PRINTER'S NO.  110

  

THE GENERAL ASSEMBLY OF PENNSYLVANIA

  

HOUSE BILL

 

No.

65

Session of

2011

  

  

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

  

  

REFERRED TO COMMITTEE ON GAMING OVERSIGHT, JANUARY 24, 2011  

  

  

  

AN ACT

  

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Amending Title 4 (Amusements) of the Pennsylvania Consolidated

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Statutes, providing for revocation and auction of slot

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machine licenses; and further providing for Category 2 slot

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machine license and for number of slot machine licenses.

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The General Assembly of the Commonwealth of Pennsylvania

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hereby enacts as follows:

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Section 1.  Title 4 of the Pennsylvania Consolidated Statutes

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is amended by adding a section to read:

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§ 1209.1.  Revocation and auction of slot machine license.

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(a)  General rule.--

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(1)  Within 30 days after the revocation of a slot

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machine license, the board shall initiate a public auction of

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the slot machine license for a fee that achieves the highest

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prospective total revenue to the Commonwealth, and otherwise

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serves the interests of the citizens of Pennsylvania. The

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awarding of the slot machine license shall be conditional on

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the successful bidder's ability to satisfy the qualifications

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as provided in this part and board regulations. The auction

 


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shall be conducted in such a manner as to maximize the price

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for each slot machine license. In no case may a Category 1

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slot machine license be sold for a fee lower than

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$66,500,000. In no case may a Category 2 slot machine license

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be sold for a fee lower than $66,500,000. In no case may a

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Category 3 slot machine license be sold for a fee lower than

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$12,500,000.

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(2)  The board shall adopt procedures and regulations to

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facilitate the conduct of the public auction in such a manner

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as to maximize the price for each slot machine license.

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(b)  Bidding procedures.--The open and competitive bidding

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process shall adhere to the following procedures:

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(1)  The board shall make applications for the slot

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machine license available to applicants pursuant to section

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1309 (relating to slot machine license application) and allow

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a reasonable time for applicants to submit applications to

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the board.

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(2)  During the filing period of slot machine license

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applications, the board shall retain the services of an

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investment banking firm to assist the board in conducting the

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open and competitive bidding process.

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(3)  A bidder must submit a definitive, noncontingent

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offer to purchase the slot machine license. The binding

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proposal shall provide the following:

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(i)  The consideration to be paid by the prospective

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purchaser.

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(ii)  Identification of all sources of external

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financing involved in the transaction and submission of

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all relevant commitment letters and other evidence of

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financing.

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(iii)  Identification of the proposed location of the

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new licensed facility.

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(iv)  Details of agreements with the municipality

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where the licensed facility is to be located, including:

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(A)  Evidence of municipal approval to the

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applicant for the licensed facility.

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(B)  Background and status of any discussions and

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agreements with municipalities regarding the

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construction of a licensed facility.

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(v)  A list of any regulatory, corporate or other

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approvals required to consummate a transaction.

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(vi)  Information responsive to any other request for

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information made by the board or the investment banker.

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(vii)  A discussion of the proposed ownership

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structure, including any other equity participants in the

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binding proposal.

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(viii)  A business plan for the proposed licensed

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facility, including:

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(A)  General statement of financial viability.

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(B)  Proposed corporate involvement in charitable

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activity.

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(C)  Revenue sharing with other communities.

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(x)  Projected financial statements through 2011.

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(xi)  Date by which the prospective purchaser will

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commit to commence gaming operations at the licensed

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facility.

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(xii)  A date until which the prospective purchaser

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agrees to keep such binding proposal open and

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irrevocable.

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(4)  After receiving all of the bid proposals, the board

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shall open all of the proposals in a public forum and

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disclose the prospective owners' names, venture partners, if

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any, and in the case of applicants for owners' licenses, the

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locations of the proposed development sites.

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(5)  No later than six business days following the

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opening of the binding proposals, the investment banker shall

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deliver to the board a summary analysis of each binding

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proposal as such has been refined and clarified by the

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prospective owners.

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(6)  The board shall evaluate the proposals within a

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reasonable time and select no more than three final

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applicants to participate in an auction.

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(7)  By agreeing to participate in the auction or by

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making a presentation to the board if so requested, each

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competing bidder is agreeing that a binding proposal, as

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refined and clarified, shall remain open and irrevocable

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until the date indicated by such prospective purchaser in

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such proposal. The date indicated shall in no event be less

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than 30 days following the auction.

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(8)  After the auction and following the presentations,

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the board shall identify a competing bidder as the leading

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proposal for the auction.

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(9)  Upon selection of a winning bid, the board shall

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evaluate the winning bid within a reasonable period of time

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for license suitability in accordance with all applicable

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statutory and regulatory criteria.

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(10)  If the winning bidder is unable or otherwise fails

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to consummate the transaction, including if the board

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determines that the winning bidder does not satisfy the

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suitability requirements pursuant to this part, the board

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may, on the same criteria, select from the remaining bidders.

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(c)  Collusion among bidders.--Collusion among bidders is

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unlawful. Any contract or conspiracy which unreasonably results

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in underbidding is unlawful. When any person has reason to

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believe collusion or other anticompetitive practices have

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occurred among any bidders, a notice of the relevant facts shall

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be transmitted to the Attorney General, who shall investigate

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the reports. A bidder who violates this section shall be

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penalized pursuant to section 1518(b)(ii) (relating to

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prohibited acts; penalties).

