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art.004/7/004/6/004/5/004/4/004/3/004/2/004/1

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     ARTICLE 4 AS AMENDED

RELATING TO TAXES AND REVENUE

     SECTION 1. Sections 42-61-4 and 42-61-15 of the General Laws in Chapter 61 entitled

"State Lottery" are hereby amended to read as follows:

     42-61-4. Powers and duties of director. 

     The director shall have the power and it shall be his or her duty to:

     (1) Supervise and administer the operation of lotteries in accordance with this chapter,

chapter 61.2 of this title and with the rules and regulations of the division;

     (2) Act as the chief administrative officer having general charge of the office and records

and to employ necessary personnel to serve at his or her pleasure and who shall be in the

unclassified service and whose salaries shall be set by the director of the department of revenue,

pursuant to the provisions of § 42-61-3.

     (3) In accordance with this chapter and the rules and regulations of the division, license as

agents to sell lottery tickets those persons, as in his or her opinion, who will best serve the public

convenience and promote the sale of tickets or shares. The director may require a bond from every

licensed agent, in an amount provided in the rules and regulations of the division. Every licensed

agent shall prominently display his or her license, or a copy of their license, as provided in the rules

and regulations of the committee;

     (4) Confer regularly as necessary or desirable, and not less than nine (9) times per year,

with the permanent joint committee on state lottery on the operation and administration of the

lotteries; make available for inspection by the committee, upon request, all books, records, files,

and other information, and documents of the division; advise the committee and recommend those

matters that he or she deems necessary and advisable to improve the operation and administration

of the lotteries;

     (5) Suspend or revoke any license issued pursuant to this chapter, chapter 61.2 of this title

or the rules and regulations promulgated under this chapter and chapter 61.2 of this title;

     (6) Enter into contracts for the operation of the lotteries, or any part of the operation of the

lotteries, and into contracts for the promotion of the lotteries;

     (7) Ensure that monthly financial reports are prepared providing gross monthly revenues,

prize disbursements, other expenses, net income, and the amount transferred to the state general

fund for keno and for all other lottery operations; submit this report to the state budget officer, the

auditor general, the permanent joint committee on state lottery, the legislative fiscal advisors, and

the governor no later than the twentieth business day following the close of the month; the monthly

report shall be prepared in a manner prescribed by the members of the revenues estimating

conference; at the end of each fiscal year the director shall submit an annual report based upon an

accrual system of accounting which shall include a full and complete statement of lottery revenues,

prize disbursements and expenses, to the governor and the general assembly, which report shall be

a public document and shall be filed with the secretary of state;

     (8) Carry on a continuous study and investigation of the state lotteries throughout the state,

and the operation and administration of similar laws, which may be in effect in other states or

countries; and the director shall continue to exercise his authority to study, evaluate and where

deemed feasible and advisable by the director, implement lottery-related initiatives, including but

not limited to, pilot programs for limited periods of time, with the goal of generating additional

revenues to be transferred by the Lottery to the general fund pursuant to § 42-61-15(3). Each such

initiative shall be objectively evaluated from time to time using measurable criteria to determine

whether the initiative is generating revenue to be transferred by the Lottery to the general fund.

Nothing herein shall be deemed to permit the implementation of an initiative that would constitute

an expansion of gambling requiring voter approval under applicable Rhode Island law.

     (9) Implement the creation and sale of commercial advertising space on lottery tickets as

authorized by § 42-61-4 of this chapter as soon as practicable after June 22, 1994;

     (10) Promulgate rules and regulations, which shall include, but not be limited to:

     (i) The price of tickets or shares in the lotteries;

     (ii) The number and size of the prizes on the winning tickets or shares;

     (iii) The manner of selecting the winning tickets or shares;

     (iv) The manner of payment of prizes to the holders of winning tickets or shares;

     (v) The frequency of the drawings or selections of winning tickets or shares;

     (vi) The number and types of location at which tickets or shares may be sold;

     (vii) The method to be used in selling tickets or shares;

     (viii) The licensing of agents to sell tickets or shares, except that a person under the age of

eighteen

     (18) shall not be licensed as an agent;

     (ix) The license fee to be charged to agents;

     (x) The manner in which the proceeds of the sale of lottery tickets or shares are maintained,

reported, and otherwise accounted for;

     (xi) The manner and amount of compensation to be paid licensed sales agents necessary to

provide for the adequate availability of tickets or shares to prospective buyers and for the

convenience of the general public;

     (xii) The apportionment of the total annual revenue accruing from the sale of lottery tickets

or shares and from all other sources for the payment of prizes to the holders of winning tickets or

shares, for the payment of costs incurred in the operation and administration of the lotteries,

including the expense of the division and the costs resulting from any contract or contracts entered

into for promotional, advertising, consulting, or operational services or for the purchase or lease of

facilities, lottery equipment, and materials, for the repayment of moneys appropriated to the lottery

fund;

     (xiii) The superior court upon petition of the director after a hearing may issue subpoenas

to compel the attendance of witnesses and the production of documents, papers, books, records,

and other evidence in any matter over which it has jurisdiction, control or supervision. If a person

subpoenaed to attend in the proceeding or hearing fails to obey the command of the subpoena

without reasonable cause, or if a person in attendance in the proceeding or hearing refuses without

lawful cause to be examined or to answer a legal or pertinent question or to exhibit any book,

account, record, or other document when ordered to do so by the court, that person may be punished

for contempt of the court;

     (xiv) The manner, standards, and specification for the process of competitive bidding for

division purchases and contracts; and

     (xv) The sale of commercial advertising space on the reverse side of, or in other available

areas upon, lottery tickets provided that all net revenue derived from the sale of the advertising

space shall be deposited immediately into the state's general fund and shall not be subject to the

provisions of § 42-61-15. 

     42-61-15. State lottery fund.

     (a) There is created the state lottery fund, into which shall be deposited all revenues

received by the division from the sales of lottery tickets and license fees. The fund shall be in the

custody of the general treasurer, subject to the direction of division for the use of the division, and

money shall be disbursed from it on the order of the controller of the state, pursuant to vouchers or

invoices signed by the director and certified by the director of administration. The moneys in the

state lottery fund shall be allotted in the following order, and only for the following purposes:

     (1) Establishing a prize fund from which payments of the prize awards shall be disbursed

to holders of winning lottery tickets on checks signed by the director and countersigned by the

controller of the state or his or her designee.

     (i) The amount of payments of prize awards to holders of winning lottery tickets shall be

determined by the division, but shall not be less than forty-five percent (45%) nor more than sixty-

five percent (65%) of the total revenue accruing from the sale of lottery tickets.

     (ii) For the lottery game commonly known as "Keno", the amount of prize awards to

holders of winning Keno tickets shall be determined by the division, but shall not be less than forty-

five percent (45%) nor more than seventy-two percent (72%) of the total revenue accruing from

the sale of Keno tickets.

     (2) Payment of expenses incurred by the division in the operation of the state lotteries

including, but not limited to, costs arising from contracts entered into by the director for

promotional, consulting, or operational services, salaries of professional, technical, and clerical

assistants, and purchases or lease of facilities, lottery equipment, and materials; provided however,

solely for the purpose of determining revenues remaining and available for transfer to the state's

general fund, beginning in fiscal year 2015 expenses incurred by the division in the operation of

state lotteries shall reflect (i) Beginning in fiscal year 2015, the actuarially determined employer

contribution to the Employees' Retirement System consistent with the state's adopted funding

policy; and (ii) Beginning in fiscal year 2018, the actuarially determined employer contribution to

the State Employees and Electing Teachers' OPEB System consistent with the state's adopted

funding policy. For financial reporting purposes, the state lottery fund financial statements shall be

prepared in accordance with generally accepted accounting principles as promulgated by the

Governmental Accounting Standards Board; and

     (3) Payment into the general revenue fund of all revenues remaining in the state lottery

fund after the payments specified in subdivisions (a)(1) – (a)(2) of this section.

     (b) The auditor general shall conduct an annual post audit of the financial records and

operations of the lottery for the preceding year in accordance with generally accepted auditing

standards and government auditing standards. In connection with the audit, the auditor general may

examine all records, files, and other documents of the division, and any records of lottery sales

agents that pertain to their activities as agents, for purposes of conducting the audit. The auditor

general, in addition to the annual post audit, may require or conduct any other audits or studies he

or she deems appropriate, the costs of which shall be borne by the division.

     (c) Payments into the state's general fund specified in subsection (a)(3) of this section shall

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

the close of the quarter except for the fourth quarter when payment shall be on the last business

day.

     SECTION 2. Purpose.

     (a) Article VI, Section 22 of the Rhode Island Constitution provides that "[n]o act

expanding the types or locations of gambling permitted within the state or within any city or town

. . . shall take effect until it has been approved by the majority of those electors voting in a statewide

referendum and by the majority of those electors voting in said referendum in the municipality in

which the proposed gambling would be allowed . . ."

     (b) In the 2012 general election, a majority of Rhode Island voters statewide and in the

Town of Lincoln approved the following referendum question (among others):

     "Shall an act be approved which would authorize the facility known as "Twin River" in the

town of Lincoln to add state-operated casino gaming, such as table games, to the types of gambling

it offers?"

     (c) Similarly, in the 2016 general election, a majority of Rhode Island voters statewide and

in the Town of Tiverton approved the following referendum question (among others):

     "Shall an act be approved which would authorize a facility owned by Twin River-Tiverton,

LLC, located in the Town of Tiverton at the intersection of William S. Canning Boulevard and

Stafford Road, to be licensed as a pari-mutuel facility and offer state-operated video-lottery games

and state-operated casino gaming, such as table games?"

     (d) In the voter information handbooks setting forth and explaining the question in each

instance, "casino gaming" was defined to include games "within the definition of Class III gaming

as that term is defined in section 2703(8) of Title 25 of the United States Code and which is

approved by the State of Rhode Island through the Lottery Division." "Casino gaming" is also

defined to include games within the definition of class III gaming in section 42-61.2-1 of the general

laws.

     (e) Section 2703(8) of Title 25 US Code (part of the Indian Gaming Regulatory Act, or

"IGRA") provides that the term "class III gaming" means "all forms of gaming that are not class I

gaming or class II gaming." The regulations promulgated under IGRA (25 CFR 502.4) expressly

state that Class III gaming includes sports wagering.

     (f) Thus, voters state-wide and locally approved state-operated sports wagering to be

offered by the Twin River and Tiverton gaming facilities. Voter approval of sports wagering shall

be implemented by providing an infrastructure for state-operated sports wagering offered by the

Twin River gaming facilities in Lincoln and Tiverton, by authorizing necessary amendments to

certain contracts and by authorizing the division of lotteries to promulgate regulations to direct and

control state-operated sports wagering.

     (g) State operated sports wagering shall be operated by the state through the division of

lotteries. Sports wagering may be conducted at (i) the Twin River Gaming Facility, located in

Lincoln at 100 Twin River Road and owned by UTGR, Inc., a licensed video lottery and table game

retailer, and at (ii) the Tiverton Gaming Facility, located in Tiverton at the intersection of William

S. Canning Boulevard and Stafford Road, and owned by Twin River-Tiverton, once Twin River-

Tiverton is licensed as a video lottery and table game retailer.

     (h) The state through the division of lotteries shall exercise its existing authority to

implement, operate, conduct and control sports wagering at the Twin River gaming facility and the

Twin River-Tiverton gaming facility in accordance with the provisions of this chapter and the rules

and regulations of the division of lotteries.

