AN ACT

 

1Amending the act of December 19, 1988 (P.L.1262, No.156),
2entitled, as amended, "An act providing for the licensing of
3eligible organizations to conduct games of chance, for the
4licensing of persons to distribute games of chance, for the
5registration of manufacturers of games of chance, and for
6suspensions and revocations of licenses and permits;
7requiring records; providing for local referendum by
8electorate; and prescribing penalties," further providing for 
9definitions, for games of chance permitted, for distributor 
10licenses, for major league sports drawing, for club licensee, 
11for distribution of proceeds, for records and for raffle 
12tickets; providing for background checks; further providing 
13for enforcement; providing for tavern gaming and for a host<- 
14municipality tavern games tax; establishing the Host 
15Municipality Tavern Games Local Share Account; providing for 
16a <-transfer report of the Legislative Budget and Finance 
17Committee; and making an editorial change.

18The General Assembly of the Commonwealth of Pennsylvania
19hereby enacts as follows:

20Section 1. Section 102 of the act of December 19, 1988 
21(P.L.1262, No.156), known as the Local Option Small Games of 
22Chance Act, amended February 2, 2012 (P.L.7, No.2), is amended 
23to read:

1Section 102. Legislative intent.

2The General Assembly hereby declares that the playing of
3games of chance for the purpose of raising funds, by certain
4nonprofit associations, for the promotion of charitable or civic
5purposes, is in the public interest. In some cases, the proceeds 
6from games of chance may be utilized to support certain 
7operating expenses of certain organizations.

8The General Assembly hereby declares that raising public
9funds from games of chance in taverns <-licensed restaurants and
10protecting the competitiveness of these restaurants is also in
11the public interest.

12It is hereby declared to be the policy of the General
13Assembly that all phases of licensing, operation and regulation
14of games of chance be strictly controlled, and that all laws and
15regulations with respect thereto as well as all gambling laws
16should be strictly construed and rigidly enforced.

17The General Assembly recognizes the possibility of
18association between commercial gambling and organized crime, and
19wishes to [discourage commercialization of games of chance,<-]
20prevent participation by organized crime and prevent the
21diversion of funds from the purposes herein authorized.

22Section 1.1. The introductory paragraph and the definitions
23of <-"games of chance," "major league sports drawing," "major
24league sport team" and "proceeds" in section 103 of the act,
25amended or added February 2, 2012 (P.L.7, No.2) and October 24,
262012 (P.L.1462, No.184), are amended <-and the section is amended 
27by adding a definition to read:

28Section 103. Definitions.

29The following words and phrases when used in this act shall, 
30except as provided under section 901, have the meanings given to

1them in this section unless the context clearly indicates
2otherwise:

<-3* * *

4"Games of chance." Punchboards, daily drawings, weekly
5drawings, 50/50 drawings, raffles, tavern games and pull-tabs,
6as defined in this act, provided that no such game shall be
7played by or with the assistance of any mechanical or electrical
8devices or media other than a dispensing machine or passive
9selection device and further provided that the particular chance
10taken by any person in any such game shall not be made
11contingent upon any other occurrence or the winning of any other
12contest, but shall be determined solely at the discretion of the
13purchaser. This definition shall not be construed to authorize
14any other form of gambling currently prohibited under [any
15provision of Title] 18 [of the Pennsylvania Consolidated
16Statutes] Pa.C.S. (relating to crimes and offenses) or
17authorized under 4 Pa.C.S. (relating to amusements). Nothing in
18this act shall be construed to authorize games commonly known as
19"slot machines" or "video poker."

20* * *

21"Major league sports drawing." [A 50/50 drawing conducted by
22an affiliated nonprofit organization at a home game of a major
23league sports team in which 50% of the money collected from
24ticket sales from the drawing are offered as the prize and the
25remaining 50% is retained by the affiliated nonprofit
26organization sponsoring the drawing for distribution to
27charitable organizations.] A 50/50 drawing conducted by a 
28nonprofit affiliate of a major league sports team in accordance 
29with section 304.1.

30"Major league sports team." [A professional team that is a
 

1member of Major League Baseball, the National Hockey League, the 
2National Basketball Association or Major League Soccer.] A 
3sports team or racing facility that is any of the following:

4(1) A member of Major League Baseball, the National
5Hockey League, the National Basketball Association, the
6National Football League or Major League Soccer.

7(2) A professional sports team affiliated with a team
8under paragraph (1).

9(3) Any other professional sports team that has a sports
10facility or an agreement with a sports facility to conduct
11home games at the facility.

12(4) A stadium, grandstand or bleacher at a closed-course
13motor facility where spectators are directly observing motor
14races with NASCAR, Indy, stock or drag racing cars.

15* * *

16"Proceeds." The difference between:

17(1) the actual gross revenue collected by a licensed
18eligible organization, or a licensee under Chapter 9, from a
19game of chance; and

20(2) the actual amount of prizes paid by a licensed
21eligible organization, or a licensee under Chapter 9, from a
22game of chance, plus the cost to purchase games of chance.

23* * *

<-24"Tavern games." Pull tabs, tavern daily drawings and tavern
25raffles.

26* * *

27Section 1.2. Section 301 of the act, amended October 24, 
282012 (P.L.1462, No.184), is amended to read:

29Section 301. Games of chance permitted.

