2013 -- H 6002

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LC02402

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STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2013

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A N A C T

RELATING TO STATE AFFAIRS AND GOVERNMENT - VIDEO LOTTERY TERMINAL -

NEWPORT GRAND

     Introduced By: Representatives Abney, Diaz, Ferri, Casey, and Ruggiero

     Date Introduced: April 23, 2013

     Referred To: House Finance

It is enacted by the General Assembly as follows:

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     SECTION 1. Section 42-61.2-7 of the General Laws in Chapter 42-61.2 entitled "Video

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Lottery Terminal" is hereby amended to read as follows:

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     42-61.2-7. Division of revenue. [Effective June 30, 2011.] -- (a) Notwithstanding the

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provisions of section 42-61-15, the allocation of net terminal income derived from video lottery

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games is as follows:

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      (1) For deposit in the general fund and to the state lottery division fund for

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administrative purposes: Net terminal income not otherwise disbursed in accordance with

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subdivisions (a)(2) -- (a)(6) herein;

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      (i) Except for the fiscal year ending June 30, 2008, nineteen one hundredths of one

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percent (0.19%) up to a maximum of twenty million dollars ($20,000,000) shall be equally

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allocated to the distressed communities as defined in section 45-13-12 provided that no eligible

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community shall receive more than twenty-five percent (25%) of that community's currently

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enacted municipal budget as its share under this specific subsection. Distributions made under

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this specific subsection are supplemental to all other distributions made under any portion of

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general laws section 45-13-12. For the fiscal year ending June 30, 2008 distributions by

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community shall be identical to the distributions made in the fiscal year ending June 30, 2007 and

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shall be made from general appropriations. For the fiscal year ending June 30, 2009, the total

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state distribution shall be the same total amount distributed in the fiscal year ending June 30,

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2008 and shall be made from general appropriations. For the fiscal year ending June 30, 2010, the

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total state distribution shall be the same total amount distributed in the fiscal year ending June 30,

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2009 and shall be made from general appropriations, provided however that $784,458 of the total

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appropriation shall be distributed equally to each qualifying distressed community. For each of

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the fiscal years ending June 30, 2011, June 30, 2012, and June 30, 2013 seven hundred eighty-

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four thousand four hundred fifty-eight dollars ($784,458) of the total appropriation shall be

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distributed equally to each qualifying distressed community.

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      (ii) Five one hundredths of one percent (0.05%) up to a maximum of five million dollars

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($5,000,000) shall be appropriated to property tax relief to fully fund the provisions of section 44-

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33-2.1. The maximum credit defined in subdivision 44-33-9(2) shall increase to the maximum

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amount to the nearest five dollar ($5.00) increment within the allocation until a maximum credit

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of five hundred dollars ($500) is obtained. In no event shall the exemption in any fiscal year be

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less than the prior fiscal year.

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      (iii) One and twenty-two one hundredths of one percent (1.22%) to fund section 44-34.1-

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1, entitled "Motor Vehicle and Trailer Excise Tax Elimination Act of 1998", to the maximum

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amount to the nearest two hundred fifty dollar ($250) increment within the allocation. In no event

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shall the exemption in any fiscal year be less than the prior fiscal year.

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      (iv) Except for the fiscal year ending June 30, 2008, ten one hundredths of one percent

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(0.10%) to a maximum of ten million dollars ($10,000,000) for supplemental distribution to

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communities not included in paragraph (a)(1)(i) above distributed proportionately on the basis of

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general revenue sharing distributed for that fiscal year. For the fiscal year ending June 30, 2008

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distributions by community shall be identical to the distributions made in the fiscal year ending

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June 30, 2007 and shall be made from general appropriations. For the fiscal year ending June 30,

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2009, no funding shall be disbursed. For the fiscal year ending June 30, 2010 and thereafter,

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funding shall be determined by appropriation.

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      (2) To the licensed video lottery retailer:

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      (a) (i) Prior to the effective date of the NGJA Master Contract, Newport Jai Ali twenty-

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six percent (26%) minus three hundred eighty four thousand nine hundred ninety-six dollars

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($384,996);

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      (ii) On and after the effective date of the NGJA Master Contract, to the licensed video

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lottery retailer who is a party to the NGJA Master Contract, all sums due and payable under said

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Master Contract minus three hundred eighty four thousand nine hundred ninety-six dollars

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($384,996).

