Establishes a fund for long-term care by casino gambling fees and taxes.

A BILL FOR AN ACT

SECTION 1. The legislature finds that the establishment of a long-term care financing program to prevent the impoverishment of Hawaii families is a matter of compelling state interest. In 1993, the population of persons aged sixty-five and over was 136,600, or sixteen per cent of the adult population in Hawaii. By the year 2020, persons aged sixty-five and over will constitute over one-fourth of Hawaii's adult population, and nearly one-third of this group are expected to be disabled. In 1993, the population of persons between the ages of eighteen to sixty-four was 736,000 of which an estimated ten per cent, or 73,600 people, were disabled. Approximately, three per cent of this disabled population, or 2,208 people in this age group were severely disabled due to conditions resulting from, but not limited to, developmental disabilities; severe chronic mental illness; work, motor vehicle, sports, and other accidental injury; hemophilia; leukemia and other types of cancer; and acquired immune deficiency syndrome (AIDS). Average annual nursing home charges in Hawaii already are almost twice the average annual disposable income for Hawaii's elderly families. Annual cash outlays for nursing home care by Hawaii families are expected to increase significantly over current costs by the year 2020, with the average cost for one year of nursing home care reaching more than $200,000.

Unless a strategy is adopted to make long-term care affordable, families paying for nursing home care increasingly will be forced to deplete their savings and other non-housing assets and face impoverishment. This will pose severe adverse ramifications for the well-being of families young and old, for the State (which will bear much of the burden of paying for long-term care through its Medicaid program), and for society in general. Unfortunately, for elders, near elders, and disabled young adults, private long-term care insurance policies currently available generally are not affordable and typically offer very restricted coverage.

An alternative strategy for funding a long term care program exists in gambling. Gambling will not only provide the State with funding for long-term care but will provide additional recreation for tourists and residents. Currently, many residents travel from Hawaii to the mainland with the express purpose of gambling If gambling were allowed in Hawaii, these people could remain here and gamble instead of travelling to another state.

This chapter establishes the Hawaii long-term care fund to be funded by casino gambling. This bill also establishes the Hawaii gaming board to administer regulate, and enforce the gaming provisions.

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

"Chapter

§    -1 Definitions. As used in this chapter, unless the context clearly requires otherwise:

"Activities of daily living" include the six basic self- activities of eating, bathing, dressing, transferring from bed to chair, bowel and bladder control, and independent ambulation.

"Board" means the board of trustees of the fund.

"Director" means the executive director of the Hawaii long- term care fund.

"Fund" means the Hawaii long-term care fund.

"Individual" means a natural person as defined by section 235-1.

"Long-term care" means any array of non-acute services needed by individuals who have lost some capacity for independence because of a chronic illness or condition. "Long-term care" includes assistance with basic activities and routines of daily living such as bathing, dressing, meal preparation, and eating. It may also include skilled and therapeutic care for the treatment and management of chronic conditions. "Long-term care" includes services that can be provided in a variety of settings -- the individual's home, the community, or an institution. "Long-term care" does not refer to services normally provided in the acute care unit of a hospital or to services normally paid for by basic medicare supplemental coverage, basic hospital expense coverage, basic medical-surgical expense coverage, hospital confinement coverage, major medical expense coverage, or specified disease or specified accident coverage.

"Member" means a member of the board of trustees of the fund.

"Nonparticipant" means an individual who is not eligible for any benefits as provided in this chapter.

"Nonresident" means the same as defined in section 235-1.

"Participant" means an individual eligible to receive benefits as provided in this chapter.

"Party in interest" includes:

"Person" means the same as in section 1-19.

"Program start year" means the program year immediately following adoption of rules pursuant to chapter 91 necessary and appropriate to carry out the purposes of this chapter.

"Program year" means twelve calendar months beginning January 1.

"Qualified provider" includes individuals, partnerships, associations, companies, corporations, and public or private agencies and organizations eligible to receive benefit payments for long-term care services rendered to participants as provided in this chapter.

"Resident" means the same as defined in section 235-1.

§    -2 Long-term care fund; establishment, authority to design and administer a long-term care benefits program. There is established the long-term care fund. For administrative purposes only, the fund shall be attached to, but shall otherwise be independent of, the office of the governor for the initial five years of its existence. Thereafter, for administrative purposes only, the fund shall be attached to, but shall otherwise be independent of, the department of budget and finance. The fund shall be a public body and a body corporate and politic with perpetual existence.

§    -3 Purpose of the fund. The fund shall establish, implement, and administer a comprehensive long-term care financing program.

§    -4 Board of trustees; appointment and composition of the board; terms of office; compensation; vacancies and succession; removal for cause; meetings; quorum. (a) The fund shall be headed by a board of trustees consisting of five members who shall be nominated as provided in subsection (b) and who, with the advice and consent of the senate, shall be appointed by the governor pursuant to section 26-34. The governor shall appoint trustees in a timely manner provided that the governor shall appoint the five trustees to be first appointed no later than August 1, 2001. If the governor fails to do so, the appointments shall be made by the long-term care fund trustee selection committee from the list of nominations with the advice and consent of the senate. All trustees shall be appointed for terms of six years each.

The trustees shall elect a chairperson, vice chairperson, and other officers as deemed necessary.

The trustees shall serve without compensation but shall be reimbursed for all expenses, including travel and per diem expenses, necessary for the performance of their duties.

(b) There shall be a long-term care fund trustee selection committee that shall consist of the director of the executive office on aging, the director of finance, the director of taxation, and the executive director of the state ethics commission. The selection committee shall nominate three persons for each vacant trustee position in a timely manner except that nominations for the five trustees to be first appointed shall be made no later than June 1, 2001. Every nomination shall be by concurrence of the majority of committee members.

In nominating persons for the position of trustee, the selection committee shall select persons who, at a minimum, have experience in accounting, business, finance, law, or other similar fields and experience equivalent to five years as a senior officer or manager of a viable business, community, or public organization involved with insurance management, portfolio management, health care management, or similar field. The selection committee shall nominate and the governor shall endeavor to appoint trustees so that there is a diversity of relevant experience represented on the board.

