PRIOR PRINTER'S NOS. 1105, 1241, 1302, PRINTER'S NO. 2218
1319, 1553, 2048, 2101, 2182, 2186, 2208
No. 862 Session of 2005
INTRODUCED BY PIPPY, BRIGHTBILL, RHOADES, LAVALLE, CORMAN,
RAFFERTY, EARLL, GORDNER, WONDERLING, KASUNIC, MADIGAN, PUNT,
C. WILLIAMS, WENGER, PILEGGI, ORIE, THOMPSON, O'PAKE,
ERICKSON, BOSCOLA, SCARNATI, D. WHITE, M. WHITE, WAUGH,
REGOLA, ROBBINS, LEMMOND AND JUBELIRER, SEPTEMBER 14, 2005
AMENDMENTS TO SENATE AMENDMENTS, HOUSE OF REPRESENTATIVES,
OCTOBER 24, 2006
AN ACT
1 Amending Titles 4 (Amusements) and 18 (Crimes and Offenses) of
2 the Pennsylvania Consolidated Statutes, further providing for
3 definitions and for the Pennsylvania Gaming Control Board;
4 providing for applicability of other statutes; further
5 providing for powers and duties of board; providing for code
6 of conduct; further providing for temporary regulations, for
7 licensed entity application appeals from board, for license
8 or permit application hearing process, for board minutes and
9 records, for collection of fees and fines, for regulatory
10 authority of board, for slot machine license fee, for number
11 of slot machines, for reports of board, for license or permit
12 prohibition, for Category 2 slot machine licenses, for
13 Category 3 slot machine licenses, for order of initial
14 license issuance, for slot machine license application and
15 for slot machine license application business entity
16 requirements; providing for licensing of principals and for
17 licensing of key employees; further providing for slot
18 machine license application financial fitness requirements
19 and for supplier and manufacturer licenses; providing for
20 manufacturer licenses; further providing for occupation
21 permit application, for central control computer system, for
22 license or permit issuance, for nontransferability of
23 licenses and for gross terminal revenue deductions; providing
24 for itemized budget reporting; further providing for
25 establishment of State Gaming Fund and net slot machine
26 revenue distribution, for distributions from Pennsylvania
27 Race Horse Development Fund, for the Compulsive and Problem
28 Gambling Program; providing for land use preemption and <--
29 conveyances within cities of the first class, and for clean
1 indoor air; providing for public official financial interest,
2 for political influence and for enforcement; providing for
3 procedures and for conduct of public officials and employees;
4 further providing for prohibited acts and penalties;
5 providing for detention and for interception of oral
6 communications; further providing for duty to provide and for
7 submission of fingerprints and photographs; providing for
8 repayments to State Gaming Fund; and further providing for
9 corrupt organizations.
10 The General Assembly of the Commonwealth of Pennsylvania
11 hereby enacts as follows:
12 Section 1. The definitions of "affiliate" or "affiliated
13 company," "applicant," "controlling interest" and INTEREST," <--
14 "gross terminal revenue" AND "LICENSED FACILITY" in section 1103 <--
15 of Title 4 of the Pennsylvania Consolidated Statutes are amended
16 and the section is amended by adding definitions to read:
17 § 1103. Definitions.
18 The following words and phrases when used in this part shall
19 have the meanings given to them in this section unless the
20 context clearly indicates otherwise:
21 "Affiliate[" or "affiliated company]," "affiliate of" or
22 "person affiliated with." A person that directly or indirectly,
23 through one or more intermediaries, controls, is controlled by
24 or is under common control with a specified person.
25 "Applicant." Any person[, officer, director or key
26 employee], who on his own behalf or on behalf of another, is
27 applying for permission to engage in any act or activity which
28 is regulated under the provisions of this part. In cases in
29 which the applicant is a [corporation, foundation, organization,
30 business trust, estate, limited liability company, trust,
31 partnership, limited partnership, association or any other form
32 of legal business entity,] person other than an individual, the
33 Pennsylvania Gaming Control Board shall determine the associated
34 persons whose qualifications are necessary as a precondition to
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1 the licensing of the applicant.
2 * * *
3 "Associated area." All parcels of land and improvements, <--
4 including a licensed racetrack and backside area, owned by the
5 licensed gaming entity or its affiliate, intermediary,
6 subsidiary or holding company which is contiguous with or
7 adjoined directly by a pedestrian walkway, bridge or easement,
8 to the land-based location of the licensed facility.
9 * * *
10 "Compensation." Any thing of value, money or a financial
11 benefit conferred on or received by a person in return for
12 services rendered, or to be rendered, whether by that person or
13 another.
14 "Complimentary service." Any lodging, service or item which
15 is provided to an individual at no cost or at a reduced cost
16 which is not generally available to the public under similar
17 circumstances. Group rates, including convention and government
18 rates, shall be deemed to be generally available to the public.
