SB306 (2008) Detail

Relative to allowing video gaming in Coos county, building a casino in Berlin, and establishing a fund to assist with the payment of property taxes.


SB 306-FN – AS INTRODUCED

2008 SESSION

08-2399

08/04

SENATE BILL 306-FN

AN ACT relative to allowing video gaming in Coos county, building a casino in Berlin, and establishing a fund to assist with the payment of property taxes.

SPONSORS: Sen. Gallus, Dist 1; Rep. Gionet, Graf 3; Rep. Ingram, Rock 4

COMMITTEE: Ways and Means

ANALYSIS

This bill:

I. Permits video gaming in certain locations in Coos county.

II. Permits the building of one economic development resort and casino in Berlin.

III. Establishes an education property tax rebate fund with the proceeds from video gaming and casinos.

IV. Allows the commissioner of the department of revenue administration to reduce property taxes by using moneys in the education property tax rebate fund.

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Explanation: Matter added to current law appears in bold italics.

Matter removed from current law appears [in brackets and struckthrough.]

Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.

08-2399

08/04

STATE OF NEW HAMPSHIRE

In the Year of Our Lord Two Thousand Eight

AN ACT relative to allowing video gaming in Coos county, building a casino in Berlin, and establishing a fund to assist with the payment of property taxes.

Be it Enacted by the Senate and House of Representatives in General Court convened:

1 New Chapters; Video Lottery and Casinos. Amend RSA by inserting after chapter 284 the following new chapters:

CHAPTER 284-A

VIDEO LOTTERY

284-A:1 Definitions. In this chapter:

I. “Net machine income” means all cash or other consideration utilized to play a video lottery machine, less all cash or other consideration paid to players of video lottery machines as winnings.

II. “Operator applicant” means the entity in which a pari-mutuel licensee applicant will participate and apply for an operator’s license to operate video lottery machines at the pari-mutuel licensee location.

III. “Operator’s license” means the license issued by the lottery commission authority to an operator licensee which allows the operator licensee to possess, conduct, and operate video lottery machines in accordance with this chapter.

IV. “Operator licensee” means a pari-mutuel licensee or operator applicant who is issued a license by the lottery commission to operate video lottery machines pursuant to this chapter.

V. “Pari-mutuel licensee” means:

(a) An entity licensed and authorized as of January 1, 2005 to conduct live horse racing as provided in RSA 284:16 or live dog racing as provided in RSA 284:16-a for at least the number of days as required in RSA 284:22-a, II(a)(3).

(b) An operator of a hotel, as defined by RSA 78-A:3, III with at least 140 rentable rooms who has applied for and received a license to manage, conduct, and operate video lottery games at their location pursuant to RSA 284-A:4.

(c) An operator of a grand hotel, meaning a facility which operated with at least 195 rentable rooms in a single structure available to the public in the calendar year of 2007, has restaurant facilities in common ownership, restrooms, and bathing facilities, public telephones, an attached 18-hole golf course in common ownership with the grand hotel facility and adequate parking for patrons, who has applied for and received a license to manage, conduct, and operate video lottery games at their location pursuant to RSA 284-A:14.

VI. “Pari-mutuel licensee location” means the facility at which the pari-mutuel licensee is located and where the pari-mutuel licensee conducts live thoroughbred horse racing or live dog racing as of January 1, 2005 and any real estate in which the pari-mutuel licensee has an interest as of January 1, 2005 which is adjacent to the real estate on which the pari-mutuel licensee conducts live thoroughbred horse racing or live dog racing.

VII. “Technology provider” means any person or entity which designs, manufactures, installs, distributes, or supplies video lottery machines for sale or lease to the lottery commission, and which are for use by an operator licensee for conducting video lottery games in accordance with this chapter.

VIII. “Token” means the coin, which is not legal tender, sold by a cashier in a face amount equal to the cash paid by a player for the sole purpose of playing a video lottery machine at a pari-mutuel licensee location or paid to a player of a video lottery machine, which can be exchanged for cash at the pari-mutuel licensee location.

IX. “Video lottery machines” means an electronic, mechanical, or computerized machine licensed by the lottery commission which, upon the insertion of cash or tokens is available to be played where, by chance or skill, or both, the player may receive cash or tokens. Video lottery machines include, but are not limited to, slot machines, video poker machines, and other lottery machines. Video lottery machines do not include any redemption slot machines and redemption poker machines as defined in RSA 647 or video poker machines or other similar machines used for amusement purposes only.

284-A:2 Authorization for Video Lottery Games of Chance.

I. A pari-mutuel licensee operating in Coos county may to install, operate, and conduct video lottery games of chance at its pari-mutuel licensee location, in accordance with the provisions of this chapter.

II. A pari-mutuel licensee operating in Coos county may enter into one or more agreements to manage or participate in the operation of video lottery games of chance at its pari-mutual licensee location, provided such operator applicant shall be licensed under this chapter.

284-A:3 Licenses, Number of Video Lottery Machines.

I. No person shall engage in the ownership, possession, transfer, maintenance, repair, or operation of a video lottery machine unless:

(a) Such person is licensed in accordance with the provisions of this chapter; and

(b) Local approval as provided in RSA 284-A:7 has been obtained.

II. Any operator, employee of an operator, or technology provider shall be licensed by the lottery commission prior to engaging in any activity authorized by this chapter.

III. Each operator licensee at a pari-mutuel licensee location at which live dog racing is conducted shall be limited to no more than 900 video lottery machines in operation at each such pari-mutuel licensee location.

IV. Each operator licensee at a pari-mutuel licensee location at which live thoroughbred horse racing is conducted shall be limited to no more than 1,200 video lottery machines in operation at each such pari-mutuel licensee location.

284-A:4 Application and License Requirement for State License for Video Lottery Games of Chance.