     (i) Notwithstanding the provisions of this section, sports wagering shall be prohibited in

connection with any collegiate sports or athletic event that takes place in Rhode Island or a sports

contest or athletic event in which any Rhode Island college team participates, regardless of where

the event takes place.

     (j) No other law providing any penalty or disability for conducting, hosting, maintaining,

supporting or participating in sports wagering, or any acts done in connection with sports wagering,

shall apply to the conduct, hosting, maintenance, support or participation in sports wagering

pursuant to this chapter.

     SECTION 3. The title of Chapter 42-61.2 of the General Laws entitled "Video-Lottery

Terminal" is hereby amended to read as follows:

CHAPTER 42-61.2

Video-Lottery Terminal

CHAPTER 42-61.2

VIDEO-LOTTERY GAMES, TABLE GAMES AND SPORTS WAGERING

     SECTION 4. Section 42-61.2-1, 42-61.2-3.2, 42-61.2-4, 42-61.2-6, 42-61.2-10, 42-61.2-

11, 42-61.2-13, 42-61.2-14 and 42-61.2-15 of the General Laws in Chapter 42-61.2 entitled "Video-

Lottery Terminal" are hereby amended to read as follows:

     42-61.2-1. Definitions.

     For the purpose of this chapter, the following words shall mean:

     (1) "Central communication system" means a system approved by the lottery division,

linking all video-lottery machines at a licensee location to provide auditing program information

and any other information determined by the lottery. In addition, the central communications

system must provide all computer hardware and related software necessary for the establishment

and implementation of a comprehensive system as required by the division. The central

communications licensee may provide a maximum of fifty percent (50%) of the video-lottery

terminals.

     (2) "Licensed, video-lottery retailer" means a pari-mutuel licensee specifically licensed by

the director subject to the approval of the division to become a licensed, video-lottery retailer.

     (3) "Net terminal income" means currency placed into a video-lottery terminal less credits

redeemed for cash by players.

     (4) "Pari-mutuel licensee" means:

     (i) An entity licensed pursuant to § 41-3.1-3; and/or

     (ii) An entity licensed pursuant to § 41-7-3.

     (5) "Technology provider" means any individual, partnership, corporation, or association

that designs, manufactures, installs, maintains, distributes, or supplies video-lottery machines or

associated equipment for the sale or use in this state.

     (6) "Video-lottery games" means lottery games played on video-lottery terminals

controlled by the lottery division.

     (7) "Video-lottery terminal" means any electronic computerized video game machine that,

upon the insertion of cash or any other representation of value that has been approved by the

division of lotteries, is available to play a video game authorized by the lottery division, and that

uses a video display and microprocessors in which, by chance, the player may receive free games

or credits that can be redeemed for cash. The term does not include a machine that directly dispenses

coins, cash, or tokens.

     (8) "Casino gaming" means any and all table and casino-style games played with cards,

dice, or equipment, for money, credit, or any representative of value; including, but not limited to,

roulette, blackjack, big six, craps, poker, baccarat, paigow, any banking or percentage game, or any

other game of device included within the definition of Class III gaming as that term is defined in

Section 2703(8) of Title 25 of the United States Code and that is approved by the state through the

division of state lottery.

     (9) "Net, table-game revenue" means win from table games minus counterfeit currency.

     (10) "Rake" means a set fee or percentage of cash and chips representing cash wagered in

the playing of a nonbanking table game assessed by a table games retailer for providing the services

of a dealer, gaming table or location, to allow the play of any nonbanking table game.

     (11) "Table game" or "Table gaming" means that type of casino gaming in which table

games are played for cash or chips representing cash, or any other representation of value that has

been approved by the division of lotteries, using cards, dice, or equipment and conducted by one

or more live persons.

     (12) "Table-game retailer" means a retailer authorized to conduct table gaming pursuant to

§§ 42-61.2-2.1 or 42-61.2-2.3.

     (13) "Credit facilitator" means any employee of a licensed, video-lottery retailer approved

in writing by the division whose responsibility is to, among other things, review applications for

credit by players, verify information on credit applications, grant, deny, and suspend credit,

establish credit limits, increase and decrease credit limits, and maintain credit files, all in

accordance with this chapter and rules and regulations approved by the division.

     (14) "Newport Grand" means Newport Grand, LLC, a Rhode Island limited-liability

company, successor to Newport Grand Jai Alai, LLC, and each permitted successor to and assignee

of Newport Grand, LLC under the Newport Grand Master Contract, including, but not limited to,

Premier Entertainment II, LLC and/or Twin River-Tiverton, LLC, provided it is a pari-mutuel

licensee as defined in § 42-61.2-1 et seq.; provided, further, however, where the context indicates

that the term is referring to the physical facility, then it shall mean the gaming and entertainment

facility located at 150 Admiral Kalbfus Road, Newport, Rhode Island.

     (15) "Newport Grand Marketing Year" means each fiscal year of the state or a portion

thereof between November 23, 2010, and the termination date of the Newport Grand Master

Contract.

     (16) "Newport Grand Master Contract" means that certain master video-lottery terminal

contract made as of November 23, 2005, by and between the Division of Lotteries of the Rhode

Island department of administration and Newport Grand, as amended and extended from time to

time as authorized therein and/or as such Newport Grand Master Contract may be assigned as

permitted therein.

     (17) "Premier" means Premier Entertainment II, LLC and/or its successor in interest by

reason of the acquisition of the stock, membership interests, or substantially all of the assets of such

entity.

     (18) "Twin River-Tiverton" means Twin River-Tiverton, LLC and/or its successor in

interest by reason of the acquisition of the stock, membership interests, or substantially all of the

assets of such entity.

     (19) "Sports wagering revenue" means:

     (1) The total of cash or cash equivalents received from sports wagering minus the total of:

     (i) Cash or cash equivalents paid to players as a result of sports wagering;

     (ii) The annual flat fee to the host communities as defined by § 42-61.2-2.4(c) of the general

laws;

     (iii) Marketing expenses related to sports wagering as agreed to by the division, the sports

wagering vendor, and the host facilities, as approved by the division of the lottery; and

     (iv) Any federal excise taxes (if applicable).

      (2) The term does not include any of the following:

     (i) Counterfeit cash.

     (ii) Coins or currency of other countries received as a result of sports wagering, except to

the extent that the coins or currency are readily convertible to cash.

     (iii) Cash taken in a fraudulent act perpetrated against a hosting facility or sports wagering

vendor for which the hosting facility or sports wagering vendor is not reimbursed.

     (iv) Free play provided by the hosting facility or sports wagering vendor as authorized by

the division of lottery to a patron and subsequently "won back" by the hosting facility or sports

wagering vendor, for which the hosting facility or sports wagering vendor can demonstrate that it

or its affiliate has not been reimbursed in cash.

     (20) "Sporting event" means any professional sport or athletic event, any Olympic or

international sports competition event and any collegiate sport or athletic event, or any portion

thereof, including, but not limited to, the individual performance statistics of athletes in a sports

event or combination of sports events, except "sports event" shall not include a prohibited sports

event.

      (21) "Collegiate sports or athletic event" shall not include a collegiate sports contest or

collegiate athletic event that takes place in Rhode Island or a sports contest or athletic event in

which any Rhode Island college team participates regardless of where the event takes place.

     (22) "Sports wagering" means the business of accepting wagers on sporting events or a

combination of sporting events, or on the individual performance statistics of athletes in a sporting

event or combination of sporting events, by any system or method of wagering. The term includes,

but is not limited to, exchange wagering, parlays, over-under, moneyline, pools and straight bets,

and the term includes the placement of such bets and wagers. However, the term does not include,

without limitation, the following:

     (1) Lotteries, including video lottery games and other types of casino gaming operated by

the state, through the division, on the date this act is enacted.

     (2) Pari-mutuel betting on the outcome of thoroughbred or harness horse racing, or

greyhound dog racing, including but not limited to pari-mutuel wagering on a race that is

"simulcast" (as defined in section 41-11-1 of the general laws), as regulated elsewhere pursuant to

the general laws, including in chapters 41-3, 41-3.1, 41-4 and 41-11 of the general laws.

     (3) Off-track betting on racing events, as regulated elsewhere pursuant to the general laws,

including in chapter 41-10 of the general laws.

     (4) Wagering on the respective scores or points of the game of jai alai or pelota and the

sale of pari-mutuel pools related to such games, as regulated elsewhere pursuant to the general

laws, including in chapter 41-7 of the general laws.

     (5) Lotteries, charitable gaming, games of chance, bingo games, raffles and pull-tab lottery

tickets, to the extent permitted and regulated pursuant to chapter 11-19 of the general laws.

     (23) "Sports wagering device" means any mechanical, electrical or computerized

contrivance, terminal, machine or other device, apparatus, equipment or supplies approved by the

division and used to conduct sports wagering.

     (24) "Sports wagering vendor" means any entity authorized by the division of lottery to

operate sports betting on the division’s behalf in accordance with this chapter.

     (25) "Payoff" when used in connection with sports wagering, means cash or cash

equivalents paid to a player as a result of the player’s winning a sports wager. A "payoff" is a type

of "prize," as the term "prize" is used in chapter 42-61, chapter 42-61.2 and in chapter 42-61.3.

     (26) "Tiverton gaming facility" (sometimes referred to as "Twin River–Tiverton") means

the gaming and entertainment facility located in the Town of Tiverton at the intersection of William

S. Canning Boulevard and Stafford Road.

     (27) "Twin River" (sometimes referred to as "UTGR") means UTGR, Inc., a Delaware

corporation, and each permitted successor to and assignee of UTGR, Inc.; provided further,

however, where the context indicates that the term is referring to a physical facility, then "Twin

River" or "Twin River gaming facility" shall mean the gaming and entertainment facility located at

100 Twin River Road in Lincoln, Rhode Island.

     (28) "Hosting facility" refers to Twin River and the Tiverton gaming facility.

     (29) "DBR" means the department of business regulation, division of licensing and gaming

and athletics, and/or any successor in interest thereto.

     (30) "Division," "division of lottery," "division of lotteries" or "lottery division" means the

division of lotteries within the department of revenue and/or any successor in interest thereto.

     (31) "Director" means the director of the division.

     42-61.2-3.2. Gaming credit authorized.

     (a) Authority. In addition to the powers and duties of the state lottery director under §§ 42-

61-4, 42-61.2-3, 42-61.2-3.1 and 42-61.2-4, the division shall authorize each licensed, video-lottery

retailer to extend credit to players pursuant to the terms and conditions of this chapter.

     (b) Credit. Notwithstanding any provision of the general laws to the contrary, including,

without limitation, § 11-19-17, except for applicable licensing laws and regulations, each licensed,

video-lottery retailer may extend interest-free, unsecured credit to its patrons for the sole purpose

of such patrons making wagers at table games and/or video-lottery terminals and/or for the purpose

of making sports wagering bets, at the licensed, video-lottery retailer's facility subject to the terms

and conditions of this chapter.

     (c) Regulations. Each licensed, video-lottery retailer shall be subject to rules and

regulations submitted by licensed, video-lottery retailers and subject to the approval of the division

of lotteries regarding procedures governing the extension of credit and requirements with respect

to a credit applicant's financial fitness, including, without limitation: annual income; debt-to-

income ratio; prior credit history; average monthly bank balance; and/or level of play. The division

of lotteries may approve, approve with modification, or disapprove any portion of the policies and

procedures submitted for review and approval.

     (d) Credit applications. Each applicant for credit shall submit a written application to the

licensed, video-lottery retailer that shall be maintained by the licensed, video-lottery retailer for

three (3) years in a confidential credit file. The application shall include the patron's name; address;

telephone number; social security number; comprehensive bank account information; the requested

credit limit; the patron's approximate amount of current indebtedness; the amount and source of

income in support of the application; the patron's signature on the application; a certification of

truthfulness; and any other information deemed relevant by the licensed, video-lottery retailer or

the division of lotteries.

