Chapter 033
2003 -- S 1011 SUBSTITUTE A
Enacted 05/02/03
A N A C T
ENABLING
THE RHODE ISLAND LOTTERY COMMISSION TO ENTER INTO A
MASTER
CONTRACT WITH GTECH
Introduced
By: Senators Irons, J Montalbano, Algiere, Ruggerio, and Celona
Date
Introduced: April 10, 2003
It
is enacted by the General Assembly as follows:
SECTION
1. Purpose. The purpose of this act is to induce GTECH Corporation to
construct,
develop and maintain its new global corporate headquarters facility in the Capital
Center
District of the City of Providence and to expand its manufacturing operations
in the Town
of
West Greenwich. This act, being necessary for the welfare of the state and its
inhabitants, shall
be
liberally construed to effectuate its purposes.
SECTION
2. Authorized procurement of Master Contract. Notwithstanding any
provisions
of the general laws or regulations adopted thereunder to the contrary,
including, but
not
limited to, the provisions of Chapter 2 of Title 37, and Chapter 61 of Title
42, the Rhode
Island
Lottery Commission (“Commission”) is hereby authorized and empowered to enter
into a
Master
Contract (“Master Contract”) with GTECH Corporation, a Delaware Corporation
(“GTECH”),
which would have a term of twenty (20) years from its effective date for the
following
purposes:
(a)
to amend the terms and conditions of the Video Lottery Central Computer System
Agreement
between GTECH and the Commission, dated as of December 20, 2001;
(b)
to amend the terms and conditions of the On-Line Gaming Agreement between
GTECH
and the Commission, dated January 29, 1997 and as amended thereafter;
(c)
to amend the terms and conditions of the Video Lottery Terminal Technology
Provider
License Agreement dated September 28, 2000; and
(d)
to allow GTECH to purchase from the Commission for a payment of $12,500,000 the
right
to be exclusive provider to the Commission of information technology hardware,
software
and
related services pertaining to:
(i)
the design, development, implementation and/or operation of Video Lottery
Central
Communications
Systems;
(ii)
the design, development, implementation, operation, and/or sales of On-Line
Games;
and
(iii)
the processing of On-Line Game Wagers and Video Lottery Wagers. For purposes of
determining
compensation, “NTI” means “Net Terminal Income.” The Commission is hereby
empowered
to fix in the Master Contract the annual compensation to be paid to GTECH
provided
such
annual compensation does not exceed the following percentage formulae:
Lottery
Percentage
(Calculated
Annually)
Sales to $275
million 5.00%
Sales from
$275-$400 million 1.00%
Sales above $400
million 5.00%
VLT Central
System
(Calculated
Annually)
NTI up to $500
million 2.50%
NTI from $500
million-$1 billion 1.00%
NTI above $1
billion 2.50%
VLT
Machines
(Average daily
income calculated on weekly basis)
NTI
up to $325 7.00%
NTI from $325-$500
1.00%
NTI above $500 7.00%
Under
the terms of the Master Contract authorized under this act, GTECH agrees that
in
consideration
of a twenty (20) year agreement with the Commission, GTECH shall undertake,
among
others, the following obligations:
(a)
GTECH (or a GTECH business affiliate) will develop and construct a new office
building
of at least 210,000 square feet to be constructed in the Capital Center
District in the City
of
Providence and GTECH will relocate and maintain its world corporate
headquarters in that
facility
for the twenty (20) year term;
(b)
GTECH will expand its manufacturing operations in the town of West Greenwich;
(c)
GTECH (or a GTECH business affiliate) will invest in the aggregate on or before
December
31, 2008, at least $100,000,000 in the state (“Investment Requirement”), in
connection
with
acquiring interests in land, building development projects or improvements to
real property
or
facilities and performing its obligations under the Master Contract, including,
without
limitation,
the provision of goods in connection with its business operations in Rhode
Island
(“Investment
Requirement Assets”); and
(d)
GTECH will employ within the state during each calendar year, beginning in
calendar
year
2006, during the term of the Master Contract with the Commission, at least
1,000 full-time
active
employees at wage levels not less than those defined in Rhode Island general
laws section
42-64.5-2(7)
(“Employment Requirement”).
The
Master Contract authorized under this act shall contain provisions which
provide that
the
Commission may terminate the Master Contract if GTECH fails to fulfill the
Investment
Requirement
on or before December 31, 2008, or if GTECH does not meet the employment
requirement
in any calendar year after 2005.
As
used in this section, the term “GTECH business affiliate” shall mean any
corporation,
trust,
partnership, joint venture or any other form of business entity which (acting
jointly with
GTECH
or at the direction of GTECH) owns, leases or finances Investment Requirement
Assets
which
are used by GTECH in its business operations in the state.
SECTION
3. Inconsistent provisions. Insofar as the provisions of this act are
inconsistent
with
the provisions of any other general or special law, the provisions of this act
shall be
controlling
and the limitations set forth in section 42-61.2-1(1) shall not apply to the
Master
Contract.
SECTION
4. Agreement of the state. The state does hereby pledge and agree with
GTECH
under this act that the state will not limit, alter, diminish, or adversely
impact the rights
or
economic benefits which vest in GTECH under the terms of the Master Contract
authorized
hereby,
unless authorized by this act.
SECTION
5. Effective date. This act shall take effect upon passage.
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LC03058/SUB
A
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