Revision: March 11, 2012, midnight
HB 1698-FN-A – AS AMENDED BY THE HOUSE
7Mar2012… 0860h
2012 SESSION
08/10
HOUSE BILL 1698-FN-A
AN ACT establishing a committee to study implementing keno in the state of New Hampshire.
SPONSORS: Rep. Baldasaro, Rock 3; Rep. Renzullo, Hills 27; Rep. Swinford, Belk 5; Rep. Ohm, Hills 26
COMMITTEE: Commerce and Consumer Affairs
This bill establishes a committee to study implementing keno in the state of New Hampshire.
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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Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.
7Mar2012… 0860h
12-2141
08/10
STATE OF NEW HAMPSHIRE
In the Year of Our Lord Two Thousand Twelve
AN ACT establishing a committee to study implementing keno in the state of New Hampshire.
Be it Enacted by the Senate and House of Representatives in General Court convened:
1 Committee Established. There is established a committee to study implementing keno in the state of New Hampshire.
2 Membership and Compensation.
I. The members of the committee shall be as follows:
(a) Three members of the house of representatives, appointed by the speaker of the house.
(b) Two members of the senate, appointed by the president of the senate.
II. Members of the committee shall receive mileage at the legislative rate when attending to the duties of the committee.
3 Duties. The committee shall study if and how to implement keno in the state.
4 Chairperson; Quorum. The members of the study committee shall elect a chairperson from among the members. The first meeting of the committee shall be called by the first-named house member. The first meeting of the committee shall be held within 45 days of the effective date of this section. Three members of the committee shall constitute a quorum.
5 Report. The committee shall report its findings and any recommendations for proposed legislation to the speaker of the house of representatives, the senate president, the house clerk, the senate clerk, the governor, and the state library on or before November 1, 2012.
6 Effective Date. This act shall take effect upon its passage.
LBAO
12-2141
Revised 01/18/12
HB 1698 FISCAL NOTE
AN ACT establishing a committee to study implementing keno in the state of New Hampshire.
FISCAL IMPACT:
The Lottery Commission and Department of Safety state this bill will increase state restricted revenue by $4,530,000 in FY 2013, and by $8,280,000 in FY 2014 and each year thereafter, and will increase state expenditures by an indeterminable amount in FY 2013 and each year thereafter. The Community College System of New Hampshire states this bill will increase state revenue by an indeterminable amount in FY 2013 and each year thereafter, and may increase state expenditures by an indeterminable amount in FY 2013 and each year thereafter. This bill will have no impact on county and local revenue or expenditures.
METHODOLOGY:
The Lottery Commission states this bill establishes keno in the state via licensed operators with the Commission responsible for the administration and enforcement of the program. The Commission states the bill directs keno revenue to be deposited into a newly created keno scholarship trust fund and the existing national guard scholarship fund to provide scholarships for New Hampshire students. The Commission estimates in the state there would be 250 locations operating keno games and 3 entities distributing keno paper supplies and electronic player systems, with both categories requiring annual licensure through the Commission. The Commission states annual license fees for operators would be $3,000 each and for distributors would be $10,000 each, for a total increase in revenue deposited into the keno scholarship trust fund per year of $750,000 for operator licenses and $30,000 for distributor licenses. The Commission also states this bill establishes an annual license fee of $5,000 for manufacturers of keno paper supplies and electronic player systems, however it assumes there will be no entities seeking that type of license. The Commission assumes operation of the keno games will commence on January 1, 2013 and it estimates each operator location will generate $150,000 worth of keno sales in a full year, so it projects there will be $18,750,000 ($150,000 per site x 250 sites x ½ year) of total keno sales in FY 2013, and $37,500,000 ($150,000 per site x 250 sites) of total keno sales in FY 2014 and each year thereafter. The Commission states the remaining revenues after accounting for the various associated costs will be deposited in the keno scholarship trust fund (75%), established in this act, and in the national guard scholarship fund (25%), established in RSA 110-B:60. The Commission states operator licensees will keep 10% of total keno sales, estimates the prizes to be awarded to players at 70% of sales, and the cost of the central computer system and keno supplies used in the administration of the program at 1.44% of sales. The Commission states there will also be additional costs of an indeterminable amount related to the administration and enforcement of the program, which would further reduce the amount deposited in the two scholarship funds. The Commission estimates keno revenue and expenses as follows:
FY 2013 FY 2014 & after
Operator License Fees $750,000 $750,000
Distributor License Fees $30,000 $30,000
Keno Sales $18,750,000 $37,500,000
Total Revenue $19,530,000 $38,280,000
Prizes (70% of Keno Sales) ($13,125,000) ($26,250,000)
Operator Licensee Proceeds (10% of Keno Sales) ($1,875,000) ($3,750,000)
Subtotal Non-State Recipients ($15,000,000) ($30,000,000)
Gross Amount to State as Revenue $4,530,000 $8,280,000
Central Computer & Supplies (1.44% of Keno Sales) ($270,000) ($540,000)
Remaining for Scholarships, Before Indeterminable Costs $4,260,000 $7,740,000
The Department of Safety states this bill requires the commissioner of safety to “receive copies of all records relating to keno licensing, taxes, and financial reports” from the Lottery Commission and requires the keno licensees to maintain all financial records pertaining to the operation of keno games and to make those records available to the Lottery Commission or the commissioner of safety upon request. The Department states it would set up an office to handle its duties under this bill. Specifically, the Department would hire a data control clerk (LG 7), to maintain records and answer phones, and an auditor (LG 9), to review various records and ensure compliance with laws and regulations. The Department also states it would incur costs for one-time computer programming changes; additional office space; office supplies and equipment; and funds for keno-specific training for the auditor. The Department also states to the extent keno-related fraud and other criminal cases occur, it may also be required to hire a state police detective (Trooper 1, LG 19) to handle such investigations. The Department assumes these costs would be funded with keno proceeds and estimates them to be, if the detective were necessary, as follows:
FY 2013 FY 2014 & after
Data Control Clerk Salary $22,016 $22,016
Data Control Clerk Benefits $10,678 $10,678
Auditor Salary $23,712 $23,712
Auditor Benefits $11,500 $11,500
Detective Salary $45,928 $45,928
Detective Benefits $22,275 $22,275
Office Rent/Utilities/Training $15,000 $15,000
Office Equipment $2,500 $0
Computer Programming Changes $25,000 $0
Total $178,609 $151,109
The Community College System of New Hampshire assumes this bill will provide scholarships to students in NH, which will encourage new students to take classes and existing students to take more classes, so the System estimates state revenue from tuition will increase. The System also states this increase in demand for classes may require it to offer more classes, which would also increase state expenditures. The System cannot predict the amount of either increase.
The University System of New Hampshire states it cannot determine this bill’s fiscal impact.
The Department of Education, the Adjutant General, and the Racing and Charitable Gaming Commission state they do not possess the information necessary to predict the fiscal impact of this bill.
The New Hampshire Municipal Association states it cannot identify a local fiscal impact of this bill.