Chapter 016

2010 -- H 8157 AS AMENDED

Enacted 05/27/10

 

A N A C T

RELATING TO AUTHORIZING THE FIRST AMENDMENTS TO THE MASTER VIDEO LOTTERY TERMINAL CONTRACTS

          

     Introduced By: Representatives Costantino, Carter, Melo, San Bento, and Jackson

     Date Introduced: May 19, 2010

 

It is enacted by the General Assembly as follows:

 

     PART A – Authorized Amendment to UTGR Master Contract

 

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

located in the Town of Lincoln is an important source of revenue for the State of Rhode Island.

The purpose of the following sections related to UTGR is to help effectuate a plan for

reorganization, pursuant to the United States Bankruptcy Code, for UTGR, and thereby

strengthen the commercial health of the Twin River facility and protect for the people of Rhode

Island the public's share of revenues generated at the Twin River facility. It is the intent of the

general assembly that this act, being necessary for the welfare of the State and its citizens, shall

be liberally construed so as to effectuate its purposes, including without limitation, the state's

attempt to minimize certain commercial risks faced by UTGR when it operates the facility and

the business conducted thereon.

 

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

following meanings, and to the extent that such terms are defined in Chapters 322 and 323 of the

Public Laws of 2005, those terms are herby amended as follows, provided that such terms, as they

may be amended hereby, only apply to UTGR and Twin River and shall have no effect with

regard to NGJA or Newport Grand.

     (a) "Control" of an entity means the power of a person (or persons acting in concert) to

cause the entity to be managed in accordance with the wishes of that person (or persons acting in

concert) whether by means of being the beneficial owner of more than fifty percent (50%) of the

issued share capital or voting rights in that entity, or having the right to appoint or remove a

majority of the directors or otherwise control the votes at board meetings of that entity.

     (b) "Director" means the director of the division of lotteries.

     (c) "Division" means the division of lotteries within the department of revenue and/or any

successor as party to the UTGR Master Contract.

     (d) "Division Percentage" means for any Marketing Year, the Division's percentage of net

terminal income as set forth in section 42-61.2-7.

     (e) "First Amendment" means that certain first amendment to the UTGR Master Contract

authorized herein, which first amendment is to be entered into by and between the Division, the

department of transportation, and UTGR.

     (f) "Lincoln Park" and "Twin River" each means the gaming and entertainment facility

located at 100 Twin River Road, Lincoln, Rhode Island.

     (g) "Marketing Program" means that Marketing Program authorized in section 4(a)(iii) of

this act, which program shall include marketing expenditures as defined by the Division.

     (h) "Marketing Year" means each fiscal year of the state or a portion thereof between the

effective date of the First Amendment and the termination date of the UTGR Master Contract.

     (i) "Master Contract" means with respect to UTGR, the UTGR Master Contract.

     (j) "Plan" means that plan of reorganization filed pursuant to chapter 11 of title 11 of the

United States Code (11 U.S.C. sections 101-1532) and to be confirmed by order of the United

States Bankruptcy Court for the District of Rhode Island in those cased jointly administered under

case number 09-12418 (ANV).

     (k) "Promotional Points Program" means that promotional points program authorized in

section 4(a)(ii) of this act.

     (l) "State" means the State of Rhode Island.

     (m) "Term" means with respect to UTGR, the UTGR Term.

     (n) "UTGR" means UTGR, Inc., a Delaware corporation and including such entity, as

reorganized under the Plan, and any UTGR Business Affiliate. References herein to "UTGR"

shall include its permitted successors and assigns under the UTGR Master Contract, if licensed by

the Rhode Island department of business regulation.

     (o) "UTGR Business Affiliate" means any corporation, trust, partnership, joint venture

or any other form of business entity that Controls, is Controlled by or is under common Control

with, UTGR.

     (p) "UTGR Master Contract" means that certain master video lottery terminal contract

made as of July 18, 2005 by and between the Division, department of transportation, and UTGR,

as such UTGR Master Contract is amended and extended as authorized herein and/or as such

UTGR Master Contract may be assigned as permitted herein.

     (q) "UTGR Term" means the term of the UTGR Master Contract, which term commences

on the effective date of the UTGR Master Contract and continues through and including the fifth

(5th) anniversary of such effective date; provided that UTGR shall have two (2) successive five

(5) year extension options consistent with the terms of the UTGR Master Contract.

 

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

and definitions of chapters 322 and 323 of the public laws of 2005 are hereby incorporated herein

by reference and shall remain in full force and effect.

 

     SECTION 4. Authorized Procurement of First Amendment to the Master Video Lottery

Terminal Contract.

     (a) Notwithstanding any provisions of the general laws or regulations adopted thereunder

to the contrary, including, but not limited to, the provisions of: Chapters 322 and 323 of the

public laws of 2005; chapter 2 of title 37 of the general laws; chapter 61 of title 42 of the general

laws; and chapter 61.2 of title 42 of the general laws, the Division is hereby expressly authorized

and empowered, and with respect to section 4(a)(vi) of this act the department of transportation is

also hereby expressly authorized and empowered, to enter into with UTGR a First Amendment to

the UTGR Master Contract, to be become effective upon the effective date of the Plan for the

following purposes and containing the following terms and conditions, all of which shall be set

forth in more particular detail in the First Amendment:

     (i) to provide for a UTGR Term commencing on the effective date of the UTGR Master

Contract and continuing through and including the fifth (5th) anniversary of such effective date;

provided that UTGR shall have two (2) successive five (5) years extension options with the First

Extension Term, as defined in the UTGR Master Contract, commencing on July 18, 2010 and the

Second Extension Term, as defined in the UTGR Master Contract, commencing on July 18, 2015.

Except as otherwise provided herein in section 4(a)(vi), the exercise of the option to extend said

Master Contract shall be subject to the terms and conditions of section 2.5 of the UTGR Master

Contract; provided however, section 2.5B of the UTGR Master Contract shall be amended such

that with respect to UTGR's exercise of its option to extend for the Second Extension Term,

UTGR shall be required to certify to the Division that (i) there are 650 full-time equivalent

employees at the Twin River facility on the date of the exercise of the option for the Second

Extension Term; and (ii) for the one-year period preceding the date said Second Extension Term

option is exercised, there had been 650 full-time equivalent employees on average, as the term

full-time equivalent employee is defined in section 2.5B of the UTGR Master Contract and as

confirmed by the Rhode Island department of labor and training.

     (ii) to provide for a Promotional Points Program at Twin River, pursuant to the terms and

conditions established from time to time by the Division during the UTGR Term, such terms to

include, but not limited to, a State fiscal year audit of the Promotional Points Program, the cost of

which audit shall be borne by UTGR. The approved amount of the Promotional Points Program

shall not exceed four percent (4%) of the amount of UTGR's net terminal income of the prior

Marketing Year. Said promotional points are to be used by UTGR to provide promotional points

to customers and prospective customers of UTGR at Twin River. Nothing herein shall prohibit

UTGR, with prior approval from the Division, from spending additional funds on the Promotional

Points Program; provided, however, that said additional amounts shall not be funded in any part

by net terminal income.

     (iii) to provide for a Marketing Program for Twin River, commencing July 1, 2010,

which shall be monitored by the Division and pursuant to which, for each Marketing Year, to the

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

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

Percentage, provided, however, that (1) the total amount payable by the Division for each

Marketing Year pursuant to this section 4(a)(iii) shall be capped at an amount equal to the

Division Percentage multiplied by six million dollars ($6,000,000) and (2) the Division shall not

owe any amount pursuant to this section 4(a)(iii) in any given Marketing Year unless, pursuant to

subsection 42-61.2-7(a), the State has received net terminal income for such Marketing Year in an

amount equal to or exceeding the amount of net terminal income the State received for the State's

fiscal year 2009; provided, further, that in any partial Marketing Year, the total amount payable

by the Division shall be capped at an amount equal to six million dollars ($6,000,000) multiplied

by the Division Percentage, the product of which shall be further reduced by multiplying it by a

fraction, (A) the numerator of which is the number of days in any such partial Marketing Year

and (B) the denominator of which is 365. (It is anticipated that the only partial Marketing Years

shall occur between the effective date of the First Amendment and the last day of the fiscal year

of the State during which such effective date occurred and/or the first day of the fiscal year of the

State in which the termination of the UTGR Master Contract occurs and the termination date of

the UTGR Master Contract, as the case may be).

