Hawaii-2024-HB918-Introduced

SECTION 1. The legislature finds that authorizing a single facility for poker and sportsbook betting will not only provide visitors with memorable nighttime activities but will also stimulate the economy by creating hundreds of jobs and generating millions of dollars in revenue for the State. By comparison, other forms of gaming, such as lotteries, internet gambling, and non-casino electronic gambling, create few quality jobs and do not generate significant economic development in the State. Polls have shown that more than seventy per cent of Japanese, Chinese, and Korean visitors approve of a gambling facility.

Other locations have found success with legalizing gambling. Within one year of the first casino opening in Singapore in 2010, tourism hit record levels and Singapore's gaming market reached an estimated $2,800,000,000. Jurisdictions that have allowed casino gambling have not experienced a predicted increase in crime following the opening of casinos. Two decades after Connecticut opened casinos, the communities around the casinos have not experienced an increase in crime and found that crime decreased compared to the time period before the casinos opened.

The legislature believes that allowing only hotel patrons to access the gaming facility will help to reduce the potential negative impacts of gambling on Hawaii residents, while creating high-paying jobs within the casino.

The legislature further rejects any argument that other entities may open a gaming casino in Hawaii pursuant to the Indian Gaming Regulatory Act, which authorized the establishment of hundreds of Native American gaming operations in other states. According to the National Indian Gaming Association, because there are no federally-recognized Native American nations indigenous to Hawaii, a Native American gaming operation would not be permissible in Hawaii under the Act.

The legislature further finds that, according to the 2022 Point in Time Count, fifty-two per cent of homeless individuals on Oahu identify "Native Hawaiian and Pacific Islander" as their only race or part of their multiracial identity. This Act will help to address the disproportionate number of Native Hawaiian and Pacific Islander homeless individuals by allocating a percentage of the facility's revenues to the department of Hawaiian home lands to build more homes for native Hawaiians (those who meet the blood quantum under the Hawaiian Homes Commission Act). This, in turn, will help to make housing more affordable for all Hawaii residents by increasing the supply of homes statewide. The Act also allocates a separate percentage to homeless programs to assist all homeless individuals, regardless of ethnicity.

The purpose of this Act is to authorize the establishment of one gaming facility within the geographic area designated by a county with a population greater than five hundred thousand residents that contains the largest concentration of hotel rooms, for poker and sportsbook betting and to limit access to that facility to individuals who are staying in hotels.

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

"CHAPTER

GAMING

PART I. GENERAL PROVISIONS

§ -101 Definitions. As used in this chapter, unless the context clearly requires otherwise:

"Affiliate" means a person who, directly or indirectly, through one or more intermediaries:

(1) Controls, is controlled by, or is under common control with;

(2) Is in a partnership or joint venture relationship with; or

(3) Is a co-shareholder of a corporation, a co-member of a limited liability company, or a co-partner in a limited liability partnership with,

a person who holds or applies for a gaming license under this chapter.

"Agent" means any individual who is employed by any agency of the State, other than the commission, who is assigned to perform full-time services on behalf of or for the benefit of the commission, regardless of the title or position held by that individual.

"Applicant" means any person who applies for a license under this chapter.

"Chairperson" means the chairperson of the Hawaii gaming control commission.

"Commission" means the Hawaii gaming control commission.

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

"Executive director" means the executive director of the commission.

"Facility" means a freestanding, land-based structure for gaming and may include bars, restaurants, showrooms, theaters, or improvements. "Facility" does not include any structure used for hotel or other transient accommodation lodging purposes.

"Financial interest" or "financially interested" means any interest in investments, awarding of contracts, grants, loans, purchases, leases, sales, or similar matters under consideration or consummated by the commission or holding a one per cent or more ownership interest in an applicant or a licensee. For purposes of this definition, member, employee, or agent of the commission shall be considered to have a financial interest in a matter under consideration if any of the following circumstances exist:

(1) The individual owns one per cent or more of any class of outstanding securities that are issued by a party to the matter under consideration or consummated by the commission; or

(2) The individual is employed by or is an independent contractor for a party to the matter under consideration or consummated by the commission.

"Gaming", "limited gaming", or "game", as the context may require, means the operation of poker rooms and sportsbook betting.

"Gaming license" means a license to operate and maintain the facility under this chapter.

"Gross receipts":

(1) Means the total of:

(A) Cash received as winnings;

(B) Cash received in payment for credit extended by a licensee to a patron for purposes of gaming; and

(2) Does not include:

(A) Counterfeit money or tokens;

(B) Coins of other countries that are received in gaming devices;

(D) Cash received as entry fees for contests or tournaments in which patrons compete for prizes.

"Individual" means a natural person.

"Institutional investor" means:

(1) Any retirement fund administered by a public agency for the exclusive benefit of federal, state, or county public employees;

(2) An employee benefit plan, or pension fund that is subject to the Employee Retirement Income Security Act of 1974, as amended;

(3) An investment company registered under the Investment Company Act of 1940 (54 Stat. 789, 15 U.S.C. 80a-1 to 80a-3 and 80a-4 to 80a-64);

(4) A collective investment trust organized by a bank under title 12 Code of Federal Regulations section 9.18 of the rules of the United States Comptroller of the Currency;

(5) A closed-end investment trust;

(6) A chartered or licensed life insurance company or property and casualty insurance company;

(7) A chartered or licensed financial institution;

(8) An investment advisor registered under the Investment Advisers Act of 1940, (54 Stat. 847, 15 U.S.C. sections 80b-1 to 80b-21 as amended); and

(9) Any other person as the commission may determine for reasons consistent with this chapter.

"Investigative hearing" means any hearing conducted by the commission or its authorized representative to investigate and gather information or evidence regarding pending license applicants, qualifiers, licensees, or alleged or apparent violations of this chapter or rules adopted by the commission. An investigative hearing shall include any matter related to an apparent deficiency.

"Occupational license" means a license issued by the commission to an individual to perform an occupation relating to gaming in the State that the commission has identified as an occupation that requires a license.

"Outside employment" includes the following:

(1) Operation of a proprietorship;

(2) Participation in a partnership or group business enterprise; or

(3) Performance as a director or corporate officer of any for-profit corporation, or banking or credit institution.

"Person" means an individual, association, partnership, estate, trust, corporation, limited liability company, or other legal entity.

"Political activity" or "politically-related activity" includes any of the following:

(1) Using the person's official authority or influence for the purpose of interfering with or affecting the result of an election;

(2) Knowingly soliciting, accepting, or receiving political campaign contributions from any person;

(3) Running for nomination or as a candidate for election to a political office; or

(4) Knowingly soliciting or discouraging the participation in any political activity of any person who is:

(A) Applying for any compensation, grant, contract, ruling, license, permit, or certificate pending before the commission; or

(B) The subject of or a participant in an ongoing audit, investigation, or enforcement action being carried out by the commission.

"Qualifier" means an affiliate, affiliated company, officer, director, or managerial employee of an applicant, or a person who holds greater than a five per cent direct or indirect interest in an applicant. As used in this definition, "affiliate" and "affiliated company" do not include a partnership, joint venture relationship, co-shareholder of a corporation, co-member of a limited liability company, or co‑partner in a limited liability partnership that has a five per cent or less direct interest in the applicant and is not involved in the facility as defined in rules adopted by the commission.

"Supplier" means a person that the commission has identified under rules adopted by the commission as requiring a license to provide the facility licensees with goods or services regarding the realty, construction, maintenance, or business of a proposed or existing facility on a regular or continuing basis, including junket enterprises, security businesses, manufacturers, distributors, persons who service gaming devices or equipment, garbage haulers, maintenance companies, food purveyors, and construction companies.

"Supplier license" means a license that authorizes a person to furnish any equipment, devices, supplies, or services to a licensed facility permitted under this chapter.

PART II. HAWAII GAMING CONTROL COMMISSION

§ -201 Hawaii gaming control commission; established. There is established the Hawaii gaming control commission within the department of business, economic development, and tourism for administrative purposes only. The commission shall be a body corporate and a public instrumentality of the State for the purpose of implementing this chapter.

§ -202 Members, chairperson, officers; appointment. (a) The commission shall consist of seven members to be appointed by the governor pursuant to section 26‑34. Of the seven members, two shall be appointed from a list of nominees submitted by the president of the senate and two shall be appointed from a list of nominees submitted by the speaker of the house of representatives.

(b) Vacancies in the commission shall be filled for the unexpired term in like manner as the original appointments.

(d) Officers of the commission shall be selected by the members.

§ -203 Member applicant disclosure. In addition to any other disclosures required by the governor or by law, before appointment as a member, the individual shall disclose to the governor all past involvement with any gaming or casino interest in the past five years.