     (e) Credit application verification. As part of the review of a credit application and before

an application for credit is approved, the licensed, video-lottery retailer shall verify:

     (1) The identity, creditworthiness, and indebtedness information of the applicant by

conducting a comprehensive review of:

     (i) The information submitted with the application;

     (ii) Indebtedness information regarding the applicant received from a credit bureau; and/or

     (iii) Information regarding the applicant's credit activity at other licensed facilities that the

licensed, video-lottery retailer may obtain through a casino credit bureau and, if appropriate,

through direct contact with other casinos.

     (2) That the applicant's name is not included on an exclusion or self-exclusion list

maintained by the licensed, video-lottery retailer and/or the division of lotteries.

     (3) As part of the credit application, the licensed, video-lottery retailer shall notify each

applicant in advance that the licensed, video-lottery retailer will verify the information in

subsections (e)(1) and (e)(2) and may verify any other information provided by the applicant as

part of the credit application. The applicant is required to acknowledge in writing that he or she

understands that the verification process will be conducted as part of the application process and

that he or she consents to having said verification process conducted.

     (f) Establishment of credit. After a review of the credit application, and upon completion

of the verification required under subsection (e), and subject to the rules and regulations approved

by the division of lotteries, a credit facilitator may approve or deny an application for credit to a

player. The credit facilitator shall establish a credit limit for each patron to whom credit is granted.

The approval or denial of credit shall be recorded in the applicant's credit file that shall also include

the information that was verified as part of the review process, and the reasons and information

relied on by the credit facilitator in approving or denying the extension of credit and determining

the credit limit. Subject to the rules and regulations approved by the division of lotteries, increases

to an individual's credit limit may be approved by a credit facilitator upon receipt of written request

from the player after a review of updated financial information requested by the credit facilitator

and re-verification of the player's credit information.

     (g) Recordkeeping. Detailed information pertaining to all transactions affecting an

individual's outstanding indebtedness to the licensed, video-lottery retailer shall be recorded in

chronological order in the individual's credit file. The financial information in an application for

credit and documents related thereto shall be confidential. All credit application files shall be

maintained by the licensed, video-lottery retailer in a secure manner and shall not be accessible to

anyone not a credit facilitator or a manager or officer of a licensed, video-lottery retailer responsible

for the oversight of the extension of credit program.

     (h) Reduction or suspension of credit. A credit facilitator may reduce a player's credit limit

or suspend his or her credit to the extent permitted by the rules and regulations approved by the

division of lotteries and shall reduce a player's credit limit or suspend a player's credit limit as

required by said rules and regulations.

     (i) Voluntary credit suspension. A player may request that the licensed, video-lottery

retailer suspend or reduce his or her credit. Upon receipt of a written request to do so, the player's

credit shall be reduced or suspended as requested. A copy of the request and the action taken by

the credit facilitator shall be placed in the player's credit application file.

     (j) Liability. In the event that a player fails to repay a debt owed to a licensed, video-lottery

retailer resulting from the extension of credit by that licensed, video-lottery retailer, neither the

state of Rhode Island nor the division of lotteries shall be responsible for the loss and said loss shall

not affect net, table-game revenue or net terminal income. A licensed, video-lottery retailer, the

state of Rhode Island, the division of lotteries, and/or any employee of a licensed, video-lottery

retailer, shall not be liable in any judicial or administrative proceeding to any player, any individual,

or any other party, including table game players or individuals on the voluntary suspension list, for

any harm, monetary or otherwise, that may arise as a result of:

     (1) Granting or denial of credit to a player;

     (2) Increasing the credit limit of a player;

     (3) Allowing a player to exercise his or her right to use credit as otherwise authorized;

     (4) Failure of the licensed, video-lottery retailer to increase a credit limit;

     (5) Failure of the licensed, video-lottery retailer to restore credit privileges that have been

suspended, whether involuntarily or at the request of the table game patron; or

     (6) Permitting or prohibiting an individual whose credit privileges have been suspended,

whether involuntarily or at the request of the player, to engage in gaming activity in a licensed

facility while on the voluntary credit suspension list.

     (k) Limitations. Notwithstanding any other provision of this chapter, for any extensions of

credit, the maximum amount of outstanding credit per player shall be fifty thousand dollars

($50,000).

     42-61.2-4. Additional powers and duties of director and lottery division.

     In addition to the powers and duties set forth in §§ 42-61-4 and 42-61.2-3, the director shall

have the power to:

     (1) Supervise and administer the operation of video lottery games and sports wagering in

accordance with this chapter and with the rules and regulations of the division;

     (2) Suspend or revoke upon a hearing any license issued pursuant to this chapter or the

rules and regulations promulgated under this chapter; and

     (3) In compliance with the provisions of chapter 2 of title 37, enter into contracts for the

operation of a central communications system and technology providers, or any part thereof. ;

     (4) In compliance with the provisions of chapter 2 of title 37, enter into contracts for the

provision of sports wagering systems, facilities and related technology necessary and/or desirable

for the state-operated sports wagering to be hosted at Twin River and the Tiverton gaming facilities,

including technology related to the operation of on-premises remote sports wagering, or any part

thereof; and

     (4)(5) Certify monthly to the budget officer, the auditor general, the permanent joint

committee on state lottery, and to the governor a full and complete statement of lottery revenues,

prize disbursements and other expenses for the preceding month; ensure that monthly financial

reports are prepared providing gross monthly revenues, prize disbursements, other expenses, and

net income for keno and for all other lottery operations; submit this report to the state budget officer,

the auditor general, the permanent joint committee on state lottery, the legislative fiscal advisors,

and the governor no later than the twentieth business day following the close of the month; at the

end of each fiscal year the director shall submit an annual report based upon an accrual system of

accounting which shall include a full and complete statement of lottery revenues, prize

disbursements and expenses, to the governor and the general assembly, which report shall be a

public document and shall be filed with the secretary of state. The monthly report shall be prepared

in a manner prescribed by the members of the revenue estimating conference.

     42-61.2-6. When games may be played.

     (a) Video-lottery games authorized by this chapter may be played at the licensed, video-

lottery retailer's facilities with the approval of the lottery commission division, even if that facility

is not conducting a pari-mutuel event.

     (b) Sports wagering authorized by this chapter, including accepting sports wagers and

administering payoffs of winning sports wagers, may be conducted at the Twin River and the

Tiverton gaming facilities, with the approval of the division, even if that facility is not conducting

a pari-mutuel event.

     42-61.2-10. Prizes exempt from taxation.

     The prizes received pursuant to this chapter shall be exempt from the state sales or use tax.

The prizes, including payoffs, received pursuant to this chapter shall be exempt from the state sales

or use tax but shall be applicable to personal income tax laws.

     42-61.2-11. Effect of other laws and local ordinances.

     (a) No other law providing any penalty or disability for operating, hosting, maintaining,

supporting or playing video lottery games, or any acts done in connection with video lottery games,

shall apply to operating, hosting, maintaining, supporting or playing video lottery games pursuant

to this chapter.

     (b) No other law providing any penalty or disability for conducting, hosting, maintaining,

supporting or participating in sports wagering, or any acts done in connection with sports wagering,

shall apply to conducting, hosting, maintaining, supporting or participating in sports wagering

pursuant to this chapter.

     (c) The provisions of §§ 41-9-4 and 41-9-6 shall not apply to this chapter, and the

provisions of this chapter shall take precedence over any local ordinances to the contrary. It is

specifically acknowledged that the installation, operation and use of video-lottery terminals by a

pari-mutuel licensee, as authorized in this chapter, shall for all purposes be deemed a permitted use

as defined in § 45-24-31. No city or town where video-lottery terminals are authorized may seek to

prevent the installation and use of said video-lottery terminals by defining such as a prohibited use.

     42-61.2-13. Table-game enforcement. [See Applicability notes.] Enforcement.

     (a) Whoever violates § 42-61.2-2.1 or § 42-61.2-3.1, or any rule or regulation, policy or

procedure, duly promulgated thereunder, or any administrative order issued pursuant to § 42-61.2-

2.1 or § 42-61.2-3.1, shall be punishable as follows:

     (1) In the Division director's discretion, the Division director may impose an administrative

penalty of not more than one thousand dollars ($1,000) for each violation. Each day of continued

violation shall be considered as a separate violation if the violator has knowledge of the facts

constituting the violation and knows or should know that such facts constitute or may constitute a

violation. Lack of knowledge regarding such facts or violation shall not be a defense to a continued

violation with respect to the first day of its occurrence. Written notice detailing the nature of the

violation, the penalty amount, and effective date of the penalty will be provided by the Division

director. Penalties shall take effect upon notification. A written request for a hearing must be

submitted in writing to the Division director within thirty (30) days of notification of violation.

     (2) In the Division director's discretion, the Division director may endeavor to obtain

compliance with requirements of this chapter by written administrative order. Such order shall be

provided to the responsible party, shall specify the complaint, and propose a time for correction of

the violation.

     (b) The Division director shall enforce this chapter. Such enforcement shall include, but

not be limited to, referral of suspected criminal activity to the Rhode Island state police for

investigation.

     (c) Any interest, costs or expense collected under this section shall be appropriated to the

Division for administrative purposes.

     (d) Any penalty imposed by the Division pursuant to this § 42-61.2-13 shall be appealable

to Superior Court.

     42-61.2-14. Compulsive and problem gambling program. [See Applicability notes.].

     The Division and the State acknowledge that the vast majority of gaming patrons can enjoy

gambling games responsibly, but that there are certain societal costs associated with gaming by

some individuals who have problems handling the product or services provided. The Division and

the State further understand that it is their duty to act responsibly toward those who cannot

participate conscientiously in gaming. Pursuant to the foregoing, Twin River and Newport Grand,

in cooperation with the State, shall offer compulsive and problem gambling programs that include,

but are not limited to (a) problem gambling awareness programs for employees; (b) player self-

exclusion program; and (c) promotion of a problem gambling hotline. Twin River and Newport

Grand (and its successor in interest, Twin River-Tiverton) shall modify their existing compulsive

and problem-gambling programs to include table games and sports wagering to the extent such

games are authorized at such facilities. Twin River and Newport Grand (and its successor in

interest, Twin River-Tiverton) shall reimburse and pay to the Division no less than one hundred

thousand dollars ($100,000) one hundred twenty-five thousand dollars ($125,000) in aggregate

annually for compulsive and problem gambling programs established by the Division. The

contribution from each facility shall be determined by the Division.

     42-61.2-15. Table-game hours of operation Table game and sports wagering hours of

operation.

     (a) To the extent table games are authorized at the premises of a table-game retailer, such

table games may be offered at the premises of a table-game retailer for all or a portion of the days

and times that video-lottery games are offered.

     (b) To the extent sports wagering is authorized at the premises of a table-game retailer,

such sports wagering may be offered at the premises of such table-game retailer for all or a portion

of the days and times that video-lottery games are offered.

     SECTION 5. Chapter 42-61.2 of the General Laws entitled "Video-Lottery Terminal" is

hereby amended by adding thereto the following sections:

     42-61.2-2.4. State to conduct sports wagering hosted by Twin River and the Tiverton

Gaming Facility.

