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                                                      PRINTER'S NO. 1053

THE GENERAL ASSEMBLY OF PENNSYLVANIA


HOUSE BILL

No. 901 Session of 2007


        INTRODUCED BY R. MILLER, ARGALL, BAKER, BOYD, CLYMER, EVERETT,
           FAIRCHILD, GEIST, GINGRICH, GRUCELA, HENNESSEY, HESS,
           HUTCHINSON, M. KELLER, McILHATTAN, MILLARD, NAILOR, NICKOL,
           PICKETT, RAPP, REICHLEY, RUBLEY, SCAVELLO, STERN,
           R. STEVENSON, SWANGER AND WATSON, MARCH 22, 2007

        REFERRED TO COMMITTEE ON GAMING OVERSIGHT, MARCH 22, 2007

                                     AN ACT

     1  Amending Title 4 (Amusements) of the Pennsylvania Consolidated
     2     Statutes, further providing for establishment of State Gaming
     3     Fund and net slot machine revenue distribution and for
     4     transfers from State Gaming Fund.

     5     The General Assembly of the Commonwealth of Pennsylvania
     6  hereby enacts as follows:
     7     Section 1.  Section 1403 of Title 4 of the Pennsylvania
     8  Consolidated Statutes, amended November 1, 2006 (P.L.1243,
     9  No.135), is amended to read:
    10  § 1403.  Establishment of State Gaming Fund and net slot machine
    11             revenue distribution.
    12     (a)  Fund established.--There is hereby established the State
    13  Gaming Fund within the State Treasury.
    14     (b)  Slot machine tax.--The department shall determine and
    15  each slot machine licensee shall pay a daily tax of 34% from its
    16  daily gross terminal revenue from the slot machines in operation
    17  at its facility and a local share assessment as provided in


     1  subsection (c) into the fund. All funds owed to the Commonwealth
     2  or a municipality under this section shall be held in trust by
     3  the licensed gaming entity until the funds are paid or
     4  transferred and distributed. Unless otherwise agreed to by the
     5  Gaming Board, a licensed gaming entity shall establish a
     6  separate bank account to maintain gaming proceeds until such
     7  time as they are paid or transferred under this section.
     8     (c)  Transfers and distributions.--[The] Subject to the
     9  provisions of subsection (e), the department shall:
    10         (1)  Transfer the slot machine tax and assessment imposed
    11     in subsection (b) to the fund.
    12         (2)  From the local share assessment established in
    13     subsection (b), make quarterly distributions among the
    14     counties hosting a licensed facility in accordance with the
    15     following schedule:
    16             (i)  If the licensed facility is a Category 1
    17         licensed facility that is located at a harness racetrack
    18         and the county, including a home rule county, in which
    19         the licensed facility is located is:
    20                 (A)  A county of the first class:  4% of the
    21             gross terminal revenue to the county hosting the
    22             licensed facility from each such licensed facility.
    23             Notwithstanding any other provision to the contrary,
    24             funds from licensed gaming entities located within a
    25             county of the first class shall not be distributed
    26             outside of a county of the first class.
    27                 (B)  A county of the second class:  2% of the
    28             gross terminal revenue to the county hosting the
    29             licensed facility from each such licensed facility.
    30                 (C)  A county of the second class A:  1% of the
    20070H0901B1053                  - 2 -     

     1             gross terminal revenue to the county hosting the
     2             licensed facility from each such licensed facility.
     3             An additional 1% of the gross terminal revenue to the
     4             county hosting the licensed facility from each such
     5             licensed facility for the purpose of municipal grants
     6             within the county in which the licensee is located.
     7                 (D)  (I)  A county of the third class:  Except as
     8                 provided in subclause (II), 2% of the gross
     9                 terminal revenue from each such licensed facility
    10                 shall be deposited into a restricted account
    11                 established in the Department of Community and
    12                 Economic Development to be used exclusively for
    13                 grants for health, safety and economic
    14                 development projects to municipalities within the
    15                 county where the licensed facility is located.
    16                 Municipalities that are contiguous to the
    17                 municipality hosting such licensed facility shall
    18                 be given priority by the Department of Community
    19                 and Economic Development in the award of such
    20                 grants.
    21                     (II)  If a licensed facility is located in
    22                 one of two counties of the third class where a
    23                 city of the third class is located in both
    24                 counties of the third class, the county in which
    25                 the licensed facility is located shall receive
    26                 1.2% of the gross terminal revenue to be
    27                 distributed as follows:  20% to the host city,
    28                 30% to the host county and 50% to the host county
    29                 for the purpose of making municipal grants within
    30                 the county, with priority given to municipalities
    20070H0901B1053                  - 3 -     

