THE GENERAL ASSEMBLY OF PENNSYLVANIA

HOUSE BILL

INTRODUCED BY GILLEN, BRADFORD, BROOKS, CALTAGIRONE, DENLINGER, EVERETT, GEIST, GILLESPIE, GROVE, HICKERNELL, HUTCHINSON, KNOWLES, MOUL, MULLERY, MUNDY, MURT, O'NEILL, SWANGER, TRUITT, VULAKOVICH AND YOUNGBLOOD, JANUARY 23, 2012

REFERRED TO COMMITTEE ON GAMING OVERSIGHT, JANUARY 23, 2012  

AN ACT

Amending Title 4 (Amusements) of the Pennsylvania Consolidated

Statutes, further providing for table game taxes, for local

share assessment, establishment of State Gaming Fund and net

slot machine revenue distribution, for distributions from

licensee's revenue receipts, for Pennsylvania Race Horse

Development Fund, for distributions from Pennsylvania Race

Horse Development Fund and for Pennsylvania Gaming Economic

Development and Tourism Fund.

The General Assembly of the Commonwealth of Pennsylvania

hereby enacts as follows:

Section 1.  Section 13A62(a) and (b)(3) of Title 4 of the

Pennsylvania Consolidated Statutes are amended to read: 

§ 13A62.  Table game taxes.

(a)  Imposition.--

(1)  Except as provided in paragraphs (2) and (3), each

certificate holder shall report to the department and pay

from its daily gross table game revenue, on a form and in the

manner prescribed by the department, a tax of [12%] 14% of

its daily gross table game revenue.

(2)  In addition to the tax payable under paragraph (1),

each certificate holder shall report to the department and

pay from its daily gross table game revenue, on a form and in

the manner prescribed by the department, a tax of [34%] 55% 

of its daily gross table game revenue from each table game

played on a fully automated electronic gaming table.

(3)  The tax reported and payable under paragraph (1) by

each certificate holder shall be [14%] 16% of daily gross

table game revenue for a period of two years following

commencement of table games operations at its licensed

facility.

(b)  Deposits and distributions.-–

* * *

(3)  The tax imposed under subsection (a) shall be

deposited into the [General Fund] Property Tax Relief Fund.

* * *

Section 2.  Section 13A63 of Title 4 is repealed:

[§ 13A63.  Local share assessment.

(a)  Required payment.--In addition to the tax imposed under

section 13A62 (relating to table game taxes), each certificate

holder shall pay on a weekly basis and on a form and in a manner

prescribed by the department a local share assessment into a

restricted receipts account established within the fund. All

funds owed under this section shall be held in trust by the

certificate holder until the funds are paid into the account.

Funds in the account are hereby appropriated to the department

on a continuing basis for the purposes set forth in this

section.

(b)  Distributions to counties.--The department shall make

quarterly distributions from the local share assessments

deposited into the fund under subsection (a) to counties,

including home rule counties, hosting a licensed facility

authorized to conduct table games under this chapter in

accordance with the following:

(1)  If the licensed facility is a Category 1 licensed

facility located at a harness racetrack and the county,

including a home rule county, in which the licensed facility

is located is:

(i)  A county of the third class:  50% of the

licensed facility's local share assessment shall be added

to and distributed with the funds distributed under

section 1403(c)(2)(i)(D) (relating to establishment of

State Gaming Fund and net slot machine revenue

distribution).

(ii)  A county of the second class A:  50% of the

licensed facility's local share assessment shall be

distributed to the county.

(iii)  A county of the fourth class:  50% of the

licensed facility's local share assessment shall be added

to the funds in the restricted receipts account

established pursuant to section 1403(c)(2)(i)(E) for

distribution with those funds.

(iv)  A county of the fifth class:  50% of the

licensed facility's local share assessment shall be added

to the funds in the restricted receipts account

established pursuant to section 1403(c)(2)(i)(F) for

distribution with those funds.

(2)  If the facility is a Category 1 licensed facility

that is located at a thoroughbred racetrack and the county in

which the licensed facility is located is:

(i)  A county of the second class A:  50% of the

licensed facility's local share assessment shall be

distributed to the county to be further distributed as

grants to a nonprofit hospital in a first class township

that is contiguous to the municipality in which the

licensed facility is located. If the nonprofit hospital

ceases to exist, 50% of the licensed facility's local

share assessment shall be distributed to the county in

which the licensed facility is located.

(ii)  Except as set forth in subparagraph (iii), a

county of the third class:  50% of the licensed

facility's local share assessment shall be distributed to

the county to be used solely to fund the establishment of

a county violent crime task force to reduce gang

violence, gun trafficking and violence and drug-related

crimes in the county. The district attorney shall

appoint, direct and coordinate the operations and

personnel of the task force.

(iii)  A county of the third class which is also a

home rule county:  100% of the licensed facility's local

share assessment shall be distributed to a community

college that is established in the county after the

effective date of this subparagraph and prior to January

1, 2014, to be used by the community college for

organizational, administrative, operating and capital

expenditures and the payment of principal, interest and

expenses related to indebtedness, subject to the

following:

(A)  Until January 1, 2014, or until a community

college is established after the effective date of

this subparagraph prior to January 1, 2014, whichever

occurs first, 100% of the licensed facility's local

share assessment shall be distributed to the county

redevelopment authority to be deposited and

maintained by the county redevelopment authority in a

restricted receipts account. The funds may be

invested by the county redevelopment authority as

permitted by law, and any interest earned on the

funds and investment income derived from the funds

shall be deposited into the restricted receipts

account. The funds in the restricted receipts account

shall be distributed as provided in clause (B) or

used as provided in clause (C), as applicable.