     (a) The state, through the division of lotteries, shall implement, operate, conduct and

control sports wagering at the Twin River gaming facility and the Twin River-Tiverton gaming

facility, once Twin River-Tiverton is licensed as a video lottery and table game retailer. In

furtherance thereof, the state, through the division, shall have full operational control to operate

such sports wagering, including, without limitation, the power and authority to:

     (1) Establish with respect to sports wagering one or more systems for linking, tracking,

depositing and reporting of receipts, audits, annual reports, prohibited conduct and other such

matters determined by the division from time to time;

     (2) Collect all sports wagering revenue indirectly through Twin River and Tiverton gaming

facilities, require that the Twin River and Tiverton gaming facilities collect all sports wagering

revenue in trust for the state (through the division), deposit such sports wagering revenue into an

account or accounts of the division’s choice, allocate such sports wagering revenue according to

law, and otherwise maintain custody and control over all sports wagering revenue;

     (3) Hold and exercise sufficient powers over the Twin River and Tiverton gaming facilities’

accounting and finances to allow for adequate oversight and verification of the financial aspects of

sports wagering hosted at their respective facilities in Lincoln and Tiverton, including, without

limitation:

     (i) The right to require the Twin River and Tiverton gaming facilities to maintain an annual

balance sheet, profit and loss statement, and any other necessary information or reports;

     (ii) The authority and power to conduct periodic compliance or special or focused audits

of the information or reports provided, as well as the premises within the facilities containing

records of sports wagering or in which the sports wagering activities are conducted; and

     (4) Monitor the sports wagering operations hosted by the Twin River and Tiverton gaming

facilities and have the power to terminate or suspend any sports wagering activities in the event of

an integrity concern or other threat to the public trust, and in furtherance thereof, require Twin

River and Tiverton, respectively, to provide a specified area or areas from which to conduct such

monitoring activities;

     (5) Through the use of a sports wagering vendor, define and limit the rules of play and odds

of authorized sports wagering games, including, without limitation, the minimum and maximum

wagers for each sports wagering game. Sports wagering payoffs shall not be subject to any

limitation or restriction related to sports wagering revenue or lottery revenue.

     (6) Establish compulsive gambling treatment programs;

     (7) Promulgate, or propose for promulgation, any legislative, interpretive and procedural

rules necessary for the successful implementation, administration and enforcement of this chapter;

and

     (8) Hold all other powers necessary and proper to fully effectively execute and administer

the provisions of this chapter for the purpose of allowing the state to operate sports wagering hosted

by the Twin River and Tiverton gaming facilities.

     (b) The state, through the division and/or the DBR, shall have approval rights over matters

relating to the employment of individuals to be involved, directly or indirectly, with the operation

of sports wagering at the Twin River and Tiverton gaming facilities.

     (c) Nothing in this chapter 42-61.2 or elsewhere in the general laws shall be construed to

create a separate license governing the hosting of sports wagering in Rhode Island by licensed video

lottery and table game retailers.

     (d) The state, through the division, shall have authority to issue such regulations as it deems

appropriate pertaining to the control, operation and management of sports wagering. The state,

through DBR shall have authority to issue such regulations as it deems appropriate pertaining to

the employment of individuals to be involved, directly or indirectly, with the operations of sports

wagering as set forth in subsection (b) of this section.

     (e) Any list or other identifiable data of sports wagering players generated or maintained

by the sports wagering vendor or the hosting facility as a result of sports wagering shall be the

exclusive property of the division, provided that the hosting facilities shall be permitted to use any

such list or other identifiable data for marketing purposes to the extent it currently uses similar data

as approved by the division and for marketing purposes to directly or indirectly generate additional

gaming revenue, as approved by the division.

     42-61.2-3.3. Sports wagering regulation.

     (a) In addition to the powers and duties of the division director under §§ 42-61-4, 42-61.2-

3, 42-61.2-4 and 42-61.2-3.1, and pursuant to § 42-61.2-2.4, the division director shall promulgate

rules and regulations relating to sports wagering and set policy therefor. These rules and regulations

shall establish standards and procedures for sports waging and associated devices, equipment and

accessories, and shall include, but not be limited to:

     (1) Approve standards, rules and regulations to govern the conduct of sports wagering and

the system of wagering associated with sports wagering, including without limitation:

     (i) The objects of the sports wagering (i.e., the sporting events upon which sports wagering

bets may be accepted) and methods of play, including what constitutes win, loss or tie bets;

     (ii) The manner in which sports wagering bets are received, payoffs are remitted and point

spreads, lines and odds are determined for each type of available sports wagering bet;

     (iii) Physical characteristics of any devices, equipment and accessories related to sports

wagering;

     (iv) The applicable inspection procedures for any devices, equipment and accessories

related to sports wagering;

     (v) Procedures for the collection of bets and payoffs, including but not limited to

requirements for internal revenue service purposes;

     (vi) Procedures for handling suspected cheating and sports wagering irregularities; and

     (vii) Procedures for handling any defective or malfunctioning devices, equipment and

accessories related to sports wagering.

     (2) Establishing the method for calculating sports wagering revenue and standards for the

daily counting and recording of cash and cash equivalents received in the conduct of sports

wagering, and ensuring that internal controls are followed and financial books and records are

maintained and audits are conducted;

     (3) Establishing the number and type of sports wagering bets authorized at the hosting

facility, including any new sports wagering bets or variations or composites of approved sports

wagering bets, and all rules related thereto;

     (4) Establishing any sports wagering rule changes, sports wagering minimum and

maximum bet changes, and changes to the types of sports wagering products offered at a particular

hosting facility, including but not limited to any new sports wagering bets or variations or

composites of approved sports wagering bets, and including all rules related thereto;

     (5) Requiring the hosting facility and/or sports wagering vendor to:

     (i) Provide written information at each sports wagering location within the hosting facility

about wagering rules, payoffs on winning sports wagers and other information as the division may

require.

     (ii) Provide specifications approved by the division to integrate and update the hosting

facility’s surveillance system to cover all areas within the hosting facility where sports wagering is

conducted and other areas as required by the division. The specifications shall include provisions

providing the division and other persons authorized by the division with onsite access to the system.

     (iii) Designate one or more locations within the hosting facility where sports wagering bets

are received.

     (iv) Ensure that visibility in a hosting facility is not obstructed in any way that could

interfere with the ability of the division, the sports wagering vendor or other persons authorized

under this section or by the division to oversee the surveillance of the conduct of sports wagering.

     (v) Ensure that the count rooms for sports wagering has appropriate security for the

counting and storage of cash.

     (vi) Ensure that drop boxes are brought into or removed from an area where sports

wagering is conducted or locked or unlocked in accordance with procedures established by the

division.

     (vii) Designate secure locations for the inspection, service, repair or storage of sports

wagering equipment and for employee training and instruction to be approved by the division.

     (vii) Establish standards prohibiting persons under eighteen (18) of age from participating

in sports wagering.

     (ix) Establish compulsive and problem gambling standards and/or programs pertaining to

sports wagering consistent with general laws chapter 42-61.2.

     (6) Establishing the minimal proficiency requirements for those individuals accepting

sports wagers and administering payoffs on winning sports wagers. The foregoing requirements of

this subsection may be in addition to any rules or regulations of the DBR requiring licensing of

personnel of state-operated gaming facilities;

     (7) Establish appropriate eligibility requirements and standards for traditional sports

wagering equipment suppliers; and

     (8) Any other matters necessary for conducting sports wagering.

     (b) The hosting facility shall provide secure, segregated facilities as required by the

division on the premises for the exclusive use of the division staff and the gaming enforcement unit

of the state police. Such space shall be located proximate to the gaming floor and shall include

surveillance equipment, monitors with full camera control capability, as well as other office

equipment that may be deemed necessary by the division. The location and size of the space and

necessary equipment shall be subject to the approval of the division.

     42-61.2-5. Allocation of sports wagering revenue.

     (a) Notwithstanding the provisions of § 42-61-15, the division of lottery is authorized to

enter into an agreement, limited to in-person on-site sports wagering, to allocate sports wagering

revenue derived from sports wagering at the Twin River and Tiverton gaming facilities, (the hosting

facilities) between the state, the state's authorized sports wagering vendor, and the host facilities.

The allocation of sports wagering revenue shall be:

     (1) To the state, fifty-one percent (51%) of sports wagering revenue;

     (2) To the state's authorized sports wagering vendor, thirty-two percent (32%) of sports

wagering revenue; and

     (3) To the host facilities, seventeen percent (17%) of sports wagering revenue.

     (b) Sports wagering revenue allocated to the state shall be deposited into the state lottery

fund for administrative purposes and then the balance remaining into the general fund.

     (c) The town of Lincoln shall be paid an annual flat fee of one hundred thousand dollars

($100,000) and the town of Tiverton shall be paid an annual flat fee of one hundred thousand dollars

($100,000) in compensation for serving as the host communities for sports wagering.

     42-61.2-9. Unclaimed prize money, including unclaimed sports wagering payoffs.

     Unclaimed prize money for prizes in connection with the play of a video lottery game and

an unclaimed payoff in connection with a sports wager shall be retained by the director for the

person entitled thereto for one year after, respectively, the completion of the applicable video

lottery game or the determination of the result of the sporting event that was the subject of the

applicable sports wager. If no claim is made for the prize money or payoff within that year, the

prize money or payoff shall automatically revert to the lottery fund and the winner shall have no

claim thereto.

     SECTION 6. Section 42-61.3-2 of the General Laws in Chapter 42-61.3 entitled "Casino

Gaming" is hereby amended to read as follows:

     42-61.3-2. Casino gaming crimes.

     (a) Definitions as used in this chapter:

     (1) "Casino gaming" shall have the meaning set forth in the Rhode Island general laws

subdivision 42-61.2-1(8).

     (2) "Cheat" means to alter the element of chance, method of selection, or criteria which

determines:

     (i) The result of the game;

     (ii) The amount or frequency of payment in a game, including intentionally taking

advantage of a malfunctioning machine;

     (iii) The value of a wagering instrument; or

     (iv) The value of a wagering credit.

     (3) "Cheating device" means any physical, mechanical, electromechanical, electronic,

photographic, or computerized device used in such a manner as to cheat, deceive or defraud a casino

game. This includes, but is not limited to:

     (i) Plastic, tape, string or dental floss, or any other item placed inside a coin or bill acceptor

or any other opening in a video-lottery terminal in a manner to simulate coin or currency

acceptance;

     (ii) Forged or stolen keys used to gain access to a casino game to remove its contents; and

     (iii) Game cards or dice that have been tampered with, marked or loaded.

     (4) "Gaming facility" means any facility authorized to conduct casino gaming as defined

in the Rhode Island general laws subdivision 42-61.2-1(8), including its parking areas and/or

adjacent buildings and structures.

     (5) "Paraphernalia for the manufacturing of cheating devices" means the equipment,

products or materials that are intended for use in manufacturing, producing, fabricating, preparing,

testing, analyzing, packaging, storing or concealing a counterfeit facsimile of the chips, tokens,

debit instruments or other wagering devices approved by the division of state lottery or lawful coin

or currency of the United States of America. This term includes, but is not limited to:

     (i) Lead or lead alloy molds, forms, or similar equipment capable of producing a likeness

of a gaming token or United States coin or currency;

     (ii) Melting pots or other receptacles;

     (iii) Torches, tongs, trimming tools or other similar equipment; and

     (iv) Equipment that can be used to manufacture facsimiles of debit instruments or wagering

instruments approved by the division of state lottery.

     (6) "Table game" shall have the meaning set forth in Rhode Island general laws subdivision

42-61.2-1(11).

     (7) "Wager" means a sum of money or representative of value that is risked on an

occurrence for which the outcome is uncertain.

