2001 SESSION

01-2035

08/10

HOUSE BILL 1353-FN-A-LOCAL

COMMITTEE: Ways and Means

ANALYSIS

This bill:

I. Authorizes video lottery machines at racetracks upon certain conditions and sets forth criteria for establishing and conducting video lottery machines.

II. Establishes requirements and guidelines for the distribution of net machine income.

III. Establishes a gaming oversight authority and its authority and duties.

IV. Establishes a division of gaming enforcement within the department of safety.

V. Establishes fee amounts for license applicants.

VI. Authorizes the issuance of special liquor licenses to license locations within tourism facilities and pari-mutuel locations that have liquor licenses.

VII. Establishes live dog racing and horse racing purse funds administered by the pari-mutuel commission, a greyhound adoption fund, pension funds for employees of pari-mutuel licensees, a thoroughbred breeding fund, and provides funds for gambling addition programs.

VIII. Reduces the business profits tax to 8 percent.

IX. Reduces the state education property tax to $4.90 per $1,000.

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Explanation: Matter added to current law appears in bold italics.

Matter removed from current law appears [in brackets and struckthrough.]

Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.

01-2035

08/10

STATE OF NEW HAMPSHIRE

In the Year of Our Lord Two Thousand One

Be it Enacted by the Senate and House of Representatives in General Court convened:

1 New Chapter; Gaming Oversight Authority and Video Lottery. Amend RSA by inserting after chapter 284 the following new chapter:

CHAPTER 284-A

GAMING OVERSIGHT AUTHORITY AND VIDEO LOTTERY

284-A:1 Definitions. In this chapter:

I. "Net machine income" means all cash or other consideration utilized to play a video lottery machine, less all cash or other consideration paid to players of video lottery machines as winnings.

II. "Operator applicant" means the entity in which a pari-mutuel licensee applicant will participate and apply for an operator's license to operate video lottery machines at the pari-mutuel licensee location.

III. "Operator's license" means the license issued by the gaming oversight authority to an operator licensee which allows the operator licensee to possess, conduct, and operate video lottery machines in accordance with this chapter.

IV. "Operator licensee" means a pari-mutuel licensee or operator applicant who is issued a license by the gaming oversight authority to operate video lottery machines pursuant to this chapter.

V. "Pari-mutuel commission" means the New Hampshire pari-mutuel commission as established in RSA 284:6-a.

VI. "Pari-mutuel licensee" means an entity licensed and authorized as of January 1, 2001 to conduct live horse racing as provided in RSA 284:16 or live dog racing as provided in RSA 284:16-a for at least the number of days as required in RSA 284:22-a, II(a)(3).

VII. "Pari-mutuel licensee location" means the facility at which the pari-mutuel licensee is located and where the pari-mutuel licensee conducts live thoroughbred horse racing or live dog racing as of January 1, 2001 and any real estate in which the pari-mutuel licensee has an interest as of January 1, 2001 which is adjacent to the real estate on which the pari-mutuel licensee conducts live thoroughbred horse racing or live dog racing.

VIII. "Sweepstakes commission" means the New Hampshire sweepstakes commission as established by RSA 284:21-a.

IX. "Technology provider" means any person or entity which designs, manufactures, installs, distributes, or supplies video lottery machines for sale or lease to the sweepstakes commission, and which are for use by an operator licensee for conducting video lottery games in accordance with this chapter.

X. "Token" means the coin, which is not legal tender, sold by a cashier in a face amount equal to the cash paid by a player for the sole purpose of playing a video lottery machine at a pari-mutuel licensee location or paid to a player of a video lottery machine, which can be exchanged for cash at the pari-mutuel licensee location.

XI. "Video lottery machines" means an electronic, mechanical, or computerized machine licensed by the gaming oversight authority which, upon the insertion of cash or tokens is available to be played where, by chance or skill, or both, the player may receive cash or tokens. Video lottery machines include, but are not limited to, slot machines, video poker machines, and other lottery machines. Video lottery machines do not include any redemption slot machines and redemption poker machines as defined in RSA 647 or video poker machines or other similar machines used for amusement purposes only.

284-A:2 Gaming Oversight Authority.

I. There is hereby established the New Hampshire gaming oversight authority. The gaming oversight authority shall consist of 7 members who shall be appointed by the governor with the approval of the council. One of the members shall be a member of the pari-mutual commission and one of the members shall be a member of the sweepstakes commission. The members shall serve terms of 3 years subject to the provisions that 2 of the initial members shall have a term of 1 year, 3 of the initial members shall have a term of 2 years, and 2 of the initial members shall have a term of 3 years. The members shall elect a chair and vice-chair. In order to conduct business, at least 4 members shall be present.

II. No license shall be issued to any person under this chapter without prior approval of the gaming oversight authority. The gaming oversight authority shall issue licenses upon the recommendation to issue such license from the pari-mutuel commission or the sweepstakes commission, and only after completion of the investigations set forth in this chapter.

III. In addition to the responsibilities in RSA 284-A:2, II, the gaming oversight authority shall have general responsibility for the implementation of this chapter and shall adopt rules under RSA 541-A relative to:

(a) Hearing and deciding all license applications or recommendations for the suspension or revocation of any license issued under this chapter.

(b) Conducting all investigations required under this chapter with regard to the application of any applicant for any license.

