PRINTER'S NO. 4104
THE GENERAL ASSEMBLY OF PENNSYLVANIA
HOUSE BILL
No.
2427
Session of
2015
INTRODUCED BY ADOLPH, OCTOBER 24, 2016
REFERRED TO COMMITTEE ON GAMING OVERSIGHT, OCTOBER 24, 2016
AN ACT
Amending Title 4 (Amusements) of the Pennsylvania Consolidated
Statutes, in Pennsylvania Gaming Control Board, further
providing for slot machine license fee and for specific
authority to suspend slot machine license; in licensees,
further providing for change in ownership or control of slot
machine licensee; in table games, further providing for
condition of continued operation and for table game
authorization fee; and, in revenues, further providing for
establishment of State Gaming Fund and net slot machine
revenue distribution.
The General Assembly of the Commonwealth of Pennsylvania
hereby enacts as follows:
Section 1. Section 1209 of Title 4 of the Pennsylvania
Consolidated Statutes is amended to read:
ยง 1209. Slot machine license fee.
(a) Imposition.--Except as provided for a Category 3
licensed gaming entity under section 1305 (relating to Category
3 slot machine license) and subject to the requirements of this
section[, at the]:
(1) At the time of license issuance the board shall
impose [a one-time] an initial slot machine license fee to be
paid by each successful applicant for a conditional Category
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1, a Category 1 or a Category 2 license in the amount of
$50,000,000 [and deposited in the State Gaming Fund. No fee
shall be imposed by the board for a Category 1 license if the
applicant has paid a $50,000,000 fee for a conditional
Category 1 license].
(2) Each year after the time of license issuance the
board shall impose an annual slot machine license fee to be
paid by each recipient of a conditional Category 1, a
Category 1 or a Category 2 license in the amount of
$10,000,000.
(b) Term.--
(1) A slot machine license, after payment of the [fee]
initial slot machine license fee under subsection (a)(1) and
the annual slot machine license fee under subsection (a)(2),
shall be in effect unless suspended, revoked or not renewed
by the board upon good cause consistent with the license
requirements as provided for in this part. Slot machine
licensees shall be required to update the information in
their initial applications annually, and the license of a
licensee in good standing shall be renewed every three years.
(2) Nothing in this subsection shall relieve a licensee
of the affirmative duty to notify the board of any changes
relating to the status of its license or to any other
information contained in the application materials on file
with the board. [As to the renewal of a license, except as
required in subsection (f)(3), no additional license fee
pursuant to subsection (a) shall be required.]
(c) Credit against tax for slot machine licensees.--
(1) If the rate of the tax imposed by section 1403
(relating to establishment of State Gaming Fund and net slot
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machine revenue distribution) is increased at any time during
the term of ten years following the initial issuance of the
slot machine license, the slot machine licensee shall be
entitled to a credit against subsequent payment of the tax
equal to the difference between the tax calculated at the
rate when the license was issued and the tax calculated at
the increased rate. This credit shall be applied on a dollar-
for-dollar basis as and when the tax is payable as set forth
in section 1403 but shall not extend beyond the ten-year
period following the initial issuance of the license. The
aggregate amount of all credits provided shall not exceed the
amount of the [licensing] initial slot machine license fee
paid by the licensee under subsection (a)(1).
(2) The department shall enter into a contract with each
slot machine licensee explicitly setting forth the terms and
conditions of this credit and which also specifically
incorporates the requirements of subsection (f).
(d) Deposit of slot machine license [fee] fees.--The total
amount of all initial slot machine license fees and annual slot
machine license fees imposed and collected by the board under
this section shall be deposited in the State Gaming Fund.
(e) Change of ownership or control of a license.--In the
event that the ownership or control of a slot machine licensee
or its affiliate, intermediary, subsidiary or holding company is
changed as described in section 1328 (relating to change in
ownership or control of slot machine licensee), the new owner
shall be entitled to the full remaining amount of the credit set
forth in subsection (c) or the return of the initial slot
machine license fee in accordance with subsection (f) as if the
new owner or controlling interest was the original licensee.
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(f) Return of initial slot machine license fee.--
(1) The entire [one-time] initial slot machine license
fee [of $50,000,000] under subsection (a)(1) for each
Category 1 and Category 2 slot machine license shall be
returned to each licensee in the event section 1201 (relating
to Pennsylvania Gaming Control Board established), 1202
(relating to general and specific powers) or 1307 (relating
to number of slot machine licenses) is amended or otherwise
altered by an act of the General Assembly, within five years
following the date established by the board as the deadline
for the initial submission of Category 1 and Category 2 slot
machine license applications, to change:
(i) the composition of the board;
(ii) the number or voting powers of members of the
board;
(iii) the manner in which members are nominated or
appointed to the board;
(iv) the length of term for which each member
serves;
(v) the general jurisdiction of the board in a
manner that impairs or otherwise reduces the board's
licensing authority; or
(vi) section 1307 to increase the statutory maximum
number of permissible Category 1 or Category 2 licensed
facilities.
(2) In the event that the General Assembly acts in the
manner described in paragraph (1):
(i) In the sixth year following the date established
by the board as the deadline for the initial submission
of Category 1 and Category 2 slot machine license
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applications, a Category 1 and Category 2 slot machine
licensee shall be entitled to a partial return of the
[one-time] initial slot machine license fee in the amount
of $41,666,667.
(ii) In the seventh year, each Category 1 and
Category 2 slot machine licensee shall be entitled to a
partial return of the [one-time] initial slot machine
license fee in the amount of $33,333,334.
(iii) In the eighth year, each Category 1 and
Category 2 slot machine licensee shall be entitled to a
partial return of the [one-time] initial slot machine
license fee in the amount of $25,000,000.