No trustee shall be appointed except as nominated by the selection committee.

(c) Each trustee shall hold office until that trustee's successor is appointed and qualified. No trustee shall serve for more than twelve consecutive years. If a vacancy occurs in the membership of the board, the governor shall fill the vacancy by appointment subject to article V, section 6 of the state constitution.

(d) The governor, with the consent of the senate, may remove or suspend a trustee for cause after due notice and public hearing.

(e) The board shall meet regularly not less than once during each month. The board shall conduct regular, special, or rescheduled meetings, including executive and emergency meetings, in accordance with chapter 92. The board shall give adequate written public notice of its meetings according to chapter 92. If a meeting of the board is recessed or otherwise not adjourned, the chairperson shall announce the date, time, and place at which the meeting will recommence.

(f) Three trustees shall constitute a quorum. Each trustee shall be entitled to one vote. Three concurring votes shall be necessary for any action of the board to be valid.

§    -5 Fiduciary responsibilities, obligations, and duties; liability and penalty for breach. (a) Subject to subsection (e) the board and every other fiduciary of the fund shall:

(b) The board shall:

(c) The annual report of the fund shall include:

Subject to chapter 92F and as designated by the board by rule, all work products, papers, documents, and data used or prepared by the responsible accountant in preparing the financial report shall be public documents and shall be retained and made available for public examination upon request;

Subject to chapter 92F and as designated by the board by rule, all work products, papers, documents, and data used or prepared by the responsible actuary in preparing the actuarial report shall be public documents and shall be retained and made available for public examination upon request; and

(d) The summary description of benefits shall be written in plain language so that it may be understood by the average participant and shall be sufficiently accurate and comprehensive to reasonably inform participants of their rights and obligations and any material modification or change thereto. The summary description of benefits shall be published on three different days not later than July 1 of every year in a newspaper of general circulation in the State and shall be deposited in every public library in the State. The summary description shall be printed in sufficient quantities and shall be furnished without charge upon request. There shall be no deliberate act taken to prevent or otherwise impede participants from fully knowing their rights and obligations. The summary description shall include the following information:

(e) Except as provided in section     -9(a), trustees and any other fiduciary of the fund found to have willfully breached any applicable fiduciary responsibility imposed by this chapter shall:

Whenever a corporation breaches any applicable fiduciary responsibility imposed by this chapter, the breach shall be deemed to be also that of the individual directors, officers, or agents of the corporation who authorized, ordered, or committed any act constituting in whole or in part the breach.

The penalties provided in this subsection shall be cumulative to the remedies or penalties available under all other laws of this State.

Subject to section    -7(a)(2), no trustee or other fiduciary shall be liable with respect to a breach of fiduciary responsibility imposed by this chapter if the breach was committed before the trustee or other fiduciary became, or after the trustee or other fiduciary ceased to be, a fiduciary of the fund.

§    -6 Powers of the board. Except as otherwise provided by law, the board may:

§    -7 Limitation of trustee liability. (a) If an investment manager has been appointed under this chapter and to the extent that no trustee participates knowingly in, or knowingly undertakes to conceal, an act or omission of the investment manager, the trustee, knowing the act or omission is a breach, shall not be liable for the acts or omissions of the investment manager or be under an obligation to invest or otherwise manage any assets of the fund which are subject to management by the investment manager.

(b) The board may require any person with whom or with which it contracts, irrespective of the purpose of the contract, to provide indemnity for its actionable acts in the form and in the amount deemed appropriate by the board.

(c) Nothing in this subsection shall relieve any trustee of any liability under this part for any act of the trustee.

§    -8 Fund's principal office. The fund shall have a principal office in Honolulu. The board shall establish branch offices in other locations as the board deems appropriate.

§    -9 Fund's employees and contractors. (a) The fund shall employ an executive director to be appointed by the board. The director shall be exempt from chapters 76, 77, and 89 and section 26-35(4), but shall be a member of the state employees retirement fund and shall be eligible to receive the benefits of any state or federal employee benefit program generally applicable to officers and employees of the State, including those under chapter 87. The director shall have at least five years of senior administrative experience in public finance or a related field. Effective for the program start year, the board shall set the salary of the director within the range from $          to $          a year. The director shall serve at the pleasure of the board. The director shall act as the chief executive officer of the fund and manage and conduct the day-to-day business affairs of the fund in accordance with the directions and policies of the board and shall perform all duties prescribed by the board. The director shall be a fiduciary of the fund and shall be liable for breaches of any applicable fiduciary responsibility, obligation, or duty imposed by this chapter and shall acknowledge the fiduciary responsibility and liability for breach in writing.

(b) The fund shall employ a staff actuary to be appointed by the board, who shall be a member of the American Academy of Actuaries and a fellow of the Society of Actuaries and who shall have actual specific prior experience in long-term care financing and who shall be the technical advisor to the board and to the director on matters regarding the operation of the fund and shall perform any other duties that are required in connection therewith. The actuary shall be exempt from chapters 76, 77, and 89 and section 26-35(4), but shall be a member of the state employees retirement system and shall be eligible to receive the benefits of any state or federal employee benefit program generally applicable to officers and employees of the State, including those under chapter 87. Effective for the program start year, the board shall set the salary of the staff actuary within the range from $          to $           a year. The actuary shall serve at the pleasure of the board. The actuary shall be a fiduciary of the fund and shall be liable for breaches of any applicable fiduciary responsibility, obligation, or duty imposed by this chapter and shall acknowledge the fiduciary responsibility and liability for breach in writing.

(c) The fund may employ, subject to chapters 76, 77, and 89 technical experts and officers, agents, employees, and other assistants, permanent and temporary, as required.

(d) The fund may also employ persons on a contractual basis not subject to chapters 76, 77, and 78 when in the determination of the board the services to be performed are unique and essential to the execution of the functions of the fund.

(e) The compensation for all services engaged by the fund and all other expenses of the fund necessary for operation of the fund shall be paid out of the assets of the fund at rates and in amounts that the board approves.

