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| THE GENERAL ASSEMBLY OF PENNSYLVANIA |
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| HOUSE BILL |
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| INTRODUCED BY SCHRODER, TURZAI, SAYLOR, VEREB, M. O'BRIEN, BAKER, BARRAR, CARROLL, D. COSTA, GROVE, KAUFFMAN, MURPHY, RAPP, REESE, ROAE, SWANGER, VULAKOVICH, WATSON AND PICKETT, JANUARY 24, 2011 |
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| REFERRED TO COMMITTEE ON GAMING OVERSIGHT, JANUARY 24, 2011 |
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| AN ACT |
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1 | Amending Title 4 (Amusements) of the Pennsylvania Consolidated |
2 | Statutes, providing for revocation and auction of slot |
3 | machine licenses; and further providing for Category 2 slot |
4 | machine license and for number of slot machine licenses. |
5 | The General Assembly of the Commonwealth of Pennsylvania |
6 | hereby enacts as follows: |
7 | Section 1. Title 4 of the Pennsylvania Consolidated Statutes |
8 | is amended by adding a section to read: |
9 | § 1209.1. Revocation and auction of slot machine license. |
10 | (a) General rule.-- |
11 | (1) Within 30 days after the revocation of a slot |
12 | machine license, the board shall initiate a public auction of |
13 | the slot machine license for a fee that achieves the highest |
14 | prospective total revenue to the Commonwealth, and otherwise |
15 | serves the interests of the citizens of Pennsylvania. The |
16 | awarding of the slot machine license shall be conditional on |
17 | the successful bidder's ability to satisfy the qualifications |
18 | as provided in this part and board regulations. The auction |
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1 | shall be conducted in such a manner as to maximize the price |
2 | for each slot machine license. In no case may a Category 1 |
3 | slot machine license be sold for a fee lower than |
4 | $66,500,000. In no case may a Category 2 slot machine license |
5 | be sold for a fee lower than $66,500,000. In no case may a |
6 | Category 3 slot machine license be sold for a fee lower than |
7 | $12,500,000. |
8 | (2) The board shall adopt procedures and regulations to |
9 | facilitate the conduct of the public auction in such a manner |
10 | as to maximize the price for each slot machine license. |
11 | (b) Bidding procedures.--The open and competitive bidding |
12 | process shall adhere to the following procedures: |
13 | (1) The board shall make applications for the slot |
14 | machine license available to applicants pursuant to section |
15 | 1309 (relating to slot machine license application) and allow |
16 | a reasonable time for applicants to submit applications to |
17 | the board. |
18 | (2) During the filing period of slot machine license |
19 | applications, the board shall retain the services of an |
20 | investment banking firm to assist the board in conducting the |
21 | open and competitive bidding process. |
22 | (3) A bidder must submit a definitive, noncontingent |
23 | offer to purchase the slot machine license. The binding |
24 | proposal shall provide the following: |
25 | (i) The consideration to be paid by the prospective |
26 | purchaser. |
27 | (ii) Identification of all sources of external |
28 | financing involved in the transaction and submission of |
29 | all relevant commitment letters and other evidence of |
30 | financing. |
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1 | (iii) Identification of the proposed location of the |
2 | new licensed facility. |
3 | (iv) Details of agreements with the municipality |
4 | where the licensed facility is to be located, including: |
5 | (A) Evidence of municipal approval to the |
6 | applicant for the licensed facility. |
7 | (B) Background and status of any discussions and |
8 | agreements with municipalities regarding the |
9 | construction of a licensed facility. |
10 | (v) A list of any regulatory, corporate or other |
11 | approvals required to consummate a transaction. |
12 | (vi) Information responsive to any other request for |
13 | information made by the board or the investment banker. |
14 | (vii) A discussion of the proposed ownership |
15 | structure, including any other equity participants in the |
16 | binding proposal. |
17 | (viii) A business plan for the proposed licensed |
18 | facility, including: |
19 | (A) General statement of financial viability. |
20 | (B) Proposed corporate involvement in charitable |
21 | activity. |
22 | (C) Revenue sharing with other communities. |
23 | (x) Projected financial statements through 2011. |
24 | (xi) Date by which the prospective purchaser will |
25 | commit to commence gaming operations at the licensed |