I. A pari-mutuel licensee or operator licensee applicant shall secure an operator’s license from the lottery commission. In the event that a pari-mutuel licensee enters into an agreement to manage and operate video lottery games of chance machines, that entity shall make application as the operator licensee applicant. An applicant must complete and sign an application on the forms prescribed by the lottery commission. The application shall include the full name, residence, date of birth, and other personal identifying information of the applicant, and if a corporation or other form of business enterprise, the same information shall be provided with respect to each partner, trustee, officer, director, and any shareholder or other holder who owns more than 10 percent of the legal or beneficial interests of such entity.

II. The lottery commission shall refer all applications received to the attorney general who shall investigate all applicants. The investigation may be conducted through any appropriate state or federal law enforcement system and may seek information as to the applicant’s financial, criminal, or business background, or any other information which the attorney general, in his or her sole discretion, may find to bear on the applicant’s fitness to be associated with the ownership or management of the operation of video lottery machines in New Hampshire, including, but not limited to, the applicant’s character, personal associations, and the extent to which the applicant is properly doing business in the manner in which it purports to operate. The attorney general shall report the results of the investigation to the lottery commission within 90 days. Notwithstanding any other law to the contrary, the results of any such investigation shall be confidential and shall not be subject to disclosure or to public inspection, except that the attorney general, in the attorney general’s sole discretion, shall determine the extent to which and the manner in which said results may be reported to the lottery commission or other state agency or official and, if reported, whether such results are to retain their confidential character; provided, however, that whenever the attorney general conducts such an investigation, the attorney general shall notify the lottery commission whether or not in his or her opinion the applicant is fit to be associated with participation in the ownership or management of the operation of video lottery machines in this state.

III. In any investigation conducted pursuant to paragraph II, the attorney general or any duly authorized member of the attorney general’s staff may require by subpoena or otherwise the attendance of witnesses and the production of such correspondence, documents, books, and papers as he or she deems advisable, and for purposes of this section, may administer oaths and take the testimony of witnesses.

IV.(a) The lottery commission shall charge the applicant an application fee of $100,000 which shall be used to defray the cost of processing the application. If the cost of processing the application exceeds $100,000, the applicant shall pay the difference. In the event that a pari-mutuel licensee makes an agreement pursuant to RSA 284-A:2, II and the operator applicant applies for the operator’s license, then the aggregate amount of the fee shall be the greater of $100,000 or the actual costs incurred by the lottery commission.

(b) The attorney general shall charge the applicant an investigation fee of $50,000 which shall be used to defray the cost of the background investigation. If the cost of the background investigation exceeds $50,000, the applicant shall pay the difference. In the event that a pari-mutuel licensee makes an agreement pursuant to RSA 284-A:2, II and that the operator applicant applies for the operator’s license, then the aggregate amount of the fee shall be the greater of $50,000 or the actual costs by the attorney general.

(c) The lottery commission shall charge a fee of $10,000 to renew a license to a pari-mutuel licensee or an operator’s licensee provided, however, such person seeking renewal of its license shall pay all costs incurred by the attorney general to conduct an investigation with regard to such application to renew the operator’s license.

284-A:5 Licensure Requirements.

I. No operator’s license shall be issued by the lottery commission unless the applicant has proven to the satisfaction of the lottery commission by clear and convincing evidence:

(a) Its financial stability, integrity and responsibility, considering, without limitation, bank references, business and personal income and disbursement schedules, tax returns and other reports filed with governmental agencies, and business and personal accounting and check records and ledgers.

(b) The trustworthiness of all financial backers, investors, mortgagees, bondholders, and holders of indentures, notes and other evidences of indebtedness of the applicant.

(c) Its good character, honesty and integrity, considering, without limitation, information pertaining to family, habits, character, reputation, criminal and arrest record, business activities, financial affairs, and business, professional and personal associates, covering at least the 10-year period immediately preceding the filing of the application.

(d) Its business ability and experience in the operation of video lottery machines, as appropriate, so as to establish the likelihood of a successful and efficient operation.

II. No operator’s license shall be issued by the lottery commission to any applicant unless the applicant has proven to the satisfaction of the lottery commission by clear and convincing evidence that each director, officer or similar principal employee and each direct or indirect owner satisfies the standards for licensure contained in this section.

284-A:6 Exclusion of Minors.

I. No person under 18 years of age shall play a video lottery machine authorized by this chapter.

II. No pari-mutuel licensee or its operator licensee shall knowingly permit any person under 18 years of age to play or participate in any aspect of the play of a video lottery machine.

III. Each violation of this section shall be punishable by a fine of no more than $1,000 and shall be payable by such person who violates paragraph I.

IV. Each violation of this section shall be punishable by a fine of no more than $1,000 and shall be payable by the pari-mutuel licensee or its operator licensee that is found to have violated paragraph II.

284-A:7 Procedures for Adoption by Local Community.

I. Any town or city in which a pari-mutuel licensee location is situated may adopt the provisions of RSA 284-A, to allow the operation of video lottery machines, in the following manner:

(a) In a town, the question shall be placed on the warrant of a special or annual town meeting under the procedures set forth in RSA 39:3, and shall be voted on a ballot; provided, however, if the question is placed on the warrant at a special town meeting, it shall be the only question at such special town meeting. In a city, the legislative body may vote to place the question on the official ballot for any regular municipal election, or, in the alternative, shall place the question on the official ballot for any regular municipal election upon submission to the legislative body of a petition signed by 5 percent of the registered voters.

(b) The selectmen or city council shall hold a public hearing on the question at least 15 days but not more than 30 days before the question is to be voted on. Notice of the hearing shall be posted in at least 2 public places in the municipality and published in a newspaper of general circulation at least 7 days before the hearing.

II. If a majority of those present and voting on the question vote in the affirmative, RSA 284-A shall apply within the city or town.

III. If the question is not approved, the question may later be voted upon according to the provisions of paragraph I, provided, however, that the town may consider the question at no more than one special town meeting and the annual town meeting in the same calendar year.

284-A:8 Inspection of Video Lottery Machines; Penalty for Tampering or Manipulating.

