Creates a state limited lottery program to fund education and substance abuse treatment programs. Establishes the rules, regulations, and procedures for the state limited lottery.

A BILL FOR AN ACT

SECTION 1. The legislature recognizes the need to develop a stream of revenue to help fund the repair and maintenance of the State's public schools, as well as to help fund and support programs relating to mental health and substance abuse.

The purpose of this Act is to provide additional moneys for public purposes by creating a limited lottery.

SECTION 2. The Hawaii Revised Statutes is amended by adding a new chapter in Title 13 to be appropriately designated and to read as follows:

"Chapter    

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

"Commission" or "lottery commission" means the five-member body, appointed by the governor, to oversee the state limited lottery, to be placed within the department.

"Commissioner" means one of the members of the lottery commission as appointed by the governor.

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

"Director" means the director of the state limited lottery.

"Lottery" or "limited lottery" means the state limited lottery established and operated under this chapter.

"Lottery game" means any procedure authorized under this chapter whereby a monetary prize is awarded among persons who have paid for tickets which provide the opportunity to win such a monetary prize.

"Lottery retailer" means a person with whom the State has contracted for the purpose of selling tickets in lottery games to the public.

§   -2 Lottery commission; establishment. There is established a lottery commission within the department to oversee the limited lottery. The lottery commission shall consist of five members appointed by the governor and confirmed by the senate. A majority of members shall constitute a quorum for the transaction of business.

§   -3 Rules and procedures. (a) The lottery commission, through the department, shall adopt rules pursuant to chapter 91 to implement this chapter and to govern the procedures relating to the limited lottery. The rules shall include but shall not be limited to:

(b) The lottery commission shall establish procedures for

the general operation of the limited lottery, including but not limited to:

(c) The commission shall have oversight over the limited lottery office and its director.

§   -4 Limited lottery office; established; duties. (a) There shall be established a limited lottery office, within the department.

(b) The director shall be appointed by the governor with

the consent of the senate. The director shall:

§   -5 State lottery account. (a) There shall be created, within the state treasury, a state lottery account. The account shall be maintained and controlled by the lottery commission and shall consist of all revenues received from the sale of lottery tickets and all other moneys credited or transferred thereto from any other fund or source permitted by law.

(b) The moneys deposited in the state lottery account shall only be used for:

Fifty per cent of any moneys remaining after any payments under paragraphs (1), (2), and (3) shall be deposited into the state education facilities improvement special fund and fifty per cent shall be deposited into the mental health and substance abuse special fund.

§   -6 Number and value of prizes. There shall be one prize for each lottery game. The prize for each lottery game shall be set at $2,000,000. The lottery retailer who sells the winning ticket in a lottery game shall be entitled to payment of $100,000.

§   -7 Lottery to be self-supporting. Except for such moneys necessary to fund the start-up of the limited lottery, the limited lottery shall operate as a self-supporting revenue-raising agency of the State and no appropriations, loans, or other transfers of state funds shall be made to it.

§   -8 Use of public assistance and electronic benefit transfer cards prohibited. The use of electronic benefit transfer cards or any other type of public assistance benefit for the purchase of lottery tickets is prohibited. As used in this section, "public assistance" shall have the same meaning as under section 346-1 of the Hawaii Revised Statutes.

§   -9 Unclaimed prizes. Unclaimed prizes shall be retained in the state lottery account for the person entitled thereto for one hundred eighty day after the prize is won. If no claim is made for the prize within this time, the prize shall be extinguished and shall become a part of the state general revenue fund.

§   -10 Prohibited acts. (a) A person shall not:

(b) Any person who violates this section shall forfeit any winnings received as a result of the violation.

(c) A violation of this section shall be a class C felony."

SECTION 3. There is appropriated out of the general revenues of the State of Hawaii the sum of $          , or so much thereof as may be necessary for fiscal year 2006-2007, for the start-up costs of the limited lottery.

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

SECTION 4. This Act shall take effect on July 1, 2006.