30Every eligible organization to which a license has been

1issued under the provisions of this chapter may conduct games of
2chance for the purpose of raising funds for public interest
3purposes. Except as provided in Chapter 5, all proceeds of a
4licensed eligible organization shall be used exclusively for
5public interest purposes, for the purchase of games of chance[,]
6or for the payment of the license fee [or for the payment of the
7fee for background checks], as required by this act.

8Section 1.3. Section 304(a) of the act, amended February 2,
92012 (P.L.7, No.2), is amended to read:

10Section 304. Distributor licenses.

11(a) License required.--No person shall sell, offer for sale
12or furnish games of chance to eligible organizations licensed
13under this chapter or licensed under chapter 9 unless such
14person shall have obtained a distributor license as provided in
15this section.

16* * *

17Section 1.4. Section 304.1(c) and (f) of the act, added 
18October 24, 2012 (P.L.1462, No.184), are amended and the section 
19is amended by adding subsections to read:

20Section 304.1. Major league sports drawing.

21* * *

22(b.2) Charitable event.--A major league sports drawing may
23be conducted by the affiliated nonprofit organization during a
24charitable event held within the same arena, stadium,
25grandstand, bleachers or other facility during a home game or
26car race of the major league sports team. Drawings may only be
27held within spectator areas within the arena, stadium,
28grandstand or bleachers where the home game or car race is being
29conducted and not at ancillary areas or facilities, including
30parking areas, restaurants and bars or areas outside the arena,

1stadium, grandstand or bleachers or areas where the sport is
2shown on remote electronic equipment.

3(c) Distribution.--The prize amount of a major league sports
4drawing shall be 50% of the total amount collected from the sale
5of major league sports drawing tickets. [The] Except as set 
6forth in subsection (c.1), the other 50% of the total amount
7collected from the sale of major league sports drawing tickets
8shall be donated within seven days from the date of the drawing
9by the affiliated nonprofit organization conducting the major
10league sports drawing to [a] one or more designated charitable
11[organization] organizations for which the drawing was
12conducted.

13(c.1) Use of funds.--

14(1) The affiliated nonprofit organization may utilize
15nonprize money collected for the following:

16(i) To employ or provide payment to individuals 18
17years of age or older to sell major league sports drawing
18tickets at a professional sporting event.

19(ii) For administrative expenses directly related to
20the conduct of the drawing under this section.

21(2) Authorized expenses under paragraph (1)(ii) may not
22exceed 2% of the total amount collected from the sale of
23major league sports drawing tickets.

24* * *

25(f) Unclaimed prizes.--Any major league [baseball] sports
26drawing prize remaining unclaimed by a winner at the end of the
27major league sports team's season shall be donated within 30
28days from the end of the season by the affiliated nonprofit
29organization to the designated charitable organization for which
30the major league sports drawing was conducted.

1* * *

2(h) Additional recordkeeping.--The department may require
3additional recordkeeping or accountability measures for major
4league sports drawings.

5Section 2. Sections 501(a), 502(a) and (a.1) <-502 and 503 of
6the act, added February 2, 2012 (P.L.7, No.2), are amended to
7read:

8Section 501. Club licensee.

9(a) Report.--

10(1) Beginning in [2013] 2014, a club licensee with 
11proceeds in excess of <-$30,000 <-$20,000 in a calendar year
12shall submit [semiannual] annual reports to the department
13for the preceding [six-month] 12-month period on a form and
14in a manner prescribed by the department.

15(2) The report under paragraph (1) must be filed under
16oath or affirmation of an authorized officer of the club
17licensee[.

18(3) The report] and shall include all of the following
19information:

20(i) The proceeds received by the club licensee from
21each game of chance conducted, itemized by week.

22(ii) The amount of prizes paid from all games of
23chance, itemized by week.

24(iii) Other costs incurred related to the conduct of 
25games of chance.

26(iv) <-[The verification] Verification and itemization 
27of amounts distributed for public interest <-[purposes 
28itemized under section 502(a)(1), itemized by the 
29re<-cipient].

<-30[(v) An itemized list of expenditures made or
 

1amounts retained and expenditures under section 
2502(a)(2).

3(vi) The address and the county in which the club 
4licensee is located.<-]

5(vii) Other information or documentation required by 
6the department.

7* * *

8Section 502. Distribution of proceeds.

9(a) Distribution.--The proceeds from games of chance
10received by a club licensee shall be distributed as follows:

11(1) No less than [70%] 60% of the proceeds shall be paid
<-12[to organizations] for public interest purposes [in the
13calendar year in which] within one year of the end of the 
14calendar year in which the proceeds were obtained.

15(2) No more than [30%] 40% of the proceeds obtained in a
16calendar year may be retained by a club licensee <-[and used
17for the following operational expenses relating to the club
18licensee:

19(i) Real property taxes.

20(ii) Utility and fuel costs.

21(iii) Heating and air conditioning equipment or
22repair costs.

23(iv) Water and sewer costs.

24(v) Property or liability insurance costs.

25(vi) Mortgage payments.

26(vii) Interior and exterior repair <-and upkeep costs,
27including repair to parking lots <-and landscaping.

28(viii) New facility construction costs.

