House Bill 8-7-1, calls for an amendment to the present law concerning Pachinko and Internet Digits concession contracts to permit additional concessions, to decrease fees, and enactment of grace period for the payment of gross revenue percentage fees.
The bill will also enable additional investors to engage in the pachinko business by amending the existing free requirements to entice potential investors.The bill stated that the term of each Concession agreement shall not exceed ten years, provided the term may be extended for up to an additional 10 years upon agreement by the President and Operator ; each Concession agreement shall provide for a minimum Concession fee of 4% of the total gross receipts realized from the operation of each Virtual Pachinko Business or Internet Digits Lottery Game Business in Palau, provided that the first payment of the 4% fee will commence two years after the date the business operation commences, plus a minimum of $2.5 million five hundred thousand dollars ($500,000) per year payable semi-annually or pursuant to a schedule of payment to be mutually agreed upon, provided that the first payment of this fee shall be made six months from the date the business operation commences.The bill further stated that funds generated by the concession fee of four percent (4%) of the gross receipts annually derived from the Virtual Pachinko Business in accordance with 11 PNC 1402(c), $500,000 shall be earmarked for and appropriated to the Civil Service Pension Plan, $125,000 shall be earmarked for and appropriated to the Palau National Scholarship Funds, $125,000 shall be earmarked for and appropriated to the Palau Community College Endowment Fund, and $250,000 shall be earmarked for and appropriated to a special fund to be created and held in trust for the financing of health care for citizens of the Republic and transferred to the Health Financing Plan Trust Fund upon future established establishment of such Trust Fund. Of the funds generated by the concession fee of four percent (4%) of the gross receipts annually derived from the Internet Digits Lottery Game Business in accordance with 11 PNC 1402(c), $500,000 shall be earmarked for and appropriated to the Palau Housing Authority, $125,000 shall be earmarked for and appropriated to the Palau National Scholarship Funds, $125,000 shall be earmarked for and appropriated to the Palau Community College Endowment Fund, and $250,000 shall be earmarked for and appropriated to a special fund to be created and held in trust for the financing of health care for citizens of the Republic and transferred to the Health Financing Plan Trust Fund upon future establishment of such Trust Fund.