     1                 contiguous to the host city. The county of the
     2                 third class, which includes a city of the third
     3                 class that is located in two counties of the
     4                 third class and is not the host county for the
     5                 licensed facility, shall receive .8% of the gross
     6                 terminal revenue to be distributed as follows:
     7                 60% to a nonhost city of the third class located
     8                 solely in the nonhost county in which the host
     9                 city of the third class is also located or 60% to
    10                 the nonhost city of the third class located both
    11                 in the host and nonhost counties of the third
    12                 class, 35% to the nonhost county and 5% to the
    13                 nonhost county for the purpose of making
    14                 municipal grants within the county.
    15                 (E)  A county of the fourth class:  2% of the
    16             gross terminal revenue from each such licensed
    17             facility shall be deposited into a restricted account
    18             established in the Department of Community and
    19             Economic Development to be used exclusively for
    20             grants to the county, to economic development
    21             authorities or redevelopment authorities within the
    22             county for grants for economic development projects,
    23             job training, community improvement projects, other
    24             projects in the public interest and reasonable
    25             administrative costs. Notwithstanding the provisions
    26             of the act of February 9, 1999 (P.L.1, No.1), known
    27             as the Capital Facilities Debt Enabling Act, grants
    28             made under this clause may be utilized as local
    29             matching funds for other grants or loans from the
    30             Commonwealth.
    20070H0901B1053                  - 4 -     

     1                 (F)  Counties of the fifth through eighth
     2             classes:  2% of the gross terminal revenue from each
     3             such licensed facility shall be deposited into a
     4             restricted account established in the Department of
     5             Community and Economic Development to be used
     6             exclusively for grants to the county.
     7                 (G)  Any county not specifically enumerated in
     8             clauses (A) through (F), 2% of the gross terminal
     9             revenue to the county hosting the licensed facility
    10             from each such licensed facility.
    11             (ii)  If the licensed facility is a Category 1
    12         licensed facility and is located at a thoroughbred
    13         racetrack and the county in which the licensed facility
    14         is located is:
    15                 (A)  A county of the first class:  4% of the
    16             gross terminal revenue to the county hosting the
    17             licensed facility from each such licensed facility.
    18             Notwithstanding any other provision to the contrary,
    19             funds from licensed gaming entities located within
    20             the county of the first class shall not be
    21             distributed outside of a county of the first class.
    22                 (B)  A county of the second class:  2% of the
    23             gross terminal revenue to the county hosting the
    24             licensed facility from each such licensed facility.
    25                 (C)  A county of the second class A:  1% of the
    26             gross terminal revenue to the county hosting the
    27             licensed facility from each such licensed facility.
    28             An additional 1% of the gross terminal revenue to the
    29             county hosting the licensed facility from each such
    30             licensed facility for the purpose of municipal grants
    20070H0901B1053                  - 5 -     