29(ix) Entertainment equipment, including television,
30video and electronic games.

<-1(x) Personnel, other than a bartender or individual
2who operates games of chance.

3[(x)] (xi) <-(x) Other expenses adopted in regulation
4by the department].

<-5(a.1) Amounts retained.--Amounts retained by a club licensee

6(a.1) Amounts retained.--

7(1) Notwithstanding subsection (a), if in a calendar
8year beginning January 1, 2013, the proceeds from a game of
9chance for a club licensee are $40,000 or less, the licensee
10shall be eligible to retain the first $20,000 in proceeds in
11the following calendar year before subsection (a) applies.

12(2) Amounts retained by a club licensee under subsection 
13(a)(2) shall be expended within [the same calendar year] one 
14year of the end of the calendar year in which the proceeds 
15were obtained unless the club licensee notifies the 
16department that funds are being retained for a substantial 
17public interest purchase or project. [Notification shall 
18include a description of the purchase or project, the cost 
19and the anticipated date of the purchase or project.]

<-20* * *

<-21(b) Prohibition.--

22(1) Proceeds shall not be used [for wages, alcohol or
23food purchases or] for the payment of any fine levied against
24the club licensee.

25(2) An officer or employee of a club licensee who
26operates the game of chance shall not participate in the
27game. This paragraph shall not apply to a raffle.

28Section 503. Records.

29A club licensee shall maintain records as required by this
30act or by the department, including invoices for games of chance

1purchased. Records necessary to [conduct an audit under section
2702(b)] enforce this act or to conduct random audits shall be
3made available to the Bureau of Liquor Control Enforcement, the 
4department or any other entity authorized to enforce or conduct 
5audits under this act.

6Section 3. Section 504 of the act, added February 2, 2012
7(P.L.7, No.2), is repealed:

8[Section 504. Raffle tickets.

9A club licensee shall maintain records relating to the 
10printing or purchase of raffle tickets. Records shall include a 
11receipt or invoice from the place of purchase that shows the 
12cost and number or amount of tickets purchased.]

13Section 4. Section 702(b) and (c) of the act, amended
14February 2, 2012 (P.L.7, No.2) and October 24, 2012 (P.L.1462,
15No.184), are amended to read:

16Section 702. Enforcement.

17* * *

18(b) Bureau of Liquor Control Enforcement.--If the licensee
19is a club licensee or a licensee under Chapter 9, the Bureau of
20Liquor Control Enforcement may enforce the provisions of this
21act in accordance with subsection (g). An administrative law
22judge under section 212 of the act of April 12, 1951 (P.L.90,
23No.21), known as the Liquor Code, may impose the penalties under
24subsection (d) following the issuance of a citation by the
25bureau.

26(c) Random audits.--The [Bureau of Liquor Control
27Enforcement] department shall conduct annual random audits of 5%
28of all club licensees.

29* * *

30Section 5. The act is amended by adding a chapter to read:

1CHAPTER 9

2TAVERN GAMING

3Section 901. Scope of chapter.

4This chapter relates to tavern gaming.

5Section 902. Definitions.

6The following words and phrases when used in this chapter
7shall have the meanings given to them in this section unless the
8context clearly indicates otherwise:

9"Applicant." The person applying for a license under this
10chapter. The term includes each owner and officer of the
11restaurant licenses tavern where tavern games will be conducted
<-12or of the license to conduct tavern games. and of the holder of
13the liquor, malt or brewed beverage license under the act of
14April 12, 1951 (P.L.90, No.21), known as the Liquor Code.

15"Board." The Pennsylvania Liquor Control Board.

16"Bureau." The Bureau of Investigations and Enforcement of
17the Pennsylvania Gaming Control Board.

18"Grocery store." <-An established place which:

19(1) primarily sells food, supplies for the table and
20food products for human consumption off the premises; and

21(2) has an area under one roof of at least 10,000 square
22feet. <-A retail establishment, commonly known as a grocery
23store, supermarket or delicatessen, where food, food products
24and supplies are sold for human consumption on or off the
25premises. The term shall include a restaurant with an
26interior connection to, and the separate and segregated
27portion of, any other retail establishment which is dedicated
28solely to the sale of food, food products and supplies for
29the table for human consumption on or off the premises.

30"Host municipality." A municipality with one or more taverns

1licensed to conduct tavern games.

2"License." A license to conduct tavern games under this
3chapter.

4"Licensee." A person that holds a license under this
5chapter.

6"Net revenue." As follows:

7(1) For tavern games required to be purchased from a
8licensed distributor under this act, the difference between:

9(i) the face value, as indicated by the
10manufacturer, collectible by a licensee from a tavern
11game; and

12(ii) the maximum amount of prizes payable, as
13indicated by the manufacturer, by a licensee from a
14tavern game.

15(2) For tavern games not required to be purchased from a
16licensed distributor, the term has the same meaning as
17proceeds.

18"Restaurant licensee." A for-profit hotel, restaurant,
19privately owned public golf course, brew pub or micro brewery
20licensed to sell liquor under <-the act of April 12, 1951 (P.L.90,
21No.21), known as the Liquor Code. The term does not include any
22of the following:

23(1) A grocery store.

24(2) A premises where the sale of liquid fuels or oil is
25conducted.

