PRINTER'S NO.  1196

  

THE GENERAL ASSEMBLY OF PENNSYLVANIA

  

SENATE BILL

 

No.

711

Session of

2009

  

  

INTRODUCED BY EARLL, MELLOW, FONTANA, WOZNIAK, M. WHITE, KITCHEN, VANCE, WARD, TOMLINSON, TARTAGLIONE, ERICKSON, MUSTO, WASHINGTON, PIPPY, YAW, DINNIMAN, KASUNIC, LEACH AND FARNESE, JUNE 22, 2009

  

  

REFERRED TO COMMUNITY, ECONOMIC AND RECREATIONAL DEVELOPMENT, JUNE 22, 2009  

  

  

  

AN ACT

  

1

Amending Title 4 (Amusements) of the Pennsylvania Consolidated

2

Statutes, further providing for legislative intent and for

3

the definitions of "conviction," "licensed entity" and "slot

4

machine licensee"; providing for the definitions of

5

"executive-level public employee," "licensed entity

6

representative" and "trustee"; further providing for the

7

Pennsylvania Gaming Control Board, for powers of the board

8

and for code of conduct; providing for expenses of

9

Pennsylvania Gaming Control Board; further providing for

10

license or permit application hearing process and public

11

hearings, for board minutes and records, for regulatory

12

authority of board, for collection of fees and fines, for

13

slot machine license fee, for reports of board, for license

14

or permit prohibition, for slot machine license application

15

character requirements, for applications for license or

16

permit, for supplier licenses, for manufacturer licenses, for

17

additional licenses and permits and approval of agreements,

18

for license renewals, for change in ownership or control of

19

slot machine licensees and for nonportability of slot machine

20

license; providing for appointment of trustee; further

21

providing for Pennsylvania Gaming Economic Development and

22

Tourism Fund, for transfers from State Gaming Fund and for

23

financial and employment interests; providing for

24

prosecutorial and adjudicative functions; and further

25

providing for investigations and enforcement and for conduct

26

of public officials and employees.

27

The General Assembly of the Commonwealth of Pennsylvania

28

hereby enacts as follows:

 


1

Section 1.  Section 1102(11) of Title 4 of the Pennsylvania

2

Consolidated Statutes is amended and the section is amended by

3

adding paragraphs to read:

4

§ 1102.  Legislative intent.

5

The General Assembly recognizes the following public policy

6

purposes and declares that the following objectives of the

7

Commonwealth are to be served by this part:

8

* * *

9

(10.1)  The General Assembly has a compelling interest in

10

protecting the integrity of both the electoral process and

11

the legislative process by preventing corruption and the

12

appearance of corruption which may arise through permitting

13

campaign contributions by the gaming industry.

14

(11)  It is necessary to maintain the integrity of the

15

regulatory control and legislative oversight over the

16

operation of slot machines in this Commonwealth; to prevent

17

the actual or appearance of corruption that may result from

18

[large] campaign contributions; ensure the bipartisan

19

administration of this part; and avoid actions that may erode

20

public confidence in the system of representative government.

21

(11.1)  Completely banning political contributions by

22

certain individuals and entities subject to this act is

23

necessary to prevent corruption, or the appearance of

24

corruption, that may arise when politics and gaming are

25

intermingled.

26

Section 2.  The definitions of "conviction," licensed entity"

27

and "slot machine licensee" in section 1103 of Title 4 are

28

amended and the section is amended by adding definitions to

29

read:

30

§ 1103.  Definitions.

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1

The following words and phrases when used in this part shall

2

have the meanings given to them in this section unless the

3

context clearly indicates otherwise:

4

* * *

5

"Conviction."  A finding of guilt or a plea of guilty or nolo

6

contendere, whether or not a judgment of sentence has been

7

imposed as determined by the law of the jurisdiction in which

8

the prosecution was held. The term does not include a conviction

9

that has been expunged or overturned or for which an individual

10

has been pardoned or an order of Accelerated Rehabilitative

11

Disposition which has been issued.

12

* * *

13

"Executive-level public employee."  The term shall include

14

the following:

15

(1)  Deputy Secretaries of the Commonwealth and the

16

Governor's Office executive staff.

17

(2)  An employee of the executive branch with

18

discretionary power which may affect or influence the outcome

19

of a State agency's action or decision and who is involved in

20

the development of regulations or policies relating to a

21

licensed entity or who is involved in other matters under

22

this part. The term shall include an employee with law

23

enforcement authority.

24

(3)  An employee of a county or municipality with

25

discretionary powers which may affect or influence the

26

outcome of the county's or municipality's action or decision

27

and who is involved in the development of law, regulation or

28

policy relating to a licensed entity or who is involved in

29

other matters under this part. The term shall include an

30

employee with law enforcement authority.

- 3 -

 


1

(4)  An employee of a department, agency, board,

2

commission, authority or other governmental body not included

3

in paragraph (1), (2) or (3) with discretionary power which

4

may affect or influence the outcome of the governmental

5

body's action or decision and who is involved in the

6

development of regulation or policy relating to a licensed

7

entity or who is involved in other matters under this part.

8

The term shall include an employee with law enforcement

9

authority.

10

* * *

11

"Licensed entity[.]" or "licensee."  Any slot machine

12

licensee, manufacturer licensee, supplier licensee or other

13

person licensed by the Pennsylvania Gaming Control Board under

14

this part.

15

"Licensed entity representative."  A person acting on behalf

16

of or representing the interest of any applicant, licensee,

17

permittee or registrant, including an attorney, agent or

18

lobbyist, regarding any matter which may reasonably be expected

19

to come before the board.

20

* * *

21

["Slot machine licensee."  A person that holds a slot machine

22

license.]

23

* * *

24

"Trustee."  A fiduciary appointed by the Pennsylvania Gaming

25

Control Board to preserve the viability of a licensed facility

26

and the integrity of gaming in this Commonwealth.

27

* * *

28

Section 3.  Section 1201(b), (b.1), (f)(3), (h)(5), (7.1),

29

(10), (11), (13), (14) and (15) and (k) of Title 4 are amended,

30

subsection (h) is amended by adding paragraphs and the section

- 4 -

 


1

is amended by adding a subsection to read:

2

§ 1201.  Pennsylvania Gaming Control Board established.

3

* * *

4

(b)  Membership.--

5

(1)  The board shall consist of the following members:

6

[(1)] (i)  Three members appointed by the Governor.

7

[(2)] (ii)  One member appointed by each of the

8

following:

9

[(i)] (A)  The President pro tempore of the

10

Senate.

11

[(ii)] (B)  The Minority Leader of the Senate.

12

[(iii)] (C)  The Speaker of the House of

13

Representatives.

14

[(iv)] (D)  The Minority Leader of the House of

15

Representatives.

16

(2)  The chairman of the Community, Economic and

17

Recreational Development Committee of the Senate may hold a

18

public hearing on an appointee under paragraph (1).

19

(b.1)  Removal.--A member of the board shall serve at the

20

pleasure of the appointing authority and shall be removed from

21

office by the appointing authority:

22

(1)  for misconduct in office, willful neglect of duty or

23

conduct evidencing unfitness for office or incompetence; or

24

(2)  upon conviction of an offense graded as a felony, an

25

infamous crime, an offense under this part or an equivalent

26

offense under Federal law or the law of another jurisdiction.

27

* * *

28

(f)  Qualified majority vote.--

29

* * *

30

(3)  Notwithstanding any other provision of this part or

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1

65 Pa.C.S. § 1103(j) (relating to restricted activities), a

2

member shall disclose the nature of his disqualifying

3

interest, disqualify himself and abstain from voting in a

4

proceeding under this part in which his objectivity,

5

impartiality, integrity or independence of judgment may be

6

reasonably questioned, as provided in subsection (h)(6) or

7

section 1202.1(c)(3) (relating to code of conduct). If a

8

legislative appointee has disqualified himself, the qualified

9

majority shall consist of all of the remaining legislative

10

appointees and at least two gubernatorial appointees.

11

* * *

12

(h)  Qualifications and restrictions.--

13

* * *

14

(4.1)  No member appointed after the effective date of

15

this paragraph shall engage in any business, employment or

16

vocation for which the member shall receive any remuneration

17

except for an individual who is reappointed and who is a

18

member of the board on the effective date of this paragraph.

19

(5)  No member shall be paid or receive any fee or other

20

compensation other than salary and expenses provided by law

21

for any activity related to the duties or authority of the

22

board. [Nothing in this part shall prohibit a member from

23

engaging in any employment or receiving any compensation for

24

such employment that is not connected to or incompatible with

25

his service as a member of the board.]

