THE GENERAL ASSEMBLY OF PENNSYLVANIA

SENATE BILL

INTRODUCED BY FARNESE AND WASHINGTON, FEBRUARY 23, 2009

REFERRED TO COMMUNITY, FEBRUARY 23, 2009  

AN ACT

Providing for first class city casino neighborhood improvement

districts.

The General Assembly of the Commonwealth of Pennsylvania

hereby enacts as follows:

Section 1.  Short title.

This act shall be known and may be cited as the First Class

City Casino Neighborhood Improvement District Act.

Section 2.  Legislative findings.

The General Assembly finds that:

(1)  Under 4 Pa.C.S. Pt. II (relating to gaming) the

Pennsylvania Gaming Control Board is statutorily mandated to

award two category 2 slot machine licenses to facilities

located within a city of the first class.

(2)  Due to the geographic nature of cities of the first

class, including population density, traffic patterns and the

location of residential neighborhoods and business corridors,

cities of the first class face unique circumstances relating

to casino siting.

(3)  Based on these unique circumstances, a city of the

first class may benefit from the creation of casino

neighborhood improvement districts, governed by a casino

neighborhood improvement management association, within its

boundaries.

(4)  Authorizing a city of the first class to create a

casino neighborhood improvement district will provide the

city with an opportunity to mitigate the impact hosting a

casino has on the city’s citizens, businesses and

neighborhoods and will assist the city in promoting economic

growth, development and employment.

(5)  In addition, authorizing the governing body of a

city of the first class to impose a casino impact fee on

casinos within the casino neighborhood improvement district

for use within the district by the casino neighborhood

improvement management association will further the goals set

forth under this act.

Section 3.  Definitions.

The following words and phrases when used in this act shall

have the meanings given to them in this section unless the

context clearly indicates otherwise:

"Authority."  A body politic and corporate, as established in

accordance with 53 Pa.C.S. Ch. 56 (relating to municipal

authorities).

"Capital project."  The acquisition, development,

construction, improvement, rehabilitation, operation and

maintenance of any building, facility, equipment or structure,

by purchase, lease or contract, by an association. The term

includes the acquisition, rehabilitation or demolition of

blighted buildings or comparable structures.

"Casino."  A licensed gaming facility as defined in 4 Pa.C.S.

Pt. II (relating to gaming).

"Casino impact fee."  A daily fee imposed by the association,

with the approval of the governing body, on a casino located

within a district. The daily fee shall not exceed 3.25% of the

casino’s daily gross terminal revenue, as defined under 4

Pa.C.S. Pt. II (relating to gaming), from the slot machines in

operation at the casino.

"Casino neighborhood improvement district" or "district."  A

limited geographic area within a city in which a casino impact

fee is imposed for the purposes of promoting the economic and

general welfare of the district and the city and mitigating the

impact hosting a casino has on the citizens and neighborhoods of

the city.

"City."  A city of the first class.

"Commercial."  Relating to or associated with any for-profit

activity involving trade, traffic or commerce in general.

"District advisory council" or "council."  A committee of

property owners who reside in a district. The council shall be

appointed by the association and shall provide guidance and

direction to the association concerning association activities.

"District improvement."  Improvements needed in specific

areas of the district or to individual properties located in the

district. Improvements shall include:

(1)  Capital projects.

(2)  Traditional streetscape and building renovations.

(3)  Construction or renovation of retaining walls.

(4)  Street paving.

(5)  Installation or repair of street lighting.

(6)  Creation, maintenance or repair of parking lots and

parking garages.

(7)  Planting and maintaining trees and shrubbery.

(8)  Creation and maintenance of pedestrian walks.

(9)  Installation, maintenance and repair of sewers and

water lines.

(10)  Establishment of rest areas.

"District management association" or "association."  The

governing body of the district.

"District plan" or "plan."  The strategic plan for

neighborhood improvements required under section 5 and all

projects, programs and supplemental services to be provided

within the district by the association.

"District programs and services."  The term includes programs

and services which improve the ability of the commercial

establishments within the district to serve the consumer or

which improve the ability of property owners to enjoy a safer

and more attractive community. Additional services provided by

the association shall supplement, not replace, existing city

services provided within the district.

"Governing body.”  The city council of a city of the first

class.

"Limited geographic area."  An area within a one-mile radius

of a casino as measured from the boundaries of the parcel of

land on which the casino is located.