     (iv) to provide that the UTGR Master Contract shall not be assigned by either party

without the prior written consent of the other party and to further provide that so long as the

proposed assignee of UTGR or any of its permitted successors shall have been found to be

qualified by the Division to hold a video lottery terminal license, the Division shall not

unreasonably withhold or delay its consent to such proposed assignment. Proposed assignees

and/or successors shall be subject to licensure by the appropriate regulatory authorities.

     (v) to permit UTGR, at its discretion, to maintain and operate all video lottery games at

Twin River up to twenty-four (24) hours per day, up to seven (7) days per week, including

without limitation, federal and state recognized holidays.

     (vi) to irrevocably waive, release, acknowledge the fulfillment of or to deem fulfilled, as

applicable, as of the effective date of the Plan, (1) any obligation, covenant, condition or

commitment performed or to be performed by UTGR, BLB and/or any BLB affiliate under or in

connection with the UTGR Master Contract prior to and/or including the effective date of the

Plan; (2) any UTGR breach, default, noncompliance or delayed compliance on the part of UTGR,

BLB and/or any BLB affiliate of any representation, warranty, covenant, term or condition any

time prior to and/or including the effective date of the Plan, and (3) in connection with UTGR's

right to exercise the option for the First Extension Term only, any prior obligation, covenant,

condition, circumstance or commitment under section 2.5.B of the UTGR Master Contract;

specifically, said waiver, release, and acknowledgement of section 2.5B shall not relate to the

Second Extension Term.

     (b) The entry into by the Division, department of transportation, and UTGR of the First

Amendment is hereby authorized, approved, ratified and confirmed in all respects.

     (c) Any amounts related to the Marketing Program payable by the Division shall be paid

on a frequency agreed by the Division (but no less frequently than annually) out of that share of

net terminal income disbursed pursuant to subsection 42-61.2-7(a)(1) as an administrative

expense of the Division, after allocation of net terminal income pursuant to subsections 42-61.2-

7(a)(1), (2), (3), (4), (5), and (6).

 

     SECTION 5. Section 42-61.2-7 of the General Laws in Chapter 42-61.2 entitled "Video

Lottery Terminal" is hereby amended as follows:

 

     42-61.2-7. Division of revenue. [Effective June 30, 2009 and expires June 30, 2010.] -

(a) Notwithstanding the provisions of section 42-61-15, the allocation of net terminal

income derived from video lottery games is as follows:

      (1) For deposit in the general fund and to the state lottery division fund for

administrative purposes: Net terminal income not otherwise disbursed in accordance with

subdivisions (a)(2) -- (a)(7)(6) herein;

      (i) Except for the fiscal year ending June 30, 2008, nineteen one hundredths of one

percent (0.19%) up to a maximum of twenty million dollars ($20,000,000) shall be equally

allocated to the distressed communities as defined in section 45-13-12 provided that no eligible

community shall receive more than twenty-five percent (25%) of that community's currently

enacted municipal budget as its share under this specific subsection. Distributions made under

this specific subsection are supplemental to all other distributions made under any portion of

general laws section 45-13-12. For the fiscal year ending June 30, 2008 distributions by

community shall be identical to the distributions made in the fiscal year ending June 30, 2007 and

shall be made from general appropriations. For the fiscal year ending June 30, 2009, the total

state distribution shall be the same total amount distributed in the fiscal year ending June 30,

2008 and shall be made from general appropriations. For the fiscal year ending June 30, 2010, the

total state distribution shall be the same total amount distributed in the fiscal year ending June 30,

2009 and shall be made from general appropriations, provided however that $784,458 of the total

appropriation shall be distributed equally to each qualifying distressed community.

      (ii) Five one hundredths of one percent (0.05%) up to a maximum of five million dollars

($5,000,000) shall be appropriated to property tax relief to fully fund the provisions of section 44-

33-2.1. The maximum credit defined in subdivision 44-33-9(2) shall increase to the maximum

amount to the nearest five dollar ($5.00) increment within the allocation until a maximum credit

of five hundred dollars ($500) is obtained. In no event shall the exemption in any fiscal year be

less than the prior fiscal year.

      (iii) One and twenty-two one hundredths of one percent (1.22%) to fund section 44-34.1-

1, entitled "Motor Vehicle and Trailer Excise Tax Elimination Act of 1998", to the maximum

amount to the nearest two hundred fifty dollar ($250) increment within the allocation. In no event

shall the exemption in any fiscal year be less than the prior fiscal year.

      (iv) Except for the fiscal year ending June 30, 2008, ten one hundredths of one percent

(0.10%) to a maximum of ten million dollars ($10,000,000) for supplemental distribution to

communities not included in paragraph (a)(1)(i) above distributed proportionately on the basis of

general revenue sharing distributed for that fiscal year. For the fiscal year ending June 30, 2008

distributions by community shall be identical to the distributions made in the fiscal year ending

June 30, 2007 and shall be made from general appropriations. For the fiscal year ending June 30,

2009, no funding shall be disbursed. For the fiscal year ending June 30, 2010 and thereafter,

funding shall be determined by appropriation.

      (2) To the licensed video lottery retailer:

      (a) (i) Prior to the effective date of the NGJA Master Contract, Newport Jai Ali twenty-

six percent (26%) minus three hundred eighty four thousand nine hundred ninety-six dollars

($384,996);

      (ii) On and after the effective date of the NGJA Master Contract, to the licensed video

lottery retailer who is a party to the NGJA Master Contract, all sums due and payable under said

Master Contract minus three hundred eighty four thousand nine hundred ninety-six dollars

($384,996).

      (b) (i) Prior to the effective date of the UTGR Master Contract, to the present licensed

video lottery retailer at Lincoln Park which is not a party to the UTGR Master Contract, twenty-

eight and eighty-five one hundredths percent (28.85%) minus seven hundred sixty-seven

thousand six hundred eighty-seven dollars ($767,687);

      (ii) On and after the effective date of the UTGR Master Contract, to the licensed video

lottery retailer who is a party to the UTGR Master Contract, all sums due and payable under said

Master Contract minus seven hundred sixty-seven thousand six hundred eighty-seven dollars

($767,687).

      (3) (i) To the technology providers who are not a party to the GTECH Master Contract

as set forth and referenced in Public Law 2003, Chapter 32, seven percent (7%) of the net

terminal income of the provider's terminals;

      (ii) To contractors who are a party to the Master Contract as set forth and referenced in

Public Law 2003, Chapter 32, all sums due and payable under said Master Contract;

      (iii) Notwithstanding paragraphs (i) and (ii) above, there shall be subtracted

proportionately from the payments to technology providers the sum of six hundred twenty-eight

thousand seven hundred thirty-seven dollars ($628,737);

      (4) To the city of Newport one and one hundredth percent (1.01%) of net terminal

income of authorized machines at Newport Grand except that upon passage effective November

9, 2009, the allocation shall be one and two tenths percent (1.2%) of net terminal income of

authorized machines at Newport Grand for each week the facility operates video lottery games on

a twenty-four (24) hour basis for all eligible hours authorized and to the town of Lincoln one and

twenty-six hundredths percent (1.26%) of net terminal income of authorized machines at Lincoln

Park except that upon passage effective November 9, 2009, the allocation shall be one and forty-

five hundredths percent (1.45%) of net terminal income of authorized machines at Lincoln Park

for each week the facility operates video lottery games on a twenty-four (24) hour basis for all

eligible hours authorized;

      (5) To the Narragansett Indian Tribe, seventeen hundredths of one percent (0.17%) of net

terminal income of authorized machines at Lincoln Park up to a maximum of ten million dollars

($10,000,000) per year, which shall be paid to the Narragansett Indian Tribe for the account of a

Tribal Development Fund to be used for the purpose of encouraging and promoting: home

ownership and improvement, elderly housing, adult vocational training; health and social

services; childcare; natural resource protection; and economic development consistent with state

law. Provided, however, such distribution shall terminate upon the opening of any gaming facility

in which the Narragansett Indians are entitled to any payments or other incentives; and provided

further, any monies distributed hereunder shall not be used for, or spent on previously contracted

debts; and

      (6) Unclaimed prizes and credits shall remit to the general fund of the state;

      (7) Payments into the state's general fund specified in subdivisions (a)(1) and (a)(7)(6)

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

the close of the month except for the last month when payment shall be on the last business day.

