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
9enforcement; and, in tavern gaming, further providing for
10definitions, for licenses, for application, for approval, for
11change in ownership, for tavern raffle, for distribution of
12net revenue, for tavern games tax, for host municipality
13tavern games tax, for reports, for enforcement and for
14prohibitions.

15The General Assembly of the Commonwealth of Pennsylvania
16hereby enacts as follows:

17Section 1. Section 702(b) of the act of December 19, 1988
18(P.L.1262, No.156), known as the Local Option Small Games of
19Chance Act, amended November 27, 2013 (P.L.1045, No.90) and 
20November 27, 2013 (P.L.1062, No.92), is amended to read:

21Section 702. Enforcement.

22* * *

23(b) Bureau of Liquor Control Enforcement.--If the licensee
 

1is a club licensee [or a licensee under Chapter 9], the Bureau 
2of Liquor Control Enforcement may enforce the provisions of this 
3act in accordance with subsection (g). An administrative law 
4judge under section 212 of the act of April 12, 1951 (P.L.90, 
5No.21), known as the Liquor Code, may impose the penalties under 
6subsection (d) following the issuance of a citation by the 
7bureau. The Bureau of Liquor Control Enforcement shall have no 
8jurisdiction to enforce the provisions of this act on any 
9special occasion permit holder under section 408.4 of the Liquor 
10Code. The Bureau of Liquor Control Enforcement shall retain all 
11powers and duties to enforce the provisions of the Liquor Code 
12on a special occasion permit holder.

13* * *

14Section 2. The definitions of "board," "bureau" and "net
15revenue" in section 902 of the act, added November 27, 2013 
16(P.L.1045, No.90), are amended to read:

17Section 902. Definitions.

18The following words and phrases when used in this chapter
19shall have the meanings given to them in this section unless the
20context clearly indicates otherwise:

21* * *

22["Board." The Pennsylvania Liquor Control Board.

23"Bureau." The Bureau of Investigations and Enforcement of
24the Pennsylvania Gaming Control Board.]

25* * *

26"Net revenue." As follows:

27(1) For tavern games required to be purchased from a
28licensed distributor under this act, the difference between:

29(i) the amount of the face value, as indicated by
30the manufacturer, minus the cost of the game, collectible

1by a licensee from a tavern game; and

2(ii) the maximum amount of prizes payable, as
3indicated by the manufacturer, by a licensee from a
4tavern game.

5(2) For tavern games not required to be purchased from a
6licensed distributor, the term has the same meaning as
7proceeds.

8* * *

9Section 3. Sections 903, 904, 905, 906, 908.1, 909,
10909.1(a), (c) and (h), 909.2(g), 912, 913 and 914 of the act,
11added November 27, 2013 (P.L.1045, No.90), are amended to read:

12Section 903. Licenses.

13(a) Application.--A restaurant licensee may apply to the
14[board] department for a license to conduct tavern games at a
15licensed premises located in a municipality that has adopted a
16referendum to allow small games of chance under section 703.

17(b) Information.--The application under subsection (a) shall
18include the following information:

19(1) The name, address and photograph of the applicant.

20(2) A current tax lien certificate issued by the
21department and a certificate from the Department of Labor and
22Industry of payment of all workers' compensation and
23unemployment compensation owed.

24[(3) The details of any license issued under 4 Pa.C.S.
25Pt. II (relating to gaming), the act of April 12, 1951
26(P.L.90, No.21), known as the Liquor Code, or this act which
27was applied for or in which the applicant or other owner has
28an interest.

29(4) Certified consent by the applicant, including each
30owner and officer of the restaurant licensee, to a background

1investigation by the bureau.

2(5) Relating to criminal information, disclosure of all
3arrests and citations of the applicant, including nontraffic
4summary offenses. The information shall include all of the
5following:

6(i) A brief description of the circumstances
7surrounding the arrest or issuance of the citation.

8(ii) The specific offense charged.

9(iii) The ultimate disposition of the charge,
10including any dismissal, plea bargain, conviction,
11sentence, pardon, expungement or order of Accelerated
12Rehabilitative Disposition.

13(6) Financial interests and transactions as required by
14the bureau.

15(7) Relating to citations of the applicant issued under
16the Liquor Code.

17(8) Relating to disclosure of conditional license
18agreements entered into under the Liquor Code.

19(9) Any other information required by the board.

20(c) Duty of bureau.--The bureau shall conduct a background
21investigation of each applicant, the scope of which shall be
22determined by the bureau.

23(d) Review.--Within six months of receipt of the background
24investigation report from the bureau, the board shall approve or
25disapprove the application.

