1201 - Pennsylvania Gaming Control Board established.
CHAPTER 12 PENNSYLVANIA GAMING CONTROL BOARD Sec. 1201. Pennsylvania Gaming Control Board established. 1201.1. Applicability of other statutes. 1202. General and specific powers. 1202.1. Code of conduct. 1202.2. Expenses of regulatory agencies. 1203. Temporary regulations. 1204. Licensed gaming entity application appeals from board. 1205. License or permit application hearing process; public input hearings. 1206. Board minutes and records. 1207. Regulatory authority of board. 1208. Collection of fees and fines. 1209. Slot machine license fee. 1210. Number of slot machines. 1211. Reports of board. 1212. Diversity goals of board. 1213. License or permit prohibition. 1214. Specific authority to suspend slot machine license. Enactment. Chapter 12 was added July 5, 2004, P.L.572, No.71, effective immediately. § 1201. Pennsylvania Gaming Control Board established. (a) Board established.--There is established an independent board which shall be a body corporate and politic to be known as the Pennsylvania Gaming Control Board. (b) Membership.--The board shall consist of the following members: (1) Three members appointed by the Governor. (2) One member appointed by each of the following: (i) The President pro tempore of the Senate. (ii) The Minority Leader of the Senate. (iii) The Speaker of the House of Representatives. (iv) The Minority Leader of the House of Representatives. (b.1) Removal.--A member of the board shall be removed from office by the appointing authority: (1) for misconduct in office, willful neglect of duty or conduct evidencing unfitness for office or incompetence; or (2) upon conviction of an offense graded as a felony, an infamous crime, an offense under this part or an equivalent offense under Federal law or the law of another jurisdiction. (c) Initial appointments to board.-- (1) Gubernatorial appointees initially appointed under subsection (b)(1) shall serve an initial term of one, two and three years respectively as designated by the Governor at the time of appointment and until their successors are appointed and qualified. (2) Legislative appointees initially appointed under subsection (b)(2) shall serve until the third Tuesday in January 2007 and until their successors are appointed and qualified. (3) An appointment to fill a vacancy created by a member appointed in accordance with paragraph (1) or (2) shall be for the remainder of the unexpired term. (d) Terms of office.--Upon the expiration of a term of a member appointed under subsection (c), the following shall apply: (1) The term of office of a gubernatorial appointee shall be three years and until a successor is appointed and qualified. (2) The term of office of a legislative appointee shall be two years and until a successor is appointed and qualified. (3) A legislative appointee shall serve no more than three full consecutive terms. (4) A gubernatorial appointee shall serve no more than two full consecutive terms. (5) An appointment to fill a vacancy shall be for the remainder of the unexpired term. (6) A member appointed to fill a vacancy under paragraph (3) may serve three full terms following the expiration of the term related to the vacancy. (7) A member appointed to fill a vacancy under paragraph (4) may serve two full terms following the expiration of the term related to the vacancy. (e) Ex officio members.--The Secretary of Revenue, the Secretary of Agriculture and the State Treasurer, or their designees, shall serve on the board as nonvoting ex officio members of the board. The designee shall be a deputy secretary or an equivalent position within the agency. (f) Qualified majority vote.-- (1) Except as permitted in paragraphs (2) and (3), any action, including, but not limited to, the approval, issuance, denial or conditioning of any license by the board under this part or the making of any order or the ratification of any permissible act done or order made by one or more of the members, shall require a qualified majority vote consisting of at least one gubernatorial appointee and the four legislative appointees. (2) Any action to suspend or revoke, not renew, void or require forfeiture of a license or permit issued under this part, to impose any administrative fine or penalty under this part or to issue cease and desist orders or similar enforcement actions shall require a majority vote of all the members appointed to the board. (3) Notwithstanding any other provision of this part or 65 Pa.C.S. § 1103(j) (relating to restricted activities), a member shall disclose the nature of his disqualifying interest, disqualify himself and abstain from voting in a hearing or proceeding under this part in which his objectivity, impartiality, integrity or independence of judgment may be reasonably questioned, as provided in subsection (h)(6) or section 1202.1(c)(3) (relating to code of conduct). If a legislative appointee has disqualified himself, the qualified majority shall consist of all of the remaining legislative appointees and at least two gubernatorial appointees. (g) Background investigation.--Appointees shall be subject to a background investigation conducted by the Pennsylvania State Police in accordance with this part. (h) Qualifications and restrictions.