement from an applicant or licensee stating the applicant or licensee is in compliance with federal and state hiring and employment practices, projected or actual admissions, and projected or actual adjusted gross gaming receipts; and

(12) A description of the product or service to be supplied by an applicant for a supplier's license.

(b) Notwithstanding any provision of law to the contrary, the board, on written request from any person, shall also provide the following information:

(1) The amount of the wagering tax and admission tax paid daily to the State by the holder of an owner's license;

(2) Whenever the board finds an applicant for an owner's license unsuitable for licensing, a written explanation of the reasons for the denial; and

(3) Whenever the board has refused to grant leave for an applicant to withdraw an application, a copy of the letter outlining the reasons for the refusal.

(1) Chapter 92F; or

(2) The statutes, rules, regulations, or intergovernmental agreements of any jurisdiction.

(d) The board may assess fees for the copying of information in accordance with chapter 92F.

§ -12 Application for owner's license. (a) A qualified person may apply to the board for an owner's license to conduct a shipboard gaming operation. The application shall be made on forms provided by the board and shall contain information as the board prescribes, including but not limited to:

(1) The identity of the ship on which the gaming operation is to be conducted;

(2) The exact location where the ship will be docked or anchored off-shore within the territorial and archipelagic waters of the State;

(3) A certification that the ship will be registered under this chapter at all times during which gaming operations are conducted on board;

(4) Detailed information regarding the ownership and management of the applicant; and

(5) Detailed personal information regarding the applicant, including two sets of the applicant's fingerprints.

Information provided on the application shall be used as the basis for a thorough background investigation that the board shall conduct for each applicant. An incomplete application shall be cause for denial of a license by the board.

(b) Applicants shall submit with their application all documents, resolutions, and letters of support from the governing body that represents the county wherein the licensee will dock or anchor off-shore.

(c) Each applicant shall disclose the identity of every person, association, trust, or corporation having a greater than five per cent direct or indirect pecuniary interest in the shipboard gaming operation for that which the license is sought. If the disclosed entity is a trust, the application shall disclose the names and addresses of the beneficiaries; if a corporation, the names and addresses of all stockholders and directors; if a partnership, the names and addresses of all partners, both general and limited.

(d) An application fee of $25,000 shall be paid at the time of filing to defray the costs associated with the background investigation conducted by the board and the search and classification of fingerprints obtained by the board with respect to the application. If the costs of the investigation exceed $25,000, the applicant shall pay the additional amount to the board. If the costs of the investigation are less than $25,000, the applicant shall receive a refund of the remaining amount. All information, records, interviews, reports, statements, memoranda, or other data supplied to or used by the board in the course of its review or investigation of an application for a license shall be privileged, strictly confidential, and used only for the purpose of evaluating an applicant. The information, records, interviews, reports, statements, memoranda, or other data shall not be admissible as evidence, nor discoverable in any action of any kind in any court or before any tribunal, board, agency, or person, except for any action deemed necessary by the board.

(e) The licensed owner shall be the person primarily responsible for the gaming ship itself. Only one shipboard gaming operation may be authorized by the board on any gaming ship. The applicant shall identify each ship that it intends to use and certify that the gaming ship:

(1) Has the capacity required in this chapter;

(2) Is accessible to persons with disabilities; and

(3) Is fully registered and licensed in accordance with any applicable laws.

(f) A person who knowingly makes a false statement on an application shall be guilty of a petty misdemeanor.

§ -13 Owner's licenses. (a) No person shall operate and maintain a gaming ship in this State unless the person has first obtained an owner's license from the board pursuant to this section. If the board finds that the applicant meets the eligibility requirements, the board shall issue an owner's license upon payment by the applicant of a $15,000 license fee for the first year of operation. An applicant shall be ineligible to receive an owner's license if:

(1) The applicant; an officer, director, or managerial employee of the applicant; or an employee who participates in the management or gaming operations of the applicant:

(A) Has been convicted of a felony under the laws of this State, any other state, or the United States;

(B) Has been convicted of any violation under part III, chapter 712, or substantially similar laws of another jurisdiction;

(D) Is a member of the board;

(2) The applicant owns more than ten per cent of an entity holding an owner's license issued under this chapter; or

(3) A license of the applicant issued under this chapter, or a license to own or operate gaming facilities in any other jurisdiction, has been revoked.