26(e) Background investigation.--Each applicant shall include
27information and documentation as required to establish personal
28and financial suitability, honesty and integrity. Information
29shall include:

30(1) Criminal history record information.

1(2) Financial background information.

2(3) Regulatory history before the board or other
3Commonwealth agency.

4(4) Other information required by the bureau.

5(f) Personal interview.--If the bureau determines that the
6results of the background report investigation warrant
7additional review of the individual, the bureau shall conduct a
8personal interview with the applicant and may request
9information and interviews from other personal or professional
10associates.

11(g) Cooperation.--The applicant shall cooperate with the
12bureau as requested during the conduct of the background
13investigation. Any refusal to provide the information required
14under this section or to consent to a background investigation
15shall result in the immediate denial of a license by the board.

16(h) Costs.--The applicant shall reimburse the bureau for the
17actual costs of conducting the background investigation. The
18board shall not approve an applicant that has not fully
19reimbursed the bureau for the investigation.

20(i) Approval.--The bureau shall transmit the investigative
21report and may make a recommendation to the board. The board
22shall review the information obtained under this section to
23determine if the applicant possesses the following:

24(1) Financial stability, integrity and responsibility.

25(2) Sufficient business experience and ability to
26effectively operate tavern games as part of the restaurant
27licensee's operator.

28(3) Character, honesty and integrity to be licensed to
29operate tavern games in a responsible and lawful manner.]

30(j) Disapproval.--The [board] department may disapprove the

1issuance of a tavern gaming license for the following reasons:

2(1) A license shall not be issued to a restaurant
3licensee whose liquor license is in safekeeping pursuant to
4section 474.1 of the Liquor Code.

5(2) A license shall not be issued to a location that is
6subject to a pending objection under section 470(a.1) of the
7Liquor Code.

8(3) A license shall not be issued to a location that is
9subject to:

10(i) a pending license suspension under section 471
11of the Liquor Code; or

12(ii) a one-year prohibition on the issuance or
13transfer of a license under section 471(b) of the Liquor
14Code.

15Section 904. Application.

16(a) Application fee.--An applicant shall pay the [board]
17department a nonrefundable application fee of $1,000.

18[(b) Investigative fee.--An applicant shall pay an
19investigative fee of $1,000 to the bureau.

20(c) Costs.--In addition to the fee under subsection (b), an
21applicant and any owner and officer of the applicant shall pay
22for the actual costs of a background investigation conducted by
23the bureau that exceed the application fee. The bureau may:

24(1) Charge an estimated amount to be provided prior to
25the background investigation.

26(2) Submit for reimbursement from the applicant for the
27additional costs incurred in the background investigation.

28(d) Funds.--Funds collected under subsections (b) and (c)
29shall augment the funds appropriated to the Pennsylvania Gaming
30Control Board under 4 Pa.C.S. (relating to amusements).]

1Section 905. Approval.

2(a) Issuance.--Upon being satisfied that the requirements of
3section 903 have been met, the [board] department may approve
4the application and issue a tavern games license for a period of
5one year. The [board] department may enter into an agreement
6with the licensee concerning additional restrictions on the
7license, and this agreement shall be binding on the licensee.
8Failure of the licensee to adhere to the agreement will be cause
9for penalties under section 913(c) and for the nonrenewal of the
10license under section 913(f).

11(b) Renewal.--A license shall be renewed annually. A license
12renewal shall not require review of the [bureau, unless
13requested by the board] department. The [board] department may
14refuse to renew a tavern gaming license for the following
15reasons:

16(1) A license shall not be issued to a restaurant
17licensee whose liquor license is in safekeeping under section
18474.1 of the act of April 12, 1951 (P.L.90, No.21), known as
19the Liquor Code.

20(2) A license shall not be issued to a location that is
21subject to a pending objection under section 470(a.1) of the
22Liquor Code.

23(3) A license shall not be issued to a location that is
24subject to:

25(i) a pending license suspension under section 471
26of the Liquor Code; or

27(ii) a one-year prohibition on the issuance or
28transfer of a license under section 471(b) of the Liquor
29Code.

30(c) Fee.--Upon approval, the applicant shall pay a [$2,000]

1$1,000 license fee to be deposited in the General Fund. The
2annual renewal fee shall be $1,000.

3(d) Entitlement.--Nothing under this chapter shall be
4construed to create an entitlement to a license by a person. The
5[board] department shall have sole discretion to issue, renew,
6condition, suspend, revoke or deny a license based on the
7requirements of this chapter and whether the issuance and
8maintenance of the license are in the best interests of the
9Commonwealth.

