PRIOR PRINTER'S NO. 1196

PRINTER'S NO.  1247

  

THE GENERAL ASSEMBLY OF PENNSYLVANIA

  

SENATE BILL

 

No.

711

Session of

2009

  

  

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

  

  

SENATOR CORMAN, APPROPRIATIONS, RE-REPORTED AS AMENDED, JULY 1, 2009   

  

  

  

AN ACT

  

1

Amending Title 4 (Amusements) of the Pennsylvania Consolidated

2

Statutes, further providing for legislative intent and for

3

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

4

machine licensee"; providing for the definitions of

5

"executive-level public employee," "licensed entity

6

representative" and "trustee"; further providing for the

7

Pennsylvania Gaming Control Board, for powers of the board

8

and for code of conduct; providing for expenses of

9

Pennsylvania Gaming Control Board; further providing for

10

license or permit application hearing process and public

11

hearings, for board minutes and records, for regulatory

12

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

13

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

14

or permit prohibition, for slot machine license application

15

character requirements, for applications for license or

16

permit, for supplier licenses, for manufacturer licenses, for

17

additional licenses and permits and approval of agreements,

18

for license renewals, for change in ownership or control of

19

slot machine licensees and for nonportability of slot machine

20

license; providing for appointment of trustee; further

21

providing for Pennsylvania Gaming Economic Development and

22

Tourism Fund, for transfers from State Gaming Fund and for

23

financial and employment interests; providing for

24

prosecutorial and adjudicative functions; and further

25

providing for investigations and enforcement and for conduct

26

of public officials and employees.

27

The General Assembly of the Commonwealth of Pennsylvania

28

hereby enacts as follows:

 


1

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

2

Consolidated Statutes is amended and the section is amended by

3

adding paragraphs to read:

4

§ 1102.  Legislative intent.

5

The General Assembly recognizes the following public policy

6

purposes and declares that the following objectives of the

7

Commonwealth are to be served by this part:

8

* * *

9

(10.1)  The General Assembly has a compelling interest in

10

protecting the integrity of both the electoral process and

11

the legislative process by preventing corruption and the

12

appearance of corruption which may arise through permitting

13

campaign contributions by the gaming industry.

14

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

15

regulatory control and legislative oversight over the

16

operation of slot machines in this Commonwealth; to prevent

17

the actual or appearance of corruption that may result from

18

[large] campaign contributions; ensure the bipartisan

19

administration of this part; and avoid actions that may erode

20

public confidence in the system of representative government.

21

(11.1)  Completely banning political CAMPAIGN 

<--

22

contributions by certain individuals and entities subject to

23

this act is necessary to prevent corruption, or the

24

appearance of corruption, that may arise when politics and

25

gaming are intermingled.

26

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

27

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

28

amended and the section is amended by adding definitions to

29

read:

30

§ 1103.  Definitions.

- 2 -

 


1

The following words and phrases when used in this part shall

2

have the meanings given to them in this section unless the

3

context clearly indicates otherwise:

4

* * *

5

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

6

contendere, whether or not a judgment of sentence has been

7

imposed as determined by the law of the jurisdiction in which

8

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

9

that has been expunged or overturned or for which an individual

10

has been pardoned or an order of Accelerated Rehabilitative

11

Disposition which has been issued.

12

* * *

13

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

14

the following:

15

(1)  Deputy Secretaries of the Commonwealth and the

16

Governor's Office executive staff.

17

(2)  An employee of the executive branch with

18

discretionary power which may affect or influence the outcome

19

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

20

the development of regulations or policies relating to a

21

licensed entity or who is involved in other matters under

22

this part. The term shall include an employee with law

23

enforcement authority.

24

(3)  An employee of a county or municipality with

25

discretionary powers which may affect or influence the

26

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

27

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

28

policy relating to a licensed entity or who is involved in

29

other matters under this part. The term shall include an

30

employee with law enforcement authority.

- 3 -

 


1

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

2

commission, authority or other governmental body not included

3

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

4

may affect or influence the outcome of the governmental

5

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

6

development of regulation or policy relating to a licensed

7

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

8

The term shall include an employee with law enforcement

9

authority.

10

* * *

11

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

12

licensee, manufacturer licensee, supplier licensee or other

13

person licensed by the Pennsylvania Gaming Control Board under

14

this part.

15

"Licensed entity representative."  A person acting on behalf

16

of or representing the interest of any applicant, licensee,

17

permittee or registrant, including an attorney, agent or

18

lobbyist, regarding any matter which may reasonably be expected

19

to come before the board.

20

* * *

21

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

22

license.]

23

* * *

24

"Trustee."  A fiduciary appointed by the Pennsylvania Gaming

25

Control Board to preserve the viability of a licensed facility

26

and the integrity of gaming in this Commonwealth.

27

* * *

28

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

29

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

30

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

- 4 -

 


1

is amended by adding a subsection to read:

2

§ 1201.  Pennsylvania Gaming Control Board established.

3

* * *

4

(b)  Membership.--

5

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

6

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

7

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

8

following:

9

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

10

Senate.

11

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

12

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

13

Representatives.

14

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

15

Representatives.

16

(2)  The chairman of the Community, Economic and

17

Recreational Development Committee of the Senate may hold a

18

public hearing on an appointee under paragraph (1).

19

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

20

pleasure of the appointing authority and shall be removed from

21

office by the appointing authority:

22

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

23

conduct evidencing unfitness for office or incompetence; or

24

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

25

infamous crime, an offense under this part or an equivalent

26

offense under Federal law or the law of another jurisdiction.

27

* * *

28

(f)  Qualified majority vote.--

29

* * *

30

(3)  Notwithstanding any other provision of this part or

- 5 -

 


1

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

2

member shall disclose the nature of his disqualifying

3

interest, disqualify himself and abstain from voting in a

4

proceeding under this part in which his objectivity,

5

impartiality, integrity or independence of judgment may be

6

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

7

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

8

legislative appointee has disqualified himself, the qualified

9

majority shall consist of all of the remaining legislative

10

appointees and at least two gubernatorial appointees.

11

* * *

12

(h)  Qualifications and restrictions.--

13

* * *

14

(4.1)  No member appointed after the effective date of

15

this paragraph shall engage in any business, employment or

16

vocation for which the member shall receive any COMPENSATION 

<--

17

OR remuneration except for an individual who is reappointed

18

and who is a member of the board on the effective date of

19

this paragraph.

20

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

21

compensation other than salary and expenses provided by law

22

for any activity related to the duties or authority of the

23

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

24

engaging in any employment or receiving any compensation for

25

such employment that is not connected to or incompatible with

26

his service as a member of the board.]

27

* * *

28

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

29

his immediate family shall divest any financial interest in

30

any applicant, licensed facility or licensed entity and in an

- 6 -

 


1

affiliate, intermediary, subsidiary or holding company

2

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

3

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

4

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

5

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

6

financial interest in any applicant, licensed facility or

7

licensed entity or in an affiliate, intermediary, subsidiary

8

or holding company thereof. For purposes of this paragraph,

9

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

10

or unemancipated child.

11

* * *

12

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

13

hearing or proceeding or participate in any other activity on

14

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

15

intermediary, subsidiary or holding company thereof, or any

16

other licensee or permittee for a period of two years from

17

the termination of term of office.

