HP0876, LD 1280, item 20, ‘An Act To Establish a Competitive Bidding Process for the Operation of a Resort-style Casino in Southern Maine and a Casino To Benefit Federally Recognized Indian Tribes in the State’

Amend the amendment by striking out the substitute title and replacing it with the following:

‘An Act To Establish a Competitive Bidding Process for the Operation of a Resort-style Casino in Southern Maine and a Casino To Benefit Federally Recognized Indian Tribes in the State’

Amend the amendment in section 7 in subsection 2-C in the 5th line (page 3, line 5 in amendment) by inserting after the following: " 1011-B" the following: ' or 1011-C'

Amend the amendment in section 9 in §1011-B in subsection 5 in paragraph B in the 4th line (page 7, line 4 in amendment) by striking out the following: " subsection 2-B" and inserting the following: ' subsection 2-C'

Amend the amendment by inserting after section 9 the following:

‘Sec. 10. 8 MRSA §1011-C is enacted to read:

§ 1011-C. Privilege to submit a casino operator license application for a northern casino pursuant to competitive bidding

The privilege to submit an application to the board for a casino operator license for a casino in Washington County or Aroostook County is governed by this section.

1. Commission required to request statements from federally recognized Indian tribes. Prior to developing a request for proposals for the privilege to apply to the board for a casino operator license for a casino in Washington County or Aroostook County, the commission shall request a statement from each of the 4 federally recognized Indian tribes in the State with regard to their support of and interest in entering into a partnership agreement relative to the operation of or ownership in a casino, or both, and whether the tribe wishes not to be included in such a partnership.

2. Request for proposals to include tribal partnership. A request for proposals developed by the commission must require a partnership agreement with all of the tribes that provided a statement under subsection 1 to the commission indicating that they wished to be included in a partnership for the operation of or ownership in a casino, except that the commission may not submit a request for proposals if more than 2 of the federally recognized Indian tribes in the State provided a statement under subsection 1 to the commission indicating that they do not wish to be included in such a partnership.

3. County approval. If the voters of either Washington County or Aroostook County, or both, approve the operation of a casino pursuant to a referendum held in accordance with section 1011-A, the commission shall develop a request for proposals designed to encourage vigorous bidding for the purpose of awarding one bidder the privilege to submit an application to the board for a casino operator license. The commission shall request bids for the privilege to submit an application to the board for one casino to be operated in either Washington County or Aroostook County, except that bids may not be requested for a proposal in a county in which the voters rejected the operation of a casino.

4. Information to bidders. A request for proposals developed by the commission must instruct potential bidders to propose the scope of the gambling facility and amenities to be offered in conjunction with the facility and how the proposed casino will establish a socially responsible, economically successful business for the operator, considering license fees, minimum capital investment requirements, regulatory standards and required rates of revenue distribution. The request for proposals must list the federally recognized Indian tribes in the State that provided a statement under subsection 1 to the commission indicating that they wished to be included in a partnership for the operation of or ownership in a casino and require a bid submission to include a partnership agreement that includes each of the tribes listed.

5. Consideration of bids for privilege to submit casino operator license application to the board for a northern casino. A bidder seeking award of the privilege to submit an application to the board for a license to operate a casino in Washington County or Aroostook County shall comply with the requirements determined by the commission, including the requirement that proposals include a partnership with at least 2 federally recognized Indian tribes in the State regarding operation of the casino or ownership in the casino, or both. The commission shall require that a proposal for the privilege to submit an application to the board for the operation of a casino include a nonrefundable application fee of $100,000 and an agreement to pay the costs of the board for processing an application and performing background investigations, as described in section 1018, subsection 1, if awarded the privilege to submit an application to the board for a license to operate a casino. The commission shall ensure that the request for proposals clearly identifies the deadline for submission and all bid requirements. The commission shall follow, as nearly as practicable, the provisions governing competitive bidding prescribed by Title 5, chapter 155, subchapter 1-A and rules adopted pursuant to that subchapter.