26 | facility. |
27 | (xii) A date until which the prospective purchaser |
28 | agrees to keep such binding proposal open and |
29 | irrevocable. |
30 | (4) After receiving all of the bid proposals, the board |
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1 | shall open all of the proposals in a public forum and |
2 | disclose the prospective owners' names, venture partners, if |
3 | any, and in the case of applicants for owners' licenses, the |
4 | locations of the proposed development sites. |
5 | (5) No later than six business days following the |
6 | opening of the binding proposals, the investment banker shall |
7 | deliver to the board a summary analysis of each binding |
8 | proposal as such has been refined and clarified by the |
9 | prospective owners. |
10 | (6) The board shall evaluate the proposals within a |
11 | reasonable time and select no more than three final |
12 | applicants to participate in an auction. |
13 | (7) By agreeing to participate in the auction or by |
14 | making a presentation to the board if so requested, each |
15 | competing bidder is agreeing that a binding proposal, as |
16 | refined and clarified, shall remain open and irrevocable |
17 | until the date indicated by such prospective purchaser in |
18 | such proposal. The date indicated shall in no event be less |
19 | than 30 days following the auction. |
20 | (8) After the auction and following the presentations, |
21 | the board shall identify a competing bidder as the leading |
22 | proposal for the auction. |
23 | (9) Upon selection of a winning bid, the board shall |
24 | evaluate the winning bid within a reasonable period of time |
25 | for license suitability in accordance with all applicable |
26 | statutory and regulatory criteria. |
27 | (10) If the winning bidder is unable or otherwise fails |
28 | to consummate the transaction, including if the board |
29 | determines that the winning bidder does not satisfy the |
30 | suitability requirements pursuant to this part, the board |
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1 | may, on the same criteria, select from the remaining bidders. |
2 | (c) Collusion among bidders.--Collusion among bidders is |
3 | unlawful. Any contract or conspiracy which unreasonably results |
4 | in underbidding is unlawful. When any person has reason to |
5 | believe collusion or other anticompetitive practices have |
6 | occurred among any bidders, a notice of the relevant facts shall |
7 | be transmitted to the Attorney General, who shall investigate |
8 | the reports. A bidder who violates this section shall be |
9 | penalized pursuant to section 1518(b)(ii) (relating to |
10 | prohibited acts; penalties). |
11 | (d) Proceeds.--The proceeds of the sale or auction of the |
12 | slot machine license shall be deposited pursuant to section 1209 |
13 | (relating to slot machine license fee). |
14 | (e) Definition.--As used in this section, "revocation" means |
15 | a decision by the board to revoke a slot machine license that is |
16 | final, binding, nonappealable and is not subject to a pending |
17 | legal challenge. |
18 | Section 2. Sections 1304(b) and 1307 of Title 4 are amended |
19 | to read: |
20 | § 1304. Category 2 slot machine license. |
21 | * * * |
22 | (b) Location.-- |
23 | (1) [Two] (i) Subject to the provisions of paragraph |
24 | (1.1), two Category 2 licensed facilities and no more |
25 | [shall] may be located by the board within a city of the |
26 | first class, and one Category 2 licensed facility and no |
27 | more [shall] may be located by the board within a city of |
28 | the second class. |
29 | (ii) No Category 2 licensed facility located by the |
30 | board within a city of the first class shall be within |
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1 | ten linear miles of a Category 1 licensed facility |
2 | regardless of the municipality where the Category 1 |
3 | licensed facility is located. Except for any Category 2 |
4 | licensed facility located by the board within a city of |
5 | the first class or a city of the second class, no |
6 | Category 2 licensed facility shall be located within 30 |
7 | linear miles of any Category 1 licensed facility that has |
8 | conducted over 200 racing days per year for the two |
9 | calendar years immediately preceding the effective date |
10 | of this part and not within 20 linear miles of any other |
11 | Category 1 licensed facility. Except for any Category 2 |
12 | licensed facility located by the board within a city of |
13 | the first class, no Category 2 licensed facility shall be |
14 | located within 20 linear miles of another Category 2 |
15 | licensed facility. |
16 | (1.1) In the event that a license for a Category 2 |