I. The lottery commission shall, from time to time, test video lottery machines installed at a pari-mutuel licensee location. In conducting such tests, the lottery commission shall use the services of an independent laboratory, the cost of which independent laboratory shall be paid by the technology provider.

II. Any person who, with the intent to manipulate the outcome, payoff, or operation of a video lottery machine, manipulates the outcome, payoff, or operation of any video lottery machine by physical, electronic, or mechanical means, shall be guilty of a felony.

284-A:9 Video Lottery Machines.

I. An operator licensee shall provide the lottery commission and, if regulated by the pari-mutuel commission, to the pari-mutuel commission, by diagram a description of:

(a) The location of each video lottery machine available for play by the public.

(b) The location of all areas for the storage, maintenance, or repair of video lottery machines.

(c) A description of all security measures to be taken for the safeguarding of video lottery machines.

(d) The location and security measures taken for the safeguarding of all moneys, tokens, or other items of value utilized in the use of video lottery machines.

(e) All procedures for the operation, maintenance, repair, and inserting or removing of moneys, tokens, or other items of value from video lottery machines.

(f) All of the above shall be approved by the gaming oversight authority prior to commencing the operation of any video lottery machines.

II. No video lottery machine shall be possessed, maintained, exhibited, brought into or removed from a pari-mutuel licensee location, by any person unless such machine has permanently affixed to it an identification number or symbol authorized by the lottery commission and prior notice of any such movement has been given to the lottery commission.

III. Each operator licensee shall maintain secure facilities for the counting and storage of all moneys, tokens, or other items of value utilized in the conduct of video lottery machines.

IV. All drop boxes and other devices where moneys, tokens, or other items of value are deposited in video lottery machines and all areas wherein such boxes and devices are kept while in use shall be equipped with 2 locking devices, one key which shall be under the exclusive control of the lottery commission and the other under the exclusive control of the operator licensee. The drop boxes and other devices shall not be brought into the pari-mutuel licensee location or removed from an electronic games of chance machine, locked or unlocked, except at such times and such places and according to such procedures as the lottery commission may require to safeguard such boxes and devices and their contents.

V. No video lottery machine shall be used to conduct gaming unless it is identical in all electrical, mechanical, and other aspects to a model which has been specifically tested by the lottery commission and licensed for use by the lottery commission.

VI. The lottery commission shall, by rule, establish technical standards for approval of video lottery machines, including mechanical and electrical reliability and security against tampering, as it may deem necessary to protect the public from fraud or deception and to ensure the integrity of their operation.

VII. All video lottery machines in operation at a pari-mutuel licensee location shall provide a pay off of at least 87 percent on an average annual basis.

VIII. All tickets given as prizes or winnings from video lottery machines must be redeemed for cash within one year after the date of winning. After the expiration of that one year, all such unredeemed tickets shall become property of the state of New Hampshire, notwithstanding any other law to the contrary.

IX. An operator licensee who operates video lottery machines shall not be restricted in the days of operation of such machines, so long as the pari-mutuel licensee has scheduled at least the number of days of racing as required by RSA 284:22-a, II(a)(3). The hours of operation on each day shall be determined by the lottery commission.

X. The lottery commission shall negotiate and execute agreements with at least 3 technology providers in accordance with reasonable business terms. Each operator licensee shall obtain video lottery machines from such technology providers and no others, provided, that no operator licensee shall obtain more than 50 percent of its video lottery machines from any one such technology provider.

XI. Video lottery machines shall be operated only at times when the public is allowed access to the locations. They shall not be operated during private functions.

284-A:10 Term of License. Any operator’s license or technology provider’s license issued pursuant to this chapter and any renewal thereof shall be valid for 2 years unless earlier suspended or revoked by the lottery commission.

284-A:11 Presence of the Gaming Oversight Authority and Lottery Commission.

I. The lottery commission may be present at any pari-mutuel licensee location at which video lottery machines are operated at all times when the facility is open to the public. The operator licensee may be required by the lottery commission or gaming enforcement division, department of safety to provide such office space and equipment which the commission shall by rule determine is reasonably necessary or proper for them to fulfill their responsibilities.

II. The lottery commission may be present at any time a video lottery machine is opened to remove or insert any drop box, hopper, or other mechanism containing money, tokens, or other items of value. The lottery commission may be present in the count room at any time money, tokens or other items of value utilized in video lottery machines are counted.

284-A:12 Sanction Powers of the Lottery Commission.

I. The lottery commission shall have the sole and exclusive authority, following appropriate hearings and factual determinations, to impose sanctions against any person for any violation of this chapter or any rule of the lottery commission or the pari-mutuel commission adopted under the provisions of this chapter.

II. The lottery commission shall have the authority to impose sanctions upon any person for any violation of this chapter or the rules of the lottery commission or the pari-mutuel commission as follows:

(a) Revocation or suspension of a license.

(b) Civil penalties as may be necessary to punish misconduct and to deter future violations, which penalties may not exceed $20,000 for each violation.

(c) Order restitution of any moneys or property unlawfully obtained or retained by a person.

(d) Issue a cease and desist order which specifies the conduct which is to be discontinued, altered, or implemented by the person.

(e) Issue letters of reprimand or censure, which letters shall be made a permanent part of the file of each person so sanctioned.

(f) Impose any or all of the foregoing sanctions in combination with each other.

III. In determining appropriate sanctions in a particular case, the lottery commission shall consider:

(a) The risk to the public and to the integrity of video lottery machine operations created by the conduct of the person.

(b) The seriousness of the conduct of the person and whether the conduct was purposeful or with knowledge that it was in contravention of the provisions of this chapter or the rules of the lottery commission or the pari-mutuel commission.

(c) Any justification or excuse for such conduct.

(d) The prior history of the person involved.

(e) The corrective action taken by the person to prevent future misconduct of a like nature from occurring.