     (b) Notwithstanding the above, the amounts payable by the Division to UTGR related to

the Marketing Program shall be paid on a frequency agreed by the Division, but no less

frequently than annually.

     (c) Notwithstanding anything in this chapter 61.2 of this title 42 to the contrary, the

Director is authorized to fund the Marketing Program as described above in regard to the First

Amendment to the UTGR Master Contract.

 

     42-61.2-7. Division of revenue. [Effective June 30, 2010] -- (a) Notwithstanding the

provisions of section 42-61-15, the allocation of net terminal income derived from video lottery

games is as follows:

      (1) For deposit in the general fund and to the state lottery division fund for

administrative purposes: Net terminal income not otherwise disbursed in accordance with

subdivisions (a)(2) -- (a)(7)(6) herein;

      (i) Except for the fiscal year ending June 30, 2008, nineteen one hundredths of one

percent (0.19%) up to a maximum of twenty million dollars ($20,000,000) shall be equally

allocated to the distressed communities as defined in section 45-13-12 provided that no eligible

community shall receive more than twenty-five percent (25%) of that community's currently

enacted municipal budget as its share under this specific subsection. Distributions made under

this specific subsection are supplemental to all other distributions made under any portion of

general laws section 45-13-12. For the fiscal year ending June 30, 2008 distributions by

community shall be identical to the distributions made in the fiscal year ending June 30, 2007 and

shall be made from general appropriations. For the fiscal year ending June 30, 2009, the total

state distribution shall be the same total amount distributed in the fiscal year ending June 30,

2008 and shall be made from general appropriations. For the fiscal year ending June 30, 2010, the

total state distribution shall be the same total amount distributed in the fiscal year ending June 30,

2009 and shall be made from general appropriations, provided however that $784,458 of the total

appropriation shall be distributed equally to each qualifying distressed community.

      (ii) Five one hundredths of one percent (0.05%) up to a maximum of five million dollars

($5,000,000) shall be appropriated to property tax relief to fully fund the provisions of section 44-

33-2.1. The maximum credit defined in subdivision 44-33-9(2) shall increase to the maximum

amount to the nearest five dollar ($5.00) increment within the allocation until a maximum credit

of five hundred dollars ($500) is obtained. In no event shall the exemption in any fiscal year be

less than the prior fiscal year.

      (iii) One and twenty-two one hundredths of one percent (1.22%) to fund section 44-34.1-

1, entitled "Motor Vehicle and Trailer Excise Tax Elimination Act of 1998", to the maximum

amount to the nearest two hundred fifty dollar ($250) increment within the allocation. In no event

shall the exemption in any fiscal year be less than the prior fiscal year.

      (iv) Except for the fiscal year ending June 30, 2008, ten one hundredths of one percent

(0.10%) to a maximum of ten million dollars ($10,000,000) for supplemental distribution to

communities not included in paragraph (a)(1)(i) above distributed proportionately on the basis of

general revenue sharing distributed for that fiscal year. For the fiscal year ending June 30, 2008

distributions by community shall be identical to the distributions made in the fiscal year ending

June 30, 2007 and shall be made from general appropriations. For the fiscal year ending June 30,

2009, no funding shall be disbursed. For the fiscal year ending June 30, 2010 and thereafter,

funding shall be determined by appropriation.

      (2) To the licensed video lottery retailer:

      (a) (i) Prior to the effective date of the NGJA Master Contract, Newport Jai Ali twenty-

six percent (26%) minus three hundred eighty four thousand nine hundred ninety-six dollars

($384,996);

      (ii) On and after the effective date of the NGJA Master Contract, to the licensed video

lottery retailer who is a party to the NGJA Master Contract, all sums due and payable under said

Master Contract minus three hundred eighty four thousand nine hundred ninety-six dollars

($384,996).

      (b) (i) Prior to the effective date of the UTGR Master Contract, to the present licensed

video lottery retailer at Lincoln Park which is not a party to the UTGR Master Contract, twenty-

eight and eighty-five one hundredths percent (28.85%) minus seven hundred sixty-seven

thousand six hundred eighty-seven dollars ($767,687);

      (ii) On and after the effective date of the UTGR Master Contract, to the licensed video

lottery retailer who is a party to the UTGR Master Contract, all sums due and payable under said

Master Contract minus seven hundred sixty-seven thousand six hundred eighty-seven dollars

($767,687).

      (3) (i) To the technology providers who are not a party to the GTECH Master Contract

as set forth and referenced in Public Law 2003, Chapter 32, seven percent (7%) of the net

terminal income of the provider's terminals;

      (ii) To contractors who are a party to the Master Contract as set forth and referenced in

Public Law 2003, Chapter 32, all sums due and payable under said Master Contract;

      (iii) Notwithstanding paragraphs (i) and (ii) above, there shall be subtracted

proportionately from the payments to technology providers the sum of six hundred twenty-eight

thousand seven hundred thirty-seven dollars ($628,737);

      (4) To the city of Newport one and one hundredths percent (1.01%) of net terminal

income of authorized machines at Newport Grand and to the town of Lincoln one and twenty-six

hundredths (1.26%) of net terminal income of authorized machines at Lincoln Park; and

      (5) To the Narragansett Indian Tribe, seventeen hundredths of one percent (0.17%) of net

terminal income of authorized machines at Lincoln Park up to a maximum of ten million dollars

($10,000,000) per year, which shall be paid to the Narragansett Indian Tribe for the account of a

Tribal Development Fund to be used for the purpose of encouraging and promoting: home

ownership and improvement, elderly housing, adult vocational training; health and social

services; childcare; natural resource protection; and economic development consistent with state

law. Provided, however, such distribution shall terminate upon the opening of any gaming facility

in which the Narragansett Indians are entitled to any payments or other incentives; and provided

further, any monies distributed hereunder shall not be used for, or spent on previously contracted

debts; and

      (6) Unclaimed prizes and credits shall remit to the general fund of the state;

      (7) Payments into the state's general fund specified in subdivisions (a)(1) and (a)(7)(6)

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

the close of the month except for the last month when payment shall be on the last business day.

     (b) Notwithstanding the above, the amounts payable by the Division to UTGR related to

the Marketing Program shall be paid on a frequency agreed by the Division, but no less

frequently than annually.

     (c) Notwithstanding anything in this chapter 61.2 of this title 42 to the contrary, the

Director is authorized to fund the Marketing Program as described above in regard to the First

Amendment to the UTGR Master Contract.

 

     SECTION 6. Chapter 322 of the 2005 Public Laws entitled "An Act Enabling the

Division of Lotteries to Enter into a Master Video Lottery Terminal Contract with UTGR, Inc.

and to Enter into a Master Video Lottery Terminal Contract With Newport Grand Jai Alai, LLC."

is hereby amended by adding thereto the following sections:

 

     Section 8A. Waiver and Release of UTGR, BLB and BLB Affiliates.

     The State, on behalf of itself and each entity thereof, including, but not limited to, the

Division, and the department of revenue and the department of transportation, hereby expressly

waives and authorizes the Division, on behalf of itself and the department of revenue and the

department of transportation on behalf of itself, to separately irrevocably waive, release,

acknowledge the fulfillment of or to deem fulfilled, as applicable, as of the effective date of the

Plan: (1) any obligation, covenant, condition or commitment performed or to be performed by

UTGR, BLB and/or any BLB affiliate under or in connection with the UTGR Master Contract

prior to and/or including the effective date of the Plan; (2) any UTGR breach, default,

noncompliance or delayed compliance on the part of UTGR, BLB and/or any BLB affiliate of any

representation, warranty, covenant, term or condition any time prior to and/or including the

effective date of the Plan; and (3) in connection with UTGR's right to exercise the option for the

First Extension only, any obligation, covenant, condition, circumstance or commitment under

section 2.5.B of the UTGR Master Contract; specifically, said waiver, release, and

acknowledgement of section 2.5B shall not relate to the Second Extension Term.

