2014 -- H 8184

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LC005600

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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 13, 2014

     Referred To: House Finance

     It is enacted by the General Assembly as follows:

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

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

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

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

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

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

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

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commercial risks faced by Twin River.

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

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the following meanings:

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

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revenue.

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

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

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

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

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

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

 

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

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amended from time to time.

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

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

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

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

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and shall remain in full force and effect.

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

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terminal contract.

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

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

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enter into with UTGR, Inc. a fourth amendment to the master contract for the following purposes

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and containing the following terms and conditions:

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

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

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

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

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division percentage.

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

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

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

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

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

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

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

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

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     (iii) To the extent UTGR, Inc.'s aggregate marketing program expenditures exceed

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

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Inc. an amount equal to the amount of such excess multiplied by the division percentage;

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provided however, if the total aggregate amount of UTGR, Inc.'s marketing program expenditures

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in any given marketing year exceeds twenty million dollars ($20,000,000), the division shall not

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be required to make payments with respect to such excess amounts. By the way of example only,

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if in a particular marketing year UTGR, Inc.'s marketing program expenditures equal fifteen

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million dollars ($15,000,000), the division shall pay to UTGR, Inc. the division percentage

 

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multiplied by the sum of six million dollars ($6,000,000), plus one million dollars ($1,000,000).

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

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

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

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

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expenditures in the gaming industry and which serve to motivate individuals to participate in

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gaming activities.

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     (3)(i) The requirements of the following subsection found in Chapter 16 of the Pub. L. of

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2010, Part A, Section 4(a)(iii)(2) be stricken and removed from the first amendment to the master

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contract, to wit; and (ii) The division shall not owe any amount pursuant to said subsection

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4(a)(iii) in any given marketing year unless, pursuant to § 42-61.2-7(a), the state has received net

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terminal income for such marketing year in an amount equal to or exceeding the amount of net

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terminal income the state received for the state's fiscal year 2009. The requirements so stricken

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shall allow the marketing program and payments due thereunder to be in effect for fiscal year

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2015 pursuant to the terms and conditions set forth in said section.

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

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

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

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

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     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

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master contract with UTGR, Inc. containing amendments to UTGR, Inc.'s marketing program,

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regarding its Twin River facility.

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     This act would take effect upon passage.

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