2014 -- H 8184

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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:

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

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

division percentage.

     (ii) Subject to subsection (a)(1)(iii) herein, 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, Inc.'s aggregate marketing program expenditures exceed

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

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

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

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).

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

payments to UTGR, Inc. hereunder (e.g., UTGR, Inc.'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)(i) The requirements of the following subsection found in Chapter 16 of the Pub. L. of

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

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

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

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

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

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

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

     (4) 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, Inc. containing amendments to UTGR, Inc.'s marketing program,

regarding its Twin River facility.

     This act would take effect upon passage.

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