(B)  If a community college is established in the

county following the effective date of this

subparagraph and prior to January 1, 2014, the funds

in the restricted receipts account established under

clause (A) shall be distributed in their entirety by

the county redevelopment authority to the community

college no later than 60 days following the date of

the establishment of the community college.

(C)  If a community college is not established in

the county following the effective date of this

subparagraph and prior to January 1, 2014, beginning

January 1, 2014, 100% of the licensed facility's

local share assessment shall be distributed to the

county redevelopment authority to be deposited into

the restricted receipts account established under

clause (A), and all funds in the restricted receipts

account shall be used by the county redevelopment

authority for a revolving loan program available to

municipalities within the county for infrastructure

projects, including, but not limited to, water,

sewer, storm water management, flood control, roads,

broadband Internet access, site remediation and

public utility infrastructure in areas other than a

public utility's own facilities. The county

redevelopment authority may use funds from the

revolving loan program for expenses related to the

cost to administer the revolving loan program in an

amount not in excess of 0.5% of the revolving loan

program portfolio in a given calendar year. A

municipality may not use funds received under the

revolving loan program for general budget or

operating expenses. The county redevelopment

authority shall develop loan program criteria and

guidelines consistent with the provisions of this

clause.

(D)  For purposes of this subparagraph, a

community college shall be considered to be

established on the date on which the proposed

community college plan is approved by the State Board

of Education within the meaning of section 1903-A(c)

of the act of March 10, 1949 (P.L.30, No.14), known

as the Public School Code of 1949, notwithstanding

the fact that a board of trustees of the community

college may not have yet been appointed by the

governing bodies of the local sponsor of the

community college.

(3)  If the facility is a Category 2 licensed facility

and if the county in which the licensed facility is located

is:

(i)  A county of the first class:  100% of the 

licensed facility's local share assessment shall be added

to and distributed with the funds distributed under

section 1403(c)(2)(iii)(A).

(ii)  A county of the second class:  50% of the

licensed facility's local share assessment shall be

distributed as follows:

(A)  Eighty-five percent shall be deposited into

a restricted receipts account to be established in

the Department of Education for distribution pursuant

to the act of June 14, 1961 (P.L.324, No.188), known

as The Library Code, for grants to an established

library system in the county but outside a city of

the second class. Funds made available under this

clause shall be in addition to any funding provided

to such libraries pursuant to the act of April 9,

1929 (P.L.343, No.176), known as The Fiscal Code, the

Public School Code of 1949 and The Library Code.

Notwithstanding The Library Code, in making

distributions from funds made available under this

clause, the library system shall distribute the funds

as follows:

(I)  At least 80% shall be distributed to

libraries in the library system in the county but

outside a city of the second class on a per

capita basis of the population of the county

based on the most recent decennial census

excluding a city of the second class.

(II)  At least 15%, but not more than 20%,

shall be distributed to libraries in the library

system in each city, borough, town or township in

the county outside a city of the second class,

which has a market value per capita below the

fifth percentile of all cities, boroughs, towns

or townships, with comparable classifications.

The market value per capita and percentiles under

this subclause shall be as determined annually by

the State Tax Equalization Board.

(III)  Not more than 5% may be used to defray

the reasonable and necessary administrative costs

of the library system in administering the funds,

as determined by the Department of Education.

(IV)  If, after the distribution and use

under subclauses (I), (II) and (III), funds are

still available for distribution under this

clause, those funds shall be shall be distributed

to libraries in the library system in the county

but outside a city of the second class on a per

capita basis of the population of the county

based on the most recent decennial census

excluding a city of the second class.

(B)  Fifteen percent to a recognized tourist

promotion agency that is established by a home rule

municipality that was formerly a township or borough

located in the county pursuant to the act of July 4,

2008 (P.L.621, No.50), known as the Tourist Promotion

Act, and recognized by the Department of Community

and Economic Development and the home rule

municipality.

(iii)  A county of the third class where a city of

the third class hosting the licensed facility is located

in two counties of the third class:  50% of the licensed

facility's local share assessment shall be distributed as

follows:

(A)  Sixty percent to the county in which the

licensed facility is located for economic development

projects, community improvement projects and other

projects in the public interest within the county.

(B)  Twenty percent to the nonhost city of the

third class in the county in which the licensed

facility is located.

(C)  Twenty percent to the nonhost county in

which the host city is located, of which 50% shall be

used solely for grants to municipalities that are

contiguous to the host city for economic development

projects, community improvement projects and other

projects in the public interest.

(iv)  A county of the fifth class:  50% of the

licensed facility's local share assessment shall be

distributed as follows:

(A)  Fifty percent shall be added to the funds in

the restricted receipts account established pursuant

to section 1403(c)(2)(iii)(F)(I) for distribution

with those funds.

(B)  Fifty percent shall be transferred to the

Pennsylvania Higher Education Assistance Agency for

deposit into a restricted receipts account to be used

exclusively for grants to a school of medicine

located in a city of the second class A within a

county of the third class for operating costs

associated with the school of medicine.

(4)  The following apply:

(i)  If the facility is a Category 3 licensed

facility located in a county of the second class A:  50%

of the licensed facility's local share assessment shall

be deposited into a restricted receipts account to be

established in the Commonwealth Financing Authority to be

used exclusively for grants or guarantees for projects in

the county that qualify under 64 Pa.C.S. §§ 1551

(relating to Business in Our Sites Program), 1556

(relating to Tax Increment Financing Guarantee Program)

and 1558 (relating to Water Supply and Waste Water

Infrastructure Program).

(ii)  Except as provided in subparagraph (i), if the

facility is a Category 3 licensed facility in a county of

any class:  50% of the licensed facility's local share

assessment shall be added to the funds in the restricted

receipts account established under section 1403(c)(2)(iv)

for distribution with those funds.