6. Request for proposals; factors; northern casino. When considering bids received in response to a request for proposals prescribed in this section for a location in Washington County or Aroostook County, the commission shall consider the following:

A. Business and market factors, including:

(1) The bidder's commitment and capacity to make an initial minimum capital investment of $20,000,000 for a casino facility. Land acquisition, license fees and off-site improvements are not considered to be part of the minimum capital investment;

(2) The potential gross and net income to be generated by the bidder based upon documented, expert market analysis;

(3) The extent to which the bidder's market plans suit the character of the region and the local population in a way that encourages residents of the State to choose to patronize the bidder's proposed facility as opposed to gaming facilities in other states or provinces;

(4) The extent to which the bidder's proposed gambling facility can reasonably be expected to serve as a regional recreational gambling destination;

(5) The bidder's proposed capital investment in a gambling facility, proposed amenities associated with the facility and timing of capital investment expenditures in terms of ensuring that the facility is profitable; and

(6) Other factors, properly disclosed in the commission's request for proposals, that the commission determines to be relevant;

B. Economic development factors, including:

(1) The bidder's plan to be part of or enter into a partnership with 2 or more federally recognized Indian tribes in the State and the extent to which the proposed gambling facility will maximize employment opportunities and economic benefits for all federally recognized Indian tribes in the State;

(2) The bidder's workforce development plan and the extent to which it will maximize use of the region's existing labor force;

(3) The impact on economic development, existing and planned, in the region of the proposed gambling facility; and

(4) Other factors, properly disclosed in the commission's request for proposals, that the commission determines to be relevant;

C. Site location factors, including:

(1) The adequacy of transportation routes leading to the proposed location of the gambling facility;

(2) Any negative impact of the proposed location of the gambling facility on the municipality in which the facility is to be located, including but not limited to traffic congestion, worsened road safety conditions and increased safety concerns for pedestrian traffic;

(3) The proximity of the proposed location of the gambling facility to major transportation routes and the Canadian border in order to maximize patronage from cross-border traffic;

(4) The bidder's proposals for mitigating negative impacts identified under this paragraph; and

(5) Other factors, properly disclosed in the commission's request for proposals, that the commission determines to be relevant; and

D. Factors other than those listed in paragraphs A to C, including:

(1) The bidder's plan to identify, address and minimize the potential for and existence of negative consequences associated with gambling and the operation of the bidder's proposed facility, including, but not limited to, a financial commitment to efforts to address problem gambling prevention, intervention, treatment and research;

(2) The effects, both positive and negative, that can be reasonably anticipated to be experienced by the municipality in which the proposed gambling facility is located and the communities in the region; and

(3) The likelihood that the bidder will meet the casino operator license requirements described in section 1016.

7. Bid award factor priorities; northern casino. The commission shall develop a system of assigning points to the factors required to be considered under subsection 6. The commission is authorized to hire or enter into a contract with vendors experienced in evaluating business plans for large-scale development and the effects of development on the local and regional economies to assist with the consideration of bids and development of the point system required by this subsection. The commission shall request, and take into consideration when awarding a bid, comment from members of the 4 federally recognized Indian tribes in the State for the purpose of determining which proposal provides the greatest employment opportunities and economic benefits to all of the 4 federally recognized Indian tribes. Development of a point system must ensure that factors that support the following are awarded the highest point value:

A. The maximum potential increase in employment opportunities and economic benefits for all federally recognized Indian tribes in the State; and

B. The representation and incorporation by the proposed casino of the character of the State generally and, in particular, the character of the surrounding region consistent with historic uses, local planning and zoning requirements.

8. Notice of award. Upon award of the privilege to submit an application for a casino operator license to the board, the commission shall identify in a document provided to all bidders and posted on the board's publicly accessible website how the successful bidder's proposal supported the priorities described in subsection 7.

9. Contract required; northern casino. A person who is selected as the winning bidder for the privilege to submit an application to the board for a casino operator license shall agree to enter into a contract with the commission that obligates the casino operator to the proposals made in the bid submitted in accordance with this section. In addition, the contract must include:

A. A framework of reasonable financial penalties for failure of the casino operator to comply with the terms of the contract and the circumstances under which failure to comply with terms of the contract justifies withholding all net slot machine income and net table game income until the terms of the contract are satisfied;

B. Disclosure of partnership agreements with at least 2 of the federally recognized Indian tribes in the State and a framework of compensation to be paid to the parties in the partnership for failure to abide by those agreements;

C. An agreement that, regardless of whether the casino is operated on land owned by a federally recognized Indian tribe, tribal reservation land, tribal territory or land held in trust by a tribe, the casino is subject to the provisions of this chapter and the laws of the State, generally; and

D. Annual reinvestment requirements that direct the casino operator, beginning no sooner than 5 years after commencing operation of slot machines at the casino, to either make capital improvements to the casino facility or deposit with the board, in an account described in section 1018, subsection 2-D, an amount no less than 2% but no greater than 3% of net slot machine income and net table game income generated by the casino during the previous year.

