ASSEMBLY, No. 1927

 

STATE OF NEW JERSEY

 

INTRODUCED MAY 6, 1996

 

 

By Assemblymen LeFEVRE, BLEE, Cottrell, Gibson, Asselta and Moran

 

 

An Act concerning development projects of the Casino Reinvestment Development Authority in Atlantic City, amending P.L.1984, c.218, and amending and supplementing P.L.1993, c.159.

 

    Be It Enacted by the Senate and General Assembly of the State of New Jersey:

 

    1.    Section 1 of P.L. 1993, c. 159 (C.5:12-173.1) is amended to read as follows:

    1. The Legislature finds that the single most significant factor contributing to the cost of constructing, maintaining, operating and supporting highways, roads and infrastructure, in Atlantic City, and particularly in the "corridor" region of the city, is the heavy volume of motor vehicular traffic occasioned by the attraction of casino gambling in Atlantic City. This traffic is encouraged by the provision of free parking by casino operations, by the relative underdevelopment of public transportation services, and by the shortage of hotel accommodations in the city. While the Legislature has taken various measures, most notably the "South Jersey Transportation Authority Act," P.L.1991, c.252 (C.27:25A-1 et al.), to provide and improve public transportation services in the South Jersey region as an alternative to the use of motor vehicles, the heavy capital costs associated with reconstruction of the corridor region's infrastructure require a continuous source of public funding. The Legislature declares, therefore, that it is in the public interest to require a standard minimum charge for casino parking within Atlantic City, and to impose fees on amounts received from those charges, with the proceeds of those fees to be used by the Casino Reinvestment Development Authority for projects which are related to improving the highways, roads, infrastructure, traffic regulation and public safety of the city, or which are otherwise necessary or useful to the economic development and redevelopment of the city in this regard. It is also in the public interest to establish a special temporary fund for the use of existing moneys of the authority for the provision of financial assistance to [casinos and] casino [hotels]licensees to construct, reconstruct or rehabilitate hotel rooms in Atlantic City.

     The Legislature declares that it is the public purpose of this amendatory act, P.L. , c. (C. ) (now pending before the Legislature as this bill), that financial assistance to casino licensees to construct, reconstruct or rehabilitate hotel rooms in Atlantic City shall be determined after excluding costs reasonably related to space used for the conduct of casino gaming. It was, and continues to be, the public purpose of P.L.1993, c.159 (C.5:12-173.1 et seq.) that financial assistance may be provided to a project which includes, incorporates, facilitates or supports space used for the conduct of casino gaming in a casino hotel facility, but only for costs reasonably related to hotel rooms and their appurtenant facilities in the project.

(cf: P.L.1993, c.159, s.1)

 

    2.    Section 8 of P.L.1993, c.159 (C.5:12-173.8) is amended to read as follows:

     8.    a. From the moneys made available to the Casino Reinvestment Development Authority pursuant to section 3 of P.L.1984, c.218 (C.5:12-144.1), the authority shall, in such manner as it may reasonably determine, set aside $100,000,000 for investment on hotel development projects in Atlantic City undertaken by a casino licensee under the "Casino Control Act," P.L.1977, c.110 (C.5:12-1 et seq.), operating an approved hotel on the effective date of this amendatory and supplementary act, P.L.1993, c.159 (C.5:12-173.1 et al.), which result in the construction, reconstruction or rehabilitation of at least 200 hotel rooms in the City of Atlantic City. The authority shall, by regulation, adopt standards for determining the extent of construction, reconstruction or rehabilitation of hotel rooms or appurtenant facilities required in order to qualify for authority investment, which standards shall require at least that the hotel rooms be operated as part of a licensed casino facility or be first class hotel rooms located and operated in a manner consistent with an authority approved project. The authority shall require as a condition for authority investment that the hotel rooms be subject to an agreement with the authority that requires the rooms to be reserved, at certain times and under certain conditions agreeable to the authority, for convention business in connection with an authority approved project. A hotel development project may qualify for authority investment notwithstanding that it includes, incorporates, facilitates or supports an expansion of space used for the conduct of casino gaming in a casino hotel facility operated by a casino licensee. The provisions of section 30 of P.L.1984, c.218 (C.5:12-178) shall not apply to investments made out of the moneys so set aside.

    The authority shall determine the amount each casino licensee shall be eligible to receive out of the moneys so set aside. The form, amount and terms of the investment made by the authority shall be determined by the authority, but the maximum amount of the investment shall not exceed the lesser of the amount which the casino licensee applying therefor is eligible to receive, or [an]the amount equal to [35%]27% of the costs reasonably related to constructing, reconstructing or rehabilitating the hotel rooms or appurtenant facilities in the project[, whichever is less.]excluding costs reasonably related to space used for the conduct of casino gaming.

   For the purposes of determining each casino licensee's eligibility for authority investments from the moneys so set aside, the authority may by resolution permit the transfer of obligation to make payment under section 3 of P.L.1984, c.218 (C.5:12-144.1) to any other casino licensee which has received approval for investment in a project to construct, reconstruct or rehabilitate hotel rooms.