 

     Section 8B. Enforcement of Obligations.

     (a) Except as currently exists for Twin River under the provisions of subsection 42-61.2-

7(a)(2) and except as hereinafter expressly provided in section 8B(b), hereof, if the State or any

entity thereof, including the Division, enters into any agreement or adopts, modifies or amends

any law, rule or regulation that would impair the rights of UTGR under this act and/or under the

UTGR Master Contract, as may be amended in the future, and as extended pursuant to this act

and as may be extended in the future (as so amended and extended by this act and as may be

amended and extended in the future), and/or fails to provide UTGR with slippage protection as

described herein and the UTGR Master Contract, UTGR may bring a claim against the State

and/or Division, for actual damages and/or specific performance and/or other equitable relief,

notwithstanding any limitation on such damages imposed by the laws of the State. For purposes

of computing the actual damages with respect to any claim by UTGR against the State and/or the

Division for a failure to provide slippage protection pursuant to the provisions of this act and the

UTGR Master Contract, "actual damages" means the positive difference between: (i) the gaming

facility revenues UTGR would have retained had the State or any entity thereof, including, the

Division, provided slippage protection for the period of time that the State and/or the Division

fails to provide slippage protect on during the term of the UTGR Master Contract; and (ii) the

gaming facility revenues actually retained by UTGR.

     (b) Except only as provided in section 8A, nothing in this act shall limit the authority of

the Division to enforce its rights under the UTGR Master Contract. Except as provided in section

8B(a), nothing in this act shall limit the authority of the State to enact, adopt and enforce laws and

regulations which are of general application.

     (c) In the event of any inconsistency between the provisions of this section 8B and the

provisions of subsections (c) and (d) of section 5 of chapters 322 and 323 of the public laws of

2005, the provisions of this section 8B shall govern.

     (d) The Division is authorized and empowered to amend the UTGR Master Contract

consistent with the provisions of this act.

 

     SECTION 7. Chapter 323 of the 2005 Public Laws entitled "An Act Enabling the

Division of Lotteries to Enter into a Master Video Lottery Terminal Contract with UTGR, Inc.

and to Enter into a Master Video Lottery Terminal Contract With Newport Grand Jai Alai, LLC."

is hereby amended by adding thereto the following sections:

 

     Section 8A. Waiver and Release of UTGR, BLB and BLB Affiliates.

     The State, on behalf of itself and each entity thereof, including, but not limited to, the

Division, and the department of revenue and the department of transportation, hereby expressly

waives and authorizes the Division on behalf of itself and the department of revenue and the

department of transportation on behalf of itself, to separately irrevocably waive, release,

acknowledge the fulfillment of or to deem fulfilled, as applicable, as of the effective date of the

Plan: (1) any obligation, covenant, condition or commitment performed or to be performed by

UTGR, BLB and/or any BLB affiliate under or in connection with the UTGR Master Contract

prior to and/or including the effective date of the Plan; (2) any UTGR breach, default,

noncompliance or delayed compliance on the part of UTGR, BLB and/or any BLB affiliate of any

representation, warranty, covenant, term or condition any time prior to and/or including the

effective date of the Plan; and (3) in connection with UTGR's right to exercise the option for the

First Extension only, any obligation, covenant, condition, circumstance or commitment under

section 2.5.B of the UTGR Master Contract; specifically, said waiver, release, and

acknowledgement of section 2.5B shall not relate to the Second Extension Term.

 

     Section 8B. Enforcement of Obligations.

     (a) Except as currently exists for Twin River under the provisions of subsection 42-61.2-

7(a)(2) and except as hereinafter expressly provided in section 8B(b), hereof, if the State or any

entity thereof, including the Division, enters into any agreement or adopts, modifies or amends

any law, rule or regulation that would impair the rights of UTGR under this act and/or under the

UTGR Master Contract, as may be amended in the future, and as extended pursuant to this act

and as may be extended in the future (as so amended and extended by this act and as may be

amended and extended in the future), and/or fails to provide UTGR with slippage protection as

described herein and the UTGR Master Contract, UTGR may bring a claim against the State

and/or Division, for actual damages and/or specific performance and/or other equitable relief,

notwithstanding any limitation on such damages imposed by the laws of the State. For purposes

of computing the actual damages with respect to any claim by UTGR against the State and/or the

Division for a failure to provide slippage protection pursuant to the provisions of this act and the

UTGR Master Contract, "actual damages" means the positive difference between: (i) the gaming

facility revenues UTGR would have retained had the State or any entity thereof, including, the

Division, provided slippage protection for the period of time that the State and/or the Division

fails to provide slippage protect on during the term of the UTGR Master Contract; and (ii) the

gaming facility revenues actually retained by UTGR.

     (b) Except only as provided in section 8A, nothing in this act shall limit the authority of

the Division to enforce its rights under the UTGR Master Contract. Except as provided in section

8B(a), nothing in this act shall limit the authority of the State to enact, adopt and enforce laws and

regulations which are of general application.

     (c) In the event of any inconsistency between the provisions of this section 8B and the

provisions of subsections (c) and (d) of section 5 of chapters 322 and 323 of the public laws of

2005, the provisions of this section 8B shall govern.

     (d) The Division is authorized and empowered to amend the UTGR Master Contract

consistent with the provisions of this act.

 

     SECTION 8. Section 8 of Chapter 322 of the 2005 Public Laws entitled "An Act

Enabling the Division of Lotteries to Enter into a Master Video Lottery Terminal Contract with

UTGR, Inc. and to Enter into a Master Video Lottery Terminal Contract With Newport Grand Jai

Alai, LLC." is hereby amended as follows:

 

     SECTION 8. State's Lincoln Park Obligations Contingent Upon Acquisition Completion.

The obligations of the State, including the department of transportation and/or the

division, set forth under the provisions of this act shall be and are hereby declared to be expressly

contingent upon the acquisition of the Wembley US Group by BLB or a BLB Affiliate taking

place, as contemplated in this act. Except as may be permitted by the UTGR Master Contract, this

act shall not be deemed and/or construed to create and or vest any rights in BLB, or a BLB

Affiliate, or any entity Controlling, Controlled by or under common Control with UTGR, which

may be assigned, delegated, and/or otherwise transferred to any other entity.; provided however,

that notwithstanding subsection 41-3.1-3(c), (i) nothing in this act shall restrict the ability of any

person owning all or part of UTGR, including a person (or persons acting in concert) Controlling

UTGR, from assigning, delegating and/or otherwise transferring its (or their) interest in UTGR to

any other entity, and (ii) any such assignment, delegation and/or transfer shall not affect UTGR's

pari-mutuel license; provided however, that any such proposed assignment, delegation and/or

transfer that effects a change of Control of UTGR shall be subject to prior approval and licensure

by the appropriate regulatory authorities. Nothing herein shall limit the ability of the department

of business regulation, in connection with any such proposed assignment, delegation and/or

transfer that effects a change of Control of UTGR, to investigate and subject to the regulatory due

diligence process, any holder of an ownership interest regardless of percentage of ownership held.

 

     SECTION 9. Section 8 of Chapter 323 of the 2005 Public Laws entitled "An Act

Enabling the Division of Lotteries to Enter into a Master Video Lottery Terminal Contract with

UTGR, Inc. and to Enter into a Master Video Lottery Terminal Contract With Newport Grand Jai

Alai, LLC." is hereby amended to read as follows:

 

     SECTION 8. State's Lincoln Park Obligations Contingent Upon Acquisition Completion.