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      (iii) Effective July 1, 2013, provided that the referendum measure authorized by Section

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1 of Chapters 24 and 25 of the Public Laws of 2012 is approved statewide and in the City of

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Newport and provided further that Newport Grand commences and continues to offer table

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games, the rate of net terminal income payable to Newport Grand, LLC under the Newport Grand

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Master Contract shall increase by one and one half percentage (1.5%) points. Effective July 1,

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2013 the rate of net terminal income payable to Newport Grand, LLC under the Newport Grand

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Master Contract shall increase by three and two tenths percentage (3.2%) points. The increase

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herein shall sunset and expire on June 30, 2015 and the rate in effect as of June 30, 2013 shall be

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reinstated.

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      (b) (i) Prior to the effective date of the UTGR Master Contract, to the present licensed

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video lottery retailer at Lincoln Park which is not a party to the UTGR Master Contract, twenty-

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eight and eighty-five one hundredths percent (28.85%) minus seven hundred sixty-seven

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thousand six hundred eighty-seven dollars ($767,687);

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      (ii) On and after the effective date of the UTGR Master Contract, to the licensed video

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lottery retailer who is a party to the UTGR Master Contract, all sums due and payable under said

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Master Contract minus seven hundred sixty-seven thousand six hundred eighty-seven dollars

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($767,687).

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      (3) (i) To the technology providers who are not a party to the GTECH Master Contract

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as set forth and referenced in Public Law 2003, Chapter 32, seven percent (7%) of the net

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terminal income of the provider's terminals; in addition thereto, technology providers who

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provide premium or licensed proprietary content or those games that have unique characteristics

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such as 3D graphics, unique math/game play features or merchandising elements to video lottery

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terminals may receive incremental compensation, either in the form of a daily fee or as an

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increased percentage, if all of the following criteria are met:

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      (A) A licensed video lottery retailer has requested the placement of premium or licensed

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proprietary content at its licensed video lottery facility;

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      (B) The division of lottery has determined in its sole discretion that the request is likely

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to increase net terminal income or is otherwise important to preserve or enhance the

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competiveness of the licensed video lottery retailer;

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      (C) After approval of the request by the division of lottery, the total number of premium

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or licensed propriety content video lottery terminals does not exceed ten percent (10%) of the

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total number of video lottery terminals authorized at the respective licensed video lottery retailer;

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and

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      (D) All incremental costs are shared between the division and the respective licensed

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video lottery retailer based upon their proportionate allocation of net terminal income. The

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division of lottery is hereby authorized to amend agreements with the licensed video lottery

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retailers, or the technology providers, as applicable, to effect the intent herein.

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      (ii) To contractors who are a party to the Master Contract as set forth and referenced in

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Public Law 2003, Chapter 32, all sums due and payable under said Master Contract;

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      (iii) Notwithstanding paragraphs (i) and (ii) above, there shall be subtracted

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proportionately from the payments to technology providers the sum of six hundred twenty-eight

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thousand seven hundred thirty-seven dollars ($628,737);

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      (4) (A) To the city of Newport one and one hundredth percent (1.01%) of net terminal

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income of authorized machines at Newport Grand, except that:

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      (i) Effective November 9, 2009 until June 30, 2013, the allocation shall be one and two

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tenths percent (1.2%) of net terminal income of authorized machines at Newport Grand for each

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week the facility operates video lottery games on a twenty-four (24) hour basis for all eligible

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hours authorized, and

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      (ii) Effective July 1, 2013, provided that the referendum measure authorized by Section 1

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of Chapters 24 and 25 of the Public Laws of 2012 is approved statewide and in the City of

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Newport, the allocation shall be one and forty-five hundredths percent (1.45%) of net terminal

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income of authorized video lottery terminals at Newport Grand; and

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      (B) To the town of Lincoln one and twenty-six hundredths percent (1.26%) of net

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terminal income of authorized machines at Twin River except that,

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      (i) Effective November 9, 2009 until June 30, 2013, the allocation shall be one and forty-

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five hundredths percent (1.45%) of net terminal income of authorized machines at Twin River for

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each week video lottery games are offered on a twenty-four (24) hour basis for all eligible hours

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authorized, and

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      (ii) Effective July 1, 2013, provided that the referendum measure authorized by Article

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25, Chapter 151, Section 4 of the Public Laws of 2011 is approved statewide and in the Town of

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Lincoln, the allocation shall be one and forty-five hundredths percent (1.45%) of net terminal