(b) In determining whether to grant an owner's license to an applicant, the board shall consider:

(1) The character, reputation, experience, and financial integrity of the applicant and of any other or separate person that either:

(A) Controls, directly or indirectly, the applicant; or

(B) Is controlled, directly or indirectly, by the applicant or by a person that controls, directly or indirectly, the applicant;

(2) The facilities or proposed facilities for the conduct of shipboard gaming;

(3) The highest prospective total revenue to be derived by the State from the conduct of shipboard gaming;

(4) The financial ability of the applicant to purchase and maintain adequate liability and casualty insurance;

(5) Whether the applicant has adequate capitalization to provide and maintain, for the duration of a license, a shipboard gaming operation; and

(6) The extent to which the applicant meets or exceeds other standards that the board may adopt by rule for the issuance of an owner's license.

(c) In the application for an owner's license, the applicant shall specify the dock at which the applicant's gaming ship will be based, including but not limited to the pier at the Aloha Tower Complex, and the area within the territorial and archipelagic waters of the State on which the gaming ship will operate. In determining the territorial and archipelagic waters upon which an applicant's gaming ship will operate with licenses, the board shall consider the economic benefit that shipboard gaming confers on the State and shall seek to ensure that all counties of the State share in the economic benefits of shipboard gaming.

(d) In granting licenses, the board may give favorable consideration to:

(1) Economically depressed areas of the State, including but not limited to the area surrounding the Aloha Tower Complex;

(2) Applicants presenting plans that provide for significant economic development;

(3) Applicants currently licensed in other United States jurisdictions; and

(4) Applicants who operated nongaming ships in Hawaii prior to the enactment of this chapter.

The board shall promptly review and determine whether to grant all applications for owner's licenses and shall promptly inform each applicant of the board's decision.

(e) The board may revoke the owner's license if a licensee fails to begin regular shipboard gaming excursions within twelve months of receipt of the license upon a finding by the board that license revocation is in the best interest of the State.

(f) Licenses shall be issued for a one-year period and shall be renewable annually upon payment of a $5,000 license renewal fee and a determination by the board that the licensee continues to meet all of the requirements of this chapter.

(g) The board may authorize a licensee to own and operate up to two gaming ships per owner's license.

(h) The board shall establish a process to facilitate and expedite the approval of any other necessary licenses or permits. The board may establish its own procedures for the issuance of liquor licenses for any holder of an owner's license under this chapter; provided that the applicant complies with all state laws and county ordinances relating to liquor.

(i) Nothing in this chapter shall be interpreted to prohibit a licensed owner from operating a school for the training of any occupational licensee.

§ -14 Bond of licensee. Before an owner's license may be issued, the licensee shall file with the department a bond in the sum of $200,000. The bond shall be used to guarantee that the licensee faithfully makes the payments, keeps books and records, makes reports, and conducts games of chance in conformity with this chapter and the rules adopted by the board. The bond shall not be canceled by a surety on less than thirty days notice in writing to the board. If a bond is canceled and the licensee fails to file a new bond with the board in the required amount on or before the effective date of cancellation, the licensee's license shall be revoked. The total and aggregate liability of the surety on the bond is limited to the amount specified in the bond.

§ -15 Supplier's licenses. (a) No person shall furnish any equipment, device, or supplies to a licensed shipboard gaming operation unless the person has first obtained a supplier's license pursuant to this section. The board may issue a supplier's license to any person, firm, or corporation who pays a nonrefundable application fee of $50,000 upon a determination by the board that the applicant is eligible for a supplier's license and upon payment by the applicant of a $1,000 license fee. Supplier's licenses shall be renewable annually upon payment of the $1,000 annual license renewal fee and a determination by the board that the licensee continues to meet all of the requirements of this chapter.

(b) The holder of a supplier's license may sell or lease, or contract to sell or lease, gaming equipment and supplies to any licensee involved in the ownership or management of gaming operations.

(c) Gaming supplies and equipment shall not be distributed unless the supplies and equipment conform to standards established in rules adopted by the board.

(d) An applicant shall be ineligible to receive a supplier's license if:

(1) The applicant; an officer, director, or managerial employee of the applicant; or an employee of the applicant who participates in the management or operation of shipboard gaming;

(A) Has been convicted of a felony under the laws of this State, any other state, or the United States;

(B) Has been convicted of any violation under part III, chapter 712, or substantially similar laws of another jurisdiction;

(D) Is a member of the board;

(2) The license of an applicant issued under this chapter, or a license to own or operate gaming facilities in any other jurisdiction, has been revoked.