     1             within the county in which the licensee is located.
     2                 (D)  A county of the third class:  1% of the
     3             gross terminal revenue to the county hosting the
     4             licensed facility from each such licensed facility.
     5             An additional 1% of the gross terminal revenue to the
     6             county hosting the licensed facility from each such
     7             licensed facility for the purpose of municipal grants
     8             within the county in which the licensee is located.
     9                 (E)  A county of the fourth class:  2% of the
    10             gross terminal revenue from each such licensed
    11             facility shall be deposited into a restricted account
    12             established in the Department of Community and
    13             Economic Development to be used exclusively for
    14             grants to the county, to economic development
    15             authorities or redevelopment authorities within the
    16             county for grants for economic development projects,
    17             community improvement projects, job training, other
    18             projects in the public interest and reasonable
    19             administrative costs. Notwithstanding the Capital
    20             Facilities Debt Enabling Act, grants made under this
    21             clause may be utilized as local matching funds for
    22             other grants or loans from the Commonwealth.
    23                 (F)  Counties of the fifth through eighth
    24             classes:  2% of the gross terminal revenue from each
    25             such licensed facility shall be deposited into a
    26             restricted account established in the Department of
    27             Community and Economic Development to be used
    28             exclusively for grants to the county.
    29                 (G)  Any county not specifically enumerated in
    30             clauses (A) through (F), 2% of the gross terminal
    20070H0901B1053                  - 6 -     

     1             revenue to the county hosting the licensed facility
     2             from each such licensed facility.
     3             (iii)  If the facility is a Category 2 licensed
     4         facility and if the county in which the licensed facility
     5         is located is:
     6                 (A)  A county of the first class:  4% of the
     7             gross terminal revenue to the county hosting the
     8             licensed facility from each such licensed facility.
     9             Notwithstanding any other provision to the contrary,
    10             funds from licensed gaming entities located within a
    11             county of the first class shall not be distributed
    12             outside of a county of the first class. The first
    13             $5,000,000 of the total amount distributed annually
    14             to the county of the first class shall be distributed
    15             to the Philadelphia School District.
    16                 (B)  A county of the second class:  2% of the
    17             gross terminal revenue to the county hosting the
    18             licensed facility from each such licensed facility.
    19                 (C)  A county of the second class A:  1% of the
    20             gross terminal revenue to the county hosting the
    21             licensed facility from each such licensed facility.
    22             An additional 1% of the gross terminal revenue to the
    23             county hosting the licensed facility from each such
    24             licensed facility for the purpose of municipal grants
    25             within the county in which the licensee is located.
    26                 (D)  A county of the third class:  1% of the
    27             gross terminal revenue to the county hosting the
    28             licensed facility from each such licensed facility.
    29             An additional 1% of the gross terminal revenue to the
    30             county hosting the licensed facility from each such
    20070H0901B1053                  - 7 -     

     1             licensed facility for the purpose of municipal grants
     2             within the county in which the licensee is located.
     3                 (D.1)  If a licensed facility is located in one
     4             of two counties of the third class where a city of
     5             the third class is located in both counties of the
     6             third class, the county in which the licensed
     7             facility is located shall receive 1.2% of the gross
     8             terminal revenue to be distributed as follows:  20%
     9             to the host city, 30% to the host county and 50% to
    10             the host county for the purpose of making municipal
    11             grants within the county, with priority given to
    12             municipalities contiguous to the host city. The
    13             county of the third class, which includes a city of
    14             the third class that is located in two counties of
    15             the third class and is not the host county for the
    16             licensed facility, shall receive .8% of the gross
    17             terminal revenue to be distributed as follows:  60%
    18             to a nonhost city of the third class located solely
    19             in the nonhost county in which the host city of the
    20             third class is also located or 60% to the nonhost
    21             city of the third class located both in the host and
    22             nonhost counties of the third class, 35% to the
    23             nonhost county and 5% to the nonhost county for the
    24             purpose of making municipal grants within the county.
    25                 (E)  A county of the fourth class:  2% of the
    26             gross terminal revenue from each such licensed
    27             facility shall be deposited into a restricted account
    28             established in the Department of Community and
    29             Economic Development to be used exclusively for
    30             grants to the county, to economic development
    20070H0901B1053                  - 8 -     