<-26"Tavern." A for-profit hotel, restaurant, privately owned
27public golf course or brew pub or micro brewery with a valid
28license to sell liquor, malt or brewed beverages under the
29Liquor Code. The term does not include any of the following:

30(1) A grocery store.

1(2) A restaurant where the sale of liquid fuels or oil
2is conducted.

3(3) A hotel or restaurant whose place of business is
4located in a licensed facility as defined in 4 Pa.C.S. § 1103
5(relating to definitions).

6(4) A business on the grounds of a facility where a
7Major League sports team conducts games or races.

8"Tavern daily drawing." A game in which:

9(1) an individual at a tavern selects or is assigned a
10number for a chance at a prize with the winner determined by
11random drawing to take place at the tavern during the same
12operating day;

13(2) a winner may be determined with the aid of a passive
14selection device or reference to drawings conducted by the
15department under the act of August 26, 1971 (P.L.351, No.91),
16known as the State Lottery Law;

17(3) chances are not sold for an amount in excess of $1;
18and

19(4) no more than one chance per individual is sold per
20drawing.

<-21"Tavern game." The conduct of pull-tab games, daily drawings
22or tavern raffles by a restaurant licensee pursuant to a license 
23issued under this chapter.

24"Tavern raffle." A raffle held in part for a charitable or
25public purpose in accordance with section 908.1.

26Section 903. Licenses.

27(a) Application.--A restaurant licensee may apply to the
28board for a license to conduct tavern games at a licensed
29premises <-in accordance with this chapter. <-located in a
30municipality that has adopted a referendum to allow small games

1of chance under section 703.

2(b) Information.--The application under subsection (a) shall
3include the following information:

4(1) The name, address and photograph of the applicant
<-5and the proposed tavern gaming licensee.

6(2) A current tax lien certificate issued by the
7department and a certificate from the Department of Labor and
8Industry of payment of all workers' compensation and
9unemployment compensation owed.

<-10(3) The details of any gaming, slot machine, casino,
11restaurant or proposed tavern gaming license applied

<-12(3) The details of any license issued under 4 Pa.C.S. 
13Pt. II (relating to gaming), the act of April 12, 1951 
14(P.L.90, No.21), known as the Liquor Code, or this act which 
15was applied for or in which the applicant or other owner has 
16an interest.

17(4) Certified consent by the applicant, <-and including
18each owner and officer of the restaurant licensee to a
19background investigation by the bureau.

20(5) Relating to criminal information, disclosure of all
21arrests and citations of the applicant <-for, including
22nontraffic summary offenses. The information shall include
23all of the following:

24(i) A brief description of the circumstances
25surrounding the arrest or issuance of the citation.

26(ii) The specific offense charged.

27(iii) The ultimate disposition of the charge,
28including any dismissal, plea bargain, conviction,
29sentence, pardon, expungement or order of Accelerated
30Rehabilitative Disposition.

1(6) Financial interests and transactions as required by
2the bureau.

<-3(7) Relating to citations of the applicant issued under
4the Liquor Code.

5(8) Relating to disclosure of conditional license
6agreements entered into under the Liquor Code.

<-7(7) (9) Any other information required by the board.

8(c) Duty of bureau.--The bureau shall conduct a background
9investigation of each applicant, the scope of which shall be
10determined by the bureau.

11(d) Review.--Within six months of receipt of the background 
12investigation report from the bureau, the board shall approve or
13disapprove the application.

14(e) Background investigation.--Each applicant<-, including
15each owner and officer of the restaurant, restaurant licensee
16and proposed tavern gaming license, shall include information
17and documentation as required to establish personal and
18financial suitability, honesty and integrity. Information shall
19include:

20(1) Criminal history record information.

21(2) Financial background information.

<-22(3) Data investigation by the bureau.

23(4) <-(3) Regulatory history before the board or other
24Commonwealth agency.

25(5) <-(4) Other information required by the bureau.

26(f) Personal interview.--If the bureau determines that the 
27results of the background report investigation warrant
28additional review of the individual, the bureau shall conduct a
29personal interview with the applicant and may request
30information and interviews from other personal or professional

1associates.

2(g) Cooperation.--The applicant shall cooperate with the 
3bureau as requested during the conduct of the background 
4investigation. Any refusal to provide the information required 
5under this section or to consent to a background investigation 
6shall result in the immediate denial of a license by the board.

7(h) Costs.--The applicant shall reimburse the bureau for the
8actual costs of conducting the background investigation. The 
9board shall not approve an applicant that has not fully 
10reimbursed the bureau for the investigation.

11(i) Approval.--The bureau shall transmit the investigative 
12report and may make a recommendation to the board. The board
13shall review the information obtained under this section to
14determine if the applicant possesses the following:

15(1) Financial stability, integrity and responsibility.

16(2) Sufficient business experience and ability to
17effectively operate tavern games as part of the restaurant
18licensee's operator.

19(3) Character, honesty and integrity to be licensed to
20operate tavern games in a responsible and lawful manner.

<-21(j) Disapproval.--The board may disapprove the issuance of a
22tavern gaming license for the following reasons:

23(1) A license shall not be issued to a restaurant
24licensee whose liquor license is in safekeeping pursuant to
25section 474.1 of the Liquor Code.

