Increases the minimum percentage collected by the municipal governments hosting the facility

Summary of specific provisions

Section 1 adds a new subdivision 2-a to State Finance Law § 99-h requir- ing any host community receiving funds pursuant to a tribal-state compact directly from a Native American nation or tribe to inform the State Comptroller of such payment within 7 days. It also makes it clear that any such payments (1) satisfy the obligations of the Native Ameri- can nation or tribe under the state-nation compact, and (2) that any such payments made directly by a Native American nation or tribe to a municipal government shall be deducted from the amounts the state would otherwise be required to pay the municipality under SFL § 99-h.

Section 2 amends subdivision 2 of State Finance Law § 99-h to authorize the payments of casino monies under a tribal-state compact directly to a host municipality.

Section 3 amends subdivision 3 of State Finance Law § 99-h to increase the percentage of money from 25% to 50% that the host municipalities of Buffalo and Niagara, as well as Cattaraugus, Chautauqua and Allegany, receive pursuant to the compact.

Section 4 adds new subdivisions d and e to § 12 of the Executive Law to provide that any municipal government that hosts a tribal casino may receive payments directly from a Native American nation or tribe. It further provides that any such payments made shall be deemed to have been made in satisfaction of the tribal-state compact, and provides that all such payments are to be deducted from the amount the municipality would otherwise receive under SFL § 99-h. The bill also provides that any municipal government which receives payment pursuant to this section shall utilize the funds received for purposes authorized under section 99-h of the state finance law,-the same purposes which would apply had the payment had been channeled through the state.

Section 5 provides for an immediate effective date.

Justification

Under current law, municipalities such as the cities of Niagara and Buffalo that host Indian gaming facilities are only entitled to receive a minimum 25% of the state's total takeout from the net drop of elec- tronic gaming devices. The state, on the other hand, is reaping the vast majority of the revenue (the remaining 75%). Put in the simplest terms, host municipalities are being shortchanged.

Given the amount of construction and development underway in Niagara, Buffalo and surrounding areas, it becomes clear that more funds from the casino must be directed to host municipalities to help offset the burden on the taxpayers who live in these areas who are otherwise shouldering these costs. This bill would therefore increase the minimum percentage of the net drop received by host municipalities from 25% to 50%.

Additionally, the State of New York and the Seneca Nation of Indians are currently in a dispute over the terms of the State-Nation gaming compact. As a result, the Seneca Nation Tribal Council recently voted to stop making payments to the state under the state-nation gaming compact, claiming that the state has breached the agreement, which gives the Seneca Nation exclusive rights to operate gaming facilities in Western New York.

Unfortunately, the municipalities hosting the Seneca Nation's casinos have become innocent victims of this dispute, since a portion of the funds generated at those casinos ultimately go to the municipalities that host them. Those funds are being denied to the host municipalities while New York State and the Seneca Nation try to resolve their differ- ences, meaning that the local governments are not receiving necessary funds that they are otherwise entitled to and desperately need in these difficult economic times.

This legislation represents a compromise to avoid economic harm to host communities. It authorizes a Native American nation or tribe, such as the Seneca Nation of Indians, to pay host municipalities directly while they work with New York State to resolve their differences.

Where a Native American nation or tribe makes direct payments to a host municipality, the bill requires the host municipality to notify the State Comptroller in order to ensure that the nation or tribe receives credit from the State for making such payments. It also provides that any municipality receiving direct payments would have such amounts deducted from the amounts they would otherwise be due from the State.

By altering state law to permit direct payments from a Native American Casino to a host community, this legislation is intended to protect host municipalities and the residents of these communities. Its enactment into law will ensure that they do not suffer while the State and a Native American nation or tribe resolve a dispute that the host munici- pality is not a party to.

This compromise will protect the Western New York economy by ensuring that payments due as a result of locally generated casino dollars are

not held up due to the inability of the state's leadership in Albany to resolve their dispute over the terms of the gaming compact with the Seneca Nation of Indians.

Prior legislative history

Similar to S.1226 of 2009/10 (Advanced to Third Reading) and S.866 of 2011/12

Fiscal implications

To be determined.

Effective date

This act shall take effect immediately, with provisions.