19 "Conduct of gaming." The licensed placement and operation of
20 games of chance under this part and approved by the Pennsylvania
21 Gaming Control Board at a licensed facility.
22 "Controlling interest." [A person shall be deemed to have
23 the ability to control a publicly traded corporation, or to
24 elect one or more of the members of its board of directors, if
25 such holder owns or beneficially holds 5% or more of the
26 securities of such publicly traded domestic or foreign
27 corporation, partnership, limited liability company or any other
28 form of legal entity, unless such presumption of control or
29 ability to elect is rebutted by clear and convincing evidence. A
30 person who is a holder of securities of a privately held
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1 domestic or foreign corporation, partnership, limited liability
2 company or any other form of legal entity shall be deemed to
3 possess a controlling interest unless such presumption of
4 control is rebutted by clear and convincing evidence.] For a
5 publicly traded domestic or foreign corporation, a controlling
6 interest is an interest in a legal entity, applicant or licensee
7 if a person's sole voting rights under State law or corporate
8 articles or bylaws entitle the person to elect or appoint one or
9 more of the members of the board of directors or other governing
10 board or the ownership or beneficial holding of 5% or more of
11 the securities of the publicly traded corporation, partnership,
12 limited liability company or other form of publicly traded legal
13 entity, unless this presumption of control or ability to elect
14 is rebutted by clear and convincing evidence. For a privately
15 held domestic or foreign corporation, partnership, limited
16 liability company or other form of privately held legal entity,
17 a controlling interest is the holding of any securities in the
18 legal entity, unless this presumption of control is rebutted by
19 clear and convincing evidence.
20 * * *
21 "Corporation." Includes a publicly traded corporation.
22 * * *
23 "Gross terminal revenue." The total of cash or cash
24 equivalent wagers received by a slot machine minus the total of:
25 (1) Cash or cash equivalents paid out to patrons as a
26 result of playing a slot machine which are paid to patrons
27 either manually or paid out by the slot machine.
28 (2) Cash paid to purchase annuities to fund prizes
29 payable to patrons over a period of time as a result of
30 playing a slot machine.
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1 (3) Any personal property distributed to a patron as the
2 result of playing a slot machine. This does not include
3 travel expenses, food, refreshments, lodging or services.
4 The term does not include counterfeit money or tokens, coins or
5 currency of other countries which are received in slot machines,
6 except to the extent that they are readily convertible to United
7 States currency, cash taken in fraudulent acts perpetrated
8 against a slot machine licensee for which the licensee is not
9 reimbursed or cash received as entry fees for contests or
10 tournaments in which the patrons compete for prizes.
11 "Holding company." A person, other than an individual,
12 which, directly or indirectly, owns, has the power or right to
13 control or to vote any significant part of the outstanding
14 voting securities of a corporation or other form of business
15 organization. A holding company indirectly has, holds or owns
16 any such power, right or security if it does so through an
17 interest in a subsidiary or successive subsidiaries.
18 * * *
19 "Independent contractor." A person who performs
20 professional, scientific, technical, advisory or consulting
21 services to the Pennsylvania Gaming Control Board for a fee,
22 honorarium or similar compensation pursuant to a contract.
23 * * *
24 "Intermediary." A person, other than an individual, which:
25 (1) is a holding company with respect to a corporation
26 or other form of business organization, which holds or
27 applies for a license under this part; and
28 (2) is a subsidiary with respect to any holding company.
29 * * *
30 "LICENSED FACILITY." THE PHYSICAL LAND-BASED LOCATION [AND <--
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1 ASSOCIATED AREAS] AT WHICH A LICENSED GAMING ENTITY IS
2 AUTHORIZED TO PLACE AND OPERATE SLOT MACHINES.
3 * * *
4 "Member." An individual appointed to and sworn in as a
5 member of the board in accordance with section 1201(b) (relating
6 to Pennsylvania Gaming Control Board established).
7 * * *
8 "Principal." An officer; director; person who directly holds
9 a beneficial interest in or ownership of the securities of an
10 applicant or licensee; person who has a controlling interest in
11 an applicant or licensee, or has the ability to elect a majority
12 of the board of directors of a licensee or to otherwise control
13 a licensee; lender or other licensed financial institution of an
14 applicant or licensee, other than a bank or lending institution
15 which makes a loan or holds a mortgage or other lien acquired in
16 the ordinary course of business; underwriter of an applicant or
17 licensee; or other person or employee of an applicant, slot
18 machine licensee, manufacturer licensee or supplier licensee
19 deemed to be a principal by the Pennsylvania Gaming Control
20 Board.
21 * * *
22 "Publicly traded corporation." A person other than an
23 individual which:
24 (1) has a class or series of securities registered under
25 the Securities Exchange Act of 1934 (48 Stat. 881, 15 U.S.C.
26 § 78a et seq.);
27 (2) is a registered management company under the
28 Investment Company Act of 1940 (54 Stat. 789, 15 U.S.C. §
29 80a-1 et seq.); or
30 (3) is subject to the reporting obligations imposed by
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1 section 15(d) of the Securities Exchange Act of 1934 by
2 reason of having filed a registration statement which has
3 become effective under the Securities Act of 1933 (48 Stat.
4 74, 15 U.S.C. § 77a et seq.).
5 * * *
6 "Subsidiary." A person other than an individual. The term
7 includes:
8 (1) a corporation, any significant part of whose
9 outstanding equity securities are owned, subject to a power
10 or right of control, or held with power to vote, by a holding
11 company or an intermediary company;
12 (2) a significant interest in a person, other than an
13 individual, which is owned, subject to a power or right of
14 control, or held with power to vote, by a holding company or
15 an intermediary company; or
16 (3) a person deemed to be a subsidiary by the
17 Pennsylvania Gaming Control Board.
18 * * *
19 "Underwriter." As defined in the act of December 5, 1972
20 (P.L.1280, No.284), known as the Pennsylvania Securities Act of
21 1972.
22 Section 2. Section 1201 of Title 4 is amended to read:
23 § 1201. Pennsylvania Gaming Control Board established.