10(e) Nontransferability.--A license shall be a grant of
11privilege to conduct tavern games. A license may not be sold,
12transferred or assigned to any other person. A licensee may not
13pledge or otherwise grant a security interest in or lien on the
14license. The [board] department shall have the sole discretion
15to issue, renew, condition or deny the issuance of a license.

16Section 906. Change in ownership.

17(a) Notice.--A licensee shall notify the [board] department
18of a change of ownership of the premises or sale or transfer of
19the restaurant license.

20(b) Qualification.--The purchaser or transferee of the
21assets or premises of a licensee must independently qualify for
22a license[,] and pay the license fee [and undergo and pay fees
23and costs for a background investigation] under section 903.

24Section 908.1. Tavern raffle.

25The following shall apply to a tavern raffle:

26(1) No more than one tavern raffle may be held in a
27calendar month.

28(2) A tavern raffle must be held for a designated
29charitable purpose.

30(3) Each individual participating in the tavern raffle

1must be informed of the charitable purpose involved.

2(4) At least 50% of the net revenues from the tavern
3raffle shall be transmitted to the designated charity within
4seven days of the tavern raffle.

5(5) Any net revenues not transmitted under paragraph (4)
6shall be distributed as follows:

7(i) [Sixty] Fifty percent shall be paid to the
8Commonwealth.

9(ii) [Thirty-five] Forty-five percent may be
10retained by the licensee.

11(iii) Five percent shall be paid to the Commonwealth
12and deposited into the restricted receipts account
13established in section 909.3.

14(6) A tavern raffle prize remaining unclaimed by a
15winner 60 days after the tavern raffle was held shall be
16donated by the licensee within 30 days to the designated
17charitable organization for which the tavern raffle was
18conducted.

19Section 909. Distribution of net revenue.

20Beginning January 1, 2014, the net revenue from tavern games
21received by a licensee shall be distributed as follows:

22(1) [Sixty] Fifty percent of the net revenue obtained in
23any calendar year shall be paid to the Commonwealth.

24(2) [Thirty-five] Forty-five percent of the net revenue
25obtained in any calendar year may be retained by the
26licensee.

27(3) Five percent shall be paid to the Commonwealth and
28deposited into the restricted receipts account established in
29section 909.3.

30Section 909.1. Tavern games tax.

1(a) Imposition.--There is imposed a tax of [60%] 55% of the
2net revenue from tavern games sold by a licensed distributor to
3a licensee within this Commonwealth.

4* * *

5(c) Other games.--In an instance where the tavern game is
6not required to be purchased from a licensed distributor under
7this act, a tax of [60%] 55% is imposed upon the net revenue
8from tavern daily drawings and tavern raffles under section
9908.1 and must be paid to the Commonwealth by the licensee.

10* * *

11(h) Penalties and interest.--If a licensee or licensed
12distributor fails to file the return required under subsection
13(e) or fails to pay the tax imposed under subsection (a) or (c),
14the department may do the following:

15(1) assess the amount of tax due;

16(2) impose and assess an administrative penalty equal to
1710% of the tax due but unpaid for each quarter or fraction
18thereof that the tax remains unpaid together with interest at
19the rate established under section 806 of the act of April 9,
201929 (P.L.343, No.176), known as The Fiscal Code, on the tax
21from the time the tax became due. The penalty provided in
22this paragraph must be added to the tax and assessed and
23collected at the same time and in the same manner as a part
24of the tax. Unless otherwise specified, the tax must be
25assessed, collected and enforced by the department under the
26provisions of Article II of the act of March 4, 1971 (P.L.6,
27No.2), known as the Tax Reform Code of 1971;

28(3) notify the [board] department that a licensee has
29not filed returns or has not paid tax. The [board] department
30may suspend or revoke a licensee's license; or

1(4) revoke a licensed distributor's license.

2* * *

3Section 909.2. Host municipality tavern games tax.

4* * *

5(g) Penalties and interest.--If a licensee or licensed
6distributor fails to file the return required under subsection
7(e) or fails to pay the tax imposed under subsection (a) or (c),
8the department may do the following:

9(1) assess the amount of tax due;

10(2) impose and assess an administrative penalty equal to
1110% of the tax due but unpaid for each quarter or fraction
12thereof that the tax remains unpaid together with interest at
13the rate established under section 806 of the act of April 9,
141929 (P.L.343, No.176), known as The Fiscal Code, on the tax
15from the time the tax became due. The penalty provided in
16this paragraph must be added to the tax and assessed and
17collected at the same time and in the same manner as a part
18of the tax. Unless otherwise specified, the tax must be
19assessed, collected and enforced by the department under the
20provisions of Article II of the act of March 4, 1971 (P.L.6,
21No.2), known as the Tax Reform Code of 1971;

22(3) [notify the board that a licensee has not filed
23returns or has not paid tax. The board may] suspend or revoke
24a licensee's license; or

25(4) revoke a licensed distributor's license.