     1             authorities or redevelopment authorities within the
     2             county for grants for economic development projects,
     3             community improvement projects, job training, other
     4             projects in the public interest and reasonable
     5             administrative costs. Notwithstanding the Capital
     6             Facilities Debt Enabling Act, grants made under this
     7             clause may be utilized as local matching funds for
     8             other grants or loans from the Commonwealth.
     9                 (F)  Counties of the fifth class:  2% of the
    10             gross terminal revenue from each such licensed
    11             facility shall be deposited and distributed as
    12             follows:
    13                     (I)  One percent shall be deposited into a
    14                 restricted receipts account in the Department of
    15                 Community and Economic Development to be used
    16                 exclusively for grants within the county for
    17                 economic development projects, community
    18                 improvement projects and other projects in the
    19                 public interest within the county. The amount
    20                 under this subclause includes reasonable
    21                 administrative costs.
    22                     (II)  One percent shall be deposited into a
    23                 restricted receipts account in the Department of
    24                 Community and Economic Development to be used
    25                 exclusively for grants within contiguous counties
    26                 for economic development projects, community
    27                 improvement projects and other projects in the
    28                 public interest within contiguous counties. The
    29                 amount under this subclause includes reasonable
    30                 administrative costs.
    20070H0901B1053                  - 9 -     

     1                     (III)  Fifty percent of any revenue required
     2                 to be transferred under paragraph (3)(v) shall be
     3                 deposited into the restricted receipts account
     4                 established under subclause (I), and 50% shall be
     5                 deposited into the restricted receipt account
     6                 established under subclause (II). Notwithstanding
     7                 the Capital Facilities Debt Enabling Act, grants
     8                 made under this clause may be utilized as local
     9                 matching funds for other grants or loans from the
    10                 Commonwealth.
    11                 (G)  Any county not specifically enumerated in
    12             clauses (A) through (F), 2% of the gross terminal
    13             revenue to the county hosting the licensed facility
    14             from each such licensed facility.
    15             (iv)  If the facility is a Category 3 licensed
    16         facility, 2% of the gross terminal revenue from each such
    17         licensed facility shall be deposited into a restricted
    18         account established in the Department of Community and
    19         Economic Development to be used exclusively for grants to
    20         the county, to economic development authorities or
    21         redevelopment authorities within the county for grants
    22         for economic development projects and community
    23         improvement projects.
    24             (v)  Unless otherwise specified, for the purposes of
    25         this paragraph money designated for municipal grants
    26         within a county, other than a county of the first class,
    27         in which a licensed facility is located shall be used to
    28         fund grants to the municipality in which the licensed
    29         facility is located, to the county in which the licensed
    30         facility is located and to the municipalities which are
    20070H0901B1053                 - 10 -     

     1         contiguous to the municipality in which the licensed
     2         facility is located and which are located within the
     3         county in which the licensed facility is located. Grants
     4         shall be administered by the county through its economic
     5         development or redevelopment authority in which the
     6         licensed facility is located. Grants shall be used to
     7         fund the costs of human services, infrastructure
     8         improvements, facilities, emergency services, health and
     9         public safety expenses associated with licensed facility
    10         operations. If at the end of a fiscal year uncommitted
    11         funds exist, the county shall pay to the economic
    12         development or redevelopment authority of the county in
    13         which the licensed facility is located the uncommitted
    14         funds.
    15             (vi)  If the licensed facility is located in more
    16         than one county, the amount available shall be
    17         distributed on a pro rata basis determined by the
    18         percentage of acreage located in each county to the total
    19         acreage of all counties occupied by the licensed
    20         facility.
    21             (vii)  The distributions provided in this paragraph
    22         shall be based upon county classifications in effect on
    23         the effective date of this section. Any reclassification
    24         of counties as a result of a Federal decennial census or
    25         of a State statute shall not apply to this subparagraph.
    26             (viii)  If any provision of this paragraph is found
    27         to be unenforceable for any reason, the distribution
    28         provided for in the unenforceable provision shall be made
    29         to the county in which the licensed facility is located
    30         for the purposes of grants to municipalities in that
    20070H0901B1053                 - 11 -     

