Regular Session 2017-2018 House Bill 2478 P.N. 3659

PRINTER'S NO. 3659

THE GENERAL ASSEMBLY OF PENNSYLVANIA

HOUSE BILL

No.

2478

Session of

2018

INTRODUCED BY BARRAR, SAINATO, P. COSTA, DeLUCA, HILL-EVANS,

MILLARD, B. O'NEILL, PETRARCA, SANKEY, STURLA AND THOMAS,

JUNE 11, 2018

REFERRED TO COMMITTEE ON GAMING OVERSIGHT, JUNE 11, 2018

AN ACT

Amending Title 4 (Amusements) of the Pennsylvania Consolidated

Statutes, in general provisions, further providing for

definitions; in administration, further providing for records

and confidentiality of information; in application and

licensure, further providing for establishment licenses, for

license or permit prohibition, for issuance and renewal and

for conditional licenses; in operation, further providing for

video gaming limitations, providing for hours of operation

and further providing for terminal placement agreements; in

enforcement, further providing for investigations and

enforcement; and, in revenues, further providing for taxes

and assessments, for distribution of local share, for

regulatory assessments and for transfers from Video Gaming

Fund and establishing the Fire and Emergency Services Grant

Fund, the Veterans' Service Officer Grant Fund and the

Veterans' Assistance Fund.

The General Assembly of the Commonwealth of Pennsylvania

hereby enacts as follows:

Section 1. The definitions of "establishment license,"

"establishment licensee," "inducement" and "licensee" in section

3102 of Title 4 of the Pennsylvania Consolidated Statutes, added

October 30, 2017 (P.L.419, No.42), are amended and the section

is amended by adding definitions to read:

§ 3102. Definitions.

The following words and phrases when used in this part shall

have the meanings given to them in this section unless the

context clearly indicates otherwise:

* * *

"Club establishment." A person that operates under a valid

club liquor license.

"Club liquor license." Any of the following licenses issued

by the Pennsylvania Liguor Control Board under Article IV of the

act of April 12, 1951 (P.L.90, No.21), known as the Liquor Code:

(1) Catering club.

(2) Club liquor.

(3) Club retail dispenser.

* * *

"Establishment." A club establishment or truck stop

establishment.

"Establishment license." A license issued by the board

authorizing [a truck stop] an establishment to permit a terminal

operator licensee to place and operate video gaming terminals on

the [truck stop] establishment's premises under this part and

the rules and regulations promulgated under this part.

"Establishment licensee." [A truck stop] An establishment

that holds an establishment license.

* * *

"Inducement."

(1) Any of the following:

(i) Consideration paid directly or indirectly, from

a manufacturer, supplier, terminal operator, procurement

agent, gaming employee, employee or another person on

behalf of an applicant or anyone licensed under this

part, to [a truck stop] an establishment, establishment

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licensee, establishment licensee owner or an employee of

the establishment licensee, directly or indirectly as an

enticement to solicit or maintain the establishment

licensee or establishment licensee owner's business.

(ii) Cash, incentive, marketing and advertising

cost, gift, food, beverage, loan, prepayment of gross

terminal revenue and other contribution or payment that

offsets an establishment licensee's operational costs, or

as otherwise determined by the board.

(2) The term shall not include costs paid by a terminal

operator applicant or terminal operator licensee related to

[making video gaming terminals operate at the premises of an

establishment licensee, including wiring and rewiring,

software updates, ongoing video gaming terminal maintenance,

redemption terminals, network connections, site controllers

and costs associated with communicating with the central

control computer system.]:

(i) Structural changes necessary to segregate the

video gaming area or maintain the security of video

gaming terminals and redemption terminals as required by

the board that do not exceed $2,500, provided, however,

that any changes in excess of $2,500 may be shared

equally between the terminal applicant or terminal

operator licensee and the establishment applicant or

establishment licensee.

(ii) Surveillance technology to monitor only the

video gaming area.