26* * *

27Section 912. Reports.

28A licensee shall submit an annual report to the [board and
29the] department for the preceding year on a form and in a manner
30prescribed by the department. The department shall develop a

1schedule for the submission of the annual report. The report
2shall include:

3(1) Prizes awarded as required under section 335 of the
4act of March 4, 1971 (P.L.6, No.2), known as the Tax Reform
5Code of 1971.

6(2) Net revenue received from each tavern game
7conducted, itemized by week.

8(3) Amount of prizes paid from all tavern games,
9itemized by week.

10(4) Amount of tax remitted to the department.

11(5) Amount given to designated charities from tavern
12raffles.

13(6) Other information as required by the department.

14Section 913. Enforcement.

15(a) [Board] Department.--The [board] department may,
16following notice and hearing, impose penalties or suspend or
17revoke a license under this chapter.

18[(b) Authority of department.--Notwithstanding any law to
19the contrary, the department may report violations of this
20chapter to the board and to the Bureau of Liquor Control
21Enforcement.]

22(c) [Penalties] Civil penalties.--The [board] department may
23impose a civil penalty for a violation of this chapter in
24accordance with the following:

25(1) Up to $2,000 for an initial violation.

26(2) Up to $3,000 for a second violation.

27(3) Up to $5,000 for a third violation.

28[(d) Criminal penalty.--A violation of this chapter shall be
29a misdemeanor of the third degree. A second or subsequent
30offense shall be a misdemeanor of the second degree.

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

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

7(1) In addition to any other sanctions the [board]
8department may impose under this chapter [or under the Liquor
9Code], the [board] department may, at its discretion,
10suspend, revoke or deny renewal of any license issued under
11this chapter if it receives any information from any source
12and determines that:

13(i) The applicant or any of its officers, directors,
14owners or employees:

15(A) Is in violation of any provision of this
16chapter.

17(B) Furnished the [board] department with false
18or misleading information.

19(ii) The information contained in the applicant's
20initial application or any renewal application is no
21longer true and correct.

22(2) In the event of a revocation, suspension or failure
23to renew, the applicant's authorization to conduct the
24previously approved activity shall immediately cease, and all
25fees paid in connection therewith shall be deemed to be
26forfeited. In the event of a suspension, the applicant's
27authorization to conduct the previously approved activity
28shall immediately cease until the [board] department has
29notified the applicant that the suspension is no longer in
30effect.

1(3) The department shall immediately and permanently
2revoke a license issued under this chapter if the licensee
3has committed three or more violations of this chapter in a
4two-year period.

5Section 914. Prohibitions.

6The following shall apply to any license authorized or issued
7under this chapter:

8(1) No license may be issued to a restaurant licensee
9whose place of business is located in a licensed facility as
10defined in 4 Pa.C.S. § 1103 (relating to definitions).

11(2) No license may be issued to a place of business on
12the grounds of a facility where a major league sports team
13conducts games or races.

14(3) No license may be issued to a place of business that
15has been decreed a nuisance pursuant to section 611 of the
16act of April 12, 1951 (P.L.90, No.21), known as the Liquor
17Code.

18(4) The [board] department shall be prohibited from
19issuing a license to any person who has been convicted of a
20felony offense or misdemeanor gambling offense in any
21jurisdiction unless 15 years have elapsed from the date of
22conviction of the offense.

23(5) It shall be unlawful for an individual under 21
24years of age to play or attempt to play or otherwise
25participate in a tavern game.

26(6) It shall be unlawful for a licensee to permit an
27employee under 18 years of age to operate tavern games.

28(7) It shall be unlawful for an owner, officer or
29employee of a licensee to sell, operate or otherwise
30participate in the conduct of tavern games if the employee

1has been convicted in any jurisdiction of a felony or a
2misdemeanor gambling offense unless 15 years have elapsed
3from the date of conviction of the offense.

4(8) It shall be unlawful for an owner or officer of a
5licensee or for an employee of the licensee who operates the
6tavern game to participate in the game. This paragraph shall
7not apply to a raffle.

8Section 4. This act shall take effect in 60 days.