2013 -- S 0858

=======

LC02258

=======

STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2013

____________

A N A C T

RELATING TO STATE AFFAIRS AND GOVERNMENT - VIDEO LOTTERY TERMINAL -

NEWPORT GRAND

     Introduced By: Senator Maryellen Goodwin

     Date Introduced: April 11, 2013

     Referred To: Senate Finance

It is enacted by the General Assembly as follows:

1-1

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

1-2

Lottery Terminal" is hereby amended to read as follows:

1-3

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

1-4

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

1-5

games is as follows:

1-6

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

1-7

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

1-8

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

1-9

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

1-10

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

1-11

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

1-12

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

1-13

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

1-14

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

1-15

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

1-16

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

1-17

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

1-18

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

1-19

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

2-1

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

2-2

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

2-3

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

2-4

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

2-5

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

2-6

distributed equally to each qualifying distressed community.

2-7

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

2-8

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

2-9

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

2-10

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

2-11

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

2-12

less than the prior fiscal year.

2-13

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

2-14

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

2-15

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

2-16

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

2-17

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

2-18

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

2-19

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

2-20

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

2-21

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

2-22

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

2-23

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

2-24

funding shall be determined by appropriation.

2-25

      (2) To the licensed video lottery retailer:

2-26

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

2-27

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

2-28

($384,996);

2-29

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

2-30

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

2-31

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

2-32

($384,996).

2-33

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

2-34

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

3-1

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

3-2

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

3-3

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

3-4

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

3-5

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

3-6

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

3-7

reinstated.

3-8

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

3-9

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

3-10

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

3-11

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

3-12

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

3-13

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

3-14

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

3-15

($767,687).

3-16

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

3-17

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

3-18

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

3-19

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

3-20

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

3-21

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

3-22

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

3-23

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

3-24

proprietary content at its licensed video lottery facility;

3-25

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

3-26

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

3-27

competiveness of the licensed video lottery retailer;

3-28

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

3-29

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

3-30

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

3-31

and

3-32

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

3-33

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

3-34

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

4-1

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

4-2

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

4-3

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

4-4

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

4-5

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

4-6

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

4-7

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

4-8

income of authorized machines at Newport Grand, except that:

4-9

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

4-10

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

4-11

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

4-12

hours authorized, and

4-13

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

4-14

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

4-15

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

4-16

income of authorized video lottery terminals at Newport Grand; and

4-17

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

4-18

terminal income of authorized machines at Twin River except that,

4-19

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

4-20

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

4-21

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

4-22

authorized, and

4-23

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

4-24

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

4-25

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

4-26

income of authorized video lottery terminals at Twin River; and

4-27

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

4-28

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

4-29

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

4-30

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

4-31

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

4-32

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

4-33

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

4-34

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

5-1

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

5-2

debts; and

5-3

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

5-4

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

5-5

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

5-6

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

5-7

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

5-8

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

5-9

frequently than annually.

5-10

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

5-11

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

5-12

Amendment to the UTGR Master Contract.

5-13

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

5-14

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

5-15

frequently than annually.

5-16

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

5-17

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

5-18

Amendment to the Newport Grand Master Contract.

5-19

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

5-20

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

5-21

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

5-22

balance remaining into the general fund:

5-23

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

5-24

(f)(1)(ii);

5-25

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

5-26

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

5-27

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

5-28

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

5-29

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

5-30

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

5-31

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

5-32

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

5-33

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

5-34

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

6-1

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

6-2

State fiscal years.

6-3

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

6-4

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

6-5

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

6-6

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

6-7

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

6-8

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

6-9

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

6-10

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

6-11

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

6-12

     SECTION 2. This act shall take effect upon passage.

=======

LC02258

=======

EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N A C T

RELATING TO STATE AFFAIRS AND GOVERNMENT - VIDEO LOTTERY TERMINAL -

NEWPORT GRAND

***

7-1

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

7-2

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

7-3

     This act would take effect upon passage.

=======

LC02258

=======