(iv) In the ninth year, each Category 1 and Category
2 slot machine licensee shall be entitled to a partial
return of the [one-time] initial slot machine license fee
in the amount of $16,666,668.
(v) In the tenth year, each Category 1 and Category
2 slot machine licensee shall be entitled to a partial
return of the [one-time] initial machine license fee in
the amount of $8,333,334.
(2.1) In the event that the General Assembly acts in the
manner described in paragraph (1) after the expiration of ten
years, Category 1 and Category 2 slot machine licensees shall
not be entitled to a return of any portion of the [one-time]
initial slot machine license fee. Notwithstanding the
foregoing, no slot machine licensee shall be entitled to the
return of any portion of the initial slot machine license fee
as a result of any act of the General Assembly insofar as it
implements a recommendation made by the board pursuant to a
qualified majority vote. In the event a full or partial
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return of the initial slot machine license fee imposed
pursuant to subsection [(a)] (a)(1) becomes due pursuant to
this subsection, the amount to be returned to any slot
machine licensee shall be reduced on a dollar-for-dollar
basis by the total accumulated tax credits granted to such
licensee pursuant to subsection (c). In no event shall the
total amount of the initial slot machine license fee returned
to a Category 1 or Category 2 licensee, combined with the
total tax credits granted, exceed the amounts set forth in
this subsection for any licensee. The total or partial return
of the initial slot machine license fee shall extinguish a
licensee's right to claim any further tax credits pursuant to
subsection (c) and to make any future claim for the return of
the initial slot machine license fee.
(3) Within ten days following a determination that a
slot machine licensee is entitled to the return of any
portion of the initial slot machine license fee paid by the
slot machine licensee based on the provisions of this section
or based on the contract executed by the slot machine
licensee and the department under subsection (c), the board
shall immediately assess a one-time slot machine license
renewal fee on the slot machine licensee in an amount equal
to the amount of the fee returned to the slot machine
licensee. The renewal fee shall be paid by the slot machine
licensee within two business days following the return of the
initial slot machine license fee. The one-time slot machine
license renewal fee authorized under this paragraph shall be
in addition to the annual slot machine license fee imposed
under subsection (a)(2).
Section 2. Section 1214 of Title 4 is amended by adding a
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subsection to read:
ยง 1214. Specific authority to suspend slot machine license.
* * *
(c.1) Failure to pay annual slot machine license fee.--If a
slot machine licensee fails to pay the annual slot machine
license fee imposed under section 1209(a)(2) (relating to slot
machine license fee), the board shall suspend the slot machine
license.
* * *
Section 3. Sections 1328, 13A24 and 13A61(d) of Title 4 are
amended to read:
ยง 1328. Change in ownership or control of slot machine
licensee.
(a) Notification and approval.--
(1) A slot machine licensee shall notify the board
immediately upon becoming aware of any proposed or
contemplated change of ownership of the slot machine licensee
by a person or group of persons acting in concert which
involves any of the following:
(i) More than 5% of a slot machine licensee's
securities or other ownership interests.
(ii) More than 5% of the securities or other
ownership interests of a corporation or other form of
business entity that owns directly or indirectly at least
20% of the voting or other securities or other ownership
interests of the licensee.
(iii) The sale other than in the ordinary course of
business of a licensee's assets.
(iv) Any other transaction or occurrence deemed by
the board to be relevant to license qualifications.
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(2) Notwithstanding the provisions of paragraph (1), a
slot machine licensee shall not be required to notify the
board of any acquisition by an institutional investor
pursuant to paragraph (1)(i) or (ii) if the institutional
investor holds less than 10% of the securities or other
ownership interests referred to in paragraph (1)(i) or (ii),
the securities or interests are publicly traded securities
and its holdings of such securities were purchased for
investment purposes only and the institutional investor files
with the board a certified statement to the effect that it
has no intention of influencing or affecting, directly or
indirectly, the affairs of the licensee, provided, however,
that it shall be permitted to vote on matters put to the vote
of the outstanding security holders. Notice to the board and
board approval shall be required prior to completion of any
proposed or contemplated change of ownership of a slot
machine licensee that meets the criteria of this section.
(b) Qualification of purchaser of slot machine licensee;
change of control.--The purchaser of the assets, other than in
the ordinary course of business, of any slot machine licensee
shall independently qualify for a license in accordance with
this part and shall pay the initial slot license fee and annual
slot machine license fee as required by section 1209 (relating
to slot machine license fee). A change in control of any slot
machine licensee shall require that the slot machine licensee
independently qualify for a license in accordance with this
part, and the slot machine licensee shall pay [a new] the
initial slot machine license fee and annual slot machine license
fee as required by section 1209, except as otherwise required by
the board pursuant to this section. The [new] initial slot
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machine license fee shall be paid upon the assignment and actual
change of control or ownership of the slot machine license.
(c) Change in control defined.--For purposes of this
section, a change in control of a slot machine licensee shall
mean the acquisition by a person or group of persons acting in
concert of more than 20% of a slot machine licensee's securities
or other ownership interests, with the exception of any
ownership interest of the person that existed at the time of
initial licensing and payment of the initial slot machine
license fee under section 1209(a)(1), or more than 20% of the
securities or other ownership interests of a corporation or
other form of business entity which owns directly or indirectly
at least 20% of the voting or other securities or other
ownership interests of the licensee.
(d) Fee reduction.--The board may in its discretion
eliminate the need for qualification and/or proportionately
reduce, but not eliminate, the [new] initial slot machine
license fee otherwise required pursuant to this section in
connection with a change of control of a licensee, depending
upon the type of transaction, the relevant ownership interests
and changes thereto resulting from the transaction and other
considerations deemed relevant by the board.
(e) License revocation.--Failure to comply with this section
may cause the license issued under this part to be revoked or
suspended by the board unless the purchase of the assets or the
change in control that meets the criteria of this section has
been independently qualified in advance by the board and any
required slot machine license fee has been paid.