(c) Conducting hearings pertaining to civil violations of this chapter or rules under the provisions of this chapter and collecting all penalties under the provisions of this chapter.

(d) Establishing standards and a reasonable fee structure for the licensing and renewal of licenses for employees and operators, technology providers, and operator licensees.

(e) Establishing technical standards for approval of video lottery machines, including mechanical and electrical reliability, and security against tampering, as deemed necessary to protect the public from fraud or deception and to insure the integrity of the operation.

(f) Establishing standards for licensing under RSA 284-A:6.

(g) Establishing standards for reviewing any structure at a pari-mutuel licensee location.

(h) Such other rules as may be necessary to implement this chapter.

IV. The gaming oversight authority shall have the authority to issue subpoenas and compel the attendance of witnesses, to administer oaths, and require testimony of witnesses under oath.

V. No later than November 1 in each calendar year, the gaming oversight authority shall provide a report to the fiscal committee of the general court, regarding the operation of video lottery machines. Such report shall include any recommendations for legislation.

VI. With regard to minutes and records of the gaming oversight authority:

(a) The gaming oversight authority shall cause to be made and kept a record of all proceedings of public meetings of the gaming oversight authority.

(b) The gaming oversight authority shall keep and maintain a list of all applicants for licenses it receives under this chapter together with a record of all actions taken with respect to such applicants. A file and record of the actions by the gaming oversight authority shall be open to public inspection provided, however, that the information regarding any applicant whose license or registration has been denied, revoked, or not renewed shall be removed from such list after 5 years from the date of such action.

(c) The gaming oversight authority shall maintain such other files and records as the gaming oversight authority determines is necessary. All records maintained by the gaming oversight authority may be maintained in digital or other format provided that such information can be produced in written form upon the request of the gaming oversight authority.

(d) All information and data required by the gaming oversight authority to be furnished to it, or which may otherwise be obtained, shall be considered to be confidential and shall not be revealed in whole or in part except in the course of the necessary administration of this chapter, or upon the lawful order of a court of competent jurisdiction, or, with the approval of the attorney general, to a duly authorized law enforcement agency.

(e) All information and data pertaining to an applicant's criminal record, family, and background furnished to or obtained by the gaming oversight authority from any source shall be considered confidential and shall be withheld in whole or in part. Such information shall be released upon the lawful order of a court of competent jurisdiction or to a duly authorized law enforcement agency.

(f) Notice of the contents of any information or data released, except to a duly authorized law enforcement agency pursuant to subparagraphs (d) or (e) of this paragraph, shall be given to any applicant, registrant, or licensee in a manner prescribed by the rules adopted by the gaming oversight authority.

VII. The gaming oversight authority shall from time to time contract for and procure on a fee or independent contracting basis such financial, economic, or security consultants and any other technical and professional services as the authority deems necessary for the discharge of its duties.

284-A:3 Authorization for Video Lottery Games of Chance.

I. A pari-mutuel licensee shall be authorized to install, operate, and conduct video lottery games of chance at its pari-mutuel licensee location, in accordance with the provisions of this chapter.

II. A pari-mutuel licensee may enter into one or more agreements to manage or participate in the operation of video lottery games of chance at its pari-mutual licensee location; provided such operator applicant shall be licensed under this chapter.

284-A:4 Licenses, Number of Video Lottery Machines.

I. No person shall engage in the ownership, possession, transfer, maintenance, repair, or operation of a video lottery machine unless:

(a) Such person is licensed in accordance with the provisions of this chapter.

(b) Local approval as provided in RSA 284-A:9 has been obtained.

II. Any operator, employee of an operator, or technology provider shall be licensed by the gaming oversight authority prior to engaging in any activity authorized by this chapter.

III Each operator licensee at a pari-mutuel licensee location at which live dog racing is conducted shall be limited to 900 video lottery machines in operation at each such pari-mutuel licensee location.

IV. Each operator licensee at a pari-mutuel licensee location at which live thoroughbred horse racing is conducted shall be limited to 1,200 video lottery machines in operation at each such pari-mutuel licensee location.

284-A:5 Application and License Requirement for State License for Video Lottery Games of Chance.

I. A pari-mutuel licensee or operator licensee applicant shall secure an operator's license from the gaming oversight authority. In the event that a pari-mutuel licensee enters into an agreement to manage and operate video lottery games of chance machines, that entity shall make application as the operator licensee applicant. An applicant must complete and sign an application on the forms prescribed by the gaming oversight authority. The application shall include the full name, residence, date of birth, and other personal identifying information of the applicant, and if a corporation or other form of business enterprise, the same information shall be provided with respect to each partner, trustee, officer, director, and any shareholder or other holder who owns more than 10 percent of the legal or beneficial interests of such entity.

II. Whenever the gaming oversight authority receives an application it shall refer it to the attorney general who shall conduct an investigation. The investigation may be conducted through any appropriate state or federal law enforcement system and may seek information as to the subject's financial, criminal, or business background, or any other information which the attorney general, in his or her sole discretion, may find to bear on the subject's fitness to be associated with the ownership or management of the operation of video lottery machines in New Hampshire, including, but not limited to, the subject's character, personal associations, and the extent to which the subject is properly doing business in the manner in which it purports to operate. The attorney general shall report the results of the investigation to the gaming oversight authority within 90 days. Notwithstanding any other law to the contrary, the results of any such investigation shall be confidential and shall not be subject to disclosure or to public inspection, except that the attorney general, in the attorney general's sole discretion, shall determine the extent to which and the manner in which said results may be reported to the gaming oversight authority or other state agency or official and, if reported, whether such results are to retain their confidential character; provided, however, that whenever the attorney general conducts such an investigation, the attorney general shall notify the gaming oversight authority whether or not in his or her opinion such person is fit to be associated with participation in the ownership or management of the operation of video lottery machines in this state. The attorney general shall have the authority to conduct an investigation on the attorney general's motion into the background of the license applicant or holder, or any person or entity upon whom the license applicant or holder relies for financial support.