     1         county, including municipal grants as specified in
     2         subparagraph (v).
     3             (ix)  Nothing in this paragraph shall prevent any of
     4         the above counties which directly receive a distribution
     5         under this section from entering into intergovernmental
     6         cooperative agreements with other jurisdictions for
     7         sharing this money.
     8         (3)  From the local share assessment established in
     9     subsection (b), make quarterly distributions among the
    10     municipalities, including home rule municipalities, hosting a
    11     licensed facility in accordance with the following schedule:
    12             (i)  To a city of the second class hosting a licensed
    13         facility, other than a Category 3 licensed facility, 2%
    14         of the gross terminal revenue or $10,000,000 annually,
    15         whichever is greater, shall be paid by each licensed
    16         gaming entity operating a facility located in that city.
    17         In the event that the revenues generated by the 2% do not
    18         meet the $10,000,000 minimum specified in this
    19         subparagraph, the department shall collect the remainder
    20         of the minimum amount of $10,000,000 from each licensed
    21         gaming entity operating a facility in the city and
    22         deposit that amount in the city treasury.
    23             (ii)  To a city of the second class A hosting a
    24         licensed facility, other than a Category 3 licensed
    25         facility, 2% of the gross terminal revenue or $10,000,000
    26         annually, whichever is greater, shall be paid by each
    27         licensed entity operating a licensed facility located in
    28         that city, subject, however, to the budgetary limitation
    29         in this subparagraph. The amount allocated to the
    30         designated municipalities shall not exceed 50% of their
    20070H0901B1053                 - 12 -     

     1         total budget for fiscal year 2003-2004, adjusted for
     2         inflation in subsequent years by an amount not to exceed
     3         an annual cost-of-living adjustment calculated by
     4         applying the percentage change in the Consumer Price
     5         Index immediately prior to the date the adjustment is due
     6         to take effect. Any remaining moneys shall be collected
     7         by the department from each licensed gaming entity and
     8         distributed in accordance with paragraph (2) based upon
     9         the classification of county where the licensed facility
    10         is located. In the event that the revenues generated by
    11         the 2% do not meet the $10,000,000 minimum specified in
    12         this subparagraph, the department shall collect the
    13         remainder of the minimum amount of $10,000,000 from each
    14         licensed gaming entity operating a facility in the city,
    15         pay any balance due to the city and transfer any
    16         remainder in accordance with paragraph (2).
    17             (iii)  To a city of the third class hosting a
    18         licensed facility, other than a Category 3 licensed
    19         facility, 2% of the gross terminal revenue or $10,000,000
    20         annually, whichever is greater, shall be paid by each
    21         licensed gaming entity operating a licensed facility
    22         located in that city, subject, however, to the budgetary
    23         limitation in this subparagraph. In the event that the
    24         city has a written agreement with a licensed gaming
    25         entity executed prior to the effective date of this part,
    26         the amount paid under the agreement to the city shall be
    27         applied and credited to the difference between 2% of the
    28         gross terminal revenue and the $10,000,000 owed under
    29         this subparagraph if the 2% of the gross terminal revenue
    30         is less than $10,000,000. If 2% of the gross terminal
    20070H0901B1053                 - 13 -     

     1         revenue is greater than the $10,000,000 required to be
     2         paid under this subparagraph, the credit shall not apply.
     3         The amount of gross terminal revenue required to be paid
     4         pursuant to the agreement shall be deemed to be gross
     5         terminal revenue for purposes of this subparagraph. The
     6         amount allocated to the designated municipalities shall
     7         not exceed 50% of their total budget for fiscal year
     8         2003-2004, adjusted for inflation in subsequent years by
     9         an amount not to exceed an annual cost-of-living
    10         adjustment calculated by applying the percentage change
    11         in the Consumer Price Index immediately prior to the date
    12         the adjustment is due to take effect. Any remaining
    13         moneys shall be collected by the department from each
    14         licensed gaming entity and distributed in accordance with
    15         paragraph (2) based upon the classification of county
    16         where the licensed facility is located. In the event that
    17         the revenues generated by the 2% do not meet the
    18         $10,000,000 minimum specified in this subparagraph, the
    19         department shall collect the remainder of the minimum
    20         amount of $10,000,000 from each licensed gaming entity
    21         operating a facility, pay any balance due to the city of
    22         the third class and transfer any remainder in accordance
    23         with paragraph (2).
    24             (iii.1)  If a licensed facility is located in a city
    25         of the third class and the city is located in more than
    26         one county of the third class, 2% of the gross terminal
    27         revenue or $10,000,000 annually, whichever is greater,
    28         shall be distributed as follows:  80% to the host city
    29         and 20% to the city of the third class located solely in
    30         a nonhost county in which the host city of the third
    20070H0901B1053                 - 14 -     