(iii) Operation of video gaming terminals at a

licensed establishment, including wiring and rewiring,

software updates, ongoing video gaming terminal

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maintenance, redemption terminals, network connections,

site controllers and costs associated with communicating

with the central control computer system.

(iv) Installation of security and alarm system at

the premises of an establishment licensee that are

reasonably necessary to protect video gaming terminals

and redemption terminals outside normal business hours,

provided that the cost does not exceed $1,000.

(v) A requirement established by the board regarding

a minimum standard for a video gaming area.

(vi) A cosmetic renovation or improvement within a

video gaming area that is reasonably necessary, as

determined by the board.

(vii) A fee established by the board to cover costs

associated with the mandatory employee training program

established under section 3706 (relating to compulsive

and problem gambling).

* * *

"Licensee." A person [listed] licensed under this part.

* * *

Section 2. Section 3305(d) of Title 4, added October 30,

2017 (P.L.419, No.42), is amended to read:

§ 3305. Records and confidentiality of information.

* * *

(d) Information held by other agencies.--Files, records,

reports and other information in the possession of the

department or the Pennsylvania Liquor Control Board pertaining

to an applicant, licensee or permittee shall be made available

to the board as may be necessary to the effective administration

of this part.

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Section 3. Section 3514(a) introductory paragraph and (f) of

Title 4, added October 30, 2017 (P.L.419, No.42), are amended

and subsection (a) is amended by adding a paragraph to read:

§ 3514. Establishment licenses.

(a) General requirements.--[A truck stop] An establishment

that submits an application for an establishment license shall

include at a minimum:

* * *

(4.1) If the applicant is a club establishment:

(i) documentation showing the liquor license of the

club establishment is valid and in good standing with the

Pennsylvania Liquor Control Board; and

(ii) disclosure of conditional license agreements

entered into under the act of April 12, 1951 (P.L.90,

No.21), known as the Liquor Code.

* * *

(f) Requirement.--In order to be eligible for an

establishment license, [a truck stop] an establishment must be

licensed as a lottery sales agent under section 305 of the act

of August 26, 1971 (P.L.351, No.91), known as the State Lottery

Law, and licensed to take any actions authorized by the

designation.

Section 4. Section 3515(2) of Title 4 is amended by adding

subparagraphs to read:

§ 3515. License or permit prohibition.

The following apply:

* * *

(2) In addition to the prohibition under paragraph (1),

the board shall be prohibited from granting the following:

* * *

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(iv) An establishment license to an applicant that

is a club establishment whose club liquor license is not

in good standing with the Pennsylvania Liquor Control

Board.

(v) An establishment license to an applicant that is

a club establishment which has been declared a nuisance

under section 611 of the act of April 12, 1951 (P.L.90,

No.21), known as the Liquor Code, or has been declared a

nuisance within the past three years.

(vi) An establishment license to an applicant that

is a club establishment with a conditional license

agreement entered into under the Liquor Code unless the

agreement has been amended to allow for video gaming.

(vii) An establishment license to an applicant that

is a club establishment whose club liquor license has

been suspended, unless three years have elapsed from the

date of suspension.

* * *

Section 5. Section 3516(a)(1) of Title 4, added October 30,

2017 (P.L.419, No.42), is amended to read:

§ 3516. Issuance and renewal.

(a) Issuance.--

(1) In addition to any other criteria provided under

this part, any terminal operator, [truck stop] establishment,

supplier, manufacturer, gaming employee, key employee,

principal or other person that the board approves as

qualified to receive a license, permit or other authorization

under this part shall be issued a license or permit upon the

payment of a fee required in section 4101 (relating to fees)

and upon the fulfillment of conditions required by the board

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or provided for in this part.

* * *

Section 6. Section 3520(a)(2) of Title 4 is amended by

adding subparagraphs to read:

§ 3520. Conditional licenses.