18

(11)  No member, employee or independent contractor of

19

the board shall accept a complimentary service, wager or be

20

paid any prize from any wager at any licensed facility within

21

this Commonwealth or at any other facility outside this

22

Commonwealth which is owned or operated by a licensed gaming

23

entity or any of its affiliates, intermediaries, subsidiaries

24

or holding companies thereof for the duration of their term

25

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

26

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

27

of office, employment or contract with the board. The

28

provisions of this paragraph prohibiting wagering during the

29

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

30

the employees utilize slot machines for testing purposes or

- 7 -

 


1

to verify the performance of a machine as part of an

2

enforcement investigation.

3

* * *

4

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

5

an independent contractor of the board] whose duties

6

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

7

development or adoption of laws, regulations or policy or who

8

has other discretionary authority which may affect the

9

outcome of an action or decision under this part, including

10

the executive director, bureau directors and attorneys, shall

11

do any of the following:

12

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

13

by an applicant or licensed entity, or an affiliate,

14

intermediary, subsidiary or holding company thereof, for

15

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

16

the employment relating to the conduct of gaming [or

17

contract with the board; or].

18

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

19

or proceeding or participate in any other activity on

20

behalf of any applicant, licensee, permittee or licensed

21

entity, or an affiliate, intermediary, subsidiary or

22

holding company thereof, for a period of two years after

23

termination of the employment [or contract with the

24

board].

25

(iii)  As a condition of employment, an employee

26

under this paragraph shall sign an affidavit that the

27

employee will not accept employment with or be retained

28

by any applicant, licensed entity or an affiliate,

29

intermediary, subsidiary or holding company thereof for a

30

period of two years from the termination of employment.

- 8 -

 


1

An applicant or licensed entity or an affiliate,

2

intermediary, subsidiary or holding company thereof shall

3

not employ or retain an individual who signed an

4

affidavit signed under this subparagraph. An applicant or

5

licensed entity or an affiliate, intermediary, subsidiary

6

or holding company that knowingly employs or retains an

7

individual in violation of this subparagraph shall be

8

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

9

prohibited acts; penalties).

10

(13.1)  No independent contractor or individual employed

11

by an independent contractor of the board whose duties

12

substantially involve consultation relating to licensing,

13

enforcement or the development or adoption of regulations or

14

policy under this part shall:

15

(i)  Accept employment with or be retained by an

16

applicant or a licensed entity or an affiliate,

17

intermediary, subsidiary or holding company thereof for a

18

period of one year after the termination of the contract

19

with the board.

20

(ii)  Appear before the board in any hearing or

21

proceeding or participate in any other activity on behalf

22

of an applicant, licensee, permittee or licensed entity

23

or an affiliate, intermediary, subsidiary or holding

24

company of an applicant, licensee, permittee or licensed

25

entity for a period of two years after termination of the

26

contract with the board.

27

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

28

contractor or individual employed by an independent

29

contractor of the board under this paragraph shall sign

30

an affidavit to not accept employment with or be retained

- 9 -

 


1

by any applicant, licensed entity or an affiliate,

2

intermediary, subsidiary or holding company of an

3

applicant, licensed entity or affiliate for a period of

4

one year from the termination of employment. A licensed

5

entity or an affiliate, intermediary, subsidiary or

6

holding company of an applicant, licensed entity or

7

affiliate shall not employ or retain an individual who

8

signed an affidavit signed under this subparagraph. A

9

licensed entity or an affiliate, intermediary, subsidiary

10

or holding company thereof that knowingly employs or

11

retains an individual in violation of this subparagraph

12

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

13

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

14

board, the executive branch of the Commonwealth or a

15

political subdivision or of the agency or political

16

subdivision employing an employee, the State Ethics

17

Commission shall determine whether the individual's duties

18

substantially involve the development or adoption of laws, 

19

regulations or policy, licensing or enforcement under this

20

part or other discretionary authority which may affect the

21

outcome of an action or decision under this part and shall

22

provide a written determination to the employee to include

23

any prohibition under this paragraph. An individual who

24

relies in good faith on a determination under this paragraph

25

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

26

provided that all material facts set forth in the request for

27

a determination are correct.

28

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

29

of the board violates any provision of this section, the

30

appointing authority [or the board may, upon notice and

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1

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

2

appointment or]. A member removed under this paragraph shall

3

be prohibited from future appointment to the board and shall

4

be prohibited from applying for a license or permit, from

5

becoming an independent contractor of the board, or

6

registering as a licensed entity representative for a period

7

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

8

employee or independent contractor of the board violates any

9

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

10

hearing, terminate the employment or contract, and the person

11

shall be ineligible for future [appointment,] employment or

12

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

13

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

14

shall be prohibited from applying for a license or permit,

15

becoming an independent contractor or registering as a

16

licensed entity representative for a period of five years

17

from the date of termination of the employment or contract.

18

* * *

19

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

20

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

21

appointing authority shall make [their initial] appointments

22

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

23

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

24

appointing authority of the required background investigation of

25

the appointee by the Pennsylvania State Police which shall be

26

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

27

any domestic or foreign jurisdiction of a felony, infamous crime

28

or gaming offense shall be appointed to the board.

29

* * *

30

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

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1

other fiscal crisis, the Governor implements a system in order 

<--

2

to ORDERS THE furlough OF employees or close THE CLOSING OF any

<--

3

Commonwealth agency, the board and its employees and all

4

employees of the Department of Revenue, the Pennsylvania State

5

Police and the Office of Attorney General whose duties involve

6

the regulation and oversight of gaming under this part shall not

7

be subject to furlough but shall continue to perform their

8

duties.

9

* * *

10

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

11

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

12

adding paragraphs to read:

13

§ 1202.  General and specific powers.

14

(a)  General powers.--

15

* * *

16

[(4)  The board shall establish a system of

17

classification and compensation of its employees and shall

18

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

19

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

20

as to classification and compensation for its employees and

21

conduct its activities consistent with the practices and

22

procedures of Commonwealth agencies.]

23

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

24

paragraph, the board shall establish a system of

25

classification and compensation of its employees and shall be

26

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

27

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

28

as to classification and compensation for its employees and

29

conduct its activities consistent with the practices and

30

procedures of Commonwealth agencies. The provisions of this

- 12 -

 


1

paragraph shall apply to employees hired after the effective

2

date of this paragraph. Nothing in this paragraph shall

3

prevent the board from altering a system, or establishing a

4

new system, of classification or compensation for employees

5

hired prior to the effective date of this section.

6

* * *

7

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

8

power and duty:

9

* * *

10

(7)  To administer oaths, examine witnesses and issue

11

subpoenas compelling the attendance of witnesses or the

12

production of documents and records or other evidence[. The

13

provisions of this paragraph shall apply to designated

14

officers and employees.], or to designate officers or

15

employees to perform these duties.

16

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

<--

17

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

18

or hearing conducted under this part, a person refuses to

19

answer a question or to produce evidence on the grounds that

20

the answer or evidence will expose the person to criminal

21

prosecution, the board may adopt a resolution recommending a

22

grant of immunity that includes the specific question to be

23

posed or information or evidence being sought from the person

24

as follows:

25

(i)  The resolution shall be submitted to the

26

Attorney General for approval or disapproval within 20

27

days of receipt of the resolution. Upon the written

28

approval of the Attorney General, the board may issue an

29

order to compel the person to answer or produce evidence

30

with immunity.