III. In any investigation conducted pursuant to paragraph II, the attorney general or any duly authorized member of the attorney general's staff may require by subpoena or otherwise the attendance of witnesses and the production of such correspondence, documents, books, and papers as he or she deems advisable, and for purposes of this section, may administer oaths and take the testimony of witnesses.

IV.(a) The gaming oversight authority shall charge the applicant an application fee of $100,000 which shall be used to defray the cost of processing the application. If the cost of processing the application exceeds $100,000, the applicant shall pay the difference. In the event that a pari-mutuel licensee makes an agreement pursuant to RSA 284-A:3, II and the operator applicant applies for the operator's license, then the aggregate amount of the fee shall be the greater of $100,000 or the actual costs incurred by the gaming oversight authority.

(b) The attorney general shall charge the applicant an investigation fee of $50,000 which shall be used to defray the cost of the background investigation. If the cost of the background investigation exceeds $50,000, the applicant shall pay the difference. In the event that a pari-mutuel licensee makes an agreement pursuant to RSA 284-A:3, II and that the operator applicant applies for the operator's license, then the aggregate amount of the fee shall be the greater of $50,000 or the actual costs by the attorney general.

(c) The gaming oversight authority shall charge a fee of $10,000 to renew a license to a pari-mutuel licensee or an operator's licensee provided, however, such person seeking renewal of its license shall pay all costs incurred by the attorney general to conduct an investigation with regard to such application to renew the operator's license.

284-A:6 Licensure Requirements.

I. No operator's license shall be issued by the gaming oversight authority unless the applicant has proven to the satisfaction of the gaming oversight authority by clear and convincing evidence:

(a) Its financial stability, integrity and responsibility, considering, without limitation, bank references, business and personal income and disbursement schedules, tax returns and other reports filed with governmental agencies, and business and personal accounting and check records and ledgers.

(b) The trustworthiness of all financial backers, investors, mortgagees, bondholders, and holders of indentures, notes and other evidences of indebtedness of the applicant.

(c) Its good character, honesty and integrity, considering, without limitation, information pertaining to family, habits, character, reputation, criminal and arrest record, business activities, financial affairs, and business, professional and personal associates, covering at least the 10-year period immediately preceding the filing of the application.

(d) Its business ability and experience in the operation of video lottery machines, as appropriate, so as to establish the likelihood of a successful and efficient operation.

II. No operator's license shall be issued by the gaming oversight authority to any applicant unless the applicant has proven to the satisfaction of the gaming oversight authority by clear and convincing evidence that each director, officer or similar principal employee and each direct or indirect owner satisfies the standards for licensure contained in this section.

284-A:7 Exclusion of Minors.

I. No person under 18 years of age shall play a video lottery machine authorized by this chapter.

II. No pari-mutuel licensee or its operator licensee shall knowingly permit any person under 18 years of age to play or participate in any aspect of the play of a video lottery machine.

III. Each violation of this section shall be punishable by a fine of no more than $1,000 and shall be payable by such person who violates paragraph I.

IV. Each violation of this section shall be punishable by a fine of no more than $1,000 and shall be payable by the pari-mutuel licensee or its operator licensee that is found to have violated paragraph II.

284-A:8 Distribution of Net Machine Income. Each operator licensee shall distribute and pay net machine income as follows:

I. Forty-four percent of the average daily net machine income generated by video lottery machines in each calendar month shall be paid to the state from which the state shall pay for it's cost of administration and regulation, and the balance shall be deposited in the general fund.

II. Two percent of the average daily net machine income from video lottery machines in each calendar month shall be paid to the municipality in which the operator licensee operates video lottery machines.

III. Three percent of the average daily net machine income generated from video lottery machines in each calendar month from the licensee that conducts live thoroughbred horse racing shall be paid to the pari-mutuel commission for the live horse racing fund established herein and shall be disbursed as follows:

(a) Three hundred thousand dollars each year, and adjusted annually for inflation, to the Jockeys Guild Health and Welfare Trust maintained by the Jockey's Guild Inc. for the sole purpose of providing health and welfare benefits to active, disabled, and retired jockeys in accordance with eligibility criteria established by the guild.

(b) A sum not to exceed 4 percent of the fund shall be distributed by the pari-mutual commission to support a New Hampshire thoroughbred and standard bred horse-breeding fund as established in the office of the state treasurer. The pari-mutuel commission shall adopt rules under the provisions of RSA 541-A to implement this subparagraph.

(c) A sum not to exceed 4 percent of the fund shall be used by the pari-mutuel commission for the purpose of establishing a pension fund for horse racing employees of the pari-mutuel licensee in the office of the state treasurer. The pari-mutuel commission shall adopt rules under the provisions of RSA 541-A for the administration of the employee pension fund.