§ -204 Member requirements. (a) Each member of the commission shall:

(1) Be a resident of the State;

(2) Serve part-time;

(3) Be paid compensation of $300 for each day in the performance of official duties; and

(4) Be reimbursed for expenses, including travel expenses, incurred in the performance of official duties.

(b) Before assuming the duties of office, each member of the commission shall:

(1) Take an oath that the member shall faithfully execute the duties of office according to the laws of the State; and

(2) 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 commission under this section shall be considered a part of the necessary expenses of the commission.

(c) By January 31 of each year, each member shall prepare and file with the commission, a disclosure form in which the member shall:

(1) Affirm that the member or the member's spouse, parent, child, or child's spouse is not a member of the board of directors of, financially interested in, or employed by, a licensee or applicant;

(2) Affirm that the member continues to meet all other criteria for commission membership under this chapter or the rules adopted by the commission;

(3) Disclose any legal or beneficial interest in any real property that is or may be directly or indirectly involved with gaming operations authorized by this chapter; and

(4) Disclose any other information that may be required to ensure that the integrity of the commission and its work is maintained.

(d) Any member who receives any ex parte communication in violation of section -310, or who is aware of an attempted communication in violation of section -310, shall immediately report details of the communication or attempted communication, including the source and content of the communication, in writing to the chairperson.

§ -205 Member disqualifications. No individual shall be appointed as a member of the commission or continue to be a member of the commission if the individual:

(1) Is an elected state official;

(2) Is licensed by the commission pursuant to this chapter, or is an official of, has a financial interest in, or has a financial relationship with, any gaming operation subject to the jurisdiction of this commission pursuant to this chapter;

(3) Is related to any individual within the second degree of consanguinity or affinity who is licensed by the commission pursuant to this chapter; or

(4) Has been under indictment, convicted, pled guilty or nolo contendere, or forfeited bail for a felony or a misdemeanor involving gambling or fraud under the laws of this State, any other state, or the United States within the ten years prior to appointment or a local ordinance in a state involving gambling or fraud that substantially corresponds to a misdemeanor in that state within the ten years prior to appointment.

§ -206 Member removal. The president of the senate and speaker of the house of representatives may request that the governor remove or suspend a member of the commission that they personally nominated for a seat on the commission. Upon receipt of a request from the president of the senate or the speaker of the house of representatives, and after due notice and public hearing, the governor may remove or suspend that member for cause.

§ -207 Powers and duties of the commission. (a) The commission shall have all powers necessary to regulate all gaming operations, including the power to:

(1) Administer, regulate, and enforce the system of gaming established by this chapter. The commission's jurisdiction shall extend to every person, association, corporation, partnership, trust, and any other entity having a financial interest in or holding a license under this chapter, or required under this chapter to hold a license in gaming operations in the city and county of Honolulu;

(2) Issue a license to operate the facility pursuant to this chapter;

(3) Determine the types and numbers of occupational licenses and supplier licenses to be permitted under this chapter;

(4) Adopt standards for the licensing of all persons under this chapter subject to the qualifications and standards set forth herein, to issue licenses, and to establish and collect fees for these licenses;

(5) Provide for the collection of all taxes imposed pursuant to this chapter, and to collect, receive, expend, and account for all revenues derived from gaming within the city and county of Honolulu;

(6) Enter at any time without a warrant and without notice to a gaming licensee, the premises, offices, facility, or other places of business of a gaming licensee or supplier licensee, where evidence of the compliance or noncompliance with this chapter or rules is likely to be found. Entry is authorized to:

(A) Inspect and examine all premises wherein gaming or the business of gaming or the business of a supplier is conducted, or where any records of the activities are prepared;

(B) Inspect, examine, audit, impound, seize, or assume physical control of, or summarily remove from the premises all books, ledgers, documents, writings, photocopies of correspondence records, videotapes, including electronically stored records, money receptacles, other containers and their contents, equipment in which the records are stored, or other gaming-related equipment and supplies on or around the premises, including counting rooms;

(C) Inspect the person, and inspect, examine, and seize personal effects present in a facility licensed under this chapter or of any holder of a gaming license; and

(D) Investigate and deter alleged violations of this chapter or rules;

(7) Investigate alleged violations of this chapter and take appropriate disciplinary action against a gaming licensee, supplier licensee, or occupational licensee for a violation, or institute appropriate legal action for enforcement, or both;

(8) Be present, through its inspectors and agents, any time gaming operations are conducted in the facility for the purpose of certifying the facility's revenue, receiving complaints from the public, or conducting other investigations into the conduct of the gaming and the maintenance of the equipment as from time to time the commission may deem necessary and proper;

(9) Employ any personnel that may be necessary to carry out its duties;

(10) Adopt appropriate standards for the facility and gaming devices;

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

(12) 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 commission, it is necessary to administer or enforce this chapter. The executive director or the executive director's designee may issue subpoenas and administer oaths and affirmations to witnesses;

(13) Prescribe any employment application form to be used by the gaming licensee involved in the ownership or management of gaming operations for hiring purposes;

(14) Eject or exclude, or authorize the ejection or exclusion of, any individual from the facility where the individual is in violation of this chapter or, based upon the individual's conduct or reputation, the individual's presence within the facility, in the opinion of the commission, may call into question the honesty and integrity of the gaming operation or interfere with the orderly conduct thereof, or any other action that, in the opinion of the commission, is a detriment or impediment to the gaming operations; provided that the propriety of that ejection or exclusion shall be subject to subsequent hearing by the commission;

(15) Permit the gaming licensee to use a wagering system whereby wagerers' money may be converted to tokens, electronic cards, or chips, that shall be used only for wagering within the facility;

(16) Suspend, revoke, or restrict any license issued pursuant to this chapter, to require the removal of a licensee or an employee of a licensee for a violation of this chapter or a commission rule, or for engaging in a fraudulent practice;

(17) 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 the gaming licensee or a supplier licensee for each violation of this chapter, any rules adopted by the commission, or for any other action that, in the commission's discretion, is a detriment or impediment to gaming operations;

(18) Establish minimum levels of insurance to be maintained by the gaming licensee or a supplier licensee;

(19) Establish a process to facilitate and expedite the approval of the necessary licenses and permits for the gaming licensee to begin regular gaming operations;

(20) Establish its own procedures for the issuance of liquor licenses for the gaming license under this chapter; provided that all state laws and county ordinances relating to liquor are satisfied;

(21) Delegate the execution of any of its powers for the purpose of administering and enforcing this chapter; and

(22) Adopt rules pursuant to chapter 91 to implement this chapter, including rules that:

(A) Govern, restrict, approve, or regulate the gaming authorized in this chapter;

(B) Promote the safety, security, and integrity of gaming authorized in this chapter;

(C) License and regulate, consistent with the qualifications and standards set forth in this chapter, persons participating in or involved with gaming authorized in this chapter; and

(D) Take any other action that may be reasonable or appropriate to enforce this chapter and rules adopted under this chapter.

(b) This section is not intended to limit warrantless inspections except in accordance with constitutional requirements.

(c) The commission shall collaborate with the Hawaii tourism authority to identify high value markets for the facility and develop and implement marketing strategies for those markets.

(d) The commission shall adopt rules in accordance with chapter 91 establishing a code of ethics for its employees that shall include a prohibition on employees participating in or wagering on any game or gaming operation subject to the jurisdiction of the commission. The code of ethics shall be separate from and in addition to any standards of conduct set forth pursuant to chapter 84.

§ -208 Chairperson; reports (a) Whenever the chairperson is required to file disclosure forms or report in writing the details of any incident or circumstance pursuant to this chapter, the chairperson shall file the forms or reports to the commission.

(b) The chairperson shall report any action the chairperson has taken or contemplates taking under this chapter, with respect to an employee or agent or former employee or former agent, to the commission at the next meeting of the commission. The commission may direct the executive director to take additional or different action.

(c) The chairperson may investigate or initiate an investigation of any matter reported pursuant to section ‑204(e) or 310(d) with the assistance of the attorney general and law enforcement to determine if the communication violates sections -204 or -310 or other state law. The disclosure under this section and the investigation shall remain confidential. Following an investigation, the chairperson shall advise the governor and the commission of the results of the investigation and may recommend action the chairperson considers appropriate.

§ -209 Meetings; hearings. (a) The commission, subject to chapter 92, shall hold at least one meeting in each quarter of the state fiscal year. The chairperson or any four members may call special meetings; provided that written notice of a special meeting shall be provided to each member not less than seventy-two hours before the meeting. Four members shall constitute a quorum, and a majority vote of the members present shall be required for any final determination by the commission. The commission shall keep a complete and accurate record of all its meetings.