§    -10 Prohibited transactions; board trustees, other fiduciaries, and employees. (a) Trustees, other fiduciaries, and employees of the fund shall not cause the fund to engage in a transaction, knowing or having reason to know that the transaction constitutes a direct or indirect:

(b) Trustees, other fiduciaries, and employees of the fund shall not:

(c) This section shall not be construed as prohibiting trustees, other fiduciaries, and employees of the fund from:

(d) Trustees and other fiduciaries who are party to any relationship described in subsection (c)(3) or who are party to any other conflict of interest as provided in chapter 84 shall:

(e) The board shall have the sole authority to grant a conditional or unconditional exemption of any trustee, other fiduciary, or employee of the fund, or transaction from any or all restrictions imposed by subsection (a) to permit the continuance of normal and reasonable practices in those instances where participants of the fund are adequately protected. The exemption shall not relieve a board member, other fiduciary, or employee from any other applicable provision of this chapter or any other applicable chapter. The board shall not grant an exemption unless it finds that the exemption is:

Before granting any exemption under this subsection, the board shall give adequate public notice of the pendency of the exemption to all interested persons and shall afford an adequate opportunity for a public hearing of views in accordance with chapter 92. The board shall make a final determination concerning the exemption on the record. All exemptions granted under this subsection shall be separately listed in the annual report together with the name of the trustee, other fiduciary, or employee of the fund involved and the nature of the relationship, the nature and the amount of the transaction, and the full text of the final determination. Subject to chapter 92F, all papers, documents, and contracts relating to a transaction exempted under this subsection shall be public documents and shall be retained and made available upon request. Any failure to comply with this subsection shall constitute a breach of fiduciary responsibility and shall be subject to penalties as provided in section     -7(e).

§    -11 Legal counsel. The fund may call upon the attorney general for any legal services that it may require, or it may employ its own legal counsel and legal staff.

§    -12 Use of assets; management of assets and liabilities. (a) Notwithstanding any other law to the contrary, the fund's assets shall consist of legislative appropriations, real property, personal property, all revenues paid into the fund, and all property and other income acquired, earned, or otherwise gained through the use of revenue paid into the fund by deposits, investments, exchanges, or other transactions. The fund's assets shall be the sole property of the fund and shall be used exclusively by the fund for the operations of the fund and the obligations incurred by the fund.

(b) In managing the fund's assets and liabilities, the board, without limitation but subject to sections     -7,     -9, and     -24 and any other applicable fiduciary responsibility imposed by this chapter, may:

§    -13 Cooperative agreements with other governmental agencies. The fund may enter into any agreements and arrangements that it deems advisable with other governmental agencies to provide for data and information collection, record keeping, information processing, computer processing, determination of payer responsibility, assessment, coordination, outreach, planning, technical advice, utilization review, long-term care facility survey and quality review, eligibility determination, and for any other purposes that the board deems appropriate or necessary.

§    -14 Liability and rights of parties and third persons. (a) Liabilities of the fund shall not be the debt of the State, and the State shall not be liable thereon. The liabilities of the fund shall not constitute an indebtedness within the meaning of any debt limitation or restriction.

(b) The participants of the fund shall not be entitled to the return of any money paid to the fund, except as may be determined by the board or by law.

§    -15 Termination. The fund may be terminated only by law.

PART II. ESTABLISHMENT OF LONG-TERM CARE FUND

§    -21 Long-term care fund; establishment; use and investment of funds. (a) There is established, separate and apart from all public moneys or funds of the State, a long-term care fund which shall be administered by the board exclusively for the purposes of this chapter, including the payment of long-term care benefits as described in this chapter and implementing rules. There shall be deposited into the fund:

The long-term care fund shall not be considered a special fund as defined in chapter 37 and section 37-53 shall not apply.

(b) The director shall be the treasurer and custodian of the fund and shall administer the fund in accordance with the directions of the board. All moneys in the fund shall be held in trust for the purposes of this chapter, including the day-to-day operation of the fund as well as to satisfy any financial obligations which the fund may incur as a consequence of its operations. Moneys from the fund shall not be expended, released or appropriated, or otherwise disposed of for any other purpose; provided that any excess reserves as determined by the staff actuary may be loaned to finance the development of the long-term care infrastructure, including the construction or improvement of long-term care facilities, service development, or training, subject to the limitations on investments by the board under sections     -12,     -23, and     -24 and subject to any requirements that the board shall impose to promote cost containment; and provided that the board may pay out of funds held for investment a reasonable amount to any person for servicing and handling of mortgages purchased by the fund or supplying investment advisory or consultative services or to meet any other costs incident to the prudent investment of funds that the board may approve. Moneys in the fund may be deposited in any depository bank in which general funds of the State may be deposited but those moneys shall not be commingled with other state funds and shall be maintained in separate accounts on the books of the depository bank. Those moneys shall be secured by the depository bank to the same extent and in the same manner as required by the general depository law of the State; and collateral pledged for this purpose shall be kept separate and distinct from any other collateral pledged to secure other funds of the State. Withdrawals from the bank or depositories shall be made only upon the signatures of at least two persons approved by the board.

(c) Subject to sections     -7,     -9,     -12,     -23, and     -24 and any other applicable fiduciary responsibility imposed by this chapter, the board may invest and reinvest any funds as authorized by this part and by law from time to time provided and hold, purchase, sell, assign, transfer, or dispose of any of the securities and investments in which any of the moneys in the fund shall have been invested, as well as of the proceeds of the investments and moneys belonging to the fund.

(d) Expenditures of money in the fund shall not be subject to any requirement for legislative appropriations. All benefits shall be paid from the fund upon vouchers approved by the director.

§    -22 Securities for protection of funds deposited. For the protection of trust fund moneys deposited under this chapter, securities specified in section 38-3 shall be deposited with the director, or with banks in the continental United States, or with financial institutions with trust powers authorized to do business in the State, as the director may select, to be held therein for safekeeping subject to the order of the director, any other provisions of the laws of the State notwithstanding.