     1         class is also located. If a licensed facility is located
     2         in a city of the third class and that city is located
     3         solely in a host county of the third class in which a
     4         nonhost city of the third class is also located, 2% of
     5         gross terminal revenue or $10,000,000 annually, whichever
     6         is greater, shall be distributed as follows:  80% to the
     7         host city and 20% to a city of the third class located
     8         both in a nonhost county of the third class and in a host
     9         county of the third class in which the host city of the
    10         third class is located.
    11             (iv)  To a township of the first class hosting a
    12         licensed facility, other than a Category 3 licensed
    13         facility, 2% of the gross terminal revenue or $10,000,000
    14         annually, whichever is greater, shall be paid by each
    15         licensed gaming entity operating a licensed facility
    16         located in the township subject, however, to the
    17         budgetary limitation in this subparagraph. The amount
    18         allocated to the designated municipalities shall not
    19         exceed 50% of their total budget for fiscal year 2003-
    20         2004, adjusted for inflation in subsequent years by an
    21         amount not to exceed an annual cost-of-living adjustment
    22         calculated by applying the percentage change in the
    23         Consumer Price Index immediately prior to the date the
    24         adjustment is due to take effect. Any remaining money
    25         shall be collected by the department from each licensed
    26         gaming entity and distributed in accordance with
    27         paragraph (2) based upon the classification of county
    28         where the licensed facility is located. In the event that
    29         the revenues generated by the 2% do not meet the
    30         $10,000,000 minimum specified in this subparagraph, the
    20070H0901B1053                 - 15 -     

     1         department shall collect the remainder of the minimum
     2         amount of $10,000,000 from each licensed gaming entity
     3         operating a licensed facility in the township, pay any
     4         balance due to the township and transfer any remainder in
     5         accordance with paragraph (2).
     6             (v)  To a township of the second class hosting a
     7         licensed facility, other than a Category 3 licensed
     8         facility, 2% of the gross terminal revenue or $10,000,000
     9         annually, whichever is greater, shall be paid by each
    10         licensed gaming entity operating a licensed facility
    11         located in the township, subject, however, to the
    12         budgetary limitation in this subparagraph. The amount
    13         allocated to the designated municipalities shall not
    14         exceed 50% of their total budget for fiscal year 2003-
    15         2004, adjusted for inflation in subsequent years by an
    16         amount not to exceed an annual cost-of-living adjustment
    17         calculated by applying the percentage change in the
    18         Consumer Price Index immediately prior to the date the
    19         adjustment is due to take effect. Any remaining money
    20         shall be collected by the department from each licensed
    21         gaming entity and distributed in accordance with
    22         paragraph (2) based upon the classification of county
    23         where the licensed facility is located. Where the
    24         licensed facility is other than a Category 3 and is
    25         located in more than one second class township, the
    26         county commissioners of the county of the third class in
    27         which the facility is located shall appoint an advisory
    28         committee for the purpose of advising the county as to
    29         the need for municipal grants for health, safety,
    30         transportation and other projects in the public interest
    20070H0901B1053                 - 16 -     