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income of authorized video lottery terminals at Twin River; and

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      (5) To the Narragansett Indian Tribe, seventeen hundredths of one percent (0.17%) of net

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terminal income of authorized machines at Lincoln Park up to a maximum of ten million dollars

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($10,000,000) per year, which shall be paid to the Narragansett Indian Tribe for the account of a

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Tribal Development Fund to be used for the purpose of encouraging and promoting: home

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ownership and improvement, elderly housing, adult vocational training; health and social

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services; childcare; natural resource protection; and economic development consistent with state

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law. Provided, however, such distribution shall terminate upon the opening of any gaming facility

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in which the Narragansett Indians are entitled to any payments or other incentives; and provided

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further, any monies distributed hereunder shall not be used for, or spent on previously contracted

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debts; and

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      (6) Unclaimed prizes and credits shall remit to the general fund of the state; and

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      (7) Payments into the state's general fund specified in subdivisions (a)(1) and (a)(6) shall

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be made on an estimated monthly basis. Payment shall be made on the tenth day following the

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close of the month except for the last month when payment shall be on the last business day.

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      (b) Notwithstanding the above, the amounts payable by the Division to UTGR related to

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the Marketing Program shall be paid on a frequency agreed by the Division, but no less

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frequently than annually.

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      (c) Notwithstanding anything in this chapter 61.2 of this title 42 to the contrary, the

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Director is authorized to fund the Marketing Program as described above in regard to the First

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Amendment to the UTGR Master Contract.

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      (d) Notwithstanding the above, the amounts payable by the Division to Newport Grand

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related to the Marketing Program shall be paid on a frequency agreed by the Division, but no less

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frequently than annually.

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      (e) Notwithstanding anything in this chapter 61.2 of this title 42 to the contrary, the

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Director is authorized to fund the Marketing Program as described above in regard to the First

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Amendment to the Newport Grand Master Contract.

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      (f) Notwithstanding the provisions of section 42-61-15, the allocation of Net Table Game

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Revenue derived from Table Games at Twin River is as follows:

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      (1) For deposit into the state lottery fund for administrative purposes and then the

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balance remaining into the general fund:

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      (i) Sixteen percent (16%) of Net Table Game Revenue, except as provided in subsection

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(f)(1)(ii);

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      (ii) An additional two percent (2%) of Net Table Game Revenue generated at Twin

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River shall be allocated starting from the commencement of Table Game activities by such Table

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Game Retailer, and ending, with respect to such Table Game Retailer, on the first date that such

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Table Game Retailer's net terminal income for a full State fiscal year is less than such Table

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Game Retailer's net terminal income for the prior State fiscal year, at which point this additional

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allocation to the State shall no longer apply to such Table Game Retailer.

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      (2) To UTGR, Net Table Game Revenue not otherwise disbursed pursuant to above

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subsection (f)(1); provided, however, on the first date that such Table Game Retailer's net

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terminal income for a full State fiscal year is less than such Table Game Retailer's net terminal

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income for the prior State fiscal year, as set forth in subsection (f)(1)(ii) above, one percent (1%)

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of this Net Table Game Revenue shall be allocated to the town of Lincoln for four (4) consecutive

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State fiscal years.

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      (g) Notwithstanding the provisions of section 42-61-15, the allocation of Net Table

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Game Revenue derived from Table Games at Newport Grand is as follows:

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      (1) For deposit into the state lottery fund for administrative purposes and then the

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balance remaining into the general fund: eighteen percent (18%) of Net Table Game Revenue.

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      (2) To Newport Grand LLC, Net Table Game Revenue not otherwise disbursed pursuant

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to above subsection (g)(1) provided, however, on the first date that such Table Game Retailer's

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net terminal income for a full State fiscal year is less than such Table Game Retailer's net

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terminal income for the prior State fiscal year, one percent (1%) of this Net Table Game Revenue

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shall be allocated to the city of Newport for four (4) consecutive State fiscal years.

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     SECTION 2. This act shall take effect upon passage.

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LC02402

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EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N A C T

RELATING TO STATE AFFAIRS AND GOVERNMENT - VIDEO LOTTERY TERMINAL -

NEWPORT GRAND

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     This act would increase the net terminal income payable to Newport Grand, LLC for a

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period of two (2) years, upon which time it would revert to the old rate.

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     This act would take effect upon passage.

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LC02402

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