(5)  Except as otherwise provided in this subsection, if

the facility is a Category 1 or a Category 2 licensed

facility in a county of any class:  50% of the licensed

facility's local share assessment shall be distributed in

accordance with section 1403(c) based upon the category and

type of licensed facility and the classification of the

county where the licensed facility is located.

(c)  Distributions to municipalities.--The department shall

make quarterly distributions from the local share assessments

deposited into the fund under subsection (a) to municipalities,

including home rule municipalities, hosting a licensed facility

authorized to conduct table games under this chapter in

accordance with the following:

(1)  If the licensed facility is a Category 2 licensed

facility and is located in a city of the second class, 50% of

the licensed facility's local share assessment shall be  

deposited into a restricted receipts account to be

established in the Department of Education for distribution

pursuant to The Library Code for grants to an established

local library in the city for the purpose of maintaining the

library branch system. Funds made available under this clause

shall be in addition to any funding provided to such

libraries pursuant to The Fiscal Code, the Public School Code

of 1949 and The Library Code. Beginning July 1, 2011, if the

established local library fails to maintain the number of

library branches operating within its system on June 30,

2011, 50% of the licensed facility's local share assessment

shall be distributed to the city to be used solely to fund

the accrued liability of all pension plans maintained by the

city.

(2)  If the licensed facility is a Category 1 licensed

facility located at a harness racetrack in a city of the

third class, 50% of the licensed facility's local share

assessment shall be distributed to the city for the purpose

of making payments to enable the city and other

municipalities in the school district in which the city is

located to become and remain local sponsors or members of a

community college. Payments may include initial buy-in costs,

including payment of debt service to fund the initial buy-in,

and annual local sponsor share payments to the community

college. Any funds remaining following the payment of all

local sponsorship, membership and other costs authorized

under this paragraph may be retained by the city and used for

any lawful purpose.

(3)  If a licensed facility is a Category 2 facility and

is located in a city of the third class and the city is

located in more than one county of the third class, 50% of

the licensed facility's local share assessment shall be

distributed as follows:

(i)  50% to the host city;

(ii)  20% to a city of the third class located solely

in the nonhost county in which the host city of the third

class is also located; and

(iii)  30% to a nonhost city of the third class

located solely in the host county.

(4)  If the licensed facility is a Category 1 licensed

facility located at a harness racetrack in a township of the

first class, 50% of the licensed facility's local share

assessment shall be distributed to the township, subject,

however, to the budgetary limitation in this paragraph. The

amount distributed to the township shall not exceed 50% of

the township's total budget for fiscal year 2009, adjusted

for inflation in subsequent years by an amount not to exceed

an annual cost-of-living adjustment calculated by applying

the percentage change in the Consumer Price Index immediately

prior to the date the adjustment is due to take effect. Any

funds not distributed to the township because of the

budgetary limitation shall be distributed in accordance with

subsection (b) based upon the classification of the county

where the licensed facility is located.

(5)  The following apply:

(i)  Except as provided in subparagraphs (ii) and

(iii), if the licensed facility is a Category 1 or

Category 2 licensed facility and is located in a township

of the second class, 50% of the licensed facility's local

share assessment shall be distributed to the township,

subject, however, to the budgetary limitation in this

subparagraph. The amount distributed to the township

shall not exceed 50% of the township's total budget for

fiscal year 2009, adjusted for inflation in subsequent

years by an amount not to exceed an annual cost-of-living

adjustment calculated by applying the percentage change

in the Consumer Price Index immediately prior to the date

the adjustment is due to take effect. Any funds not

distributed to the township because of the budgetary

limitation shall be distributed in accordance with

subsection (b) based upon the classification of county

where the licensed facility is located. No funds shall be

distributed under this subparagraph to a township of the

second class located in a county of the third class

receiving any funds under subsection (b)(2)(iii).

(ii)  If the licensed facility is a Category 1

licensed facility located at a thoroughbred racetrack in

a township of the second class in a county of the second

class A, 50% of the licensed facility's local share  

assessment shall be distributed to the township of the

second class, subject, however, to the budgetary

limitation in this subparagraph. The amount distributed

shall not exceed 50% of the department's total budget for

fiscal year 2009, adjusted for inflation in subsequent

years by an amount not to exceed an annual cost-of-living

adjustment calculated by applying the percentage change

in the Consumer Price Index immediately prior to the date

the adjustment is due to take effect. Any funds not

distributed to the recreation department because of the

budgetary limitation shall be distributed in accordance

with subsection (b) based upon the classification of

county where the licensed facility is located.

(iii)  If the licensed facility is a Category 1

licensed facility located at a thoroughbred racetrack in

a township of the second class in a county of the third

class with a population of not less than 200,000 but not

more than 260,000 where the licensed facility and all

attached or contiguous acreage owned by the licensed

facility is located in more than one township of the

second class, 50% of the licensed facility's local share

assessment shall be distributed as follows:

(A)  $120,000 of the licensed facility's local

share assessment shall be distributed annually to

each such township of the second class; and

(B)  remaining funds shall be added to and

distributed with the funds distributed to the county

under subsection (b)(2)(ii).

(6)  The following apply:

(i)  If the licensed facility is a Category 3

licensed facility and is located in a borough in a county

of the third class and the borough is contiguous to a

city of the third class:

(A)  Twenty-five percent of the licensed

facility's local share assessment shall be

distributed to the host borough, subject to clause

(C).

(B)  Twenty-five percent of the licensed

facility's local share assessment shall be

distributed to the city of the third class that is

contiguous to the host borough, subject to clause

(C).