(d) A sum not to exceed 1% of the fund shall be allocated to the alcohol and drug abuse treatment program as established in RSA 172 to treat problem gambling.

(e) A sum not to exceed 2% of the fund shall be allocated to the county where the pari-mutuel licensee is located for the purpose of economic development.

(f) The balance of the fund to enhance live horse racing purses at the pari-mutuel licensee location. The pari-mutuel commission shall adopt rules to implement this subparagraph.

IV. Three percent of the average daily net machine income generated by each of the licensee that conduct live dog racing shall be paid to the pari-mutual commission and distributed as follows:

(a) An amount not to exceed 1 percent of the fund shall be used by the pari-mutual commission to establish a greyhound adoption fund administered by the commission in the office of the state treasurer. The pari-mutuel commission shall adopt rules pursuant to RSA 541-A for the establishment and administration of the greyhound adoption fund.

(b) An amount not to exceed 4 percent of the fund shall be used by the pari-mutuel commission for the purpose of establishing a pension fund for dog racing employees of the pari-mutuel licensee in the office of the state treasurer. The pari-mutuel commission shall adopt rules under the provisions of RSA 541-A for the administration of the employee pension fund.

(c) A sum not to exceed 1% of the fund shall be allocated to the alcohol and drug abuse treatment program as established in RSA 172 to treat problem gambling.

(d) A sum not to exceed 1% shall be allocated to the county where the pari-mutuel licensee is located to be used for economic development.

(e) The balance of the funds shall be shall be used by the pari-mutuel commission for the purpose of enhancing live dog racing purses at the pari-mutuel licensee locations, provided that, payments from the fund to enhance live dog racing purses at each pari-mutuel licensee location shall not exceed the amount that said pari-mutuel licensee location has paid into the fund. The pair-mutual commission shall adopt rules under the provisions of RSA 541-A to implement this subparagraph.

V. Three percent of the average daily net machine income from video lottery machines in each calendar month shall be paid to the state treasurer to be used by the office of travel and tourism.

VI. Forty-eight percent of the average daily net machine income from video lottery machines generated in each calendar month shall be retained by the operator licensee. The operator licensee shall pay all costs to technology providers and for the operation of a central computer system.

284-A:9 Procedures for Adoption by Local Community.

I. Any town or city in which a pari-mutuel licensee location is situated may adopt the provisions of RSA 284-A, to allow the operation of video lottery machines, in the following manner:

(a) In a town, the question shall be placed on the warrant of a special or annual town meeting under the procedures set out in RSA 39:3, and shall be voted on a ballot; provided, however, if the question is placed on the warrant at a special town meeting, it shall be the only question at such special town meeting. In a city, the legislative body may vote to place the question on the official ballot for any regular municipal election, or, in the alternative, shall place the question on the official ballot for any regular municipal election upon submission to the legislative body of a petition signed by 5 percent of the registered voters.

(b) The selectmen or city council shall hold a public hearing on the question at least 15 days but not more than 30 days before the question is to be voted on. Notice of the hearing shall be posted in at least 2 public places in the municipality and published in a newspaper of general circulation at least 7 days before the hearing.

(c) The wording of the question shall be substantially as follows: "Shall we adopt the provisions of RSA 284-A allowing the operation of video lottery machines at [insert the name of the licensed pari-mutuel facility] located within the town?"

II. If a majority of those voting on the question vote "Yes," RSA 284-A shall apply within the city or town.

III. If the question is not approved, the question may later be voted upon according to the provisions of paragraph I, provided, however, that the town may consider the question at no more than one special town meeting and the annual town meeting in the same calendar year.

284-A:10 Inspection of Video Lottery Machines; Penalty for Tampering or Manipulating.

I. The sweepstakes commission shall, from time to time, test video lottery machines installed at a pari-mutuel licensee location. In conducting such tests, the sweepstakes commission shall use the services of an independent laboratory, the cost of which independent laboratory shall be paid by the technology provider.

II. Any person who, with the intent to manipulate the outcome, payoff, or operation of a video lottery machine, manipulates the outcome, payoff, or operation of any video lottery machine by physical, electronic, or mechanical means, shall be guilty of a felony.

284-A:11 Video Lottery Machines.

I. An operator licensee shall provide to the gaming oversight authority, the sweepstakes commission and, if regulated by the pari-mutuel commission, to the pari-mutuel commission, by diagram a description of:

(a) The location of each video lottery machine available for play by the public.

(b) The location of all areas for the storage, maintenance, or repair of video lottery machines.

(c) A description of all security measures to be taken for the safeguarding of video lottery machines.

(d) The location and security measures taken for the safeguarding of all moneys, tokens, or other items of value utilized in the use of video lottery machines.

(e) All procedures for the operation, maintenance, repair, and inserting or removing of moneys, tokens, or other items of value from video lottery machines.

(f) All of the above shall be approved by the gaming oversight authority prior to commencing the operation of any video lottery machines.

II. No video lottery machine shall be possessed, maintained, exhibited, brought into or removed from a pari-mutuel licensee location, by any person unless such machine has permanently affixed to it an identification number or symbol authorized by the gaming oversight authority and prior notice of any such movement has been given to the sweepstakes commission.

III. Each operator licensee shall maintain secure facilities for the counting and storage of all moneys, tokens, or other items of value utilized in the conduct of video lottery machines.