The obligations of the State, including the department of transportation and/or the

division, set forth under the provisions of this act shall be and are hereby declared to be expressly

contingent upon the acquisition of the Wembley US Group by BLB or a BLB Affiliate taking

place, as contemplated in this act. Except as may be permitted by the UTGR Master Contract, this

act shall not be deemed and/or construed to create and or vest any rights in BLB, or a BLB

Affiliate, or any entity Controlling, Controlled by or under common Control with UTGR, which

may be assigned, delegated, and/or otherwise transferred to any other entity.; provided however,

that notwithstanding subsection 41-3.1-3(c), (i) nothing in this act shall restrict the ability of any

person owning all or part of UTGR, including a person (or persons acting in concert) Controlling

UTGR, from assigning, delegating and/or otherwise transferring its (or their) interest in UTGR to

any other entity, and (ii) any such assignment, delegation and/or transfer shall not affect UTGR's

pari-mutuel license; provided however, that any such proposed assignment, delegation and/or

transfer that effects a change of Control of UTGR shall be subject to prior approval and licensure

by the appropriate regulatory authorities. Nothing herein shall limit the ability of the department

of business regulation, in connection with any such proposed assignment, delegation and/or

transfer that effects a change of Control of UTGR, to investigate and subject to the regulatory due

diligence process, any holder of an ownership interest regardless of percentage of ownership held.

 

     SECTION 10. Consistent with the Rhode Island Constitution, nothing in this act shall be

deemed to give any person or entity other than the Division operational control of video lottery

games or the conduct thereof, and provided further, this act shall not affect any statutory authority

establishing regulatory authority over or control by any other State agency(ies) of Twin River, its

licensees, Video Lottery Terminals, individuals, and/or entities as appropriate.

 

     SECTION 11. Severability. If any clause, sentence, paragraph, section, or part of this act

shall be adjudged by any court of competent jurisdiction as invalid, such judgment shall not

affect, impair, or invalidate the remainder thereof, but shall be confined in its operation to clause,

sentence, paragraph, section or part directly involved in the controversy in which such judgment

shall have been rendered.

 

     SECTION 12. This act shall take effect upon passage.

 

     PART B – Authorized Amendment to Newport Grand Master Contract

 

     SECTION 1. Purpose. The general assembly hereby finds that the Newport Grand facility

located in the City of Newport is an important source of revenue for the State of Rhode Island.

The purpose of the following sections related to Newport Grand is to help strengthen the

commercial health of the Newport Grand facility and protect for the people of Rhode Island the

public's share of revenues generated at the Newport Grand facility. It is the intent of the general

assembly that this act, being necessary for the welfare of the State and its citizens, shall be

liberally construed so as to effectuate its purposes, including without limitation, the state's attempt

to minimize certain commercial risks faced by Newport Grand when it operates the facility and

the business conducted thereon.

 

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

following meanings, and to the extent that such terms are defined in Chapters 322 and 323 of the

Public Laws of 2005, those terms are herby amended as follows, provided that such terms, as they

may be amended hereby, only apply to Newport Grand and shall have no effect with regard to

UTGR or Twin River.

     (a) "Director" means the director of the division of lotteries.

     (b) "Division" means the division of lotteries within the department of revenue and/or

any successor as party to the Newport Grand Master Contract.

     (c) "Division Percentage" means for any Marketing Year, the Division's percentage of net

terminal income as set forth in section 42-61.2-7.

     (d) "First Amendment" means that certain first amendment to the Newport Grand Master

Contract authorized herein, which first amendment is to be entered into by and between the

Division and Newport Grand.

     (e) "Newport Grand facility" means the gaming and entertainment facility located at 150

Admiral Kalbfus Road, Newport, Rhode Island.

     (f) "Marketing Program" means that Marketing Program authorized in section 4(a)(iii) of

this act, which program shall include marketing expenditures as defined by the Division.

     (g) "Marketing Year" means each fiscal year of the state or a portion thereof between the

effective date of the First Amendment and the termination date of the Newport Grand Master

Contract.

     (h) "Master Contract" means with respect to Newport Grand, the Newport Grand Master

Contract as the same may have heretofore been amended.

     (i) "Promotional Points Program" means that promotional points program authorized in

section 4(a)(ii) of this act.

     (j) "State" means the State of Rhode Island.

     (k) "Term" means with respect to Newport Grand, the Newport Grand Term.

     (l) "Newport Grand" means Newport Grand, LLC, a Rhode Island Limited Liability

corporation, Newport Grand being successor to "Newport Grand Jai Alai, LLC" as defined in

Newport Grand Master Contract. References herein to "Newport Grand" shall include its

permitted successors and assigns under the Newport Grand Master Contract, if licensed by the

Rhode Island department of business regulation.

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

contract made as of November 23, 2005 by and between the Division and Newport Grand Jai

Alai, LLC, as such Newport Grand Master Contract is amended and extended as authorized

herein and/or as such Newport Grand Master Contract may be assigned as permitted herein.

     (n) "Newport Grand Term" means the term of the Newport Grand Master Contract,

which term commences on the effective date of the Newport Grand Master Contract and

continues through and including the fifth (5th) anniversary of such effective date; provided that

Newport Grand shall have one (1) successive five (5) year extension option consistent with the

terms of the Newport Grand Master Contract, and a section option pursuant to section 4 (a)(i)

below.

 

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

and definitions of chapters 322 and 323 of the public laws of 2005 are hereby incorporated herein

by reference and shall remain in full force and effect.

 

     SECTION 4. Authorized Procurement of First Amendment to the Master Video Lottery

Terminal Contract.

     (a) Notwithstanding any provisions of the general laws or regulations adopted thereunder

to the contrary, including, but not limited to, the provisions of: Chapters 322 and 323 of the

public laws of 2005; chapter 2 of title 37 of the general laws; chapter 61 of title 42 of the general

laws; and chapter 61.2 of title 42 of the general laws, the Division is hereby expressly authorized

and empowered to enter into with Newport Grand a First Amendment to the Newport Grand

Master Contract, for the following purposes and containing the following terms and conditions,

all of which shall be set forth in more particular detail in the First Amendment:

     (i) to provide for a Newport Grand Term commencing on the effective date of the

Newport Grand Master Contract and continuing through and including the fifth (5th) anniversary

of such effective date; provided that Newport Grand shall have two (2) successive five (5) years

extension options with the First Extension Term, as defined in the Newport Grand Master

Contract, commencing on November 23, 2010 and the Second Extension Term, commencing on

November 23, 2015. Except as otherwise provided herein in section 4(a)(vii), the exercise of the

option to extend said Master Contract shall be subject to the terms and conditions of section 2.3

of the Newport Grand Master Contract; provided however, section 2.3B of the Newport Grand's

Master Contract shall be amended such that with respect to UTGR's exercise of its option to

extend for the Second Extension Term, Newport Grand shall be required to certify to the Division

that (i) there are 180 full-time equivalent employees at the Newport Grand facility on the date of

the exercise of the option for the Second Extension Term; and (ii) for the one-year period

preceding the date said Second Extension Term option is exercised, there had been 180 full-time

equivalent employees on average, as the term full-time equivalent employee is defined in section

2.3B of the Newport Grand Master Contract and as confirmed by the Rhode Island department of

labor and training.

     (ii) to provide for a Promotional Points Program at Newport Grand facility, pursuant to

the terms and conditions established from time to time by the Division during the Newport Grand

Term, such terms to include, but not limited to, a State fiscal year audit of the Promotional Points

Program, the cost of which audit shall be borne by Newport Grand. The approved amount of the

Promotional Points Program shall not exceed four percent (4%) of the amount of Newport

Grand's net terminal income of the prior Marketing Year. Said promotional points are to be used

by Newport Grand to provide promotional points to customers and prospective customers of

Newport Grand at the Newport Grand facility. Nothing herein shall prohibit Newport Grand, with

prior approval from the Division, from spending additional funds on the Promotional Points

Program; provided, however, that said additional amounts shall not be funded in any part by net

terminal income.