     1         to be comprised of two individuals from the host
     2         municipality, two from contiguous municipalities within
     3         the county of the third class and one from the host
     4         county. A county other than a county of the third class
     5         in which the licensed facility is located is not required
     6         to appoint an advisory committee and may use funds
     7         received under this subparagraph for purposes other than
     8         municipal grants. In the event that the revenues
     9         generated by the 2% do not meet the $10,000,000 minimum
    10         specified in this subparagraph, the department shall
    11         collect the remainder of the minimum amount of
    12         $10,000,000 from each licensed gaming entity operating a
    13         licensed facility in the township, pay any balance due to
    14         the township and transfer any remainder in accordance
    15         with paragraph (2).
    16             (vi)  To a borough hosting a licensed facility, other
    17         than a Category 3 licensed facility, 2% of the gross
    18         terminal revenue or $10,000,000 annually, whichever is
    19         greater, shall be paid by each licensed gaming entity
    20         operating a licensed facility located in that borough,
    21         subject, however, to the budgetary limitation in this
    22         subparagraph. The amount allocated to the designated
    23         municipalities shall not exceed 50% of their total budget
    24         for fiscal year 2003-2004, adjusted for inflation in
    25         subsequent years by an amount not to exceed an annual
    26         cost-of-living adjustment calculated by applying the
    27         percentage change in the Consumer Price Index immediately
    28         prior to the date the adjustment is due to take effect.
    29         Any remaining money shall be collected by the department
    30         from each licensed gaming entity and distributed in
    20070H0901B1053                 - 17 -     

     1         accordance with paragraph (2) based upon the
     2         classification of county where the licensed facility is
     3         located. In the event that the revenues generated by the
     4         2% do not meet the $10,000,000 minimum specified in this
     5         subparagraph, the department shall collect the remainder
     6         of the minimum amount of $10,000,000 from each licensed
     7         gaming entity operating a licensed facility in the
     8         borough, pay any balance due to the borough and transfer
     9         any remainder in accordance with paragraph (2).
    10             (vii)  To an incorporated town hosting a licensed
    11         facility, other than a Category 3 licensed facility, 2%
    12         of the gross terminal revenue or $10,000,000 annually,
    13         whichever is greater, shall be paid by each licensed
    14         entity operating a licensed facility located in the town,
    15         subject, however, to the budgetary limitation in this
    16         subparagraph. The amount allocated to the designated
    17         municipalities shall not exceed 50% of their total budget
    18         for fiscal year 2003-2004, adjusted for inflation in
    19         subsequent years by an amount not to exceed an annual
    20         cost-of-living adjustment calculated by applying the
    21         percentage change in the Consumer Price Index immediately
    22         prior to the date the adjustment is due to take effect.
    23         Any remaining money shall be collected by the department
    24         from each licensed gaming entity and distributed in
    25         accordance with paragraph (2) based upon the
    26         classification of county where the licensed facility is
    27         located. In the event that the revenues generated by the
    28         2% do not meet the $10,000,000 minimum specified in this
    29         subparagraph, the department shall collect the remainder
    30         of the minimum amount of $10,000,000 from each licensed
    20070H0901B1053                 - 18 -     

     1         gaming entity operating a licensed facility in the
     2         incorporated town, pay any balance due to the town and
     3         transfer any remainder in accordance with paragraph (2).
     4             (viii)  To a municipality of any class hosting a
     5         Category 3 facility, 2% of the gross terminal revenue
     6         from the Category 3 licensed facility located in the
     7         municipality, subject, however, to the budgetary
     8         limitation in this subparagraph. The amount allocated to
     9         the designated municipalities shall not exceed 50% of
    10         their total budget for fiscal year 2003-2004, adjusted
    11         for inflation in subsequent years by an amount not to
    12         exceed an annual cost-of-living adjustment calculated by
    13         applying the percentage change in the Consumer Price
    14         Index immediately prior to the date the adjustment is due
    15         to take effect. Any remaining money shall be collected by
    16         the department from each licensed gaming entity and
    17         distributed in accordance with paragraph (2) based upon
    18         the classification of county where the licensed facility
    19         is located.
    20             (ix)   Any municipality not specifically enumerated
    21         in subparagraphs (i) through (viii), 2% of the gross
    22         terminal revenue to the municipality hosting the licensed
    23         facility from each such licensed facility.
    24             (x)  If the licensed facility is located in more than
    25         one municipality, the amount available shall be
    26         distributed on a pro rata basis determined by the
    27         percentage of acreage located in each municipality to the
    28         total acreage of all municipalities occupied by the
    29         licensed facility.
    30             (xi)  If the licensed facility is located at a resort
    20070H0901B1053                 - 19 -     