(b) Upon order of the commission, one of the commission members, or a hearings officer designated by the commission, may conduct any hearing provided for under this chapter related to gaming or by commission rule, and may recommend findings and decisions to the commission. The record made at the time of the hearing shall be reviewed by the commission, or a majority thereof, and the findings and decisions of the majority of the commission shall constitute the order of the commission in that case.

(c) Notice of the actions of the commission 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.

(d) Any party aggrieved by an action of the commission denying, suspending, revoking, restricting, or refusing to renew a license under this chapter may request a hearing before the commission. A request for a hearing shall be made to the commission in writing within five days after service of notice of the action of the commission. The commission shall conduct all requested hearings promptly and in reasonable order.

§ -210 Executive director of the Hawaii gaming control commission. (a) The commission shall appoint an executive director of the commission who shall be subject to the commission's supervision. The executive director shall:

(1) Hold office at the pleasure of the commission;

(2) Be exempt from chapters 76 and 89;

(3) Devote full time to the duties of the office;

(4) Not hold any other office or employment;

(5) Perform all duties that the commission assigns;

(6) Receive an annual salary at an amount set by the commission;

(7) Be reimbursed for expenses actually and necessarily incurred in the performance of the executive director's duties;

(8) Preserve all records, books, documents, and other papers belonging to the commission or entrusted to its care relating to gaming;

(9) Set the salaries of employees hired pursuant to this section; and

(10) Keep records of all proceedings of the commission.

(b) Except as otherwise provided by law, the executive director may:

(1) Hire assistants, other officers, and employees, who shall be exempt from chapters 76 and 89 and who shall serve at the pleasure of the executive director; and

(2) Appoint committees and consultants necessary for the efficient operation of gaming; provided that no individual shall be hired or appointed under this subsection who:

(A) Is an elected state official;

(B) Is licensed by the commission pursuant to this chapter or is an official of, has a financial interest in, or has a financial relationship with, any gaming operation subject to the jurisdiction of the commission pursuant to this chapter;

(C) Is related to any individual within the second degree of consanguinity or affinity who is licensed by the commission pursuant to this chapter; or

(D) Has been under indictment, convicted, pled guilty or nolo contendere, or forfeited bail for a felony or misdemeanor concerning gambling or fraud under the laws of this State, any other state, or the United States within the last ten years, or a local ordinance in any state involving gambling or fraud that substantially corresponds to a misdemeanor in that state within the ten years prior to employment.

§ -211 Commission employees. (a) No individual shall be employed by the commission if:

(1) During the three years immediately preceding appointment or employment, the individual held any direct or indirect interest in, or was employed by:

(A) A licensee under this chapter or in another jurisdiction; or

(B) A potential licensee who had an application to operate the facility pending before the commission or any other jurisdiction;

except that the individual seeking employment may be employed by the commission if the individual's interest in any licensee would not, in the opinion of the commission, interfere with the objective discharge of the individual's employment obligations. An individual shall not be employed by the commission if the individual's interest in the licensee constitutes a controlling interest in that licensee; or

(2) The individual or the individual's spouse, parent, child, child's spouse, or sibling:

(A) Is a member of the commission;

(B) Is a director of or has a financial interest in the gaming licensee;

(D) Has an application for any license pending before the commission.

§ -212 Employee, agent of commission; pre-employment disclosure. Before employment as an employee or agent of the commission, the individual shall disclose all past involvement with any gaming or casino interest in the past five years.

§ -213 Hawaii gaming control commission employees; financial disclosures. Each employee or agent of the commission, except the executive director, shall file with the commission at the time of employment a financial disclosure statement listing all assets, liabilities, property and business interests, and sources of income of the employee and the employee's spouse.

§ -214 Member, employee, or agent of commission; conduct. (a) Any member, employee, or agent of the commission who:

(1) Becomes aware that the member, employee, or agent of the commission or their spouse, parent, or child is a member of the board of directors of, financially interested in, or employed by a licensee or an applicant shall immediately provide detailed written notice thereof to the chairperson.

(2) Has been indicted, charged with, convicted of, pled guilty or nolo contendere to, or forfeited bail for:

(A) A misdemeanor involving gambling, dishonesty, theft, or fraud;

(B) A local ordinance in any state involving gambling, dishonesty, theft, or fraud that substantially corresponds to a misdemeanor in that state; or

shall immediately provide detailed written notice of the conviction or charge to the chairperson.

(3) Is negotiating for, or acquires by any means, any interest in a licensee or an applicant, or is affiliated with such a person, shall immediately provide written notice of the details of the interest to the chairperson. The member, employee, or agent of the commission shall not act on behalf of the commission with respect to that person.

(4) Receives an invitation, written or oral, to initiate a discussion concerning employment or the possibility of employment with a person, or affiliate of a person, who is a licensee or an applicant shall immediately report the invitation to the chairperson. The member, employee, or agent of the commission shall not take action on behalf of the commission with respect to that person;

(5) Is offered a bribe in violation of this chapter shall immediately provide a written account of the details of the incident to the chairperson and to a law enforcement officer of a law enforcement agency having jurisdiction; and

(6) Acquires a financial interest in a licensee or applicant, or affiliate or representative of a licensee or applicant through no intentional action of the employee or agent, shall have up to thirty days to divest or terminate the financial interest. An individual who has been offered employment with the commission and any employee's, agent's, or member's spouse, parent, or child who acquires a financial interest in a licensee or applicant, or affiliate or representative of a licensee or applicant through no intentional action of the individual who has been offered employment with the commission, member, employee, or agent of the commission shall have up to thirty days to divest or terminate the financial interest. Any employment or agent may be terminated by the chairperson if the interest has not been divested after thirty days.

§ -215 Member, employee, or agent of commission; prohibitions. No member, employee, or agent of the commission shall:

(1) Engage in political activity or politically-related activity during the duration of the individual's appointment or employment;

(2) Enter into any negotiations for employment with any person or affiliate of any person who is a licensee or an affiliate; provided that if a member, an employee, or an agent of the commission does enter into any negotiations for employment with any person or affiliate of any person who is a licensee or an affiliate, the member, employee, or agent of the commission shall immediately provide written notice of the details of any negotiations or discussions to the chairperson, and the member, employee, or agent of the commission shall not take any action on behalf of the commission with respect to that person for the duration of any negotiations for employment;

(3) Accept any gift, gratuity, compensation, travel, lodging, or anything of value, directly or indirectly, from any licensee, applicant, or any affiliate or representative of an applicant or licensee or allow any parent, spouse, sibling, or child of a member, employee, or agent of the commission to do the same, unless the acceptance conforms to a written policy or directive issued by the chairperson or the commission. If any member, employee, or agent of the commission or any parent, spouse, sibling, or child of a member, employee, or agent of the commission is offered or receives any gift, gratuity, compensation, travel, lodging, or anything of value, directly or indirectly, from any licensee or any applicant or affiliate or representative of an applicant or licensee, that member, employee, or agent of the commission shall immediately provide written notification of the details to the chairperson;

(4) Engage in any conduct that constitutes a conflict of interest, and shall immediately provide written notification to the chairperson of the details of any incident or circumstances that would present the appearance of a conflict of interest with respect to the performance of commission-related work or duty of the member, employee, or agent of the commission; and

(5) Participate in or wager on any gambling game conducted by any licensee or applicant, or any affiliate of an applicant or licensee, in the State or in any other jurisdiction; provided that:

(A) A member, employee, or agent of the commission may participate in and wager on a gambling game conducted by a licensee under this chapter, to the extent authorized by the chairperson or commission as part of the member's surveillance, security, or other official duties for the commission; and

(B) A member, employee, or agent of the commission shall advise the chairperson at least twenty-four hours in advance if the member plans to be present in the facility in the State, or a casino in another jurisdiction, operated by a licensee, applicant, or affiliate of a licensee or applicant, outside the scope of their official duties for the commission.

§ -216 Employee; outside employment. (a) A new or current employee or agent of the commission shall obtain written permission from the executive director before continuing outside employment held at the time the employee begins to work for the commission. Permission shall be denied, or permission previously granted shall be revoked, if the nature of the work is considered to create a possible conflict of interest or otherwise interferes with the duties of the employee or agent for the commission.

(b) An employee or agent of the commission granted permission for outside employment shall not conduct any business or perform any activities, including solicitation, related to outside employment on premises used by the commission or during the employee's working hours for the commission.

§ -217 Confidentiality. A member, employee, or agent of the commission, or former member, employee, or agent of the commission, shall not disseminate or otherwise disclose any material or information in the possession of the commission that the commission considers confidential, unless specifically authorized to do so by the chairperson or the commission.