"Municipality Authorities Act."  The provisions of 53 Pa.C.S.

Ch. 56 (relating to municipal authorities).

"Nonprofit corporation."  A legal entity that is incorporated

within this Commonwealth and specifies in its charter or bylaws

that no part of the net earnings may benefit any private

shareholder or individual holding interest in the entity.

"Private security officer."  A person or firm that contracts

with the association for the purpose of providing increased

security or protective patrol services within the district. The

term may include off-duty police officers if the use of off-duty

police officers employed by the city is approved by the

governing body.

"Service area."  The area within the boundaries of the

district in which the association provides programs, services

and improvements. The term may also include an area outside the

district where services are being provided by the association

under contract.

"Soft costs."  The term includes architectural fees,

engineering fees, attorney fees, consulting fees, professional

fees, preliminary planning expenditures, feasibility study

expenditures, financing costs and any other expenditures

necessary and incidental to the development, construction or

completion of the improvement.

"Sunset provision."  A provision in the ordinance

establishing the district which provides for the automatic

termination of the district on a date certain. The governing

body may, by ordinance, extend the district beyond the date

contained in the enabling ordinance following a review of the

district and the association programs and services provided

within the district.

Section 4.  Powers of governing body.

The governing body shall have the power to do any of the

following:

(1)  Designate by ordinance an area or areas within the

city as a district.

(2)  Designate an association as the administrator of the

district.

(3)  Appropriate and expend, in accordance with the

specific provisions of the enabling ordinance, city funds as

may be required to do any of the following:

(i)  Acquire, by purchase or lease, real or personal

property deemed necessary to effectuate the purposes of

the district.

(ii)  Prepare or have prepared preliminary planning

or feasibility studies to determine needed programs,

services and improvements in a proposed district.

(4)  Advance funds to an association as may be required

to carry out the purposes of this act.

(5)  Authorize the imposition of casino impact fees by

the association. Casino impact fees distributed to the city

under section 8(d) shall be remitted to the association for

use as prescribed in this act.

(6)  Acquire by gift, purchase or eminent domain, land,

real property or rights-of-way which may be needed for the

purposes of making district improvements.

(7)  Issue bonds, notes or guarantees, in accordance with

the provisions of general laws in the amounts and for the

periods necessary to finance needed district improvements.

(8)  Review all proposed expenditures of funds within

districts by associations and suggest changes to the proposed

expenditures.

(9)  Include in the agreement with the association and in

the enabling ordinance establishing the district a sunset

provision of no less than five years for renewal of the

agreement.

Section 5.  Casino neighborhood improvement district.

(a)  Establishment.--Creation of a district may be initiated

only by the governing body, except that if the governing body

has not taken action to create a district within 180 days of the

effective date of this section, city businesses or residents, or

a combination of both, comprising 51% of the property owners

within a limited geographic area may petition the governing body

to establish a district as set forth in this act.

(b)  Procedure for creating a district.--Prior to enacting an

ordinance creating a district, the governing body shall do all

of the following:

(1)  Submit a preliminary plan containing the information

required under subsections (c) and (d) to all property owners

and lessees of property located in the proposed district at

least 30 days prior to the first public hearing required

under this section.

(2)  Hold at least one public hearing on the preliminary

plan for the purpose of receiving public comment from

affected property owners or lessees located within the

proposed district. The governing body shall notify all

property owners and lessees of property located in the

proposed district of the date, location and time of the

public hearing and shall advertise notice of the public

hearing at least ten days prior thereto in a newspaper of

general circulation within the city.

(3)  Provide a minimum 30-day public comment period after

the completion of the last public hearing conducted under

paragraph (2) during which time affected property owners or

lessees may submit comments or recommendations regarding the

preliminary plan. Comments and recommendations shall be made

in writing, signed by the property owner and filed in the

office of the clerk of the governing body.

(4)  Submit a final plan to all property owners and

lessees of property located in the proposed district at least

ten days prior to the public hearing required under paragraph

(5). The final plan shall incorporate changes, if any, made

to the preliminary plan based on comments and recommendations

from affected property owners within the proposed district

provided at the public hearing under paragraph (2) or during

the public comment period under paragraph (3). Changes to the

preliminary plan shall be indicated in an easily discernible

method for the reader, including changes being in boldface or

italic type.