§    -23 Investments. (a) The board, in consultation with investment managers and other pertinent experts, shall develop and duly adopt a detailed and specific list of permitted investments into which the assets of the fund may be invested. The list of permitted investments shall be developed and adopted within one year of the effective date of this chapter and shall be submitted to the legislature for adoption as an amendment of this section. Before submitting the intended list of permitted investments to the legislature, the board shall give adequate public notice to all interested persons of its adoption and impending submission of the list to the legislature and shall afford an adequate opportunity for a public hearing of views in accordance with chapter 92.

The list of permitted investments shall be consistent with this section and sections     -7,     -9,     -12, and     -24 and shall include detailed and specific information describing:

(b) Prior to the amendment of this section as provided in subsection (a) and notwithstanding any provision of this chapter to the contrary, assets of the fund may only be invested in:

§    -24 Investment guidelines. (a) Assets of the fund shall be invested and managed in strict compliance with this section and sections     -7,     -9,     -12, and     -23 and all other applicable fiduciary duties imposed by this chapter. Trustees and other fiduciaries shall exercise prudence in performing any investment duties imposed, assumed, or undertaken. The requirement to exercise prudence shall mean that prior to making or participating in the making of any particular investment or taking any series or program of investments or actions related to an investment course of action, a trustee or other fiduciary shall give appropriate consideration to those facts and circumstances that, given the scope of a trustee's or other fiduciary's investment duties, the trustee or other fiduciary knows or should have known are relevant to the particular investment or investment course of action under review. To give appropriate consideration, a trustee or other fiduciary shall:

If a trustee or other fiduciary is ill-equipped or otherwise unable to give appropriate consideration in evaluating a particular investment or investment course of action under review, the trustee or fiduciary shall have the duty to seek outside assistance. The lack of familiarity with investments shall not relieve any trustee or other fiduciary from the fiduciary duty to exercise prudence in investing and managing the assets of the fund. Except as provided in section     -9(a), it shall be a breach of fiduciary responsibility for a trustee or other fiduciary to make or participate in making any investment or take any investment course of action without giving appropriate consideration to the investment as herein required and the breach shall be subject to penalties as provided in section     -7(e).

(b) Any transaction involving a loan of the assets of the fund shall be in strict compliance with sections     -7,     -9,     -12,     -20,     -23, this section, and all other applicable fiduciary duties imposed by this chapter. Trustees and other fiduciaries shall exercise prudence in making any loan of the assets of the fund. In determining whether a particular loan is a prudent investment of the assets of the fund, trustees and other fiduciaries shall give appropriate consideration as provided in subsection (a) to:

(c) The board shall establish written policies setting forth conditions and restrictions applicable to every investment and loan of assets of the fund. The board shall review its policies from time to time and formulate, amend, or repeal the conditions and restrictions as needed after giving full consideration to prevailing economic conditions. The board, in accordance with chapter 91, shall adopt, amend, and repeal rules as necessary to implement this section.

§    -25 Power to make agreements to protect securities on reorganization or otherwise. Any provision in this part to the contrary notwithstanding, the board may enter into an agreement or agreements for the purpose of protecting the interests of the fund in securities held by the fund, or for the purpose of reorganization of a corporation which issued securities so held, and deposit of securities thereunder with a committee or depositories appointed under the agreement; provided that the agreement and deposit shall first be approved in writing by the board with a statement of their reasons for approval. The board may accept corporate stock or bonds or other securities, which may be distributed pursuant to any approved agreement or to any plan or reorganization approved in writing by a majority of the members of the board with a statement of their reasons for approval. But if securities so received consist in whole or in part of stock in any corporation or of bonds or obligations which are not secured by adequate collateral security or where less than two-thirds of the total value of the required collateral security therefor consists of collateral other than stock, then any stock and any bonds or obligation so received shall be disposed of within five years from the time of acquisition or before expiration of any further period or periods of time that may be fixed in writing for that purpose by the board.

§    -31 Financing plan. The executive office on aging shall develop a financing plan for the provision of long-term care benefits to reflect appropriate federal commitments, agreements, and waivers secured by the executive office on aging as the designated lead agency and as approved by the legislature to minimize adverse financial consequences for Hawaii in establishing the long-term care fund. The financing plan shall be fair, equitable, protective of the State against unwarranted claims for long-term care benefits, generate sufficient revenues to reimburse long-term care benefits, and derive revenues in a sound and reliable manner.

Upon the board's review and approval, the board shall submit the financing plan to the legislature no later than January 1, 1998, for adoption as an amendment of this part after affording an adequate opportunity for a public hearing of views in accordance with chapter 92.

§    -41 Rule making. The board shall adopt rules in accordance with chapter 91 to carry out the purposes of this chapter.

§    -42 Administrative appeals. (a) Any person aggrieved by any administrative action or determination made under this chapter may appeal the administrative action or determination by filing an appeal in the form and manner prescribed by rule adopted by the board, within ninety days after the date of the action or determination in question.

(b) Appeals may be heard and decided by the board or by a hearings officer or officers appointed by the board in its discretion. The hearings officer or officers shall have power to issue subpoenas, administer oaths, hear testimony, find facts, and make conclusions of law and a recommended decision; provided that the conclusions and decisions of the hearings officer or officers shall be subject to review and redetermination by the board.

(c) All parties shall be afforded a reasonable opportunity for a hearing in accordance with chapter 91. An appeal shall be heard in the county in which the appeal is filed; provided that the board may provide by rule for the holding of a hearing in another county for good cause and may provide for the taking of depositions. Witnesses subpoenaed pursuant to this subsection shall be allowed fees the same as witnesses subpoenaed to testify in a circuit court of the State and the fees shall be deemed part of the expenses of administering this chapter. All parties to an appeal shall be delivered or mailed a certified copy of the appeal decision and order and accompanying findings and conclusions within sixty days after the appeal hearing is closed; except that when parties have filed exceptions and presented arguments, an additional sixty days shall be allowed.

(d) Any right, fact, or matter in issue directly passed upon or necessarily involved in an appeal which has become final shall be conclusive.

(e) Any aggrieved party may obtain judicial review of the appeal decision and order in the manner provided in chapter 91, by instituting a proceeding in the circuit court.

(f) A proceeding for judicial review shall not stay enforcement of the final administrative decision and order.