§ -218 Post-employment, post-membership; restrictions. (a) Within five years after the date of termination of the individual's membership on or employment with the commission, a member of the commission or the executive director, shall not hold direct or indirect interest in, be employed by, or enter into a contract for service with, any applicant or person licensed by the commission.

(b) Within three years after the date of termination of the member's term of office or the employee's period of employment with the commission, a commission member or an individual employed by the commission shall not represent a person or party other than the State before or against the commission.

(c) Within a period of three years after the date of termination of the individual's employment with the commission, the individual shall not acquire any direct or indirect interest in, be employed by, or enter into a contract for services with any applicant or person licensed by the commission.

(d) A business entity in which a former commission member or employee or agent has an interest, or any partner, officer, or employee of the business entity, shall not make any appearance or representation before the commission from which that former member, employee, or agent is prohibited. As used in this subsection, "business entity" means a corporation, limited liability company, partnership, limited liability partnership association, trust, or other form of legal entity.

§ -219 Former member, employee, agent of the commission; witness. A former member, employee, or agent of the commission may appear before the commission as a witness testifying as to factual matters or actions handled by the member, employee, or agent during the individual's tenure as a member, employee, or agent of the commission. The member, employee, or agent of the commission shall not receive compensation for the appearance other than a standard witness fee and reimbursement for travel expenses as established by statute or court rule.

§ -220 Member, employee, or agent of commission; penalties. (a) Violation of this chapter by a member of the commission may result in disqualification or constitute cause for removal under section 26-34(d) or other disciplinary action as determined by the commission.

(b) Violation of this chapter by an employee or agent of the commission shall not result in termination of employment or require other disciplinary action if the commission determines that the conduct involved does not violate the purpose of this chapter; provided that employment shall be terminated:

(1) If the employee or agent is a spouse, parent, child, or spouse of a child of a commission member; or

(2) If, after being offered employment or having begun employment with the commission, the employee or agent intentionally acquires a financial interest in a licensee or applicant, or affiliate or representative of a licensee or applicant.

§ -221 Annual report. The commission shall file a written report with the governor and legislature at least sixty days prior to the close of each fiscal year and shall file any additional reports that the governor or legislature requests. The annual report shall include:

(1) A statement of receipts and disbursements related to gaming pursuant to this chapter;

(2) Actions taken by the commission; and

(3) Any additional information and recommendations that the commission may deem valuable or which the governor or legislature may request.

§ -222 No civil cause of action. A violation of this part shall not create a civil cause of action.

PART III. GAMING FACILITY

SUBPART A. GAMING LICENSE APPLICATIONS

§ -301 Authorization of gaming. (a) Gaming shall only be authorized in one facility located in the geographic area designated by a county with a population greater than five hundred thousand residents as a special district that contains the largest concentration of hotel rooms.

(b) Within one hundred and twenty days of its appointment, the commission shall adopt necessary rules and make applications available for a gaming license to operate the facility. Applications for a gaming license shall be submitted to the commission no later than sixty days after the date applications are made available. The commission shall select the applicant that best meets the criteria pursuant to this subpart no later than ninety days after the final date applications must be submitted to the commission. If the selected applicant meets all the requirements of this chapter, the commission shall issue a gaming license to the applicant within one hundred and twenty days after the date the applicant is selected.

§ -302 Application for the gaming license. (a) Each applicant shall be a resident of the State for at least the thirty years immediately preceding the submission of the application. If an entity submits an application, a principal of the entity shall be a resident of the State for the thirty years immediately preceding the submission of the application.

(b) A person, including qualifiers, may apply to the commission for a gaming license. The application shall be made under oath on forms provided by the commission and shall contain information as prescribed by the commission, including the following:

(1) The name, business address, telephone number, social security number and, where applicable, the federal tax identification number of the applicant and every qualifier;

(2) An identification of any business, including, if applicable, the state of incorporation or registration, in which the applicant or qualifier has an equity interest of more than five per cent. If the applicant or qualifier is a corporation, partnership or other business entity, the applicant or qualifier shall identify any other corporation, partnership, or other business entity in which it has an equity interest of more than five per cent, including, if applicable, the state of incorporation or registration. The applicant or qualifier may comply with this paragraph by filing a copy of the applicant's or qualifier's registration with the United States Securities and Exchange Commission if the registration contains the information required by this paragraph;

(3) Whether the applicant or qualifier has been indicted, convicted, pled guilty or nolo contendere, or forfeited bail for a felony within the last eight years or a misdemeanor involving gambling, theft, or fraud within the last eight years, not including traffic violations, and including the date, name, and location of the court, arresting agency, prosecuting agency, the case caption, docket number, offense, disposition, and location and length of incarceration;

(4) Whether the applicant or qualifier has ever been granted any license or certificate issued by a licensing authority in the State, or any other jurisdiction, that has been restricted, suspended, revoked, or not renewed and a statement describing the facts and circumstances concerning the application, denial, restriction, suspension, revocation, or nonrenewal, including the licensing or codifying authority, the date each action was taken, and the reason for each action;

(5) Whether the applicant or qualifier, within the last ten years, has filed or had filed against it a civil or administrative action or proceeding in bankruptcy or has, within the last ten years, been involved in any formal process to adjust, defer, suspend, or otherwise address the payment of any debt, including the date of filing, name and location of the court, case caption, docket number, and disposition;

(6) Whether the applicant or qualifier, within the last five tax years, has failed to pay any final amount of tax due and payable under federal, state, or local law, after exhaustion of all interagency appeals processes, including the amount, type of tax, taxing jurisdiction, and time periods involved;

(7) Bank statements, escrow accounts, or other documents demonstrating the financial resources that have been under the control of the applicant for not less than ninety days immediately preceding the date of the application;

(8) A statement listing the names and titles of all public officials or officers of any unit of state or county government in the jurisdiction in which the facility is to be located, and the spouses, parents, and children 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 an interest in any contractual or service relationship with, the applicant or a qualifier. As used in this paragraph, "public official" or "officer" does not include an individual who would be listed solely because of the individual's state or federal military service;

(9) The name and business telephone number of any attorney, counsel, or any other person representing an applicant or a qualifier in matters before the commission; and

(10) For the applicant only, a development plan for the facility that includes a description of the proposed facility, including the economic benefit to the community, anticipated or actual number of employees, any statement from an applicant regarding compliance with federal and state affirmative action guidelines, projected or actual admissions, projected or actual gross receipts, and scientific market research, if any.

(c) Applicants shall submit with their application a plan for training residents of the State for jobs that are available at the facility. The plan shall take into consideration the need to provide training to low-income individuals to enable them to qualify for jobs that will be created by the facility.

(d) Each applicant and qualifier shall disclose the identity of every person, association, trust, or corporation having a greater than five per cent direct or indirect financial interest in the gaming operation for which the license is sought. If the disclosed entity is a:

(1) Trust, the application shall disclose the names and addresses of the beneficiaries;

(2) Corporation, the application shall disclose the names and addresses of all stockholders and directors; and

(3) Partnership, the application shall disclose the names and addresses of all partners, both general and limited.

(e) To demonstrate financial ability, the applicant may include the economic resources of the person or persons who will operate the facility and any qualifiers.

(f) Each applicant and qualifier shall submit with the application two sets of the applicant's fingerprints on forms provided by the commission.

(g) An application fee of $50,000 shall be paid to the commission by an applicant at the time of filing to defray the costs associated with an applicant and qualifier's background investigation conducted by the commission. If the costs of the investigation exceed $50,000, the applicant shall pay the additional amount to the commission. If the costs of the investigation are less than $50,000, 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 commission in the course of its review or investigation of an application for a license shall be confidential, used only for the purpose of evaluating an applicant, and exempt from public disclosure required by chapter 92F, and shall not be admissible as evidence, nor discoverable in any action of any kind in any court or before any tribunal, commission, agency, or person, except for any action deemed necessary by the commission.

§ -303 Gaming license application; denial. (a) An applicant shall be denied a gaming license if:

(1) The applicant has been convicted of a felony under the laws of this State, any other state, or the United States within eight years before the date of the application;

(2) The individual has been convicted of any violation under part III of chapter 712, or substantially similar laws of another jurisdiction;

(3) The individual has knowingly submitted an application for a license under this chapter that contains false information;

(4) The applicant fails to present proof of financial resources in excess of $1,000,000 under its control;

(5) The individual is a member of the commission;

(6) The firm or corporation applying for a license employs an individual described in paragraph (1), (2), (3), or (4) who participates in the management or operation of gaming operations authorized under this chapter; or

(7) 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) An incomplete application shall be cause for denial of a license by the commission.