17 | licensed facility to be located within a city of the first |
18 | class, which license was issued prior to the effective date |
19 | of this paragraph, is revoked by the board prior to |
20 | commencement of operations of the Category 2 licensed |
21 | facility, then the board shall reissue the revoked Category 2 |
22 | slot machine license, pursuant to section 1209.1 (relating to |
23 | revocation and action of slot machine license) to another |
24 | applicant located anywhere in this Commonwealth for a |
25 | Category 2 licensed facility, provided that: |
26 | (i) no more than two Category 2 licensed facilities |
27 | may be located within a city of the first class; |
28 | (ii) no more than one Category 2 licensed facility |
29 | may be located in a city of the second class; and |
30 | (iii) the provisions of paragraph (1)(ii) are |
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1 | satisfied. |
2 | (2) Within five days of approving a license for an |
3 | applicant with a proposed licensed facility consisting of |
4 | land designated a subzone, an expansion subzone or an |
5 | improvement subzone under the Keystone Opportunity Zone, |
6 | Keystone Opportunity Expansion Zone and Keystone Opportunity |
7 | Improvement Zone Act for a slot machine license under this |
8 | section, the board shall notify the Department of Community |
9 | and Economic Development. The notice shall include a |
10 | description of the land of the proposed licensed facility |
11 | which is designated a subzone, an expansion subzone or an |
12 | improvement subzone. Within five days of receiving the notice |
13 | required by this paragraph, the Secretary of Community and |
14 | Economic Development shall decertify the land of the proposed |
15 | licensed facility as being a subzone, an expansion subzone or |
16 | an improvement subzone. Upon decertification in accordance |
17 | with this paragraph and notwithstanding Chapter 3 of the |
18 | Keystone Opportunity Zone, Keystone Opportunity Expansion |
19 | Zone and Keystone Opportunity Improvement Zone Act, a |
20 | political subdivision may amend the ordinance, resolution or |
21 | other required action which granted the exemptions, |
22 | deductions, abatements or credits required by the Keystone |
23 | Opportunity Zone, Keystone Opportunity Expansion Zone and |
24 | Keystone Opportunity Improvement Zone Act to repeal the |
25 | exemptions, deductions, abatements or credits for the land |
26 | decertified. |
27 | (3) Notwithstanding any other provision of law, the |
28 | governing body of a city of the first class shall not exempt |
29 | from real property taxation or provide any real property tax |
30 | abatement under the act of December 1, 1977 (P.L.237, No.76), |
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1 | known as the Local Economic Revitalization Tax Assistance |
2 | Act, to a Category 2 licensed facility located within the |
3 | city, or any improvements to such facility, unless the owner |
4 | of the licensed facility enters into or has entered into a |
5 | tax settlement agreement or payment in lieu of taxes |
6 | agreement with the city, including any amendments, |
7 | supplements or modifications of such agreements. |
8 | § 1307. Number of slot machine licenses. |
9 | The board may license no more than seven Category 1 licensed |
10 | facilities and no more than five Category 2 licensed facilities, |
11 | as it may deem appropriate, as long as [two, and not more ,] not |
12 | more than two Category 2 licensed facilities are located by the |
13 | board within the city of the first class and that [one, and not |
14 | more,] not more than one Category 2 licensed facility is located |
15 | by the board within the city of the second class, except in the |
16 | case of license revocation the provisions of section 1304(b) |
17 | (1.1) (relating to Category 2 lot machine license) apply. The |
18 | board may at its discretion increase the total number of |
19 | Category 2 licensed facilities permitted to be licensed by the |
20 | board by an amount not to exceed the total number of Category 1 |
21 | licenses not applied for within five years following the |
22 | effective date of this part. Except as permitted by section 1328 |
23 | (relating to change in ownership or control of slot machine |
24 | licensee), any Category 1 license may be reissued by the board |
25 | at its discretion as a Category 2 license if an application for |
26 | issuance of such license has not been made to the board. The |
27 | board may license no more than three Category 3 Licensed |
28 | facilities. |
29 | Section 3. This act shall take effect immediately. |
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