- 13 -

 


1

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

2

immunity order provides the answer or evidence, the

3

person shall be immune from criminal prosecution based on

4

the answer or evidence that was the subject of the

5

immunity order.

6

(iii)  The person may be prosecuted for perjury

7

committed in the answer or production of evidence or held

8

in contempt for failing to give an answer or produce

9

evidence in accordance with the order. The answer or

10

evidence shall be admissible only against the person in a

11

criminal investigation, or a trial or other proceeding

12

for perjury or contempt.

13

(iv)  Immunity under this paragraph shall not

14

preclude the use of any other remedy or sanction

15

authorized by law.

16

* * *

17

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

18

permit unless it is satisfied that the applicant has

19

demonstrated by clear and convincing evidence that the

20

applicant is a person of good character, honesty and

21

integrity and is a person whose prior activities, criminal

22

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

23

pose a threat to the public interest or the effective

24

regulation and control of slot machine operations or create

25

or enhance the danger of unsuitable, unfair or illegal

26

practices, methods and activities in the conduct of slot

27

machine operations or the carrying on of the business and

28

financial arrangements incidental thereto.

29

* * *

30

(30)  To promulgate rules and regulations necessary for

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1

the administration and enforcement of this part, including

2

regulations in cooperation with the Pennsylvania Liquor

3

Control Board and regulations relating to the sale and

4

service of liquor and malt and brewed beverages by licensees.

5

[Except as provided in section 1203 (relating to temporary

6

regulations), regulations] Regulations shall be adopted

7

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

8

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

9

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

10

Review Act.

11

(31)  To collect and post information on its Internet

12

website with sufficient detail to inform the public of the

13

controlling interest or ownership interest of an applicant

14

for a slot machine license or a licensed gaming entity or

<--

15

affiliate, intermediary, subsidiary or holding company

16

thereof. The posting shall include:

17

(i)  The names of all persons with a controlling

18

interest in a publicly traded domestic or foreign

19

corporation, partnership, limited liability company or

20

other legal entity.

21

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

<--

22

equity share or interest with an ownership interest equal 

<--

23

to or greater than 1% of a privately held domestic or

24

foreign corporation, partnership, limited liability

25

company or other legal entity.

26

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

27

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

28

(iv)  The names of all officers, directors,

29

principals and key employees of a licensed gaming entity.

30

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

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1

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

2

Commonwealth and the board to operate a licensed facility and

3

ensure compliance with this part.

4

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

5

§ 1202.1.  Code of conduct.

6

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

7

conduct prior to the consideration of any license, permit or

8

registration application. The code of conduct shall supplement

9

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

10

(relating to accountability) and shall provide guidelines

11

applicable to members, employees, independent contractors of the

12

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

13

subsection (e), employees and independent contractors to enable

14

them to avoid any perceived or actual conflict of interest and

15

to promote public confidence in the integrity and impartiality

16

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

17

this section shall include registration of licensed entity

18

representatives under subsection (b) and the restrictions under

19

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

20

(b)  Registration.--

21

(1)  A licensed entity representative shall register with

22

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

23

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

24

of both the licensed entity representative and the [licensed

25

entity] applicant, licensee, permittee or registrant or 

<--

26

individual being represented.

27

(2)  A licensed entity representative shall have an

28

[ongoing] affirmative duty to update its registration

29

information on an ongoing basis.

30

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

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1

registration list which shall contain the information

2

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

3

public inspection at the offices of the board and on the

4

board's Internet website.

5

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

6

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

7

person.

8

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

9

compensation, travel, lodging or other thing of value,

10

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

11

licensed entity, including any affiliate, subsidiary,

12

intermediary or holding company thereof, permittee,

13

registrant or licensed entity representative thereof.

14

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

15

hearing or other proceeding in which the member's

16

objectivity, impartiality, integrity or independence of

17

judgment may be reasonably questioned due to the member's

18

relationship or association with a party connected to any

19

hearing or proceeding or a person appearing before the board.

20

(4)  Refrain from any financial or business dealing which

21

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

22

impartiality or independence of judgment.

23

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

24

office in any political party or political committee as

25

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

26

contribute to or solicit contributions to a political

27

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

28

candidate, publicly endorse a candidate or actively

29

participate in a political campaign.

30

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

- 17 -

 


1

religious, health, fraternal, civic or other nonprofit entity

2

from an applicant, licensed entity or affiliate, subsidiary,

3

intermediary or holding company of a licensed entity,

4

interested party, permittee or licensed entity

5

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

6

(relating to Pennsylvania Gaming Control Board established),

7

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

8

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

9

personal contributions to and plan or preside over the

10

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

11

name to appear on the letterhead used for fundraising events

12

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

13

position with the nonprofit entity.

14

(7)  Not meet or engage in discussions with any

15

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

16

permittee, [or a] licensed entity representative or person

17

who provides goods, property or services to a slot machine

18

licensee unless the meeting or discussion occurs on the

19

business premises of the board and is recorded in a log

20

maintained for this purpose. The log shall be available for

21

public inspection during the regular business hours of the

22

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

23

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

24

discussion, the names of the participants and the subject

25

matter discussed. The provisions of this paragraph shall not

26

apply to meetings [of the board] to consider matters

27

requiring the physical inspection of the equipment or

28

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

29

location of the licensed facility.

30

(8)  Avoid impropriety and the appearance of impropriety

- 18 -

 


1

at all times and observe standards and conduct that promote

2

public confidence in the oversight of gaming.

3

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

4

relating to the conduct of a member.

5

(c.1)  Prohibitions.--

6

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

7

advising the board on a particular licensing issue or

8

proceeding or employee whose duties relate to licensing and

9

who is advising the board on a particular licensing issue or

10

proceeding shall engage in any ex parte communication with

11

any person.

12

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

13

Enforcement Counsel or an applicant, licensee or permittee in

14

any proceeding shall engage in an ex parte communication with

15

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

16

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

17

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

18

Enforcement Counsel who is involved in a proceeding shall

19

engage in an ex parte communication with a member, an

20

attorney of the Office of Chief Counsel who is advising the

21

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

22

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

23

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

24

a board member, employee or hearing officer shall be recorded

25

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

26

available for public inspection during the regular business

27

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

28

Internet website. The LOG SHALL INCLUDE:

<--

29

(I) The individual recording the ex parte

30

communication. shall include:

<--

- 19 -

 


1

(i) (ii)  The date and time of the ex parte 

<--

2

communication.

3

(ii)  The name of any other individual (iii)  The 

<--

4

names of all individuals involved in the ex parte

5

communication.

6

(iii) (iv)  The subject matter and substance of the 

<--

7

ex parte communication.

8

(2)  In addition to documenting an ex parte communication

9

under paragraph (1), notification and an opportunity to

10

respond shall be provided to the following as follows:

<--

11

(i)  A board member or employee shall promptly notify

12

the board and all persons directly affected by the

13

anticipated vote or action of the board of the substance

14

of the communication.

15

(ii)  A hearing officer shall promptly notify the

16

board and all parties to the proceeding before the

17

hearing officer of the substance of the communication.