ยง 13A24. Condition of continued operation.
As a condition of continued operation, a certificate holder
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shall pay all annual slot machine license fees imposed under
section 1209(a)(2) (relating to slot machine license fee) and
agree to maintain all books, records and documents pertaining to
table games in a manner and location within this Commonwealth as
approved by the board. All books, records and documents related
to table games shall:
(1) be segregated by separate accounts within the slot
machine licensee's books, records and documents, except for
any books, records or documents that are common to both slot
machine and table game operations;
(2) be immediately available for inspection upon request
of the board, the bureau, the department, the Pennsylvania
State Police or the Attorney General, or agents thereof,
during all hours of operation of the licensed facility in
accordance with regulations promulgated by the board; and
(3) be maintained for a period as the board, by
regulation, may require.
ยง 13A61. Table game authorization fee.
* * *
(d) Suspension of certificate.--The board shall suspend the
table game operation certificate if the certificate holder fails
to pay:
(1) the total authorization fee and the penalty prior to
the expiration of an extension period granted under
subsection (c); or
(2) the annual slot machine license fee imposed under
section 1209(a)(2) (relating to slot machine license fee).
The suspension shall remain in effect until final payment is
made.
* * *
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Section 4. Section 1403 of Title 4 is reenacted and amended
to read:
ยง 1403. Establishment of State Gaming Fund and net slot machine
revenue distribution.
(a) Fund established.--There is hereby established the State
Gaming Fund within the State Treasury.
(b) Slot machine tax.--The department shall determine and
each slot machine licensee shall pay, in addition to the annual
slot machine license fee under section 1209(a)(2) (relating to
slot machine license fee), a daily tax of 34% from its daily
gross terminal revenue from the slot machines in operation at
its facility [and a local share assessment as provided in
subsection (c)]. All funds owed to the Commonwealth, a county or
a municipality under this section shall be held in trust by the
licensed gaming entity for the Commonwealth, the county and the
municipality until the funds are paid or transferred to the
fund. Unless otherwise agreed to by the board, a licensed gaming
entity shall establish a separate bank account to maintain
gross terminal revenue until such time as the funds are paid or
transferred under this section. Moneys in the fund are hereby
appropriated to the department on a continuing basis for the
purposes set forth in subsection (c).
(c) Transfers and distributions.--The department shall:
(1) Transfer the slot machine tax [and assessment]
imposed in subsection (b) and the annual slot machine license
fee imposed under section 1209(a)(2) to the fund.
(2) From the [local share assessment established in
subsection (b)] fund, make quarterly distributions among the
counties hosting a licensed facility in accordance with the
following schedule:
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(i) If the licensed facility is a Category 1
licensed facility that is located at a harness racetrack
and the county, including a home rule county, in which
the licensed facility is located is:
(A) A county of the first class: [4%] 2% of the
gross terminal revenue to the county hosting the
licensed facility from each such licensed facility
and $10,000,000 annually. Notwithstanding any other
provision to the contrary, funds from licensed gaming
entities located within a county of the first class
shall not be distributed outside of a county of the
first class.
(B) A county of the second class: 2% of the
gross terminal revenue to the county hosting the
licensed facility from each such licensed facility.
(C) A county of the second class A: 1% of the
gross terminal revenue to the county hosting the
licensed facility from each such licensed facility.
An additional 1% of the gross terminal revenue to the
county hosting the licensed facility from each such
licensed facility for the purpose of municipal grants
within the county in which the licensee is located.
(D) (I) A county of the third class: Except as
provided in subclause (II), 2% of the gross
terminal revenue from each such licensed facility
shall be deposited into a restricted receipts
account to be established in the Commonwealth
Financing Authority to be used exclusively for
grants for projects in the public interest to
municipalities within the county where the
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licensed facility is located.
(I.1) Priority shall be given to multiyear
projects approved or awarded by the Department of
Community and Economic Development under
subclause (I) on or before the effective date of
this subclause.
(II) If a licensed facility is located in
one of two counties of the third class where a
city of the third class is located in both
counties of the third class, the county in which
the licensed facility is located shall receive
1.2% of the gross terminal revenue to be
distributed as follows: 20% to the host city,
30% to the host county and 50% to the host county
for the purpose of making municipal grants within
the county, with priority given to municipalities
contiguous to the host city. The county of the
third class, which includes a city of the third
class that is located in two counties of the
third class and is not the host county for the
licensed facility, shall receive .8% of the gross
terminal revenue to be distributed as follows:
60% to a nonhost city of the third class located
solely in the nonhost county in which the host
city of the third class is also located or 60% to
the nonhost city of the third class located both
in the host and nonhost counties of the third
class, 35% to the nonhost county and 5% to the
nonhost county for the purpose of making
municipal grants within the county.
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(E) A county of the fourth class: 2% of the
gross terminal revenue from each such licensed
facility shall be distributed as follows:
(I) The department shall make distributions
directly to each municipality within the county,
except the host municipality, by using a formula
equal to the sum of $25,000 plus $10 per resident
of the municipality using the most recent
population figures provided by the Department of
Community and Economic Development, provided,
however, that the amount so distributed to any
municipality shall not exceed 50% of its total
budget for fiscal year 2009, adjusted for
inflation in subsequent fiscal years by an amount
not to exceed an annual cost-of-living adjustment
calculated by applying any upward percentage
change in the Consumer Price Index immediately
prior to the date the adjustment is due to take
effect. Distributions to a municipality in
accordance with this subclause shall be deposited
into a special fund which shall be established by
the municipality. The governing body of the
municipality shall have the right to draw upon
the special fund for any lawful purpose provided
that the municipality identifies the fund as the
source of the expenditure. Each municipality
shall annually submit a report to the Department
of Community and Economic Development detailing
the amount and purpose of each expenditure made
from the special fund during the prior fiscal
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year.