(f) In the case of a monetary penalty, the amount of the penalty in relation to the type of the misconduct and the financial means of the person.

(g) Notwithstanding the foregoing, in the event that a person receives 3 civil penalties each in the amount of $20,000 during the term of such person’s license, the lottery commission shall, in its discretion, either revoke the license for the balance of the term of the license or suspend such license for a period of 60 days.

284-A:13 Declaration of Limited Exemption from Operation of Provisions of 15 U.S.C. sections 1171-1177. Pursuant to section 2 of an act of Congress of the United States entitled “An act to prohibit transportation of gambling devices in interstate and foreign commerce,” approved January 2, 1951, being Chapter 1194, 64 Stat. 1134, and also designated as 15 U.S.C. sections 1171-1177, the state of New Hampshire, acting by and through the duly elected and qualified members of its legislature, does hereby, in accordance with and in compliance with the provisions of that section 2 of that act of Congress, declare and proclaim that section 2 of that act of Congress shall not apply to any gambling device in this state where the transportation of such a device is specifically authorized by and done in compliance with the provisions of this chapter and any rules adopted pursuant to it, and that any such gambling device transported in compliance with state law and rules shall be exempt from the provisions of that act of Congress.

284-A:14 Legal Shipment of Gaming Devices into New Hampshire. All shipments into this state of gaming devices, the registering, recording, and labeling of which has been duly had by the manufacturer or dealer in accordance with sections 3 and 4 of an act of Congress of the United States entitled “An act to prohibit transportation of gambling devices in interstate and foreign commerce, approved January 2, 1951, being chapter 1194, 64 Stat. 1134, and also designated as 15 U.S.C. sections 1171-1177, shall be deemed legal shipments into this state.

CHAPTER 284-B

ECONOMIC DEVELOPMENT RESORT AND CASINO

284-B:1 Definitions. In this chapter:

I. “Casino employee” means any person employed in the operation of a casino, including without limitation, boxmen, cashiers, dealers or croupiers, floormen, hosts or other persons empowered to extend credit or complimentary service, machine mechanics, security personnel or inspectors, shift or pit bosses, supervisors or managers, and other persons employed within the casino.

II. “Casino work permit” means any card, certificate or permit issued by the commission which authorizes the employment of the holder as a casino employee at a casino.

III. “Commission” means the lottery commission established in RSA 284:21-a or an executive director to whom authority may be delegated under RSA 284-B:2.

IV. “Commissioner” means any member of the lottery commission.

V. “Economic development resort and casino” means a facility which is operated in accordance with this chapter and rules adopted under authority of this chapter. The facility shall include rooms, restaurants, and entertainment facilities consistent with a destination resort and casino.

VI. “Executive director” means the executive director hired by the commission.

VII. “Game” or “gambling game” means any banking or percentage game located exclusively within a casino played with cards, dice, or any mechanical or electrical device or machine for money or other consideration including, but not limited to: roulette, twenty-one, blackjack, baccarat, chemin-de-fer, dice, any game of poker, or slot machine. For the purposes of this chapter, “game” or “gambling game” shall not include the game of bingo, any derivative of bingo such as keno, or betting of any sort upon sports events or other activities not conducted in a casino.

VIII. “Gaming” or “gambling” means the dealing, operating, carrying on, conducting, maintaining or exposing for pay any game as defined in paragraph VII.

IX. “Gaming device” means any mechanical or electrical contrivance or machine used in connection with gaming or any game.

X. “Gross revenues” means the total of all sums actually received by a casino from gaming operations, less only the total of all sums paid out as winnings to patrons. Gross revenues shall be calculated daily.

XI. “Hearing examiner” means a commissioner or other person authorized by the commission to conduct investigative hearings.

XII. “House profits” means gross revenues from the casino in their entirety, less operating and administrative expenses and bond payments.

XIII. “Person” means any corporation, association, operation, firm, partnership, trust, or other form of business association, as well as a natural person.

XIV. “Slot machine” means any mechanical, electrical, or other device, contrivance, or machine which, upon insertion of a coin, token, or similar object, or upon payment of any consideration, is available to play or operate, the play or operation of which, whether by reason of skill of the operator or application of the element of chance, or both, may deliver or entitle the person playing or operating the machine to receive cash, premiums, merchandise, tokens, or anything of value, whether the payoff is made automatically from the machine or in any other manner.

284-B:2 Executive Director. The commission may appoint an executive director who shall serve at the commission’s pleasure. No person shall be eligible for nomination and appointment to such office unless he or she has had at least 5 years of responsible administrative experience in public or business administration. The executive director shall receive an annual salary as specified in RSA 94:1-a. The executive director shall be responsible to and under the supervision and direction of the commission, for the administration of this chapter and for enforcement of the rules adopted by the commission.

284-B:3 Commission Duties; Investigators. The commission shall:

I. Participate in the selection of a suitable and qualified developer pursuant to RSA 284-B:4.

II. Regulate casino operations.

III. Collect and administer the revenues received under this chapter.

IV. Investigate the circumstances surrounding any act or transaction for which commission approval is required.

V. Observe the conduct of all persons having a material involvement directly or indirectly with the operation or management of the casino to ensure that there shall be no material involvement directly or indirectly with the management or operation of the casino by:

(a) Unqualified or disqualified persons.

(b) Unsuitable persons.

(c) Persons whose operations are conducted in an unsuitable manner, or in an unsuitable place or location.

284-B:4 Bidding and Location. One economic development resort and casino may be constructed and exclusively operated for a 15-year period, in the city of Berlin, at a precise location to be determined by negotiation between the commission, the city of Berlin, and the operator of the economic development resort and casino.

284-B:5 Construction; Commencement of Operations.

I. Construction plans shall be approved by all appropriate local and state agencies and all necessary permits shall be obtained before the commencement of economic development resort and casino construction. The operator shall be selected by the city, with consent of the commission, after receiving proposals and bids from applicants. The selected operator shall pay a fee of $100,000 to the commission to fund construction oversight and initial regulatory oversight.