26

* * *

27

(7.1)  Prior to being sworn as a member, an appointee and

28

his immediate family shall divest any financial interest in

29

any applicant, licensed facility or licensed entity and in an

30

affiliate, intermediary, subsidiary or holding company

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1

thereof owned or held by the appointee or known to be held by

2

the appointee's immediate family. For the duration of the

3

member's term and for [one year] two years thereafter, the

4

member and the member's immediate family may not acquire a

5

financial interest in any applicant, licensed facility or

6

licensed entity or in an affiliate, intermediary, subsidiary

7

or holding company thereof. For purposes of this paragraph,

8

the term "immediate family" shall mean spouse and any minor

9

or unemancipated child.

10

* * *

11

(10)  No former member may appear before the board in any

12

hearing or proceeding or participate in any other activity on

13

behalf of any applicant, licensed entity, or an affiliate,

14

intermediary, subsidiary or holding company thereof, or any

15

other licensee or permittee for a period of two years from

16

the termination of term of office.

17

(11)  No member, employee or independent contractor of

18

the board shall accept a complimentary service, wager or be

19

paid any prize from any wager at any licensed facility within

20

this Commonwealth or at any other facility outside this

21

Commonwealth which is owned or operated by a licensed gaming

22

entity or any of its affiliates, intermediaries, subsidiaries

23

or holding companies thereof for the duration of their term

24

of office, employment or contract with the board and for a

25

period of [one year] two years from the termination of term

26

of office, employment or contract with the board. The

27

provisions of this paragraph prohibiting wagering during the

28

term of employment shall not apply to employees [who] when

29

the employees utilize slot machines for testing purposes or

30

to verify the performance of a machine as part of an

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1

enforcement investigation.

2

* * *

3

(13)  No employee of the board [or individual employed by

4

an independent contractor of the board] whose duties

5

substantially involve licensing[,] or enforcement [or], the

6

development or adoption of laws, regulations or policy or who

7

has other discretionary authority which may affect the

8

outcome of an action or decision under this part, including

9

the executive director, bureau directors and attorneys, shall

10

do any of the following:

11

(i)  [accept] Accept employment with or be retained

12

by an applicant or licensed entity, or an affiliate,

13

intermediary, subsidiary or holding company thereof, for

14

a period of [one year] two years after the termination of

15

the employment relating to the conduct of gaming [or

16

contract with the board; or].

17

(ii)  [appear] Appear before the board in any hearing

18

or proceeding or participate in any other activity on

19

behalf of any applicant, licensee, permittee or licensed

20

entity, or an affiliate, intermediary, subsidiary or

21

holding company thereof, for a period of two years after

22

termination of the employment [or contract with the

23

board].

24

(iii)  As a condition of employment, an employee

25

under this paragraph shall sign an affidavit that the

26

employee will not accept employment with or be retained

27

by any applicant, licensed entity or an affiliate,

28

intermediary, subsidiary or holding company thereof for a

29

period of two years from the termination of employment.

30

An applicant or licensed entity or an affiliate,

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1

intermediary, subsidiary or holding company thereof shall

2

not employ or retain an individual who signed an

3

affidavit signed under this subparagraph. An applicant or

4

licensed entity or an affiliate, intermediary, subsidiary

5

or holding company that knowingly employs or retains an

6

individual in violation of this subparagraph shall be

7

subject to a penalty under section 1518(c) (relating to

8

prohibited acts; penalties).

9

(13.1)  No independent contractor or individual employed

10

by an independent contractor of the board whose duties

11

substantially involve consultation relating to licensing,

12

enforcement or the development or adoption of regulations or

13

policy under this part shall:

14

(i)  Accept employment with or be retained by an

15

applicant or a licensed entity or an affiliate,

16

intermediary, subsidiary or holding company thereof for a

17

period of one year after the termination of the contract

18

with the board.

19

(ii)  Appear before the board in any hearing or

20

proceeding or participate in any other activity on behalf

21

of an applicant, licensee, permittee or licensed entity

22

or an affiliate, intermediary, subsidiary or holding

23

company of an applicant, licensee, permittee or licensed

24

entity for a period of two years after termination of the

25

contract with the board.

26

(iii)  As a condition of a contract, an independent

27

contractor or individual employed by an independent

28

contractor of the board under this paragraph shall sign

29

an affidavit to not accept employment with or be retained

30

by any applicant, licensed entity or an affiliate,

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1

intermediary, subsidiary or holding company of an

2

applicant, licensed entity or affiliate for a period of

3

one year from the termination of employment. A licensed

4

entity or an affiliate, intermediary, subsidiary or

5

holding company of an applicant, licensed entity or

6

affiliate shall not employ or retain an individual who

7

signed an affidavit signed under this subparagraph. A

8

licensed entity or an affiliate, intermediary, subsidiary

9

or holding company thereof that knowingly employs or

10

retains an individual in violation of this subparagraph

11

shall be subject to a penalty under section 1518(c).

12

(14)  Upon the written request of an employee of the

13

board, the executive branch of the Commonwealth or a

14

political subdivision or of the agency or political

15

subdivision employing an employee, the State Ethics

16

Commission shall determine whether the individual's duties

17

substantially involve the development or adoption of laws, 

18

regulations or policy, licensing or enforcement under this

19

part or other discretionary authority which may affect the

20

outcome of an action or decision under this part and shall

21

provide a written determination to the employee to include

22

any prohibition under this paragraph. An individual who

23

relies in good faith on a determination under this paragraph

24

shall not be subject to any penalty for an action taken,

25

provided that all material facts set forth in the request for

26

a determination are correct.

27

(15)  If a member[, employee or independent contractor]

28

of the board violates any provision of this section, the

29

appointing authority [or the board may, upon notice and

30

hearing,] may remove the person from the board[, withdraw the

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1

appointment or]. A member removed under this paragraph shall

2

be prohibited from future appointment to the board and shall

3

be prohibited from applying for a license or permit, from

4

becoming an independent contractor of the board, or

5

registering as a licensed entity representative for a period

6

of five years from the date of removal from the board. If an

7

employee or independent contractor of the board violates any

8

provision of this section, the board may, upon notice and

9

hearing, terminate the employment or contract, and the person

10

shall be ineligible for future [appointment,] employment or

11

contract with the board and [for approval of a license or

12

permit under this part for a period of two years thereafter]

13

shall be prohibited from applying for a license or permit,

14

becoming an independent contractor or registering as a

15

licensed entity representative for a period of five years

16

from the date of termination of the employment or contract.

17

* * *

18

(k)  Appointments.--[The appointing authorities] Following

19

the initial appointment of members under subsection (b), the

20

appointing authority shall make [their initial] appointments

21

within 60 days of [the effective date of this part] a vacancy in

22

an office. No appointment shall be final until receipt by the

23

appointing authority of the required background investigation of

24

the appointee by the Pennsylvania State Police which shall be

25

completed within 30 days. No person who has been convicted in

26

any domestic or foreign jurisdiction of a felony, infamous crime

27

or gaming offense shall be appointed to the board.

28

* * *

29

(m.1)  Budgetary impasse.--If, in the event of a budgetary or

30

other fiscal crisis, the Governor implements a system in order

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1

to furlough employees or close any Commonwealth agency, the

2

board and its employees and all employees of the Department of

3

Revenue, the Pennsylvania State Police and the Office of

4

Attorney General whose duties involve the regulation and

5

oversight of gaming under this part shall not be subject to

6

furlough but shall continue to perform their duties.

7

* * *

8

Section 4.  Section 1202(a)(4) and (b)(7), (23) and (30) of

9

Title 4 are amended and subsections (a) and (b) are amended by

10

adding paragraphs to read:

11

§ 1202.  General and specific powers.

12

(a)  General powers.--

13

* * *

14

[(4)  The board shall establish a system of

15

classification and compensation of its employees and shall

16

not be subject to the provisions of the act of April 9, 1929

17

(P.L.177, No.175), known as The Administrative Code of 1929,

18

as to classification and compensation for its employees and

19

conduct its activities consistent with the practices and

20

procedures of Commonwealth agencies.]

21

(4.1)  Within 90 days of the effective date of this

22

paragraph, the board shall establish a system of

23

classification and compensation of its employees and shall be

24

subject to the provisions of the act of April 9, 1929

25

(P.L.177, No.175), known as The Administrative Code of 1929,

26

as to classification and compensation for its employees and

27

conduct its activities consistent with the practices and

28

procedures of Commonwealth agencies. The provisions of this

29

paragraph shall apply to employees hired after the effective

30

date of this paragraph. Nothing in this paragraph shall

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1

prevent the board from altering a system, or establishing a

2

new system, of classification or compensation for employees

3

hired prior to the effective date of this section.

4

* * *

5

(b)  Specific powers.--The board shall have the specific

6

power and duty:

7

* * *

8

(7)  To administer oaths, examine witnesses and issue

9

subpoenas compelling the attendance of witnesses or the

10

production of documents and records or other evidence[. The

11

provisions of this paragraph shall apply to designated

12

officers and employees.], or to designate officers or

13

employees to perform these duties.