§ -304 Application deficiency. (a) If, in the review of an application submitted under this chapter, the executive director identifies an apparent deficiency that, if true, would require denial of the license or the disqualification of a qualifier, the executive director shall notify the affected applicant or qualifier in writing of the apparent deficiency. The applicant or qualifier may then request an informal conference with the executive director to discuss the factual basis of the apparent deficiency.

(b) The executive director shall provide the applicant or qualifier a reasonable period of time to correct the apparent deficiency. If the apparent deficiency is not corrected within the reasonable time period, the executive director shall find that the apparent deficiency has not been corrected. Following this finding, the affected applicant or qualifier shall have an opportunity to appeal the executive director's finding of an apparent deficiency to the commission. The commission shall conduct an investigative hearing, pursuant to section ‑209 and in accordance with rules adopted under this chapter, to determine whether there is sufficient evidence to support an apparent deficiency finding. At the hearing, the burden of proof shall be on the executive director to demonstrate that the finding of an apparent deficiency is supported by law and facts. Any finding by the commission about an applicant or a qualifier's apparent deficiency shall not constitute a final determination by the commission as to the suitability of the applicant to hold a license, or the suitability of a qualifier to hold an ownership interest in the facility applicant.

(c) At any time prior to a finding by the commission that a qualifier is unsuitable to hold an ownership interest in the facility license applicant, a qualifier shall have the ability to sell its ownership interest in the facility license applicant to the facility license applicant, another qualifier, or a third party.

(d) A qualifier who has been issued a finding of an apparent deficiency shall have the right to request that the commission expand the apparent deficiency hearing under this section to include a determination of the qualifier's suitability to hold an ownership interest in the gaming license applicant. If that request is made, the commission shall determine the suitability of the affected qualifier separate from the suitability of the applicant and any of its other qualifiers. A request by a qualifier for an extended hearing pursuant to this section shall not prevent the commission from issuing a license to the applicant. Until the commission determines that a qualifier under this section is suitable to hold an ownership interest in the applicant, the applicant or licensee shall not do any of the following:

(1) Make any direct or indirect payments or distributions of revenue or other benefits to the qualifier that are related in any way to the qualifier's interest in the applicant; or

(2) Pay any direct or indirect compensation to the qualifier for services rendered to the applicant, unless specifically approved and authorized by the commission.

§ -305 Criteria for award of a gaming license. (a) The information provided on the application shall be used as the basis for a background investigation that the commission shall conduct with respect to each applicant and qualifier.

(b) The license to operate a facility shall be awarded based upon the following criteria:

(1) Whether the applicant's facility development plan for the facility will increase tourism, generate jobs, and provide revenue to the local economy;

(2) Whether the applicant has the financial resources and ability to construct the facility, based upon the submitted financial data and other facts;

(3) Whether the applicant has the financial ability to purchase and maintain adequate liability and casualty insurance and to provide an adequate surety bond;

(4) Whether the applicant has adequate capitalization to develop, construct, maintain, and operate, for the duration of the license, the proposed facility, in accordance with the requirements of this chapter and rules adopted by the commission, and to responsibly pay off its secured and unsecured debts, in accordance with its financing agreement and other contractual obligations;

(5) The extent to which the applicant or any of its qualifiers demonstrate that they have assisted the State in developing gaming through their commitment of resources to support, promote, and establish gaming in the State. Expenditures of time, money, and effort shall all be considered in connection with this criterion. The timing of participation shall further influence this criterion, with early participation and contribution to the development program receiving more favorable consideration;

(6) The extent to which the applicant or any of its qualifiers demonstrate that they have at least four years of experience in helping to revitalize an urban area by successfully planning, developing, and opening a land-based casino in any state that previously did not permit gaming. The experience in planning, developing, and opening a land-based casino in an urban area in the past five years shall receive more favorable consideration for this criterion. For purposes of this paragraph, "urban area" means a jurisdiction having a population of at least seven hundred fifty thousand;

(7) Whether the applicant or any of its qualifiers has been indicted, convicted, pled guilty or nolo contendere, or forfeited bail for a felony within the last ten years or a misdemeanor involving gambling, theft, or fraud within the last ten years, not including traffic violations;

(8) Whether the applicant or any of its qualifiers, within the last ten years:

(A) Has filed, or had filed against it, a proceeding for bankruptcy; or

(B) Has been involved in any formal process to adjust, defer, suspend, or otherwise address the payment of any debt;

(9) Whether an applicant or any of its qualifiers, within the last five tax years, has failed to pay any final amount of tax due and payable under federal, state, or local law, after exhaustion of all interagency appeals processes; and

(10) Whether the applicant meets other standards for the issuance of a gaming license that the commission may have adopted by rule. Any rules adopted pursuant to chapter 91 shall not be arbitrary, capricious, or contradictory to the expressed provisions of this chapter and shall further define and clarify the above listed conditions, rather than create new conditions for licensure.

§ -306 Institutional investor. (a) Unless the commission determines that an institutional investor is unqualified, an institutional investor holding less than ten per cent of the equity securities or ten per cent of the debt securities of a gaming licensee's affiliate or affiliated company that is related in any way to the financing of the gaming licensee, shall be granted a waiver of the eligibility and suitability requirements if:

(1) The securities represent a percentage of the outstanding debt of the affiliate or affiliated company not exceeding twenty per cent, or a percentage of any issue of the outstanding debt of the affiliate or affiliated company not exceeding fifty per cent;

(2) The securities are those of a publicly traded corporation and its holdings of the securities were purchased for investment purposes only; and

(3) Upon request by the commission, the institutional investor files with the commission a certified statement that it has no intention of influencing or affecting the affairs of the issuer, the gaming licensee, or its affiliate or affiliated company.

(b) The commission may grant a waiver under this section to an institutional investor holding a higher percentage of securities than allowed in subsection (a) upon a showing of good cause and if the conditions specified in subsection (a) are met.

(c) An institutional investor granted a waiver under this section that subsequently intends to influence or affect the affairs of the issuer shall provide notice to the commission and file an application for a determination of eligibility and suitability before taking any action that may influence or affect the affairs of the issuer.

(d) Notwithstanding any provisions of this chapter, an institutional investor may vote on all matters that are put to the vote of the outstanding security holders of the issuer.

(e) If an institutional investor changes its investment intent or if the commission finds that the institutional investor is unqualified, no action other than divestiture of the security holdings shall be taken until there has been compliance with this chapter.

(f) The gaming licensee or an affiliate or affiliated company of the gaming licensee shall immediately notify the commission of any information concerning an institutional investor holding its equity or debt securities that may affect the eligibility and suitability of the institutional investor for a waiver under this section.

(g) If the commission finds that an institutional investor, holding any security of an affiliate or affiliated company of a gaming licensee that is related in any way to the financing of the gaming licensee, fails to comply with the requirements of this section, or if at any time the commission finds that, by reason of the extent or nature of its holdings, an institutional investor is in a position to exercise a substantial impact upon the controlling interests of a gaming licensee, the commission may take any necessary action to protect the public interest, including requiring the institutional investor to satisfy the eligibility and suitability requirements under sections ‑302, ‑305, and ‑307.

§ -307 Bond of gaming licensee. Before a gaming license is issued, the licensee shall file a bond in the sum of $200,000 with the department. 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 rules adopted by the commission. The bond shall not be canceled by a surety less than thirty days after providing written notice to the commission. If a bond is canceled and the licensee fails to file a new bond with the commission 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 shall be limited to the amount specified in the bond.

§ -308 Gaming license; term. The term of the gaming license shall be ten years and shall be renewable for additional ten-year terms according to rules adopted by the commission.

§ -309 Revocation of gaming license. The commission may revoke the gaming license if the gaming licensee fails to begin regular gaming operations within twelve months of receipt of the commission's approval of the application or twelve months after a certificate of occupancy for the facility is first issued, whichever is later, upon a finding by the commission that the gaming license revocation is in the best interest of the State.

§ -310 Gaming licensee or applicant; prohibitions; ex parte communications. (a) A licensee or applicant shall not knowingly initiate a negotiation for, or discussion of, employment with a member, employee, or agent of the commission. A licensee or applicant who initiates a negotiation or discussion about employment shall immediately provide written notice of the details of the negotiation or discussion to the chairperson as soon as that person becomes aware that the negotiation or discussion has been initiated with a member, employee, or agent of the commission.

(b) A licensee or applicant, or affiliate or representative of an applicant or licensee, shall not, directly or indirectly, knowingly give or offer to give any gift, gratuity, compensation, travel, lodging, or anything of value to any member, employee, or agent of the commission that the member, employee, or agent of the commission is prohibited from accepting under subsection (j).

(c) A licensee or applicant or any affiliate or representative of an applicant or licensee shall not engage in ex parte communications concerning a pending application, license, or enforcement action with members of the commission. A member of the commission shall not engage in any ex parte communications with a licensee or an applicant, or with any affiliate or representative of an applicant or licensee, concerning a pending application, license, or enforcement action.