     (b) Prohibited acts and penalties. It shall be unlawful for any person to:

     (1) Use, or attempt to use, a cheating device in a casino game or to have possession of such

a device in a gaming facility. Any person convicted of violating this section shall be guilty of a

felony punishable by imprisonment for not more than ten (10) years or a fine of not more than one

hundred thousand dollars ($100,000), or both;

     (2) Use, acquire, or possess paraphernalia with intent to cheat, or attempt to use, acquire or

possess, paraphernalia with the intent to manufacture cheating devices. Any person convicted of

violating this section shall be guilty of a felony punishable by imprisonment for not more than ten

(10) years or a fine of not more than one hundred thousand dollars ($100,000), or both;

     (3) Cheat, or attempt to cheat, in order to take or collect money or anything of value,

whether for one's self or another, in or from a casino game in a gaming facility. Any person

convicted of violating this section shall be guilty of a felony punishable by imprisonment for not

more than ten (10) years or a fine of not more than one hundred thousand dollars ($100,000), or

both;

     (4) Conduct, carry on, operate, deal, or attempt to conduct, carry on, operate or deal, or

allow to be conducted, carried on, operated, or dealt, any cheating game or device. Any person

convicted of violating this section shall be guilty of a felony punishable by imprisonment for not

more than ten (10) years or a fine of not more than one hundred thousand dollars ($100,000), or

both;

     (5) Manipulate or alter or attempt to manipulate or alter, with the intent to cheat, any

physical, mechanical, electromechanical, electronic, or computerized component of a casino game,

contrary to the designed and normal operational purpose for the component. Any person convicted

of violating this section shall be guilty of a felony punishable by imprisonment for not more than

ten (10) years or a fine of not more than one hundred thousand dollars ($100,000), or both;

     (6) Use, sell or possess, or attempt to use, sell or possess, counterfeit: coins, slugs, tokens,

gaming chips, debit instruments, player rewards cards or any counterfeit wagering instruments

and/or devices resembling tokens, gaming chips, debit or other wagering instruments approved by

the division of state lottery for use in a casino game in a gaming facility. Any person convicted of

violating this section shall be guilty of a felony punishable by imprisonment for not more than ten

(10) years or a fine of not more than one hundred thousand dollars ($100,000), or both;

     (7) (i) Place, increase, decrease, cancel or remove a wager or determine the course of play

of a table game, or attempt to place, increase, decrease, cancel or remove a wager or determine the

course of play of a table game, with knowledge of the outcome of the table game where such

knowledge is not available to all players; or

     (ii) Aid, or attempt to aid anyone in acquiring such knowledge for the purpose of placing,

increasing, decreasing, cancelling or removing a wager or determining the course of play of the

table game. Any person convicted of violating this section shall be guilty of a felony punishable by

imprisonment for not more than ten (10) years or a fine of not more than one hundred thousand

dollars ($100,000), or both;

     (8) Claim, collect or take, or attempt to claim, collect or take, money or anything of value

in or from a casino game or gaming facility, with intent to defraud, or to claim, collect or take an

amount greater than the amount won. Any person convicted of violating this section shall be guilty

of a felony punishable by imprisonment for not more than ten (10) years or a fine of not more than

one hundred thousand dollars ($100,000), or both;

     (9) For any employee of a gaming facility or anyone acting on behalf of or at the direction

of an employee of a gaming facility, to knowingly fail to collect, or attempt to fail to collect, a

losing wager or pay, or attempt to pay, an amount greater on any wager than required under the

rules of a casino game. Any person convicted of violating this section shall be guilty of a felony

punishable by imprisonment for not more than ten (10) years or a fine of not more than one hundred

thousand dollars ($100,000), or both;

     (10) Directly or indirectly offer, or attempt to offer, to conspire with another, or solicit, or

attempt to solicit, from another, anything of value, for the purpose of influencing the outcome of a

casino game. Any person convicted of violating this section shall be guilty of a felony punishable

by imprisonment for not more than ten (10) years or a fine of not more than one hundred thousand

dollars ($100,000), or both;

     (11) Use or possess, or attempt to use or possess, at a gaming facility, without the written

consent of the director of the division of state lottery, any electronic, electrical or mechanical device

designed, constructed or programmed to assist the user or another person with the intent to:

     (i) Predict the outcome of a casino game;

     (ii) Keep track of the cards played;

     (iii) Analyze and/or predict the probability of an occurrence relating to the casino game;

and/or

     (iv) Analyze and/or predict the strategy for playing or wagering to be used in the casino

game. Any person convicted of violating this section shall be guilty of a felony punishable by

imprisonment for not more than ten (10) years or a fine of not more than one hundred thousand

dollars ($100,000), or both;

     (12) Skim, or attempt to skim, casino gaming proceeds by excluding anything of value

from the deposit, counting, collection, or computation of:

     (i) Gross revenues from gaming operations or activities;

     (ii) Net gaming proceeds; and/or

     (iii) Amounts due the state pursuant to applicable casino gaming-related laws. Any person

convicted of violating this section shall be guilty of a felony punishable by imprisonment for not

more than ten (10) years or a fine of not more than one hundred thousand dollars ($100,000), or

both;

     (13) Cheat, or attempt to cheat, in the performance of his/her duties as a dealer or other

casino employee by conducting one's self in a manner that is deceptive to the public or alters the

normal random selection of characteristics or the normal chance or result of the game, including,

but not limited to, using cards, dice or any cheating device(s) which have been marked, tampered

with or altered. Any person convicted of violating this section shall be guilty of a felony punishable

by imprisonment for not more than ten (10) years or a fine of not more than one hundred thousand

dollars ($100,000), or both;

     (14) Possess or use, or attempt to use, without proper authorization from the state lottery

division, while in the gaming facility any key or device designed for the purpose of or suitable for

opening or entering any self-redemption unit (kiosk), vault, video-lottery terminal, drop box or any

secured area in the gaming facility that contains casino gaming and/or surveillance equipment,

computers, electrical systems, currency, cards, chips, dice, or any other thing of value. Any person

convicted of violating this section shall be guilty of a felony punishable by imprisonment for not

more than ten (10) years or a fine of not more than one hundred thousand dollars ($100,000), or

both;

     (15) Tamper and/or interfere, or attempt to tamper and/or interfere, with any casino gaming

and/or surveillance equipment, including, but not limited to, related computers and electrical

systems. Any person convicted of violating this section shall be guilty of a felony punishable by

imprisonment for not more than ten (10) years or a fine of not more than one hundred thousand

dollars ($100,000), or both;

     (16) Access, interfere with, infiltrate, hack into or infect, or attempt to access, interfere

with, infiltrate, hack into or infect, any casino gaming-related computer, network, hardware and/or

software or other equipment. Any person convicted of violating this section shall be guilty of a

felony punishable by imprisonment for not more than ten (10) years or a fine of not more than one

hundred thousand dollars ($100,000), or both;

     (17) Sell, trade, barter, profit from or otherwise use to one's financial advantage, or attempt

to sell, trade, barter, profit from or otherwise use to one's financial advantage, any confidential

information related to casino-gaming operations, including, but not limited to, data (whether stored

on a computer's software, hardware, network or elsewhere), passwords, codes, surveillance and

security characteristics and/or vulnerabilities, and/or non-public internal controls, policies and

procedures related thereto. Any person convicted of violating this section shall be guilty of a felony

punishable by imprisonment for not more than ten (10) years or a fine of not more than one hundred

thousand dollars ($100,000), or both;

     (18) Conduct a gaming operation, or attempt to conduct a gaming operation, where

wagering is used or to be used without a license issued by or authorization from the division of

state lottery. Any person convicted of violating this section shall be guilty of a felony punishable

by imprisonment for not more than ten (10) years or a fine of not more than one hundred thousand

dollars ($100,000), or both;

     (19) Provide false information and/or testimony to the division of state lottery, department

of business regulation, or their authorized representatives and/or the state police while under oath.

Any person convicted of violating this section shall be guilty of a felony punishable by

imprisonment for not more than ten (10) years or a fine of not more than one hundred thousand

dollars ($100,000), or both;

     (20) Play a casino game and/or make a wager, or attempting to play a casino game and/or

make a wager, if under the age eighteen (18) years. Any person charged under this section shall be

referred to family court; or

     (21) Permit, or attempt to permit, a person to play a casino game and/or accept, or attempt

to accept, a wager from a person, if he/she is under the age of eighteen (18) years. Any person

convicted of violating this section be guilty of a misdemeanor punishable by imprisonment for not

more than one year or a fine of not more than one thousand dollars ($1,000), or both.

     SECTION 7. Section 11-19-14 of the General Laws in Chapter 11-19 entitled "Gambling

and Lotteries" is hereby amended to read as follows:

     11-19-14. Bookmaking.

     Except as provided in chapter 4 of title 41 and excluding activities authorized by the

division of lottery under chapters 61 and 61.2 of title 42, any person who shall engage in pool

selling or bookmaking, or shall occupy or keep any room, shed, tenement, tent, or building, or any

part of them, or shall occupy any place upon any public or private grounds within this state, with

books, apparatus, or paraphernalia for the purpose of recording or registering bets or wagers or of

buying or selling pools, or who shall record or register bets or wagers or sell pools upon the result

of any trial or contest of skill, speed or power of endurance of man or beast, or upon the result of

any political nomination, appointment, or election, or, being the owner or lessee or occupant of any

room, tent, tenement, shed, booth, or building, or part of them, knowingly shall permit it to be used

or occupied for any of these purposes, or shall keep, exhibit or employ any device or apparatus for

the purpose of recording or registering bets or wagers, or the selling of pools, or shall become the

custodian or depositary for gain, hire, or reward of any money, property, or thing of value staked,

wagered, or pledged or to be wagered or pledged upon the result, or who shall receive, register,

record, forward, or purport or pretend to forward to or for any race course, or person, within or

outside this state, any money, thing, or consideration of value bet or wagered, or money, thing, or

consideration of value offered for the purpose of being bet or wagered upon the speed or endurance

of any man or beast; or who shall occupy any place or building or part of it with books, papers,

apparatus, or paraphernalia for the purpose of receiving or pretending to receive, or for recording

or registering, or for forwarding or pretending or attempting to forward in any manner whatsoever,

any money, thing, or consideration of value bet or wagered or to be bet or wagered for any other

person, or who shall receive or offer to receive any money, thing, or consideration of value bet or

to be bet at any race track within or without this state, or who shall aid, assist or abet in any manner

in any of the acts forbidden by this section, shall upon conviction be punished by a fine not

exceeding five hundred dollars ($500) or imprisonment not exceeding one year, and upon a second

conviction of a violation of this section shall be imprisoned for a period not less than one nor more

than five (5) years.

     SECTION 8. Sections 42-142-1 and 42-142-2 of the General Laws in Chapter entitled

"Department of Revenue" are hereby amended to read as follows:

     42-142-1. Department of revenue.

      (a) There is hereby established within the executive branch of state government a

department of revenue.

     (b) The head of the department shall be the director of revenue, who shall be appointed by

the governor, with the advice and consent of the senate, and shall serve at the pleasure of the

governor.

     (c) The department shall contain the division of taxation (chapter 1 of title 44), the division

of motor vehicles (chapter 2 of title 31), the division of state lottery (chapter 61 of title 42), the

office of revenue analysis (chapter 142 of title 42), the division of municipal finance (chapter 142

of title 42), and a collection unit (chapter 142 of title 42). Any reference to the division of property

valuation, division of property valuation and municipal finance, or office of municipal affairs in

the Rhode Island general laws shall mean the division of municipal finance. 

     42-142-2. Powers and duties of the department.