(e) A licensed supplier shall:

(1) Furnish to the board a list of all equipment, devices, and supplies offered for sale or lease in connection with games authorized under this chapter;

(2) Keep books and records for the furnishing of equipment, devices, and supplies to gaming operations separate and distinct from any other business that the supplier operates;

(3) File a quarterly return with the board listing all sales and leases;

(4) Permanently affix its name to all its equipment, devices, and supplies for gaming operations; and

(5) File an annual report listing its inventories of gaming equipment, devices, and supplies.

(f) Any person who knowingly makes a false statement on an application is guilty of a petty misdemeanor.

(g) Any gaming equipment, devices, or supplies provided by any licensed supplier may either be repaired on the gaming ship or removed from the gaming ship to a facility owned by the holder of an owner's license for repair. Any licensed supplier's equipment, devices, and supplies that are used by any person in an unauthorized gaming operation shall be forfeited to the State.

§ -16 Occupational licenses. (a) The board may issue an occupational license to an applicant upon the payment of a nonrefundable application fee as set by the board, upon a determination by the board that the applicant is eligible for an occupational license, and upon payment of an annual license fee in an amount set by the board. To be eligible for an occupational license, an applicant shall:

(1) Be twenty-one years of age or older if the applicant will perform any function involved in gaming. Any applicant seeking an occupational license for a nongaming function shall be at least eighteen years of age;

(2) Not have been convicted of a felony, or a similar statute in any other jurisdiction, or a crime involving dishonesty or moral turpitude; and

(3) Meet standards for holding of an occupational license as provided by rules adopted by the board, including background inquiries and other requirements similar to those for an owner's license.

(b) Each application for an occupational license shall be on forms prescribed by the board and shall contain all information required by the board. The applicant shall set forth in the application whether the applicant:

(1) Has been issued prior gaming-related licenses in any other jurisdiction;

(2) Has been licensed in any other jurisdiction under any other name, and, if so, the name and the applicant's age at the time the license was issued; or

(3) Whether or not a permit or license issued to the applicant in any other jurisdiction has been suspended, restricted, or revoked and, if so, for what period of time.

(c) Each applicant shall submit with the application two sets of the applicant's fingerprints. The board shall charge each applicant a fee to defray the costs associated with the search and classification of fingerprints obtained by the board with respect to the application.

(d) The board may refuse an occupational license to any person:

(1) Who is unqualified to perform the duties required of a licensee;

(2) Who fails to disclose or states falsely any information called for in the application;

(3) Who has been found guilty of a violation of this chapter or whose prior gaming-related license or application therefor has been suspended, restricted, revoked, or denied for just cause in any other jurisdiction; or

(4) For any other just cause.

(e) The board may suspend, revoke, or restrict any occupational licensee:

(1) For any violation of this chapter;

(2) For any violation of the rules of the board;

(3) For any cause which, if known to the board, would have disqualified the applicant from receiving the license;

(4) For default in the payment of any obligation or debt due to the State; or

(5) For any other just cause.

(f) A person who knowingly makes a false statement on an application is guilty of a petty misdemeanor.

(g) Any license issued pursuant to this section shall be valid for a period of one year from the date of issuance and shall be renewable annually upon payment of the annual license renewal fee and a determination by the board that the licensee continues to meet all of the requirements of this chapter.

(h) Any training provided for occupational licensees may be conducted either on a licensed gaming ship or at a school with which a licensed owner has entered into an agreement.

§ -17 Conduct of gaming. Gaming may be conducted by licensed owners aboard gaming ships, subject to the following standards:

(1) Gaming shall be permitted after a vessel departs and no closer than one hundred yards from the dock;

(2) Minimum and maximum wagers on games shall be set by the licensee;

(3) Agents of the board may board and inspect any gaming ship at any time for the purpose of determining compliance with this chapter. Every gaming ship, if under way and being hailed by a law enforcement officer or agent of the board, shall stop immediately and lay to;

(4) Employees of the board may be present on the gaming ship or on adjacent facilities under the control of the licensee;

(5) Gaming equipment and supplies customarily used in conducting shipboard gaming shall be purchased or leased only from suppliers licensed under this chapter;

(6) Persons licensed under this chapter shall permit no form of wagering on games except as permitted by this chapter;

(7) Wagers may be received only from a person present on a licensed gaming ship. No person present on a licensed gaming ship shall place or attempt to place a wager on behalf of another person who is not present on the gaming ship;

(8) Wagering shall not be conducted with money or other negotiable currency, except for wagering on slot machines;