(5)  Hold at least one public hearing on the proposed

final plan for the purpose of receiving public comment.

Notice of the public hearing shall be provided as set forth

under paragraph (2).

(6)  Following the last public hearing required under

paragraph (5), provide a 45-day period during which affected

property owners, excluding owners of a casino property,

situated within the proposed district, may file written

objections to the establishment of the district. Written

objections shall be signed by the property owner or lessee

and filed with the office of the clerk of the governing body.

(7)  If, at the close of the 45-day period established

under paragraph (6), the governing body determines that 51%

of the property owners within the proposed district,

excluding owners of casino property, whose property valuation

as assessed for taxable purposes amounts to 51% of the total

property valuation located within the proposed district

object to the creation of the district, the governing body

shall not establish the district.

(8)  If the governing body is not prohibited from

establishing the district under paragraph (7), the governing

body shall create the district as reflected in the final plan

through ordinance. Any ordinance creating a district under

this act shall be adopted in accordance with law.

(c)  Preliminary plan.--The preliminary plan shall include

the following:

(1)  A map indicating the boundaries, by street, of the

proposed district.

(2)  A written report from the city containing:

(i)  The name of the proposed district.

(ii)  A detailed description of the service areas of

the proposed district.

(iii)  The name of the casino upon which the casino

impact fee will be imposed. No casino may be included in

more than one district.

(iv)  A list of proposed programs, services and

improvements to be completed within the district and the

estimated cost of each.

(v)  A proposed itemized budget for the first fiscal

year, including expenditures for the following:

(A)  Personnel and administration.

(B)  District programs and services.

(C)  District improvements.

(D)  Soft costs.

(vi)  The proposed revenue sources for financing all

proposed improvements, programs and services.

(vii)  The estimated time for implementation and

completion of all proposed improvements, programs and

services.

(viii)  A statement identifying the administrative

body which will govern and administer the district.

(ix)  Any other information, including the statutory

authority or, in the case of a nonprofit corporation, the

bylaws, which describe the powers and duties and the

method for making decisions by the association.

(d)  Additional preliminary plan provisions.--The preliminary

plan shall also:

(1)  Identify in detail the specific duties and

responsibilities of both the association and the city with

respect to the district.

(2)  Require that a written agreement be signed by the

governing body and the association which:

(i)  describes in detail their respective duties and

responsibilities;

(ii)  provides that the city must maintain the same

level of city programs and services provided within the

district after district designation as before district

designation; and

(iii)  allows the governing body the right to include

in the agreement a sunset provision of no less than five

years for renewal of the agreement.

(3)  Allow for and encourage tax-exempt property owners

located within the district to provide in-kind services or a

financial contribution to the association.

(4)  Establish the procedure by which affected property

owners, with the exception of the owners of casino property,

may defeat a proposal to establish a district, as follows:

(i)  A negative vote of at least 51% of the property

owners within the district or property owners within the

district whose property valuation, as assessed for

taxable purposes, amounts to 51% of the total property

valuation located within the district proposed in the

final plan shall be required to defeat the establishment

of the proposed district; and

(ii)  Those objecting to the establishment of a

district shall file objections with the clerk for the

municipal corporation within 45 days of presentation of

the final plan where the governing body of the

municipality is inclined to establish a district.

(e)  Amendments to final plan.--

(1)  The final plan may be amended by the association any

time after the establishment of a district, under this act,

upon the majority vote of the association board, if there is

concurrence by the owners, excluding the owners of casino

property, of at least 51% of the assessed valuation of all

property within the district or 51% of the property owners

within the district.

(2)  (i)  Amendments to the final plan which also require

the approval of the governing body include:

(A)  Substantially changed or added programs,

improvements and services to be provided in the

district.

(B)  Increased expenditures affecting more than

25% of the total association budget for the fiscal

year.

(C)  Incurring increased indebtedness.

(D)  Changing the legal entity (association)

which provides programs, improvements and services

within the district.

(E)  Changing the district service area

boundaries.

(ii)  Prior to the approving of any of the changes in

this paragraph, the governing body shall hold at least

one public hearing to determine that the changes are in

the public's interest as they relate to affected property

owners within the district. The governing body shall

provide public notice of a hearing for any amendments by

publication of a notice in at least one newspaper having

a general circulation within the city. The notice shall

set forth the date, time and location of the hearing and

the amendments to be considered. This notice shall be

published once at least ten days prior to the date of the

hearing. The governing body may, within 30 days following

the public hearing and at its sole discretion, approve or

disapprove any amendments to the plan. If approved, the

amendments shall be effective upon the date of the

approval.