14

(7.1)  To order a person to answer a question or produce

15

evidence of any kind. If, in the course of an investigation

16

or hearing conducted under this part, a person refuses to

17

answer a question or to produce evidence on the grounds that

18

the answer or evidence will expose the person to criminal

19

prosecution, the board may adopt a resolution recommending a

20

grant of immunity that includes the specific question to be

21

posed or information or evidence being sought from the person

22

as follows:

23

(i)  The resolution shall be submitted to the

24

Attorney General for approval or disapproval within 20

25

days of receipt of the resolution. Upon the written

26

approval of the Attorney General, the board may issue an

27

order to compel the person to answer or produce evidence

28

with immunity.

29

(ii)  If the person who is the subject of the

30

immunity order provides the answer or evidence, the

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1

person shall be immune from criminal prosecution based on

2

the answer or evidence that was the subject of the

3

immunity order.

4

(iii)  The person may be prosecuted for perjury

5

committed in the answer or production of evidence or held

6

in contempt for failing to give an answer or produce

7

evidence in accordance with the order. The answer or

8

evidence shall be admissible only against the person in a

9

criminal investigation, or a trial or other proceeding

10

for perjury or contempt.

11

(iv)  Immunity under this paragraph shall not

12

preclude the use of any other remedy or sanction

13

authorized by law.

14

* * *

15

(23)  The board shall not issue or renew a license or

16

permit unless it is satisfied that the applicant has

17

demonstrated by clear and convincing evidence that the

18

applicant is a person of good character, honesty and

19

integrity and is a person whose prior activities, criminal

20

record, if any, reputation, habits and associations do not

21

pose a threat to the public interest or the effective

22

regulation and control of slot machine operations or create

23

or enhance the danger of unsuitable, unfair or illegal

24

practices, methods and activities in the conduct of slot

25

machine operations or the carrying on of the business and

26

financial arrangements incidental thereto.

27

* * *

28

(30)  To promulgate rules and regulations necessary for

29

the administration and enforcement of this part, including

30

regulations in cooperation with the Pennsylvania Liquor

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1

Control Board and regulations relating to the sale and

2

service of liquor and malt and brewed beverages by licensees.

3

[Except as provided in section 1203 (relating to temporary

4

regulations), regulations] Regulations shall be adopted

5

pursuant to the act of July 31, 1968 (P.L.769, No.240),

6

referred to as the Commonwealth Documents Law, and the act of

7

June 25, 1982 (P.L.633, No.181), known as the Regulatory

8

Review Act.

9

(31)  To collect and post information on its Internet

10

website with sufficient detail to inform the public of the

11

controlling interest or ownership interest of an applicant or

12

a licensed gaming entity or affiliate, intermediary,

13

subsidiary or holding company thereof. The posting shall

14

include:

15

(i)  The names of all persons with a controlling

16

interest in a publicly traded domestic or foreign

17

corporation, partnership, limited liability company or

18

other legal entity.

19

(ii)  The names of all persons who own a financial

20

equity share or interest equal to or greater than 1% of a

21

privately held domestic or foreign corporation,

22

partnership, limited liability company or other legal

23

entity.

24

(iii)  The name of a trustee entitled to cast the

25

vote of a person under subparagraph (i) or (ii).

26

(iv)  The names of all officers, directors,

27

principals and key employees of a licensed gaming entity.

28

(32)  To appoint a trustee as prescribed in section 1332

29

(relating to appointment of trustee) to act on behalf of the

30

Commonwealth and the board to operate a licensed facility and

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1

ensure compliance with this part.

2

Section 5.  Section 1202.1 of Title 4 is amended to read:

3

§ 1202.1.  Code of conduct.

4

(a)  Scope.--The board shall adopt a comprehensive code of

5

conduct prior to the consideration of any license, permit or

6

registration application. The code of conduct shall supplement

7

all other requirements under this part and 65 Pa.C.S. Pt. II

8

(relating to accountability) and shall provide guidelines

9

applicable to members, employees, independent contractors of the

10

board and the immediate families of the members, as defined in

11

subsection (e), employees and independent contractors to enable

12

them to avoid any perceived or actual conflict of interest and

13

to promote public confidence in the integrity and impartiality

14

of the board. At a minimum, the code of conduct adopted under

15

this section shall include registration of licensed entity

16

representatives under subsection (b) and the restrictions under

17

[subsection (c)] subsections (c) and (c.1).

18

(b)  Registration.--

19

(1)  A licensed entity representative shall register with

20

the board in a manner prescribed by the board, which shall

21

include the name, employer or firm, address, telephone number

22

of both the licensed entity representative and the [licensed

23

entity] applicant, licensee, permittee or registrant or

24

individual being represented.

25

(2)  A licensed entity representative shall have an

26

[ongoing] affirmative duty to update its registration

27

information on an ongoing basis.

28

(3)  The [registration list] board shall maintain a

29

registration list which shall contain the information

30

required under paragraph (1) and which shall be available for

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1

public inspection at the offices of the board and on the

2

board's Internet website.

3

(c)  Restrictions.--A member of the board shall:

4

(1)  Not engage in any ex parte communication with any

5

person.

6

(2)  Not accept any discount, gift, gratuity,

7

compensation, travel, lodging or other thing of value,

8

directly or indirectly, from any applicant, [licensee,]

9

licensed entity, including any affiliate, subsidiary,

10

intermediary or holding company thereof, permittee,

11

registrant or licensed entity representative thereof.

12

(3)  Disclose and [disqualify] recuse himself from any

13

hearing or other proceeding in which the member's

14

objectivity, impartiality, integrity or independence of

15

judgment may be reasonably questioned due to the member's

16

relationship or association with a party connected to any

17

hearing or proceeding or a person appearing before the board.

18

(4)  Refrain from any financial or business dealing which

19

would tend to reflect adversely on the member's objectivity,

20

impartiality or independence of judgment.

21

(5)  Not hold or campaign for public office, hold an

22

office in any political party or political committee as

23

defined in section 1513(d)(relating to political influence),

24

contribute to or solicit contributions to a political

25

campaign, [party,] political party, political committee or

26

candidate, publicly endorse a candidate or actively

27

participate in a political campaign.

28

(6)  Not solicit funds for any charitable, educational,

29

religious, health, fraternal, civic or other nonprofit entity

30

from an applicant, licensed entity or affiliate, subsidiary,

- 17 -

 


1

intermediary or holding company of a licensed entity,

2

interested party, permittee or licensed entity

3

representative. [A] Unless prohibited under § 1201(h)(4.1)

4

(relating to Pennsylvania Gaming Control Board established),

5

a board member may serve as an officer, employee or member of

6

the governing body of a nonprofit entity and may attend, make

7

personal contributions to and plan or preside over the

8

entity's fundraising events. A board member may permit his

9

name to appear on the letterhead used for fundraising events

10

if the letterhead contains only the board member's name and

11

position with the nonprofit entity.

12

(7)  Not meet or engage in discussions with any

13

applicant, [person licensed under this part] licensed entity,

14

permittee, [or a] licensed entity representative or person

15

who provides goods, property or services to a slot machine

16

licensee unless the meeting or discussion occurs on the

17

business premises of the board and is recorded in a log

18

maintained for this purpose. The log shall be available for

19

public inspection during the regular business hours of the

20

board and shall be posted on the board's Internet website.

21

The log shall include the date and time of the meeting or

22

discussion, the names of the participants and the subject

23

matter discussed. The provisions of this paragraph shall not

24

apply to meetings [of the board] to consider matters

25

requiring the physical inspection of the equipment or

26

premises of an applicant or a licensed entity at [their] the 

27

location of the licensed facility.

28

(8)  Avoid impropriety and the appearance of impropriety

29

at all times and observe standards and conduct that promote

30

public confidence in the oversight of gaming.

- 18 -

 


1

(9)  Comply with any other laws, rules or regulations

2

relating to the conduct of a member.

3

(c.1)  Prohibitions.--

4

(1)  No member or attorney of the Office of Chief Counsel

5

advising the board on a particular licensing issue or

6

proceeding or employee whose duties relate to licensing and

7

who is advising the board on a particular licensing issue or

8

proceeding shall engage in any ex parte communication with

9

any person.

10

(2)  No attorney representing the bureau or the Office of

11

Enforcement Counsel or an applicant, licensee or permittee in

12

any proceeding shall engage in an ex parte communication with

13

a member, an attorney of the Office of Chief Counsel advising

14

the board on a proceeding or a hearing officer of the board.

15

(3)  No employee of the bureau or the Office of

16

Enforcement Counsel who is involved in a proceeding shall

17

engage in an ex parte communication with a member, an

18

attorney of the Office of Chief Counsel who is advising the

19

board on the proceeding or a hearing officer of the board.