26(2) A license shall not be issued to a location that is
27subject to a pending objection under section 470(a.1) of the
28Liquor Code.

29(3) A license shall not be issued to a location that is
30subject to:

1(i) a pending license suspension under section 471
2of the Liquor Code; or

3(ii) a one-year prohibition on the issuance or
4transfer of a license under section 471(b) of the Liquor
5Code.

6Section 904. Application.

7(a) Application fee.--An applicant shall pay the board a
8nonrefundable application fee of $1,000.

9(b) Investigative fee.--An applicant shall pay an 
10investigative fee of $1,000 to the bureau.

11(c) Costs.--In addition to the fee under subsection (b), an 
12applicant and any owner and officer of the applicant shall pay 
13for the actual costs of a background investigation conducted by 
14the bureau that exceed the application fee. The bureau may:

15(1) Charge an estimated amount to be provided prior to
16the background investigation.

17(2) Submit for reimbursement from the applicant for the
18additional costs incurred in the background investigation.

19(d) Funds.--Funds collected under subsections (b) and (c)
20shall augment the funds appropriated to the Gaming Control Board
21under 4 Pa.C.S. (relating to amusements).

22Section 905. Approval.

23(a) Issuance.--Upon being satisfied that the requirements of
24section 903 have been met, the board may approve the application
25and issue a tavern games license for a period of one year. The
26board may <-place conditions on the license as it deems
27appropriate. <-enter into an agreement with the licensee
28concerning additional restrictions on the license, and this
29agreement shall be binding on the licensee. Failure of the
30licensee to adhere to the agreement will be cause for penalties

1under section 913(c) and for the nonrenewal of the license under
2section 913(f).

3(b) Renewal.--A license shall be renewed annually. A license 
4renewal shall not require review of the bureau, unless requested 
5by the board. <-The board may refuse to renew a tavern gaming 
6license for the following reasons:

7(1) A license shall not be issued to a restaurant
8licensee whose liquor license is in safekeeping under section
9474.1 of the act of April 12, 1951 (P.L.90, No.21), known as
10the Liquor Code.

11(2) A license shall not be issued to a location that is
12subject to a pending objection under section 470(a.1) of the
13Liquor Code.

14(3) A license shall not be issued to a location that is
15subject to:

16(i) a pending license suspension under section 471
17of the Liquor Code; or

18(ii) a one-year prohibition on the issuance or
19transfer of a license under section 471(b) of the Liquor
20Code.

21(c) Fee.--Upon approval, the applicant shall pay a $2,000
22license fee to be deposited in the General Fund. The annual
23renewal fee shall be $1,000.

24(d) Entitlement.--Nothing under this chapter shall be
25construed to create an entitlement to a license by a person. The
26board shall have sole discretion to issue, renew, condition, 
27suspend, revoke or deny a license based on the requirements of
28this chapter and whether the issuance and maintenance of the 
29license are in the best interests of the Commonwealth.

30(e) Nontransferability.--A license shall be a grant of

1privilege to conduct tavern games. A license may not be sold,
2transferred or assigned to any other person. A licensee may not
3pledge or otherwise grant a security interest in or lien on the
4license. The board shall have the sole discretion to issue,
5renew, condition or deny the issuance of a license.

6Section 906. Change in ownership.

7(a) Notice.--A licensee shall notify the board of a change
8of ownership of the premises or sale or transfer of the 
9restaurant license.

10(b) Qualification.--The purchaser or transferee of the
11assets or premises of a licensee must independently qualify for
12a license, pay the license fee and undergo and pay fees and 
13costs for a background investigation under section 903.

14Section 907. Prize limits.

15(a) Individual prize limit.--The maximum prize which may be
16awarded for any single chance shall be $2,000. No tavern game
17sold, offered for sale or furnished may contain, permit, depict
18or designate a prize having a prize limit in excess of $2,000.

19(b) Aggregate prize limit.--No more than $35,000 in prizes
20may be awarded from tavern games by a licensee in a seven-day
21period.

22Section 908. Bank account.

23A licensee shall maintain a bank account to hold the net
24revenue from tavern games which shall be separate from all other
25funds belonging to the licensee. Account records shall show all
26expenditures and income and shall be retained by the licensee
27for at least two years.

28Section 908.1. Tavern raffle.

29The following shall apply to a tavern raffle:

30(1) No more than one tavern raffle may be held in a

1calendar month.

2(2) A tavern raffle must be held for a designated
3charitable purpose.

4(3) Each individual participating in the tavern raffle
5must be informed of the charitable purpose involved.

6(4) At least 50% of the net revenues from the tavern
7raffle shall be transmitted to the designated charity within
8seven days of the tavern raffle.

9(5) Any net revenues not transmitted under paragraph (4)
10shall be distributed as follows:

11(i) Sixty percent shall be paid to the Commonwealth.

12(ii) <-Forty Thirty-five percent may be retained by
13the licensee.

<-14(iii) Five percent shall be paid to the Commonwealth
15and deposited into the restricted receipts account
16established in section 909.3.

17(6) A tavern raffle prize remaining unclaimed by a
18winner 60 days after the tavern raffle was held shall be
19donated by the licensee within 30 days to the designated
20charitable organization for which the tavern raffle was
21conducted.