(a) Conditional establishment licenses.--

* * *

(2) The board shall issue a conditional license to an

applicant for an establishment license if the applicant

satisfies, as determined by the board, all of the following

criteria:

* * *

(v) For a club establishment applicant, the

applicant held a valid club liquor license on the date of

application and the license is in good standing.

(vi) For a club establishment applicant, the club

liquor licensee has been declared a nuisance under

section 611 of the act of April 12, 1951 (P.L.90, No.21),

known as the Liquor Code, within the past three years.

(vii) For a club establishment applicant, the

applicant has a conditional license agreement entered

into under the Liquor Code unless the agreement has been

amended to allow for video gaming.

(viii) For a club establishment applicant, the

applicant's club liquor license has been suspended,

unless three years have elapsed from the date of

suspension.

* * *

Section 7. Section 3702(b)(6) and (7) of Title 4, added

October 30, 2017 (P.L.419, No.42), are amended to read:

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§ 3702. Video gaming limitations.

* * *

(b) Terminal operator licensee limitations.--A terminal

operator licensee may place and operate video gaming terminals

on the premises of an establishment licensee, subject to the

following:

* * *

(6) No terminal operator licensee may give or offer to

give, directly or indirectly, any type of inducement to [a

truck stop] an establishment to secure or maintain a terminal

placement agreement.

(7) No terminal operator licensee may give an

establishment licensee a percentage of gross terminal revenue

other than [15%] 30% of the gross terminal revenue of the

video gaming terminals operating in the establishment

licensee's premises.

* * *

Section 8. Title 4 is amended by adding a section to read:

§ 3703.1. Hours of operation.

(a) Club establishments.--An establishment licensee that is

also a club establishment may only permit the play of a video

gaming terminal during the hours that the club establishment is

authorized by the Pennsylvania Liquor Control Board to sell

alcoholic beverages.

(b) Truck stop establishments.--An establishment licensee

that is also a truck stop establishment may permit play of a

video gaming terminal during normal business hours.

Section 9. Section 3704(d) of Title 4, added October 30,

2017 (P.L.419, No.42), is amended and the section is amended by

adding a subsection to read:

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§ 3704. Terminal placement agreements.

* * *

(d) Provisions required.--A terminal placement agreement

shall include a provision that:

(1) Renders the agreement invalid if either the terminal

operator license or terminal operator application or the

establishment license or establishment licensee application

is denied, revoked, not renewed, withdrawn or surrendered.

(2) Provides the establishment licensee no more or less

than [15%] 30% of gross terminal revenue from each video

gaming terminal located on the premises of the establishment

licensee.

(3) Identifies who solicited the terminal placement

agreement on behalf of a terminal operator licensee or

applicant.

* * *

(f.1) Additional void agreements.--An agreement entered into

by a club establishment prior to the effective date of this

section with a person for the placement, operation, service or

maintenance of a video gaming terminal, including an agreement

granting a person the right to enter into an agreement or match

an offer made after the effective date of this section shall be

void and may not be approved by the board.

* * *

Section 10. Section 3904(d) of Title 4 is amended by adding

a paragraph and the section is amended by adding a subsection to

read:

§ 3904. Investigations and enforcement.

* * *

(d) Powers and duties of the Pennsylvania State Police.--The

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Pennsylvania State Police shall have the following powers and

duties:

* * *

(14) Require the Bureau of Liquor Control Enforcement to

report to the bureau violations of this part that are found

during the normal course of duties required under the laws of

this Commonwealth.

* * *

(j) Pennsylvania Liquor Control Board.--Nothing in this part

shall be construed as conferring on the Pennsylvania Liquor

Control Board the authority to assess penalties under the act of

April 12, 1951 (P.L.90, No.21), known as the Liquor Code,

against a club establishment that holds an establishment license

for violations of this part that are not a criminal offense.

Section 11. Sections 4102(b), 4103, 4104(b) and (d) and 4105

of Title 4, added October 30, 2017 (P.L.419, No.42), are amended

to read:

§ 4102. Taxes and assessments.