20

(c.2)  Procedures relating to ex parte communications.--

21

(1)  An ex parte communication received or engaged in by

22

a board member, employee or hearing officer shall be recorded

23

in a log maintained for this purpose. The log shall be

24

available for public inspection during the regular business

25

hours of the board and shall be posted on the board's

26

Internet website. The individual recording the ex parte

27

communication shall include:

28

(i)  The date and time of the ex parte communication.

29

(ii)  The name of any other individual involved in

30

the ex parte communication.

- 19 -

 


1

(iii)  The subject matter and substance of the ex

2

parte communication.

3

(2)  In addition to documenting an ex parte communication

4

under paragraph (1), notification and an opportunity to

5

respond shall be provided to the following:

6

(i)  A board member or employee shall promptly notify

7

the board and all persons directly affected by the

8

anticipated vote or action of the board of the substance

9

of the communication.

10

(ii)  A hearing officer shall promptly notify the

11

board and all parties to the proceeding before the

12

hearing officer of the substance of the communication.

13

(3)  (i)  A board member, employee or hearing officer who

14

received or engaged in an ex parte communication shall

15

recuse himself from any hearing or other proceeding

16

related to the ex parte communication if the context and

17

substance of the ex parte communication creates

18

substantial reasonable doubt as to the individual's

19

ability to act objectively, independently or impartially.

20

(ii)  A board member, employee or hearing officer who

21

elects not to recuse himself based on an ex parte

22

communication shall state his reasons for doing so on the

23

record prior to the commencement of the hearing or

24

proceeding.

25

(iii)  If a legislative appointee recuses himself

26

from any hearing or other proceeding under this section,

27

any qualified majority vote required under this part

28

shall consist of all of the remaining legislative

29

appointees and at least two gubernatorial appointees.

30

(iv)  Failure of a hearing officer or employee to

- 20 -

 


1

recuse himself from a hearing or other proceeding due to

2

receipt of an ex parte communication under this section

3

shall be grounds for appeal to the board of the failure

4

to recuse.

5

(v)  Failure of a board member to recuse himself from

6

a hearing or other proceeding due to receipt of an ex

7

parte communication under this section shall be grounds

8

for appeal of a decision to a court of competent

9

jurisdiction if the board action being appealed would not

10

have occurred without the participation of the board

11

member who received the ex parte communication.

12

(d)  Ex officio members.--The restrictions under subsection

13

(c)(5) shall not apply to ex officio members.

14

(e)  Definitions.--As used in this section, the following

15

words and phrases shall have the meanings given to them in this

16

subsection:

17

"Ex parte communication."  An off-the-record communication

18

engaged in or received by a member [or], employee or hearing

19

officer of the board regarding the merits of or any fact in

20

issue relating to a pending matter before the board or which may

21

reasonably be expected to come before the board in a contested

22

on-the-record proceeding. The term shall not include off-the-

23

record communications by or between a member [or], employee or

24

hearing officer of the board, Department of Revenue,

25

Pennsylvania State Police, Attorney General or other law

26

enforcement official prior to the beginning of the proceeding

27

solely for the purpose of seeking clarification or correction to

28

evidentiary materials intended for use in the proceedings.

29

"Immediate family."  The spouse, parents, children and

30

siblings and the spouses of any of those individuals.

- 21 -

 


1

["Licensed entity representative."  A person acting on behalf

2

of or representing the interest of any applicant, licensee,

3

permittee or registrant, including an attorney, agent or

4

lobbyist, regarding any matter which may reasonably be expected

5

to come before the board.]

6

Section 6.  Title 4 is amended by adding a section to read:

7

§ 1202.2.  Expenses of the Pennsylvania Gaming Control Board.

8

Members and employees of the board shall only be reimbursed

9

for actual and reasonable expenses incurred during the

10

performance of their duties. In order to receive reimbursement

11

for an expense in excess of $10, the member or employee shall

12

submit a receipt validating the expense incurred.

13

Reimbursements, allowances or other payments in an amount

14

greater than the expenses for which receipts are submitted are

15

prohibited. Receipts and requests for reimbursement shall be

16

financial records for purposes of the act of February 14, 2008

17

(P.L.6, No.3), known as the Right-to-Know Law.

18

Section 7.  Section 1205(b)(1) and (2) of Title 4 are amended

19

and the subsection is amended by adding paragraphs to read:

20

§ 1205.  License or permit application hearing process; public

21

input hearings.

22

* * *

23

(b)  Public input hearing requirement.--

24

(1)  [Prior to licensing a facility under this part, the

25

board shall hold at least one public input hearing on the

26

matter.] The board shall hold at least one public input

27

hearing prior to:

28

(i)  Licensing a facility.

29

(ii)  Approving the structural redesign of a licensed

30

facility located in a city of the first class.

- 22 -

 


1

(2)  All public input hearings [relating to an

2

application for a slot machine license] under paragraph (1) 

3

shall be held in the municipality where the facility will be,

4

or is, located and shall be organized in cooperation with the

5

municipality.

6

* * *

7

(4)  In addition to any witnesses scheduled to testify

8

under paragraph (3), the board shall establish a public

9

comment period during which time members of the public may

10

address the board regarding the proposed license or

11

structural redesign under paragraph (1). The board, in its

12

discretion, may place reasonable time limits on an

13

individual's comments.

14

Section 8.  Sections 1206(f), 1207(4), 1208(1)(i) and (ii)

15

and 1209(b) of Title 4 are amended to read:

16

§ 1206.  Board minutes and records.

17

* * *

18

(f)  Confidentiality of information.--[All]

19

(1)  The following information submitted by an applicant

20

pursuant to section 1310(a) (relating to slot machine license

21

application character requirements) or 1308(a.1) (relating to

22

applications for license or permit) or obtained by the board

23

or the bureau as part of a background or other investigation

24

from any source shall be [considered] confidential[.] and

25

withheld from public disclosure:

26

(i)  All information relating to good character,

27

honesty and integrity, including family, habits,

28

reputation, history of criminal activity, business

29

activities, financial affairs and business, professional

30

and personal associations submitted under section 1310(a)

- 23 -

 


1

or 1308(a.1) or otherwise obtained by the board or the

2

bureau.

3

(ii)  Nonpublic personal information, including

4

telephone numbers, Social Security numbers, educational

5

records, memberships, medical records, tax returns and

6

declarations, actual or proposed compensation, financial

7

account records, creditworthiness or a financial

8

condition relating to an applicant, licensee or permittee

9

or the immediate family thereof.

10

(iii)  Documents and information relating to

11

proprietary information, trade secrets, patents or

12

exclusive licenses, architectural and engineering plans

13

and information relating to competitive marketing

14

materials and strategies, which may include customer-

15

identifying information or customer prospects for

16

services subject to competition.

17

(iv)  Security information, including risk prevention

18

plans, detection and countermeasures, emergency

19

management plans, security and surveillance plans,

20

equipment and usage protocols and theft and fraud

21

prevention plans and countermeasures.

22

(v)  Information with respect to which there is a

23

reasonable possibility that public release or inspection

24

of the information would constitute an unwarranted

25

invasion into personal privacy of any individual as

26

determined by the board.

27

(vi)  Records of an applicant or licensee not

28

required to be filed with the Securities and Exchange

29

Commission by issuers that either have securities

30

registered under section 12 of the Securities Exchange

- 24 -

 


1

Act of 1934 (48 Stat. 881, 15 U.S.C. § 78a et seq.) or

2

are required to file reports under section 15(d) of the

3

Securities Exchange Act of 1934.

4

(vii)  Records considered nonpublic matters or

5

information by the Securities and Exchange Commission as

6

provided by 17 CFR 200.80 (relating to commission records

7

and information).

8

No claim of confidentiality shall be made regarding any

9

information from a criminal history record check under 18

10

Pa.C.S. Ch. 91 (relating to criminal history record

11

information) or that is otherwise publicly available in this

12

Commonwealth or another jurisdiction.

13

(2)  Except as provided in section 1517(f) (relating to

14

[investigation] investigations and enforcement), the

15

confidential information shall be withheld from public

16

disclosure in whole or in part, except that any confidential 

17

information shall be released upon the lawful order of a

18

court of competent jurisdiction or, with the approval of the

19

Attorney General, to a duly authorized law enforcement agency

20

or shall be released to the public, in whole or in part, to

21

the extent that such release is requested by an applicant and

22

does not otherwise contain confidential information about

23

another person.

24

(3)  The board may seek a voluntary waiver of

25

confidentiality from an applicant or licensed entity but may 

26

not require any applicant or licensed entity to waive any

27

confidentiality provided for in this subsection as a

28

condition for the approval of a license or any other action

29

of the board. Any [person who violates this subsection]

30

employee or contractor who publicly discloses confidential

- 25 -

 


1

information in violation of this subsection commits a

2

misdemeanor and shall be administratively disciplined by

3

discharge, suspension, termination of contract or other

4

formal disciplinary action as the board deems appropriate.

