2014 -- H 8169

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LC005585

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     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2014

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A N   A C T

RELATING TO PUBLIC FINANCE - STATE REVENUE PROTECTION AND

ENHANCEMENT

     Introduced By: Representative Raymond E.Gallison

     Date Introduced: May 08, 2014

     Referred To: House Finance

     It is enacted by the General Assembly as follows:

     SECTION 1. Purpose. The general assembly hereby finds that the Twin River facility

located in the town of Lincoln is an important source of revenue for the state of Rhode Island.

The purpose of this act is to protect and enhance the state's ability to maximize revenues at Twin

River during a period of increasing competition in the regional market by setting forth terms and

conditions of certain Twin River growth opportunities. It is the intent of the general assembly that

this act, being necessary for the welfare of the state and its citizens, shall be liberally construed so

as to effectuate its purposes, including without limitation, the state's attempt to minimize certain

commercial risks faced by Twin River.

     SECTION 2. Definitions. For the purposes of this chapter, the following terms shall have

the following meanings:

     (1) "Division" means the division of lotteries within the Rhode Island department of

revenue.

     (2) "Division percentage" means for any marketing year, the division's percentage of net

terminal income as set forth in § 41-61.2-7.

     (3) "Marketing program" means that marketing program set forth in Chapter 16 of the

Public Laws of 2010, Part A, Section 4(a)(iii), as amended by Chapter 151, Article 25 of the

Public Laws of 2011, Section 8 and as further amended by Section 4 hereof.

     (4) "Master contract" means that certain master video lottery terminal contract made as of

July 18, 2005 by and between the division, the department of transportation and UTGR, Inc., as

amended from time to time.

     SECTION 3. Unless otherwise amended by this act, the terms, conditions, provisions and

definitions of Chapters 322 and 323 of the Public Laws of 2005, Chapter 16 of the Public Laws of

2010, Chapter 151, Article 25 of the Public Laws of 2011, Chapter 289 and 290 of the Public

Laws of 2012 and Chapters 106 and 107 of the Public Laws of 2013 are hereby incorporated by

reference and shall remain in full force and effect.

     SECTION 4. Authorized procurement of fourth amendment to the master video lottery

terminal contract.

     (a) Notwithstanding any provision of the general or Public Laws to the contrary, within

ninety (90) days of the date hereof, the division is hereby expressly authorized and directed to

enter into with UTGR a fourth amendment to the master contract for the following purposes and

containing the following terms and conditions:

     (1) Commencing July 1, 2014, the marketing program shall be amended as follows:

     (i) Subject to subsections (a)(1)(ii) and (a)(1)(iii) herein for each marketing year to the

extent UTGR's marketing expenditures exceed four million dollars ($4,000,000), the division

shall pay UTGR an amount equal to the amount of such excess multiplied by the division

percentage.

     (ii) Subject to subsection (a)(1)(iii) hereof, the total amount payable by the division for

each marketing year shall be capped at an amount equal to the division percentage multiplied by

six million dollars ($6,000,000) (i.e., ten million dollars ($10,000,000) total marketing program

expenditures); provided further, that in any partial marketing year, the total amount payable by

the division shall be capped at an amount equal to the division percentage multiplied by six

million dollars ($6,000,000), the product of which shall be further reduced by multiplying it by a

fraction: (A) The numerator of which is the number of days in any partial marketing year; and (B)

The denominator of which is three hundred sixty-five (365).

     (iii) To the extent UTGR's aggregate marketing program expenditures exceed fourteen

million dollars ($14,000,000) in any given marketing year, the division shall pay UTGR an

amount equal to the amount of such excess multiplied by the division percentage; provided

however, if the total aggregate amount of UTGR's marketing program expenditures in any given

marketing year exceeds twenty million dollars ($20,000,000), the division shall not be required to

make payments with respect to such excess amounts. By the way of example only, if in a

particular marketing year UTGR's marketing program expenditures equal fifteen million dollars

($15,000,000), the division shall pay to UTGR the division percentage multiplied by the sum of

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six million dollars ($6,000,000), plus one million dollars ($1,000,000).

     (2) Marketing program expenditures for which the division has no obligation to make

payments to UTGR hereunder (e.g., UTGR's first four million dollars ($4,000,000) in marketing

program expenditures) shall be deemed to qualify as marketing program expenditures; provided,

that they are expenditures of the type and nature typically considered marketing expenditures in

the gaming industry and which serve to motivate individuals to participate in gaming activities.

     (3) Except to the extent amended hereby, the terms, provisions and conditions of the

master contract, including without limitation those terms, provisions and conditions relating to

the marketing program, shall remain in full force and effect. If there is a conflict between any

provision of the master contract and this act, the provisions of this act control.

     SECTION 5. This act shall take effect upon passage.

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EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N   A C T

RELATING TO PUBLIC FINANCE - STATE REVENUE PROTECTION AND

ENHANCEMENT

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     This act would authorize the division of lotteries to enter into a fourth amendment to the

master contract with UTGR containing amendments to UTGR's marketing program, regarding its

Twin River facility.

     This act would take effect upon passage.

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