18

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

19

received or engaged in an ex parte communication shall

20

recuse himself from any hearing or other proceeding

21

related to the ex parte communication if the context and

22

substance of the ex parte communication creates

23

substantial reasonable doubt as to the individual's

24

ability to act objectively, independently or impartially.

25

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

26

elects not to recuse himself based on an ex parte

27

communication shall state his reasons for doing so on the

28

record prior to the commencement of the hearing or

29

proceeding.

30

(iii)  If a legislative appointee recuses himself

- 20 -

 


1

from any hearing or other proceeding under this section,

2

any qualified majority vote required under this part

3

shall consist of all of the remaining legislative

4

appointees and at least two gubernatorial appointees.

5

(iv)  Failure of a hearing officer or employee to

6

recuse himself from a hearing or other proceeding due to

7

receipt of an ex parte communication under this section

8

shall be grounds for appeal to the board of the failure

9

to recuse.

10

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

11

a hearing or other proceeding due to receipt of an ex

12

parte communication under this section shall be grounds

13

for appeal of a decision to a court of competent

14

jurisdiction if the board action being appealed would not

15

have occurred without the participation of the board

16

member who received the ex parte communication.

17

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

18

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

19

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

20

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

21

subsection:

22

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

23

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

24

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

25

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

26

reasonably be expected to come before the board in a contested

27

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

28

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

29

hearing officer of the board, Department of Revenue,

30

Pennsylvania State Police, Attorney General or other law

- 21 -

 


1

enforcement official prior to the beginning of the proceeding

2

solely for the purpose of seeking clarification or correction to

3

evidentiary materials intended for use in the proceedings.

4

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

5

siblings and the spouses of any of those individuals.

<--

6

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

7

of or representing the interest of any applicant, licensee,

8

permittee or registrant, including an attorney, agent or

9

lobbyist, regarding any matter which may reasonably be expected

10

to come before the board.]

11

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

12

§ 1202.2.  Expenses of the Pennsylvania Gaming Control Board.

13

Members and employees of the board shall only be reimbursed

14

for actual and reasonable expenses incurred during the

15

performance of their duties. In order to receive reimbursement

16

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

17

submit a receipt validating the expense incurred.

18

Reimbursements, allowances or other payments in an amount

19

greater than the expenses for which receipts are submitted are

20

prohibited. Receipts and requests for reimbursement shall be

21

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

22

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

23

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

24

and the subsection is amended by adding paragraphs to read:

25

§ 1205.  License or permit application hearing process; public

26

input hearings.

27

* * *

28

(b)  Public input hearing requirement.--

29

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

30

board shall hold at least one public input hearing on the

- 22 -

 


1

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

2

hearing prior to:

3

(i)  Licensing a facility.

4

(ii)  Approving the structural redesign of a licensed

5

facility located in a city of the first class.

6

(2)  All public input hearings [relating to an

7

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

8

shall be held in the municipality where the licensed facility

<--

9

will be, or is, located and shall be organized in cooperation

10

with the municipality.

11

* * *

12

(4)  In addition to any witnesses scheduled to testify

13

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

14

comment period during which time members of the public may

15

address the board regarding the proposed license or

16

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

17

discretion, may place reasonable time limits on an

18

individual's comments.

19

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

20

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

21

§ 1206.  Board minutes and records.

22

* * *

23

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

24

(1)  The following information submitted by an applicant

25

or licensee pursuant to section 1310(a) (relating to slot

<--

26

machine license application character requirements) or

27

1308(a.1) (relating to applications for license or permit) or

28

obtained by the board or the bureau as part of a background

29

or other investigation from any source shall be [considered]

30

confidential[.] and withheld from public disclosure:

- 23 -

 


1

(i)  All information relating to good character,

2

honesty and integrity, including family, habits,

3

reputation, history of criminal activity, business

4

activities, financial affairs and business, professional

5

and personal associations submitted under section 1310(a)

6

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

7

bureau.

8

(ii)  Nonpublic personal information, including

9

telephone numbers, Social Security numbers, educational

10

records, memberships, medical records, tax returns and

11

declarations, actual or proposed compensation, financial

12

account records, creditworthiness or a financial

13

condition relating to an applicant, licensee or permittee

14

or the immediate family thereof.

15

(iii)  Documents and information relating to

16

proprietary information, trade secrets, patents or

17

exclusive licenses, architectural and engineering plans

18

and information relating to competitive marketing

19

materials and strategies, which may include customer-

20

identifying information or customer prospects for

21

services subject to competition.

22

(iv)  Security information, including risk prevention

23

plans, detection and countermeasures, location of count

<--

24

rooms, emergency management plans, security and

25

surveillance plans, equipment and usage protocols and

26

theft and fraud prevention plans and countermeasures.

27

(v)  Information with respect to which there is a

28

reasonable possibility that public release or inspection

29

of the information would constitute an unwarranted

30

invasion into personal privacy of any individual as

- 24 -

 


1

determined by the board.

2

(vi)  Records of an applicant or licensee not

3

required to be filed with the Securities and Exchange

4

Commission by issuers that either have securities

5

registered under section 12 of the Securities Exchange

6

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

7

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

8

Securities Exchange Act of 1934.

9

(vii)  Records considered nonpublic matters or

10

information by the Securities and Exchange Commission as

11

provided by 17 CFR 200.80 (relating to commission records

12

and information).

13

(viii)  Any financial information deemed confidential

<--

14

by the board upon a showing of good cause by the

15

applicant or licensee.

16

(2)  No claim of confidentiality shall be made regarding

<--

17

any information from a criminal history record check that is

<--

18

available to the public under 18 Pa.C.S. Ch. 91 (relating to

<--

19

criminal history record information) or § 9121(b) (relating 

<--

20

to noncriminal justice agencies and individuals).

21

(3)  This subsection shall not apply to any information 

22

that is otherwise publicly available in this Commonwealth or

23

another jurisdiction.

24

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

<--

25

to [investigation] investigations and enforcement), the

26

confidential information shall be withheld from public

27

disclosure in whole or in part, except that any confidential 

28

information shall be released upon the lawful order of a

29

court of competent jurisdiction or, with the approval of the

30

Attorney General, to a duly authorized law enforcement agency

- 25 -

 


1

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

2

the extent that such release is requested by an applicant and

3

does not otherwise contain confidential information about

4

another person.

5

(3)  (5)  The board may seek a voluntary waiver of

<--

6

confidentiality from an applicant or licensed entity but may 

7

not require any applicant or licensed entity to waive any

8

confidentiality provided for in this subsection as a

9

condition for the approval of a license or any other action

10

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

11

current or former board member employee or contractor who

<--

12

publicly discloses confidential information in violation of

13

this subsection commits a misdemeanor and shall be

14

administratively disciplined by discharge, suspension,

15

termination of contract or other formal disciplinary action

16

as the board deems appropriate.

17

* * *

18

§ 1207.  Regulatory authority of board.

19

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

20

* * *

21

(4)  Require that each licensed entity provide to the

22

board its audited annual financial statements, with such

23

additional detail as the board from time to time shall

24

require, which information shall be submitted not later than

25

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

26

* * *

27

§ 1208.  Collection of fees and fines.

