N.Y. Comp. Codes R. & Regs. tit. 9 § 5122.4

Current through Register Vol. 46, No. 45, November 2, 2024

Section 5122.4 - Capital improvement plan implementation and withdrawals from the capital investments account

(a) Request for approval. Prior to the commencement of each capital improvement project, the agent shall submit to the commission a request for project approval in a standard format as prescribed by the commission. Such request shall:

(1) describe the overall capital project, including the reasons for implementing the project, the estimated total project cost and the estimated start and completion date for the project; and

(2) describe how the capital project will increase attendance at the video gaming facility and increase the amount of revenue generated in support of education aid.

(b) Time limits to request approval . The commission shall approve withdrawals from the capital investments account only for capital project construction or improvements commenced on or after April 1, 2008, or the portion of a project completed after April 1, 2008 for projects, or phases of projects, commenced before April 1, 2008.

(c) Requirements for approval. Not later than 15 days from receipt of a capital project request for approval, the commission shall review the request and provide the commission's approval or denial of the project. Each project shall qualify as an approved use of the funds from the capital investments account if such project meets the following guidelines:

(1) the capital project includes the addition of tangible, permanent assets in the form of land, buildings, or equipment; or the project includes the restoration of such existing assets ;

(2) project assets purchased or restored, are to be used in the operation of video gaming and are expected to have a useful life of two years or more, providing a reasonable benefit throughout the assets useful life ;

(3) the capital expenditure is of significant value, consistent with standard accounting policies for the recording of capital assets ; and

(4) the capital project will increase patronage at the video gaming facility and increase the amount of revenue generated to support education aid.

(d) Approved projects. Commission approval of a capital project shall entitle the video lottery gaming agent to withdraw the amount of associated costs of such approved project from such video lottery gaming agent's the capital investments account, for which the video lottery gaming agent obtains substantiation that the costs are reasonable within the industry for the size and scope of the project. Competitive bidding shall be required for all single-component project costs in excess of $50,000, provided, however, that certain sole-source and professional services, such as architectural and engineering services and construction manager services where the construction manager does not perform construction work itself, may be excluded from the competitive bid requirements. Any firm exempt from competitive bidding must be at arm's length from the video lottery gaming agent.

(e) Denial of approval. In the event the commission does not approve a capital project request, the video lottery gaming agent shall be so notified in writing and any costs incurred for the project shall be the sole responsibility of such video lottery gaming agent and shall not be withdrawn from the capital investments account.

(f) Withdrawal of funds for approved projects. Upon receiving the commission's approval of a capital project, a video lottery gaming agent may at any time submit requests to withdraw the amounts associated with the approved project. Any such request shall be submitted in writing to the commission and shall be accompanied by supporting documentation in the form of invoices and cancelled checks, or other documents as may be required to show proof of payment for capital expenditures associated with the approved project. Upon receiving the commission's approval, a video lottery gaming agent shall be authorized to withdraw the approved funds from the segregated capital investments account.

(g) Review of books and records. The commission or the commission's representative may, at the discretion of the commission, review the books and records of a video lottery gaming agent to determine additional needs for assurance in regard to use of the capital award. Each agent shall maintain sufficient documentation and a clear audit trail to support the expenditures from the segregated capital investments account.

(h) Violations. The failure of a video lottery gaming agent to submit any report required by this Part shall be a violation of such video lottery gaming agent's license, the act and this Part .

(i) Inquiries. Exceptions, discrepancies, or questionable spending the commission identifies must be explained by the video lottery gaming agent in a timely manner to the satisfaction of the commission, but in no event later than 30 days from the date of the commission inquiry. A failure by the video lottery gaming agent to adequately respond to any inquiry of the commission shall be a violation of this Part.

(j) Detail of expenses. The agent shall prepare each report in a professional manner, detailing the use of funds from the capital investments account . Appropriate penalties may be applied if the commission determines that a video lottery gaming agent has submitted expenses that do not qualify as a capital expense.

(k) Sanctions. In the event an expenditure or discrepancy the commission raises cannot be adequately explained by the video lottery gaming agent, or in the event any violation of this Part remains uncured for a period of up to 30 days, the commission, in addition to any other remedy permitted by this Subtitle, may take any or all of the following actions:

(1) rescind or withhold approval of capital projects, in which event no further withdrawal from the capital investments account shall be permitted until such violation is cured;

(2) deny the cost and deduct the amount thereof from the balance of any succeeding approved capital improvement project ;

(3) require the agent to reimburse the capital investments account in an amount equal to the discrepancy; and

(4) reimburse the commission for the cost of the commission's expenses related to researching and investigating such expenditure.

(l) Insufficient expense reports. In the event any expense reports are deemed insufficient at the commission's sole discretion, the commission may require an agent to provide the following information:

(1) a full and complete reconciliation of the capital improvement expenses and associated costs incurred; and

(2) an accounting for the cash spending related to the capital improvement funds.

(m) Documentation. Each agent shall maintain sufficient documentation to support the withdrawals made from such agent's capital investments account.

N.Y. Comp. Codes R. & Regs. Tit. 9 § 5122.4

Amended New York State Register November 24, 2021/Volume XLIII, Issue 47, eff. 11/24/2021