(C)  The amount distributed to the borough or the

city shall not exceed 50% of the borough's or the

city's total budget for fiscal year 2009, adjusted

for inflation in subsequent years by an amount not to

exceed an annual cost-of-living adjustment calculated

by applying the percentage change in the Consumer

Price Index immediately prior to the date the

adjustment is due to take effect. Any funds not

distributed to the borough or the city because of the

budgetary limitation shall be distributed in

accordance with subsection (b) based upon the

classification of the county where the licensed

facility is located.

(ii)  Except as provided in subparagraph (i), if the

licensed facility is a Category 3 licensed facility and

is located in a municipality of any class, 50% of the

licensed facility's local share assessment shall be

distributed to the municipality, subject, however, to the

budgetary limitation in this subparagraph. The amount

distributed to the municipality shall not exceed 50% of

the municipality's total budget for fiscal year 2009,

adjusted for inflation in subsequent years by an amount

not to exceed an annual cost-of-living adjustment

calculated by applying the percentage change in the

Consumer Price Index immediately prior to the date the

adjustment is due to take effect. Any funds not

distributed to the municipality because of the budgetary

limitation shall be distributed in accordance with

subsection (b) based upon the classification of county

where the licensed facility is located.

(7)  Except as otherwise provided in this subsection, if

the facility is a Category 1 or a Category 2 licensed

facility in a municipality of any class, 50% of the licensed

facility's local share assessment shall be distributed to the

municipality, subject, however, to the budgetary limitation

in this paragraph. The amount distributed to the municipality

shall not exceed 50% of the municipality's total budget for

fiscal year 2009 adjusted for inflation in subsequent years

by an amount not to exceed the annual cost-of-living

adjustment calculated by applying the percentage change in

the Consumer Price Index immediately prior to the date the

adjustment is due to take effect. Any funds not distributed

to the municipality because of the budgetary limitation shall

be distributed in accordance with subsection (b) based upon

the classification of county where the licensed facility is

located.

(d)  Construction.--The following shall apply to

distributions provided for in this section:

(1)  Distributions to counties shall be based upon county

classifications in effect on the effective date of this

section, and any reclassification of a county as a result of

a Federal decennial census or pursuant to an act of the

General Assembly shall not apply to this section unless the

act of the General Assembly specifically provides otherwise.

(2)  Distributions to municipalities shall be based upon

municipal classifications in effect on the effective date of

this section, and any reclassification of a municipality as a

result of a Federal decennial census or pursuant to an act of

the General Assembly shall not apply to this section unless

the act of the General Assembly specifically provides

otherwise.

(e)  Miscellaneous provisions.--

(1)  If any provision of this section is found to be

unenforceable for any reason, the distribution provided for

in such unenforceable provision shall be made to the

municipality in which the licensed facility is located.

(2)  References to the Consumer Price Index shall mean

the Consumer Price Index for All Urban Consumers for the

Pennsylvania, New Jersey, Delaware and Maryland area for the

most recent 12-month period for which figures have been

officially reported by the United States Department of Labor,

Bureau of Labor Statistics.

(3)  A person or its affiliated entity or a political

subdivision may not compensate or incur an obligation to

compensate a person to engage in lobbying for compensation

contingent in whole or in part upon the approval, award,

receipt or denial of funds under this section. A person or

its affiliated entity may not engage in or agree to engage in

lobbying for compensation contingent in whole or in part upon

the approval, award, receipt or denial of funds under this

section. A violation of this paragraph shall be considered an

intentional violation of 65 Pa.C.S. § 13A09(e) (relating to

penalties). This paragraph shall not apply to a county or

municipality that compensates a person to prepare a grant

application for funds under this section if all of the

following requirements are met:

(i)  The person is not identified in the application.

(ii)  The person has no direct contact with the

agency, county or municipality providing the funding.

(iii)  The person is paid a fixed fee or percentage

of the amount of any funds approved, awarded or received

of up to 0.5%.

(4)  In cooperation with the department, the Office of

the Budget and the Commonwealth Financing Authority, the

Department of Community and Economic Development shall submit

an annual report on all distributions of local share

assessments to counties and municipalities under this section

to the chairman and minority chairman of the Appropriations

Committee of the Senate, the chairman and the minority

chairman of the Community, Economic and Recreational

Development Committee of the Senate, the chairman and the

minority chairman of the Appropriations Committee of the

House of Representatives and the chairman and minority

chairman of the Gaming Oversight Committee of the House of

Representatives.

(5)  All counties and municipalities receiving

distributions of local share assessments under this section

shall submit an annual report to the Department of Community

and Economic Development on a form prepared by the Department

of Community and Economic Development that sets forth the

amount and use of the funds received for the prior calendar

year. The report shall set forth whether the funds received

were deposited into the county's or municipality's general

fund or committed to a specific project or use. The report

shall be submitted by August 31, 2010, and by August 31 of

each year thereafter.

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

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

subsection:

"Community college."  The term shall have the meaning

ascribed to it in section 1901-A(4) of the act of March 10, 1949

(P.L.30, No.14), known as the Public School Code of 1949.

"Local share assessment."  Two percent of a certificate

holder's daily gross table game revenue.]

Section 3.  Section 1403 of Title 4 is amended to read:

§ 1403.  Establishment of State Gaming Fund and net slot machine

revenue distribution.

(a)  Fund established.--There is hereby established the State

Gaming Fund within the State Treasury.

(b)  Slot machine tax.--The department shall determine and

each slot machine licensee shall pay a daily tax of [34%] 55% 

from its daily gross terminal revenue from the slot machines in

operation at its facility [and a local share assessment as

provided in subsection (c)]. All funds owed to the

Commonwealth[, a county or a municipality] under this section

shall be held in trust by the licensed gaming entity for the

Commonwealth[, the county and the municipality] until the funds

are paid or transferred to the fund. Unless otherwise agreed to

by the board, a licensed gaming entity shall establish a

separate bank account to maintain  gross terminal revenue until

such time as the funds are paid or transferred under this

section. Moneys in the fund are hereby appropriated to the

department on a continuing basis for the purposes set forth in

subsection (c).