     (iii) to provide for a Marketing Program for Newport Grand facility, commencing on July

1, 2010, which shall be monitored by the Division and pursuant to which, for each Marketing

Year, to the extent Newport Grand's marketing expenditures exceed five hundred sixty thousand

dollars ($560,000), the Division shall pay Newport Grand an amount equal to the product of such

excess multiplied by the Division Percentage, provided, however, that (1) the total amount

payable by the Division for each Marketing Year pursuant to this section 4(a)(iii) shall be capped

at an amount equal to the Division Percentage multiplied by eight hundred forty thousand dollars

($840,000) and (2) the Division shall not owe any amount pursuant to this section 4(a)(iii) in any

given Marketing Year unless, pursuant to subsection 42-61.2-7(a), the State has received net

terminal income for such Marketing Year in an amount equal to or exceeding the amount of net

terminal income the State received for the State's fiscal year 2010; provided, further, that in any

partial Marketing Year, the total amount payable by the Division shall be capped at an amount

equal to eight hundred forty thousand dollars ($840,000) multiplied by the Division Percentage,

the product of which shall be further reduced by multiplying it by a fraction, (A) the numerator of

which is the number of days in any such partial Marketing Year and (B) the denominator of

which is 365. (It is anticipated that the only partial Marketing Years shall occur between the

effective date of the First Amendment and the last day of the fiscal year of the State during which

such effective date occurred and/or the first day of the fiscal year of the State in which the

termination of the Newport Grand Master Contract occurs and the termination date of the

Newport Grand Master Contract, as the case may be).

     (iv) to provide that the Newport Grand Master Contract shall not be assigned by either

party without the prior written consent of the other party and to further provide that so long as the

proposed assignee of Newport Grand or any of its permitted successors shall have been found to

be qualified by the Division to hold a video lottery terminal license, the Division shall not

unreasonably withhold or delay its consent to such proposed assignment. Proposed assignees

and/or successors shall be subject to licensure by the appropriate regulatory authorities.

     (v) To provide that upon the effective date of the First Amendment to the Newport Grand

Master Contract there will be an allocation to Newport Grand of total video lottery net terminal

income equal in percentage terms to that amount allocated under Section 3 of the Master Video

Lottery Terminal Contract between the Division of Lotteries and UTGR, Inc. dated July 18, 2005

(UTGR Master Contract). Total net terminal income due to Newport Grand shall be the

equivalent total percentage as calculated in Section 3.4 of said UTGR Master Contract so as to

result in an equalized percentage of net terminal income payable to all facilities operating video

lottery terminals; provided, however, the allocation to Newport Grand set forth in this section

4(a)(v) shall apply beginning in the state’s fiscal year 2011.

     (vi) to permit Newport Grand, at its discretion, to maintain and operate all video lottery

games at Newport Grand facility between the hours of 9:00 a.m. and 2:00 a.m. the following day,

up to seven (7) days per week, including without limitation, federal and state recognized holidays.

     (vii) to irrevocably waive, release, acknowledge the fulfillment of or to deem fulfilled, as

applicable, as of the effective date of the First Amendment to the Newport Grand Master

Contract, (1) any obligation, covenant, condition or commitment performed or to be performed by

Newport Grand under or in section 4.1(i) of the Newport Grand Master Contract prior to and/or

including the effective date of the First Amendment to the Master Contract; (2) any Newport

Grand breach, default, noncompliance or delayed compliance on the part of Newport Grand of

any representation, warranty, covenant, term or condition of or under section 4.1(i) of the

Newport Grand Master Contract any time prior to and/or including the effective date of the First

Amendment to the Newport Grand Master Contract, and (3) in connection with Newport Grand's

right to exercise the option for the First Extension Term only, any prior obligation, covenant,

condition, circumstance or commitment under section 2.3.B of the Newport Grand Master

Contract; specifically, said waiver, release, and acknowledgement shall not relate to the Second

Extension Term.

     (b) The entry into by the Division, and Newport Grand of the First Amendment is hereby

authorized, approved, ratified and confirmed in all respects.

     (c) Any amounts related to the Marketing Program payable by the Division shall be paid

on a frequency agreed by the Division (but no less frequently than annually) out of that share of

net terminal income disbursed pursuant to subsection 42-61.2-7(a)(1) as an administrative

expense of the Division, after allocation of net terminal income pursuant to subsections 42-61.2-

7(a)(1), (2), (3), (4), (5), and (6).

 

     SECTION 5. Section 42-61.2-7 of the General Laws in Chapter 42-61.2 entitled "Video

Lottery Terminal" is hereby amended as follows:

 

     42-61.2-7. Division of revenue. [Effective June 30, 2009 and expires June 30, 2010.] -

(a) Notwithstanding the provisions of section 42-61-15, the allocation of net terminal

income derived from video lottery games is as follows:

      (1) For deposit in the general fund and to the state lottery division fund for

administrative purposes: Net terminal income not otherwise disbursed in accordance with

subdivisions (a)(2) -- (a)(7)(6) herein;

      (i) Except for the fiscal year ending June 30, 2008, nineteen one hundredths of one

percent (0.19%) up to a maximum of twenty million dollars ($20,000,000) shall be equally

allocated to the distressed communities as defined in section 45-13-12 provided that no eligible

community shall receive more than twenty-five percent (25%) of that community's currently

enacted municipal budget as its share under this specific subsection. Distributions made under

this specific subsection are supplemental to all other distributions made under any portion of

general laws section 45-13-12. For the fiscal year ending June 30, 2008 distributions by

community shall be identical to the distributions made in the fiscal year ending June 30, 2007 and

shall be made from general appropriations. For the fiscal year ending June 30, 2009, the total

state distribution shall be the same total amount distributed in the fiscal year ending June 30,

2008 and shall be made from general appropriations. For the fiscal year ending June 30, 2010, the

total state distribution shall be the same total amount distributed in the fiscal year ending June 30,

2009 and shall be made from general appropriations, provided however that $784,458 of the total

appropriation shall be distributed equally to each qualifying distressed community.

      (ii) Five one hundredths of one percent (0.05%) up to a maximum of five million dollars

($5,000,000) shall be appropriated to property tax relief to fully fund the provisions of section 44-

33-2.1. The maximum credit defined in subdivision 44-33-9(2) shall increase to the maximum

amount to the nearest five dollar ($5.00) increment within the allocation until a maximum credit

of five hundred dollars ($500) is obtained. In no event shall the exemption in any fiscal year be

less than the prior fiscal year.

      (iii) One and twenty-two one hundredths of one percent (1.22%) to fund section 44-34.1-

1, entitled "Motor Vehicle and Trailer Excise Tax Elimination Act of 1998", to the maximum

amount to the nearest two hundred fifty dollar ($250) increment within the allocation. In no event

shall the exemption in any fiscal year be less than the prior fiscal year.

      (iv) Except for the fiscal year ending June 30, 2008, ten one hundredths of one percent

(0.10%) to a maximum of ten million dollars ($10,000,000) for supplemental distribution to

communities not included in paragraph (a)(1)(i) above distributed proportionately on the basis of

general revenue sharing distributed for that fiscal year. For the fiscal year ending June 30, 2008

distributions by community shall be identical to the distributions made in the fiscal year ending

June 30, 2007 and shall be made from general appropriations. For the fiscal year ending June 30,

2009, no funding shall be disbursed. For the fiscal year ending June 30, 2010 and thereafter,

funding shall be determined by appropriation.

      (2) To the licensed video lottery retailer:

      (a) (i) Prior to the effective date of the NGJA Master Contract, Newport Jai Ali twenty-

six percent (26%) minus three hundred eighty four thousand nine hundred ninety-six dollars

($384,996);

      (ii) On and after the effective date of the NGJA Master Contract, to the licensed video

lottery retailer who is a party to the NGJA Master Contract, all sums due and payable under said

Master Contract minus three hundred eighty four thousand nine hundred ninety-six dollars

($384,996).

      (b) (i) Prior to the effective date of the UTGR Master Contract, to the present licensed

video lottery retailer at Lincoln Park which is not a party to the UTGR Master Contract, twenty-

eight and eighty-five one hundredths percent (28.85%) minus seven hundred sixty-seven

thousand six hundred eighty-seven dollars ($767,687);

      (ii) On and after the effective date of the UTGR Master Contract, to the licensed video

lottery retailer who is a party to the UTGR Master Contract, all sums due and payable under said

Master Contract minus seven hundred sixty-seven thousand six hundred eighty-seven dollars

($767,687).