II. Temporary operation prior to completion of construction may be permitted as agreed during contract negotiation.

284-B:6 Inspection. The commission and its agents, inspectors, and employees shall have the authority, without notice and without warrant, to:

I. Inspect and examine the premises on which casino gambling is conducted.

II. Inspect all equipment and supplies in, about, upon, or around such premises.

III. Seize summarily and remove from such premises and impound any such equipment or supplies for the purposes of examination and inspection.

IV. Inspect books, memoranda, and documents showing the receipts and disbursements of the casino.

V. Seize, impound, or assume physical control of any book, record, ledger, game, device, cash box and its contents, counting room or its contents, or casino operations. Any equipment, supplies, records, or other objects or documents seized, impounded, or physically controlled by the commission under this section may be held pending the filing and disposition of a complaint.

VI. Inspect the casino at any time during hours of operation and certify the accuracy of money and vouchers received by the casino, in order to ensure compliance with applicable statutes and the rules of the commission.

284-B:7 Subpoena; Service of Process. The commission shall have authority to issue subpoenas and compel the attendance of witnesses at any place within this state, to administer oaths, and to require testimony under oath. Any process or notice may be served in a manner provided for service of process and notice in civil actions.

284-B:8 Commission Records. The commission shall keep a record of all proceedings under this chapter. The commission may also maintain such other files and records as it deems necessary.

284-B:9 Enforcement.

I. The commission shall request the attorney general to proceed in any action or prosecution to enforce the provisions of this chapter.

II. At any time within 5 years after any amount of revenue required to be collected under this chapter becomes due and payable, the commission through the attorney general may bring a civil action in the courts of this state, any other state, or of the United States to collect in the name of the state of New Hampshire the amount delinquent together with penalties and interest. If the action is brought in this state:

(a) A writ of attachment may be issued and no bond or affidavit prior to its issuance shall be required.

(b) The records of the commission shall be prima facie evidence of the determination of the amount of the delinquency.

284-B:10 Rules. The commission shall adopt rules, under RSA 541-A, relative to:

I. Methods of identification of casino employees.

II. The manner and method of collection of revenue under this chapter.

III. The games and devices permitted, and the method of operation of such games and devices.

IV. The practice of extending credit to patrons, including the authority to limit the circumstances and amount of credit.

V. Standards for exclusion or ejection of persons from the casino.

VI. Internal fiscal procedures and periodic financial reports.

VII. Security procedures used in the operation of the casino.

VIII. Any other matter necessary to the administration of this chapter.

284-B:11 Financial Reports; Internal Fiscal Procedures.

I. The commission shall by rule require periodic financial reports and shall:

(a) Specify standard forms for reporting financial condition, results of operations, and other relevant information.

(b) Formulate a uniform code of accounts and accounting classifications to assure consistency, comparability, and effective disclosure of all financial information.

(c) Determine the intervals at which such information shall be furnished.

(d) Require audits of the financial statements which shall be made not less frequently than once each year.

II. The commission shall by rule prescribe minimum procedures to be followed in the exercise of effective control over its internal fiscal affairs including, but not limited to:

(a)(1) The safeguarding of assets and revenues, and the recording of cash and evidences of indebtedness. No credit shall be extended on behalf of the casino to any patron without a written memorandum of credit. Such memorandum shall be filed with the daily receipts and preserved until satisfied or canceled pursuant to rules of the commission.

(2) No casino employee shall extend credit or favors to any member of the general court, any appointed or elected state official, or any member of the family of such member of the general court or official.

(3) Violation of this subparagraph shall be a class B misdemeanor.

(b) The adoption and use of internal audits, whether by qualified internal auditors or by accountants holding a license to practice public accounting.

284-B:12 Conduct Prohibited.

I. It shall be unlawful for any person:

(a) To deal, operate, carry on, conduct, maintain, or expose for play in the state of New Hampshire any game or slot machine as defined in this chapter, except as provided by this chapter and rules adopted by the commission pursuant to this chapter.

(b) To receive, directly or indirectly, any compensation, reward, or any percentage or share of the money or property played for keeping, running, or carrying on any game or slot machine except under the provisions of this chapter.

II. It shall be unlawful for any person to lend, let, lease, or otherwise deliver or furnish any service including service in managing the casino, or any equipment for any gambling game including slot machines, for any interest or any percentage or share of the money or property played for with respect to such equipment, or for any interest however defined in the revenues, profits, or earnings of the casino, other than pursuant to the terms of a written agreement, which agreement shall not be effective unless approved by the commission.

284-B:13 Agreements; Prohibition.

I. The commission may require an application for approval of any agreement regarding the realty of, or any business or person doing business on the premises of the casino, in order that the commission may determine whether said agreement or person should be approved to be associated with the casino in accordance with this chapter. If the commission does not approve such an application, the commission shall require the termination of such association. Any agreement which entitles a business other than a casino to be conducted on such premises shall be subject to commission approval of the business or of any person associated with the business. Every such agreement shall be deemed to include a provision for its termination without liability on the part of the business, if the commission disapproves of the business or of any other person associated with the business, by reason of a finding that the business or person is unsuitable to be associated with the casino. Failure to expressly include such a condition in the agreement shall not constitute a defense in any action brought to terminate the agreement.

II. It shall be unlawful for any person to sell, purchase, lease, assign, hypothecate, borrow, or loan money upon, or create a voting trust agreement or any other agreement of any sort with respect to the casino, except in accordance with the rules of the commission.

284-B:14 Distribution of Revenues. Twenty percent of the annual gross revenue, less expenses of the executive director under RSA 284-B:2, shall be deposited in the education property tax rebate fund established under RSA 76:3-a.

284-B:15 Prohibited Acts.