(d) Any licensee or applicant, or affiliate or representative of licensee or applicant, who receives any ex parte communication in violation of this section from a member, or who is aware of an attempted communication in violation of this section, shall immediately report in writing to the chairperson details of the communication or attempted communication.

(e) Violation this section by a licensee, applicant, or affiliate or representative of a licensee or applicant, may result in denial of the application for licensure, revocation or suspension of a license, or other disciplinary action by the commission.

SUBPART B. GAMING LICENSEE OPERATIONS

§ -351 Conduct of gaming. Gaming conducted by the gaming licensee shall be subject to the following:

(1) The site of the facility shall be restricted to the area specified in § -301(a);

(2) The facility shall be a standalone building or buildings and shall not be located within a hotel;

(3) The facility shall open no earlier than 8:00 a.m. and shall close no later than 4:00 a.m. daily, at which time all individuals admitted pursuant to section ‑352 shall leave the facility;

(4) Minimum and maximum wagers on games shall be set by the gaming licensee; provided that the maximum permitted wager for:

(A) Sportsbook gaming shall not exceed $1,500 per event; and

(B) Each poker hand shall not exceed $1,500 in gaming tokens or other objects not in violation of paragraph (7);

(5) The facility shall not have more than thirty poker tables, and each poker table shall not seat more than nine players and one dealer;

(6) No person under twenty-one years of age shall be permitted in an area of the facility where gaming is being conducted, except for a person at least eighteen years of age who is an employee of the facility. No employee under twenty-one years of age shall perform any function involved in gaming by patrons. No person under twenty-one years of age shall be permitted to make a wager under this chapter;

(7) Wagering for poker shall not be conducted with money or other negotiable currency;

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

(9) All tokens, chips, or electronic cards used to make wagers shall only be purchased from a licensed owner within the facility. 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 shall be used while within the facility only for the purpose of making wagers on authorized games; and

(10) All rules adopted by the commission.

§ -352 Gaming facility admission. (a) The facility shall only admit individuals twenty-one years of age or older who:

(1) Pay a $ fee; and

(2) Provide proof that the individual will stay or has stayed at a transient accommodation, such as a hotel, on the same island as the facility, within twenty-four hours of the admission to the facility.

After an individual has paid the $ fee pursuant to paragraph (1), the individual need only demonstrate compliance with paragraph (2) for any subsequent admission within one year of payment. The facility shall provide a membership card to the individual upon payment of the fee.

(b) The gaming licensee shall adopt rules governing admission and make those rules available to the general public.

(c) This section shall not require the facility to admit any individual who has violated any gaming licensee rule or who is prohibited from entering the facility pursuant to law or order of a court.

§ -353 In person wagers; remote wagers. (a) During the first three years of operation of the facility:

(1) All wagers shall be received from an individual present in the facility; and

(2) No individual present in the facility shall place or attempt to place a wager on behalf of another individual who is not present in the facility.

(b) After the first three years of operation of the facility, the gaming licensee may allow sportsbook wagers to be made through the Internet; provided that no individual making a wager with the facility shall place a wager on behalf of another individual. Any individual who places a wager pursuant to this subsection shall satisfy the facility admission requirements of section ‑352 and wagers shall be subject to the maximum permitted wager limits for sportsbook gaming in the facility.

§ -354 Collection of amounts owing under credit agreements. Notwithstanding any other law to the contrary, a gaming licensee who extends credit to an individual for the purpose of making a wager at the facility shall be expressly authorized to institute a cause of action to collect any amounts due and owing under the extension of credit as well as the gaming licensee's costs, expenses, and reasonable attorney's fees incurred in collection.

§ -355 Training occupational licensees. A gaming licensee may:

(1) Train occupational licensees; or

(2) Enter into an agreement with another entity to train occupational licensees,

in the facility or at a location away from the facility; provided that the training does not violate of any other law or rule.

PART IV. GAMING SUPPLIES

§ -401 Supplier license; when required. No person shall furnish in excess of $500,000 worth of equipment, devices, or supplies to a gaming licensee unless the person has first obtained a supplier license pursuant to this part.

§ -402 Supplier license; applications. (a) The commission may issue a supplier license to any person, firm, or corporation who pays a nonrefundable application fee, as set by the commission, upon a determination by the commission that the applicant is eligible for a supplier license and upon payment by the applicant of a $5,000 license fee.

(b) Supplier licenses shall be renewable annually upon payment of the $5,000 annual license fee and a determination by the commission that the licensee continues to meet all of the requirements of this part.

(1) The person has been convicted of a felony under the laws of this State, any other state, or the United States;

(2) The person has been convicted of any violation under part III of chapter 712, or substantially similar laws of another jurisdiction;

(3) The person has knowingly submitted an application for a license under this chapter that contains false information;

(4) The person is a member of the commission;

(5) The firm or corporation is one in which a person described in paragraph (1), (2), (3), or (4) is an officer, director, or managerial employee;

(6) The firm or corporation employs a person described in paragraph (1), (2), (3), or (4) that participates in the management or operation of gaming authorized under this chapter; or

(7) The license of the person, firm, or corporation issued under this chapter, or a license to own or operate gambling facilities in any other jurisdiction, has been revoked.

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

§ -403 Supplier requirements. (a) Each licensed supplier shall:

(1) Furnish to the commission a list of all equipment, devices, and supplies offered for sale or lease in connection with gaming 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 might operate;

(3) File quarterly returns with the commission listing all sales and leases;

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

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

(b) No gaming supplier shall distribute supplies and equipment worth more than $500,000 unless that distribution conforms to standards adopted by rules of the commission.

§ -404 Supply repairs. Any gaming equipment, device, or supply provided by a supplier licensee may be repaired in the facility or moved from the facility to a location owned by the gaming licensee for repair.

§ -405 Supply forfeiture. Any equipment, device, or supplies that are used by any person in an unauthorized gambling operation shall be forfeited to the county in which the facility is situated.

PART V. GAMING OCCUPATIONS

§ -501 Occupational license; required. No individual shall be employed at a facility without a valid occupational license issued pursuant to this chapter.

§ -502 Occupational license; application. (a) The commission may issue an occupational license to an individual upon:

(1) Submission of an application form prescribed by the commission;

(2) Submission of two sets of the applicant's fingerprints;

(3) The payment of a nonrefundable application fee set by the commission. The amount of the fee shall be sufficient to defray the costs associated with the search and classification of fingerprints obtained by the commission with respect to the application and any other expenses to process the application;

(4) A determination by the commission that the applicant meets the requirements for an occupational license; and

(5) Payment of an annual license fee in an amount set by the commission.

(b) Each application for an occupational license shall be on a form prescribed by the commission and shall contain all information required by the commission. The form shall require the disclosure of whether the applicant:

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

(2) Has been issued a gambling-related license in any other jurisdiction under any other name, and, if so, the name and the applicant's age at the time; and

(3) Has had a gambling-related license issued from any other jurisdiction suspended, restricted, or revoked, and, if so, for what period of time.

(1) Be at least twenty-one years of age if the applicant seeks to perform any function involved in gaming; provided that any applicant seeking an occupational license for a non-gaming function shall be at least eighteen years of age;

(2) Not have been convicted of a felony offense in any jurisdiction or a crime involving dishonesty or moral turpitude;

(3) Have demonstrated a level of skill or knowledge that the commission determines to be necessary to operate games in the facility; and

(4) Have met standards for the holding of an occupational license, as provided in rules adopted by the commission, including background inquiries and other requirements.

(d) The commission may deny an application for an occupational license because the applicant:

(1) Is unqualified to perform the duties required;

(2) Has failed to disclose or stated falsely any information called for in the application;

(3) Has been found guilty of a violation of this chapter;

(4) Whose prior gambling-related permit, license, or application has been suspended, restricted, revoked, or denied for just cause in any other jurisdiction; or

(5) For any other just cause.

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

§ -503 Occupational license; term. Any occupational license issued pursuant to this part 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 fee and a determination by the commission that the licensee continues to meet all of the requirements of this chapter.

§ -504 Occupational license; suspension, revocation, restriction. The commission may suspend, revoke, or restrict any occupational license:

(1) For any violation of this chapter;

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

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

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

(5) For any other just cause.