(II) Any funds not distributed under
subclause (I) shall be deposited into a
restricted receipts account established in the
Department of Community and Economic Development
to be used exclusively for grants to the county,
to economic development authorities or
redevelopment authorities within the county for
grants for economic development projects,
infrastructure projects, job training, community
improvement projects, other projects in the
public interest, and necessary and reasonable
administrative costs. Notwithstanding the
provisions of the act of February 9, 1999 (P.L.1,
No.1), known as the Capital Facilities Debt
Enabling Act, grants made under this clause may
be utilized as local matching funds for other
grants or loans from the Commonwealth.
(F) Counties of the fifth through eighth
classes:
(I) Except as set forth in subclause (II),
2% of the gross terminal revenue from each such
licensed facility shall be deposited into a
restricted account established in the Department
of Community and Economic Development to be used
exclusively for grants to the county.
(II) If the licensed facility is located in
a second class township in a county of the fifth
class, 2% of the gross terminal revenue from the
licensed facility shall be distributed as
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follows:
(a) 1% shall be deposited into a
restricted receipts account to be established
in the Commonwealth Financing Authority to be
used exclusively for grants for projects in
the public interest to municipalities within
the county where the licensed facility is
located.
(b) 1% shall be distributed to the county
for projects in the public interest in the
county.
(G) Any county not specifically enumerated in
clauses (A) through (F), 2% of the gross terminal
revenue to the county hosting the licensed facility
from each such licensed facility.
(ii) If the licensed facility is a Category 1
licensed facility and is located at a thoroughbred
racetrack and the county in which the licensed facility
is located is:
(A) A county of the first class: [4%] 2% of the
gross terminal revenue to the county hosting the
licensed facility from each such licensed facility
and $10,000,000 annually. Notwithstanding any other
provision to the contrary, funds from licensed gaming
entities located within the county of the first class
shall not be distributed outside of a county of the
first class.
(B) A county of the second class: 2% of the
gross terminal revenue to the county hosting the
licensed facility from each such licensed facility.
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(C) A county of the second class A: 1% of the
gross terminal revenue to the county hosting the
licensed facility from each such licensed facility.
An additional 1% of the gross terminal revenue to the
county hosting the licensed facility from each such
licensed facility for the purpose of municipal grants
within the county in which the licensee is located.
(D) A county of the third class: 1% of the
gross terminal revenue to the county hosting the
licensed facility from each such licensed facility.
An additional 1% of the gross terminal revenue to the
county hosting the licensed facility from each such
licensed facility for the purpose of municipal grants
within the county in which the licensee is located.
(E) A county of the fourth class: 2% of the
gross terminal revenue from each such licensed
facility shall be deposited into a restricted account
established in the Department of Community and
Economic Development to be used exclusively for
grants to the county, to economic development
authorities or redevelopment authorities within the
county for grants for economic development projects,
community improvement projects, job training, other
projects in the public interest and reasonable
administrative costs. Notwithstanding the Capital
Facilities Debt Enabling Act, grants made under this
clause may be utilized as local matching funds for
other grants or loans from the Commonwealth.
(F) Counties of the fifth through eighth
classes: 2% of the gross terminal revenue from each
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such licensed facility shall be deposited into a
restricted account established in the Department of
Community and Economic Development to be used
exclusively for grants to the county.
(G) Any county not specifically enumerated in
clauses (A) through (F), 2% of the gross terminal
revenue to the county hosting the licensed facility
from each such licensed facility.
(iii) If the facility is a Category 2 licensed
facility and if the county in which the licensed facility
is located is:
(A) A county of the first class: [4%] 2% of the
gross terminal revenue to the county hosting the
licensed facility from each such licensed facility
and $10,000,000 annually. Notwithstanding any other
provision to the contrary, funds from licensed gaming
entities located within a county of the first class
shall not be distributed outside of a county of the
first class. The first $5,000,000 of the total amount
distributed annually to the county of the first class
shall be distributed to the Philadelphia School
District.
(B) A county of the second class: 2% of the
gross terminal revenue to the county hosting the
licensed facility from each such licensed facility.
(C) A county of the second class A: 1% of the
gross terminal revenue to the county hosting the
licensed facility from each such licensed facility.
An additional 1% of the gross terminal revenue to the
county hosting the licensed facility from each such
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licensed facility for the purpose of municipal grants
within the county in which the licensee is located.
(D) A county of the third class: 1% of the
gross terminal revenue to the county hosting the
licensed facility from each such licensed facility.
An additional 1% of the gross terminal revenue to the
county hosting the licensed facility from each such
licensed facility for the purpose of municipal grants
within the county in which the licensee is located.
(D.1) If a licensed facility is located in one
of two counties of the third class where a city of
the third class is located in both counties of the
third class, the county in which the licensed
facility is located shall receive 1.2% of the gross
terminal revenue to be distributed as follows: 20%
to the host city, 30% to the host county and 50% to
the host county for the purpose of making municipal
grants within the county, with priority given to
municipalities contiguous to the host city. The
county of the third class, which includes a city of
the third class that is located in two counties of
the third class and is not the host county for the
licensed facility, shall receive .8% of the gross
terminal revenue to be distributed as follows: 60%
to a nonhost city of the third class located solely
in the nonhost county in which the host city of the
third class is also located or 60% to the nonhost
city of the third class located both in the host and
nonhost counties of the third class, 35% to the
nonhost county and 5% to the nonhost county for the
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purpose of making municipal grants within the county.