The commission shall consult with the Office of the Attorney General during the negotiation and execution of the contract. The contract must be approved by the Attorney General. The casino operator license issued by the board does not take effect and the board may not accept the license fee required under section 1018, subsection 1, paragraph C-3 until the contract is executed.

10. Entity that is not federally recognized tribe may submit bid; expert analysis may be required. Nothing in this section precludes an entity that is not a federally recognized Indian tribe from submitting a bid to the commission as long as the entity that is not a federally recognized Indian tribe has entered into a partnership agreement with the federally recognized Indian tribes that provided a statement to the commission under subsection 1 indicating that they wished to be in a partnership for the operation of or ownership in a casino. The commission may require submission of documented expert analysis from a bidder to support the proposals submitted by the bidder.’

Amend the amendment by striking out all of section 12 and inserting the following:

‘Sec. 12. 8 MRSA §1018, sub-§1, ¶¶C-2 to C-5 are enacted to read:

C-2. The fee for a casino operator license for a casino in York County or Cumberland County, issued in accordance with section 1011-B, is $55,000,000. The license fee must be deposited in accordance with section 1018-A, except for $5,000,000, which must be deposited to the General Fund and used for the administrative expenses of the board. The license fee is separate from the nonrefundable application fee required pursuant to section 1011-B, subsection 1 and the payment of costs to the board for processing the application and performing background investigations.

C-3. The fee for a casino operator license for a casino in Washington County or Aroostook County, issued in accordance with section 1011-C, is $1,000,000, which must be deposited to the General Fund and used for the administrative expenses of the board. The license fee is separate from the nonrefundable application fee required pursuant to section 1011-C, subsection 5 and the payment of costs to the board for processing the application and performing background investigations.

C-4. The renewal fee for a casino operator license for a casino in Washington County or Aroostook County, issued subsequent to the award by competitive bidding in accordance with section 1011-C, is $100,000 and is due 5 years after the initial fee required under paragraph C-3 and every 5 years thereafter.

C-5. The annual registration fee for a slot machine and a table game operated at a casino licensed on or after January 1, 2016 is $100.’

Amend the amendment by striking out all of section 15 and inserting the following:

‘Sec. 15. 8 MRSA §1018, sub-§§2-A to 2-D, 3-A and 3-B are enacted to read:

2-A. Term of license issued on or after January 1, 2016; southern casino. A casino operator license issued by the board pursuant to section 1011, subsection 2-C is effective for 20 years unless revoked or surrendered pursuant to subchapter 5.

2-B. Term of license issued on or after January 1, 2016; northern casino. A casino operator license for a facility in Washington County or Aroostook County issued by the board pursuant to section 1011, subsection 2-C is effective for 5 years from the date of issuance unless revoked or surrendered pursuant to subchapter 5.

2-C. Annual reinvestment requirements; southern casino. A casino operator licensed by the board pursuant to section 1011, subsection 2-C operating a casino in York County or Cumberland County may deposit with the board the percentage of net slot machine income and net table game income required as an annual reinvestment pursuant to the contract executed in accordance with section 1011-B, subsection 5. The board shall hold the funds in an interest-bearing, nonlapsing account. The casino operator may request funds from the account for the purpose of making capital investments or improvements to the casino facility. If there are funds in the account and the casino ceases operation for a period of more than 90 days, the funds must be deposited to the General Fund.

2-D. Annual reinvestment requirements; northern casino. A casino operator licensed by the board pursuant to section 1011, subsection 2-C operating a casino in Washington County or Aroostook County may deposit with the board the percentage of net slot machine income and net table game income required as an annual reinvestment pursuant to the contract executed in accordance with section 1011-C, subsection 9. The board shall hold the funds in an interest-bearing, nonlapsing account. The casino operator may request funds from the account for the purpose of making capital investments or improvements to the casino facility. If there are funds in the account and the casino ceases operation for a period of more than 90 days, the funds must be deposited to the General Fund.