5

* * *

6

§ 1207.  Regulatory authority of board.

7

The board shall have the power and its duties shall be to:

8

* * *

9

(4)  Require that each licensed entity provide to the

10

board its audited annual financial statements, with such

11

additional detail as the board from time to time shall

12

require, which information shall be submitted not later than

13

[60] 90 days after the end of the licensee's fiscal year.

14

* * *

15

§ 1208.  Collection of fees and fines.

16

The board has the following powers and duties:

17

(1)  To levy and collect fees from the various

18

applicants, licensees and permittees to fund the operations

19

of the board. The fees shall be deposited into the State

20

Gaming Fund as established in section 1403 (relating to

21

establishment of State Gaming Fund and net slot machine

22

revenue distribution) and distributed to the board upon

23

appropriation by the General Assembly. In addition to the

24

fees set forth in sections 1209 (relating to slot machine

25

license fee) and 1305 (relating to Category 3 slot machine

26

license), the board shall assess and collect fees as follows:

27

(i)  Supplier licensees shall pay a fee of $25,000

28

upon the issuance of a license and $10,000 for the annual

29

renewal of a supplier license. When the renewal period

30

under section 1317(c)(1) (relating to supplier licenses)

- 26 -

 


1

is three years, the fee shall be $30,000 for the renewal.

2

(ii)  Manufacturer licensees shall pay a fee of

3

$50,000 upon the issuance of a license and $25,000 for

4

the annual renewal of a manufacturer license. When the

5

renewal period under section 1317.1(c)(1) (relating to

6

manufacturer licenses) is three years, the fee shall be

7

$75,000 for the renewal.

8

* * *

9

§ 1209.  Slot machine license fee.

10

* * *

11

(b)  Term.--A slot machine license, after payment of the fee,

12

shall be in effect unless suspended, revoked or not renewed by

13

the board upon good cause consistent with the license

14

requirements as provided for in this part. Slot machine

15

licensees shall be required to update the information in their

16

initial applications annually, and the license of a licensee in

17

good standing shall be updated and renewed annually for two

18

subsequent years following the initial license issuance.

19

Thereafter, license renewals shall be every three years. As to

20

the renewal of a license, no additional license fee pursuant to

21

subsection (a) shall be required.

22

* * *

23

Section 9.  Section 1211 of Title 4 is amended by adding a

24

subsection to read:

25

§ 1211.  Reports of board.

26

* * *

27

(a.1)  Expenses.--Beginning 30 days after the effective date

28

of this subsection, the board shall post by the fifteenth of

29

each month on its Internet website a list of all its itemized

30

expenses of employees and members for the preceding month. The

- 27 -

 


1

list shall identify the nature of the expense and the employee

2

or board member to which an expense is attributable. The list

3

shall include each expense for which a receipt is submitted to

4

obtain reimbursement. If the expense is directly attributable to

5

or paid by a licensed facility, the list shall identify the

6

facility. By October 1 of each year, a final report of all

7

expenses for the preceding fiscal year shall be posted on the

8

board's Internet website and shall be transmitted to the

9

Appropriations Committee of the Senate, the Community, Economic

10

and Recreational Development Committee of the Senate, the

11

Appropriations Committee of the House of Representatives and the

12

Gaming Oversight Committee of the House of Representatives.

13

* * *

14

Section 10.  Section 1213 of Title 4 is amended to read:

15

§ 1213.  License or permit prohibition.

16

(1)  [No applicant for a license or permit under this

17

part, including principals and key employees,] The board

18

shall be prohibited from granting a principal license or key

19

employee license to a person who has been convicted of a

20

felony [or gambling offense] in any jurisdiction [shall be

21

issued a license or permit unless 15 years has elapsed from

22

the date of expiration of the sentence for the offense].

23

(2)  [When determining whether to issue a license or

24

permit to an permit applicant who has been convicted in any

25

jurisdiction of a felony or gambling offense,] In addition to

26

the prohibition under paragraph (1), the board shall be

27

prohibited from granting the following:

28

(i)  A principal license or key employee license to a

29

person who has been convicted of a gambling offense in

30

any jurisdiction that is not classified as a felony

- 28 -

 


1

unless 15 years has elapsed from the date of the

2

expiration of the sentence for the offense.

3

(ii)  A gaming employee permit or license other than

4

a principal license or key employee license to a person

5

who has been convicted of a felony or gambling offense

6

unless 15 years has elapsed from the date of the

7

expiration of the sentence for the offense.

8

(3)  In determining whether to issue a license or permit

9

under paragraph (2), the board shall consider the following

10

factors:

11

[(1)] (i)  The nature and duties of the applicant's

12

position with the licensed entity.

13

[(2)] (ii)  The nature and seriousness of the offense

14

or conduct.

15

[(3)] (iii)  The circumstances under which the

16

offense or conduct occurred.

17

[(4)] (iv)  The age of the applicant when the offense

18

or conduct was committed.

19

[(5)] (v)  Whether the offense or conduct was an

20

isolated or a repeated incident.

21

[(6)] (vi)  Any evidence of rehabilitation, including

22

good conduct in the community, counseling or psychiatric

23

treatment received and the recommendation of persons who

24

have substantial contact with the applicant.

25

Section 10.1.  Section 1308 of Title 4 is amended by adding a

26

subsection to read:

27

§ 1308.  Applications for license or permit.

28

* * *

29

(a.1)  Submission of information.--Notwithstanding the

30

provisions of 18 Pa.C.S. § 9124(b) (relating to use of records

- 29 -

 


1

by licensing agencies), an application for a license or permit

2

under this part shall include all arrests and convictions of the

3

applicant, including summary offenses. The information shall

4

include:

5

(1)  A brief description of the circumstances surrounding

6

the arrest.

7

(2)  The specific offense charged.

8

(3)  The ultimate disposition of the charges, including

9

the details of any dismissal, plea bargain, conviction or

10

sentence, including any pardon, expungement or order of

11

Accelerated Rehabilitative Disposition.

12

* * *

13

Section 10.2.  Sections 1310, 1317(c)(1), 1317.1(c)(1),

14

1321(a)(2), 1326(a), 1328(b) and 1329 of Title 4 are amended to

15

read:

16

§ 1310.  Slot machine license application character

17

requirements.

18

(a)  Application.--

19

(1)  Every application for a slot machine license shall

20

include such information, documentation and assurances as may

21

be required to establish by clear and convincing evidence the

22

applicant's suitability, including good character, honesty

23

and integrity. Information shall include, without limitation,

24

information pertaining to family, habits, character,

25

reputation, criminal history background, business activities,

26

financial affairs and business, professional and personal

27

associates, covering at least the ten-year period immediately

28

preceding the filing date of the application.

29

(2)  Notwithstanding 18 Pa.C.S. § 9124(b) (relating to

30

use of records by licensing agencies), a conviction that has

- 30 -

 


1

been expunged or overturned, or for which a person has been

2

pardoned or an order of Accelerated Rehabilitative

3

Disposition has been issued, shall be included with an

4

application and shall be considered by the board as part of

5

the review of the applicant's suitability under paragraph

6

(1).

7

(b)  Civil judgments and law enforcement agency

8

information.--Each applicant shall notify the board of any civil

9

judgments obtained against the applicant pertaining to antitrust

10

or security regulation laws of the Federal Government, this

11

Commonwealth or any other state, jurisdiction, province or

12

country. In addition, each applicant shall produce a letter of

13

reference from law enforcement agencies having jurisdiction in

14

the applicant's place of residence and principal place of

15

business, which letter of reference shall indicate that the law

16

enforcement agencies do not have any pertinent information

17

concerning the applicant or, if the law enforcement agency does

18

have information pertaining to the applicant, shall specify the

19

nature and content of that information. If no letters are

20

received within 30 days of the request, the applicant may submit

21

a statement under oath which is subject to the penalty for false

22

swearing under 18 Pa.C.S. § 4903 (relating to false swearing)

23

that the applicant is or was during the period the activities

24

were conducted in good standing with the gaming or casino

25

enforcement or control agency.

26

(c)  Gaming or casino enforcement agency information.--If the

27

applicant has held a gaming license in a jurisdiction where

28

gaming activities are permitted, the applicant shall produce a

29

letter of reference from the gaming or casino enforcement or

30

control agency which shall specify the experiences of that

- 31 -

 


1

agency with the applicant, the applicant's associates and the

2

applicant's gaming operation. If no letters are received within

3

30 days of the request, the applicant may submit a statement

4

under oath which is subject to the penalty for false swearing

5

under 18 Pa.C.S. § 4903 that the applicant is or was during the

6

period the activities were conducted in good standing with the

7

gaming or casino enforcement or control agency.