24 (a) Board established.--There is established an independent
25 [administrative] board which shall be a body corporate and
26 politic to be known as the Pennsylvania Gaming Control Board[,
27 which shall be implemented as set forth in this section].
28 (b) Membership.--The board shall consist of the following
29 members[, who shall serve a set term and may not be removed
30 except for good cause]:
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1 (1) Three members appointed by the Governor.[, each
2 being referred to as a "gubernatorial appointee."]
3 (2) One member appointed by each of the following
4 [legislative caucus leaders, each being referred to as a
5 "legislative appointee"]:
6 (i) The President pro tempore of the Senate.
7 (ii) The Minority Leader of the Senate.
8 (iii) The Speaker of the House of Representatives.
9 (iv) The Minority Leader of the House of
10 Representatives.
11 (b.1) Removal.--A member of the board shall be removed from
12 office by the appointing authority:
13 (1) for misconduct in office, willful neglect of duty or
14 conduct evidencing unfitness for office or incompetence; or
15 (2) upon conviction of an offense graded as a felony, an
16 infamous crime, an offense under this part or an equivalent
17 offense under Federal law or the law of another jurisdiction.
18 (c) Initial appointments to board.--
19 (1) Gubernatorial [appointee members] appointees
20 initially appointed under subsection (b)(1) shall serve an
21 initial term of one, two and three years respectively as
22 designated by the Governor at the time of appointment and
23 until their successors are appointed and qualified.
24 (2) Legislative [appointee members] appointees initially
25 appointed under subsection (b)(2) shall serve until the third
26 Tuesday in January 2007 and until their successors are
27 appointed and qualified.
28 (3) [Any] An appointment to fill a vacancy created by a
29 member appointed in accordance with paragraph (1) or (2)
30 shall be for the remainder of the unexpired term. [Members so
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1 appointed to fill the unexpired term of an initial appointee
2 shall be subject to the provisions of subsection (d).]
3 (d) [Appointments after expiration of initial term or upon
4 vacancy] Terms of office.--Upon the expiration of a term of a
5 member appointed under [this subsection or upon the existence of
6 a vacancy of a member appointed pursuant to subsection (c) or
7 this] subsection (c), [the appointing authority shall appoint a
8 member subject to the following:
9 (1) For a gubernatorial appointment under subsection
10 (b)(1), the term shall be for three years and until a
11 successor is appointed and qualified.] the following shall
12 apply:
13 (1) The term of office of a gubernatorial appointee
14 shall be three years and until a successor is appointed and
15 qualified.
16 (2) [Terms for legislative appointee members appointed
17 under subsection (b)(2) shall be for a two-year term and
18 shall expire on the third Tuesday of January of such year,
19 but such members shall continue to serve until their
20 successors are appointed and qualified.] The term of office
21 of a legislative appointee shall be two years and until a
22 successor is appointed and qualified.
23 (3) [No] A legislative appointee [member] shall serve no
24 more than three full [successive] consecutive terms.
25 (4) [No] A gubernatorial appointee [member] shall serve
26 no more than two full [successive] consecutive terms.
27 (5) An appointment to fill a vacancy shall be for the
28 remainder of the unexpired term.
29 (6) A member appointed to fill a vacancy under paragraph
30 (3) may serve three full terms following the expiration of
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1 the term related to the vacancy.
2 (7) A member appointed to fill a vacancy under paragraph
3 (4) may serve two full terms following the expiration of the
4 term related to the vacancy.
5 (e) Ex officio members.--The Secretary of Revenue, the
6 Secretary of Agriculture and the State Treasurer, or their
7 designees, shall serve on the board as nonvoting ex officio
8 members of the board. The designee shall be a deputy secretary
9 or an equivalent position within the agency.
10 (f) Qualified majority vote.--
11 (1) Except as permitted in paragraphs (2) and (3), any
12 action, including, but not limited to, the approval,
13 issuance, denial or conditioning of any license by the board
14 under this part or the making of any order or the
15 ratification of any permissible act done or order made by one
16 or more of the members, shall require a qualified majority
17 vote consisting of at least one gubernatorial appointee and
18 the four legislative appointees.
19 (2) Any action to suspend or revoke, not renew, void or
20 require forfeiture of a license or permit issued under this
21 part, to impose any administrative fine or penalty under this
22 part or to issue cease and desist orders or similar
23 enforcement actions shall require a majority vote of all the
24 members appointed to the board.
25 (3) Notwithstanding any other provision [to the
26 contrary] of this part or 65 Pa.C.S. § 1103(j) (relating to
27 restricted activities), a member shall disclose the nature of
28 his disqualifying interest, disqualify himself and abstain
29 from voting in a proceeding under this part in which his [or
30 her impartiality] objectivity, impartiality, integrity or
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1 independence of judgment may be reasonably questioned,
2 [including, but not limited to, instances where he or she
3 knows that they possess a substantial financial interest in
4 the subject matter of the proceeding or any other interest
5 that could be substantially affected by the outcome of the
6 proceeding. In such circumstances in which it is] as provided
7 in subsection (h)(6). If a legislative appointee [member that
8 has disqualified himself or herself] has disqualified
9 himself, the qualified majority shall consist of all of the
10 remaining [three] legislative appointees and at least two
11 gubernatorial appointees.