3-A. Licensee other than the original applicant; contract applicable; transfer fee. If a person initially licensed to operate a casino after January 1, 2016 in York County or Cumberland County surrenders the license or the license is revoked, a subsequent licensee authorized to operate the casino in accordance with this chapter is subject to the terms of the contract required by and executed under section 1011-B, subsection 5. A subsequent licensee is required to submit an application to the board and is subject to the licensing qualifications prescribed under section 1016 and may only operate the casino for the remainder of the 20-year license term applied to the initial licensee. The fee for the transfer of a casino operator license initially issued subsequent to the competitive bid process under section 1011-B is $500,000, which must be submitted to the board for deposit to the General Fund.

3-B. Licensee other than original applicant; contract applicable. If a person initially licensed to operate a casino in Washington County or Aroostook County surrenders the license or the license is revoked, a subsequent licensee authorized to operate the casino in accordance with this chapter is subject to the terms of the contract required by and executed under section 1011-C, subsection 9. A subsequent licensee is required to submit an application to the board and is subject to the licensing qualifications prescribed under section 1016.’

Amend the amendment in section 16 in §1018-A in the first line (page 9, line 2 in amendment) by inserting after the following: " mitigation" the following: ' ; southern casino fee'

Amend the amendment in section 19 in subsection 3 in paragraph A in the last line (page 10, line 9 in amendment) by striking out the following: "and" and inserting the following: ' and'

Amend the amendment in section 19 in subsection 3 in paragraph B in the last line (page 10, line 13 in amendment) by striking out the following: "casino." and inserting the following: 'casino . ; and'

Amend the amendment in section 19 in subsection 3 by inserting at the end the following:

‘ C. A casino operating in Washington County or Aroostook County, licensed pursuant to section 1011-C, may operate up to 250 slot machines for the 3 years after commencement of slot machine operation at the casino and up to 350 machines after 3 years of slot machine operation at the casino.’

Amend the amendment by inserting after section 19 the following:

‘Sec. 20. 8 MRSA §1036, sub-§2-A, as amended by PL 2013, c. 118, §2, is further amended to read:

2-A. Distribution from casino of slot machine income. A casino operator shall collect and distribute 46% of the net slot machine income from slot machines operated by the casino operator to the board for distribution by the board as follows:

A. Twenty-five percent of the net slot machine income must be forwarded directly by the board to the Treasurer of State, who shall credit the money to the Department of Education, to be used to supplement and not to supplant funding for essential programs and services for kindergarten to grade 12 under Title 20-A, chapter 606-B;

B. Four percent of the net slot machine income must be forwarded by the board to the University of Maine System Scholarship Fund created in Title 20-A, section 10909 and to the Board of Trustees of the Maine Maritime Academy to be applied by the board of trustees to fund its scholarship program. The slot machine income under this paragraph must be distributed as follows:

(1) The University of Maine System share is the total amount of the distribution multiplied by the ratio of enrolled students in the system to the total number of enrolled students both in the system and at the Maine Maritime Academy; and

(2) The Maine Maritime Academy share is the total amount of the distribution multiplied by the ratio of enrolled students at the academy to the total number of enrolled students both in the system and at the academy;

C. Three percent of the net slot machine income must be forwarded by the board to the Board of Trustees of the Maine Community College System to be applied by the board of trustees to fund its scholarships program under Title 20-A, section 12716, subsection 1;

D. Four percent of the net slot machine income must be forwarded by the board to the Treasurer of State, who shall distribute the funds to the tribal governments of the Penobscot Nation and the Passamaquoddy Tribe;

E. Three percent of the net slot machine income must be deposited to the General Fund for administrative expenses of the board, including gambling addiction counseling services, in accordance with rules adopted by the board;

F. Two percent of the net slot machine income must be forwarded directly to the municipality in which the casino is located;

G. One percent of the net slot machine income must be forwarded by the board to the Treasurer of State, who shall credit the money to the Agricultural Fair Support Fund established in Title 7, section 91;

H. One percent of the net slot machine income must be forwarded by the board to the Treasurer of State, who shall credit the money to the fund established in section 298 to supplement harness racing purses;

I. One percent of the net slot machine income must be credited by the board to the Sire Stakes Fund created in section 281;

J. One percent of the net slot machine income must be forwarded directly to the county in which the casino is located to pay for mitigation of costs resulting from gaming operations;

L. Beginning July 1, 2013, 1/2 of 1% of the net slot machine income must be forwarded by the board to the Treasurer of State, who shall credit the money to the Maine Milk Pool, Other Special Revenue Funds account within the Department of Agriculture, Conservation and Forestry to help fund dairy farm stabilization pursuant to Title 7, sections 3153-B and 3153-D; and

M. Beginning July 1, 2013, 1/2 of 1% of the net slot machine income must be forwarded by the board to the Treasurer of State, who shall credit the money to the Dairy Improvement Fund established under Title 10, section 1023-P.