(c)  Transfers and distributions.--The department shall:

(1)  Transfer the slot machine tax and assessment imposed

in subsection (b) to the fund.

[(2)  From the local share assessment established in

subsection (b), make quarterly distributions among the

counties hosting a licensed facility in accordance with the

following schedule:

(i)  If the licensed facility is a Category 1

licensed facility that is located at a harness racetrack

and the county, including a home rule county, in which

the licensed facility is located is:

(A)  A county of the first class:  4% of the

gross terminal revenue to the county hosting the

licensed facility from each such licensed facility.

Notwithstanding any other provision to the contrary,

funds from licensed gaming entities located within a

county of the first class shall not be distributed

outside of a county of the first class.

(B)  A county of the second class:  2% of the

gross terminal revenue to the county hosting the

licensed facility from each such licensed facility.

(C)  A county of the second class A:  1% of the

gross terminal revenue to the county hosting the

licensed facility from each such licensed facility.

An additional 1% of the gross terminal revenue to the

county hosting the licensed facility from each such

licensed facility for the purpose of municipal grants

within the county in which the licensee is located.

(D)  (I)  A county of the third class:  Except as

provided in subclause (II), 2% of the gross

terminal revenue from each such licensed facility

shall be deposited into a restricted receipts 

account to be established in the Commonwealth

Financing Authority to be used exclusively for

grants for projects in the public interest to

municipalities within the county where the

licensed facility is located. 

(I.1)  Priority shall be given to multiyear

projects approved or awarded by the Department of

Community and Economic Development under

subclause (I) on or before the effective date of

this subclause.

(II)  If a licensed facility is located in

one of two counties of the third class where a

city of the third class is located in both

counties of the third class, the county in which

the licensed facility is located shall receive

1.2% of the gross terminal revenue to be

distributed as follows:  20% to the host city,

30% to the host county and 50% to the host county

for the purpose of making municipal grants within

the county, with priority given to municipalities

contiguous to the host city. The county of the

third class, which includes a city of the third

class that is located in two counties of the

third class and is not the host county for the

licensed facility, shall receive .8% of the gross

terminal revenue to be distributed as follows:

60% to a nonhost city of the third class located

solely in the nonhost county in which the host

city of the third class is also located or 60% to

the nonhost city of the third class located both

in the host and nonhost counties of the third

class, 35% to the nonhost county and 5% to the

nonhost county for the purpose of making

municipal grants within the county.

(E)  A county of the fourth class:  2% of the

gross terminal revenue from each such licensed

facility shall be distributed as follows:

(I)  The department shall make distributions

directly to each municipality within the county,

except the host municipality, by using a formula

equal to the sum of $25,000 plus $10 per resident

of the municipality using the most recent

population figures provided by the Department of

Community and Economic Development, provided,

however, that the amount so distributed to any

municipality shall not exceed 50% of its total

budget for fiscal year 2009, adjusted for

inflation in subsequent fiscal years by an amount

not to exceed an annual cost-of-living adjustment

calculated by applying any upward percentage

change in the Consumer Price Index immediately

prior to the date the adjustment is due to take

effect. Distributions to a municipality in

accordance with this subclause shall be deposited

into a special fund which shall be established by

the municipality. The governing body of the

municipality shall have the right to draw upon

the special fund for any lawful purpose provided

that the municipality identifies the fund as the

source of the expenditure. Each municipality

shall annually submit a report to the Department

of Community and Economic Development detailing

the amount and purpose of each expenditure made

from the special fund during the prior fiscal

year.

(II)  Any funds not distributed under

subclause (I) shall be deposited into a

restricted receipts account established in the

Department of Community and Economic Development

to be used exclusively for grants to the county,

to economic development authorities or

redevelopment authorities within the county for

grants for economic development projects,

infrastructure projects, job training, community

improvement projects, other projects in the

public interest, and necessary and reasonable

administrative costs. Notwithstanding the

provisions of the act of February 9, 1999 (P.L.1,

No.1), known as the Capital Facilities Debt

Enabling Act, grants made under this clause may

be utilized as local matching funds for other

grants or loans from the Commonwealth.

(F)  Counties of the fifth through eighth

classes:

(I)  Except as set forth in subclause (II), 

2% of the gross terminal revenue from each such

licensed facility shall be deposited into a

restricted account established in the Department

of Community and Economic Development to be used

exclusively for grants to the county.

(II)  If the licensed facility is located in

a second class township in a county of the fifth

class, 2% of the gross terminal revenue from the

licensed facility shall be distributed as

follows:

(a)  1% shall be deposited into a

restricted receipts account to be established

in the Commonwealth Financing Authority to be

used exclusively for grants for projects in

the public interest to municipalities within

the county where the licensed facility is

located.

(b)  1% shall be distributed to the county

for projects in the public interest in the

county.

(G)  Any county not specifically enumerated in

clauses (A) through (F), 2% of the gross terminal

revenue to the county hosting the licensed facility

from each such licensed facility.

(ii)  If the licensed facility is a Category 1

licensed facility and is located at a thoroughbred

racetrack and the county in which the licensed facility

is located is:

(A)  A county of the first class:  4% of the

gross terminal revenue to the county hosting the

licensed facility from each such licensed facility.

Notwithstanding any other provision to the contrary,

funds from licensed gaming entities located within

the county of the first class shall not be

distributed outside of a county of the first class.

(B)  A county of the second class:  2% of the

gross terminal revenue to the county hosting the

licensed facility from each such licensed facility.