12 (g) Background investigation.--Appointees shall be subject
13 to a background investigation conducted by the Pennsylvania
14 State Police in accordance with this part.
15 (h) Qualifications and restrictions.--
16 (1) Each member at the time of appointment shall be at
17 least 25 years of age and shall have been a resident of this
18 Commonwealth for a period of at least one year immediately
19 preceding appointment. Each member shall continue to remain a
20 resident of this Commonwealth during the term of membership
21 on the board.
22 (2) Except for ex officio members, no person shall be
23 appointed a member of the board or [hold any place, position
24 or office under the board if that person holds any other
25 elected office or party office] be employed by or be an
26 independent contractor of the board if that person is a
27 public official or party officer as defined in section 1512
28 (relating to [public official financial interest] financial
29 and employment interests) in this Commonwealth or any of its
30 political subdivisions.
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1 [(3) No member, appointee, employee or official shall
2 hold any office or employment position, the duties of which
3 are incompatible with the duties of the office.
4 (4) No member, employee, appointee or official engaged
5 in the service of or in any manner connected with the board
6 shall hold any office or position, or be engaged in any
7 employment or vocation, the duties of which are incompatible
8 with employment in the service of or in connection with the
9 work of the board.]
10 (3) Each member, employee and independent contractor of
11 the board shall sign an agreement not to disclose
12 confidential information.
13 (4) No member, employee or independent contractor of the
14 board or other agency having regulatory authority over the
15 board or over forms of gaming regulated by this part shall be
16 employed, hold any office or position or be engaged in any
17 activity which is incompatible with the position, employment
18 or contract.
19 (5) No member shall be paid or [accept for any service
20 connected with the office any fee other than the salary and
21 expenses provided by law.] receive any fee or other
22 compensation other than salary and expenses provided by law
23 for any activity related to the duties or authority of the
24 board. Nothing in this part shall prohibit a member from
25 engaging in any employment [or vocation] or receiving any
26 compensation for such employment [or vocation] that is not
27 [otherwise] connected to or incompatible with his [or her]
28 service as a member of the board.
29 (6) No member, employee[, appointee or official shall
30 participate in any hearing or proceeding in which that person
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1 has any direct or indirect pecuniary interest.] or
2 independent contractor of the board shall participate in a
3 hearing, proceeding or other matter in which the member,
4 employee or independent contractor, or the immediate family
5 thereof, has a financial interest in the subject matter of
6 the hearing or proceeding or other interest that could be
7 substantially affected by the outcome of the hearing or
8 proceeding, without first fully disclosing the nature of the
9 interest to the board and other persons participating in the
10 hearing or proceeding. The board shall determine if the
11 interest is a disqualifying interest that requires the
12 disqualification or nonparticipation of an employee or
13 independent contractor. For purposes of this paragraph, the
14 term "immediate family" shall mean spouse, parent, brother,
15 sister or child.
16 (7) At the time of appointment and annually thereafter,
17 each member shall disclose the existence of [all ownership
18 interests in licensed facilities and all securities in any
19 licensed entity or applicant, its affiliates or subsidiaries
20 held by the member, the member's spouse and any minor or
21 unemancipated children and must divest such ownership
22 interests in licensed facilities or securities prior to an
23 appointment becoming final. A member may not acquire any
24 security in any licensed entity, its affiliates or
25 subsidiaries during the member's tenure.] any financial
26 interest in any applicant, licensed entity or licensed
27 facility and in an affiliate, intermediary, subsidiary or
28 holding company thereof held by the member or known to be
29 held by the member's immediate family. The disclosure
30 statement shall be filed with the executive director of the
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1 board and with the appointing authority for such member and
2 shall be open to inspection by the public at the office of
3 the board during the normal business hours of the board
4 [during the tenure of the member] for the duration of the
5 member's term and for two years after the member leaves
6 office. For purposes of this paragraph, the term "immediate
7 family" shall mean spouse, parent, brother, sister or child.
8 (7.1) Prior to being sworn as a member, an appointee and
9 his immediate family shall divest any financial interest in
10 any applicant, licensed facility or licensed entity and in an
11 affiliate, intermediary, subsidiary or holding company
12 thereof owned or held by the appointee or known to be held by
13 the appointee's immediate family. For the duration of the
14 member's term, and for one year thereafter, the member and
15 the member's immediate family may not acquire a financial
16 interest in any applicant, licensed facility or licensed
17 entity or in an affiliate, intermediary, subsidiary or
18 holding company thereof. For purposes of this paragraph, the
19 term "immediate family" shall mean spouse and any minor or
20 unemancipated child.
21 (7.2) Prior to entering into employment or a contract
22 with the board and annually thereafter, an employee or
23 independent contractor shall disclose the existence of any
24 financial interest in any applicant, licensed facility or
25 licensed entity and in an affiliate, intermediary, subsidiary
26 or holding company thereof owned or held by the employee or
27 independent contractor or known to be held by the immediate
28 family of the employee or independent contractor. The
29 disclosure statement shall be filed with the board and shall
30 be open to inspection by the public at the office of the
20050S0862B2218 - 14 -
1 board during the normal business hours of the board and for
2 two years after termination of employment or a contract with
3 the board. For purposes of this paragraph, the term
4 "immediate family" shall mean spouse, parent, brother, sister
5 or child.