IV. All drop boxes and other devices where moneys, tokens, or other items of value are deposited in video lottery machines and all areas wherein such boxes and devices are kept while in use shall be equipped with 2 locking devices, one key which shall be under the exclusive control of the sweepstakes commission and the other under the exclusive control of the operator licensee. The drop boxes and other devices shall not be brought into the pari-mutuel licensee location or removed from an electronic games of chance machine, locked or unlocked, except at such times and such places and according to such procedures as the sweepstakes commission may require to safeguard such boxes and devices and their contents.

V. No video lottery machine shall be used to conduct gaming unless it is identical in all electrical, mechanical, and other aspects to a model which has been specifically tested by the sweepstakes commission and licensed for use by the sweepstakes commission.

VI. The sweepstakes commission shall, by rule, establish technical standards for approval of video lottery machines, including mechanical and electrical reliability and security against tampering, as it may deem necessary to protect the public from fraud or deception and to ensure the integrity of their operation.

VII. All video lottery machines in operation at a pari-mutuel licensee location shall provide a pay off of at least 87 percent on an average annual basis.

VIII. All tickets given as prizes or winnings from video lottery machines must be redeemed for cash within one year after the date of winning. After the expiration of that one year, all such unredeemed tickets shall become property of the state of New Hampshire, notwithstanding any other law to the contrary.

IX. An operator licensee who operates video lottery machines shall not be restricted in the days of operation of such machines, so long as the pari-mutuel licensee has scheduled at least the number of days of racing as required by RSA 284:22-a, II(a)(3). The hours of operation on each day shall be determined by the gaming oversight authority.

X. The sweepstakes commission shall negotiate and execute agreements with at least 3 technology providers in accordance with reasonable business terms subject to the provisions of RSA 284:21-k, I(f). Each operator licensee shall obtain video lottery machines from such technology providers and no others, provided, that no operator licensee shall obtain more than 50 percent of its video lottery machines from any one such technology provider.

XI. Video lottery machines shall be operated only at times when the public is allowed access to the locations. They shall not be operated during private functions.

284-A:12 Term of License. Any operator's license or technology provider's license issued pursuant to this chapter and any renewal thereof shall be valid for 2 years unless earlier suspended or revoked by the gaming oversight authority.

284-A:13 Presence of the Gaming Oversight Authority and Sweepstakes Commission.

I. The gaming oversight authority may be present at any pari-mutuel licensee location at which video lottery machines are operated at all times when the facility is open to the public. The operator licensee may be required by the gaming oversight authority or gaming enforcement division, department of safety to provide such office space and equipment which the commission shall by rule determine is reasonably necessary or proper for them to fulfill their responsibilities.

II. The sweepstakes commission may be present at any time a video lottery machine is opened to remove or insert any drop box, hopper, or other mechanism containing money, tokens, or other items of value. The sweepstakes commission may be present in the count room at any time money, tokens or other items of value utilized in video lottery machines are counted.

284-A:14 Sanction Powers of the Gaming Oversight Authority.

I. The gaming oversight authority shall have the sole and exclusive authority, following appropriate hearings and factual determinations, to impose sanctions against any person for any violation of this chapter or any rule of the gaming oversight authority, the sweepstakes commission, or the pari-mutuel commission adopted under the provisions of this chapter.

II. The gaming oversight authority shall have the authority to impose sanctions upon any person for any violation of this chapter or the rules of the gaming oversight authority, the pari-mutuel commission or the sweepstakes commission as follows:

(a) Revocation or suspension of a license.

(b) Civil penalties as may be necessary to punish misconduct and to deter future violations, which penalties may not exceed $20,000 for each violation.

(c) Order restitution of any moneys or property unlawfully obtained or retained by a person.

(d) Issue a cease and desist order which specifies the conduct which is to be discontinued, altered, or implemented by the person.

(e) Issue letters of reprimand or censure, which letters shall be made a permanent part of the file of each person so sanctioned.

(f) Impose any or all of the foregoing sanctions in combination with each other.

III. In determining appropriate sanctions in a particular case, the gaming oversight authority shall consider:

(a) The risk to the public and to the integrity of video lottery machine operations created by the conduct of the person.

(b) The seriousness of the conduct of the person and whether the conduct was purposeful or with knowledge that it was in contravention of the provisions of this chapter or the rules of the gaming oversight authority, the pari-mutuel commission or the sweepstakes commission.

(c) Any justification or excuse for such conduct.

(d) The prior history of the person involved.

(e) The corrective action taken by the person to prevent future misconduct of a like nature from occurring.

(f) In the case of a monetary penalty, the amount of the penalty in relation to the of the misconduct and the financial means of the person.

(g) Notwithstanding the foregoing, in the event that a person receives 3 civil penalties each in the amount of $20,000 during the term of such person's license, the gaming oversight authority shall either revoke the license for the balance of the term of the license or suspend such license for a period of 60 days, as determined by the gaming oversight authority.

284-A:15 Declaration of Limited Exemption from Operation of Provisions of 15 U.S.C. section 1171-1172. Pursuant to section 2 of an act of Congress of the United States entitled "An act to prohibit transportation of gambling devices in interstate and foreign commerce," approved January 2, 1951, being Chapter 1194, 64 Stat. 1134, and also designated as 15 U.S.C. sections 1171-1177, the state of New Hampshire, acting by and through the duly elected and qualified members of its legislature, does hereby, in accordance with and in compliance with the provisions of that section 2 of that act of Congress, declare and proclaim that section 2 of that act of Congress shall not apply to any gambling device in this state where the transportation of such a device is specifically authorized by and done in compliance with the provisions of this chapter and any rules adopted pursuant to it, and that any such gambling device transported in compliance with state law and rules shall be exempt from the provisions of that act of Congress.