(3)  Prior to the adoption of an amendment to the

district boundaries which increases the size of the district,

an owner of property to be added to the district shall be

notified of the date, time and location of the public hearing

on the proposed amendment to the final plan and provided all

information required under subsection (c).

Section 6.  Casino neighborhood improvement district management

association.

(a)  Designation.--When a governing body establishes a

district under this act, the governing body shall designate a

casino neighborhood improvement district management association

to administer district improvements, programs and services as

set forth in the district plan. The association shall be either

an authority created pursuant to the Municipal Authorities Act

or a nonprofit development corporation or other nonprofit

corporation established or authorized to be established by the

governing body.

(b)  Powers.--The association shall have the authority to

exercise the following powers immediately upon the effective

date of the ordinance designating district under section 4:

(1)  All powers authorized under section 7.

(2)  If the association is an authority, all powers,

rights and duties authorized under the Municipal Authorities

Act, to the extent the powers are not inconsistent with or

prohibited under this act.

(3)  If the association is a nonprofit development

corporation or other nonprofit corporations, all powers,

rights and duties prescribed under laws applicable to those

entities or included in the corporation’s charter and bylaws,

to the extent the powers are not inconsistent with or

prohibited under this act.

(c)  Governance.--Every association shall be governed by an

administrative board.

(1)  Notwithstanding any other provision of law, the

board shall consist of the following seven voting members:

(i)  One member representing residential property

owners within the district appointed by majority vote of

the ex officio members.

(ii)  One member representing commercial business

owners within the district appointed by majority vote of

the ex officio members.

(iii)  One member appointed by the governing body.

(iv)  One member appointed by the mayor.

(v)  One member appointed by the State senator

representing the district.

(vi)  One member appointed by the State

representative representing the district.

(vii)  One member appointed by the casino located

within the district. 

(2)  The following individuals, or their designees, shall

serve on the board as nonvoting ex officio members: 

(i)  The State senator representing the district.

(ii)  The State representative representing the

district.

(iii)  A member of the governing body.

(iv)  A representative of the casino located within

the district.

(v)  The mayor of the city.  

(3)  Appointees under paragraph (1) shall serve a term of

two years and until their successors are appointed and

qualified. No appointee shall serve more than four

consecutive terms.

(4)  An appointment to fill a vacancy created by a member

appointed in accordance with paragraph (1) shall be for the

remainder of the unexpired term. Individuals appointed to

fill a vacancy may serve the maximum number of terms

permitted under paragraph (3) following the expiration of the

term related to the vacancy.

(5)  A member of the board shall serve at the pleasure of

the appointing authority.

(6)  A member of the board shall serve at the pleasure of

the appointing authority.

Section 7.  Powers of casino neighborhood improvement district

management association.

(a)  General powers.--An association shall have the power to:

(1)  Prepare planning or feasibility studies or contract

for the preparation of the same to determine needed district

improvements, programs and services.

(2)  Employ an executive director or administrator and

any necessary supporting staff or contract for the provision

of same.

(3)  Make district improvements or provide district

programs and services.

(4)  Contract with existing businesses within the

district.

(5)  Contract for the provision of products or services

by the association to clients located inside and outside the

district.

(6)  Appropriate and expend district funds, including any

Federal, State or municipal funds received by the

association. The funds shall be expended in accordance with

any specific provisions contained in the ordinance

establishing the district and this act, including:

(i)  To acquire by purchase or lease real or personal

property to effectuate the purposes of this act,

including making district improvements.

(ii)  To fund district programs and services.

(7)  Impose a casino impact fee, with the approval of the

governing body.

(8)  Solicit in-kind services or financial contributions

from tax-exempt property owners.

(9)  Contract with off-duty police officers or private

security officers to patrol the district and to support

existing city and volunteer efforts aimed at reducing crime

and improving security in the district.

(10)  Designate a district advisory council for each

district established within the city. Each council shall

consist of an odd number of members, between five and nine,

who shall be representative of the neighborhood's character,

including age, gender and cultural diversity.