6 (7.3) Prior to entering into employment or contracting
7 with the board, an employee or independent contractor and the
8 employee's or independent contractor's immediate family shall
9 divest any financial interest in any applicant, licensed
10 facility or licensed entity, and in an affiliate,
11 intermediary, subsidiary or holding company thereof, owned or
12 held by the employee or independent contractor or known to be
13 held by the immediate family of the employee or independent
14 contractor. For the duration of the employee's employment
15 with the board or the independent contractor's contract with
16 the board, and for one year thereafter, the employee or
17 independent contractor and the immediate family thereof shall
18 not acquire, by purchase, gift, exchange or otherwise, any
19 financial interest in any applicant, licensed facility or
20 licensed entity and in any affiliate, intermediary,
21 subsidiary or holding company thereof. For purposes of this
22 paragraph, the term "immediate family" shall mean spouse and
23 any minor or unemancipated child.
24 (8) [Every member, employee, appointee or official of
25 the board, in the service of or in connection with the work
26 of the board, is forbidden, directly or indirectly, to
27 solicit or request from or to suggest or recommend to any
28 applicant, licensed entity, its] No member, employee or
29 independent contractor of the board may directly or
30 indirectly solicit, request, suggest or recommend to any
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1 applicant, licensed entity, or an affiliate, intermediary,
2 subsidiary[,] or holding company thereof or to any [officer,
3 attorney, agent or employee] principal, employee, independent
4 contractor or agent thereof, the appointment or employment of
5 any [individual to any office, place or position in or the
6 employment of any individual] person in any capacity by the
7 applicant, licensed entity, [its] or an affiliate,
8 intermediary, subsidiary or holding company thereof for a
9 period of two years from the termination of term of office,
10 employment or contract with the board.
11 [(9) Every member, executive-level employee, appointee
12 or official appointed to office in the service of or in
13 connection with the work of the board is prohibited from
14 accepting employment with any applicant, licensed gaming
15 entity, its affiliate, intermediary, subsidiary or holding
16 company for a period of one year from the termination of
17 employment or service with the board. Every member,
18 executive-level employee, appointee or official appointed to
19 office in the service of or in connection with the work of
20 the board is prohibited from appearing before the board on
21 behalf of any applicant, licensed gaming entity, its
22 affiliate, intermediary, subsidiary or holding company or
23 other licensee or permittee of the board for a period of two
24 years after terminating employment or service with the board.
25 (10) If any person employed or appointed in the service
26 of the board violates any provision of this section, the
27 appointing authority or the board shall forthwith remove the
28 person from the office or employment and the person shall be
29 ineligible for future employment or service with the board
30 and shall be ineligible to be approved for any license or
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1 permit under this part for a period of two years thereafter.]
2 (9) No member may accept employment with any applicant,
3 licensed entity, or an affiliate, intermediary, subsidiary or
4 holding company thereof, for a period of two years from the
5 termination of term of office.
6 (10) No member may appear before the board on behalf of
7 any applicant, licensed entity, or an affiliate,
8 intermediary, subsidiary or holding company thereof, or any
9 other licensee or permittee for a period of two years from
10 the termination of term of office.
11 (11) No member [or], employee or independent contractor
12 of the board shall accept a complimentary service, wager or
13 be paid any prize from any wager at any licensed facility
14 within this Commonwealth or at any other facility outside
15 this Commonwealth which is owned or operated by a licensed
16 gaming entity or any of its [affiliates or subsidiaries.]
17 affiliates, intermediaries, subsidiaries or holding companies
18 thereof for the duration of their term of office, employment
19 or contract with the board, and for a period of one year from
20 the termination of term of office, employment or contract
21 with the board. The provisions of this paragraph shall not
22 apply to employees who utilize slot machines for testing
23 purposes or to verify the performance of a machine as part of
24 an enforcement investigation.
25 (12) A member [of the board] who has been convicted
26 during his term in any domestic or foreign jurisdiction of a
27 felony, infamous crime [of moral turpitude] or gambling
28 offense shall, upon conviction, be automatically removed from
29 the board and shall be ineligible to become a [board] member
30 in the future. If an ex officio member is convicted during
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1 his term in any domestic or foreign jurisdiction of a felony,
2 infamous crime or gambling offense, the ex officio member
3 shall, upon conviction, be automatically removed from the
4 board, and a designee shall be designated pursuant to
5 subsection (e) to serve the remainder of the ex officio
6 member's term.
7 (13) No employee of the board or individual employed by
8 an independent contractor of the board whose duties
9 substantially involve licensing, enforcement or the
10 development or adoption of regulations or policy under this
11 part shall:
12 (i) accept employment with an applicant, licensed
13 entity, or an affiliate, intermediary, subsidiary or
14 holding company thereof, for a period of one year after
15 the termination of the employment relating to the conduct
16 of gaming or contract with the board; or
17 (ii) appear before the board in any hearing or
18 proceeding or participate in any other activity on behalf
19 of any applicant, licensee, permittee, licensed entity,
20 or an affiliate, intermediary, subsidiary or holding
21 company thereof, for a period of two years after
22 termination of the employment or contract with the board.
23 (14) Upon the written request of an employee of the
24 board, the executive branch of the Commonwealth or a
25 political subdivision or of the agency or political
26 subdivision employing an employee, the State Ethics
27 Commission shall determine whether the individual's duties
28 substantially involve the development or adoption of
29 regulations or policy, licensing or enforcement, under this
30 part, and shall provide a written determination to the
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1 employee to include any prohibition under this paragraph. An
2 individual who relies in good faith on a determination under
3 this paragraph shall not be subject to any penalty for an
4 action taken, provided that all material facts set forth in
5 the request for a determination are correct.