(E) A county of the fourth class: 2% of the
gross terminal revenue from each such licensed
facility shall be deposited into a restricted account
established in the Department of Community and
Economic Development to be used exclusively for
grants to the county, to economic development
authorities or redevelopment authorities within the
county for grants for economic development projects,
community improvement projects, job training, other
projects in the public interest and reasonable
administrative costs. Notwithstanding the Capital
Facilities Debt Enabling Act, grants made under this
clause may be utilized as local matching funds for
other grants or loans from the Commonwealth.
(F) Counties of the fifth class: 2% of the
gross terminal revenue from each such licensed
facility shall be deposited and distributed as
follows:
(I) One percent to be distributed as
follows:
(a) Beginning in 2010, the sum of
$2,400,000 annually for a period of 20 years
to the county for purposes of funding debt
service related to the construction of a
community college campus located within the
county.
(b) Any funds not distributed under
subclause (a) shall be deposited into a
restricted receipts account to be established
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in the Commonwealth Financing Authority to be
used exclusively for grants within the county
for economic development projects, road
projects located within a 20-mile radius of
the licensed facility and located within the
county, community improvement projects and
other projects in the public interest within
the county. The amount under this subclause
includes reasonable administrative costs.
(II) One percent shall be deposited into a
restricted receipts account to be established in
the Commonwealth Financing Authority to be used
exclusively for grants within contiguous counties
for economic development projects, community
improvement projects and other projects in the
public interest within contiguous counties. The
amount under this subclause includes reasonable
administrative costs. A contiguous county that
hosts a Category 1 licensed facility shall be
ineligible to receive grants under this
subclause.
(II.1) Priority shall be given to multiyear
projects approved or awarded by the Department of
Community and Economic Development under
subclause (I)(b) or (II) on or before the
effective date of this subclause.
(III) Fifty percent of any revenue required
to be transferred under paragraph (3)(v) shall be
deposited into the restricted receipts account
established under subclause (I)(b), and 50% shall
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be deposited into the restricted receipts account
established under subclause (II). Notwithstanding
the Capital Facilities Debt Enabling Act, grants
made under this clause may be utilized as local
matching funds for other grants or loans from the
Commonwealth.
(G) Any county not specifically enumerated in
clauses (A) through (F), 2% of the gross terminal
revenue to the county hosting the licensed facility
from each such licensed facility.
(iv) (A) Except as provided in clause (B) or (C),
if the facility is a Category 3 licensed facility, 2%
of the gross terminal revenue from the licensed
facility shall be deposited into a restricted
receipts account established in the Department of
Community and Economic Development to be used
exclusively for grants to the county, to economic
development authorities or redevelopment authorities
within the county for grants for economic development
projects, community improvement projects and other
projects in the public interest.
(B) If the facility is a Category 3 licensed
facility located in a county of the second class A,
2% of the gross terminal revenue from the licensed
facility shall be deposited into a restricted
receipts account to be established in the
Commonwealth Financing Authority to be used
exclusively for grants or guarantees for projects in
the host county that qualify under 64 Pa.C.S. ยงยง 1551
(relating to Business in Our Sites Program), 1556
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(relating to Tax Increment Financing Guarantee
Program) and 1558 (relating to Water Supply and
Wastewater Infrastructure Program).
(C) If the facility is a Category 3 licensed
facility located in a county of the fifth class that
is contiguous to a county of the seventh class, 2% of
the gross terminal revenue from the licensed facility
shall be deposited into a restricted receipts account
to be established in the Commonwealth Financing
Authority to be used exclusively for grants within
the county for economic development projects,
infrastructure projects, community improvement
projects and other projects in the public interest
within the county and for infrastructure projects
within a 20-mile radius of the licensed facility in a
contiguous county of the seventh class.
(v) Unless otherwise specified, for the purposes of
this paragraph money designated for municipal grants
within a county, other than a county of the first class,
in which a licensed facility is located shall be used to
fund grants to the municipality in which the licensed
facility is located, to the county in which the licensed
facility is located and to the municipalities which are
contiguous to the municipality in which the licensed
facility is located and which are located within the
county in which the licensed facility is located. Grants
shall be administered by the county through its economic
development or redevelopment authority in which the
licensed facility is located. Grants shall be used to
fund the costs of human services, infrastructure
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improvements, facilities, emergency services, health and
public safety expenses associated with licensed facility
operations. If at the end of a fiscal year uncommitted
funds exist, the county shall pay to the economic
development or redevelopment authority of the county in
which the licensed facility is located the uncommitted
funds.
(vi) If the licensed facility is located in more
than one county, the amount available shall be
distributed on a pro rata basis determined by the
percentage of acreage located in each county to the total
acreage of all counties occupied by the licensed
facility.
(vii) The distributions provided in this paragraph
shall be based upon county classifications in effect on
the effective date of this section. Any reclassification
of counties as a result of a Federal decennial census or
of a State statute shall not apply to this subparagraph.
(viii) If any provision of this paragraph is found
to be unenforceable for any reason, the distribution
provided for in the unenforceable provision shall be made
to the county in which the licensed facility is located
for the purposes of grants to municipalities in that
county, including municipal grants as specified in
subparagraph (v).
(ix) Nothing in this paragraph shall prevent any of
the above counties which directly receive a distribution
under this section from entering into intergovernmental
cooperative agreements with other jurisdictions for
sharing this money.
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(3) From the [local share assessment established in
subsection (b)] fund, make quarterly distributions among the
municipalities, including home rule municipalities, hosting a
licensed facility in accordance with the following schedule:
(i) To a city of the second class hosting a licensed
facility, other than a Category 3 licensed facility, [2%
of the gross terminal revenue or $10,000,000 annually,
whichever is greater, shall be paid by each licensed
gaming entity operating a facility located in that city.
In the event that the revenues generated by the 2% do not
meet the $10,000,000 minimum specified in this
subparagraph, the department shall collect the remainder
of the minimum amount of $10,000,000 from each licensed
gaming entity operating a facility in the city and
deposit that amount in the city treasury] $10,000,000
annually.