(C)  A county of the second class A:  1% of the

gross terminal revenue to the county hosting the

licensed facility from each such licensed facility.

An additional 1% of the gross terminal revenue to the

county hosting the licensed facility from each such

licensed facility for the purpose of municipal grants

within the county in which the licensee is located.

(D)  A county of the third class:  1% of the

gross terminal revenue to the county hosting the

licensed facility from each such licensed facility.

An additional 1% of the gross terminal revenue to the

county hosting the licensed facility from each such

licensed facility for the purpose of municipal grants

within the county in which the licensee is located.

(E)  A county of the fourth class:  2% of the

gross terminal revenue from each such licensed

facility shall be deposited into a restricted account

established in the Department of Community and

Economic Development to be used exclusively for

grants to the county, to economic development

authorities or redevelopment authorities within the

county for grants for economic development projects,

community improvement projects, job training, other

projects in the public interest and reasonable

administrative costs. Notwithstanding the Capital

Facilities Debt Enabling Act, grants made under this

clause may be utilized as local matching funds for

other grants or loans from the Commonwealth.

(F)  Counties of the fifth through eighth

classes:  2% of the gross terminal revenue from each

such licensed facility shall be deposited into a

restricted account established in the Department of

Community and Economic Development to be used

exclusively for grants to the county.

(G)  Any county not specifically enumerated in

clauses (A) through (F), 2% of the gross terminal

revenue to the county hosting the licensed facility

from each such licensed facility.

(iii)  If the facility is a Category 2 licensed

facility and if the county in which the licensed facility

is located is:

(A)  A county of the first class:  4% of the

gross terminal revenue to the county hosting the

licensed facility from each such licensed facility.

Notwithstanding any other provision to the contrary,

funds from licensed gaming entities located within a

county of the first class shall not be distributed

outside of a county of the first class. The first

$5,000,000 of the total amount distributed annually

to the county of the first class shall be distributed

to the Philadelphia School District.

(B)  A county of the second class:  2% of the

gross terminal revenue to the county hosting the

licensed facility from each such licensed facility.

(C)  A county of the second class A:  1% of the

gross terminal revenue to the county hosting the

licensed facility from each such licensed facility.

An additional 1% of the gross terminal revenue to the

county hosting the licensed facility from each such

licensed facility for the purpose of municipal grants

within the county in which the licensee is located.

(D)  A county of the third class:  1% of the

gross terminal revenue to the county hosting the

licensed facility from each such licensed facility.

An additional 1% of the gross terminal revenue to the

county hosting the licensed facility from each such

licensed facility for the purpose of municipal grants

within the county in which the licensee is located.

(D.1)  If a licensed facility is located in one

of two counties of the third class where a city of

the third class is located in both counties of the

third class, the county in which the licensed

facility is located shall receive 1.2% of the gross

terminal revenue to be distributed as follows:  20%

to the host city, 30% to the host county and 50% to

the host county for the purpose of making municipal

grants within the county, with priority given to

municipalities contiguous to the host city. The

county of the third class, which includes a city of

the third class that is located in two counties of

the third class and is not the host county for the

licensed facility, shall receive .8% of the gross

terminal revenue to be distributed as follows:  60%

to a nonhost city of the third class located solely

in the nonhost county in which the host city of the

third class is also located or 60% to the nonhost

city of the third class located both in the host and

nonhost counties of the third class, 35% to the

nonhost county and 5% to the nonhost county for the

purpose of making municipal grants within the county.

(E)  A county of the fourth class:  2% of the

gross terminal revenue from each such licensed

facility shall be deposited into a restricted account

established in the Department of Community and

Economic Development to be used exclusively for

grants to the county, to economic development

authorities or redevelopment authorities within the

county for grants for economic development projects,

community improvement projects, job training, other

projects in the public interest and reasonable

administrative costs. Notwithstanding the Capital

Facilities Debt Enabling Act, grants made under this

clause may be utilized as local matching funds for

other grants or loans from the Commonwealth.

(F)  Counties of the fifth class:  2% of the

gross terminal revenue from each such licensed

facility shall be deposited and distributed as

follows:

(I)  One percent to be distributed as

follows:

(a)  Beginning in 2010, the sum of

$2,400,000 annually for a period of 20 years

to the county for purposes of funding debt

service related to the construction of a

community college campus located within the

county.

(b)  Any funds not distributed under

subclause (a) shall be deposited into a

restricted receipts account to be established 

in the Commonwealth Financing Authority to be

used exclusively for grants within the county

for economic development projects, road

projects located within a 20-mile radius of

the licensed facility and located within the

county, community improvement projects and

other projects in the public interest within

the county. The amount under this subclause

includes reasonable administrative costs.

(II)  One percent shall be deposited into a

restricted receipts account to be established in

the Commonwealth Financing Authority to be used

exclusively for grants within contiguous counties

for economic development projects, community

improvement projects and other projects in the

public interest within contiguous counties. The

amount under this subclause includes reasonable

administrative costs. A contiguous county that

hosts a Category 1 licensed facility shall be

ineligible to receive grants under this

subclause.

(II.1)  Priority shall be given to multiyear

projects approved or awarded by the Department of

Community and Economic Development under

subclause (I)(b) or (II) on or before the

effective date of this subclause.

(III)  Fifty percent of any revenue required

to be transferred under paragraph (3)(v) shall be

deposited into the restricted receipts account

established under subclause (I)(b), and 50% shall

be deposited into the restricted  receipts 

account established under subclause (II).

Notwithstanding the Capital Facilities Debt

Enabling Act, grants made under this clause may

be utilized as local matching funds for other

grants or loans from the Commonwealth.

(G)  Any county not specifically enumerated in

clauses (A) through (F), 2% of the gross terminal

revenue to the county hosting the licensed facility

from each such licensed facility.