284-A:16 Legal Shipment of Gaming Devices into New Hampshire. All shipments into this state of gaming devices, the registering, recording, and labeling of which has been duly had by the manufacturer or dealer in accordance with sections 3 and 4 of an act of Congress of the United States entitled "An act to prohibit transportation of gambling devices in interstate and foreign commerce, approved January 2, 1951, being chapter 1194, 64 Stat. 1134, and also designated as 15 U.S.C. sections 1171-1172, shall be deemed legal shipments into this state.

284-A:17 Effect on Other Laws. This chapter shall take precedence over any other law, rule, ordinance, or regulation of the state or its political subdivisions to the contrary.

2 New Section; Sweepstakes Commission Supervision of Gaming Oversight Authority. Amend RSA 284 by inserting after section 21-v the following new section:

284:21-w Video Lottery; Duties of the Sweepstakes Commission; Gaming Oversight Authority.

I. The sweepstakes commission shall:

(a) Hear and make recommendations promptly to the gaming oversight authority and in reasonable order all license applications for technology providers.

(b) Collect all license fees imposed upon any applicant and all taxes imposed by RSA 284-A.

(c) Adopt, pursuant to RSA 541-A, such rules as may be necessary to implement RSA 284-A.

(d) Certify net machine income by inspecting records, conducting audits, having its agents on site, or by any other reasonable means.

(e) Establish criteria for a central computer system located at the office of the sweepstakes commission linking all video lottery machines to insure control over electronic games of chance. The sweepstakes commission shall establish a bid procedure for such contracts. The cost of the purchase or lease and the operation of the central computer system shall be paid by the operator licensee. Each operator licensee shall pay 25 percent of the total cost of the central computer system.

(f) Establish criteria for technology providers to provide video lottery machines to operator licensees.

(g) Establish technical standards for approval of video lottery machines, including mechanical and electrical reliability and security against tampering, as it may deem necessary to protect the public from fraud or deception and to ensure the integrity of their operation.

II. The sweepstakes commission shall have the authority to issue subpoenas and compel the attendance of witnesses, to administer oaths and to require testimony under oath.

III. No later than March 31 in each calendar year, the sweepstakes commission shall provide a report to the gaming oversight authority regarding the generation of revenues of video lottery machines by pari-mutuel licensees or operator licensees.

IV. With regard to minutes and records of the sweepstakes commission:

(a) The sweepstakes commission shall cause to be made and kept a record of all proceedings held at public meetings of the sweepstakes commission. A verbatim transcript of those proceedings shall be prepared by the sweepstakes commission upon the request of any commissioner or upon the request of any other person and the payment by that person of the costs of preparation. A copy of the transcript shall be made available to any person upon request and payment of the costs of preparing the copy.

(b) The sweepstakes commission shall keep and maintain a list of all notices for licenses as technology providers under RSA 284-A, together with a record of all actions taken with respect to such applicants. A file and record of the actions by the sweepstakes commission shall be open to public inspection provided, however, that the information regarding any applicant whose license or registration has been denied, revoked, or not renewed shall be removed from such list after 5 years from the date of such action.

(c) The sweepstakes commission shall maintain such other files and records as the sweepstakes commission determines is necessary.

(d) All information and data required by the commission to be furnished to it, or which may otherwise be obtained, shall be considered to be confidential and shall not be revealed in whole or in part except in the course of the necessary administration of this chapter, or upon the lawful order of a court of competent jurisdiction, or with the approval of the attorney general, to a duly authorized law enforcement agency.

(e) All information and data pertaining to an applicant's criminal record, family, and background furnished to or obtained by the sweepstakes commission from any source shall be considered confidential and shall be withheld in whole or in part. Such information shall be released upon the lawful order of a court of competent jurisdiction, or with the approval of the attorney general, to a duly authorized law enforcement agency.

(f) Notice of the contents of any information or data released, except to a duly authorized law enforcement agency pursuant to subparagraphs (d) or (e) of this paragraph, shall be given to any applicant, registrant, or licensee in a manner prescribed by the rules adopted by the sweepstakes commission.

(g) All records, information or data maintained or kept by the sweepstakes commission shall be maintained or kept at the office of gaming oversight authority.

V. Pending the adoption of rules under RSA 541-A, and notwithstanding RSA 541-A:18, the sweepstakes commission shall adopt interim rules after public hearing and within 30 days after enactment of this chapter.

3 New Sections; Department of Safety; Gaming Enforcement Division Established. Amend RSA 21-P by inserting after section 11-a the following new sections:

21-P:11-b Division of Gaming Enforcement.

I. There is established within the department a division of gaming enforcement under the supervision of the commissioner of safety. The division shall be authorized to:

(a) Investigate violations of RSA 284 or RSA 284-A and the rules adopted under the provisions of RSA 284 or RSA 284-A and initiate proceedings before the gaming oversight authority for such violations.

(b) Report the results of any investigation conducted to the pari-mutuel commission, the sweepstakes commission, or the gaming oversight authority, as appropriate.