Section 8.  Casino impact fee.

(a)  Assessment.--The association may, upon approval of the

governing body, assess a casino impact fee. The governing body

shall approve the assessment of a casino impact fee through

ordinance adopted in accordance with law.

(b)  Notification.--Upon approving the assessment of a casino

impact fee by the association, the governing body shall notify

the Department of Revenue, which shall administer the assessment

of the fee. The department shall determine the amount of the fee

in the same manner as it determines the casino’s daily slot

machine tax and local share assessment pursuant to 4 Pa.C.S. §

1403(b) (relating to establishment of State Gaming Fund and net

slot machine revenue distribution).

(c)  Trust.--All funds owed to the association under this

subsection shall be held in trust by the licensed gaming entity

and shall be paid or transferred to the city in the same manner

as the casino’s local share assessment pursuant to 4 Pa.C.S. §

1403. Unless otherwise agreed to by the Pennsylvania Gaming

Control Board, a casino shall establish a separate bank account

to maintain the funds until they are paid or transferred under

this subsection.

(d)  Use of revenue.--Revenue generated by the fee

transferred by the city to the association shall be used by the

association to mitigate the impact of the casino on the

residents and neighborhoods located within the district and to

make improvements and provide programs and services within the

district as authorized under this act.

(e)  Rate.--The rate of the casino impact fee shall be based

upon the estimated cost of the programs, improvements or

services to be provided in the district as stated in the final

plan under section 5(e). The total revenues received by the

association during the year may not exceed the estimated cost of

proposed programs, improvements and services for the year.

Section 9.  Dissolution of casino neighborhood improvement

district management association and casino

neighborhood improvement district.

(a)  Termination.--The procedure for terminating a district

shall be as follows:

(1)  If the property owners within the district seek to

terminate the district, the property owners shall submit a

petition, signed by 51% of the property owners within the

district, excluding the owners of casino property, to the

governing body. Within 30 days of receipt of the petition,

the governing body shall hold a public hearing on the merits

of the request. Notice of the hearing shall be provided in

accordance with section 5(b)(2). If the governing body

approves the request, the governing body shall repeal the

ordinance enacting the district and the association and

provide written notice of the termination to the Secretary of

the Commonwealth. The secretary shall note the termination of

the district and association on the association’s record of

incorporation and provide a copy of the same to the governing

body. Upon termination of the district and association, all

property owned by the association shall pass to the city.

(2)  If the governing body seeks to terminate the

district, the governing body shall notify all property owners

and lessees of property located in the district of its

intention to terminate the district. No earlier than 30 days

after providing notice to the property owners and lessees of

its intent to terminate the district, the governing body

shall hold a public hearing on the merits of the proposed

termination. Notice of the hearing shall be provided in

accordance with section 5(b)(2). Following the public

hearing, the governing body shall establish a 45-day period

during which affected property owners, excluding owners of a

casino property, situated within the district may file

written objections to the termination of the district.

Written objections shall be signed by the property owner and

filed with the office of the clerk of the governing body. If,

at the close of the 45-day period, the governing body

determines that 51% of the property owners within the

district, excluding owners of casino property, whose property

valuation as assessed for taxable purposes amounts to 51% of

the total property valuation located within the district

object to the termination of the district, the governing body

shall not terminate the district. If less than 51% of the

property owners described under this paragraph object to the

termination of the district, the governing body may terminate

the district by repealing the ordinance enacting the district

and the association and provide written notice of the

termination to the secretary. The secretary shall note the

termination of the district and association on the

association’s record of incorporation and provide a copy of

the same to the governing body. Upon termination of the

district and association, all property owned by the

association shall pass to the city.

(b)  Conveying projects.--When any association shall have

finally paid and discharged all bonds, which together with the

interest due thereon shall have been secured by a pledge of any

of the revenues or receipts of a project, it may, subject to any

agreements concerning the operation or disposition of the

project and the association bylaws, convey the project or

projects to the city.

Section 10.  Annual audit and report.

The association shall annually do all of the following:

(1)  Submit an audit of all income and expenditures to

the Department of Community and Economic Development and the

governing body within 120 days after the end of each fiscal

year.

(2)  Submit a report, including financial and

programmatic information and a summary of audit findings, to

the governing body and to all property owners in the

district.

Section 20.  Effective date.

This act shall take effect in 60 days.