22Section 909. Distribution of proceeds <-net revenue.

23Beginning January 1, 2014, the net revenue from tavern games
24received by a licensee shall be distributed as follows:

25(1) Sixty percent of the net revenue obtained in any
26calendar year shall be paid to the Commonwealth.

27(2) <-Forty Thirty-five percent of the net revenue
28obtained in any calendar year may be retained by the
29licensee.

<-30(3) Five percent shall be paid to the Commonwealth and

1deposited into the restricted receipts account established in
2section 909.3.

3Section 909.1. Tavern games tax.

4(a) Imposition.--There is imposed a tax of 60% of the net
5revenue from tavern games sold by a licensed distributor to a
6licensee within this Commonwealth.

7(b) Collection.--The tax imposed under subsection (a) must
8be collected by the licensed distributor from the licensee in an
9instance where the tavern game is required to be purchased from
10a licensed distributor under this act and must be paid over to
11the Commonwealth.

12(c) Other games.--In an instance where the tavern game is
13not required to be purchased from a licensed distributor under
14this act, a tax of 60% is imposed upon the net revenue from
<-15tavern daily drawings and tavern raffles under section 908.1 and
16must be paid to the Commonwealth by the licensee.

17(d) Requirement to collect and remit.--Failure of a seller
18of tavern games to obtain a distributor's license does not
19relieve the seller from the requirement of collecting and
20remitting the tax imposed under this section.

21(e) Returns.--A licensee or licensed distributor subject to
22this article shall file with the department, upon a form
23prescribed by the department, a tavern games tax return. The
24return must be filed under oath or affirmation of an authorized
25officer of the licensee or licensed distributor reporting the
26net revenue and the tax due under this section in the prior
27calendar quarter for licensees and in the prior calendar month
28for licensed distributors. A return is due by the 20th day
29following the end of the reporting period. The return must set
30forth the following:

1(1) In the case of a licensed distributor, the total
2amount of net revenue for the tavern games sold to licensees
3in the prior calendar month, which must be calculated by
4indicating the number of each type of tavern game sold and
5the net revenue for each type of game.

6(2) In the case of a licensee, the amount of net revenue
7for the tavern games not purchased from a licensed
8distributor that the licensee operated in the prior calendar
9quarter.

10(3) Calculation of the tax due under this section.

11(4) For a licensee, the amount from tavern games
12distributed to a designated charity.

13(5) Other information required by the department.

14(f) Payment.--A licensee or licensed distributor subject to
15pay or collect the tax under this section shall remit the tax to
16the department when the return in subsection (e) is made.

<-17(g) Applicability.--The provisions of section 704 shall
18apply to a licensee.

<-19(g) (h) Penalties and interest.--If a licensee or licensed
20distributor fails to file the return required under subsection
21(e) or fails to pay the tax imposed under subsection (a) or (c),
22the department may do the following:

23(1) assess the amount of tax due;

24(2) impose and assess an administrative penalty equal to
2510% of the tax due but unpaid for each quarter or fraction
26thereof that the tax remains unpaid together with interest at
27the rate established under section 806 of the act of April 9,
281929 (P.L.343, No.176), known as The Fiscal Code, on the tax
29from the time the tax became due. The penalty provided in
30this paragraph must be added to the tax and assessed and

1collected at the same time and in the same manner as a part
2of the tax. Unless otherwise specified, the tax must be
3assessed, collected and enforced by the department under the
4provisions of Article II of the act of March 4, 1971 (P.L.6,
5No.2), known as the Tax Reform Code of 1971;

6(3) notify the appropriate licensing authority <-board
7that a licensee has not filed returns or has not paid tax.
8The licensing authority <-board may suspend or revoke a
9licensee's license; or

10(4) revoke a licensed distributor's license.

11(h) <-(i) Funds held in trust.--The funds owed to the
12Commonwealth under this section shall be held in trust by a
13licensed distributor.

<-14(i) (j) Deposit.--Beginning in fiscal year 2013-2014, the
15total amount of taxes imposed by this section shall be deposited
16in the General Fund.

<-17Section 909.2. Host municipality tavern games tax.

18(a) Imposition.--There is imposed a tax of 5% of the net
19revenue from tavern games sold by a licensed distributor to a
20licensee within this Commonwealth.

21(b) Collection.--The tax imposed under subsection (a) must
22be collected by the licensed distributor from the licensee in an
23instance where the tavern game is required to be purchased from
24a licensed distributor under this act and must be paid to the
25Commonwealth and deposited into the restricted receipts account
26established in section 909.3.

27(c) Other games.--In an instance where the tavern game is
28not required to be purchased from a licensed distributor under
29this act, a tax of 5% is imposed upon the net revenue from
30tavern daily drawings and tavern raffles under section 908.1 and

1must be paid to the Commonwealth and deposited into the
2restricted receipts account established in section 909.3.

3(d) Requirement to collect and remit.--Failure of a seller
4of tavern games to obtain a distributor's license does not
5relieve the seller from the requirement of collecting and
6remitting the tax imposed under this section.