(9) A person under age twenty-one shall not be permitted in an area of a gaming ship where gaming is being conducted, except for a person at least eighteen years of age who is an employee of the shipboard gaming operation. No gaming ship employee under age twenty-one shall perform any function involved in gaming by the patrons. No person under age twenty-one shall be permitted to make a wager under this chapter;

(10) Gaming excursions shall be permitted only when the territorial and archipelagic waters for which the ship is licensed are navigable, as determined by the board in consultation with the United States Army Corps of Engineers or the United States Coast Guard, as appropriate;

(11) All tokens, chips, or electronic cards used to make wagers shall be purchased from a licensed owner either aboard a gaming ship or at an onshore facility that has been approved by the board and that is located where the gaming ship docks. The tokens, chips, or electronic cards may be purchased by means of an agreement under which the owner extends credit to the patron. The tokens, chips, or electronic cards may be used while aboard the gaming ship only for the purpose of making wagers on authorized games; and

(12) In addition to the provisions of this section, gaming shall be conducted in accordance with all rules adopted by the board pursuant to chapter 91.

S -18 Collection of amounts owing under credit agreements. Notwithstanding any other law to the contrary, a licensed owner who extends credit to a shipboard gaming patron is expressly authorized to institute a cause of action to collect any amounts due and owing under the extension of credit, as well as the owner's costs, expenses, and reasonable attorney's fees incurred in collection; provided that all collections activity shall be subject to state and federal fair debt collection practices.

§ -19 Wagering tax; rate; distribution. A tax is imposed on the adjusted gross receipts received from games authorized under this chapter at the rate of per cent. The tax imposed by this section shall be paid by the licensed owner to the board no later than seven days following the last day of each month in which the wagers were made and shall be deposited into the state gaming revolving fund pursuant to section -27. The wagering tax imposed by this section shall be in lieu of all other state taxes on gross or adjusted gross receipts including taxes levied under chapters 237 and 239, except income taxes.

§ -20 Licensed owners; records; reports; supervision. (a) A licensed owner shall keep books and records so as to clearly show:

(1) The daily number of admissions and the amount of admission tax payable each day;

(2) The total amount of gross receipts; and

(3) The total amount of adjusted gross receipts.

(b) The licensed owner shall furnish to the board on forms designed and supplied for such purpose by the board reports and information as the board may require with respect to its activities.

(c) The books and records kept by a licensed owner are government records and the examination, publication, and dissemination of the books and records shall be subject to chapter 92F.

§ -21 Audit of licensee operations. Within ninety days after the end of each quarter of each fiscal year, the licensed owner shall transmit to the board an audit of the financial transactions and condition of the licensed owner's total operations. All audits shall be conducted by certified public accountants that are registered and licensed to practice in this State and selected by the board. The compensation for each certified public accountant shall be paid directly by the licensed owner to the certified public accountant.

§ -22 Judicial review. Jurisdiction and venue for the judicial review of a final order of the board relating to owner's, supplier's, occupational, shuttle service, or special event licenses is vested in the circuit court of the appropriate jurisdiction. A petition for judicial review of a final order of the board shall be filed within thirty days after entry of the final order.

§ -23 Prohibited activities; penalty. (a) A person shall be guilty of a misdemeanor for any of the following:

(1) Intentionally operating a gaming ship where wagering is used or is to be used without a license issued by the board;

(2) Intentionally operating a gaming ship where wagering is permitted other than in the manner authorized under this chapter;

(3) Knowingly permitting a person under twenty-one years of age to make a wager; or

(4) Knowingly violating section -17.

(b) A person wagering or accepting a wager at any location outside the gaming ship is subject to the penalties in part III of chapter 712.

(c) A person shall be guilty of a class C felony and, in addition, shall be barred for life from gaming ships under the jurisdiction of the board, if the person commits any of the following acts:

(1) Offers, promises, or gives anything of value or benefit to a person who is connected with a gaming ship owner, including but not limited to an officer or employee of a licensed owner or holder of an occupational license, pursuant to an agreement or arrangement or with the intent that the promise or thing of value or benefit will influence the actions of the person to whom the offer, promise, or gift was made in order to affect or attempt to affect the outcome of a gaming activity or to influence official action of a member of the board;

(2) Solicits or knowingly accepts or receives a promise of anything of value or benefit while the person is connected with a gaming ship, including but not limited to an officer or employee of a licensed owner or holder of an occupational license, pursuant to an understanding or arrangement or with the intent that the promise or thing of value or benefit will influence the actions of the person to affect or attempt to affect the outcome of a gaming activity or to influence official action of a member of the board;