(g) Any person found to have received any benefit or payment of any kind under this chapter to which the person was not properly entitled shall be liable for the amount received unless the benefit or payment was received without fault on the part of the recipient and its recovery would be against equity and good conscience. The person liable, in the discretion of the board, shall either repay the amount or have the amount deducted from any future benefit or payment payable under this chapter within two years after service of the final administrative decision and order or circuit court decision, as applicable. In any case in which an individual is liable to repay any amount under this subsection, the amount shall be payable without interest.

(h) All matters relating to tax appeals shall be decided as provided in chapter 232.

§    -43 Penalties. In addition to any other penalties provided in this chapter, any person who willfully fails to comply with this chapter or rules adopted pursuant to this chapter may be fined not more than $10,000 for each violation. Any action taken to impose or collect the penalty provided in this section shall be considered a civil action.

§    -51 Benefits; covered long-term care services. (a) Subject to sections     -53,     -58, and     -59, and without limiting the development of more desirable combinations, the inclusion of new types of benefits, or the deletion of certain benefits, benefit payments shall be made for the following covered long-term care services to the extent not covered by medical or other insurance subscribed or otherwise indemnifying a participant:

(B) Intermediate care nursing facility stays, including:

(b) Benefit payments for associated noninstitutional long- term care services shall only be paid when those services are received in conjunction with a primary noninstitutional long-term care benefit related to impairment.

(c) From time to time, the board may alter the coverage of long-term care services by addition, deletion, or other modification to reflect new developments in modalities of care and other pertinent changes; provided that any alteration shall be based on actuarial valuations that take into account the assumptions, regular interest, mortality, utilization and other tables, and standards that may be adopted by the board and the requirement that the fund's financing shall be actuarially sound.

§    -52 Benefits; excluded services. No benefit payments shall be paid for the following:

(b) The board shall adopt rules pursuant to chapter 91 for the coordination of benefit payments with medicare, medicaid, and other similar programs as necessary.

§    -53 Benefits; portability. Subject to sections     -58 and     -59, claims for the payment of primary institutional long- term care benefits as defined in section     -51 shall be honored regardless of whether those services are received in the State; provided that no benefits shall be paid for any institutional services received in a location other than a location that is within the territories, possessions, or otherwise within the jurisdiction of the United States.

§    -54 Rules; benefit amount. (a) Benefit amounts shall be determined by rule adopted by the board, provided that persons at or below the federal poverty level will receive 100 per cent of the cost of their required care pursuant to subsection (b). The board shall ensure that persons above the federal poverty level receive percentages based on their income with those in the lowest income brackets receiving the higher percentage and those in the top income brackets receiving the lowest percentage or none. The board shall amend either the percentages or the brackets yearly based on the gambling receipts deposited into the fund but shall not lower the percentage of those receiving 100 per cent of their costs.

(b) Benefit amounts shall be capped as follows:

(b) In case the percentage of benefit entitlement for a participant is less than one hundred per cent, the amount of benefits payable shall be determined by first calculating the one hundred per cent benefit payment amount according to subsection (b) as applicable and then multiplying the benefit payment so determined by the percentage of benefit entitlement to which the participant is entitled.

(c) The exact maximum daily benefit limit dollar amounts for the program start year shall be set by the board on the basis of actuarial valuations as provided in section     -55.

(d) For every program year after the program start year, benefit amounts shall be determined as provided in subsection (a), except that the board may amend the maximum daily benefit limit dollar amounts as required in accordance with section     -55.

§    -55 Rules; adjustment of maximum daily benefit limits. (a) The board shall adopt rules pursuant to chapter 91 establishing criteria and methodologies for determining maximum daily benefit limits as applied in section     -54. The board may consider, but shall not be limited by, the following:

(b) Based on assumptions, regular interest, mortality, utilization and other tables, rules adopted by the board, and the requirement that the fund's financing shall be actuarially sound, the actuary engaged by the board, on the basis of successive annual actuarial valuations, shall determine in advance of each program year the maximum daily benefit limits as applied in section     -54.

(c) The board may adopt the maximum daily benefit limits determined in subsection (b) for application during the next program year.

§    -56 Maximum benefits. (a) Except as limited in section     -51, the cumulative total benefits received by a participant under section     -60 shall not be limited.

(b) The board shall cause to be separately maintained for each participant, an accurate chronological accounting of all benefits received.

§    -57 Elimination periods for new long-term care benefit claims. (a) Every new long-term care benefit claim as defined in subsection (c) shall be subject to an initial elimination period during which no benefit payments shall be paid as follows:

(b) The application of subsection (a) shall be subject to the following:

(c) A claim for benefit payments shall be deemed a new long-term care benefit claim subject to elimination periods as provided in subsection (a) only if the claim is brought after a period of ninety consecutive days during which no covered long- term care benefits as defined in section     -51 are received and there is no period of acute hospital confinement, beginning on the last preceding day on which any covered long-term care benefit was paid or the participant was hospitalized. A claim for benefit payments brought within the ninety-day period as provided in this subsection, shall not be subject to subsection (a).

(d) Any participant aggrieved by any administrative action or determination made under this section may appeal the administrative action or determination as provided in section     -42.

§    -58 Rules; determination of benefit eligibility. (a) The payment of benefits shall only be made for covered long-term care services as defined in section     -51 rendered by qualified providers to a participant determined to be eligible to receive benefits as provided in this section.

(b) The board shall adopt rules pursuant to chapter 91 establishing criteria for determining the eligibility of a participant for benefits. The board may consider, but shall not be limited to, the following:

The board shall establish specific criteria for determining the eligibility of a participant for primary institutional benefits as defined in section     -51 so that the criteria are generally equivalent for actuarial purposes to needing assistance with three of six activities of daily living. The board shall establish specific criteria for determining the eligibility of a participant for primary and associated noninstitutional benefits as defined in section     -51 so that the criteria are generally equivalent for actuarial purposes to needing assistance with two of six activities of daily living.

(c) The board shall adopt rules pursuant to chapter 91 prescribing routine methods and procedures for determining the eligibility of a participant for benefits. The board may consider, but shall not be limited by, the following:

(d) The board shall adopt rules pursuant to chapter 91 prescribing routine methods and procedures for determining that a participant determined to be eligible for benefits remains continuously eligible for the benefits received during the entire period in which benefits are received. The board may consider, but shall not be limited to, the following:

(e) Any participant aggrieved by any administrative action or determination made under this section may appeal the administrative action or determination as provided in section     -42.

§    -59 Rules; qualified provider. (a) The payment of benefits shall only be made to qualified providers for covered long-term care services, as defined in section     -51, rendered to eligible participants as provided in section     -58.

(b) The board shall adopt rules pursuant to chapter 91 establishing eligibility criteria for qualified providers. The board may consider, but shall not be limited by, the following:

(c) The board shall adopt rules pursuant to chapter 91 prescribing routine methods and procedures for determining eligibility as a qualified provider. The board may consider, but shall not be limited to, the following:

(d) The board may adopt criteria for exemption from subsections (a) and (b).

(e) Any person aggrieved by any administrative action or determination made under this section may appeal the administrative action or determination as provided in section     -42.

§    -60 Rules; determination of benefit payments. (a) The board shall adopt rules pursuant to chapter 91 for determining the amount of benefit payments to which a participant is entitled. The board shall consider the following:

The board may consider, but shall not be limited to, the following:

(b) The benefit payments to which a participant is entitled and receives shall be adjusted each program year in accordance with section     -54.

(c) Duplication of benefits shall not be permitted. The fund shall be relieved from the obligation to make benefit payments, up to the entire amount determined under this section, for the period and to the extent not covered by medical or other insurance subscribed or otherwise indemnifying a participant.

(d) Any participant aggrieved by any administrative action or determination made under this section may appeal the administrative action or determination as provided in section     -42.

§    -61 Penalties for fraud. (a) No person shall willfully make a false statement or representation for the purpose of directly or indirectly obtaining any compensation or payment or for the purpose of avoiding any liability for compensation or payment under this chapter. Any person who violates this subsection shall be subject to one or more of the following:

(b) No penalty shall be imposed except upon a written complaint which specifically alleges a violation of this section occurring within two years of the date of the violation. A copy of the complaint specifying the alleged violations shall be served promptly upon the person charged. Where a penalty is ordered, a written decision stating all findings shall be issued following a hearing held under section     -42.

§    -71 Individual records. Individual records of participation identified by social security number or other unique identifying device shall be maintained regardless of marital status and tax filing status.

§    -81 Participant advocate. There is established the position of participant advocate. The participant advocate shall represent, protect, and advance the interests of all participants as defined in this chapter. The responsibility for advocating the interests of the participants shall be separate and distinct from the responsibilities of the board. The director of the executive office on aging shall be the participant advocate in hearings before the board. As participant advocate, the director of the executive office on aging shall have full rights to participate as a party with proper standing in all proceedings before the board. The participant advocate shall not receive any salary in addition to the salary received as director of the executive office on aging.

§    -82 Participant advocate; support personnel. The director of the executive office on aging may employ, and at the director's pleasure, dismiss an administrator, who shall be exempt from chapters 76, 77, and 89, may define the administrator's powers and duties, and fix the administrator's compensation. The administrator shall provide administrative support to the director of the executive office on aging acting in the capacity of participant advocate. The director of the executive office on aging may employ other assistants that may be necessary for the performance of the participant advocate's functions, subject to chapters 76, 77, and 89.

§    -83 Powers and duties. (a) The participant advocate shall have the authority expressly conferred by, or reasonably implied from, this part.

(b) The participant advocate may:

(c) The participant advocate may institute proceedings before the board to represent, protect, and advance the interests of all participants. The participant advocate may appeal any final decision and order in any proceeding to which the participant advocate is a party in the manner provided by law.

(d) The participant advocate may file a written request with the fund to furnish any information reasonably relevant to any matter or proceeding before the fund or reasonably required by the participant advocate to perform the duties hereunder. Any such request shall specify the purpose for which the information is requested and shall designate with reasonable specificity the information desired. The fund shall furnish the requested information or state its reasons for denying the request within ten days after the request is filed or after any other mutually agreed upon period. The participant advocate, within thirty days after the denial, may bring an action in the circuit court to compel compliance with the request.

Subject to this subsection, the participant advocate may ask the fund to:

§     -84 Legal counsel for participant advocate. The attorney general shall serve as legal counsel for the participant advocate."

SECTION 3. The Hawaii Revised Statutes is amended by adding a new chapter to be appropriately designated and to read as follows:

"CHAPTER

§     -1 Casino gaming authorized. Any other law to the contrary notwithstanding, casino gaming operations and the system of wagering incorporated therein, as defined in this chapter, are authorized in any county to the extent that they are carried out in accordance with this chapter.

§     -2 Definitions. As used in this chapter unless the context otherwise requires:

"Adjusted gross receipts" means the gross receipts less the total of all cash value of items awarded as losses to wagerers and those amounts paid to purchase annuities to fund losses paid to wagerers over several years by independent financial institutions. Deductible losses shall not include gifts, travel expenses, food, refreshments, lodging, or services provided to a person in an effort to encourage patronage at the gaming facility.

"Board" means the Hawaii gaming board.

"Casino facility" means a freestanding, land—based structure which may include structures with bars, restaurants, showrooms, theaters, or other facilities, to provide casino gaming with not less than two thousand gaming stations.

"Casino gaming" means the operation of games under this chapter, including baccarat, twenty—one, poker, craps, slot machine, video game of chance, roulette wheel, klondike table, pachinko, punch—board, faro layout, keno layout, numbers ticket, push card, jar ticket, pull tab, or other game of chance that is authorized by the board as a wagering device.

"County" means a county having a population of at least two hundred thousand.

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

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

"Gaming facility" means a casino facility.

"Gaming facility master development plan" means the master plan for a casino facility and related amenities, including recreational facilities.

"Gross receipts" means the total of:

"Gross receipts" does not include counterfeit money or tokens, coins of other countries which are received in gaming devices, cash taken in fraudulent acts perpetrated against a licensee for which the licensee is not reimbursed, and cash received as entry fees for contests or tournaments in which patrons compete for prizes.