28

The board has the following powers and duties:

29

(1)  To levy and collect fees from the various

30

applicants, licensees and permittees to fund the operations

- 26 -

 


1

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

2

Gaming Fund as established in section 1403 (relating to

3

establishment of State Gaming Fund and net slot machine

4

revenue distribution) and distributed to the board upon

5

appropriation by the General Assembly. In addition to the

6

fees set forth in sections 1209 (relating to slot machine

7

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

8

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

9

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

10

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

11

renewal of a supplier license. When the renewal period

12

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

13

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

14

(ii)  Manufacturer licensees shall pay a fee of

15

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

16

the annual renewal of a manufacturer license. When the

17

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

18

manufacturer licenses) is three years, the fee shall be

19

$75,000 for the renewal.

20

* * *

21

§ 1209.  Slot machine license fee.

22

* * *

23

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

24

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

25

the board upon good cause consistent with the license

26

requirements as provided for in this part. Slot machine

27

licensees shall be required to update the information in their

28

initial applications annually, and the license of a licensee in

29

good standing shall be updated and renewed annually for two

30

subsequent years following the initial license issuance.

- 27 -

 


1

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

2

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

3

subsection (a) shall be required.

4

* * *

5

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

6

subsection to read:

7

§ 1211.  Reports of board.

8

* * *

9

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

10

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

11

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

12

expenses of employees and members for the preceding month. The

13

list shall identify the nature of the expense and the employee

14

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

15

shall include each expense for which a receipt is submitted to

16

obtain reimbursement. If the expense is directly attributable to

17

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

18

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

19

expenses for the preceding fiscal year shall be posted on the

20

board's Internet website and shall be transmitted to the

21

Appropriations Committee of the Senate, the Community, Economic

22

and Recreational Development Committee of the Senate, the

23

Appropriations Committee of the House of Representatives and the

24

Gaming Oversight Committee of the House of Representatives.

25

* * *

26

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

27

§ 1213.  License or permit prohibition.

28

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

29

part, including principals and key employees,] The board

30

shall be prohibited from granting a principal license or key

- 28 -

 


1

employee license to a person who has been convicted of a

2

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

3

issued a license or permit unless 15 years has elapsed from

4

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

5

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

6

permit to an applicant who has been convicted in any

7

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

8

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

9

prohibited from granting the following:

10

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

11

person who has been convicted of a gambling offense in

12

any jurisdiction that is not classified as a felony

13

unless 15 years has elapsed from the date of the

14

expiration of the sentence for the offense.

15

(ii)  A gaming employee permit or license other than

16

a principal license or key employee license to a person

17

who has been convicted of a felony or gambling offense in

<--

18

any jurisdiction unless 15 years has elapsed from the

19

date of the expiration of the sentence for the offense.

20

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

21

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

22

factors:

23

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

24

position with the licensed entity.

25

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

26

or conduct.

27

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

28

offense or conduct occurred.

29

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

30

or conduct was committed.

- 29 -

 


1

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

2

isolated or a repeated incident.

3

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

4

good conduct in the community, counseling or psychiatric

5

treatment received and the recommendation of persons who

6

have substantial contact with the applicant.

7

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

8

subsection to read:

9

§ 1308.  Applications for license or permit.

10

* * *

11

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

12

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

13

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

14

under this part shall include all arrests and convictions of the

15

applicant, including summary offenses. The information shall

16

include:

17

(1)  A brief description of the circumstances surrounding

18

the arrest.

19

(2)  The specific offense charged.

20

(3)  The ultimate disposition of the charges, including

21

the details of any dismissal, plea bargain, conviction or

22

sentence, including any pardon, expungement or order of

23

Accelerated Rehabilitative Disposition.

24

* * *

25

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

26

1321(a)(2), 1326(a), 1328(b) 1328(A)(1) and (B) and 1329 of

<--

27

Title 4 are amended to read:

28

§ 1310.  Slot machine license application character

29

requirements.

30

(a)  Application.--

- 30 -

 


1

(1)  Every application for a slot machine license shall

2

include such information, documentation and assurances as may

3

be required to establish by clear and convincing evidence the

4

applicant's suitability, including good character, honesty

5

and integrity. Information shall include, without limitation,

6

information pertaining to family, habits, character,

7

reputation, criminal history background, business activities,

8

financial affairs and business, professional and personal

9

associates, covering at least the ten-year period immediately

10

preceding the filing date of the application.

11

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

12

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

13

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

14

pardoned or an order of Accelerated Rehabilitative

15

Disposition has been issued, shall be included with an

16

application and shall be considered by the board as part of

17

the review of the applicant's suitability under paragraph

18

(1).

19

(b)  Civil judgments and law enforcement agency

20

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

21

judgments obtained against the applicant pertaining to antitrust

22

or security regulation laws of the Federal Government, this

23

Commonwealth or any other state, jurisdiction, province or

24

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

25

reference from law enforcement agencies having jurisdiction in

26

the applicant's place of residence and principal place of

27

business, which letter of reference shall indicate that the law

28

enforcement agencies do not have any pertinent information

29

concerning the applicant or, if the law enforcement agency does

30

have information pertaining to the applicant, shall specify the

- 31 -

 


1

nature and content of that information. If no letters are

2

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

3

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

4

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

5

that the applicant is or was during the period the activities

6

were conducted in good standing with the gaming or casino

7

enforcement or control agency.

8

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

9

applicant has held a gaming license in a jurisdiction where

10

gaming activities are permitted, the applicant shall produce a

11

letter of reference from the gaming or casino enforcement or

12

control agency which shall specify the experiences of that

13

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

14

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

15

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

16

under oath which is subject to the penalty for false swearing

17

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

18

period the activities were conducted in good standing with the

19

gaming or casino enforcement or control agency.

20

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

21

license, principal license or key employee license shall be

22

required to apply to the Federal Government regarding agency

23

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

24

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

25

board with the complete record received from the Federal

26

Government. The board may issue a conditional license to the

<--

27

applicant prior to the receipt of information under this

28

subsection.

29

§ 1317.  Supplier licenses.

30

* * *

- 32 -

 


1

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

2

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

3

approve the application and issue the applicant a supplier

4

license consistent with all of the following:

5

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

6

expiration, the license may be renewed in accordance with

7

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

8

one year and shall be subject to renewal annually under

9

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

10

the initial issuance. Thereafter, a license shall be subject

11

to renewal every three years. Nothing in this paragraph shall

12

relieve the licensee of the affirmative duty to notify the

13

board of changes to any information contained in the original

14

application.

15

* * *

16

§ 1317.1.  Manufacturer licenses.

17

* * *

18

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

19

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

20

approve the application and grant the applicant a manufacturer

21

license consistent with all of the following:

22

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

23

expiration, a license may be renewed in accordance with

24

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

25

one year and shall be subject to renewal annually under

26

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

27

the initial issuance. Thereafter, a license shall be subject

28

to renewal every three years. Nothing in this paragraph shall

29

relieve the licensee of the affirmative duty to notify the

30

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

- 33 -

 


1

relieve the licensee of its responsibility to notify the

2

board of changes to any information contained in the original

3

application.

4

* * *

5

§ 1321.  Additional licenses and permits and approval of

6

agreements.