-- (1) Each member at the time of appointment shall be at least 25 years of age and shall have been a resident of this Commonwealth for a period of at least one year immediately preceding appointment. Each member shall continue to remain a resident of this Commonwealth during the term of membership on the board. (2) Except for ex officio members, no person shall be appointed a member of the board or be employed by or be an independent contractor of the board if that person is a public official or party officer as defined in section 1512 (relating to financial and employment interests) in this Commonwealth or any of its political subdivisions. (3) Each member, employee and independent contractor of the board shall sign an agreement not to disclose confidential information. (4) No member, employee or independent contractor of the board or other agency having regulatory authority over the board or over forms of gaming regulated by this part shall be employed, hold any office or position or be engaged in any activity which is incompatible with the position, employment or contract. (4.1) No member shall engage in any business, employment or vocation for which the member receives a salary, compensation or fee for services rendered which is in excess of 15% of the member's gross annual salary as a member of the board. For purposes of this paragraph, the terms "salary," "compensation" and "fee" do not include any of the following: (i) Passive or unearned income, including interest, dividends or capital gains from the sale of assets or securities held for investment purposes. (ii) Health care benefits or retirement, pension or annuity payments. (iii) Amounts received from a family-controlled trade or business in which both personal services and capital are income-producing factors, provided that the personal services actually rendered by the member do not generate a significant amount of income. (iv) Director's fees attributable to board membership of a corporate or nonprofit body or board or reimbursement for expenses incurred in connection with board membership. (5) No member shall be paid or receive any fee or other compensation for any activity related to the duties or authority of the board other than salary and expenses provided by law. (6) No member, employee or independent contractor of the board shall participate in a hearing, proceeding or other matter in which the member, employee or independent contractor, or the immediate family thereof, has a financial interest in the subject matter of the hearing or proceeding or other interest that could be substantially affected by the outcome of the hearing or proceeding without first fully disclosing the nature of the interest to the board and other persons participating in the hearing or proceeding. The board shall determine if the interest is a disqualifying interest that requires the disqualification or nonparticipation of an employee or independent contractor. For purposes of this paragraph, the term "immediate family" shall mean spouse, parent, brother, sister or child. (7) At the time of appointment and annually thereafter, each member shall disclose the existence of any financial interest in any applicant, licensed entity or licensed facility and in an affiliate, intermediary, subsidiary or holding company thereof held by the member or known to be held by the member's immediate family. The disclosure statement shall be filed with the executive director of the board and with the appointing authority for such member and shall be open to inspection by the public at the office of the board during the normal business hours of the board for the duration of the member's term and for two years after the member leaves office. For purposes of this paragraph, the term "immediate family" shall mean spouse, parent, brother, sister or child. (7.1) Prior to being sworn as a member, an appointee and his immediate family shall divest any financial interest in any applicant, licensed facility or licensed entity and in an affiliate, intermediary, subsidiary or holding company thereof owned or held by the appointee or known to be held by the appointee's immediate family. For the duration of the member's term and for two years thereafter, the member and the member's immediate family may not acquire a financial interest in any applicant, licensed facility or licensed entity or in an affiliate, intermediary, subsidiary or holding company of an applicant, licensed facility or licensed entity. For purposes of this paragraph, the term "immediate family" shall mean spouse and any minor or unemancipated child. (7.2) Prior to entering into employment or a contract with the board and annually thereafter, an employee or independent contractor shall disclose the existence of any financial interest in any applicant, licensed facility or licensed entity and in an affiliate, intermediary, subsidiary or holding company thereof owned or held by the employee or independent contractor or known to be held by the immediate family of the employee or independent contractor. The disclosure statement shall be filed with the board and shall be open to inspection by the public at the office of the board during the normal business hours of the board and for two years after termination of employment or a contract with the board. For purposes of this paragraph, the term "immediate family" shall mean spouse, parent, brother, sister or child. (7.3) Prior to entering into employment or contracting with the board, an employee or independent contractor and the