6 (15) If a member, employee or independent contractor of
7 the board violates any provision of this section, the
8 appointing authority or the board may, upon notice and
9 hearing, remove the person from the board, withdraw the
10 appointment or terminate the employment or contract and the
11 person shall be ineligible for future appointment, employment
12 or contract with the board and for approval of a license or
13 permit under this part for a period of two years thereafter.
14 (h.1) Fiduciary relationship.--A member or employee of the
15 board shall serve as a fiduciary of the Commonwealth.
16 (h.2) Standard of care.--Members shall exercise the standard
17 of care required by 20 Pa.C.S. Ch. 73 (relating to
18 municipalities investments) in the performance of their duties
19 under this part.
20 (h.3) Liability.--Members shall not be personally liable for
21 any of the following:
22 (1) Obligations of the board.
23 (2) Actions which were within the scope of their office
24 and made in good faith.
25 (i) Compensation.--
26 (1) The Executive Board as established in the act of
27 April 9, 1929 (P.L.177, No.175), known as The Administrative
28 Code of 1929, shall establish the compensation of the members
29 [appointed pursuant to this section].
30 (2) Members shall be reimbursed for all necessary and
20050S0862B2218 - 19 -
1 actual expenses.
2 (3) Members shall be eligible for retirement under the
3 State Employees' Retirement Code and shall, if the member
4 elects to participate, be considered a State employee for the
5 purposes of 71 Pa.C.S. Pt. XXV (relating to retirement for
6 State employees and officers).
7 (j) Chairman.--The chairman of the board shall be selected
8 by the Governor.
9 (k) Appointments.--The appointing authorities shall make
10 their initial appointments within 60 days of the effective date
11 of this part. No appointment shall be final until receipt by the
12 appointing authority of the required background investigation of
13 the appointee by the Pennsylvania State Police which shall be
14 completed within 30 days. No person who has been convicted in
15 any domestic or foreign jurisdiction of a felony [or gambling],
16 infamous crime or gaming offense shall be appointed to the
17 board.
18 [(l) Disclosure statements.--Members and employees of the
19 board are subject to the provisions of 65 Pa.C.S. Ch. 11
20 (relating to ethics standards and financial disclosure) and the
21 act of July 19, 1957 (P.L.1017, No.451), known as the State
22 Adverse Interest Act.]
23 (l) Prohibition against nepotism.--No member may solicit,
24 request, suggest or recommend the employment by the board of any
25 individual related within the second degree of consanguinity to
26 the member as set forth in 23 Pa.C.S. § 1304(e) (relating to
27 restrictions on issuance of license) or the spouse of the
28 individual.
29 (m) Employment requirements.--
30 (1) Prospective employees shall submit an application
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1 and a personal disclosure form to the board which shall
2 include a complete criminal history, including convictions
3 and current charges for all felonies and misdemeanors.
4 (2) Prospective employees shall be required to undergo
5 testing which detects the presence of illegal substances in
6 the body.
7 (3) The board shall obtain fingerprints and photographs
8 for each prospective employee consistent with the standards
9 adopted by the Pennsylvania State Police.
10 (4) The board shall verify the identification,
11 employment and education of each prospective employee,
12 including:
13 (i) Legal name, including any alias.
14 (ii) All educational institutions attended
15 regardless of graduation status.
16 (iii) Places of residence for the past ten years.
17 (iv) Employment history for the past 15 years.
18 (5) The board shall not hire a prospective employee if
19 the prospective employee:
20 (i) has been convicted of a crime that bears a close
21 relationship to the duties and responsibilities of the
22 position for which employment is sought;
23 (ii) has been dismissed from other employment for
24 gross misconduct; or
25 (iii) has intentionally made a false statement
26 concerning a material fact in connection with the
27 application to the board.
28 (6) The board shall not employ a person unless the
29 requirements of paragraphs (1), (2), (3) and (4) have been
30 met. This paragraph shall apply only to persons employed
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1 after the effective date of this subsection.
2 (7) The board shall:
3 (i) Immediately refer any criminal matter involving
4 an employee to law enforcement.
5 (ii) Develop a disciplinary process for an employee
6 charged with a crime or with gross misconduct.
7 (iii) Immediately suspend from employment any
8 employee charged with a felony.
9 (iv) Develop a process to discipline all other
10 instances of misconduct.
11 (8) Disciplinary action shall be instituted promptly
12 against an employee who, while on or off duty, engages in
13 serious misconduct which may bring the board into disrepute.
14 (n) Definitions.--As used in this section, the following
15 words and phrases shall have the meanings given to them in this
16 subsection:
17 "Financial interest." An ownership, property, leasehold or
18 other beneficial interest in an entity. The term shall not
19 include an interest which is held or deemed to be held in any of
20 the following:
21 (1) Securities that are held in a pension plan, profit-
22 sharing plan, individual retirement account, tax sheltered
23 annuity, a plan established pursuant to section 457 of the
24 Internal Revenue Code of 1986 (Public Law 99-514, 26 U.S.C. §
25 1 et seq.), or any successor provision, deferred compensation
26 plan whether qualified or not qualified under the Internal
27 Revenue Code of 1986, or any successor provision, or other
28 retirement plan that:
29 (i) is not self-directed by the individual; and
30 (ii) is advised by an independent investment adviser
20050S0862B2218 - 22 -
1 who has sole authority to make investment decisions with
2 respect to contributions made by the individual to these
3 plans.