PART VI. MISCELLANEOUS PROVISIONS

§ -601 The state gaming fund; disposition of revenues collected. There is established within the state treasury the state gaming fund to be administered by the Hawaii gaming control commission into which shall be deposited all fees and fines collected under this chapter and general excise tax revenues realized pursuant to section 237‑31. Moneys from the state gaming fund shall be used to fund:

(1) A compulsive gamblers program;

(2) Public security at the facility;

(3) Administrative expenses of the commission;

(4) Marketing of the facility;

(5) The department of Hawaiian home lands by depositing not less than per cent of the revenues realized by the fund in each fiscal year into the Hawaiian home lands trust fund establish pursuant to section 213.6 of the Hawaiian Homes Commission Act, 1920, as amended;

(6) Programs that address homelessness by setting aside not less than per cent of the revenues to the fund in each fiscal year for appropriation by the legislature to the department of human services; and

(7) Law enforcement programs by setting aside not less than per cent of the revenues to the fund in each fiscal year for appropriation by the legislature to the department of law enforcement;

provided that no more than one per cent of the tax revenues collected in any fiscal year pursuant to section 237-13(9) shall be expended to fund the public security at the facility and the administrative expenses of the commission.

§ -602 Legislative oversight. (a) After the first fiscal year of operation, the auditor shall conduct a financial and social assessment of gaming operations. Thereafter, the auditor shall conduct biennial financial and social assessments of gaming operations. In conducting the assessments, the auditor shall identify the financial impacts of gaming on the state economy and social impacts of gaming upon the community. 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 initial and biennial assessments are completed.

(b) After the first full fiscal year of operation, the auditor shall conduct a program and financial audit of the Hawaii gaming commission. Thereafter, the auditor shall conduct a program and financial audit every four years after the initial audit is completed.

§ -603 Compulsive gambler program. The commission shall create and implement a program to assist individuals who are identified as compulsive gamblers and shall train operational licensees to identify and monitor potential compulsive gambling behavior."

SECTION 3. Chapter 712, Hawaii Revised Statutes, is amended by adding a new section to part III to be appropriately designated and to read as follows:

"§712‑ Gaming; exempted. This part shall not apply to gaming as authorized by chapter ."

SECTION 4. Section 84-17, Hawaii Revised Statutes, is amended by amending subsection (c) to read as follows:

"(c) The following persons shall file annually with the state ethics commission a disclosure of financial interests:

(1) The governor, the lieutenant governor, the members of the legislature, and delegates to the constitutional convention; provided that delegates to the constitutional convention shall only be required to file initial disclosures;

(2) The directors and their deputies, the division chiefs, the executive directors and the executive secretaries and their deputies, the purchasing agents and the fiscal officers, regardless of the titles by which the foregoing persons are designated, of every state agency and department;

(3) The permanent employees of the legislature and its service agencies, other than persons employed in clerical, secretarial, or similar positions;

(4) The administrative director of the State, and the assistants in the office of the governor and the lieutenant governor, other than persons employed in clerical, secretarial, or similar positions;

(5) The hearings officers of every state agency and department;

(6) The president, the vice presidents, assistant vice presidents, the chancellors, and the provosts of the University of Hawaii and its community colleges;

(7) The superintendent, the deputy superintendent, the assistant superintendents, the complex area superintendents, the state librarian, and the deputy state librarian of the department of education;

(8) The administrative director and the deputy director of the courts;

(9) The members of every state board or commission whose original terms of office are for periods exceeding one year and whose functions are not solely advisory;

(10) Candidates for state elective offices, including candidates for election to the constitutional convention, provided that candidates shall only be required to file initial disclosures;

(11) The administrator and assistant administrator of the office of Hawaiian affairs;

(12) The Hawaii unmanned aerial systems test site chief operating officer[[];[~~] and~~]

(13) The members of the school facilities board appointed by the governor[.]; and

(14) The executive director, assistants, officers, and employees of the Hawaii gaming control commission."

SECTION 5. Section 237-13, Hawaii Revised Statutes, is amended to read as follows:

"§237-13 Imposition of tax. There is hereby levied and shall be assessed and collected annually privilege taxes against persons on account of their business and other activities in the State measured by the application of rates against values of products, gross proceeds of sales, or gross income, whichever is specified, as follows:

(1) Tax on manufacturers.

(A) Upon every person engaging or continuing within the State in the business of manufacturing, including compounding, canning, preserving, packing, printing, publishing, milling, processing, refining, or preparing for sale, profit, or commercial use, either directly or through the activity of others, in whole or in part, any article or articles, substance or substances, commodity or commodities, the amount of the tax to be equal to the value of the articles, substances, or commodities, manufactured, compounded, canned, preserved, packed, printed, milled, processed, refined, or prepared for sale, as shown by the gross proceeds derived from the sale thereof by the manufacturer or person compounding, preparing, or printing them, multiplied by one-half of one per cent.

(B) The measure of the tax on manufacturers is the value of the entire product for sale.

(2) Tax on business of selling tangible personal property; producing.

(A) Upon every person engaging or continuing in the business of selling any tangible personal property whatsoever, there is likewise hereby levied, and shall be assessed and collected, a tax equivalent to four per cent of the gross proceeds of sales of the business; provided that, in the case of a wholesaler, the tax shall be equal to one-half of one per cent of the gross proceeds of sales of the business; and provided further that insofar as the sale of tangible personal property is a wholesale sale under section 237-4(a)(8), the tax shall be one-half of one per cent of the gross proceeds. Upon every person engaging or continuing within this State in the business of a producer, the tax shall be equal to one-half of one per cent of the gross proceeds of sales of the business, or the value of the products, for sale.

(B) Gross proceeds of sales of tangible property in interstate and foreign commerce shall constitute a part of the measure of the tax imposed on persons in the business of selling tangible personal property, to the extent, under the conditions, and in accordance with the provisions of the Constitution of the United States and the Acts of the Congress of the United States which may be now in force or may be hereafter adopted, and whenever there occurs in the State an activity to which, under the Constitution and Acts of Congress, there may be attributed gross proceeds of sales, the gross proceeds shall be so attributed.

(C) No manufacturer or producer, engaged in such business in the State and selling the manufacturer's or producer's products for delivery outside of the State (for example, consigned to a mainland purchaser via common carrier f.o.b. Honolulu), shall be required to pay the tax imposed in this chapter for the privilege of so selling the products, and the value or gross proceeds of sales of the products shall be included only in determining the measure of the tax imposed upon the manufacturer or producer.

(D) A manufacturer or producer, engaged in such business in the State, shall pay the tax imposed in this chapter for the privilege of selling its products in the State, and the value or gross proceeds of sales of the products, thus subjected to tax, may be deducted insofar as duplicated as to the same products by the measure of the tax upon the manufacturer or producer for the privilege of manufacturing or producing in the State; provided that no producer of agricultural products who sells the products to a purchaser who will process the products outside the State shall be required to pay the tax imposed in this chapter for the privilege of producing or selling those products.

(E) A taxpayer selling to a federal cost-plus contractor may make the election provided for by paragraph (3)(C), and in that case the tax shall be computed pursuant to the election, notwithstanding this paragraph or paragraph (1) to the contrary.

(F) The department, by rule, may require that a seller take from the purchaser of tangible personal property a certificate, in a form prescribed by the department, certifying that the sale is a sale at wholesale; provided that:

(i) Any purchaser who furnishes a certificate shall be obligated to pay to the seller, upon demand, the amount of the additional tax that is imposed upon the seller whenever the sale in fact is not at wholesale; and

(ii) The absence of a certificate in itself shall give rise to the presumption that the sale is not at wholesale unless the sales of the business are exclusively at wholesale.

(3) Tax upon contractors.

(A) Upon every person engaging or continuing within the State in the business of contracting, the tax shall be equal to four per cent of the gross income of the business.

(B) In computing the tax levied under this paragraph, there shall be deducted from the gross income of the taxpayer so much thereof as has been included in the measure of the tax levied under subparagraph (A), on another taxpayer who is a contractor, as defined in section 237-6; provided that any person claiming a deduction under this paragraph shall be required to show in the person's return the name and general excise number of the person paying the tax on the amount deducted by the person.

(C) In computing the tax levied under this paragraph against any federal cost-plus contractor, there shall be excluded from the gross income of the contractor so much thereof as fulfills the following requirements:

(i) The gross income exempted shall constitute reimbursement of costs incurred for materials, plant, or equipment purchased from a taxpayer licensed under this chapter, not exceeding the gross proceeds of sale of the taxpayer on account of the transaction; and

(ii) The taxpayer making the sale shall have certified to the department that the taxpayer is taxable with respect to the gross proceeds of the sale, and that the taxpayer elects to have the tax on gross income computed the same as upon a sale to the state government.