7(e) Returns.--A licensee or licensed distributor subject to
8this chapter shall file with the department, upon a form
9prescribed by the department, a host municipality tavern games
10tax return. The return must be filed under oath or affirmation
11of an authorized officer of the licensee or licensed distributor
12reporting the net revenue and the tax due under this section in
13the prior calendar quarter for licensees and in the prior
14calendar month for licensed distributors. A return is due by the
1520th day following the end of the reporting period. The return
16must set forth the following:

17(1) In the case of a licensed distributor, the total
18amount of net revenue for the tavern games sold to licensees
19in each host municipality in the prior calendar month, which
20must be calculated by indicating the number of each type of
21tavern game sold, the net revenue for each type of game and
22the host municipality of each licensee.

23(2) In the case of a licensee, the amount of net revenue
24for the tavern games not purchased from a licensed
25distributor that the licensee operated in the prior calendar
26quarter.

27(3) Calculation of the tax due under this section.

28(4) For a licensee, the amount from tavern games
29distributed to a designated charity.

30(5) Other information required by the department.

1(f) Payment.--A licensee or licensed distributor subject to
2pay or collect the tax under this section shall remit the tax to
3the department when the return in subsection (e) is made.

4(g) Penalties and interest.--If a licensee or licensed
5distributor fails to file the return required under subsection
6(e) or fails to pay the tax imposed under subsection (a) or (c),
7the department may do the following:

8(1) assess the amount of tax due;

9(2) impose and assess an administrative penalty equal to
1010% of the tax due but unpaid for each quarter or fraction
11thereof that the tax remains unpaid together with interest at
12the rate established under section 806 of the act of April 9,
131929 (P.L.343, No.176), known as The Fiscal Code, on the tax
14from the time the tax became due. The penalty provided in
15this paragraph must be added to the tax and assessed and
16collected at the same time and in the same manner as a part
17of the tax. Unless otherwise specified, the tax must be
18assessed, collected and enforced by the department under the
19provisions of Article II of the act of March 4, 1971 (P.L.6,
20No.2), known as the Tax Reform Code of 1971;

21(3) notify the board that a licensee has not filed
22returns or has not paid tax. The board may suspend or revoke
23a licensee's license; or

24(4) revoke a licensed distributor's license.

25(h) Funds held in trust.--The funds owed to the Commonwealth
26under this section shall be held in trust by a licensed
27distributor.

28(i) Deposit.--Beginning in fiscal year 2013-2014, the total
29amount of taxes imposed by this section shall be paid to the
30Commonwealth and deposited into the restricted receipts account

1established in section 909.3.

2Section 909.3. Restricted Receipts Account.

3(a) Account established.--There is established within the
4General Fund a restricted receipts account to be known as the
5Host Municipality Tavern Games Local Share Account.

6(b) Distributions.--The department shall make distributions
7from the Host Municipality Tavern Games Local Share Account to
8each host municipality. Each host municipality shall receive a
9distribution equal to the revenue remitted into the Host
10Municipality Tavern Games Local Share Account by:

11(1) licensees located within the host municipality; and

12(2) licensed distributors under section 909.2 generated
13by purchases from licensees in the host municipality.

14(c) Payments to host municipalities.--The department shall
15make payments to host municipalities within 60 days of the end
16of each calendar year.

17Section 910. Regulation.

18The department shall enforce all revenue provisions of this
19chapter and may promulgate and enforce regulations relating to
20the enforcement, collection of tax and imposition of tax.

21Section 911. Invoice.

22A sale of a tavern game by a licensed distributor to a
23licensee must be documented by an invoice listing the names and
24types of games sold, quantities of each game sold, the net
25revenue of each game and the aggregate amount of tax due on the
26net revenue on each invoice. Failure to provide a correct
27invoice shall result in a penalty of 50% of the tax amount due
28payable to the Commonwealth.

29Section 912. Reports.

30A licensee shall submit an annual report to the board and the

1department for the preceding year on a form and in a manner 
2prescribed by the department. The department shall develop a
3schedule for the submission of the annual report. The report 
4shall include:

5(1) Prizes awarded as required under section 335 of the
6act of March 4, 1971 (P.L.6, No.2), known as the Tax Reform 
7Code of 1971.

8(2) Net revenue received from each <-game of chance <-tavern
9game conducted, itemized by week.

10(3) Amount of prizes paid from all <-games of chance
<-11tavern games, itemized by week.

12(4) Amount of tax remitted to the department.

13(5) Amount given to designated charities from tavern
14raffles.

15(6) Other information as required by the department.

16Section 913. Enforcement.

17(a) Board.--The board may, following notice and hearing,
18impose penalties or suspend or revoke a license under this
19chapter.

<-20(b) Authority of department.--Notwithstanding any law to the
21contrary, the department may report violations of this chapter
22to the board and to the Bureau of Liquor Control Enforcement.

<-23(b) (c) Penalties.--The board may impose a civil penalty for
24a violation of this chapter in accordance with the following:

25(1) Up to $1,000 $2,000 for an initial violation <-of this
26act.

27(2) Up to $3,000 for a second <-or subsequent violation.

<-28(3) Up to $5,000 for a third violation.

29(c) (d) Criminal penalty.--A violation of this act <-chapter
30shall be a misdemeanor of the third degree. A second or

1subsequent offense shall be a misdemeanor of the second degree.