4 (2) A tuition account plan organized and operated
5 pursuant to section 529 of the Internal Revenue Code of 1986
6 (Public Law 99-514, 26 U.S.C. § 529) that is not self-
7 directed by the individual.
8 (3) A mutual fund where the interest owned by the mutual
9 fund in a licensed entity does not constitute a controlling
10 interest as defined in this part.
11 "Ownership interest." Owning or holding or being deemed to
12 hold, debt or equity securities or other ownership interest or
13 profit interest.
14 Section 3. Title 4 is amended by adding a section to read:
15 § 1201.1. Applicability of other statutes.
16 (a) General rule.--The following acts shall apply to the
17 board:
18 (1) The act of June 21, 1957 (P.L.390, No.212), referred
19 to as the Right-to-Know Law.
20 (2) The act of July 19, 1957 (P.L.1017, No.451), known
21 as the State Adverse Interest Act.
22 (3) The provisions of 65 Pa.C.S. Chs. 7 (relating to
23 open meetings) and 11 (relating to ethics standards and
24 financial disclosure).
25 (b) Status of board.--
26 (1) The board shall be considered an independent agency
27 for the purposes of the following:
28 (i) 62 Pa.C.S. Pt. I (relating to Commonwealth
29 Procurement Code). The expediting of the payment of
30 revenue to the Commonwealth shall not be grounds for an
20050S0862B2218 - 23 -
1 emergency procurement by the board.
2 (ii) The act of October 15, 1980 (P.L.950, No.164),
3 known as the Commonwealth Attorneys Act.
4 (2) The board shall be considered an agency for the
5 purposes of the following:
6 (i) The act of July 31, 1968 (P.L.769, No.240),
7 referred to as the Commonwealth Documents Law.
8 (ii) The act of June 25, 1982 (P.L.633, No.181),
9 known as the Regulatory Review Act.
10 Section 4. Section 1202 of Title 4 is amended to read:
11 § 1202. General and specific powers.
12 (a) General powers.--
13 (1) The board shall have general [jurisdiction] and sole
14 regulatory authority over [all gaming activities] the conduct
15 of gaming or related activities as described in this part.
16 The board shall [be responsible to] ensure the integrity of
17 the acquisition and operation of slot machines and associated
18 equipment and shall have [jurisdiction] sole regulatory
19 authority over every aspect of the authorization and
20 operation of slot machines.
21 (2) The board shall employ [an executive director, chief
22 counsel, deputies, secretaries, officers, hearing officers
23 and agents as it may deem necessary] individuals as necessary
24 to carry out the powers and duties of the board, who shall
25 serve at the board's pleasure. [The board shall also employ
26 other employees as it deems appropriate whose duties shall be
27 determined by the board. In order to ensure the ability of
28 the board to recruit and retain individuals necessary to
29 execute its responsibilities under this part, the board shall
30 set the] An employee of the board shall be considered a State
20050S0862B2218 - 24 -
1 employee for purposes of 71 Pa.C.S. Pt. XXV (relating to
2 retirement for State employees and officers). For the
3 purposes of this paragraph, the board shall not be considered
4 an executive or independent agency under the act of October
5 15, 1980 (P.L.950, No.164), known as the Commonwealth
6 Attorneys Act.
7 (3) In addition to employees authorized by the board,
8 each member may employ one special assistant whose
9 classification and compensation shall be established by the
10 board. A special assistant shall be a State employee for
11 purposes of 71 Pa.C.S. Pt. XXV, shall serve at the pleasure
12 of the member and may only be removed by the board for cause.
13 (4) The board shall establish a system of classification
14 and compensation of its employees and shall not be subject to
15 the provisions of the act of April 9, 1929 (P.L.177, No.175),
16 known as The Administrative Code of 1929, as to
17 classification and compensation for its employees and conduct
18 its activities consistent with the practices and procedures
19 of Commonwealth agencies. [For the purposes of the act of
20 October 15, 1980 (P.L.950, No.164), known as the Commonwealth
21 Attorneys Act, the board shall not be considered an executive
22 or independent agency. The board shall have such other powers
23 and authority necessary to carry out its duties and the
24 objectives of this part.]
25 (5) Within 90 days of the effective date of this
26 paragraph, the board shall publish in the Pennsylvania
27 Bulletin, and on its Internet website, the classification
28 system for all employees of the board.
29 (6) A request for proposal to conduct investigations of
30 employees and applicants under this part shall include a
20050S0862B2218 - 25 -
1 requirement that an offeror provide the number of employees
2 of the offeror who will be engaged in the conduct of
3 investigations and who are residents of this Commonwealth and
4 annuitants of a Federal, State or local law enforcement
5 agency. Preference shall be given to an offeror with a
6 substantial number of employees who will be engaged in the
7 conduct of investigations and who are residents of this
8 Commonwealth and annuitants of a Federal, State or local law
9 enforcement agency.
10 (b) Specific powers.--The board shall have the specific
11 power and duty:
12 (1) To adopt, use and alter a corporate seal.
13 (2) To pay or satisfy obligations of the board.
14 (3) To sue or be sued, implead and be impleaded, or
15 interplead.
16 (4) To contract and execute instruments as necessary to
17 carry out the powers and duties of the board. Contracts for
18 the purchase of supplies, services and construction shall be
19 for a term not to exceed two years.
20 (5) To sell, transfer, convey and dispose of tangible or
21 intangible property owned by the board.