(ii) To a city of the second class A hosting a
licensed facility, other than a Category 3 licensed
facility, [2% of the gross terminal revenue or
$10,000,000 annually, whichever is greater, shall be paid
by each licensed entity operating a licensed facility
located in that city,] subject, however, to the budgetary
limitation in this subparagraph. The amount allocated to
the designated municipalities shall not exceed 50% of
their total budget for fiscal year 2003-2004, adjusted
for inflation in subsequent years by an amount not to
exceed an annual cost-of-living adjustment calculated by
applying the percentage change in the Consumer Price
Index immediately prior to the date the adjustment is due
to take effect. Any remaining moneys shall be collected
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by the department from each licensed gaming entity and
distributed in accordance with paragraph (2) based upon
the classification of county where the licensed facility
is located. [In the event that the revenues generated by
the 2% do not meet the $10,000,000 minimum specified in
this subparagraph, the department shall collect the
remainder of the minimum amount of $10,000,000 from each
licensed gaming entity operating a facility in the city,
pay any balance due to the city and transfer any
remainder in accordance with paragraph (2)] $10,000,000
annually.
(iii) To a city of the third class hosting a
licensed facility, other than a Category 3 licensed
facility, [2% of the gross terminal revenue or
$10,000,000 annually, whichever is greater, shall be paid
by each licensed gaming entity operating a licensed
facility located in that city,] subject, however, to the
budgetary limitation in this subparagraph. In the event
that the city has a written agreement with a licensed
gaming entity executed prior to the effective date of
this part, the amount paid under the agreement to the
city shall be applied and credited to the [difference
between 2% of the gross terminal revenue and the]
$10,000,000 owed under this subparagraph [if the 2% of
the gross terminal revenue is less than $10,000,000. If
2% of the gross terminal revenue is greater than the
$10,000,000 required to be paid under this subparagraph,
the credit shall not apply. The amount of gross terminal
revenue required to be paid pursuant to the agreement
shall be deemed to be gross terminal revenue for purposes
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of this subparagraph] $10,000,000 annually. The amount
allocated to the designated municipalities shall not
exceed 50% of their total budget for fiscal year 2003-
2004, adjusted for inflation in subsequent years by an
amount not to exceed an annual cost-of-living adjustment
calculated by applying the percentage change in the
Consumer Price Index immediately prior to the date the
adjustment is due to take effect. Any remaining moneys
shall be collected by the department from each licensed
gaming entity and distributed in accordance with
paragraph (2) based upon the classification of county
where the licensed facility is located. [In the event
that the revenues generated by the 2% do not meet the
$10,000,000 minimum specified in this subparagraph, the
department shall collect the remainder of the minimum
amount of $10,000,000 from each licensed gaming entity
operating a facility, pay any balance due to the city of
the third class and transfer any remainder in accordance
with paragraph (2).]
(iii.1) If a licensed facility is located in a city
of the third class and the city is located in more than
one county of the third class, [2% of the gross terminal
revenue or $10,000,000 annually, whichever is greater,]
$10,000,000 annually shall be distributed as follows:
80% to the host city and 20% to the city of the third
class located solely in a nonhost county in which the
host city of the third class is also located. If a
licensed facility is located in a city of the third class
and that city is located solely in a host county of the
third class in which a nonhost city of the third class is
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also located, [2% of gross terminal revenue or
$10,000,000 annually, whichever is greater,] $10,000,000
annually shall be distributed as follows: 80% to the
host city and 20% to a city of the third class located
both in a nonhost county of the third class and in a host
county of the third class in which the host city of the
third class is located.
(iv) To a township of the first class hosting a licensed
facility, other than a Category 3 licensed facility, [2% of
the gross terminal revenue or $10,000,000 annually, whichever
is greater, shall be paid by each licensed gaming entity
operating a licensed facility located in the township]
$10,000,000 annually , subject, however, to the budgetary
limitation in this subparagraph. The amount allocated to the
designated municipalities shall not exceed 50% of their total
budget for fiscal year 2003-2004, adjusted for inflation in
subsequent years by an amount not to exceed an annual cost-
of-living adjustment calculated by applying the percentage
change in the Consumer Price Index immediately prior to the
date the adjustment is due to take effect. Any remaining
money shall be collected by the department from each licensed
gaming entity and distributed in accordance with paragraph
(2) based upon the classification of county where the
licensed facility is located. [In the event that the revenues
generated by the 2% do not meet the $10,000,000 minimum
specified in this subparagraph, the department shall collect
the remainder of the minimum amount of $10,000,000 from each
licensed gaming entity operating a licensed facility in the
township, pay any balance due to the township and transfer
any remainder in accordance with paragraph (2).]
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(v) To a township of the second class hosting a
licensed facility:
(A) [2% of the gross terminal revenue or]
$10,000,000 annually[, whichever is greater,] shall
be paid by each licensed gaming entity operating a
licensed facility, other than a Category 3 licensed
facility or a licensed facility owning land adjacent
to the licensed facility located in more than one
township of the second class, to the township of the
second class hosting the licensed facility, subject,
however, to the budgetary limitation in this
subparagraph. The amount allocated to the designated
municipalities shall not exceed 50% of their total
budget for fiscal year 2003-2004, adjusted for
inflation in subsequent years by an amount not to
exceed an annual cost-of-living adjustment calculated
by applying the percentage change in the Consumer
Price Index immediately prior to the date the
adjustment is due to take effect. Any remaining money
shall be collected by the department from each
licensed gaming entity and distributed in accordance
with paragraph (2) based upon the classification of
county where the licensed facility is located. [If
revenues generated by the 2% do not meet the
$10,000,000 minimum specified in this subparagraph,
the department shall collect the remainder of the
minimum amount of $10,000,000 from each licensed
gaming entity operating a licensed facility in the
township, pay any balance due to the township and
transfer any remainder in accordance with paragraph
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(2).]