      (3) (i) To the technology providers who are not a party to the GTECH Master Contract

as set forth and referenced in Public Law 2003, Chapter 32, seven percent (7%) of the net

terminal income of the provider's terminals;

      (ii) To contractors who are a party to the Master Contract as set forth and referenced in

Public Law 2003, Chapter 32, all sums due and payable under said Master Contract;

      (iii) Notwithstanding paragraphs (i) and (ii) above, there shall be subtracted

proportionately from the payments to technology providers the sum of six hundred twenty-eight

thousand seven hundred thirty-seven dollars ($628,737);

      (4) To the city of Newport one and one hundredth percent (1.01%) of net terminal

income of authorized machines at Newport Grand except that upon passage effective November

9, 2009, the allocation shall be one and two tenths percent (1.2%) of net terminal income of

authorized machines at Newport Grand for each week the facility operates video lottery games on

a twenty-four (24) hour basis for all eligible hours authorized and to the town of Lincoln one and

twenty-six hundredths percent (1.26%) of net terminal income of authorized machines at Lincoln

Park except that upon passage effective November 9, 2009, the allocation shall be one and forty-

five hundredths percent (1.45%) of net terminal income of authorized machines at Lincoln Park

for each week the facility operates video lottery games on a twenty-four (24) hour basis for all

eligible hours authorized;

      (5) To the Narragansett Indian Tribe, seventeen hundredths of one percent (0.17%) of net

terminal income of authorized machines at Lincoln Park up to a maximum of ten million dollars

($10,000,000) per year, which shall be paid to the Narragansett Indian Tribe for the account of a

Tribal Development Fund to be used for the purpose of encouraging and promoting: home

ownership and improvement, elderly housing, adult vocational training; health and social

services; childcare; natural resource protection; and economic development consistent with state

law. Provided, however, such distribution shall terminate upon the opening of any gaming facility

in which the Narragansett Indians are entitled to any payments or other incentives; and provided

further, any monies distributed hereunder shall not be used for, or spent on previously contracted

debts; and

      (6) Unclaimed prizes and credits shall remit to the general fund of the state;

      (7) Payments into the state's general fund specified in subdivisions (a)(1) and (a)(7)(6)

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

the close of the month except for the last month when payment shall be on the last business day.

     (d) Notwithstanding the above, the amounts payable by the Division to Newport Grand

related to the Marketing Program shall be paid on a frequency agreed by the Division, but no less

frequently than annually.

     (e) Notwithstanding anything in this chapter 61.2 of this title 42 to the contrary, the

Director is authorized to fund the Marketing Program as described above in regard to the First

Amendment to the Newport Grand Master Contract.

 

     42-61.2-7. Division of revenue. [Effective June 30, 2010] -- (a) Notwithstanding the

provisions of section 42-61-15, the allocation of net terminal income derived from video lottery

games is as follows:

      (1) For deposit in the general fund and to the state lottery division fund for

administrative purposes: Net terminal income not otherwise disbursed in accordance with

subdivisions (a)(2) -- (a)(7)(6) herein;

      (i) Except for the fiscal year ending June 30, 2008, nineteen one hundredths of one

percent (0.19%) up to a maximum of twenty million dollars ($20,000,000) shall be equally

allocated to the distressed communities as defined in section 45-13-12 provided that no eligible

community shall receive more than twenty-five percent (25%) of that community's currently

enacted municipal budget as its share under this specific subsection. Distributions made under

this specific subsection are supplemental to all other distributions made under any portion of

general laws section 45-13-12. For the fiscal year ending June 30, 2008 distributions by

community shall be identical to the distributions made in the fiscal year ending June 30, 2007 and

shall be made from general appropriations. For the fiscal year ending June 30, 2009, the total

state distribution shall be the same total amount distributed in the fiscal year ending June 30,

2008 and shall be made from general appropriations. For the fiscal year ending June 30, 2010, the

total state distribution shall be the same total amount distributed in the fiscal year ending June 30,

2009 and shall be made from general appropriations, provided however that $784,458 of the total

appropriation shall be distributed equally to each qualifying distressed community.

      (ii) Five one hundredths of one percent (0.05%) up to a maximum of five million dollars

($5,000,000) shall be appropriated to property tax relief to fully fund the provisions of section 44-

33-2.1. The maximum credit defined in subdivision 44-33-9(2) shall increase to the maximum

amount to the nearest five dollar ($5.00) increment within the allocation until a maximum credit

of five hundred dollars ($500) is obtained. In no event shall the exemption in any fiscal year be

less than the prior fiscal year.

      (iii) One and twenty-two one hundredths of one percent (1.22%) to fund section 44-34.1-

1, entitled "Motor Vehicle and Trailer Excise Tax Elimination Act of 1998", to the maximum

amount to the nearest two hundred fifty dollar ($250) increment within the allocation. In no event

shall the exemption in any fiscal year be less than the prior fiscal year.

      (iv) Except for the fiscal year ending June 30, 2008, ten one hundredths of one percent

(0.10%) to a maximum of ten million dollars ($10,000,000) for supplemental distribution to

communities not included in paragraph (a)(1)(i) above distributed proportionately on the basis of

general revenue sharing distributed for that fiscal year. For the fiscal year ending June 30, 2008

distributions by community shall be identical to the distributions made in the fiscal year ending

June 30, 2007 and shall be made from general appropriations. For the fiscal year ending June 30,

2009, no funding shall be disbursed. For the fiscal year ending June 30, 2010 and thereafter,

funding shall be determined by appropriation.

      (2) To the licensed video lottery retailer:

      (a) (i) Prior to the effective date of the NGJA Master Contract, Newport Jai Ali twenty-

six percent (26%) minus three hundred eighty four thousand nine hundred ninety-six dollars

($384,996);

      (ii) On and after the effective date of the NGJA Master Contract, to the licensed video

lottery retailer who is a party to the NGJA Master Contract, all sums due and payable under said

Master Contract minus three hundred eighty four thousand nine hundred ninety-six dollars

($384,996).

      (b) (i) Prior to the effective date of the UTGR Master Contract, to the present licensed

video lottery retailer at Lincoln Park which is not a party to the UTGR Master Contract, twenty-

eight and eighty-five one hundredths percent (28.85%) minus seven hundred sixty-seven

thousand six hundred eighty-seven dollars ($767,687);

      (ii) On and after the effective date of the UTGR Master Contract, to the licensed video

lottery retailer who is a party to the UTGR Master Contract, all sums due and payable under said

Master Contract minus seven hundred sixty-seven thousand six hundred eighty-seven dollars

($767,687).

      (3) (i) To the technology providers who are not a party to the GTECH Master Contract

as set forth and referenced in Public Law 2003, Chapter 32, seven percent (7%) of the net

terminal income of the provider's terminals;

      (ii) To contractors who are a party to the Master Contract as set forth and referenced in

Public Law 2003, Chapter 32, all sums due and payable under said Master Contract;

      (iii) Notwithstanding paragraphs (i) and (ii) above, there shall be subtracted

proportionately from the payments to technology providers the sum of six hundred twenty-eight

thousand seven hundred thirty-seven dollars ($628,737);

      (4) To the city of Newport one and one hundredths percent (1.01%) of net terminal

income of authorized machines at Newport Grand and to the town of Lincoln one and twenty-six

hundredths (1.26%) of net terminal income of authorized machines at Lincoln Park; and

      (5) To the Narragansett Indian Tribe, seventeen hundredths of one percent (0.17%) of net

terminal income of authorized machines at Lincoln Park up to a maximum of ten million dollars

($10,000,000) per year, which shall be paid to the Narragansett Indian Tribe for the account of a

Tribal Development Fund to be used for the purpose of encouraging and promoting: home

ownership and improvement, elderly housing, adult vocational training; health and social

services; childcare; natural resource protection; and economic development consistent with state

law. Provided, however, such distribution shall terminate upon the opening of any gaming facility

in which the Narragansett Indians are entitled to any payments or other incentives; and provided

further, any monies distributed hereunder shall not be used for, or spent on previously contracted

debts; and

      (6) Unclaimed prizes and credits shall remit to the general fund of the state;

      (7) Payments into the state's general fund specified in subdivisions (a)(1) and (a)(7)(6)

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

the close of the month except for the last month when payment shall be on the last business day.

     (d) Notwithstanding the above, the amounts payable by the Division to Newport Grand

related to the Marketing Program shall be paid on a frequency agreed by the Division, but no less

frequently than annually.