(c) Participate in any hearing conducted by the pari-mutuel commission or the sweepstakes commission.

II. The commissioner of safety shall organize the division into such units as the commissioner deems necessary. The commissioner of safety may employ such personnel as the commissioner deems necessary to fulfill the responsibilities of the division.

21-P:11-c Enforcement Expenditures. Notwithstanding any other provisions of law, the governor and council with the prior approval of the fiscal committee of the general court, upon request from the commissioner of safety may authorize the transfer of general funds to the department of safety to implement and enforce RSA 21-P:11-b, RSA 284 and RSA 284-A.

4 New Section; Duties; Gaming Oversight Authority. Amend RSA 284 by inserting after section 6-a the following new section:

284:6-b Duties of the Pari-mutuel Commission.

I. The pari-mutuel commission shall:

(a) Provide to the gaming oversight authority all records pertaining to the licensing of a pari-mutuel licensee under RSA 284 within 30 days after the pari-mutuel commission receives a request.

(b) Hear and make recommendations to the gaming oversight authority in reasonable order on all license applications for a license under RSA 284-A:8.

II. The pari-mutuel commission shall make its recommendation to the gaming oversight authority in writing and after hearing. All hearings shall be conducted in accordance with the rules adopted by the pari-mutuel commission.

III. With regard to minutes and records of the pari-mutuel commission:

(a) The pari-mutuel commission shall cause to be made and kept a record of all proceedings of public meetings of the pari-mutuel commission pursuant to this chapter. A verbatim transcript of those proceedings shall be prepared by the pari-mutuel commission upon the request of any commissioner or upon the request of any other person and the payment by that person of the costs of preparation. A copy of a transcript shall be made available to any person upon request and payment of the costs of preparing the copy.

(b) The pari-mutuel commission shall keep and maintain a list of all notices it receives under RSA 284-A, together with a record of all actions taken with respect to such notices. A file and record of the pari-mutuel commission's actions shall be open to public inspection provided, however, that the information regarding any applicant whose license or registration has been denied, revoked, or not renewed shall be removed from such list after 5 years from the date of such action.

(c) The pari-mutuel commission shall maintain such other files and records as the pari-mutuel commission determines is necessary.

(d) All information and data required by the pari-mutuel commission to be furnished to it, or which may otherwise be obtained, shall be considered to be confidential and shall not be revealed in whole or in part except in the course of the necessary administration of this chapter, or upon the lawful order of a court of competent jurisdiction, or with the approval of the attorney general, to a duly authorized law enforcement agency.

(e) All information and data pertaining to an applicant's criminal record, family, and background furnished to or obtained by the pari-mutuel commission from any source shall be considered confidential and shall be withheld in whole or in part. Such information shall be released upon the lawful order of a court of competent jurisdiction or to a duly authorized law enforcement agency.

(f) Notice of the contents of any information or data released, except to a duly authorized law enforcement agency pursuant to subparagraphs (d) or (e) of this paragraph, shall be given to any applicant, registrant, or licensee in a manner prescribed by the rules and regulations adopted by the pari-mutuel commission.

(g) All records, information or data maintained or kept by the pari-mutuel commission shall be maintained or kept at the office of the gaming oversight authority.

5 License Restricted. RSA 284:16-c is repealed and reenacted to read as follows:

284:16-c License Restricted.

I. Notwithstanding any other provision of law, the pari-mutuel commission shall not issue a license to conduct live thoroughbred horse racing or live harness horse racing pursuant to RSA 284:16 to any applicant if the place where such races or race meets are to be held is within a radius of 40 miles of the place where live thoroughbred horse races or race meets have already been licensed pursuant to RSA 284:16; provided, however, that the pari-mutuel commission may issue a license to conduct live harness racing to the holder of a license to conduct live thoroughbred racing if the live harness racing is conducted at the same place where the live thoroughbred racing is being conducted.

II. Notwithstanding any other provision of law, the pari-mutuel commission shall not issue a license to conduct live dog racing pursuant to RSA 284:16-a to any applicant if the place where the races or race meets are to be held is within a radius of 40 miles of the place where such races or race meets have already been licensed pursuant to RSA 284:16-a.

6 Restriction on Gambling. RSA 284:17-c is repealed and reenacted to read as follows:

284:17-c Restriction on Gambling. Except as provided in the introductory paragraph of RSA 284:22, RSA 284:22-a, and RSA 284-A, no licensee who holds running horse races shall at the same facility hold any other kinds of races or permit any other type of gambling except harness horse races and activities licensed by the gaming oversight authority, pari-mutuel commission, or the sweepstakes commission.

7 New Subparagraph; Pari-mutuel licensee; On-Sale Special Cocktail Lounge License. Amend RSA 178:20, V by inserting after subparagraph (u) the following new subparagraphs:

(v) Pari-Mutuel licensee or operator licensee. The commission may issue a special license to a person holding a pari-mutuel license or an operator's license at a pari-mutuel licensee location under the provisions of RSA 284-A provided the pari-mutuel licensee location has an existing liquor license. Such special license shall allow the sale of liquor, wine, and beverages within the pari-mutuel licensee location, including dining room, function room, gaming room, lounge, or any other area designated by the commission, without regard to whether meals are served therein, but only during the time gaming is being conducted under RSA 284-A.