employee's or independent contractor's immediate family shall divest any financial interest in any applicant, licensed facility or licensed entity, and in an affiliate, intermediary, subsidiary or holding company thereof, owned or held by the employee or independent contractor or known to be held by the immediate family of the employee or independent contractor. For the duration of the employee's employment with the board or the independent contractor's contract with the board and for one year thereafter, the employee or independent contractor and the immediate family thereof shall not acquire, by purchase, gift, exchange or otherwise, any financial interest in any applicant, licensed facility or licensed entity and in any affiliate, intermediary, subsidiary or holding company thereof. For purposes of this paragraph, the term "immediate family" shall mean spouse and any minor or unemancipated child. (8) No member, employee or independent contractor of the board may directly or indirectly solicit, request, suggest or recommend to any applicant, licensed entity, or an affiliate, intermediary, subsidiary or holding company thereof or to any principal, employee, independent contractor or agent thereof, the appointment or employment of any person in any capacity by the applicant, licensed entity, or an affiliate, intermediary, subsidiary or holding company thereof for a period of two years from the termination of term of office, employment or contract with the board. (9) No member may accept employment with any applicant, licensed entity, or an affiliate, intermediary, subsidiary or holding company thereof, for a period of two years from the termination of term of office. (10) No former member may appear before the board in any hearing or proceeding or participate in any other activity on behalf of any applicant, licensed entity, or an affiliate, intermediary, subsidiary or holding company of an applicant or licensed entity, or any other licensee or permittee, for a period of two years from the termination of term of office. (11) No member, employee of the board or independent contractor shall accept a complimentary service, wager or be paid any prize from any wager at any licensed facility within this Commonwealth or at any other facility outside this Commonwealth which is owned or operated by a licensed gaming entity or any of its affiliates, intermediaries, subsidiaries or holding companies for the duration of their term of office, employment or contract with the board and for a period of two years from the termination of term of office, employment or contract with the board. The provisions of this paragraph prohibiting wagering during the term of employment shall not apply to employees or independent contractors while utilizing slot machines or table game devices for testing purposes or while verifying the performance of a slot machine or table game as part of an enforcement investigation. (12) A member who has been convicted during his term in any domestic or foreign jurisdiction of a felony, infamous crime or gambling offense shall, upon conviction, be automatically removed from the board and shall be ineligible to become a member in the future. If an ex officio member is convicted during his term in any domestic or foreign jurisdiction of a felony, infamous crime or gambling offense, the ex officio member shall, upon conviction, be automatically removed from the board, and a designee shall be designated pursuant to subsection (e) to serve the remainder of the ex officio member's term. (13) The following shall apply to an employee of the board whose duties substantially involve licensing, enforcement, development of law, promulgation of regulations or development of policy, relating to gaming under this part or who has other discretionary authority which may affect or influence the outcome of an action, proceeding or decision under this part, including the executive director, bureau directors and attorneys: (i) The individual may not, for a period of two years following termination of employment, accept employment with or be retained by an applicant or a licensed entity or by an affiliate, intermediary, subsidiary or holding company of an applicant or a licensed entity. (ii) The individual may not, for a period of two years following termination of employment, appear before the board in a hearing or proceeding or participate in activity on behalf of any applicant, licensee, permittee or licensed entity or on behalf of an affiliate, intermediary, subsidiary or holding company of any applicant, licensee, permittee or licensed entity. (iii) An applicant or a licensed entity or an affiliate, intermediary, subsidiary or holding company of an applicant or a licensed entity may not, until the expiration of two years following termination of employment, employ or retain the individual. Violation of this subparagraph shall result in termination of the individual's employment and subject the violator to section 1518(c) (relating to prohibited acts; penalties). (iv) A prospective employee who, upon employment, would be subject to this paragraph must, as a condition of employment, sign an affidavit that the prospective employee will not violate subparagraph (i) or (ii). If the prospective employee fails to sign the affidavit, the board shall rescind any offer of employment and shall not employ the individual. (13.1) The following shall apply to an independent contractor and to an employee of an independent contractor whose duties substantially involve consultation relating to licensing, enforcement, development of law, promulgation of regulations or development of policy, relating to gaming under this part: (i) The person may not, for a period of one year following termination of the contract with the board, be retained by an applicant or a licensed entity or by an affiliate, intermediary, subsidiary or holding company of an applicant or a licensed entity. (ii) The person may not, for a period of two years following termination of the contract with the board, appear before the board in a hearing or proceeding or participate in activity on behalf of any applicant, licensee, permittee or licensed entity or on behalf of an affiliate, intermediary, subsidiary or holding company of any applicant, licensee, permittee or licensed entity. (iii) An applicant or a licensed entity or an affiliate, intermediary, subsidiary or holding company of an applicant or a licensee may not, until the expiration of one year following termination of the contract with the board, employ or retain the person. A knowing violation of this subparagraph shall result in termination of the person's employment and subject the violator to section 1518(c). (iv) Each contract between the board and an independent contractor which involves the duties set forth in this paragraph shall contain a provision requiring the independent contractor to sign an affidavit that the independent contractor will not violate subparagraph (i) or (ii). If the independent contractor fails to sign the affidavit, the board shall not enter into the contract. (v) An independent contractor shall require a prospective employee whose employment would involve the duties set forth in this paragraph to sign an affidavit that the prospective employee will not violate subparagraph (i) or (ii). If the prospective employee fails to sign the affidavit, the independent contractor shall rescind any offer of employment and shall not employ the individual. (13.2) Nothing under paragraph (13) or (13.1) shall prevent a current or former employee of the board, a current or former independent contractor or a current or former employee of an independent contractor from appearing before the board in any hearing or proceeding as a witness or testifying as to any fact or information. (14) The State Ethics Commission shall issue a written determination of whether a person is subject to paragraph (13) or (13.1) upon the written request of the person or the person's employer or potential employer. A person that relies in good faith on a determination issued under this paragraph shall not be subject to any penalty for an action taken, provided that all material facts set forth in the request for the determination are correct. (14.1) The State Ethics Commission shall publish a list of all employment positions within the board and employment positions within independent contractors whose duties would subject the individuals in those positions to the provisions of paragraphs (13) and (13.1). The board and each independent contractor shall assist the State Ethics Commission in the development of the list, which shall be published by the State Ethics Commission in the Pennsylvania Bulletin biennially and posted by the board on the board's Internet website. Upon request, employees of the board and each independent contractor shall have a duty to provide the State Ethics Commission with adequate information to accurately develop and maintain the list. The State Ethics Commission may impose a civil penalty under 65 Pa.C.S. § 1109(f) (relating to penalties) upon an individual who fails to cooperate with the State Ethics Commission under this paragraph. An individual who relies in good faith on the list published by the State Ethics Commission shall not be subject to any penalty for a violation of paragraph (13) or (13.1). (15) If a member of the board violates any provision of this section, the appointing authority may remove the person from the board. A member removed under this paragraph shall, for a period of five years following removal, be prohibited from future appointment to the board and shall be prohibited from applying for a license, permit or other authorization under this part and from becoming an independent contractor or registering as a licensed entity representative. (h.1) Fiduciary relationship.--A member or employee of the board shall serve as a fiduciary of the Commonwealth. (h.2) Standard of care.--Members shall exercise the standard of care required by 20 Pa.C.S. Ch. 73 (relating to municipalities investments) in the performance of their duties under this part. (h.3) Liability.--Members shall not be personally liable for any of the following: (1) Obligations of the board. (2) Actions which were within the scope of their office and made in good faith. (i) Compensation.-- (1) The Executive Board as established in the act of April 9, 1929 (P.L.177, No.175), known as The Administrative Code of 1929, shall establish the compensation of the members. (2) Members shall be reimbursed for all necessary and actual expenses. (3) Members shall be eligible for retirement under the State Employees' Retirement Code and shall, if the member elects to participate, be considered a State employee for the purposes of 71 Pa.C.S. Pt. XXV (relating to retirement for State employees and officers). (j) Chairman.--The chairman of the board shall be selected by the Governor. (k) Appointments.--The appointing authorities shall make their initial appointments within 60 days of the effective date of this part. Appointments to fill a vacancy shall be made within 60 days of the creation of the vacancy. No appointment shall be final until receipt by the appointing authority of the required background investigation of the appointee by the Pennsylvania State Police which shall be completed within 30 days. No person who has been convicted in any domestic or foreign jurisdiction of a felony, infamous crime or gaming offense shall be appointed to the board. (l) Prohibition against nepotism.--No member may solicit, request, suggest or recommend the employment by the board of any individual related within the second degree of consanguinity to the member as set forth in 23 Pa.C.S. § 1304(e) (relating to restrictions on issuance of license) or the spouse of the individual. (m) Employment requirements.-- (1) Prospective employees shall submit an application and a personal disclosure form to the board which shall include a complete criminal history, including convictions and current charges for all felonies and misdemeanors. (2) Prospective employees shall be required to undergo testing which detects the presence of illegal substances in the body. (3) The board shall obtain fingerprints and photographs for each prospective employee consistent with the standards adopted by the Pennsylvania State Police. (4) The board shall verify the identification, employment and education of each prospective employee, including: (i) Legal name, including any alias. (ii) All educational institutions attended regardless of graduation status. (iii) Places of residence for the past ten years. (iv) Employment history for the past 15 years. (5) The board shall not hire a prospective employee if the prospective employee: (i) has been convicted of a crime that bears a close relationship to the duties and responsibilities of the position for which employment is sought; (ii) has been dismissed from other employment for gross misconduct; or (iii) has intentionally made a false statement concerning a material fact in connection with the application to the board. (6) The board shall not employ a person unless the requirements of paragraphs (1), (2), (3) and (4) have been met. This paragraph shall apply only to persons employed after the effective date of this subsection. (7) The board shall: (i) Immediately refer any criminal matter involving an employee to law enforcement. (ii) Develop a disciplinary process for an employee charged with a crime or with gross misconduct. (iii) Immediately suspend from employment any employee charged with a felony. (iv) Develop a process to discipline all other instances of misconduct. (8) Disciplinary action shall be instituted promptly against an employee who, while on or off duty, engages in serious misconduct which may bring the board into disrepute. (m.1) Budgetary impasse.--If, in the event of a budgetary or other fiscal crisis, the Governor orders the furlough of Commonwealth employees, the board and its employees and all employees of the department and the Pennsylvania State Police whose duties involve the regulation and oversight of gaming under this part shall not be subject to furlough and shall continue to perform their duties of employment. (n) Definitions.--As used in this section, the following words and phrases shall have the meanings given to them in this subsection: "Financial interest." An ownership, property, leasehold or other beneficial interest in an entity. The term shall not include an interest which is held or deemed to be held in any of the following: (1) Securities that are held in a pension plan, profit- sharing plan, individual retirement account, tax-sheltered annuity, a plan established pursuant to section 457 of the Internal Revenue Code of 1986 (Public Law 99-514, 26 U.S.C. § 1 et seq.), or any successor provision, deferred compensation plan whether qualified or not qualified under the Internal Revenue Code of 1986, or any successor provision, or other retirement plan that: (i) is not self-directed by the individual; and (ii) is advised by an independent investment adviser who has sole authority to make investment decisions with respect to contributions made by the individual to these plans. (2) A tuition account plan organized and operated pursuant to section 529 of the Internal Revenue Code of 1986 (Public Law 99-514, 26 U.S.C. § 529) that is not self- directed by the individual. (3) A mutual fund where the interest owned by the mutual fund in a licensed entity does not constitute a controlling interest as defined in this part. "Ownership interest." Owning or holding, or being deemed to hold, debt or equity securities or other ownership interest or profit interest. (Nov. 1, 2006, P.L.1243, No.135, eff. imd.; Jan. 7, 2010, P.L.1, No.1, eff. imd.) 2010 Amendment. Act 1 amended subsecs. (f)(3), (h)(5), (7.1), (10), (11), (13), (14) and (15) and (k) and added subsecs. (h)(4.1), (13.1), (13.2) and (14.1) and (m.1). See sections 19.4 and 20(3) of Act 1 in the appendix to this title for special provisions relating to Pennsylvania Gaming Control Board employees and applicability. Cross References. Section 1201 is referred to in sections 1103, 1202, 1209, 1902 of this title.