(iv)  (A)  Except as provided in clause (B) or (C),

if the facility is a Category 3 licensed facility, 2%

of the gross terminal revenue from the licensed

facility shall be deposited into a restricted

receipts account established in the Department of

Community and Economic Development to be used

exclusively for grants to the county, to economic

development authorities or redevelopment authorities

within the county for grants for economic development

projects, community improvement projects and other

projects in the public interest.

(B)  If the facility is a Category 3 licensed

facility located in a county of the second class A,

2% of the gross terminal revenue from the licensed

facility shall be deposited into a restricted

receipts account to be established in the

Commonwealth Financing Authority to be used

exclusively for grants or guarantees for projects in

the host county that qualify under 64 Pa.C.S. §§ 1551

(relating to Business in Our Sites Program), 1556

(relating to Tax Increment Financing Guarantee

Program) and 1558 (relating to Water Supply and

Wastewater Infrastructure Program).

(C)  If the facility is a Category 3 licensed

facility located in a county of the fifth class that

is contiguous to a county of the seventh class, 2% of

the gross terminal revenue from the licensed facility

shall be deposited into a restricted receipts account

to be established in the Commonwealth Financing

Authority to be used exclusively for grants within

the county for economic development projects,

infrastructure projects, community improvement

projects and other projects in the public interest

within the county and for infrastructure projects

within a 20-mile radius of the licensed facility in a

contiguous county of the seventh class.

(v)  Unless otherwise specified, for the purposes of

this paragraph money designated for municipal grants

within a county, other than a county of the first class,

in which a licensed facility is located shall be used to

fund grants to the municipality in which the licensed

facility is located, to the county in which the licensed

facility is located and to the municipalities which are

contiguous to the municipality in which the licensed

facility is located and which are located within the

county in which the licensed facility is located. Grants

shall be administered by the county through its economic

development or redevelopment authority in which the

licensed facility is located. Grants shall be used to

fund the costs of human services, infrastructure

improvements, facilities, emergency services, health and

public safety expenses associated with licensed facility

operations. If at the end of a fiscal year uncommitted

funds exist, the county shall pay to the economic

development or redevelopment authority of the county in

which the licensed facility is located the uncommitted

funds.

(vi)  If the licensed facility is located in more

than one county, the amount available shall be

distributed on a pro rata basis determined by the

percentage of acreage located in each county to the total

acreage of all counties occupied by the licensed

facility.

(vii)  The distributions provided in this paragraph

shall be based upon county classifications in effect on

the effective date of this section. Any reclassification

of counties as a result of a Federal decennial census or

of a State statute shall not apply to this subparagraph.

(viii)  If any provision of this paragraph is found

to be unenforceable for any reason, the distribution

provided for in the unenforceable provision shall be made

to the county in which the licensed facility is located

for the purposes of grants to municipalities in that

county, including municipal grants as specified in

subparagraph (v).

(ix)  Nothing in this paragraph shall prevent any of

the above counties which directly receive a distribution

under this section from entering into intergovernmental

cooperative agreements with other jurisdictions for

sharing this money.

(3)  From the local share assessment established in

subsection (b), make quarterly distributions among the

municipalities, including home rule municipalities, hosting a

licensed facility in accordance with the following schedule:

(i)  To a city of the second class hosting a licensed

facility, other than a Category 3 licensed facility, 2%

of the gross terminal revenue or $10,000,000 annually,

whichever is greater, shall be paid by each licensed

gaming entity operating a facility located in that city.

In the event that the revenues generated by the 2% do not

meet the $10,000,000 minimum specified in this

subparagraph, the department shall collect the remainder

of the minimum amount of $10,000,000 from each licensed

gaming entity operating a facility in the city and

deposit that amount in the city treasury.

(ii)  To a city of the second class A hosting a

licensed facility, other than a Category 3 licensed

facility, 2% of the gross terminal revenue or $10,000,000

annually, whichever is greater, shall be paid by each

licensed entity operating a licensed facility located in

that city, subject, however, to the budgetary limitation

in this subparagraph. The amount allocated to the

designated municipalities shall not exceed 50% of their

total budget for fiscal year 2003-2004, adjusted for

inflation in subsequent years by an amount not to exceed

an annual cost-of-living adjustment calculated by

applying the percentage change in the Consumer Price

Index immediately prior to the date the adjustment is due

to take effect. Any remaining moneys shall be collected

by the department from each licensed gaming entity and

distributed in accordance with paragraph (2) based upon

the classification of county where the licensed facility

is located. In the event that the revenues generated by

the 2% do not meet the $10,000,000 minimum specified in

this subparagraph, the department shall collect the

remainder of the minimum amount of $10,000,000 from each

licensed gaming entity operating a facility in the city,

pay any balance due to the city and transfer any

remainder in accordance with paragraph (2).

(iii)  To a city of the third class hosting a

licensed facility, other than a Category 3 licensed

facility, 2% of the gross terminal revenue or $10,000,000

annually, whichever is greater, shall be paid by each

licensed gaming entity operating a licensed facility

located in that city, subject, however, to the budgetary

limitation in this subparagraph. In the event that the

city has a written agreement with a licensed gaming

entity executed prior to the effective date of this part,

the amount paid under the agreement to the city shall be

applied and credited to the difference between 2% of the

gross terminal revenue and the $10,000,000 owed under

this subparagraph if the 2% of the gross terminal revenue

is less than $10,000,000. If 2% of the gross terminal

revenue is greater than the $10,000,000 required to be

paid under this subparagraph, the credit shall not apply.