8 New Subparagraphs; Application of Receipts. Amend RSA 6:12, I by inserting after subparagraph (hhhh) the following new subparagraphs:

(iiii) Moneys received under RSA 284-A:10, III(b), which shall be credited to the New Hampshire thoroughbred and standard horse breeding program fund.

(jjjj) Moneys received under RSA 284-A:8, III(c), which shall be credited to the horse racing employees pension fund.

(kkkk) Moneys received under RSA 284-A:8, IV(a), which shall be credited to the greyhound adoption fund.

(llll) Moneys received under RSA 284-A:8, IV (b), which shall be credited to the dog racing employees pension fund.

9 New Subparagraph; Authorized Video Lottery Games of Chance Machines Not Prohibited. Amend RSA 647:2, V by inserting after subparagraph (c) the following new subparagraph:

(d) Video lottery machines authorized pursuant to RSA 284-A.

10 Business Profits Tax. Amend RSA 77-A:2 to read as follows.

77-A:2 Imposition of tax. A tax is imposed at a rate of [8.5] 8 percent upon the taxable business profits of every business organization.

11 Business Enterprise Tax; Rate Increase. Amend RSA 77-E:2 to read as follows:

77-E:2 Imposition of Tax. A tax is imposed at the rate of [3/4] 1/2 of one percent upon the taxable enterprise value tax base of every business enterprise.

12 Education Property Tax. Amend RSA 76:3 to read as follows.

76:3 Education Property Tax. An annual education property tax at the uniform rate of $[5.80] 4.90 on each $1,000.00 of the value of taxable property is hereby imposed on all persons and property taxable pursuant to RSA 72 and 73, except property subject to tax under RSA 82 and RSA 83-F.

13 Gambling Addiction Added. Amend RSA 172:2-a to read as follows:

172:2-a Program Established. The commissioner shall provide for the scientific care, treatment, and rehabilitation of gambling, alcohol, and drug abusers, and work towards the prevention of, and assist in the control of, gambling, alcohol, and drug abuse within the state through education, treatment, community organization, and research.

14 Gambling Addiction Added. Amend RSA 172:8 to read as follows:

172:8 Duties of Commissioner. The commissioner shall:

I. Study the problems presented by gambling, alcohol, and drug abuse, including methods and facilities available for the care, treatment, custody, employment, and rehabilitation of persons who are inebriates, alcohol abusers, drug dependent, [or] drug abusers, or gambling addicts.

II. Promote meetings and programs for the discussion of gambling, alcohol, and drug dependency and abuse for the guidance and assistance of individuals, schools, courts, and other public and private agencies.

III. Conduct, promote and finance, in full or in part, studies, and other appropriate facilities dealing with the physical, psychological, and/or social aspects of gambling, alcohol, and drug abuse.

IV. Have the authority to accept or reject for examination, diagnosis, guidance, and treatment, insofar as funds and facilities permit, any resident of the state who comes to the commissioner voluntarily for advice and treatment.

V. [Repealed.]

VI. Render biennially to the governor and council a report of his activities including recommendations for improvements therein by legislation or otherwise.

VII. Coordinate community medical resources for the emergency medical care of persons suffering acute mental or physical reaction to gambling, alcohol, or drugs and of persons suffering from drug dependency.

VIII. Employ such assistants as may be necessary to carry out the purposes of this chapter, in accordance with state personnel regulations, and within available appropriations and funds.

IX. Disseminate information on the subjects of gambling, alcohol, and drug abuse for the guidance and assistance of individuals, schools, courts and other public and private agencies.

X. [Repealed.]

15 Gambling Addiction Added. Amend RSA 172:8-a to read as follows:

172:8-a Confidentiality of Client Records. No reports or records or the information contained therein on any client of the program or a certified gambling, alcohol, or drug abuse treatment facility or any client referred by the commissioner shall be discoverable by the state in any criminal prosecution. No such reports or records shall be used for other than rehabilitation, research, statistical or medical purpose, except upon the written consent of the person examined or treated. Confidentiality shall not be construed in such manner as to prevent recommendation by the commissioner to a referring court, nor shall it deny release of information through court order pursuant to appropriate federal regulations.

16 Gambling Addiction Added. Amend RSA 172:8-b to read as follows:

172:8-b Rulemaking. The commissioner shall adopt rules under RSA 541-A relative to the following:

I. The acceptance, care and treatment of gambling, alcohol, or drug dependent persons and alcohol or drug abusers who are clients of the program established under this chapter or a certified substance abuse treatment facility.

II. A fee schedule and collection of fees under RSA 172:14, IV.

III. Certification of substance abuse treatment facilities including, but not limited to:

(a) Program content;

(b) Qualifications of program staff; and

(c) Type of substance abuse treatment offered.

IV. Certification and recertification of gambling, alcohol, and drug abuse counselors including, but not limited to:

(a) Peer review of applicants.

(b) Minimum qualifications and competency.

(c) Education and continuing education.

(d) Experience required.

(e) Required knowledge of gambling, alcohol and drug abuse counseling.

(f) Such other matters as the commissioner may deem necessary to carry out the purposes of this chapter.

V. Voluntary admissions under RSA 172:13.

17 Effective Date. This act shall take effect July 1, 2002.

LBAO

01-2035

Revised 12/13/01

HB 1353 FISCAL NOTE

FISCAL IMPACT:

METHODOLOGY:

The estimated amounts are shown below: