Senate Changes to SB 862 (October 18, 2006)
 

     The Senate will make the following material changes to the House version of SB 862. The general intent of the amendment is to address issues raised by the House and to remove objectionable materials if appropriate. The significant changes are as follows:

• Significantly, the Senate has removed all local zoning preemption. As a result of public opposition, the Senate and removed all references to state preemption of local zoning ordinances, thereby removing a significant political hurdle in ensuring the passage of SB 862.

• Senate has imposed a $50 fee on each slot machine placed into use or operation into the Commonwealth. All revenue from the fee is transferred to the Compulsive Gaming Treatment Fund. It is reasonably expected that this fee will generate $1.5 million for each time 30,000 are placed into operation. The fees continue to be imposed as machines are replaced.

• Senate has agreed with the House’s removal of a compensation fund for disenfranchised suppliers. The House objected to the fund, claiming that it was a “slush” fund and would be incentive for suppliers who were adversely affected by the change in mandatory nature of slot suppliers to seek compensation from the Commonwealth.

• Senate has restored the strict Board member recusal standard. The House amendment removed a provision in the bill that would have required a member of the Board, who had a conflict involving a single slot license applicant, to recuse himself from considering and voting in any proceeding in which that applicant and all other applicants seeking the same license. For example, if there were 3 applicants seeking a single license in Pittsburgh, and one of the Board members possessed a conflict involving one of the applicants, he would have to disqualify himself from considering or voting on any of the applications seeking the Pittsburgh license. Unfortunately, the House amendment removed this provision, thereby permitting the Board member to remain involved in the proceeding from which his conflict arose. The Senate removed this provision.

• Senate has restored the immediate termination of the mandatory use of suppliers. The House amendment maintains the mandatory nature of suppliers until the supplier license is “renewed” by the Board. The effect of this change is to delay, for at least a year, the desire of the Senate to remove the mandatory nature of suppliers. The Senate removed this provision.

• Senate has removed the “ex parte” loophole inserted by the House. The Senate version of the bill included an absolute ban on “ex parte” conversations. The Senate version defined all “ex parte” conversation in a manner that was consistent with the definition contained in the Public Utility Code. See, 66 Pa.C.S.A. § 334(c). The House amended the definition to permit “ex parte”communications “by” members of the Board and employees of the Board if the member or employee believes it is “necessary.” There is no precedent in state law for this type of exception to ex parte prohibitions. Accordingly, the Senate restored the original definition of “ex parte.”

• Strengthen public input hearing provision. The House changed a provision of the bill that would have required only one public input hearings concerning a slot license application to be held in the municipality where the licensed facility is to be located. The House amendment changed the Senate requirement for all hearings to be held in the host municipality. The Bill has been restored to the Senate version.

• Restore the mandate that the Board regulate wide-area progressive agreements. The Senate version directed the Board to review and approve all agreements concerning the management and operation of wide-area progressive slot machines among multi-casinos. The House amendment removed this mandate. This change has been restored.

• Remove a clause to benefit a potential Category 1 slot applicant in Beaver County. The House amended the bill to include two provisions intended to benefit an applicant for a Harness Racing License in Beaver County. The House amendment authorizes the Board to reclassify the remaining Category 1 slot license as a Category 2 slot license in July 2008. Additionally, it removed the prohibition in Act 71 that would prevent any person who sues the Harness Racing Commission from contemporaneously seeking a slot license. The Senate removed this provision.

• Restore the “licensing” of key employees. Without explanation, the House amended the Senate version of the bill to “permit” those individuals who are significantly involved in the operation or management of casinos. All other state jurisdictions routinely use the term “license” to connote a higher level of background investigation. A “permit” indicates a lesser level of review. The practical effect of this change will compel the Board to redraft most of its regulations related to licensing and permitting. The Board has formally objected to this change, and as such the Senate removed this change by the House.

• Remove language that would permits Casinos to provide free drinks. The House inserted a provision in the back of the bill that removes the prohibition in the Pennsylvania Race Horse and Reform Act that would prohibit tracks from providing free drinks. The Senate removed this provision.

     In addition, the Senate bill restores the grant of authority to the Pennsylvania Department of General Services to negotiate the granting of riparian rights lease agreements to applicants granted, permits expedited appeals of zoning or land use decisions, strengthens post-employment restrictions and makes various editorial or technical changes.