The amount of gross terminal revenue required to be paid

pursuant to the agreement shall be deemed to be gross

terminal revenue for purposes of this subparagraph. The

amount allocated to the designated municipalities shall

not exceed 50% of their total budget for fiscal year

2003-2004, adjusted for inflation in subsequent years by

an amount not to exceed an annual cost-of-living

adjustment calculated by applying the percentage change

in the Consumer Price Index immediately prior to the date

the adjustment is due to take effect. Any remaining

moneys shall be collected by the department from each

licensed gaming entity and distributed in accordance with

paragraph (2) based upon the classification of county

where the licensed facility is located. In the event that

the revenues generated by the 2% do not meet the

$10,000,000 minimum specified in this subparagraph, the

department shall collect the remainder of the minimum

amount of $10,000,000 from each licensed gaming entity

operating a facility, pay any balance due to the city of

the third class and transfer any remainder in accordance

with paragraph (2).

(iii.1)  If a licensed facility is located in a city

of the third class and the city is located in more than

one county of the third class, 2% of the gross terminal

revenue or $10,000,000 annually, whichever is greater,

shall be distributed as follows:  80% to the host city

and 20% to the city of the third class located solely in

a nonhost county in which the host city of the third

class is also located. If a licensed facility is located

in a city of the third class and that city is located

solely in a host county of the third class in which a

nonhost city of the third class is also located, 2% of

gross terminal revenue or $10,000,000 annually, whichever

is greater, shall be distributed as follows:  80% to the

host city and 20% to a city of the third class located

both in a nonhost county of the third class and in a host

county of the third class in which the host city of the

third class is located.

(iv)  To a township of the first class hosting a

licensed facility, other than a Category 3 licensed

facility, 2% of the gross terminal revenue or $10,000,000

annually, whichever is greater, shall be paid by each

licensed gaming entity operating a licensed facility

located in the township subject, however, to the

budgetary limitation in this subparagraph. The amount

allocated to the designated municipalities shall not

exceed 50% of their total budget for fiscal year

2003-2004, adjusted for inflation in subsequent years by

an amount not to exceed an annual cost-of-living

adjustment calculated by applying the percentage change

in the Consumer Price Index immediately prior to the date

the adjustment is due to take effect. Any remaining money

shall be collected by the department from each licensed

gaming entity and distributed in accordance with

paragraph (2) based upon the classification of county

where the licensed facility is located. In the event that

the revenues generated by the 2% do not meet the

$10,000,000 minimum specified in this subparagraph, the

department shall collect the remainder of the minimum

amount of $10,000,000 from each licensed gaming entity

operating a licensed facility in the township, pay any

balance due to the township and transfer any remainder in

accordance with paragraph (2).

(v)  To a township of the second class hosting a

licensed facility:

(A)  2% of the gross terminal revenue or

$10,000,000 annually, whichever is greater, shall be

paid by each licensed gaming entity operating a

licensed facility, other than a Category 3 licensed

facility or a licensed facility owning land adjacent

to the licensed facility located in more than one

township of the second class, to the township of the

second class hosting the licensed facility, subject,

however, to the budgetary limitation in this

subparagraph. The amount allocated to the designated

municipalities shall not exceed 50% of their total

budget for fiscal year 2003-2004, adjusted for

inflation in subsequent years by an amount not to

exceed an annual cost-of-living adjustment calculated

by applying the percentage change in the Consumer

Price Index immediately prior to the date the

adjustment is due to take effect. Any remaining money

shall be collected by the department from each

licensed gaming entity and distributed in accordance

with paragraph (2) based upon the classification of

county where the licensed facility is located. If

revenues generated by the 2% do not meet the

$10,000,000 minimum specified in this subparagraph,

the department shall collect the remainder of the

minimum amount of $10,000,000 from each licensed

gaming entity operating a licensed facility in the

township, pay any balance due to the township and

transfer any remainder in accordance with paragraph

(2).

(B)  2% of the gross terminal revenue or

$10,000,000 annually, whichever is greater, less the

amount paid under clause (C), shall be paid by each

licensed gaming entity operating a licensed facility

and owning land adjacent to the licensed facility

located in more than one township of the second

class, other than a Category 3 licensed facility, to

the township of the second class hosting the licensed

facility, subject, however, to the budgetary

limitation in this subparagraph. The amount allocated

to the designated municipalities may not exceed 50%

of their total budget for the fiscal year 2003-2004,

adjusted for inflation in subsequent years by an

amount not to exceed an annual cost-of-living

adjustment calculated by applying the percentage

change in the Consumer Price Index immediately prior

to the date the adjustment is due to take effect. Any

remaining money shall be collected by the department

from each licensed gaming entity and distributed in

accordance with paragraph (2) based upon the

classification of the county where the licensed

facility is located. The county commissioners of a 

county of the third class in which the licensed 

facility is located shall appoint an advisory

committee for the purpose of advising the county as

to the need for municipal grants for health, safety,

transportation and other projects in the public

interest to be comprised of two individuals from the

host municipality, two from contiguous municipalities

within the county of the third class and one from the

host county. In the event that the revenues generated

by the 2% do not meet the $10,000,000 minimum

specified in this subparagraph, the department shall

collect the remainder of the minimum amount of

$10,000,000 from each licensed gaming entity

operating a licensed facility in the township, pay

any balance due to the township and transfer any

remainder in accordance with paragraph (2).

(C)  $160,000 annually shall be paid by each

licensed gaming entity operating a licensed facility

and owning land adjacent to the licensed facility

located in more than one township of the second

class, other than a Category 3 licensed facility, to

the township of the second class that is located in a

county of the fifth class in which the adjacent land

is located, including racetracks, grazing fields or

any other adjoining real property.

(vi)  To a borough hosting a licensed facility, other

than a Category 3 licensed facility, 2% of the gross

terminal revenue or $10,000,000 annually, whichever is