I. Any person who knowingly fails to report, pay, or truthfully account for and pay over any revenue received under this chapter, or who knowingly attempts in any manner to evade or defeat such payments shall be guilty of a class A misdemeanor, and shall in addition be liable for a fine in the same amount as the revenue owed, paid, collected, or paid over subject to the maximum fine amounts set forth in RSA 651:2, IV.

II.(a) No person shall permit any gambling game, slot machine or device to be conducted, operated, dealt, or carried on in the casino by a person other than by a person employed under this chapter and any gaming device, slot machine, or related equipment used contrary to this paragraph shall be seized by appropriate state and local enforcement authorities.

(b) No games or slot machines shall be put into play or displayed without the authority of the commission.

(c) No person shall work as a casino employee without obtaining a casino work permit.

(d) Any person who violates this paragraph shall be fined pursuant to RSA 651:2, IV, and shall have any gaming device, slot machine or related equipment seized by appropriate state and local enforcement authorities.

III. Any person with 2 or more violations of paragraph II within a 2-year period shall be guilty of a class B felony.

284-B:16 Cheating; Penalty.

I. No person playing a gambling game at the casino shall:

(a) Use bogus or counterfeit chips, or substitute and use in any such game cards or dice that have been marked, loaded, or tampered with.

(b) Employ or have on their person any device to facilitate cheating in such games.

II. It shall be unlawful for any person playing or using a slot machine designed to receive or be operated by legal tender of the United States of America:

(a) To knowingly use any tender other than legal tender of the United States of America, or to use coin not of the same denomination as the coin intended to be used in such slot machine, except that in the playing of any slot machine it shall be lawful for any person to use tokens or similar objects which are approved by the commission.

(b) To use any cheating or thieving device, including but not limited to tools, drills, wires, coins attached to strings or wires, or electronic or magnetic devices, to facilitate the alignment of any winning combination or removing money or other contents from any slot machine.

III. It shall be unlawful for any person, except a duly authorized employee of the casino acting in furtherance of such employee’s scope of employment, to have on his or her person or in his or her possession while on the premises of the casino, any cheating or thieving device, including but not limited to tools, wires, drills, coins attached to strings or wires, or electronic or magnetic devices to facilitate removing money or other contents from any slot machine.

IV. It shall be unlawful for any person, except a duly authorized employee of the casino acting in furtherance of such employee’s scope of employment, to have on his or her person or in his or her possession while on the premises of the casino any key or device known to have been designed for the purpose of and suitable for opening or entering any slot machine or drop box.

V. It shall be unlawful:

(a) To conduct, carry on, operate, deal or allow to be conducted, carried on, operated or dealt any cheating or thieving game or device.

(b) To deal, conduct, carry on, operate or expose for play any game or games played with cards, dice or any mechanical device, or any combination of games or devices, which have in any manner been marked or tampered with, or placed in a condition, or operated in a manner, the result of which tends to deceive the public or tends to alter the normal random selection of criteria which determine the result of a game.

(c) To use or possess any marked cards, loaded dice, plugged or tampered-with machines or devices.

VI. Any person who violates this section shall be guilty of a class B felony.

284-B:17 Minors Prohibited; Penalty. No person under 21 years of age shall be employed by or allowed to enter the casino. Any casino employee who knowingly allows a minor to enter the casino shall be guilty of a class A misdemeanor, provided, however, that the following facts established by a person allowing any such minor to enter the casino shall constitute an affirmative defense to any prosecution therefor:

I. The minor falsely represented that such minor was 21 years of age or older.

II. The appearance of the minor was such that an ordinary prudent person would believe the minor to be 21 years of age or older.

III. Admittance was made in good faith, relying upon such written representation and appearance, and in reasonable belief that the minor was actually 21 years of age or older.

284-B:18 Declaration of Limited Exemption from Operation of Provisions of 15 U.S.C. section 1172. Pursuant to section 2 of an act of Congress of the United States entitled “An act to prohibit transportation of gambling devices in interstate and foreign commerce”, approved January 2, 1951, being Chapter 1194, 64 Stat. 1134, and also designated as 15 U.S.C. sections 1171-1177, the state of New Hampshire, acting by and through the duly elected and qualified members of its legislature, does hereby, in accordance with and in compliance with the provisions of section 2 of that act of Congress, declare and proclaim that section 2 of that act of Congress shall not apply to any gambling device in this state where the transportation of such a device is specifically authorized by and done in compliance with the provisions of this chapter and any rules adopted pursuant to it, and that any such gambling device transported in compliance with state law and rules shall be exempt from the provisions of that act of Congress.

284-B:19 Legal Shipment of Gaming Devices into New Hampshire. All shipments of gaming devices into this state, the registering, recording and labeling of which has been duly had by the manufacturer or dealer in accordance with sections 3 and 4 of an act of Congress of the United States entitled “An act to prohibit transportation of gambling devices in interstate and foreign commerce, approved January 2, 1951, being chapter 1194, 64 Stat. 1134, and also designated as 15 U.S.C. sections 1171-1177, shall be deemed legal shipments into this state.

3 New Paragraphs; Lottery Commission; Authority. Amend RSA 284:21-i by inserting after paragraph V the following new paragraphs:

VI. The lottery commission may adopt rules relative to the administration, licensing, regulation, and inspection of video lottery systems in Coos county.

VII. The lottery commission may adopt rules relative to the citing, construction, administration and regulation of casinos in Berlin and at the Pease Development Authority.

4 Executive Director; Casino; Salary. The salary for the unclassified position authorized in section 1 of this act shall be established as provided in RSA 14:14-c, RSA 17-A:7, and RSA 94:1-d.