     1         which is also an incorporated municipality, such
     2         municipality shall not be eligible to receive any
     3         distribution under this paragraph. The distribution it
     4         would have otherwise been entitled to under this
     5         paragraph shall instead be distributed in accordance with
     6         paragraph (2) based upon the county where the licensed
     7         facility is located.
     8             (xii)  The distributions provided in this paragraph
     9         shall be based upon municipal classifications in effect
    10         on the effective date of this section. For the purposes
    11         of this paragraph, any reclassification of municipalities
    12         as a result of a Federal decennial census or of a State
    13         statute shall not apply to this paragraph.
    14             (xiii)  If any provision of this paragraph is found
    15         to be unenforceable for any reason, the distribution
    16         provided for in such unenforceable provision shall be
    17         made to the municipality in which the licensed facility
    18         is located.
    19             (xiv)  Nothing in this paragraph shall prevent any of
    20         the above municipalities from entering into
    21         intergovernmental cooperative agreements with other
    22         jurisdictions for sharing this money.
    23             (xv)  Notwithstanding any other law, agreement or
    24         provision in this part to the contrary, all revenues
    25         provided, directed or earmarked under this section to or
    26         for the benefit of a city of the second class in which an
    27         intergovernmental cooperation authority has been
    28         established and is in existence pursuant to the act of
    29         February 12, 2004 (P.L.73, No.11), known as the
    30         Intergovernmental Cooperation Authority Act for Cities of
    20070H0901B1053                 - 20 -     

     1         the Second Class, shall be directed to and under the
     2         exclusive control of such intergovernmental cooperation
     3         authority to be used:
     4                 (A)  to reduce the debt of the second class city;
     5                 (B)  to increase the level of funding of the
     6             municipal pension funds of the second class city; or
     7                 (C)  for any other purposes as determined to be
     8             in the best interest of the second class city by such
     9             intergovernmental cooperation authority. Such
    10             revenues shall not be directed to or under the
    11             control of such city of the second class or any
    12             coordinator appointed pursuant to the act of July 10,
    13             1987 (P.L.246, No.47), known as the Municipalities
    14             Financial Recovery Act, for such city of the second
    15             class.
    16     (d)  Consumer Price Index.--For purposes of subsection (c),
    17  references to the Consumer Price Index shall mean the Consumer
    18  Price Index for All Urban Consumers for the Pennsylvania, New
    19  Jersey, Delaware and Maryland area for the most recent 12-month
    20  period for which figures have been officially reported by the
    21  United States Department of Labor, Bureau of Labor Statistics.
    22     (e)  Priority transfer for preservation of funding level for
    23  State Lottery Fund.--
    24         (1)  Prior to making any transfer or distribution under
    25     this section or section 1408 (relating to transfers from
    26     State Gaming Fund), the department shall annually determine
    27     the balance in the State Lottery Fund after payment, under
    28     section 311 of the act of August 26, 1971 (P.L.351, No.91),
    29     known as the State Lottery Law, of lottery prizes and
    30     operating expenses of the department relating thereto for the
    20070H0901B1053                 - 21 -     

     1     prior fiscal year and shall make the transfer under paragraph
     2     (2), if applicable.
     3         (2)  If such balance is less than the balance from the
     4     prior fiscal year determined in the same manner, the
     5     department shall transfer an amount equal to the difference
     6     between the balances from the State Gaming Fund to the State
     7     Lottery Fund.
     8     Section 2.  Section 1408(e) of Title 4 is amended to read:
     9  § 1408.  Transfers from State Gaming Fund.
    10     * * *
    11     (e)  Transfer to Property Tax Relief Fund.--[Monthly]
    12  Annually, the State Treasurer shall transfer the remaining
    13  balance in the State Gaming Fund which is not otherwise
    14  transferred under section 1403(e) (relating to establishment of
    15  State Gaming Fund and net slot machine revenue distribution) and
    16  allocated in subsections (a), (b), (c) and (d) to the Property
    17  Tax Relief Fund established in section 1409 (relating to
    18  Property Tax Relief Fund).
    19     Section 3.  This act shall take effect in 60 days.








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