8

(d)  Agency records.--Each applicant for a slot machine

9

license, principal license or key employee license shall be

10

required to apply to the Federal Government regarding agency

11

records under the Freedom of Information Act (Public Law 89-554,

12

5 U.S.C. § 522) pertaining to the applicant and provide the

13

board with the complete record received from the Federal

14

Government. The board may issue a conditional license to the

15

applicant prior to the receipt of information under this

16

subsection.

17

§ 1317.  Supplier licenses.

18

* * *

19

(c)  Review and approval.--Upon being satisfied that the

20

requirements of subsection (b) have been met, the board may

21

approve the application and issue the applicant a supplier

22

license consistent with all of the following:

23

(1)  [The license shall be for a period of one year. Upon

24

expiration, the license may be renewed in accordance with

25

subsection (d)] The initial license shall be for a period of

26

one year and shall be subject to renewal annually under

27

subsection (d) for two consecutive one-year periods following

28

the initial issuance. Thereafter, a license shall be subject

29

to renewal every three years. Nothing in this paragraph shall

30

relieve the licensee of the affirmative duty to notify the

- 32 -

 


1

board of changes to any information contained in the original

2

application.

3

* * *

4

§ 1317.1.  Manufacturer licenses.

5

* * *

6

(c)  Review and approval.--Upon being satisfied that the

7

requirements of subsection (b) have been met, the board may

8

approve the application and grant the applicant a manufacturer

9

license consistent with all of the following:

10

(1)  [The license shall be for a period of one year. Upon

11

expiration, a license may be renewed in accordance with

12

subsection (d)] The initial license shall be for a period of

13

one year and shall be subject to renewal annually under

14

subsection (d) for two consecutive one-year periods following

15

the initial issuance. Thereafter, a license shall be subject

16

to renewal every three years. Nothing in this paragraph shall

17

relieve the licensee of the affirmative duty to notify the

18

board of any changes relating to the status of its license or

19

relieve the licensee of its responsibility to notify the

20

board of changes to any information contained in the original

21

application.

22

* * *

23

§ 1321.  Additional licenses and permits and approval of

24

agreements.

25

(a)  Requirements.--In addition to the requirements for a

26

license or permit specifically set forth in this part, the board

27

may require a license [or], permit or other authorization, and

28

set a fee for the same, for any key or gaming employee or any

29

person who satisfies any of the following criteria:

30

* * *

- 33 -

 


1

(2)  The person is presently not [otherwise] required to

2

be licensed or permitted under this part and provides any

3

goods, property or services, including, but not limited to,

4

management contracts for compensation to a slot machine

5

licensee at the licensed facility. The board may by

6

regulation establish a classification system for a person who

7

provides goods, property or services to a slot machine

8

licensee. If the classification system requires the person

9

providing goods, property or services to submit to a criminal

10

history record check under 18 Pa.C.S. Ch. 91 (relating to

11

criminal history record information), the board shall notify

12

the slot machine licensee if the person providing goods,

13

property or services has been convicted of a felony or

14

gambling offense.

15

* * *

16

§ 1326.  License renewals.

17

(a)  Renewal.--All permits and licenses issued under this

18

part unless otherwise provided shall be subject to renewal on an

19

annual basis [upon the application of the holder of the permit

20

or license submitted to the board at least 60 days prior to the

21

expiration of the permit or license] for the first two years

22

following the initial issuance. Thereafter, all permits and

23

licenses shall be subject to renewal every three years. The

24

application for renewal shall be submitted at least 60 days

25

prior to the expiration of the permit or license and shall 

26

include an update of the information contained in the initial

27

and any prior renewal applications and the payment of any

28

renewal fee required by this part. A permit or license for which

29

a completed renewal application and fee, if required, has been

30

received by the board will continue in effect unless and until

- 34 -

 


1

the board sends written notification to the holder of the permit

2

or license that the board has denied the renewal of such permit

3

or license.

4

* * *

5

§ 1328.  Change in ownership or control of slot machine

6

licensee.

7

* * *

8

(b)  Qualification of purchaser of slot machine licensee;

9

change of control.--The purchaser of the assets, other than in

10

the ordinary course of business, of any slot machine licensee

11

shall independently qualify for a license in accordance with

12

this part and shall pay the license fee as required by section

13

1209 (relating to slot machine license fee). A change in control

14

of any slot machine licensee shall require that the slot machine

15

licensee independently qualify for a license in accordance with

16

this part, and the slot machine licensee shall pay a new license

17

fee as required by section 1209, except as otherwise required by

18

the board pursuant to this section. The new license fee under

19

this section shall be paid upon the assignment and actual change

20

of control or ownership of the slot machine license.

21

* * *

22

§ 1329.  [Nonportability] Portability and relocation of slot

23

machine license.

24

(a)  General rule.--Each slot machine license shall only be

25

valid for the specific physical location within the municipality

26

and county for which it was originally granted.

27

(b)  Petition.--In evaluating a petition to relocate, the

28

board shall consider the following factors:

29

(1)  The reason for the relocation.

30

(2)  A comparative analysis, submitted by the petitioner,

- 35 -

 


1

detailing estimated gross terminal revenues at the new

2

location with estimated gross terminal revenues at the

3

original location.

4

(3)  A comparative analysis, submitted by the petitioner,

5

detailing the economic impact of the licensed facility at the

6

new location with the estimated economic impact at the

7

original location. The comparative analysis shall include the

8

total cost of the project and projected direct and indirect

9

employment figures.

10

(4)  A comprehensive traffic study commissioned by the

11

board.

12

(5)  Community support or opposition.

13

(6)  Any other information requested by the board.

14

(c)  Relocation.--A [No] slot machine licensee [shall] may be

15

permitted to move or relocate the physical location of the

16

licensed facility [without] with board approval [for] upon good

17

cause shown if:

18

(1)  the relocated licensed facility remains within the

19

same county as originally licensed;

20

(2)  the relocation will facilitate the timely operation

21

of slot machines;

22

(3)  the relocated licensed facility complies with all

23

other provisions of this part related to the siting and

24

location of a licensed facility; and

25

(4)  relocation of the licensed facility is in the best

26

interests of the Commonwealth.

27

(d)  Public input hearing.--The board shall hold at least one

28

public input hearing in the municipality where the licensed

29

facility will be located prior to approval of the relocation.

30

(e)  No grant or loan from the Commonwealth may be awarded

- 36 -

 


1

for the purpose of relocating or developing the relocated

2

licensed facility to comply with any conditions of approval of

3

the relocation.

4

Section 11.  Title 4 is amended by adding a section to read:

5

§ 1332.  Appointment of trustee.

6

(a)  Appointment.--Upon petition of the Office of Enforcement

7

Counsel, the board may order the appointment of a trustee from

8

the list required under subsection (j) to act on behalf of the

9

interests of the Commonwealth and the board to assure compliance

10

with this part and any conditions imposed upon the slot machine

11

license in the following circumstances:

12

(1)  Upon the revocation, suspension or nonrenewal of a

13

slot machine license or a principal license of an individual

14

who the board has determined controls a slot machine license.

15

(2)  Upon the failure to renew a slot machine license or

16

a principal license of an individual who the board has

17

determined controls a slot machine licensee until the slot

18

machine or principal license is renewed or until the

19

discontinuation of the trusteeship pursuant to subsection

20

(i).

21

(3)  If necessary to protect the best interests of the

22

Commonwealth.

23

(b)  Qualifications.--The following shall apply:

24

(1)  A trustee shall be required to obtain a principal

25

license. The board may appoint a trustee and award the

26

trustee a temporary principal license as prescribed in board

27

regulations.

28

(2)  Before assuming duties, a trustee shall execute and

29

file a bond for the faithful performance of the trustee's

30

duties. The bond shall be payable to the board with sureties

- 37 -

 


1

and in the amount and form required by board order. The cost

2

of the bond shall be paid by the former or suspended

3

licensee.

4

(c)  Powers.--A trustee appointed under this section shall

5

have all of the power and duties granted to the trustee by the

6

board. The board's order appointing the trustee shall set forth

7

the powers, duties and responsibilities of the trustees which

8

may include:

9

(1)  Maintaining and operating the licensed facility in a

10

manner that complies with this part and any conditions

11

imposed by the board.

12

(2)  Maintaining and operating the licensed facility

13

consistent with the measures generally taken in the ordinary

14

course of business including:

15

(i)  Entering into contracts.

16

(ii)  Borrowing money.

17

(iii)  Pledging, mortgaging or otherwise encumbering

18

the licensed facility or property thereof as security for

19

the repayment of the trustee's loans subject to any

20

provisions and restrictions in any existing credit

21

documents.

22

(iv)  Hiring, firing and disciplining employees.

23

(3)  Exercising the rights and obligations of the former

24

or suspended licensee.

25

(4)  Taking possession of all of the property of the slot

26

machine licensee, including its books, records and papers.

27

(5)  Establishing accounts with financial institutions.

28

An account may not be established with a financial

29

institution in which an affiliate of the former or suspended

30

licensee, or in which the trustee, has a financial interest.

- 38 -

 


1

(6)  Meeting with the former or suspended licensee.

2

(7)  Meeting with principals and key employees at the

3

licensed facility.

4

(8)  Meeting with the independent audit committee.

5

(9)  Meeting with the board's executive director and

6

keeping the board's executive director apprised of actions

7

taken and the trustee's plans and goals for the future.

8

(10)  Hiring legal counsel, accountants or other

9

consultants or assistants, with prior approval of the board,

10

as necessary to carry out the trustee's duties and

11

responsibilities.

12

(11)  Settling or compromising with any debtor or

13

creditor of the former or suspended licensee, including any

14

taxing authority.

15

(12)  Reviewing outstanding agreements to which the

16

former or suspended licensee is a party and advising the

17

board as to which, if any, of the agreements should be the

18

subject of scrutiny, examination or investigation by the

19

board.

20

(13)  Obtaining board approval prior to any sale, change

21

of ownership, change of control, change of financial status,

22

restructuring, transfer of assets or execution of a contract

23

outside of the ordinary course of business.

24

(14)  Obtaining board approval for any payments outside

25

of those made in the ordinary course of business.

26

(d)  Compensation.--The board shall establish the

27

compensation of the trustee and shall review and approve

28

reasonable costs and expenses of the trustee, legal counsel,

29

accountants or other consultants or assistants hired by the

30

trustee and other persons the board may appoint in connection

- 39 -

 


1

with the trusteeship action. The compensation, costs and

2

expenses shall be paid by the former or suspended licensee.

3

Total compensation for the trustee and all individuals hired or

4

retained by the trustee under subsection (c)(10) shall not

5

exceed $600 per hour in the aggregate.

6

(e)  Reports.--A trustee shall file reports with regard to

7

the administration of the trusteeship with the board in the form

8

and at intervals as the board orders. The board may direct that

9

copies or portions of the trustee's reports be mailed to

10

creditors or other parties in interest and make summaries of the

11

reports available to the public and shall post them on the

12

board's Internet website.

13

(f)  Review of actions.--A creditor or party in interest

14

aggrieved by any alleged breach of a delegated power or duty of

15

a trustee in the discharge of the trustee's duties may request a

16

review of the trustee's action or inaction by filing a petition

17

in accordance with board regulations. The petition must set

18

forth in detail the pertinent facts and the reasons why the

19

facts constitute the alleged breach. The board will review any

20

petition filed under this section and take whatever action, if

21

any, it deems appropriate.

22

(g)  Effect of the trusteeship.--After issuance of an order

23

to appoint a trustee, the former or suspended principal or slot

24

machine licensee may not exercise any of its privileges, collect

25

or receive any debts and pay out, sell, assign or transfer any

26

of its property to anyone without prior approval of the

27

appointed trustee and the board.

28

(h)  Disposition of net earnings.--During the period of

29

trusteeship, net earnings shall be deposited in an account

30

maintained for that purpose. Payment of net earnings during the

- 40 -

 


1

period of trusteeship may not be made by the trustee without the

2

prior approval of the board. A suspended or former principal or

3

slot machine licensee may request payment of all or a portion of

4

the net earnings during the period of trusteeship by filing a

5

petition in accordance with board regulation. The suspended or

6

former principal or slot machine licensee shall have the burden

7

of demonstrating good cause for the payment of the net earnings

8

requested.

9

(i)  Discontinuation.--The board may issue an order to

10

discontinue a trusteeship when:

11

(1)  The board determines that the cause for which the

12

trustee was appointed no longer exists.

13

(2)  The trustee has, with the prior approval of the

14

board, consummated the sale, assignment, conveyance or other

15

disposition of all the property of the former principal or

16

slot machine licensee relating to the slot machine license.

17

Upon board approval of the discontinuation of the trusteeship,

18

the trustee shall, in an orderly manner, transfer the property

19

of the former or suspended principal or slot machine licensee.

20

(j)  List of approved trustees.--The board shall promulgate

21

regulations to establish a list of persons approved by the board

22

qualified to serve as a trustee. At a minimum, the regulations

23

shall provide for the following:

24

(1)  The minimum qualifications an individual must

25

possess to be approved as a trustee, which shall include

26

possession of a principal license.

27

(2)  The procedure for placement on or removal from the

28

list.

29

(3)  Any other information the board deems necessary to

30

carry out the intent of this section.

- 41 -

 


1

Section 12.  Section 1407 of Title 4 is amended by adding

2

subsections to read:

3

§ 1407.  Pennsylvania Gaming Economic Development and Tourism

4

Fund.

5

* * *

6

(e)  Annual report.--The Office of the Budget in cooperation

7

with the Department of Community and Economic Development shall

8

submit an annual report of all distribution of funds under this

9

section to the chairman and minority chairman of the

10

Appropriations Committee of the Senate, the chairman and

11

minority chairman of the Community, Economic and Recreational

12

Development Committee of the Senate, the chairman and minority

13

chairman of the Appropriations Committee of the House of

14

Representatives and the chairman and minority chairman of the

15

Gaming Oversight Committee of the House of Representatives. The

16

report shall include detailed information relating to transfers

17

made from the Pennsylvania Gaming Economic Development and

18

Tourism Fund and all reimbursements, distributions and payments

19

made under subsection (b). The report shall be submitted by

20

January 31, 2010, and by January 31 of each year thereafter.

21

(f)  Local report.--A city of the first class, city of the

22

second class, county of the second class, convention center,

23

professional hockey franchise, urban redevelopment authority,

24

airport authority or other entity that receives money from the

25

fund pursuant to an Economic Development Capital Budget under

26

this section shall submit an annual report to the Office of the

27

Budget, the chairman and minority chairman of the Appropriations

28

Committee of the Senate, the chairman and minority chairman of

29

the Community, Economic and Recreational Development Committee

30

of the Senate, the chairman and minority chairman of the

- 42 -

 


1

Appropriations Committee of the House of Representatives and the

2

chairman and the minority chairman of the Gaming Oversight

3

Committee of the House of Representatives. The report shall

4

include detailed information, including records of expenditures,

5

payments and other distributions made from money received under

6

subsection (b). The initial report shall include information on

7

all funds received prior to January 31, 2010. The report shall

8

be submitted by January 31, 2010, and by January 31 of each year

9

thereafter until all funds under this section are distributed or

10

received. An entity that receives funds after the effective date

11

of this section shall submit an initial report by January 31 of

12

the year following receipt of the funds.

13

(g)  Distribution to international airport.--Notwithstanding

14

the provisions of section 7(d) of the act of July 25, 2007

15

(P.L.342, No.53), known as the Pennsylvania Gaming Economic

16

Development and Tourism Fund Capital Budget Itemization Act of

17

2007, following the distribution of $42.5 million of funds

18

allocated to the county for debt service and economic

19

development projects for an international airport in a county of

20

the second class under section 3(2)(i)(E) of said act, all

21

remaining funds shall be distributed directly to an authority

22

that operates an international airport in a county of the second

23

class.

24

Section 13.  Sections 1408(c) and 1512(a.5) and (b) of Title

25

4 are amended to read:

26

§ 1408.  Transfers from State Gaming Fund.

27

* * *

28

(c)  Local law enforcement grants.--Annually, the sum of

29

[$5,000,000] $3,000,000 shall be transferred to the board for

30

the purpose of issuing grants to local law enforcement agencies

- 43 -

 


1

to enforce and prevent [the unlawful operation of slot machines]

2

all forms of unlawful gambling in this Commonwealth. For

3

purposes of this subsection, the term "local law enforcement

4

agency" shall include Pennsylvania State Police activities in a

5

municipality which does not have a municipal police department

6

for activities in that municipality.

7

* * *

8

§ 1512.  Financial and employment interests.

9

* * *

10

(a.5)  State Ethics Commission.--The State Ethics Commission

11

shall publish a list of all State, county, municipal and other

12

government positions that meet the definitions of "public

13

official" as defined under subsection (b) or "executive-level

14

public employee" [under subsection (b)]. The Office of

15

Administration shall assist the [Ethics Commission] commission 

16

in the development of the list, which shall be published in the

17

Pennsylvania Bulletin biennially and on the board's website.

18

Upon request, each public official shall have a duty to provide

19

the [Ethics Commission] commission with adequate information to

20

accurately develop and maintain the list. The [Ethics

21

Commission] commission may impose a civil penalty under 65

22

Pa.C.S. § 1109(f) (relating to penalties) upon any public

23

official or executive-level public employee who fails to

24

cooperate with the [Ethics Commission] commission under this

25

subsection. An individual who relies in good faith on the list

26

published by the commission shall not be subject to any penalty

27

for a violation of this section.

28

(b)  Definitions.--As used in this section, the following

29

words and phrases shall have the meanings given to them in this

30

subsection:

- 44 -

 


1

["Executive-level public employee."  The term shall include

2

the following:

3

(1)  Deputy Secretaries of the Commonwealth and the

4

Governor's Office executive staff.