7

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

8

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

9

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

10

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

11

person who satisfies any of the following criteria:

12

* * *

13

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

14

be licensed or permitted under this part and provides any

15

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

16

management contracts for compensation to a slot machine

17

licensee at the licensed facility. The board may by

18

regulation establish a classification system for a person who

19

provides goods, property or services to a slot machine

20

licensee. If the classification system requires the person

21

providing goods, property or services to submit to a criminal

22

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

23

criminal history record information), the board shall notify

24

the slot machine licensee if the person providing goods,

25

property or services has been convicted of a felony or

26

gambling offense.

27

* * *

28

§ 1326.  License renewals.

29

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

30

part unless otherwise provided shall be subject to renewal on an

- 34 -

 


1

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

2

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

3

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

4

following the initial issuance. Thereafter, all permits and

5

licenses shall be subject to renewal every three years. The

6

application for renewal shall be submitted at least 60 days

7

prior to the expiration of the permit or license and shall 

8

include an update of the information contained in the initial

9

and any prior renewal applications and the payment of any

10

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

11

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

12

received by the board will continue in effect unless and until

13

the board sends written notification to the holder of the permit

14

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

15

or license.

16

* * *

17

§ 1328.  Change in ownership or control of slot machine

18

licensee.

19

* * *

<--

20

(a)  Notification and approval.--

<--

21

(1)  A slot machine licensee shall notify the board

22

[prior to or] immediately upon becoming aware of any proposed

23

or contemplated change of ownership of the slot machine

24

licensee by a person or group of persons acting in concert

25

which involves any of the following:

26

(i)  More than 5% of a slot machine licensee's

27

securities or other ownership interests.

28

(ii)  More than 5% of the securities or other

29

ownership interests of a corporation or other form of

30

business entity that owns directly or indirectly at least

- 35 -

 


1

20% of the voting or other securities or other ownership

2

interests of the licensee.

3

(iii)  The sale other than in the ordinary course of

4

business of a licensee's assets.

5

(iv)  Any other transaction or occurrence deemed by

6

the board to be relevant to license qualifications.

7

* * *

8

(b)  Qualification of purchaser of slot machine licensee;

9

change of control.--The purchaser of the slot machine license or 

<--

10

assets, other than in the ordinary course of business, of any

11

slot machine licensee shall independently qualify for a license

12

in accordance with this part and shall pay the license fee as

13

required by section 1209 (relating to slot machine license fee).

14

A change in control of any slot machine licensee shall require

15

that the slot machine licensee independently qualify for a

16

license in accordance with this part, and the slot machine

17

licensee shall pay a new license fee as required by section

18

1209, except as otherwise required by the board pursuant to this

19

section. The new license fee under this section shall be paid 

<--

20

upon the assignment and actual change of control or ownership of

21

the slot machine license.

22

* * *

23

§ 1329.  [Nonportability] Portability and relocation of slot

24

machine license.

25

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

26

valid for the specific physical location within the municipality

27

and county for which it was originally granted.

28

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

29

board shall consider the following factors:

30

(1)  The reason for the relocation.

- 36 -

 


1

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

2

detailing estimated gross terminal revenues at the new

3

location with estimated gross terminal revenues at the

4

original location.

5

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

6

detailing the economic impact of the licensed facility at the

7

new location with the estimated economic impact at the

8

original location. The comparative analysis shall include the

9

total cost of the project and projected direct and indirect

10

employment figures.

11

(4)  A comprehensive traffic study commissioned by the

12

board.

13

(5)  Community support or opposition.

14

(6)  Any other information requested by the board.

15

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

16

permitted to move or relocate the physical location of the

17

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

18

cause shown if:

19

(1)  the relocated licensed facility remains within the

20

same county as originally licensed;

21

(2)  the relocation will facilitate the timely operation

22

of slot machines;

23

(3)  the relocated licensed facility complies with all

24

other provisions of this part related to the siting and

25

location of a licensed facility; and

26

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

27

interests of the Commonwealth.

28

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

29

public input hearing in the municipality where the licensed

30

facility will be located prior to approval of the relocation.

- 37 -

 


1

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

2

for the purpose of relocating or developing the relocated

3

licensed facility to comply with any conditions of approval of

4

the relocation.

5

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

6

§ 1332.  Appointment of trustee.

7

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

8

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

9

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

10

interests of the Commonwealth and the board to assure compliance

11

with this part and any conditions imposed upon the slot machine

12

license in the following circumstances:

13

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

14

slot machine license or a principal license of an individual

<--

15

who the board has determined controls a slot machine license

16

if the principal licensee is the only principal who exercises

<--

17

operational control of the licensed facility.

18

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

19

a principal license of an individual who the board has

<--

20

determined controls a slot machine licensee if the principal

<--

21

licensee is the only principal who exercises operational

22

control of the licensed facility until the slot machine or

23

principal license is renewed or until the discontinuation of

24

the trusteeship pursuant to subsection (i).

25

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

26

Commonwealth.

27

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

28

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

29

license. The board may appoint a trustee and award the

30

trustee a temporary principal license as prescribed in board

- 38 -

 


1

regulations.

2

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

3

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

4

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

5

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

<--

6

cost of the bond shall be paid by the former or suspended

7

licensee.

8

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

9

have all of the power and duties granted to exercise only those

<--

10

powers and perform those duties expressly conferred upon the

11

trustee by the board. The board's order appointing the trustee

12

shall set forth the powers, duties and responsibilities of the

13

trustees which may include:

14

(1)  Maintaining and operating the licensed facility in a

15

manner that complies with this part and any conditions

16

imposed by the board.

17

(2)  Maintaining and operating the licensed facility

18

consistent with the measures generally taken in the ordinary

19

course of business including:

20

(i)  Entering into contracts.

21

(ii)  Borrowing money.

22

(iii)  Pledging, mortgaging or otherwise encumbering

23

the licensed facility or property thereof as security for

24

the repayment of the trustee's loans subject to any 

<--

25

provisions and restrictions in any existing credit

26

documents.

27

(iv)  Hiring, firing and disciplining employees.

28

(3)  Exercising the rights and obligations of the former

29

or suspended licensee.

30

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

- 39 -

 


1

machine licensee, including its books, records and papers.

2

(5)  Establishing accounts with financial institutions.

3

An account may not be established with a financial

4

institution in which an affiliate of the former or suspended

5

licensee, or in which the trustee, has a financial 

<--

6

controlling interest.

<--

7

(6)  Meeting with the former or suspended licensee.

8

(7)  Meeting with principals and key employees at the

9

licensed facility.

10

(8)  Meeting with the independent audit committee.

11

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

12

keeping the board's executive director apprised of actions

13

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

14

(10)  Hiring legal counsel, accountants or other

15

consultants or assistants, with prior approval of the board,

16

as necessary to carry out the trustee's duties and

17

responsibilities.

18

(11)  Settling or compromising with any debtor or

19

creditor of the former or suspended licensee, including any

20

taxing authority.

21

(12)  Reviewing outstanding agreements to which the

22

former or suspended licensee is a party and advising the

23

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

24

subject of scrutiny, examination or investigation by the

25

board.

26

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

27

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

28

restructuring, transfer of assets or execution of a contract

29

or any other action taken outside of the ordinary course of

<--

30

business.

- 40 -

 


1

(14)  Obtaining board approval for any payments outside

2

of those made in the ordinary course of business.