(B) [2% of the gross terminal revenue or]
$10,000,000 annually[, whichever is greater,] less
the amount paid under clause (C), shall be paid by
each licensed gaming entity operating a licensed
facility and owning land adjacent to the licensed
facility located in more than one township of the
second class, other than a Category 3 licensed
facility, to the township of the second class hosting
the licensed facility, subject, however, to the
budgetary limitation in this subparagraph. The amount
allocated to the designated municipalities may not
exceed 50% of their total budget for the fiscal year
2003-2004, adjusted for inflation in subsequent years
by an amount not to exceed an annual cost-of-living
adjustment calculated by applying the percentage
change in the Consumer Price Index immediately prior
to the date the adjustment is due to take effect. Any
remaining money shall be collected by the department
from each licensed gaming entity and distributed in
accordance with paragraph (2) based upon the
classification of the county where the licensed
facility is located. The county commissioners of a
county of the third class in which the licensed
facility is located shall appoint an advisory
committee for the purpose of advising the county as
to the need for municipal grants for health, safety,
transportation and other projects in the public
interest to be comprised of two individuals from the
host municipality, two from contiguous municipalities
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within the county of the third class and one from the
host county. [In the event that the revenues
generated by the 2% do not meet the $10,000,000
minimum specified in this subparagraph, the
department shall collect the remainder of the minimum
amount of $10,000,000 from each licensed gaming
entity operating a licensed facility in the township,
pay any balance due to the township and transfer any
remainder in accordance with paragraph (2).]
(C) $160,000 annually shall be paid [by each
licensed gaming entity operating a licensed facility
and owning land adjacent to the licensed facility
located in more than one township of the second
class, other than a Category 3 licensed facility, to]
if the township of the second class [that] is located
in a county of the fifth class in which the adjacent
land is located, including racetracks, grazing fields
or any other adjoining real property.
(vi) To a borough hosting a licensed facility, other
than a Category 3 licensed facility, [2% of the gross
terminal revenue or $10,000,000 annually, whichever is
greater, shall be paid by each licensed gaming entity
operating a licensed facility located in that borough]
$10,000,000 annually, subject, however, to the budgetary
limitation in this subparagraph. The amount allocated to
the designated municipalities shall not exceed 50% of
their total budget for fiscal year 2003-2004, adjusted
for inflation in subsequent years by an amount not to
exceed an annual cost-of-living adjustment calculated by
applying the percentage change in the Consumer Price
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Index immediately prior to the date the adjustment is due
to take effect. Any remaining money shall be collected by
the department from each licensed gaming entity and
distributed in accordance with paragraph (2) based upon
the classification of county where the licensed facility
is located. [In the event that the revenues generated by
the 2% do not meet the $10,000,000 minimum specified in
this subparagraph, the department shall collect the
remainder of the minimum amount of $10,000,000 from each
licensed gaming entity operating a licensed facility in
the borough, pay any balance due to the borough and
transfer any remainder in accordance with paragraph (2).]
(vii) To an incorporated town hosting a licensed
facility, other than a Category 3 licensed facility, [2%
of the gross terminal revenue or $10,000,000 annually,
whichever is greater, shall be paid by each licensed
entity operating a licensed facility located in the town]
$10,000,000 annually, subject, however, to the budgetary
limitation in this subparagraph. The amount allocated to
the designated municipalities shall not exceed 50% of
their total budget for fiscal year 2003-2004, adjusted
for inflation in subsequent years by an amount not to
exceed an annual cost-of-living adjustment calculated by
applying the percentage change in the Consumer Price
Index immediately prior to the date the adjustment is due
to take effect. Any remaining money shall be collected by
the department from each licensed gaming entity and
distributed in accordance with paragraph (2) based upon
the classification of county where the licensed facility
is located. [In the event that the revenues generated by
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the 2% do not meet the $10,000,000 minimum specified in
this subparagraph, the department shall collect the
remainder of the minimum amount of $10,000,000 from each
licensed gaming entity operating a licensed facility in
the incorporated town, pay any balance due to the town
and transfer any remainder in accordance with paragraph
(2).]
(viii) (A) Except as provided in clause (B) or (C),
to a municipality of any class hosting a Category 3
facility, 2% of the gross terminal revenue from the
Category 3 licensed facility located in the
municipality, subject, however, to the budgetary
limitation in this clause. The amount allocated to
the designated municipalities shall not exceed 50% of
their total budget for fiscal year 2009, adjusted for
inflation in subsequent years by an amount not to
exceed an annual cost-of-living adjustment calculated
by applying the percentage change in the Consumer
Price Index immediately prior to the date the
adjustment is due to take effect. Any remaining money
shall be collected by the department from each
licensed gaming entity and distributed in accordance
with paragraph (2) based upon the classification of
county where the licensed facility is located.
(B) If the municipality hosting a Category 3
licensed facility is a borough located in a county of
the third class and the borough is contiguous to a
city of the third class, 1% of gross terminal revenue
shall be distributed to the host borough and 1% of
gross terminal revenue shall be distributed to the
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city of the third class that is contiguous to the
host borough, subject, however, to the budgetary
limitation in this clause. The amount allocated to
each designated municipality shall not exceed 50% of
its total budget for fiscal year 2009, adjusted for
inflation in subsequent years by an amount not to
exceed an annual cost-of-living adjustment calculated
by applying the percentage increase, if any, in the
Consumer Price Index immediately prior to the date
the adjustment is due to take effect. Any remaining
money shall be collected by the department from each
licensed gaming entity and distributed in accordance
with paragraph (2) based upon the classification of
county where the licensed facility is located.