5

(2)  An employee of the Executive Branch with

6

discretionary power which may affect or influence the outcome

7

of a State agency's action or decision and who is involved in

8

the development of regulations or policies relating to a

9

licensed entity or who is involved in other matters under

10

this part. The term shall include an employee with law

11

enforcement authority.

12

(3)  An employee of a county or municipality with

13

discretionary powers which may affect or influence the

14

outcome of the county's or municipality's action or decision

15

and who is involved in the development of law, regulation or

16

policy relating to a licensed entity or who is involved in

17

other matters under this part. The term shall include an

18

employee with law enforcement authority.

19

(4)  An employee of a department, agency, board,

20

commission, authority or other governmental body not included

21

in paragraph (1), (2) or (3) with discretionary power which

22

may affect or influence the outcome of the governmental

23

body's action or decision and who is involved in the

24

development of regulation or policy relating to a licensed

25

entity or who is involved in other matters under this part.

26

The term shall include an employee with law enforcement

27

authority.]

28

"Financial interest."  Owning or holding, or being deemed to

29

hold, debt or equity securities or other ownership interest or

30

profits interest. A financial interest shall not include any

- 45 -

 


1

debt or equity security, or other ownership interest or profits

2

interest, which is held or deemed to be held in any of the

3

following:

4

(1)  A blind trust over which the executive-level public

5

employee, public official, party officer or immediate family

6

member thereof may not exercise any managerial control or

7

receive income during the tenure of office and the period

8

under subsection (a). The provisions of this paragraph shall

9

apply only to blind trusts established prior to the effective

10

date of this paragraph.

11

(2)  Securities that are held in a pension plan, profit-

12

sharing plan, individual retirement account, tax-sheltered

13

annuity, a plan established pursuant to section 457 of the

14

Internal Revenue Code of 1986 (Public Law 99-514, 26 U.S.C. §

15

1 et seq.) or any successor provision deferred compensation

16

plan whether qualified or not qualified under the Internal

17

Revenue Code of 1986 or any successor provision or other

18

retirement plan that:

19

(i)  is not self-directed by the individual; and

20

(ii)  is advised by an independent investment adviser

21

who has sole authority to make investment decisions with

22

respect to contributions made by the individual to these

23

plans.

24

(3)  A tuition account plan organized and operated

25

pursuant to section 529 of the Internal Revenue Code of 1986

26

(Public Law 99-514, 26 U.S.C. § 529) that is not self-

27

directed by the individual.

28

(4)  A mutual fund where the interest owned by the mutual

29

fund in a licensed entity does not constitute a controlling

30

interest as defined in this part.

- 46 -

 


1

"Immediate family."  A spouse, minor child or unemancipated

2

child.

3

"Law enforcement authority."  The power to conduct

4

investigations of or to make arrests for criminal offenses.

5

"Party officer."  A member of a national committee; a

6

chairman, vice chairman, secretary, treasurer or counsel of a

7

State committee or member of the executive committee of a State

8

committee; a county chairman, vice chairman, counsel, secretary

9

or treasurer of a county committee in which a licensed facility

10

is located; or a city chairman, vice chairman, counsel,

11

secretary or treasurer of a city committee of a city in which a

12

licensed facility is located.

13

"Public official."  The term shall include the following:

14

(1)  The Governor, Lieutenant Governor, a member of the

15

Governor's cabinet, Treasurer, Auditor General and Attorney

16

General of the Commonwealth.

17

(2)  A member of the Senate or House of Representatives

18

of the Commonwealth.

19

(3)  An individual elected or appointed to any office of

20

a county or municipality that directly receives a

21

distribution of revenue under this part.

22

(4)  An individual elected or appointed to a department,

23

agency, board, commission, authority or other governmental

24

body not included in paragraph (1), (2) or (3) that directly

25

receives a distribution of revenue under this part.

26

(5)  An individual elected or appointed to a department,

27

agency, board, commission, authority, county, municipality or

28

other governmental body not included in paragraph (1), (2) or

29

(3) with discretionary power which may influence or affect

30

the outcome of an action or decision and who is involved in

- 47 -

 


1

the development of regulation or policy relating to a

2

licensed entity or who is involved in other matters under

3

this part.

4

The term does not include a member of a school board or an

5

individual who held an uncompensated office with a governmental

6

body prior to January 1, 2006, and who no longer holds the

7

office as of January 1, 2006. The term includes a member of an

8

advisory board or commission which makes recommendations

9

relating to a licensed facility.

10

Section 14.  Title 4 is amended by adding a section to read:

11

§ 1516.1.  Prosecutorial and adjudicatory functions.

12

The board shall adopt regulations and procedures necessary to

13

ensure that the Bureau of Investigations and Enforcement is a

14

distinct administrative entity and to prevent commingling of the

15

investigatory and prosecutorial functions of the Bureau of

16

Investigations and Enforcement under section 1517 (relating to

17

investigations and enforcement) and the adjudicatory functions

18

of the board.

19

Section 15.  Section 1517(a.1)(6) of Title 4 is amended,

20

subsection (a.2)(1) is amended by adding a subparagraph and

21

subsection (c) is amended by adding a paragraph to read:

22

§ 1517.  Investigations and enforcement.

23

* * *

24

(a.1)  Powers and duties of bureau.--The Bureau of

25

Investigations and Enforcement shall have the following powers

26

and duties:

27

* * *

28

(6)  Conduct [audits] reviews of a licensed entity as

29

necessary to ensure compliance with this part. [An audit] A

30

review may include the review of accounting, administrative

- 48 -

 


1

and financial records, management control systems, procedures

2

and other records utilized by a licensed entity.

3

* * *

4

(a.2)  Office of Enforcement Counsel.--

5

(1)  There is established within the bureau an Office of

6

Enforcement Counsel which shall act as the prosecutor in all

7

noncriminal enforcement actions initiated by the bureau under

8

this part and shall have the following powers and duties:

9

* * *

10

(iv)  Petition the board for the appointment of a

11

trustee under section 1332 (relating to appointment of

12

trustee).

13

* * *

14

(c)  Powers and duties of the Pennsylvania State Police.--The

15

Pennsylvania State Police shall have the following powers and

16

duties:

17

* * *

18

(14)  By March 1 of each year, the Commissioner of the

19

Pennsylvania State Police shall submit a report to the

20

Appropriations Committee of the Senate, the Community,

21

Economic and Recreational Development Committee of the

22

Senate, the Appropriations Committee of the House of

23

Representatives and the Gaming Oversight Committee of the

24

House of Representatives. The report shall summarize law

25

enforcement activities at each licensed facility during the

26

previous calendar year and shall include all of the

27

following:

28

(i)  The number of arrests at each licensed facility.

29

(ii)  A list of specific offenses charged for each

30

offense.

- 49 -

 


1

(iii)  The number of criminal prosecutions resulting

2

from arrests.

3

(iv)  The number of convictions resulting from

4

prosecutions.

5

(v)  The number of Pennsylvania State Police troopers

6

assigned to each licensed facility and to the gaming unit

7

at the Pennsylvania State Police headquarters.

8

(vi)  The number and nature of disciplinary actions

9

taken and complaints made against Pennsylvania State

10

Police troopers in a licensed facility.

11

(vii)  The closest local police station, Pennsylvania

12

State Police station and regional Pennsylvania State

13

Police headquarters to each licensed facility.

14

* * *

15

Section 16.  Section 1517.2 of Title 4 is amended to read:

16

§ 1517.2.  Conduct of [public officials and] board employees.

17

(a)  [Ex parte discussion prohibited.--An attorney

18

representing the bureau or the Office of Enforcement Counsel, or

19

an employee of the bureau or office involved in the hearing

20

process, shall not discuss the case ex parte with a hearing

21

officer, chief counsel or member] (Reserved).

22

(b)  [Other prohibitions.--A hearing officer, the chief

23

counsel or a member shall not discuss or exercise any

24

supervisory responsibility over any employee with respect to an

25

enforcement hearing with which the employee is involved]

26

(Reserved).

27

(c)  Disqualification.--If it becomes necessary for the chief

28

counsel or member to become involved on behalf of the board in

29

any enforcement proceeding, the chief counsel or member shall be

30

prohibited from participating in the adjudication of that matter

- 50 -

 


1

and shall designate appropriate individuals to exercise

2

adjudicatory functions.

3

Section 17.  The amendment of 4 Pa.C.S. § 1213 shall not

4

apply to any of the following:

5

(1)  An application submitted before the effective date

6

of this section.

7

(2)  Any license or permit issued prior to the effective

8

date of this section.

9

(3)  The renewal of any license or permit issued prior to

10

the effective date of this section.

11

Section 18.  This act shall take effect in 60 days.

- 51 -