3

Notwithstanding any provision contained in this subsection to

<--

4

the contrary, the trustee shall have the duty to conserve and

5

preserve the assets of the licensed entity.

6

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

7

compensation of the trustee and shall review and approve actual

<--

8

and reasonable costs and expenses of the trustee, legal counsel,

9

accountants or other consultants or assistants hired by the

10

trustee and other persons the board may appoint in connection

11

with the trusteeship action. The compensation, costs and

12

expenses shall be paid by the former or suspended licensee.

13

Total compensation for the trustee and all individuals hired or

14

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

15

exceed $600 per hour in the aggregate.

16

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

17

the administration of the trusteeship with the board in the form

18

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

19

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

20

creditors or other parties in interest and make summaries of the

21

reports available to the public and shall post them on the

22

board's Internet website.

23

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

24

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

25

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

26

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

27

in accordance with board regulations. The petition must set

28

forth in detail the pertinent facts and the reasons why the

29

facts constitute the alleged breach. The board will review any

30

petition filed under this section and take whatever action, if

- 41 -

 


1

any, it deems appropriate.

2

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

3

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

4

machine licensee may not exercise any of its privileges, collect

5

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

6

of its property to anyone without prior approval of the

7

appointed trustee and the board.

8

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

<--

9

of trusteeship, net earnings income shall be deposited in an

<--

10

escrow account maintained for that purpose. Payment of net

<--

11

earnings income during the period of trusteeship may not be made

<--

12

by the trustee without the prior approval of the board. A

13

suspended or former principal or slot machine licensee may

14

request payment distribution of all or a portion of the net

<--

15

earnings income during the period of trusteeship by filing a 

<--

16

petition in accordance with board regulation. The suspended or

17

former principal or slot machine licensee shall have the burden

18

of demonstrating good cause for the payment distribution of the

<--

19

net earnings income requested.

<--

20

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

21

discontinue a trusteeship when:

22

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

23

trustee was appointed no longer exists.

24

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

25

board, consummated the sale, assignment, conveyance or other

26

disposition of all the property or interest of the former

<--

27

principal or slot machine licensee relating to the slot

28

machine license.

29

Upon board approval of the discontinuation of the trusteeship,

<--

30

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

- 42 -

 


1

of the former or suspended principal or slot machine licensee.

2

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

3

regulations to establish a list of persons approved by the board

4

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

5

shall provide for the following:

6

(1)  The minimum qualifications an individual must

7

possess to be approved as a trustee, which shall include

8

possession of a principal license.

9

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

10

list.

11

(3)  Any other information the board deems necessary to

12

carry out the intent of this section.

13

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

14

subsections to read:

15

§ 1407.  Pennsylvania Gaming Economic Development and Tourism

16

Fund.

17

* * *

18

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

19

with the Department of Community and Economic Development shall

20

submit an annual report of all distribution of funds under this

21

section to the chairman and minority chairman of the

22

Appropriations Committee of the Senate, the chairman and

23

minority chairman of the Community, Economic and Recreational

24

Development Committee of the Senate, the chairman and minority

25

chairman of the Appropriations Committee of the House of

26

Representatives and the chairman and minority chairman of the

27

Gaming Oversight Committee of the House of Representatives. The

28

report shall include detailed information relating to transfers

29

made from the Pennsylvania Gaming Economic Development and

30

Tourism Fund and all reimbursements, distributions and payments

- 43 -

 


1

made under subsection (b) or the act of July 25, 2007 (P.L.342,

<--

2

No.53), known as Pennsylvania Gaming Economic Development and

3

Tourism Fund Capital Budget Itemization Act of 2007. The report

4

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

5

each year thereafter.

6

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

7

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

<--

8

convention center authority, professional hockey franchise 

<--

9

sports and exhibition authority of a county of the second class, 

<--

10

urban redevelopment authority, airport authority or other entity

11

that receives money from the fund pursuant to an Economic

12

Development Capital Budget under this section subsection (b) or

<--

13

the act of July 25, 2007 (P.L.342, No.53), known as Pennsylvania

14

Gaming Economic Development and Tourism Fund Capital Budget

15

Itemization Act of 2007, shall submit an annual report to the

16

Office of the Budget, the chairman and minority chairman of the

17

Appropriations Committee of the Senate, the chairman and

18

minority chairman of the Community, Economic and Recreational

19

Development Committee of the Senate, the chairman and minority

20

chairman of the Appropriations Committee of the House of

21

Representatives and the chairman and the minority chairman of

22

the Gaming Oversight Committee of the House of Representatives.

23

The report shall include detailed information, including records

24

of expenditures, payments and other distributions made from

25

money received under subsection (b). The initial report shall

26

include information on all funds received prior to January 31,

27

2010. The report shall be submitted by January 31, 2010, and by

28

January 31 of each year thereafter until all funds under this

29

section are distributed or received. An entity that receives

30

funds after the effective date of this section shall submit an

- 44 -

 


1

initial report by January 31 of the year following receipt of

2

the funds.

3

(g)  Distribution to international airport.--Notwithstanding

4

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

5

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

6

Development and Tourism Fund Capital Budget Itemization Act of

7

2007, following the distribution of $42.5 million of funds

8

allocated to the county for debt service and economic

9

development projects for an international airport in a county of

10

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

11

remaining funds shall be distributed directly to an authority

12

that operates an international airport in a county of the second

13

class.

14

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

15

4 are amended to read:

16

§ 1408.  Transfers from State Gaming Fund.

17

* * *

18

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

19

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

20

the purpose of issuing grants to local law enforcement agencies

21

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

22

all forms of unlawful gambling in this Commonwealth. For

23

purposes of this subsection, the term "local law enforcement

24

agency" shall include Pennsylvania State Police activities in a

25

municipality which does not have a municipal police department

26

for activities in that municipality.

27

* * *

28

§ 1512.  Financial and employment interests.

29

* * *

30

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

- 45 -

 


1

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

2

government positions that meet the definitions of "public

3

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

4

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

5

Administration shall assist the [Ethics Commission] commission 

6

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

7

Pennsylvania Bulletin biennially and on the board's website.

8

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

9

the [Ethics Commission] commission with adequate information to

10

accurately develop and maintain the list. The [Ethics

11

Commission] commission may impose a civil penalty under 65

12

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

13

official or executive-level public employee who fails to

14

cooperate with the [Ethics Commission] commission under this

15

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

16

published by the commission shall not be subject to any penalty

17

for a violation of this section.

18

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

19

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

20

subsection:

21

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

22

the following:

23

(1)  Deputy Secretaries of the Commonwealth and the

24

Governor's Office executive staff.

25

(2)  An employee of the Executive Branch with

26

discretionary power which may affect or influence the outcome

27

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

28

the development of regulations or policies relating to a

29

licensed entity or who is involved in other matters under

30

this part. The term shall include an employee with law

- 46 -

 


1

enforcement authority.

2

(3)  An employee of a county or municipality with

3

discretionary powers which may affect or influence the

4

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

5

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

6

policy relating to a licensed entity or who is involved in

7

other matters under this part. The term shall include an

8

employee with law enforcement authority.

9

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

10

commission, authority or other governmental body not included

11

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

12

may affect or influence the outcome of the governmental

13

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

14

development of regulation or policy relating to a licensed

15

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

16

The term shall include an employee with law enforcement

17

authority.]