5 New Section; Education Property Tax Rebate Fund. Amend RSA 76 by inserting after section 3 the following new section:

76:3-a Education Property Tax Rebate Fund. There is hereby established in the office of the state treasurer the education property tax rebate fund, which shall be kept separate and distinct from all other funds. Revenue collected under RSA 284-A and RSA 284-B:14 shall be deposited in this revolving, nonlapsing fund for the sole purpose of providing a rebate or tax credit to taxpayers. The commissioner of the department of revenue administration shall elect one of the following to disburse funds:

I. Within 120 days of the end of the fiscal year, the department of revenue administration may deplete the fund by mailing a check to each taxpayer in an amount proportional to the tax paid by the taxpayer in the preceding year; or

II. Within 120 days of the end of the fiscal year, the department of revenue administration may issue a tax credit voucher to each taxpayer in an amount proportional to the tax paid by each taxpayer in the preceding year, and the contents of the fund shall be transferred to the education trust fund established in RSA 198:39; or

III. The commissioner of revenue administration may include the balance in the fund in the education property tax calculation required under RSA 76:8, and the contents of the fund shall be transferred to the education trust fund in lieu of taxes that would otherwise be collected under RSA 76:3.

6 Commissioner’s Warrant. Amend RSA 76:8, I to read as follows:

I.(a) The commissioner shall annually determine a municipality’s tax base for the statewide enhanced education tax by subtracting from the total equalized valuation of all property, as determined under RSA 21-J:3, XIII for the preceding year, property that was then taxable under RSA 82 and RSA 83-F. In determining the tax base, the value of any utility property that is included in the total equalized valuation upon which the statewide education property tax is computed, and is also taxable under RSA 83-F for that year, shall also be subtracted from the tax base, provided the sum value of the utility property represents at least 5 percent of the total equalized value of all property, except property taxable under RSA 82 or RSA 83-F in the preceding year.

(b) The commissioner shall calculate the portion of the statewide enhanced education tax to be raised by each municipality by multiplying the uniform education property tax rate by the municipality’s tax base. If the commissioner elects to proceed under RSA 76:3-a, III, the commissioner shall subtract the amount of the education property tax rebate fund from the amount calculated in subparagraph I(b).

7 Application of Receipts. Amend RSA 6:12, I(a) to read as follows:

(a) Moneys received by the state sweepstakes commission, which shall be credited to the sweepstakes special fund, except for moneys received under RSA 284-A and RSA 284-B:14.

8 New Subparagraph; Property Tax Rebate Fund. Amend RSA 6:12, I by inserting after subparagraph (252) the following new subparagraph:

(253) Funds received pursuant to RSA 284-A and RSA 284-B:14 which shall be deposited in the education property tax rebate fund established in RSA 76:3-a.

9 New Paragraph; Department of Revenue Administration; Duties of the Commissioner. Amend RSA 21-J:3 by inserting after paragraph XXVIII the following new paragraph:

XXIX. Choose the method, and disburse funds from the education property tax rebate fund established in, and according to RSA 76:3-a.

10 New Paragraph; Department of Revenue Administration; Rulemaking Authority. Amend RSA 21-J:13 by inserting after paragraph XII the following new paragraph:

XIII. The disbursement of funds from the education property tax rebate fund established in RSA 76:3-a.

11 Effective Date. This act shall take effect July 1, 2008.

LBAO

08-2399

Revised 01/16/08

SB 306 FISCAL NOTE

AN ACT relative to allowing video gaming in Coos county, building a casino in Berlin, and establishing a fund to assist with the payment of property taxes.

FISCAL IMPACT:

The Lottery Commission, Department of Justice, and Department of Revenue Administration state this bill will increase state restricted revenue and expenditures by an indeterminable amount in FY 2009 and each fiscal year thereafter. The Judicial Branch, Department of Justice, Judicial Council, and Department of Corrections state this bill will increase state general fund expenditures by an indeterminable amount in FY 2009 and each fiscal year thereafter. The Association of Counties states this bill may increase county expenditures by an indeterminable amount in FY 2009 and each fiscal year thereafter. The NH Municipal Association states this bill may increase local revenue and expenditures by an indeterminable amount in FY 2009 and each fiscal year thereafter. There will be no fiscal impact on county revenue.

METHODOLOGY:

The Lottery Commission states the intent of this bill is to allow video lottery gaming at pari-mutuel licensee locations in Coos County, as well as an economic development resort and casino in Berlin. The Commission states there is no pari-mutuel license for a dog or horse track operating in Coos County at this time, and the Commission does not have data to estimate possible additional sites of pari-mutuel licenses in Coos County.

The Lottery Commission assumes there will be one resort and casino in Berlin with 1,200 video lottery machines (VLMs), effective July 1, 2008. The Commission assumes in FY 2009 operations would begin at a temporary location for the second half of the fiscal year. The Commission estimates net daily income from each VLM at $296, an amount derived from the NH Commission on Education Funding Report from August, 2000. The Commission would also generate revenue of $100,000 for the first year license processing request. The Commission estimates expenses for a central system vendor to be 10% of net revenue, and estimates VLT leasing costs of $4,862 per machine per year. The Commission estimates annual revenue and expenditures related to VLMs at the resort casino as follows:

FY 2009 FY 2010 and beyond

VLM Revenue $64,824,000 $129,648,000

Fee Revenue $100,000 -

Central System Expense $6,482,400 $12,964,800

VLM Lease Expense $2,917,200 $5,834,400

The Commission states it would need additional investigators, auditors, and outside contractual services to implement the requirements of this bill, but is unable to determine the number of additional employees, including salary and benefit costs, at this time. The Commission also states it does not have any financial data for the operation of casino table games, so it is unable to estimate revenue from those sources.

The Judicial Branch states several areas of this bill have potential fiscal impact on the Branch. In RSA 284-A, the Lottery Commission is charged with making decisions such as granting operator licenses and providing sanctions for violations of the chapter or rules of the Commission. Although the bill does not say these decisions can be appealed to the Supreme Court pursuant to RSA 541, where no appeal is provided, one may appeal to the Supreme Court on a petition for writ of certiorari. Also, RSA 284-A:8 provides for an unspecified felony for tampering with or manipulating a video lottery machine.