     (e) Notwithstanding anything in this chapter 61.2 of this title 42 to the contrary, the

Director is authorized to fund the Marketing Program as described above in regard to the First

Amendment to the Newport Grand Master Contract.

 

     SECTION 6. Chapter 322 of the 2005 Public Laws entitled "An Act Enabling the

Division of Lotteries to Enter into a Master Video Lottery Terminal Contract with UTGR, Inc.

and to Enter into a Master Video Lottery Terminal Contract With Newport Grand Jai Alai, LLC."

is hereby amended by adding thereto the following sections:

 

     Section 4(e). Waiver and Release of Newport Grand.

     The State, on behalf of itself and each entity thereof, including, but not limited to, the

Division, and the department of revenue hereby expressly waives and authorizes the Division, on

behalf of itself and the department of revenue on behalf of itself, to separately irrevocably waive,

release, acknowledge the fulfillment of or to deem fulfilled, as applicable, as of the effective date

of the First Amendment to the Newport Grand Master Contract: (1) any obligation, covenant,

condition or commitment performed or to be performed by Newport Grand under or in section 4.1

(i) of the Newport Grand Master Contract prior to and/or including the effective date of the First

Amendment to the Newport Grand Master Contract; (2) any Newport Grand breach, default,

noncompliance or delayed compliance on the part of Newport Grand of any representation,

warranty, covenant, term or condition of or under section 4.1(i) of the Newport Grand Master

Contract any time prior to and/or including the effective date of the First Amendment to the

Newport Grand Master Contract; and (3) in connection with Newport Grand's right to exercise

the option for the First Extension only, any obligation, covenant, condition, circumstance or

commitment under section 2.3.B of the Newport Grand Master Contract; specifically, said

waiver, release, and acknowledgement shall not relate to the Second Extension Term.

 

     Section 4(f). Enforcement of Obligations.

     (1) Except as currently exists for Newport Grand under the provisions of subsection 42-

61.2-7(a)(2) and except as hereinafter expressly provided in section 4(f)(2), hereof, if the State or

any entity thereof, including the Division, enters into any agreement or adopts, modifies or

amends any law, rule or regulation that would impair the rights of Newport Grand under this act

and/or under the Newport Grand Master Contract, as may be amended in the future, and as

extended pursuant to this act and as may be extended in the future (as so amended and extended

by this act and as may be amended and extended in the future), and/or fails to provide Newport

Grand with slippage protection as described herein and the Newport Grand Master Contract,

Newport Grand may bring a claim against the State and/or Division, for actual damages and/or

specific performance and/or other equitable relief, notwithstanding any limitation on such

damages imposed by the laws of the State. For purposes of computing the actual damages with

respect to any claim by Newport Grand against the State and/or the Division for a failure to

provide slippage protection pursuant to the provisions of this act and the Newport Grand Master

Contract, "actual damages" means the positive difference between: (i) the gaming facility

revenues Newport Grand would have retained had the State or any entity thereof, including, the

Division, provided slippage protection for the period of time that the State and/or the Division

fails to provide slippage protect on during the term of the Newport Grand Master Contract; and

(ii) the gaming facility revenues actually retained by Newport Grand.

     (2) Except only as provided in section 4(e), nothing in this act shall limit the authority of

the Division to enforce its rights under the Newport Grand Master Contract. Except as provided

in section 4(f)(1), nothing in this act shall limit the authority of the State to enact, adopt and

enforce laws and regulations which are of general application.

     (3) In the event of any inconsistency between the provisions of this section 4(f) and the

provisions of subsections (c) and (d) of section 5 of chapters 322 and 323 of the public laws of

2005, the provisions of this section 4(f) shall govern.

     (4) The Division is authorized and empowered to amend the Newport Grand Master

Contract consistent with the provisions of this act.

 

     SECTION 7. Chapter 323 of the 2005 Public Laws entitled "An Act Enabling the

Division of Lotteries to Enter into a Master Video Lottery Terminal Contract with UTGR, Inc.

and to Enter into a Master Video Lottery Terminal Contract With Newport Grand Jai Alai, LLC."

is hereby amended by adding thereto the following sections:

 

     Section 4(e). Waiver and Release of Newport Grand.

     The State, on behalf of itself and each entity thereof, including, but not limited to, the

Division, and the department of revenue hereby expressly waives and authorizes the Division, on

behalf of itself and the department of revenue on behalf of itself, to separately irrevocably waive,

release, acknowledge the fulfillment of or to deem fulfilled, as applicable, as of the effective date

of the First Amendment to the Newport Grand Master Contract: (1) any obligation, covenant,

condition or commitment performed or to be performed by Newport Grand under or in section 4.1

(i) of the Newport Grand Master Contract prior to and/or including the effective date of the First

Amendment to the Newport Grand Master Contract; (2) any Newport Grand breach, default,

noncompliance or delayed compliance on the part of Newport Grand of any representation,

warranty, covenant, term or condition of or under section 4.1(i) of the Newport Grand Master

Contract any time prior to and/or including the effective date of the First Amendment to the

Newport Grand Master Contract; and (3) in connection with Newport Grand's right to exercise

the option for the First Extension only, any obligation, covenant, condition, circumstance or

commitment under section 2.3.B of the Newport Grand Master Contract; specifically, said

waiver, release, and acknowledgement shall not relate to the Second Extension Term.

 

     Section 4(f). Enforcement of Obligations.

     (1) Except as currently exists for Newport Grand under the provisions of subsection 42-

61.2-7(a)(2) and except as hereinafter expressly provided in section 4(f)(2), hereof, if the State or

any entity thereof, including the Division, enters into any agreement or adopts, modifies or

amends any law, rule or regulation that would impair the rights of Newport Grand under this act

and/or under the Newport Grand Master Contract, as may be amended in the future, and as

extended pursuant to this act and as may be extended in the future (as so amended and extended

by this act and as may be amended and extended in the future), and/or fails to provide Newport

Grand with slippage protection as described herein and the Newport Grand Master Contract,

Newport Grand may bring a claim against the State and/or Division, for actual damages and/or

specific performance and/or other equitable relief, notwithstanding any limitation on such

damages imposed by the laws of the State. For purposes of computing the actual damages with

respect to any claim by Newport Grand against the State and/or the Division for a failure to

provide slippage protection pursuant to the provisions of this act and the Newport Grand Master

Contract, "actual damages" means the positive difference between: (i) the gaming facility

revenues Newport Grand would have retained had the State or any entity thereof, including, the

Division, provided slippage protection for the period of time that the State and/or the Division

fails to provide slippage protect on during the term of the Newport Grand Master Contract; and

(ii) the gaming facility revenues actually retained by Newport Grand.

     (2) Except only as provided in section 4(e), nothing in this act shall limit the authority of

the Division to enforce its rights under the Newport Grand Master Contract. Except as provided

in section 4(f)(1), nothing in this act shall limit the authority of the State to enact, adopt and

enforce laws and regulations which are of general application.

     (3) In the event of any inconsistency between the provisions of this section 4(f) and the

provisions of subsections (c) and (d) of section 5 of chapters 322 and 323 of the public laws of

2005, the provisions of this section 4(f) shall govern.

     (4) The Division is authorized and empowered to amend the Newport Grand Master

Contract consistent with the provisions of this act.

 

     SECTION 8. Consistent with the Rhode Island Constitution, nothing in this act shall be

deemed to give any person or entity other than the Division operational control of video lottery

games or the conduct thereof, and provided further, this act shall not affect any statutory authority

establishing regulatory authority over or control by any other State agency(ies) of Newport

Grand, its licensees, Video Lottery Terminals, individuals, and/or entities as appropriate.

 

     SECTION 9. Severability. If any clause, sentence, paragraph, section, or part of this act

shall be adjudged by any court of competent jurisdiction as invalid, such judgment shall not

affect, impair, or invalidate the remainder thereof, but shall be confined in its operation to clause,

sentence, paragraph, section or part directly involved in the controversy in which such judgment

shall have been rendered.

 

     SECTION 10. This act shall take effect upon passage.

     

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LC02676

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