     The department of revenue shall have the following powers and duties:

     (a) To operate a division of taxation.;

     (b) To operate a division of motor vehicles;

     (c) To operate a division of state lottery;

     (d) To operate an office of revenue analysis; and

     (e) To operate a division of property valuation; and

     (f) To operate a collection unit.

     SECTION 9. Chapter 42-142 of the General Laws entitled "Department of Revenue" is

hereby amended by adding thereto the following section:

     42-142-8. Collection unit.

     (a) The director of the department of revenue is authorized to establish within the

department of revenue a collections unit for the purpose of assisting state agencies in the collection

of debts owed to the state. The director of the department of revenue may enter into an agreement

with any state agency(ies) to collect any delinquent debt owed to the state.

     (b) The director of the department of revenue shall initially implement a pilot program to

assist the agency(ies) with the collection of delinquent debts owed to the state.

     (c) The agency(ies) participating in the pilot program shall refer to the collection unit

within department of revenue, debts owed by delinquent debtors where the nature and amount of

the debt owed has been determined and reconciled by the agency and the debt is: (i) The subject of

a written settlement agreement and/or written waiver agreement and the delinquent debtor has

failed to timely make payments under said agreement and/or waiver and is therefore in violation of

the terms of said agreement and/or waiver; (ii) The subject of a final administrative order or

decision and the debtor has not timely appealed said order or decision; (iii) The subject of final

order, judgement or decision of a court of competent jurisdiction and the debtor has not timely

appealed said order, judgement or decision. The collections unit shall not accept a referral of any

delinquent debt unless it satisfies subsection (c)(i), (ii) or (iii) of this section.

     (d) Any agency(ies) entering into an agreement with the department of revenue to allow

the collection unit of the department to collect a delinquent debt owed to the state shall indemnify

the department of revenue against injuries, actions, liabilities, or proceedings arising from the

collection, or attempted collection, by the collection unit of the debt owed to the state.

     (e) Before referring a delinquent debt to the collection unit, the agency(ies) must notify the

debtor of its intention to submit the debt to the collection unit for collection and of the debtor's right

to appeal that decision not less than thirty (30) days before the debt is submitted to the collection

unit.

     (f) At such time as the agency(ies) refers a delinquent debt to the collection unit, the agency

shall: (i) Represent in writing to the collection unit that it has complied with all applicable state and

federal laws and regulations relating to the collection of the debt, including, but not limited to, the

requirement to provide the debtor with the notice of referral to the collection unit under section (e)

of this section; and (ii) Provide the collection unit personnel with all relevant supporting

documentation including, not limited to notices, invoices, ledgers, correspondence, agreements,

waivers, decisions, orders and judgements necessary for the collection unit to attempt to collect the

delinquent debt.

     (g) The referring agency(ies) shall assist the collection unit by providing any and all

information, expertise and resources deemed necessary by the collection unit to collect the

delinquent debts referred to the collection unit.

     (h) Upon receipt of a referral of a delinquent debt from an agency(ies), the amount of the

delinquent debt shall accrue interest at an annual rate with such rate determined by adding two (2)

percent to the prime rate which was in effect on October 1 of the preceding year; provided however,

in no event shall the rate of interest exceed twenty-one (21%) per annum nor be less than eighteen

percent (18%) per annum.

     (i) Upon receipt of a referral of a delinquent debt from the agency(ies), the collection unit

shall provide the delinquent debtor with a "Notice of Referral" advising the debtor that:

     (1) The delinquent debt has been referred to the collection unit for collection; and

     (2) The collection unit will initiate, in its names, any action that is available under state law

for the collection of the delinquent debt, including, but not limited to, referring the debt to a third

party to initiate said action.

     (j) Upon receipt of a referral of a delinquent debt from an agency(ies), the director of the

department of revenue shall have the authority to institute, in its name, any action(s) that are

available under state law for collection of the delinquent debt and interest, penalties and/or fees

thereon and to, with or without suit, settle the delinquent debt.

     (k) In exercising its authority under this section, the collection unit shall comply with all

state and federal laws and regulations related to the collection of debts.

     (l) Upon of the receipt of payment from a delinquent debtor, whether a full or partial

payment, the collection unit shall disburse/deposit the proceeds of said payment in the following

order:

     (1) To the appropriate federal account to reimburse the federal government funds owed to

them by the state from funds recovered; and

     (2) The balance of the amount collected to the referring agency.

     (m) Notwithstanding the above, the establishment of a collection unit within the department

of revenue shall be contingent upon an annual appropriation by the general assembly of amounts

necessary and sufficient to cover the costs and expenses to establish, maintain and operate the

collection unit including, but not limited, computer hardware and software, maintenance of the

computer system to manage the system and personnel perform work within the collection unit.

     (n) In addition to the implementation of any pilot program, the collection unit shall comply

with the provisions of this section in the collection of all delinquent debts under to this section.

     (o) The department of revenue is authorized to promulgate rules and regulations as it deems

appropriate with respect to the collection unit.

     (p) By September 1, 2020 and each year thereafter, the department of revenue shall

specifically assess the performance, effectiveness, and revenue impact of the collections associated

with this section, including, but not limited to, the total amounts referred and collected by each

referring agency during the previous state fiscal year to the governor, the speaker of the house of

representatives, the president of the senate, and the chairpersons of the house and senate finance

committees, the house and senate fiscal advisors. Such report shall include the net revenue impact

to the state of the collections unit.

     (q) No operations of a collections unit pursuant to this chapter shall be authorized after

June 30, 2021.

     SECTION 10. Sections 44-18-7, 44-18-7.1, 44-18-7.3, 44-18-8, 44-18-15, 44-18-20, 44-

18-21, 44-18-22, 44-18-23, 44-18-25, and 44-18-30 of the General Laws in Chapter 44-18 entitled

"Sales and Use Taxes – Liability and Computation" are hereby amended to read as follows:

     44-18-7. Sales defined.

     "Sales" means and includes:

     (1) Any transfer of title or possession, exchange, barter, lease, or rental, conditional or

otherwise, in any manner or by any means of tangible personal property for a consideration.

"Transfer of possession", "lease", or "rental" includes transactions found by the tax administrator

to be in lieu of a transfer of title, exchange, or barter.

     (2) The producing, fabricating, processing, printing, or imprinting of tangible personal

property for a consideration for consumers who furnish either directly or indirectly the materials

used in the producing, fabricating, processing, printing, or imprinting.

     (3) The furnishing and distributing of tangible personal property for a consideration by

social, athletic, and similar clubs and fraternal organizations to their members or others.

     (4) The furnishing, preparing, or serving for consideration of food, meals, or drinks,

including any cover, minimum, entertainment, or other charge in connection therewith.

     (5) A transaction whereby the possession of tangible personal property is transferred, but

the seller retains the title as security for the payment of the price.

     (6) Any withdrawal, except a withdrawal pursuant to a transaction in foreign or interstate

commerce, of tangible personal property from the place where it is located for delivery to a point

in this state for the purpose of the transfer of title or possession, exchange, barter, lease, or rental,

conditional or otherwise, in any manner or by any means whatsoever, of the property for a

consideration.

     (7) A transfer for a consideration of the title or possession of tangible personal property,

which has been produced, fabricated, or printed to the special order of the customer, or any

publication.

     (8) The furnishing and distributing of electricity, natural gas, artificial gas, steam,

refrigeration, and water.

     (9)(i) The furnishing for consideration of intrastate, interstate and international

telecommunications service sourced in this state in accordance with subsections 44-18.1(15) and

(16) and all ancillary services, any maintenance services of telecommunication equipment other

than as provided for in subdivision 44-18-12(b)(ii). For the purposes of chapters 18 and 19 of this

title only, telecommunication service does not include service rendered using a prepaid telephone

calling arrangement.

     (ii) Notwithstanding the provisions of paragraph (i) of this subdivision, in accordance with

the Mobile Telecommunications Sourcing Act (4 U.S.C. §§ 116 – 126), subject to the specific

exemptions described in 4 U.S.C. § 116(c), and the exemptions provided in §§ 44-18-8 and 44-18-

12, mobile telecommunications services that are deemed to be provided by the customer's home

service provider are subject to tax under this chapter if the customer's place of primary use is in this

state regardless of where the mobile telecommunications services originate, terminate or pass

through. Mobile telecommunications services provided to a customer, the charges for which are

billed by or for the customer's home service provider, shall be deemed to be provided by the

customer's home service provider.

     (10) The furnishing of service for transmission of messages by telegraph, cable, or radio

and the furnishing of community antenna television, subscription television, and cable television

services.

     (11) The rental of living quarters in any hotel, rooming house, or tourist camp.

     (12) The transfer for consideration of prepaid telephone calling arrangements and the

recharge of prepaid telephone calling arrangements sourced to this state in accordance with §§ 44-

18.1-11 and 44-18.1-15. "Prepaid telephone calling arrangement" means and includes prepaid

calling service and prepaid wireless calling service.

     (13) The sale, storage, use or other consumption of over-the-counter drugs as defined in

paragraph 44-18-7.1(h)(ii).

     (14) The sale, storage, use or other consumption of prewritten computer software delivered

electronically or by load and leave as defined in paragraph 44-18-7.1(g)(v).

     (15) The sale, storage, use or other consumption of vendor-hosted prewritten computer

software as defined in § 44-18-7.1(g)(vii).

     (15)(16) The sale, storage, use or other consumption of medical marijuana as defined in §

21-28.6-3.

     (16)(17) The furnishing of services in this state as defined in § 44-18-7.3.

     44-18-7.1. Additional Definitions.

     (a) "Agreement" means the streamlined sales and use tax agreement.

     (b) "Alcoholic beverages" means beverages that are suitable for human consumption and

contain one-half of one percent (.5%) or more of alcohol by volume.

     (c) "Bundled transaction" is the retail sale of two or more products, except real property

and services to real property, where (1) The products are otherwise distinct and identifiable, and

(2) The products are sold for one non-itemized price. A "bundled transaction" does not include the

sale of any products in which the "sales price" varies, or is negotiable, based on the selection by

the purchaser of the products included in the transaction.

     (i) "Distinct and identifiable products" does not include:

     (A) Packaging – such as containers, boxes, sacks, bags, and bottles – or other materials –

such as wrapping, labels, tags, and instruction guides – that accompany the "retail sale" of the

products and are incidental or immaterial to the "retail sale" thereof. Examples of packaging that

are incidental or immaterial include grocery sacks, shoeboxes, dry cleaning garment bags, and

express delivery envelopes and boxes.

     (B) A product provided free of charge with the required purchase of another product. A

product is "provided free of charge" if the "sales price" of the product purchased does not vary

depending on the inclusion of the products "provided free of charge."

     (C) Items included in the member state's definition of "sales price," pursuant to appendix

C of the agreement.

     (ii) The term "one non-itemized price" does not include a price that is separately identified

by product on binding sales or other supporting sales-related documentation made available to the

customer in paper or electronic form including, but not limited to, an invoice, bill of sale, receipt,

contract, service agreement, lease agreement, periodic notice of rates and services, rate card, or

price list.

     (iii) A transaction that otherwise meets the definition of a "bundled transaction" as defined

above, is not a "bundled transaction" if it is:

     (A) The "retail sale" of tangible personal property and a service where the tangible personal

property is essential to the use of the service, and is provided exclusively in connection with the

service, and the true object of the transaction is the service; or

     (B) The "retail sale" of services where one service is provided that is essential to the use or

receipt of a second service and the first service is provided exclusively in connection with the

second service and the true object of the transaction is the second service; or

     (C) A transaction that includes taxable products and nontaxable products and the "purchase

price" or "sales price" of the taxable products is de minimis.