If a recipient of net slot machine income in paragraph D, H or I owns or receives funds from a slot machine facility or casino, other than the casino in Oxford County or the slot machine facility in Bangor, then the recipient may not receive funds under this subsection, and those funds must be retained by the Oxford County casino operator.’

Amend the amendment in section 20 in the first line (page 10, line 14 in amendment) by striking out the following: "and 2-E" and inserting the following: 'to 2-F'

Amend the amendment in section 20 by inserting at the end the following:

‘ 2-F. Distribution of slot machine income and table game income from a northern casino. A casino operator licensed to operate a casino in Washington County or Aroostook County pursuant to section 1011-C shall collect and distribute 46% of net slot machine income and 16% of net table game income to the board. The distributions must be held by the board until a distribution is established by the Legislature for net slot machine income and net table game income generated by a casino.’

Amend the amendment by inserting after section 24 the following:

‘Sec. 25. Joint standing committee authorized to submit legislation. The joint standing committee of the Legislature having jurisdiction over veterans and legal affairs is authorized to submit legislation to the First Regular Session of the 128th Legislature establishing a manner of distribution of slot machine and table game revenue that will apply to a casino licensed pursuant to the Maine Revised Statutes, Title 8, section 1011-C in either Washington County or Aroostook County and amending the laws governing the issuance of casino operator licenses and the regulation of casinos based on rules of the Department of Public Safety, Gambling Control Board that currently govern those functions.’

Amend the amendment by relettering or renumbering any nonconsecutive Part letter or section number to read consecutively.

summary

This amendment establishes a competitive bid process for a casino in either Washington County or Aroostook County, the operation of which is to maximize economic and employment benefits for the 4 federally recognized Indian tribes in the State, known as the northern casino. The Casino Development Commission is directed to develop a request for proposals for the privilege to submit an application to the Department of Public Safety, Gambling Control Board for a casino operator license. Prior to the commission's submitting a request for proposals for a northern casino operator license, voters would have to approve the operation of a casino by a countywide referendum. The referendum must be held on the same date as a statewide election and no sooner than June 1, 2017 and no later than July 1, 2018. The fee to submit a bid to the commission is $100,000 for a northern casino. It provides for specific supporting information to be submitted by the bidder and considered by the commission including the bidder's ability to make a minimum capital investment of $20,000,000 for a northern casino. The bid for a northern casino requires a partnership with at least 2 federally recognized Indian tribes in the State.

For the northern casino, the commission is directed to develop a point system for the factors to be considered in evaluating proposals and give priority to proposals that maximize the employment and economic benefits to federally recognized Indian tribes in the State. The winning bidder must enter into a contract with the commission that obligates the casino operator to abide by the proposals made in the winning bid. Failure to abide by the terms of the contract could result in financial penalties to the operator.

The license fee for a northern casino under the amendment is $1,000,000 for a 5-year term with a renewal fee of $100,000.

The amendment sets the distribution of net slot machine revenue for the northern casino at 46% and sets the distribution of net table game revenue for the casino at 16%. The bill authorizes the Joint Standing Committee on Veterans and Legal Affairs to submit legislation establishing a distribution of the slot machine and table game revenue required to be paid by the casino.

Under current law, 4% of net slot machine income must be forwarded to the tribal governments of the Penobscot Nation and the Passamaquoddy Tribe, unless those tribal governments own or receive funds from a slot machine facility or casino, other than the casino located in Oxford County or the slot machine facility in Bangor, in which case the tribal governments are not due any of the net slot machine income. This amendment removes that disqualification, allowing those tribal governments to receive net slot machine income even if they own or receive funds from a slot machine facility or casino.

HP0876 LD 1280	Session - 127th Maine Legislature S "B" to C "E", Filing Number S-442, Sponsored by Patrick		LR 1572 Item 20
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