22 (6) To establish, charge and collect fees and fines as
23 authorized by this part.
24 (7) To administer oaths, examine witnesses and issue
25 subpoenas compelling the attendance of witnesses or the
26 production of documents and records or other evidence. The
27 provisions of this paragraph shall apply to designated
28 officers and employees.
29 (8) To purchase insurance against a loss related to the
30 board's property or assets.
20050S0862B2218 - 26 -
1 (8.1) Retain attorneys, accountants, auditors and
2 financial and other experts, to render services as necessary.
3 For the purposes of this paragraph, the board shall be
4 considered an independent agency for purposes of the
5 Commonwealth Attorneys Act.
6 (9) To require background investigations on [prospective
7 or existing] applicants, licensees, principals, key employees
8 or permittees [or persons holding a controlling interest in
9 any prospective or existing licensee or permittee] under the
10 jurisdiction of the board.
11 [(2)] (10) To enter into an agreement with the
12 Pennsylvania State Police for the reimbursement of actual
13 costs as approved by the board to the Pennsylvania State
14 Police for the investigations. Investigations shall include
15 information in the possession of the Attorney General.
16 [(3)] (11) For purposes of licensing and enforcement and
17 for purposes of the background investigation, [the board may]
18 to receive information otherwise protected by 18 Pa.C.S. Ch.
19 91 (relating to criminal history record information).
20 [(4)] (12) At its discretion, to issue, approve, renew,
21 revoke, suspend, condition or deny issuance or renewal of
22 slot machine licenses.
23 [(5)] (13) At its discretion, to issue, approve, renew,
24 revoke, suspend, condition or deny issuance or renewal of
25 supplier and manufacturer licenses.
26 [(6)] (14) At its discretion, to issue, approve, renew,
27 revoke, suspend, condition or deny issuance or renewal of
28 [occupation permits] a license or permit for various classes
29 of employees as required under this part.
30 [(7)] (15) At its discretion, to issue, approve, renew,
20050S0862B2218 - 27 -
1 revoke, suspend, condition or deny issuance or renewal of any
2 additional licenses or permits which may be required by the
3 board under this part. [or by regulation, including, but not
4 limited to, violations of sections 1328 (relating to change
5 in ownership or control of slot machine licensee) and 1330
6 (relating to multiple slot machine license prohibition).]
7 [(8)] (16) At its discretion, to suspend, condition or
8 deny the issuance or renewal of any license or permit or levy
9 fines or other sanctions for any violation of this part.
10 [(9)] (17) To require prospective and existing
11 employees, independent contractors, applicants [for licenses
12 and permits], licensees and permittees to submit to
13 fingerprinting by the Pennsylvania State Police. The
14 Pennsylvania State Police shall submit the fingerprints to
15 the Federal Bureau of Investigation for purposes of verifying
16 the identity of the [applicants] individual and obtaining
17 records of criminal arrests and convictions.
18 [10] (18) To require prospective and existing employees,
19 independent contractors, applicants, licensees and permittees
20 to submit photographs consistent with the standards of the
21 Commonwealth Photo Imaging Network.
22 (19) To levy fines or other sanctions against an
23 applicant, licensed entity or other licensee, permittee or
24 employee of the board who possesses, uses, sells or offers
25 for sale any device, equipment or material subject to this
26 part in a manner which constitutes a violation of this part.
27 (20) In addition to the power of the board regarding
28 license and permit applicants, to determine at its discretion
29 the suitability of any person who furnishes or seeks to
30 furnish to a slot machine licensee directly or indirectly any
20050S0862B2218 - 28 -
1 services or property related to slot machines or associated
2 equipment or through any arrangements under which that person
3 receives payment based directly or indirectly on earnings,
4 profits or receipts from the slot machines and associated
5 equipment. The board may require any such person to comply
6 with the requirements of this part and the regulations of the
7 board and may prohibit the person from furnishing the
8 services or property.
9 [(11) As a board and through its designated officers,
10 employees or agents, to administer oaths, examine witnesses
11 and issue subpoenas to compel attendance of witnesses and
12 production of all relevant and material reports, books,
13 papers, documents and other evidence.
14 (12)] (21) Within six months after the effective date of
15 this part, in a manner that does not impede the immediate
16 implementation of the duties and responsibilities of the
17 board under this part during the immediate two years after
18 the effective date of this part, to develop and implement an
19 affirmative action plan to assure that all persons are
20 accorded equality of opportunity in employment and
21 contracting by the board, its contractors, subcontractors,
22 assignees, lessees, agents, vendors and suppliers.
23 [(13)] (22) Except for contracts related to the central
24 control computer [and such other contracts as the board, in
25 consultation with the Secretary of General Services,
26 determines would result in substantial savings to the board
27 if entered into for a longer period than provided in this
28 paragraph], all contracts entered into by the board during
29 the two-year period following the effective date of this part
30 shall not exceed a term of two years.
20050S0862B2218 - 29 -
1 [(14) To promulgate rules and regulations the board
2 deems necessary to carry out the policy and purposes of this
3 part and to enhance the credibility and the integrity of the
4 licensed operation of slot machines and associated equipment
5 in this Commonwealth.
6 (15)] (23) The board shall not issue or renew a license
7 or permit unless it is satisfied that the applicant is a
8 person of good character, honesty and integrity and is a
9 person whose prior activities, criminal record, if any,
10 reputation, habits and associations do not pose a threat to
11