    In approving a hotel development project, the authority shall establish a schedule for investments to be made by the authority as progressive stages of construction, reconstruction or rehabilitation are accomplished. [A schedule so established shall provide for the completion of the project on or before December 31, 1996, unless the authority shall prior to that date find, by resolution, that a time extension for project completion is warranted by special circumstances or unforeseen occurrences.] Any moneys remaining in the special fund thereafter shall be available for investment in otherwise eligible projects of the authority.

    b. From the moneys made available to the Casino Reinvestment Development Authority pursuant to section 3 of P.L.1984, c.218 (C.5:12-144.1), the authority shall, in such manner as it may reasonably determine, set aside $75,000,000 for investment on hotel development projects in Atlantic City, which shall be in addition to the moneys set aside pursuant to subsection a. of this section. Any moneys set aside pursuant to that subsection a. which are not invested by the authority as the result of the failure of a casino licensee to comply with requirements, regulations, conditions or determinations made under that subsection a. shall be available for authority investment pursuant to this subsection b. Authority investments under this subsection b. shall be subject to the requirements, regulations, conditions and determinations of that subsection a., except as follows:

    (1)  The authority may provide an additional investment amount to a casino licensee which has had a hotel development project approved prior to the effective date of this amendatory act, P.L. , c. (C. ) (now pending before the Legislature as this bill), but which the authority has approved for an amount out of the moneys set aside pursuant to that subsection a. that is less than the maximum amount of investment for the approved project because sufficient investment funds were not available to fund all projects approved under that subsection a. at the maximum amount of investment. The additional investment may be made only as the result of an application made to the authority on or before April 1, 1996. The additional investment amount shall not be greater than the difference between the maximum amount of investment for the approved project under that subsection a. and the amount which the authority actually approved for the project. The authority may provide an additional investment amount pursuant to this paragraph (1) only for those previously approved hotel development projects for which construction, reconstruction or rehabilitation has actually and substantially commenced on or before August 31, 1996.

    (2)  Thereafter, any casino licensee may be eligible to receive an investment out of moneys set aside pursuant to this subsection b.; provided, that the casino licensee shall apply for approval of a hotel development project by the authority within 90 days following the effective date of this amendatory act. The authority shall require as a condition for authority investment under this paragraph that construction, reconstruction or rehabilitation of the hotel development project actually and substantially commence within 12 months after the date upon which the authority and the casino licensee enter into a hotel room credit agreement.

(cf: P.L.1993, c.159, s.8)

 

    3.    Section 5 of P.L.1984, c.218 (C.5:12-153) is amended to read as follows:

    5. a. There is established in, but not of, the Department of the Treasury a Casino Reinvestment Development Authority to consist of the following members:

    (1) Six members appointed by the Governor with the advice and consent of the Senate for terms of four years, except that of the initial members to be appointed pursuant to this 1991 amendatory act, P.L.1991, c.219, one shall be appointed for a term of two years and one for a term of four years;

    (2) One member appointed by the Governor upon the recommendation of the President of the Senate for a term of four years, except that the initial member to be appointed shall be appointed for a term of three years;

    (3) One member appointed by the Governor upon the recommendation of the Speaker of the General Assembly for a term of four years, except that the initial member to be appointed shall be appointed for a term of one year;

    (4) A member of the Casino Control Commission, who shall be appointed by the Governor and shall be a voting member of the authority;

    (5) The mayor of Atlantic City, ex officio and voting;

    (6) The Attorney General and the State Treasurer, ex officio and voting; [and]

    (7) Two casino industry representatives, both of whom shall be voting members, appointed by the Governor for terms of two years, except that of the initial appointees, one shall serve for a term of one year and one for a term of two years. No person shall be reappointed to succeed himself as a casino industry representative member, and no person appointed shall be an employee, officer or agent of the same casino licensee as the person whom he succeeds as a casino industry representative member; and

    (8)  One member appointed by the Governor to serve ex officio as a voting member, who shall be either the Commissioner of the Department of Commerce and Economic Development or the Commissioner of the Department of Community Affairs, or the Governor may appoint, in lieu thereof, an additional member of the Casino Control Commission as a voting member.

    No more than four of the voting members appointed by the Governor pursuant to paragraph (1) of this subsection shall be of the same political party.

    In the appointment of members of the authority, consideration should be given to achieving a membership of high quality and varied experience, with special emphasis on the fields of banking, finance, investment, and housing and urban development.

     b. Each member appointed by the Governor shall hold office for the term of his appointment and until his successor shall have been appointed and qualified. A member shall be eligible for reappointment. Any vacancy in the membership occurring other than by expiration of term shall be filled in the same manner as the original appointment but for the unexpired term only.

    c. The member or members of the Casino Control Commission appointed by the Governor shall serve as a member or members of the Casino Reinvestment Development Authority at the pleasure of the Governor, subject to the limitations in subsections c., f., and h. of section 52 of P.L.1977, c.110 (C.5:12-52). [The]Such a member may be removed or suspended from office as a member of the Casino Reinvestment Development Authority as provided in section 6 of this act. Any removal or suspension from office of [the]a member of the Casino Control Commission from the Casino Reinvestment Development Authority shall not affect his office held as a member of the Casino Control Commission. Removal from office as a member of the Casino Control Commission may only be done in accordance with subsection g. of section 52 of P.L.1977, c.110 (C.5:12-52).