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(d)  Proceeds.--The proceeds of the sale or auction of the

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slot machine license shall be deposited pursuant to section 1209

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(relating to slot machine license fee).

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(e)  Definition.--As used in this section, "revocation" means

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a decision by the board to revoke a slot machine license that is

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final, binding, nonappealable and is not subject to a pending

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legal challenge.

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Section 2.  Sections 1304(b) and 1307 of Title 4 are amended

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to read:

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§ 1304.  Category 2 slot machine license.

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* * *

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(b)  Location.--

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(1)  [Two] (i)  Subject to the provisions of paragraph

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(1.1), two Category 2 licensed facilities and no more

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[shall] may be located by the board within a city of the

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first class, and one Category 2 licensed facility and no

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more [shall] may be located by the board within a city of

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the second class.

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(ii)  No Category 2 licensed facility located by the

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board within a city of the first class shall be within

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ten linear miles of a Category 1 licensed facility

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regardless of the municipality where the Category 1

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licensed facility is located. Except for any Category 2

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licensed facility located by the board within a city of

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the first class or a city of the second class, no

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Category 2 licensed facility shall be located within 30

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linear miles of any Category 1 licensed facility that has

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conducted over 200 racing days per year for the two

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calendar years immediately preceding the effective date

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of this part and not within 20 linear miles of any other

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Category 1 licensed facility. Except for any Category 2

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licensed facility located by the board within a city of

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the first class, no Category 2 licensed facility shall be

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located within 20 linear miles of another Category 2

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licensed facility.

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(1.1)  In the event that a license for a Category 2

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licensed facility to be located within a city of the first

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class, which license was issued prior to the effective date

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of this paragraph, is revoked by the board prior to

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commencement of operations of the Category 2 licensed

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facility, then the board shall reissue the revoked Category 2

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slot machine license, pursuant to section 1209.1 (relating to

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revocation and action of slot machine license) to another

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applicant located anywhere in this Commonwealth for a

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Category 2 licensed facility, provided that:

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(i)  no more than two Category 2 licensed facilities

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may be located within a city of the first class;

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(ii)  no more than one Category 2 licensed facility

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may be located in a city of the second class; and

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(iii)  the provisions of paragraph (1)(ii) are

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satisfied.

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(2)  Within five days of approving a license for an

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applicant with a proposed licensed facility consisting of

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land designated a subzone, an expansion subzone or an

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improvement subzone under the Keystone Opportunity Zone,

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Keystone Opportunity Expansion Zone and Keystone Opportunity

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Improvement Zone Act for a slot machine license under this

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section, the board shall notify the Department of Community

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and Economic Development. The notice shall include a

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description of the land of the proposed licensed facility

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which is designated a subzone, an expansion subzone or an

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improvement subzone. Within five days of receiving the notice

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required by this paragraph, the Secretary of Community and

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Economic Development shall decertify the land of the proposed

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licensed facility as being a subzone, an expansion subzone or

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an improvement subzone. Upon decertification in accordance

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with this paragraph and notwithstanding Chapter 3 of the

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Keystone Opportunity Zone, Keystone Opportunity Expansion

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Zone and Keystone Opportunity Improvement Zone Act, a

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political subdivision may amend the ordinance, resolution or

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other required action which granted the exemptions,

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deductions, abatements or credits required by the Keystone

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Opportunity Zone, Keystone Opportunity Expansion Zone and

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Keystone Opportunity Improvement Zone Act to repeal the

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exemptions, deductions, abatements or credits for the land

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decertified.

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(3)  Notwithstanding any other provision of law, the

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governing body of a city of the first class shall not exempt

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from real property taxation or provide any real property tax

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abatement under the act of December 1, 1977 (P.L.237, No.76),

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known as the Local Economic Revitalization Tax Assistance

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Act, to a Category 2 licensed facility located within the

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city, or any improvements to such facility, unless the owner

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of the licensed facility enters into or has entered into a

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tax settlement agreement or payment in lieu of taxes

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agreement with the city, including any amendments,

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supplements or modifications of such agreements.

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§ 1307.  Number of slot machine licenses.

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The board may license no more than seven Category 1 licensed

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facilities and no more than five Category 2 licensed facilities,

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as it may deem appropriate, as long as [two, and not more ,] not

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more than two Category 2 licensed facilities are located by the

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board within the city of the first class and that [one, and not

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more,] not more than one Category 2 licensed facility is located

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by the board within the city of the second class, except in the

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case of license revocation the provisions of section 1304(b)

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(1.1) (relating to Category 2 lot machine license) apply. The

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board may at its discretion increase the total number of

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Category 2 licensed facilities permitted to be licensed by the

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board by an amount not to exceed the total number of Category 1

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licenses not applied for within five years following the

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effective date of this part. Except as permitted by section 1328

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(relating to change in ownership or control of slot machine

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licensee), any Category 1 license may be reissued by the board

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at its discretion as a Category 2 license if an application for

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issuance of such license has not been made to the board. The

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board may license no more than three Category 3 Licensed

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facilities.

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Section 3.  This act shall take effect immediately.

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