* * *

(b) Video gaming terminal tax and assessments.--

(1) The department shall determine and each terminal

operator licensee shall pay on a bimonthly basis:

(i) A tax of [42%] 34% of its gross terminal revenue

from all video gaming terminals operated by the terminal

operator licensee within this Commonwealth.

(ii) A [10%] 4% local share assessment from its

gross terminal revenue.

(iii) A regulatory assessment established in section

4104 (relating to regulatory assessments) from the

terminal operator licensee's weekly gross terminal

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revenue.

(2) All money owed under this section shall be held in

trust by the terminal operator licensee until the money is

paid or transferred to the Video Gaming Fund.

(3) Unless otherwise agreed to by the board, a terminal

operator licensee shall establish a separate bank account to

maintain gross terminal revenue until such time as the money

is paid or transferred under this section.

* * *

§ 4103. Distribution of local share.

[(a) Distribution.--

(1) (Reserved).

(2) The department shall on a quarterly basis deposit

the local share assessment imposed under section 4102(b)(1)

(ii) (relating to taxes and assessments) 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 within the Commonwealth.]

(a.1) Distribution.--

(1) Subject to the limitation under subsection (c), the

department shall distribute, in a manner and according to a

schedule adopted by the department, to each municipality 2%

of the gross terminal revenue of each video gaming terminal

operating within the municipality.

(2) The department shall deposit 2% of the gross

terminal revenue of each video gaming terminal operating

within the county into a restricted receipts account on a

quarterly basis.

(3) A restricted account shall be established in the

Commonwealth Financing Authority to be used exclusively for

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grants for projects in the public interest in the host

county.

(b) Duty of terminal operator.--A terminal operator licensee

shall continuously provide the department with records,

documents or other information necessary to effectuate the

requirements of subsection [(a)] (a.1).

share amount to a municipality in excess of 50% of the total

budget of the municipality for fiscal year 2018. The local share

amount shall be adjusted for inflation in subsequent fiscal

years by an amount not to exceed an annual cost-of-living

adjustment calculated by applying an upward percentage change in

the consumer price index immediately prior to the date the

adjustment is due to take effect.

(d) Transfers.--Local share amounts not distributed by the

department to a municipality under subsection (c) shall be

distributed to the host county in accordance with subsection

(a.1)(2).

(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 by

August 31, 2019, and by August 31 of each year thereafter, on

all distributions of local share assessments to

municipalities and counties under this section to the

chairperson and minority chairperson of:

(i) The Appropriations Committee of the Senate.

(ii) The Appropriations Committee of the House of

Representatives.

(iii) The Community, Economic and Recreational

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Development Committee of the Senate.

(iv) The Gaming Oversight Committee of the House of

Representatives.

(2) A municipality or county that receives a

distribution 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 states the amount and

use of the money received under this section in the prior

fiscal year. The form shall specify whether the money

received was deposited in the general fund of the

municipality or county or committed to a specific project or

use.

(f) Definitions.--As used in this section, the following

words and phrases shall have the meanings given to them in this

subsection unless the context clearly indicates otherwise:

"Consumer price index." 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.

"Municipality." The term shall not include county.

§ 4104. Regulatory assessments.

* * *

(b) Bi-monthly deposits.--

(1) The department shall determine the appropriate

assessment amount for each terminal operator licensee, which

shall be a percentage assessed on the terminal operator

licensee's bi-monthly gross terminal revenue, provided that

the percentage assessed shall not exceed 2%.

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(2) The percentage assessed shall not exceed an amount

equal to the costs or expenses incurred by the board, the

department, the Pennsylvania State Police or the Office of

Attorney General in carrying out their powers and duties

under this part based upon a budget submitted by the

department under subsection (c).

* * *

(d) Appropriation.--

(1) Costs and expenses may be paid from the accounts

established under subsection (a) only upon appropriation by

the General Assembly.