(3) Cheats at a gaming activity;

(4) Manufactures, sells, or distributes any cards, chips, dice, game, or device that is intended to be used to violate this chapter;

(5) Alters or misrepresents the outcome of a gaming activity on which wagers have been made after the outcome is made sure but before it is revealed to the players;

(6) Places a bet after acquiring knowledge, not available to all players, of the outcome of the gaming activity that is subject of the bet or to aid a person in acquiring the knowledge for the purpose of placing a bet contingent on that outcome;

(7) Claims, collects, or takes, or attempts to claim, collect, or take, money or anything of value in or from the games, with intent to defraud, without having made a wager contingent on winning a gaming activity, or claims, collects, or takes an amount of money or thing of value of greater value than the amount won;

(8) Uses counterfeit chips or tokens in a gaming activity; or

(9) Possesses any key or device designed for the purpose of opening, entering, or affecting the operation of a gaming activity, drop box, or an electronic or mechanical device connected with the gaming activity or for removing coins, tokens, chips, or other contents of a gaming activity. This paragraph shall not apply to a gaming licensee or employee of a gaming licensee acting within the scope of the employee's employment.

(d) An action to prosecute any crime occurring during a gaming excursion shall be tried in the county of the dock at which the gaming ship is based.

§ -24 Forfeiture of property. (a) Except as provided in subsection (b), any gaming ship used for the conduct of gaming in violation of section -17, shall be subject to section 712-1222.5. Every gaming device found on a ship operating games in violation of this chapter shall be subject to seizure, confiscation, and destruction.

(b) It is not a violation of this chapter for a vessel that is licensed for gaming by a foreign nation or another state or territory of the United States to dock in the State if the State has granted permission for docking; provided that no gaming is conducted on the vessel while it is docked in the State or traversing in the territorial and archipelagic waters of the State. No gaming device shall be subject to seizure, confiscation, or destruction if the gaming device is located on such a vessel.

§ -25 Prohibited activities; civil penalties. Any:

(1) Person who conducts a gaming operation without first obtaining an owner's license, or who continues to conduct gaming operations after revocation of the person's owner's license; or

(2) Licensee who conducts or allows to be conducted any unauthorized games on a ship where it is authorized to conduct its shipboard gaming,

in addition to other penalties provided, shall be subject to a civil penalty equal to the amount of gross receipts derived from wagering on games in violation of this section, as well as confiscation and forfeiture of all gaming equipment used in the conduct of games in violation of this section.

§ -26 Criminal history record information. Whenever the board is authorized or required by law to consider a person's criminal history for the purpose of carrying out its statutory powers and responsibilities, upon request from the board, the Hawaii criminal justice data center shall furnish criminal history record information contained in its files.

§ -27 State gaming revolving fund; There is established in the state treasury the state gaming revolving fund into which shall be deposited all fees, taxes, and fines collected under this chapter, and all other moneys credited or transferred from any other fund or source pursuant to statute.

§ -28 Use of moneys in state gaming revolving fund; report. (a) The moneys in the state gaming revolving fund shall be expended by the board for expenses incurred for the administration and enforcement of this chapter.

(b) All unencumbered moneys in excess of $ remaining in the state gaming revolving fund at the close of each fiscal year shall be transferred by the director of finance in equal amounts to the director of finance of each county that has established a county surcharge on state tax pursuant to section 46-16.8, for deposit into an appropriate fund established by the county to receive the proceeds of the surcharge on state tax. (c) A county receiving moneys pursuant to this section shall expend the moneys for the purposes established under section 46-16.8(e).

(d) In addition to the annual report required under section -9, the board shall submit to the legislature no less than twenty days prior to the convening of each regular session, a comprehensive financial report detailing:

(1) The revenues collected from the taxes, fees, and fines imposed under this chapter; and

(2) The amounts allocable to administrative and enforcement costs.

§ -29 Legislative oversight. (a) Beginning with the second fiscal year after gaming activities commence pursuant to this chapter, the auditor shall conduct a biennial financial and social assessment of shipboard gaming operations. In conducting the assessment, the auditor shall identify the financial impacts of shipboard gaming on the State's economy and the social impacts of gaming upon persons in the State. The auditor shall submit a report of its findings and recommendations to the legislature no later than twenty days prior to the convening of the next regular session after the biennial assessment is completed.