18

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

19

hold, debt or equity securities or other ownership interest or

20

profits interest. A financial interest shall not include any

21

debt or equity security, or other ownership interest or profits

22

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

23

following:

24

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

25

employee, public official, party officer or immediate family

26

member thereof may not exercise any managerial control or

27

receive income during the tenure of office and the period

28

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

29

apply only to blind trusts established prior to the effective

30

date of this paragraph.

- 47 -

 


1

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

2

sharing plan, individual retirement account, tax-sheltered

3

annuity, a plan established pursuant to section 457 of the

4

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

5

1 et seq.) or any successor provision deferred compensation

6

plan whether qualified or not qualified under the Internal

7

Revenue Code of 1986 or any successor provision or other

8

retirement plan that:

9

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

10

(ii)  is advised by an independent investment adviser

11

who has sole authority to make investment decisions with

12

respect to contributions made by the individual to these

13

plans.

14

(3)  A tuition account plan organized and operated

15

pursuant to section 529 of the Internal Revenue Code of 1986

16

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

17

directed by the individual.

18

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

19

fund in a licensed entity does not constitute a controlling

20

interest as defined in this part.

21

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

22

child.

23

"Law enforcement authority."  The power to conduct

24

investigations of or to make arrests for criminal offenses.

25

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

26

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

27

State committee or member of the executive committee of a State

28

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

29

or treasurer of a county committee in which a licensed facility

30

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

- 48 -

 


1

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

2

licensed facility is located.

3

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

4

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

5

Governor's cabinet, Treasurer, Auditor General and Attorney

6

General of the Commonwealth.

7

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

8

of the Commonwealth.

9

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

10

a county or municipality that directly receives a

11

distribution of revenue under this part.

12

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

13

agency, board, commission, authority or other governmental

14

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

15

receives a distribution of revenue under this part.

16

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

17

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

18

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

19

(3) with discretionary power which may influence or affect

20

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

21

the development of regulation or policy relating to a

22

licensed entity or who is involved in other matters under

23

this part.

24

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

25

individual who held an uncompensated office with a governmental

26

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

27

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

28

advisory board or commission which makes recommendations

29

relating to a licensed facility.

30

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

- 49 -

 


1

§ 1516.1.  Prosecutorial and adjudicatory functions.

2

The board shall adopt regulations and procedures necessary to

3

ensure that the Bureau of Investigations and Enforcement is a

4

distinct administrative entity and to prevent commingling of the

<--

5

investigatory and prosecutorial functions of the Bureau of

6

Investigations and Enforcement under section 1517 (relating to

7

investigations and enforcement) and the adjudicatory functions

8

of the board.

9

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

10

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

<--

11

subparagraphs and subsection (c) is amended by adding a 

<--

12

paragraph to read:

13

§ 1517.  Investigations and enforcement.

14

* * *

15

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

16

Investigations and Enforcement shall have the following powers

17

and duties:

18

* * *

19

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

20

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

21

review may include the review of accounting, administrative

22

and financial records, management control systems, procedures

23

and other records utilized by a licensed entity.

24

* * *

25

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

26

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

27

Enforcement Counsel which shall act as the prosecutor in all

28

noncriminal enforcement actions initiated by the bureau under

29

this part and shall have the following powers and duties:

30

* * *

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1

(iv)  Petition the board for the appointment of a

2

trustee under section 1332 (relating to appointment of

3

trustee).

4

(v)  Notwithstanding 42 Pa.C.S. § 5947 (relating to

<--

5

immunity of witnesses), the Commonwealth Court may grant

6

an immunity order, in the course of an investigation or

7

hearing conducted under this part, a person refuses to

8

answer a question or to produce evidence on the grounds

9

that the answer or evidence will expose the person to

10

criminal prosecution. The chief enforcement counsel of

11

the bureau may petition the Commonwealth Court for a

12

grant of immunity that includes the specific question to

13

be posed or information or evidence being sought from the

14

person as follows:

15

(A)  A copy of the petition shall be provided to

16

the Attorney General and the district attorney of the

17

person's county of residence who may object to the

18

petition.

19

(B)  The court shall hold an in camera proceeding

20

with the person to hear the evidence that will be

21

offered if the order to produce evidence is granted.

22

(C)  The court may issue an order to compel the

23

person to answer or produce evidence with immunity

24

if:

25

(I)  the testimony or other information from

26

a witness may be necessary to the public

27

interest; and

28

(II)  a witness has refused or is likely to

29

refuse to testify or provide other information on

30

the basis of his privilege against self-

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1

incrimination.

2

(D)  The court shall grant or deny the request

3

for immunity within 45 days of the filing of the

4

request.

5

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

6

immunity order provides the answer or evidence, the

7

person shall be immune from criminal prosecution

8

based on the answer or evidence that was the subject

9

of the immunity order.

10

(F)  The person may be prosecuted for perjury

11

committed in the answer or production of evidence or

12

held in contempt for failing to give an answer or

13

produce evidence in accordance with the order. The

14

answer or evidence shall be admissible against the

15

person only in a criminal investigation, or a trial

16

or other proceeding for perjury or contempt.

17

(G)  Immunity under this paragraph shall not

18

preclude the use of any other remedy or sanction

19

authorized by law.

20

* * *

21

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

22

Pennsylvania State Police shall have the following powers and

23

duties:

24

* * *

25

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

26

Pennsylvania State Police shall submit a report to the

27

Appropriations Committee of the Senate, the Community,

28

Economic and Recreational Development Committee of the

29

Senate, the Appropriations Committee of the House of

30

Representatives and the Gaming Oversight Committee of the

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1

House of Representatives. The report shall summarize law

2

enforcement activities at each licensed facility during the

3

previous calendar year and shall include all of the

4

following:

5

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

6

(ii)  A list of specific offenses charged for each

7

offense.

8

(iii)  The number of criminal prosecutions resulting

9

from arrests.

10

(iv)  The number of convictions resulting from

11

prosecutions.

12

(v)  The number of Pennsylvania State Police troopers

13

assigned to each licensed facility and to the gaming unit

14

at the Pennsylvania State Police headquarters.

15

(vi)  The number and nature of disciplinary actions

16

taken and complaints made against Pennsylvania State

17

Police troopers in a licensed facility.

18

(vii)  The closest local police station, Pennsylvania

19

State Police station and regional Pennsylvania State

20

Police headquarters to each licensed facility.

21

* * *

22

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

23

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

24

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

25

representing the bureau or the Office of Enforcement Counsel, or

26

an employee of the bureau or office involved in the hearing

27

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

28

officer, chief counsel or member] (Reserved).

29

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

30

counsel or a member shall not discuss or exercise any

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1

supervisory responsibility over any employee with respect to an

2

enforcement hearing with which the employee is involved]

3

(Reserved).

4

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

5

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

6

any enforcement proceeding, the chief counsel or member shall be

7

prohibited from participating in the adjudication of that matter

8

and shall designate appropriate individuals to exercise

9

adjudicatory functions.

10

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

11

apply to any of the following:

12

(1)  An application submitted before the effective date

13

of this section.

14

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

15

date of this section.

16

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

17

the effective date of this section.

18

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

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