     1. De minimis means the seller's "purchase price" or "sales price" of the taxable products

is ten percent (10%) or less of the total "purchase price" or "sales price" of the bundled products.

     2. Sellers shall use either the "purchase price" or the "sales price" of the products to

determine if the taxable products are de minimis. Sellers may not use a combination of the

"purchase price" and "sales price" of the products to determine if the taxable products are de

minimis.

     3. Sellers shall use the full term of a service contract to determine if the taxable products

are de minimis; or

     (D) The "retail sale" of exempt tangible personal property and taxable tangible personal

property where:

     1. The transaction includes "food and food ingredients", "drugs", "durable medical

equipment", "mobility enhancing equipment", "over-the-counter drugs", "prosthetic devices" (all

as defined in this section) or medical supplies; and

     2. Where the seller's "purchase price" or "sales price" of the taxable tangible personal

property is fifty percent (50%) or less of the total "purchase price" or "sales price" of the bundled

tangible personal property. Sellers may not use a combination of the "purchase price" and "sales

price" of the tangible personal property when making the fifty percent (50%) determination for a

transaction.

     (d) "Certified automated system (CAS)" means software certified under the agreement to

calculate the tax imposed by each jurisdiction on a transaction, determine the amount of tax to remit

to the appropriate state, and maintain a record of the transaction.

     (e) "Certified service provider (CSP)" means an agent certified under the agreement to

perform all the seller's sales and use tax functions, other than the seller's obligation to remit tax on

its own purchases.

     (f) Clothing and Related Items

     (i) "Clothing" means all human wearing apparel suitable for general use.

     (ii) "Clothing accessories or equipment" means incidental items worn on the person or in

conjunction with "clothing." "Clothing accessories or equipment" does not include "clothing",

"sport or recreational equipment", or "protective equipment."

     (iii) "Protective equipment" means items for human wear and designed as protection of the

wearer against injury or disease or as protections against damage or injury of other persons or

property but not suitable for general use. "Protective equipment" does not include "clothing",

"clothing accessories or equipment", and "sport or recreational equipment."

     (iv) "Sport or recreational equipment" means items designed for human use and worn in

conjunction with an athletic or recreational activity that are not suitable for general use. "Sport or

recreational equipment" does not include "clothing", "clothing accessories or equipment", and

"protective equipment."

     (g) Computer and Related Items

     (i) "Computer" means an electronic device that accepts information in digital or similar

form and manipulates it for a result based on a sequence of instructions.

     (ii) "Computer software" means a set of coded instructions designed to cause a "computer"

or automatic data processing equipment to perform a task.

     (iii) "Delivered electronically" means delivered to the purchaser by means other than

tangible storage media.

     (iv) "Electronic" means relating to technology having electrical, digital, magnetic, wireless,

optical, electromagnetic, or similar capabilities.

     (v) "Load and leave" means delivery to the purchaser by use of a tangible storage media

where the tangible storage media is not physically transferred to the purchaser.

     (vi) "Prewritten computer software" means "computer software," including prewritten

upgrades, that is not designed and developed by the author or other creator to the specifications of

a specific purchaser. The combining of two (2) or more "prewritten computer software" programs

or prewritten portions thereof does not cause the combination to be other than "prewritten computer

software." "Prewritten computer software" includes software designed and developed by the author

or other creator to the specifications of a specific purchaser when it is sold to a person other than

the specific purchaser. Where a person modifies or enhances "computer software" of which the

person is not the author or creator, the person shall be deemed to be the author or creator only of

such person's modifications or enhancements. "Prewritten computer software" or a prewritten

portion thereof that is modified or enhanced to any degree, where such modification or

enhancement is designed and developed to the specifications of a specific purchaser, remains

"prewritten computer software"; provided, however, that where there is a reasonable, separately

stated charge or an invoice or other statement of the price given to the purchaser for such

modification or enhancement, such modification or enhancement shall not constitute "prewritten

computer software."

     (vii) "Vendor-hosted prewritten computer software" means prewritten computer software

that is accessed through the Internet and/or a vendor-hosted server regardless of whether the access

is permanent or temporary and regardless of whether any downloading occurs.

     (h) Drugs and Related Items

     (i) "Drug" means a compound, substance, or preparation, and any component of a

compound, substance, or preparation, other than "food and food ingredients," "dietary

supplements" or "alcoholic beverages":

     (A) Recognized in the official United States Pharmacopoeia, official Homeopathic

Pharmacopoeia of the United States, or official National Formulary, and supplement to any of them;

or

     (B) Intended for use in the diagnosis, cure, mitigation, treatment, or prevention of disease;

or

     (C) Intended to affect the structure or any function of the body.

     "Drug" shall also include insulin and medical oxygen whether or not sold on prescription.

     (ii) "Over-the-counter drug" means a drug that contains a label that identifies the product

as a drug as required by 21 C.F.R. § 201.66. The "over-the-counter drug" label includes:

     (A) A "Drug Facts" panel; or

     (B) A statement of the "active ingredient(s)" with a list of those ingredients contained in

the compound, substance, or preparation.

     "Over-the-counter drug" shall not include "grooming and hygiene products."

     (iii) "Grooming and hygiene products" are soaps and cleaning solutions, shampoo,

toothpaste, mouthwash, antiperspirants, and suntan lotions and screens, regardless of whether the

items meet the definition of "over-the-counter drugs."

     (iv) "Prescription" means an order, formula, or recipe issued in any form of oral, written,

electronic, or other means of transmission by a duly licensed practitioner authorized by the laws of

the member state.

     (i) "Delivery charges" means charges by the seller of personal property or services for

preparation and delivery to a location designated by the purchaser of personal property or services

including, but not limited to: transportation, shipping, postage, handling, crating, and packing.

     "Delivery charges" shall not include the charges for delivery of "direct mail" if the charges

are separately stated on an invoice or similar billing document given to the purchaser.

     (j) "Direct mail" means printed material delivered or distributed by United States mail or

other delivery service to a mass audience or to addressees on a mailing list provided by the

purchaser or at the direction of the purchaser when the cost of the items are not billed directly to

the recipients. "Direct mail" includes tangible personal property supplied directly or indirectly by

the purchaser to the direct mail seller for inclusion in the package containing the printed material.

"Direct mail" does not include multiple items of printed material delivered to a single address.

     (k) "Durable medical equipment" means equipment including repair and replacement parts

for same which:

     (i) Can withstand repeated use; and

     (ii) Is primarily and customarily used to serve a medical purpose; and

     (iii) Generally is not useful to a person in the absence of illness or injury; and

     (iv) Is not worn in or on the body.

     Durable medical equipment does not include mobility enhancing equipment.

     (l) Food and Related Items

     (i) "Food and food ingredients" means substances, whether in liquid, concentrated, solid,

frozen, dried, or dehydrated form, that are sold for ingestion or chewing by humans and are

consumed for their taste or nutritional value and seeds and plants used to grow food and food

ingredients. "Food and food ingredients" does not include "alcoholic beverages", "tobacco",

"candy", "dietary supplements", and "soft drinks.", or "marijuana seeds or plants."

     (ii) "Prepared food" means:

     (A) Food sold in a heated state or heated by the seller;

     (B) Two (2) or more food ingredients mixed or combined by the seller for sale as a single

item; or

     (C) Food sold with eating utensils provided by the seller, including: plates, knives, forks,

spoons, glasses, cups, napkins, or straws. A plate does not include a container or packaging used to

transport the food.

     "Prepared food" in (B) does not include food that is only cut, repackaged, or pasteurized

by the seller, and eggs, fish, meat, poultry, and foods containing these raw animal foods requiring

cooking by the consumer as recommended by the Food and Drug Administration in chapter 3, part

401.11 of its Food Code so as to prevent food borne illnesses.

     (iii) "Candy" means a preparation of sugar, honey, or other natural or artificial sweeteners

in combination with chocolate, fruits, nuts, or other ingredients or flavorings in the form of bars,

drops, or pieces. "Candy" shall not include any preparation containing flour and shall require no

refrigeration.

     (iv) "Soft drinks" means non-alcoholic beverages that contain natural or artificial

sweeteners. "Soft drinks" do not include beverages that contain milk or milk products, soy, rice, or

similar milk substitutes, or greater than fifty percent (50%) of vegetable or fruit juice by volume.

     (v) "Dietary supplement" means any product, other than "tobacco", intended to supplement

the diet that:

     (A) Contains one or more of the following dietary ingredients:

     1. A vitamin;

     2. A mineral;

     3. An herb or other botanical;

     4. An amino acid;

     5. A dietary substance for use by humans to supplement the diet by increasing the total

dietary intake; or

     6. A concentrate, metabolite, constituent, extract, or combination of any ingredient

described above; and

     (B) Is intended for ingestion in tablet, capsule, powder, softgel, gelcap, or liquid form, or

if not intended for ingestion in such a form, is not represented as conventional food and is not

represented for use as a sole item of a meal or of the diet; and

     (C) Is required to be labeled as a dietary supplement, identifiable by the "supplemental

facts" box found on the label and as required pursuant to 21 C.F.R. § 101.36.

     (m) "Food sold through vending machines" means food dispensed from a machine or other

mechanical device that accepts payment.

     (n) "Hotel" means every building or other structure kept, used, maintained, advertised as,

or held out to the public to be a place where living quarters are supplied for pay to transient or

permanent guests and tenants and includes a motel.

     (i) "Living quarters" means sleeping rooms, sleeping or housekeeping accommodations, or

any other room or accommodation in any part of the hotel, rooming house, or tourist camp that is

available for or rented out for hire in the lodging of guests.

     (ii) "Rooming house" means every house, boat, vehicle, motor court, or other structure

kept, used, maintained, advertised, or held out to the public to be a place where living quarters are

supplied for pay to transient or permanent guests or tenants, whether in one or adjoining buildings.

     (iii) "Tourist camp" means a place where tents or tent houses, or camp cottages, or cabins

or other structures are located and offered to the public or any segment thereof for human

habitation.

     (o) "Lease or rental" means any transfer of possession or control of tangible personal

property for a fixed or indeterminate term for consideration. A lease or rental may include future

options to purchase or extend. Lease or rental does not include:

     (i) A transfer of possession or control of property under a security agreement or deferred

payment plan that requires the transfer of title upon completion of the required payments;

     (ii) A transfer of possession or control of property under an agreement that requires the

transfer of title upon completion of required payments and payment of an option price does not

exceed the greater of one hundred dollars ($100) or one percent of the total required payments; or

     (iii) Providing tangible personal property along with an operator for a fixed or

indeterminate period of time. A condition of this exclusion is that the operator is necessary for the

equipment to perform as designed. For the purpose of this subsection, an operator must do more

than maintain, inspect, or set-up the tangible personal property.

     (iv) Lease or rental does include agreements covering motor vehicles and trailers where the

amount of consideration may be increased or decreased by reference to the amount realized upon

sale or disposition of the property as defined in 26 U.S.C. § 7701(h)(1).

     (v) This definition shall be used for sales and use tax purposes regardless if a transaction

is characterized as a lease or rental under generally accepted accounting principles, the Internal

Revenue Code, the Uniform Commercial Code, or other provisions of federal, state, or local law.

     (vi) This definition will be applied only prospectively from the date of adoption and will

have no retroactive impact on existing leases or rentals. This definition shall neither impact any

existing sale-leaseback exemption or exclusions that a state may have, nor preclude a state from

adopting a sale-leaseback exemption or exclusion after the effective date of the agreement.