(b) Beginning with the second fiscal year after gaming activities commence pursuant to this chapter, the auditor shall conduct a program and financial audit of the board. Thereafter, the auditor shall conduct a program and financial audit every four years after the first audit is completed."

SECTION 3. Section 36-30, Hawaii Revised Statutes, is amended by amending subsection (a) to read as follows:

"(a) Each special fund, except the:

(1) Special out-of-school time instructional program fund under section 302A-1310;

(2) School cafeteria special funds of the department of education;

(3) Special funds of the University of Hawaii;

(4) State educational facilities improvement special fund;

(5) Special funds established by section 206E-6;

(6) Aloha Tower fund created by section 206J-17;

(7) Funds of the employees' retirement system created by section 88-109;

(8) Hawaii hurricane relief fund established under chapter 431P;

(9) Convention center enterprise special fund established under section 201B-8;

(10) Hawaii health systems corporation special funds and the subaccounts of its regional system boards;

(11) Tourism special fund established under section 201B-11;

(12) Universal service fund established under section 269-42;

(13) Emergency and budget reserve fund under section 328L-3;

(14) Public schools special fees and charges fund under section 302A-1130;

(15) Sport fish special fund under section 187A-9.5;

[[](16)[]] Neurotrauma special fund under section 321H-4;

[[](17)[]] Center for nursing special fund under section 304A-2163;

[[](18)[]] Passenger facility charge special fund established by section 261-5.5;

[[](19)[]] Court interpreting services revolving fund under section 607-1.5;

[[](20)[]] Trauma system special fund under section 321-22.5;

[[](21)[]] Hawaii cancer research special fund;

[[](22)[]] Community health centers special fund;

[[](23)[]] Emergency medical services special fund;

[[](24)[]] Rental motor vehicle customer facility charge special fund established under section 261-5.6;

[[](25)[]] Shared services technology special fund under section 27-43;

[[](26)[]] Nursing facility sustainability program special fund established pursuant to [section 346F-4];

[[](27)[]] Automated victim information and notification system special fund established under section 353-136;

[[](28)[]] Hospital sustainability program special fund under [section 346G-4]; [~~and~~]

[[](29)[]] Civil monetary penalty special fund under section 321-30.2[,]; and

(30) State gaming revolving fund under section -27;

shall be responsible for its pro rata share of the administrative expenses incurred by the department responsible for the operations supported by the special fund concerned."

SECTION 4. Section 712-1222.5, Hawaii Revised Statutes, is amended by amending subsection (3) to read as follows:

"(3) This section shall not apply to gambling activity conducted during travel from foreign nations or another state or territory of the United States to the point of first entry into state waters or during travel to foreign nations or another state or territory of the United States from the point of final exit from state waters; provided that nothing herein shall preclude prosecution for any offense under this part.

This part shall not apply to gaming activity authorized on ships licensed under chapter ."

SECTION 5. If any person commences a proceeding in any court of competent jurisdiction to extend any provision of this Act to allow shipboard gaming as defined in this Act on any land, on or in any building, structure, or improvement attached to or on land within the jurisdiction of the State, or if any person contests, challenges, or defends against any prosecution or claim that no provision of this Act allows shipboard gaming as defined in this Act on any land, on or in any building, structure, or improvement attached to or on land within the jurisdiction of the State, the commencement of the proceeding, prosecution, or claim shall be deemed to be public notice that this Act shall be repealed on the date that a court of competent jurisdiction issues a final order that would allow shipboard gaming on land, on or in any building, structure, or improvement attached to or on land.

This Act shall be repealed on the date that a court of competent jurisdiction issues a final order that would allow shipboard gaming on land, on or in any building, structure, or improvement attached to or on land, and, the underlying provisions of sections 36-30(a) and 712-1222.5(3), Hawaii Revised Statutes, shall be reenacted in the form in which those sections read on the day before the effective date of this Act.

SECTION 6. There is appropriated out of the general revenues of the State of Hawaii the sum of $ or so much thereof as may be necessary for fiscal year 2017-2018 and the same sum or so much thereof as may be necessary for fiscal year 2018-2019 for the purposes of implementing this Act.

The sums appropriated shall be expended by the department of business, economic development, and tourism for the purposes of this Act.

SECTION 7. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 8. This Act shall take effect on July 1, 2017.

INTRODUCED BY:	_____________________________

Report Title:

Shipboard Gaming, Appropriation

Description:

Establishes regulatory framework for licensed shipboard gaming in state waters. Makes an appropriation.

The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.