(2) If the total costs or expenses incurred by the

board, the department, the Pennsylvania State Police or the

Office of Attorney General exceed the amounts available in

the accounts established under subsection (a), the General

Assembly [may] shall appropriate additional amounts to the

board, the department, the Pennsylvania State Police or the

Office of Attorney General from the Video Gaming Fund.

§ 4105. Transfers from Video Gaming Fund.

(a) Transfer for compulsive and problem gambling

treatment.--On June 30, [2018] 2019, and on the last day of each

fiscal year thereafter, the State Treasurer shall transfer from

the Video Gaming Fund an amount equal to 0.002 multiplied by the

total gross terminal revenue of all terminal operator licensees

to the Compulsive and Problem Gambling Treatment Fund

established in section 1509 (relating to compulsive and problem

gambling program).

(a.1) Transfer to Fire and Emergency Services Grant Fund.--

On June 30, 2019, and on the last day of each fiscal year

thereafter, the State Treasurer shall transfer from the Video

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Gaming Fund an amount equal to $30,000,000 to the Fire and

Emergency Services Grant Fund an established in section 4106

(relating to Fire and Emergency Services Grant Fund).

(a.2) Transfer to Veterans' Service Officer Grant Fund.--On

June 30, 2019, and on the last day of each fiscal year

thereafter, the State Treasurer shall transfer from the Video

Gaming Fund an amount equal to $3,000,000 to the Veterans'

Service Officer Grant Fund established in section 4107 (relating

to Veterans' Service Officer Grant Fund).

(a.3) Transfer to the Veterans' Assistance Fund.--On June

30, 2019, and on the last day of each fiscal year thereafter,

the State Treasurer shall transfer from the Video Gaming Fund an

amount equal to $1,000,000 to the Veterans' Assistance Fund

established in section 4108 (relating to Veterans' Assistance

Fund).

(b) General Fund transfer.--On June 30, [2018] 2019, and on

the last day of each fiscal year thereafter, the State Treasurer

shall transfer the remaining balance in the Video Gaming Fund

that is not transferred under [subsection] subsections (a),

(a.1), (a.2), and (a.3) to the General Fund.

Section 12. Title 4 is amended by adding sections to read:

§ 4106. Fire and Emergency Services Grant Fund.

(a) Establishment.--The Fire and Emergency Services Grant

Fund is established in the State Treasury. The fund shall

receive money from the Video Gaming Fund in accordance with

section 4105 (relating to transfers from Video Gaming Fund).

(b) Use of money.--Money in the fund shall be used for

programs that provide grants to volunteer fire companies,

municipal fire companies, volunteer emergency medical service

companies and career emergency medical service companies as

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specified through a separate act of the General Assembly.

§ 4107. Veterans' Service Officer Grant Fund.

(a) Establishment.--The Veterans' Service Officer Grant Fund

is established in the State Treasury. The fund shall receive

money from the Video Gaming Fund in accordance with section 4105

(relating to transfers from Video Gaming Fund).

(b) Use of money.--Money in the fund shall be used for

programs that provide grants to veterans' service organizations

that support veterans' service officer programs as specified

through a separate act of the General Assembly.

§ 4108. Veterans' Assistance Fund.

(a) Establishment.--The Veterans' Assistance Fund is

established in the State Treasury. The fund shall receive money

from the Video Gaming Fund in accordance with section 4105

(relating to transfers from Video Gaming Fund).

(b) Use of money.--Money in the fund shall be used for

programs that support veterans and their families or assist with

the operation, maintenance and repair of monuments honoring

veterans and service members as specified through a separate act

of the General Assembly.

Section 13. This act shall take effect as follows:

(1) The following provisions shall take effect

immediately:

(i) This section.

(ii) The amendment or addition of 4 Pa.C.S. §§

3704(f.1), 4105, 4106, 4107 and 4108.

(2) The remainder of this act shall take effect in 60

days.

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