     (p) "Mobility enhancing equipment" means equipment, including repair and replacement

parts to same, that:

     (i) Is primarily and customarily used to provide or increase the ability to move from one

place to another and that is appropriate for use either in a home or a motor vehicle; and

     (ii) Is not generally used by persons with normal mobility; and

     (iii) Does not include any motor vehicle or equipment on a motor vehicle normally

provided by a motor vehicle manufacturer.

     Mobility enhancing equipment does not include durable medical equipment.

     (q) "Model 1 Seller" means a seller that has selected a CSP as its agent to perform all the

seller's sales and use tax functions, other than the seller's obligation to remit tax on its own

purchases.

     (r) "Model 2 Seller" means a seller that has selected a CAS to perform part of its sales and

use tax functions, but retains responsibility for remitting the tax.

     (s) "Model 3 Seller" means a seller that has sales in at least five member states, has total

annual sales revenue of at least five hundred million dollars ($500,000,000), has a proprietary

system that calculates the amount of tax due each jurisdiction, and has entered into a performance

agreement with the member states that establishes a tax performance standard for the seller. As

used in this definition, a seller includes an affiliated group of sellers using the same proprietary

system.

     (t) "Prosthetic device" means a replacement, corrective, or supportive device including

repair and replacement parts for same worn on or in the body to:

     (i) Artificially replace a missing portion of the body;

     (ii) Prevent or correct physical deformity or malfunction; or

     (iii) Support a weak or deformed portion of the body.

     (u) "Purchaser" means a person to whom a sale of personal property is made or to whom a

service is furnished.

     (v) "Purchase price" applies to the measure subject to use tax and has the same meaning as

sales price.

     (w) "Seller" means a person making sales, leases, or rentals of personal property or

services.

     (x) "State" means any state of the United States and the District of Columbia.

     (y) "Telecommunications" tax base/exemption terms

     (i) Telecommunication terms shall be defined as follows:

     (A) "Ancillary services" means services that are associated with or incidental to the

provision of "telecommunications services", including, but not limited to, "detailed

telecommunications billing", "directory assistance", "vertical service", and "voice mail services".

     (B) "Conference bridging service" means an "ancillary service" that links two (2) or more

participants of an audio or video conference call and may include the provision of a telephone

number. "Conference bridging service" does not include the "telecommunications services" used

to reach the conference bridge.

     (C) "Detailed telecommunications billing service" means an "ancillary service" of

separately stating information pertaining to individual calls on a customer's billing statement.

     (D) "Directory assistance" means an "ancillary service" of providing telephone number

information, and/or address information.

     (E) "Vertical service" means an "ancillary service" that is offered in connection with one

or more "telecommunications services", which offers advanced calling features that allow

customers to identify callers and to manage multiple calls and call connections, including

"conference bridging services".

     (F) "Voice mail service" means an "ancillary service" that enables the customer to store,

send, or receive recorded messages. "Voice mail service" does not include any "vertical services"

that the customer may be required to have in order to utilize the "voice mail service".

     (G) "Telecommunications service" means the electronic transmission, conveyance, or

routing of voice, data, audio, video, or any other information or signals to a point, or between or

among points. The term "telecommunications service" includes such transmission, conveyance, or

routing in which computer processing applications are used to act on the form, code, or protocol of

the content for purposes of transmission, conveyance, or routing without regard to whether such

service is referred to as voice over internet protocol services or is classified by the Federal

Communications Commission as enhanced or value added. "Telecommunications service" does not

include:

     (1) Data processing and information services that allow data to be generated, acquired,

stored, processed, or retrieved and delivered by an electronic transmission to a purchaser where

such purchaser's primary purpose for the underlying transaction is the processed data or

information;

     (2) Installation or maintenance of wiring or equipment on a customer's premises;

     (3) Tangible personal property;

     (4) Advertising, including, but not limited to, directory advertising;

     (5) Billing and collection services provided to third parties;

     (6) Internet access service;

     (7) Radio and television audio and video programming services, regardless of the medium,

including the furnishing of transmission, conveyance, and routing of such services by the

programming service provider. Radio and television audio and video programming services shall

include, but not be limited to, cable service as defined in 47 U.S.C. § 522(6) and audio and video

programming services delivered by commercial mobile radio service providers as defined in 47

C.F.R. § 20.3;

     (8) "Ancillary services"; or

     (9) Digital products "delivered electronically", including, but not limited to: software,

music, video, reading materials or ring tones.

     (H) "800 service" means a "telecommunications service" that allows a caller to dial a toll-

free number without incurring a charge for the call. The service is typically marketed under the

name "800", "855", "866", "877", and "888" toll-free calling, and any subsequent numbers

designated by the Federal Communications Commission.

     (I) "900 service" means an inbound toll "telecommunications service" purchased by a

subscriber that allows the subscriber's customers to call in to the subscriber's prerecorded

announcement or live service. "900 service" does not include the charge for: collection services

provided by the seller of the "telecommunications services" to the subscriber, or service or product

sold by the subscriber to the subscriber's customer. The service is typically marketed under the

name "900 service," and any subsequent numbers designated by the Federal Communications

Commission.

     (J) "Fixed wireless service" means a "telecommunications service" that provides radio

communication between fixed points.

     (K) "Mobile wireless service" means a "telecommunications service" that is transmitted,

conveyed, or routed regardless of the technology used, whereby the origination and/or termination

points of the transmission, conveyance, or routing are not fixed, including, by way of example only,

"telecommunications services" that are provided by a commercial mobile radio service provider.

     (L) "Paging service" means a "telecommunications service" that provides transmission of

coded radio signals for the purpose of activating specific pagers; such transmissions may include

messages and/or sounds.

     (M) "Prepaid calling service" means the right to access exclusively "telecommunications

services", which must be paid for in advance and that enables the origination of calls using an

access number or authorization code, whether manually or electronically dialed, and that is sold in

predetermined units or dollars of which the number declines with use in a known amount.

     (N) "Prepaid wireless calling service" means a "telecommunications service" that provides

the right to utilize "mobile wireless service", as well as other non-telecommunications services,

including the download of digital products "delivered electronically", content and "ancillary

services" which must be paid for in advance that is sold in predetermined units of dollars of which

the number declines with use in a known amount.

     (O) "Private communications service" means a telecommunications service that entitles the

customer to exclusive or priority use of a communications channel or group of channels between

or among termination points, regardless of the manner in which such channel or channels are

connected, and includes switching capacity, extension lines, stations, and any other associated

services that are provided in connection with the use of such channel or channels.

     (P) "Value-added non-voice data service" means a service that otherwise meets the

definition of "telecommunications services" in which computer processing applications are used to

act on the form, content, code, or protocol of the information or data primarily for a purpose other

than transmission, conveyance, or routing.

     (ii) "Modifiers of Sales Tax Base/Exemption Terms" – the following terms can be used to

further delineate the type of "telecommunications service" to be taxed or exempted. The terms

would be used with the broader terms and subcategories delineated above.

     (A) "Coin-operated telephone service" means a "telecommunications service" paid for by

inserting money into a telephone accepting direct deposits of money to operate.

     (B) "International" means a "telecommunications service" that originates or terminates in

the United States and terminates or originates outside the United States, respectively. United States

includes the District of Columbia or a U.S. territory or possession.

     (C) "Interstate" means a "telecommunications service" that originates in one United States

state, or a United States territory or possession, and terminates in a different United States state or

a United States territory or possession.

     (D) "Intrastate" means a "telecommunications service" that originates in one United States

state or a United States territory or possession, and terminates in the same United States state or a

United States territory or possession.

     (E) "Pay telephone service" means a "telecommunications service" provided through any

pay telephone.

     (F) "Residential telecommunications service" means a "telecommunications service" or

"ancillary services" provided to an individual for personal use at a residential address, including an

individual dwelling unit such as an apartment. In the case of institutions where individuals reside,

such as schools or nursing homes, "telecommunications service" is considered residential if it is

provided to and paid for by an individual resident rather than the institution.

     The terms "ancillary services" and "telecommunications service" are defined as a broad

range of services. The terms "ancillary services" and "telecommunications service" are broader

than the sum of the subcategories. Definitions of subcategories of "ancillary services" and

"telecommunications service" can be used by a member state alone or in combination with other

subcategories to define a narrower tax base than the definitions of "ancillary services" and

"telecommunications service" would imply. The subcategories can also be used by a member state

to provide exemptions for certain subcategories of the more broadly defined terms.

     A member state that specifically imposes tax on, or exempts from tax, local telephone or

local telecommunications service may define "local service" in any manner in accordance with §

44-18.1-28, except as limited by other sections of this Agreement.

     (z) "Tobacco" means cigarettes, cigars, chewing, or pipe tobacco, or any other item that

contains tobacco.

     44-18-7.3. Services defined.

     (a) "Services" means all activities engaged in for other persons for a fee, retainer,

commission, or other monetary charge, which activities involve the performance of a service in this

state as distinguished from selling property.

     (b) The following businesses and services performed in this state, along with the applicable

2007 North American Industrial Classification System (NAICS) codes, are included in the

definition of services:

     (1) Taxicab and limousine services including but not limited to:

     (i) Taxicab services including taxi dispatchers (485310); and

     (ii) Limousine services (485320).

     (2) Other road transportation service including but not limited to:

     (i) Charter bus service (485510);

     (ii) "Transportation network companies" (TNC) defined as an entity that uses a digital

network to connect transportation network company riders to transportation network operators who

provide prearranged rides. Any TNC operating in this state is a retailer as provided in § 44-18-15

and is required to file a business application and registration form and obtain a permit to make sales

at retail with the tax administrator, to charge, collect, and remit Rhode Island sales and use tax; and

     (iii) All other transit and ground passenger transportation (485999).

     (3) Pet care services (812910) except veterinary and testing laboratories services.

     (4)(i) "Room reseller" or "reseller" means any person, except a tour operator as defined in

§ 42-63.1-2, having any right, permission, license, or other authority from or through a hotel as

defined in § 42-63.1-2, to reserve, or arrange the transfer of occupancy of, accommodations the

reservation or transfer of which is subject to this chapter, such that the occupant pays all or a portion

of the rental and other fees to the room reseller or reseller, room reseller or reseller shall include,

but not be limited to, sellers of travel packages as defined in this section. Notwithstanding the

provisions of any other law, where said reservation or transfer of occupancy is done using a room

reseller or reseller, the application of the sales and use tax under §§ 44-18-18 and 44-18-20, and

the hotel tax under § 44-18-36.1 shall be as follows: The room reseller or reseller is required to

register with, and shall collect and pay to, the tax administrator the sales and use and hotel taxes,

with said taxes being calculated upon the amount of rental and other fees paid by the occupant to

the room reseller or reseller, less the amount of any rental and other fees paid by the room reseller

or reseller to the hotel. The hotel shall collect and pay to the tax administrator said taxes upon the

amount of rental and other fees paid to the hotel by the room reseller or reseller and/or the occupant.

No assessment shall be made by the tax administrator against a hotel because of an incorrect

remittance of the taxes under this chapter by a room reseller or reseller. No assessment shall be

made by the tax administrator against a room reseller or reseller because of an incorrect remittance

of the taxes under this chapter by a hotel. If the hotel has paid the taxes imposed under this chapter,

the occupant and/or room reseller or reseller, as applicable, shall reimburse the hotel for said taxes.

If the room reseller or reseller has paid said taxes, the occupant shall reimburse the room reseller

or reseller for said taxes. Each hotel and room reseller or reseller shall add and collect, from the

occupant or the room reseller or the reseller, the full amount of the taxes imposed on the rental and

other fees. When added to the rental and other fees, the taxes shall be a debt owed by the occupant