(D) A person who, as a business or as a part of a business in which the person is engaged, erects, constructs, or improves any building or structure, of any kind or description, or makes, constructs, or improves any road, street, sidewalk, sewer, or water system, or other improvements on land held by the person (whether held as a leasehold, fee simple, or otherwise), upon the sale or other disposition of the land or improvements, even if the work was not done pursuant to a contract, shall be liable to the same tax as if engaged in the business of contracting, unless the person shows that at the time the person was engaged in making the improvements the person intended, and for the period of at least one year after completion of the building, structure, or other improvements the person continued to intend to hold and not sell or otherwise dispose of the land or improvements. The tax in respect of the improvements shall be measured by the amount of the proceeds of the sale or other disposition that is attributable to the erection, construction, or improvement of such building or structure, or the making, constructing, or improving of the road, street, sidewalk, sewer, or water system, or other improvements. The measure of tax in respect of the improvements shall not exceed the amount which would have been taxable had the work been performed by another, subject as in other cases to the deductions allowed by subparagraph (B). Upon the election of the taxpayer, this paragraph may be applied notwithstanding that the improvements were not made by the taxpayer, or were not made as a business or as a part of a business, or were made with the intention of holding the same. However, this paragraph shall not apply in respect of any proceeds that constitute or are in the nature of rent, which shall be taxable under paragraph (9); provided that insofar as the business of renting or leasing real property under a lease is taxed under section 237-16.5, the tax shall be levied by section 237-16.5.

(4) Tax upon theaters, amusements, radio broadcasting stations, etc.

(A) Upon every person engaging or continuing within the State in the business of operating a theater, opera house, moving picture show, vaudeville, amusement park, dance hall, skating rink, radio broadcasting station, or any other place at which amusements are offered to the public, the tax shall be equal to four per cent of the gross income of the business, and in the case of a sale of an amusement at wholesale under section 237‑4(a)(13), the tax shall be one-half of one per cent of the gross income.

(B) The department may require that the person rendering an amusement at wholesale take from the licensed seller a certificate, in a form prescribed by the department, certifying that the sale is a sale at wholesale; provided that:

(i) Any licensed seller who furnishes a certificate shall be obligated to pay to the person rendering the amusement, upon demand, the amount of additional tax that is imposed upon the seller whenever the sale is not at wholesale; and

(ii) The absence of a certificate in itself shall give rise to the presumption that the sale is not at wholesale unless the person rendering the sale is exclusively rendering the amusement at wholesale.

(5) Tax upon sales representatives, etc. Upon every person classified as a representative or purchasing agent under section 237-1, engaging or continuing within the State in the business of performing services for another, other than as an employee, there is likewise hereby levied and shall be assessed and collected a tax equal to four per cent of the commissions and other compensation attributable to the services so rendered by the person.

(6) Tax on service business.

(A) Upon every person engaging or continuing within the State in any service business or calling including professional services not otherwise specifically taxed under this chapter, there is likewise hereby levied and shall be assessed and collected a tax equal to four per cent of the gross income of the business, and in the case of a wholesaler under section 237-4(a)(10), the tax shall be equal to one-half of one per cent of the gross income of the business.

(B) The department may require that the person rendering a service at wholesale take from the licensed seller a certificate, in a form prescribed by the department, certifying that the sale is a sale at wholesale; provided that:

(i) Any licensed seller who furnishes a certificate shall be obligated to pay to the person rendering the service, upon demand, the amount of additional tax that is imposed upon the seller whenever the sale is not at wholesale; and

(ii) The absence of a certificate in itself shall give rise to the presumption that the sale is not at wholesale unless the person rendering the sale is exclusively rendering services at wholesale.

(C) Where any person is engaged in the business of selling interstate or foreign common carrier telecommunication services within and without the State, other than as a home service provider, the tax shall be imposed on that portion of gross income received by a person from service which is originated or terminated in this State and is charged to a telephone number, customer, or account in this State notwithstanding any other state law (except for the exemption under section 237-23(a)(1)) to the contrary. If, under the Constitution and laws of the United States, the entire gross income as determined under this paragraph of a business selling interstate or foreign common carrier telecommunication services cannot be included in the measure of the tax, the gross income shall be apportioned as provided in section 237-21; provided that the apportionment factor and formula shall be the same for all persons providing those services in the State.

(D) Where any person is engaged in the business of a home service provider, the tax shall be imposed on the gross income received or derived from providing interstate or foreign mobile telecommunications services to a customer with a place of primary use in this State when the services originate in one state and terminate in another state, territory, or foreign country; provided that all charges for mobile telecommunications services which are billed by or for the home service provider are deemed to be provided by the home service provider at the customer's place of primary use, regardless of where the mobile telecommunications originate, terminate, or pass through; provided further that the income from charges specifically derived from interstate or foreign mobile telecommunications services, as determined by books and records that are kept in the regular course of business by the home service provider in accordance with section 239-24, shall be apportioned under any apportionment factor or formula adopted under subparagraph (C). Gross income shall not include:

(i) Gross receipts from mobile telecommunications services provided to a customer with a place of primary use outside this State;

(ii) Gross receipts from mobile telecommunications services that are subject to the tax imposed by chapter 239;

(iii) Gross receipts from mobile telecommunications services taxed under section 237-13.8; and

(iv) Gross receipts of a home service provider acting as a serving carrier providing mobile telecommunications services to another home service provider's customer.

For the purposes of this paragraph, "charges for mobile telecommunications services", "customer", "home service provider", "mobile telecommunications services", "place of primary use", and "serving carrier" have the same meaning as in section 239-22.

(7) Tax on insurance producers. Upon every person engaged as a licensed producer pursuant to chapter 431, there is hereby levied and shall be assessed and collected a tax equal to 0.15 per cent of the commissions due to that activity.

(8) Tax on receipts of sugar benefit payments. Upon the amounts received from the United States government by any producer of sugar (or the producer's legal representative or heirs), as defined under and by virtue of the Sugar Act of 1948, as amended, or other Acts of the Congress of the United States relating thereto, there is hereby levied a tax of one-half of one per cent of the gross amount received; provided that the tax levied hereunder on any amount so received and actually disbursed to another by a producer in the form of a benefit payment shall be paid by the person or persons to whom the amount is actually disbursed, and the producer actually making a benefit payment to another shall be entitled to claim on the producer's return a deduction from the gross amount taxable hereunder in the sum of the amount so disbursed. The amounts taxed under this paragraph shall not be taxable under any other paragraph, subsection, or section of this chapter.

(9) Tax on gaming. Upon every person engaging or continuing within the State in the business of gaming, as authorized under chapter , the tax shall be equal to per cent of the gross income of the business.

[~~(9)~~] (10) Tax on other business. Upon every person engaging or continuing within the State in any business, trade, activity, occupation, or calling not included in the preceding paragraphs or any other provisions of this chapter, there is likewise hereby levied and shall be assessed and collected, a tax equal to four per cent of the gross income thereof. In addition, the rate prescribed by this paragraph shall apply to a business taxable under one or more of the preceding paragraphs or other provisions of this chapter, as to any gross income thereof not taxed thereunder as gross income or gross proceeds of sales or by taxing an equivalent value of products, unless specifically exempted."

SECTION 6. Section 237-31, Hawaii Revised Statutes, is amended to read as follows:

"§237-31 Remittances. All remittances of taxes imposed by this chapter shall be made by money, bank draft, check, cashier's check, money order, or certificate of deposit to the office of the department of taxation to which the return was transmitted. The department shall issue its receipts therefor to the taxpayer and shall pay the moneys into the state treasury as a state realization, to be kept and accounted for as provided by law; provided that:

(1) A sum, not to exceed $5,000,000, from all general excise tax revenues realized by the State shall be deposited in the state treasury in each fiscal year to the credit of the compound interest bond reserve fund; [~~and~~]

(2) A sum from all general excise tax revenues realized by the State that is equal to one-half of the total amount of funds appropriated or transferred out of the hurricane reserve trust fund under sections 4 and 5 of Act 62, Session Laws of Hawaii 2011, shall be deposited into the hurricane reserve trust fund in fiscal year 2013-2014 and in fiscal year 2014-2015; provided that the deposit required in each fiscal year shall be made by October 1 of that fiscal year[.]; and

(3) Two per cent of all general excise tax revenues realized by the State pursuant to section 237-13(9) shall be deposited into the state gaming fund, established under section -601."

SECTION 7. All initial appointments to the Hawaii gaming control commission shall be made within sixty days of the effective date of this Act.

SECTION 8. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 9. This Act shall take effect on July 1, 2023; provided that the amendments made to section 237-31, Hawaii Revised Statutes, by section 6 of this Act shall not be repealed when that section is reenacted on June 30, 2023, pursuant to section 9 of Act 229, Session Laws of Hawaii 2021.

INTRODUCED BY:	_____________________________

HOUSE OF REPRESENTATIVES	H.B. NO.	918
THIRTY-SECOND LEGISLATURE, 2023
STATE OF HAWAII