The Judicial Branch states there are six sections of RSA 284-B where the Branch is directly involved. These sections are RSA 284-B:9, which allows the Attorney General to enforce the provisions of the chapter and provides for civil actions to be brought within five years to collect delinquent amounts; RSA 284-B:11, which makes it a class B misdemeanor to violate rules regarding the casino’s fiscal affairs; RSA 284-B:12, which lists certain prohibited conduct; RSA 284-B:15, which makes it a class A misdemeanor to fail to pay certain revenue and which provides for class B felonies for multiple violations of certain operating rules within two years; RSA 284-B:16, which makes cheating in the casino a class B felony; and RSA 284-B:17, which makes it a class A misdemeanor to allow minors in the casino.

The Judicial Branch states that based on judicial and clerical needs assessment studies done by the National Center for State Courts, the Branch calculates the per case costs for civil and equity cases and the per charge costs for criminal cases as follows, not including the costs of a Supreme Court appeal:

FY 2009 FY 2010 and beyond

Complex Equity Case in Superior Court $491 $507

Complex Civil Case in Superior Court $547 $559

Class B Misdemeanor $36 $37

Class A Misdemeanor $50 $51

Class B Felony $328 $336

The Judicial Branch states that regarding appeals to the Supreme Court from Lottery Commission decisions on operator licenses and sanctions, the Supreme Court has discretionary review of such appeals, meaning that the court decides whether to accept the appeal for full appellate review, accept if for a more limited review, or decline the appeal. The Branch states such appeals are too speculative to arrive at a conclusion regarding fiscal impact; however an appeal accepted for full appellate consideration could result in a fiscal impact in excess of $10,000.

The Department of Justice states this bill grants oversight of video gaming at pari-mutuel locations to the Lottery Commission. The Department anticipates the Commission will require assistance from an assistant attorney general in the Civil Bureau to assist with promulgation of rules and administrative enforcement of violations, as well as to provide legal counsel. The Department anticipates this will require 50% of the time of an assistant attorney general in the first year and 25% of the time of an assistant attorney general in each subsequent year. The Department also anticipates the Lottery Commission will require 50% of the time of an assistant attorney general in the first year and 25% of the time of an assistant attorney general in each subsequent year for assistance related to the Commission’s oversight of an economic development resort and casino in Berlin. The Department also states it will be necessary to hire a 10-hour-per-week support staff. The Department calculates the cost of salary, benefits, and equipment related to these positions as follows:

FY 2009 FY 2010 FY 2011 FY 2012

Attorney Salary $66,950 $34,479 $35,514 $36,579

Benefits (48.3%) $32,337 $16,653 $17,153 $17,668

Secretary Salary $7,259 $7,540 $7,836 $8,154

Benefits (48.3%) $3,506 $3,642 $3,785 $3,938

Computers (2) $2,400 - - -

Office Furniture $3,000 - - -

Software Licenses $2,000 - - -

Total $117,452 $62,314 $64,288 $66,339

The Department further states under this bill the Department is responsible for conducting a background investigation of every applicant for a video gaming license. The Department expects it will hire two temporary full-time investigators and two financial analysts to complete each investigation within the required 90-day time period. This bill authorizes the Department to charge the applicant an investigation fee of $50,000, with the applicant also responsible for paying investigation costs beyond $50,000. While the bill does not specifically authorize the payment of personnel costs from the investigation fee, the Department anticipates the fees paid by applicants will cover these costs.

In addition, the Department states criminal penalties authorized by this bill would likely be prosecuted by a county attorney’s office. The Department states there may be some fiscal impact to the Department in instances when an appeal is taken to the Supreme Court; however, the fiscal impact cannot be determined. There may also be an indeterminable fiscal impact related to the Lottery Commission requesting that the Attorney General proceed in any action or prosecution to enforce the provisions of the bill relating to the resort and casino, and appeals related to such prosecutions.

The Judicial Council states this bill establishes new misdemeanor and penalty offenses. If an individual is charged with a misdemeanor or felony under this bill and is determined to be indigent, the court must appoint the public defender in the first instance, then a contract attorney, or finally an assigned counsel if a public defender or contract attorney is not available or if there are multiple co-defendants in the case. If either a public defender or contract attorney is appointed to the case, the fixed fee is $275 per misdemeanor and $756 per felony. If an assigned counsel is provided, the rate is $60 per hour with a cap of $1,400 for a misdemeanor and $4,100 for a felony, which may be waived upon motions filed in advance and approved by the court. The Council may also be required to make additional expenditures for “services other than counsel” or appeals to the Superior Court or Supreme Court.

The Department of Corrections states this bill may increase state general fund expenditures for the incarceration of persons convicted of felony offences by an indeterminable amount in FY 2009 and each fiscal year thereafter. The number of individuals that may be convicted of a felony under this bill is indeterminable; however, the average annual cost of incarcerating an individual in the general prison population in FY 2007 was $31,546, and the average annual cost of supervising an offender by the Division of Field Services in FY 2007 was $1,174.

The Department of Revenue Administration states it is unable to determine the amount of revenue that would be deposited into the Education Property Tax Rebate Fund established by this bill, and is unable to determine the increase in expenditures that would result from payments to property taxpayers from the fund.

The Association of Counties states this bill creates new misdemeanors for violations of the gaming law. To the extent any individual is prosecuted, convicted, and sentenced to a county correctional facility for a violation of the gaming law, county expenditures will increase. The average annual cost of incarceration at a county correctional facility is approximately $29,000.

The NH Municipal Association states this bill allows operators of certain horse-racing facilities, dog-racing facilities, and hotels located in Coos County to operate video lottery games at their facilities, subject to approval of the Lottery Commission and the town or city in which they are located. It also allows for an economic development resort and casino in the city of Berlin. The Association states neither provision would impose any direct costs or provide any revenue directly to municipalities. The Association assumes the development and operation of such facilities would result indirectly in both revenues and costs to host municipalities; however, such revenues and expenditures would result only if a municipality chooses to allow the development, and it is not possible to predict the amounts of such revenues or expenditures..