(cf: P.L.1993,c.159,s.10)

 

    4.    Section 7 of P.L. 1984, c.218 (C.5:12-155) is amended to read as follows:

    7. The Governor shall designate from among the appointed and voting public members, a chairman and a vice chairman of the Casino Reinvestment Development Authority, who shall serve in those capacities at the pleasure of the Governor. The powers of the Casino Reinvestment Development Authority shall be vested in the members thereof in office from time to time and [seven]eight voting members of the Casino Reinvestment Development Authority shall constitute a quorum at any meeting thereof. Action may be taken by motions and resolutions adopted by the Casino Reinvestment Development Authority at any meeting thereof by the affirmative vote of at least [seven]eight members of the Casino Reinvestment Development Authority. No vacancy in the membership of the Casino Reinvestment Development Authority shall impair the right of a quorum of the members to exercise all the powers and perform all the duties of the Casino Reinvestment Development Authority.

 (cf: P.L.1995,c.18,s.42)

 

    5.    Section 9 of P.L. 1984, c.218(C.5:12-157) is amended to read as follows:

    9. The Attorney General and the State Treasurer, and, where appropriate, the Commissioner of the Department of Commerce and Economic Development or the Commissioner of the Department of Community Affairs, may designate an officer or employee of [his department]their respective departments and the Casino Control Commission member or members on the Casino Reinvestment Development Authority may designate another commissioner or employee of the commission to represent them at meetings of the Casino Reinvestment Development Authority, and each designee may lawfully vote and otherwise act on behalf of the member for whom he constitutes the designee. Any designation shall be in writing delivered to the Casino Reinvestment Development Authority and shall continue in effect until revoked or amended by writing delivered to the Casino Reinvestment Development Authority.

(cf: P.L.1991,c.219,s.4)

 

    6.    (New section) The State of New Jersey hereby covenants with the purchasers, holders and owners, from time to time, of any bonds secured by funds derived from fees imposed for the use of casino parking spaces pursuant to section 3 of P.L.1993, c.159 (C.5:12-173.3) that it shall not repeal or reduce the fee so imposed under that act, while bonds entitled to benefits from the fee so imposed are outstanding, and shall not modify or amend the provisions of that act so as to create any lien or charge on, or any pledge, assignment, diversion, withholding payment or other use of or deduction from the fee so imposed which is prior in time or superior in right to any payments required to be made pursuant to any bond covenants entered into with the purchasers, holders and owners of the bonds so secured.

 

    7.    This act shall take effect immediately.

 

 

STATEMENT

 

    It is the legislative intent of this bill that investments made by the Casino Reinvestment Development Authority under P.L.1993, c.159 (C.5:12-173.1et seq.) exclude costs reasonably related to space used for the conduct of casino gaming. It is also the intent of this bill to address the decision of the trial court in CRDA v. Coking, et al. Docket No. ATL-L-2974-94 by clarifying that it was and continues to be the public purpose of P.L.1993, c.159 (C.5:12-173.1 et seq.) and of this bill that investment monies may be used for hotel development projects which include, incorporate, facilitate or support an expansion of casino space in a casino hotel facility, but only for costs reasonably related to constructing, reconstructing or rehabilitating hotel rooms or appurtenant facilities, and not for costs reasonably related to casino space.

    The bill also clarifies the regulatory power of the authority to require that casinos licensees reserve hotel rooms in an approved hotel development project for convention business pursuant to an agreement with the authority.

    The bill requires that the Casino Reinvestment Development Authority set aside for investment on hotel development projects in Atlantic City an additional $75 million of moneys made available to the authority. The bill sets forth the order of priority for use of those investment moneys: first, for previously approved hotel development projects which were approved for less than the maximum amount of investment which they would have if sufficient funds were otherwise available; and second, for additional hotel development projects for casino licensees which apply after the effective date of the act. The bill provides appropriate application deadlines for new and additional hotel development projects, and deadlines by which construction, reconstruction or rehabilitation of a hotel development project must actually and substantially commence.

    In addition, the bill provides for appointment of two additional members to the authority, the Attorney General and a second member appointed by the Governor who may be the Commissioner of Commerce and Economic Development, the Commissioner of Community Affairs or a second Casino Control Commission member. It provides that persons appointed to the authority as casino industry representatives cannot be reappointed to succeed themselves or to represent the same casino licensee as their predecessors.

    The bill includes a provision pledging not to repeal or reduce the parking fee on casino parking spaces during the time that bonds secured by the parking fee revenues are outstanding.


                             

 

Concerns investments by Casino Reinvestment Development Authority in development projects in Atlantic City.