(C) If the municipality hosting a Category 3
licensed facility is a township of the second class
in a county of the fifth class which is contiguous to
a county of the seventh class, 2% of the gross
terminal revenue from the Category 3 licensed
facility located in the municipality shall be
distributed to the municipality, subject, however, to
the budgetary limitation in this clause. The amount
allocated to the designated municipalities shall not
exceed the lesser of $1,000,000 or 50% of their total
budget for fiscal year 2009, adjusted for inflation
in subsequent years by an amount not to exceed an
annual cost-of-living adjustment calculated by
applying the percentage change in the Consumer Price
Index immediately prior to the date the adjustment is
due to take effect. Any remaining money shall be
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collected by the department from each licensed gaming
entity and distributed in equal amounts to each
municipality contiguous to the host municipality.
However, the amount to be allocated to any contiguous
municipality shall not exceed the lesser of
$1,000,000 or 50% of the municipality's total budget
for fiscal year 2009, adjusted for inflation in
subsequent years by an amount not to exceed an annual
cost-of-living adjustment calculated by applying the
percentage change in the Consumer Price Index
immediately prior to the date the adjustment is due
to take effect. Any money remaining following
distribution to contiguous municipalities shall be
collected by the department and distributed in
accordance with paragraph (2) based upon the
classification of county where the licensed facility
is located.
(ix) Any municipality not specifically enumerated
in subparagraphs (i) through (viii), 2% of the gross
terminal revenue to the municipality hosting the licensed
facility from each such licensed facility.
(x) If the licensed facility is located in more than
one municipality, the amount available shall be
distributed on a pro rata basis determined by the
percentage of acreage located in each municipality to the
total acreage of all municipalities occupied by the
licensed facility.
(xi) If the licensed facility is located at a resort
which is also an incorporated municipality, such
municipality shall not be eligible to receive any
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distribution under this paragraph. The distribution it
would have otherwise been entitled to under this
paragraph shall instead be distributed in accordance with
paragraph (2) based upon the county where the licensed
facility is located.
(xii) The distributions provided in this paragraph
shall be based upon municipal classifications in effect
on the effective date of this section. For the purposes
of this paragraph, any reclassification of municipalities
as a result of a Federal decennial census or of a State
statute shall not apply to this paragraph.
(xiii) If any provision of this paragraph is found
to be unenforceable for any reason, the distribution
provided for in such unenforceable provision shall be
made to the municipality in which the licensed facility
is located.
(xiv) Nothing in this paragraph shall prevent any of
the above municipalities from entering into
intergovernmental cooperative agreements with other
jurisdictions for sharing this money.
(xv) Notwithstanding any other law, agreement or
provision in this part to the contrary, all revenues
provided, directed or earmarked under this section to or
for the benefit of a city of the second class in which an
intergovernmental cooperation authority has been
established and is in existence pursuant to the act of
February 12, 2004 (P.L.73, No.11), known as the
Intergovernmental Cooperation Authority Act for Cities of
the Second Class, shall be directed to and under the
exclusive control of such intergovernmental cooperation
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authority to be used:
(A) to reduce the debt of the second class city;
(B) to increase the level of funding of the
municipal pension funds of the second class city; or
(C) for any other purposes as determined to be
in the best interest of the second class city by such
intergovernmental cooperation authority. Such
revenues shall not be directed to or under the
control of such city of the second class or any
coordinator appointed pursuant to the act of July 10,
1987 (P.L.246, No.47), known as the Municipalities
Financial Recovery Act, for such city of the second
class.
(d) Consumer Price Index.--For purposes of subsection (c),
references to the Consumer Price Index shall mean the Consumer
Price Index for All Urban Consumers for the Pennsylvania, New
Jersey, Delaware and Maryland area for the most recent 12-month
period for which figures have been officially reported by the
United States Department of Labor, Bureau of Labor Statistics.
(e) Reporting.--
(1) In cooperation with the department and the
Commonwealth Financing Authority, the Department of Community
and Economic Development shall submit an annual report on all
distributions of local share assessments to counties and
municipalities under this section to the chairman and
minority chairman of the Appropriations Committee of the
Senate, the chairman and minority chairman of the Community,
Economic and Recreational Development Committee of the
Senate, the chairman and minority chairman of the
Appropriations Committee of the House of Representatives and
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the chairman and minority chairman of the Gaming Oversight
Committee of the House of Representatives. The report shall
be submitted by August 31, 2010, and by August 31 of each
year thereafter.
(2) All counties and municipalities receiving
distributions of local share assessments under this section
shall submit information to the Department of Community and
Economic Development on a form prepared by the Department of
Community and Economic Development that sets forth the amount
and use of the funds received in the prior calendar year. The
form shall set forth whether the funds received were
deposited in the county's or municipality's General Fund or
committed to a specific project or use.
(f) Prohibited activities.--
(1) A person or its affiliated entity or a political
subdivision shall not compensate or incur an obligation to
compensate a person to engage in lobbying for compensation
contingent in whole or in part upon the approval, award,
receipt or denial of funds under this section. A person or
its affiliated entity shall not engage in or agree to engage
in lobbying for compensation contingent in whole or in part
upon the approval, award, receipt or denial of funds under
this section. This subsection shall not apply to a county or
municipality that compensates a person to prepare a grant
application for funds under this section if the following
requirements are met:
(i) The person is not identified in the application.
(ii) The person has no direct contact with the
agency, county or municipality providing the funding.
(iii) The person is paid a fixed fee or percentage
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of the amount of any funds approved, awarded or received
up to .5%.
(2) A violation of this section shall be considered an
intentional violation of 65 Pa.C.S. ยง 13A09(e) (relating to
penalties).
Section 5. This act shall take effect in 60 days.
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