2(d) <-(e) Administrative law judge.--An administrative law
3judge under section 212 of the act of April 12, 1951 (P.L.90,
4No.21), known as the Liquor Code, may impose the penalties under
5this section following the issuance of a citation by the Bureau
6of Liquor Control Enforcement.

<-7(e) Revocation or failure to renew.--In addition to any
8other sanctions the board may impose under this chapter or under
9the Liquor Code, the board may, at its discretion suspend,
10revoke or deny renewal of any license issued under this chapter
11if it receives any information from any source that the
12applicant or any of its officers, directors, owners or employees
13is in violation of any provision of this chapter, that the
14applicant has furnished the board with false or misleading
15information or that the information contained in the applicant's
16initial application or any renewal application is no longer true
17and correct. In the event of a revocation or failure to renew,
18the applicant's authorization to conduct the previously approved
19activity shall immediately cease, and all fees paid in
20connection therewith shall be deemed to be forfeited. In the
21event of a suspension, the applicant's authorization to conduct
22the previously approved activity shall immediately cease until
23the board has notified the applicant that the suspension is no
24longer in effect.

<-25(f) Suspension, revocation or failure to renew.--

26(1) In addition to any other sanctions the board may
27impose under this chapter or under the Liquor Code, the board
28may, at its discretion suspend, revoke or deny renewal of any
29license issued under this chapter if it receives any
30information from any source and determines that:

1(i) The applicant or any of its officers, directors,
2owners or employees:

3(A) Is in violation of any provision of this
4chapter.

5(B) Furnished the board with false or misleading
6information.

7(ii) The information contained in the applicant's
8initial application or any renewal application is no
9longer true and correct.

10(2) In the event of a revocation, suspension or failure
11to renew, the applicant's authorization to conduct the
12previously approved activity shall immediately cease, and all
13fees paid in connection therewith shall be deemed to be
14forfeited. in the event of a suspension, the applicant's
15authorization to conduct the previously approved activity
16shall immediately cease until the board has notified the
17applicant that the suspension is no longer in effect.

18Section 914. Prohibitions.

19The following shall apply to any license authorized or issued
20under this chapter:

21(1) No license may be issued to a restaurant licensee
22whose place of business is located in a licensed facility as
23defined in 4 Pa.C.S. § 1103 (relating to definitions).

24(2) No license may be issued to a place of business on
25the grounds of a facility where a major league sports team
26conducts games or races.

27(3) No license may be issued to a place of business that
28has been decreed a nuisance pursuant to section 611 of the
29act of April 12, 1951 (P.L.90, No.21), known as the Liquor 
30Code.

1(4) The board shall be prohibited from issuing a license
2to any person who has been convicted of a felony offense or
3misdemeanor gambling offense in any jurisdiction unless 15
4years have elapsed from the date of conviction of the
5offense.

6(5) It shall be unlawful for an individual under 21
7years of age to play or attempt to play or otherwise
8participate in a tavern game.

9(6) It shall be unlawful for a licensee to permit an
10employee under 18 years of age to operate tavern games.

11(7) It shall be unlawful for an <-owner, officer or 
12employee of a licensee to sell, operate or otherwise
13participate in the conduct of tavern games if the employee
14has been convicted in any jurisdiction of a felony or a
15misdemeanor gambling offense unless 15 years have elapsed
16from the date of conviction of the offense.

<-17(8) It shall be unlawful for an owner or officer of a
18licensee or for an employee of the licensee who operates the
19tavern game to participate in the game. This paragraph shall
20not apply to a raffle.

21Section 915. Applicability.

22(a) Local option.--This chapter applies only to restaurant
23licensees located in municipalities which have exercised the
24option under section 703.

25(b) Advertising.--Section 704 shall apply to all licenses
26awarded under this chapter.

27(c) Limitation and abrogation.--Nothing in this chapter is
28intended to limit or otherwise abrogate the applicability of any
29provision of this act.

30Section 6. The act is amended by adding a section to read:

<-1Section 3101. State Lottery Fund.

2The department shall submit an annual report on the State 
3Lottery Fund and the impact of small games of chance on the 
4State Lottery Fund, if any, to the chairman and minority 
5chairman of the Appropriations Committee of the Senate and the 
6chairman and minority chairman of the Appropriations Committee 
7of the House of Representatives.

<-8Section 3101. Report of the Legislative Budget and Finance
9Committee.

10No later than March 15, 2016, and each March 15 thereafter,
11the Legislative Budget and Finance Committee shall issue a
12report to the General Assembly analyzing the impact, if any, of
13Chapter 9 on the State Lottery. The Governor may submit a
14request to the General Assembly to authorize a transfer of funds
15from the General Fund to the State Lottery Fund up to the amount
16identified in the report for the fiscal year following the date
17of the report.

18Section 7. Section 3101 of the act, added February 2, 2012
19(P.L.7, No.2), is amended to read:

20Section [3101] 3110. Effective date.

21This act shall take effect in 60 days.

22Section 8. This act shall take effect as follows:

23(1) The following provisions shall take effect
24immediately:

25(i) This section.

26(ii) The amendment of the definition of "major
27league sports drawing" and "major league sporting team"
28in section 103 of the act.

29(iii) The amendment or addition of section 304.1(c),
30(c.1), (f) and (h) of the act.

1(2) The remainder of this act shall take effect in 60
2days.

 

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