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

"Operator's license" means a license to operate and maintain a gaming facility permitted under this chapter.

"Supplier's license" means a license to furnish any equipment, devices, or supplies to a licensed gaming operation permitted under this chapter.

§     -3 Hawaii gaming board. (a) There is established within the department, for administrative purposes only, the Hawaii gaming board, which shall administer, regulate, and enforce the system of gaming established by this chapter. Its jurisdiction shall extend to every person, association, corporation, partnership, and trust involved in gaming operations in the State.

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

(c) The term of office of the board member shall be four years, except that the terms of office of the board members initially appointed shall be staggered with three members (one each from the two selected from the senate president's list, the two selected from the house speaker's list, and the three selected solely by the governor) serving four—year terms and four members serving two—year terms. Vacancies in the board shall be filled for the unexpired term in like manner as the original appointments.

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

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

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

§     -4 Board members; bond requirement. Before assuming the duties of office, each member of the board shall take an oath that the member shall faithfully execute the duties of office according to the laws of the State and shall file and maintain with the director a bond in the sum of $25,000 with good and sufficient sureties. The cost of any bond for any member of the board under this section shall be considered a part of the necessary expenses of the board.

§     -5 Staff. (a) The board shall appoint, without regard to chapter 76, an administrator who shall perform any and all duties that the board shall assign. The salary of the administrator shall be determined by the board. The administrator shall keep records of all proceedings of the board and shall preserve all records, books, documents, and other papers belonging to the board or entrusted to its care. The administrator shall devote full time to the duties of the office and shall not hold any other office or employment.

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

§     -6 Powers of the board. The board shall have all powers necessary and proper to fully and effectively supervise all gaming operations by:

§     -7 Meetings of the board. The board shall hold at least one meeting each quarter of the State's fiscal year. In addition, special meetings may be called by the chairperson or any two board members upon seventy—two hours written notice to each member. All board meetings shall be subject to chapter 92. Four members of the board shall constitute quorum, and a majority vote of the members present and constituting a quorum shall be required for any final determination by the board. The board shall keep a complete and accurate record of all its meetings.

§     -8 Annual report. (a) The board shall submit an annual report to the governor and the legislature not less than twenty days prior to the convening of each regular session. The annual report shall include:

§     -9 Hearings by the board. (a) Upon order of the board, one of the board members or a hearings officer designated by the board may conduct any hearing provided for under this chapter or by board rule and may recommend findings and decisions to the board. The board member or hearings officer conducting the hearing shall have all powers and rights granted to the board in this chapter. The record made at the time of the hearing shall be reviewed by the board, or a majority thereof, and the findings and decision of the majority of the board shall constitute the order of the board in that case.

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

§     -10 Disclosure of records. (a) Notwithstanding any other law to the contrary, the board on written request from any person, shall provide information furnished by an applicant or licensee concerning the applicant or licensee, or the applicant's or licensee's products, services, or gaming enterprises, and business holdings, as follows:

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

(c) Subject to the above provisions, the board shall not disclose any information which would be barred by:

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

§     -11 Contract for gaming facility and operation; license required. (a) The board shall award contracts to operate or construct and operate gaming facilities pursuant to chapter 103D. No person shall be awarded such a contract without having a valid license pursuant to section     -11.

(b) Bids or proposals shall contain the exact location of the gaming facility, a gaming facility master development plan if the facility has not been used or constructed for gaming under this chapter, and any other information required by the board.

(c) The contract shall be awarded to the most responsible bid based on the requirements set forth in the invitation for bids and upon the payment by the bidder of an initial operator's fee of $100,000,000.

(d) In determining which bid is most responsible, the board shall consider factors including:

(e) The operator awarded the bid shall be required to implement a gaming facility master development plan, which shall entail an expenditure of at least $____________, including all development expenditures for construction of casino and related facilities and amenities and any other development infrastructure (including on and off site development improvements), and expenditures for any improvements exacted as a condition to any governmental approval, action, or permit, but excluding the costs of acquiring, subdividing, or rezoning land (other than land required to satisfy governmental exactions) and prior development expenditures for existing improvements to real property. To secure this commitment, the holder of an operator's license shall file a financial guarantee bond in the sum of $________________ with the department in favor of the county for which the operator's license is issued.

(f) The casino facility may be on the same parcel, contiguous parcels, or noncontiguous parcels from the rest of the facilities described in the gaming facility master development plan. Transient accommodation lodging shall not be permitted within the casino facility.

§     -12 Application for operator's license. (a) A qualified person may apply to the board for an operator's license to conduct a gaming operation. The application shall be made on forms provided by the board and shall contain any information that the board prescribes, including detailed information regarding the ownership and management of the applicant and detailed personal information regarding the applicant. Information provided on the application shall be used as the basis for a thorough background investigation which the board shall conduct with respect to each applicant. An incomplete application shall be cause for denial of a license by the board.

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

(c) An application fee of $50,000 shall be paid at the time of filing to defray the costs associated with the background investigation conducted by the board, and the search and classification of fingerprints obtained by the board with request to the application. If the costs of the investigation exceed $50,000, the applicant shall pay the additional amount to the board. 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 board in the course of its review or investigation of an application for a license shall be privileged, strictly confidential, and shall be used only for the purpose of evaluating an applicant. The information, records, interviews, reports, statements, memoranda, or other data shall not be admissible as evidence, nor discoverable in any action of any kind in any court or before any tribunal, board, agency, or person, except for any action deemed necessary by the board.

(d) The licensed operator shall be the person primarily responsible for the gaming facility itself. The applicant shall identify the gaming facility it intends to use and certify that the facility:

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

§    —13 Operator's licenses; term; fee. (a) No person shall operate and maintain a gaming facility in this State unless the person has first obtained an operator's license from the board pursuant to this section and has been awarded the contract to operate or construct and operate a gaming facility pursuant to section     -11. If the board finds that the applicant meets the eligibility requirements, the board shall issue an operator's license within ninety days. Licenses initially issued for casino gaming shall be valid as long as the board determines that the licensee continues to meet all of the requirements of this chapter. An operator's license shall be valid only for the casino facility described in the license. An operator's license is issued to the operator and not to the casino facility.

(c) The board shall establish a process to facilitate and expedite the approval of the necessary licenses and permits.

(d) An applicant is ineligible to receive an owner's license if:

(e) On forms provided by the board, each applicant shall submit with the application two sets of the applicant's fingerprints.

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

§    —14 Bond of licensee. Before an operator's 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 the rules adopted by the board. The bond shall not be canceled by a surety on less than thirty days notice in writing to the board. If a bond is canceled and the licensee fails to file a new bond with the board in the required amount on or before the effective date of cancellation the licensee's license shall be revoked. The total and aggregate liability of the surety on the bond is limited to the amount specified in the bond.

§     -15 Supplier's licenses. (a) No person shall furnish any equipment, devices, or supplies to a licensed gaming operation unless the person has first obtained a supplier's license pursuant to this section. The board may issue a supplier's license to any person, firm, or corporation who pays a nonrefundable application fee as set by the board upon a determination by the board that the applicant is eligible for a supplier's license and upon payment by the applicant of a $5,000 license fee. Supplier's licenses shall be renewable annually upon payment of the $5,000 annual license fee and a determination by the board that the licensee continues to meet all of the requirements of this chapter.

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

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

(d) A person, firm, or corporation is ineligible to receive a supplier's license if:

(e) A supplier shall:

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

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

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

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

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

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

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

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

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

(h) Any training provided for occupational licensees may be conducted either in a licensed gaming facility or at a school with which a licensed operator has entered into as agreement.

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

§    —18 Collection of amounts owing under credit agreements. Notwithstanding any other law to the contrary, a licensed owner who extends credit to a gaming patron is expressly authorized to institute a cause of action to collect any amounts due and owing under the extension of credit, as well as the owner's costs, expenses, and reasonable attorney's fees incurred in collection.

§     -19 Wagering tax; rate; distribution; tax credit. (a) A tax shall be imposed on the adjusted gross receipts received from gaming authorized under this chapter at the rate of fifteen per cent of which the board shall retain one—half of one per cent, but not less than $1,000,000, to cover the expenses of the board's operations. The wagering tax collected pursuant to this section shall be deposited into the long-term care fund, established by chapter   . The wagering tax imposed by this section shall be in lieu of all other state taxes on gross or adjusted gross receipts, except income taxes, including taxes levied under chapters 237 and 239; provided that nongaming operations shall be subject to chapter 237.

(b) The tax imposed under this section shall be paid by the licensed operator to the board no less frequently than monthly by the fifteenth day of the following month. If the amount of wagering tax required to be reported and paid pursuant to this section is later determined to be greater or less than the amount actually reported and paid by the licensee, the board shall:

Interest shall be computed, until paid, at the rate of one per cent per month from the first day of the first month following either the due date of the additional wagering tax or the date of overpayment.

(c) For the first year of operation, operators issued the initial licenses for casino gaming and who have paid the fee required under section    —12 for the first year of operation may claim a tax credit equal to the amount of wagering taxes due under this section provided:

(d) As used in this section, "adjusted gross income" means the amount of net winnings by the casino after payment of prizes.

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

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

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

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

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

§     -23 Offenses; penalty. (a) A person is guilty of a misdemeanor for any of the following:

(b) A person wagering or accepting a wager at any location outside a gaming facility is subject to the penalties in sections 712—1220 to 712—1230.

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

(d) The possession of more than one of the devices described in subsection (c)(3), (5), or (10) raises a rebuttable presumption that the possessor intended to use the device for cheating.

§     -24 Prohibited activities; civil penalties. Any person who conducts a gaming operation without first obtaining a license to do so, or who continues to conduct gaming operations after revocation of the person's license, or any licensee who conducts or allows to be conducted any unauthorized games in a gaming facility where it is authorized to conduct its gaming operation, in addition to other penalties provided, shall be subject to a civil penalty equal to the amount of gross receipts derived from wagering on the games, whether unauthorized or authorized, conducted on that day as well as confiscation and forfeiture of all gaming equipment used in the conduct of unauthorized games.

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

§     -27 Exemption from federal laws prohibiting gaming devices. The transportation of gambling devices into a county in which gaming is permitted and through other counties of the State shall be exempt from the provisions of Title 15 United States Code section 1172. This exemption shall only apply to gambling devices that have satisfied the registration, record keeping, and labeling requirements of Title 15 United States Code section 1173-74 before entry into the State.

§    —28 Legislative oversight. (a) The legislative auditor shall conduct a biennial financial and social assessment of gaming operations. In conducting the assessment, the auditor shall identify the financial impacts of gaming on the state economy and the social impacts of gaming upon the community. The auditor shall submit a report of its findings and recommendations to the legislature prior to the convening of the next regular session after the biennial assessment is completed.

(b) Initially, the auditor shall conduct a program and financial audit of the Hawaii gaming board. Thereafter, the auditor shall conduct a program and financial audit every four years after the first audit is completed."

SECTION 4. 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- Casino gaming: exempted. This part shall not apply to casino gaming as authorized by chapter  ."

SECTION 5. Section 28-8.3, Hawaii Revised Statutes, is amended as follows:

1. By amending subsection (a) to read:

"(a) No department of the State other than the attorney general may employ or retain any attorney, by contract or otherwise, for the purpose of representing the State or the department in any litigation, rendering legal counsel to the department, or drafting legal documents for the department; provided that the foregoing provision shall not apply to the employment or retention of attorneys:

2. By amending subsection (c) to read:

"(c) Every attorney employed by any department on a full- time basis, except an attorney employed by the public utilities commission, the labor and industrial relations appeals board, the Hawaii labor relations board, the office of Hawaiian affairs, the Hawaii health systems corporation, the department of commerce and consumer affairs in prosecution of consumer complaints, the long-term care fund, or the Hawaiian home lands trust individual claims review panel, or as grand jury counsel, shall be a deputy attorney general."

SECTION 6. Section 237-24, Hawaii Revised Statutes, is amended to read as follows:

"§237-24 Amounts not taxable. This chapter shall not apply to the following amounts:

SECTION 4. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 5. This Act shall take effect upon its approval.