PROPOSED RULEMAKING
DEPARTMENT
OF REVENUE
[61 PA. CODE CH. 901]
Local Option Small Games of Chance
[34 Pa.B. 5563] The Department of Revenue (Department), under section 9 of the Local Option Small Games of Chance Act (act) (10 P. S. § 319), proposes to amend Chapter 901 (relating to small games of chance) to read as set forth in Annex A.
Purpose of the Proposed Rulemaking
This proposed rulemaking contains comprehensive amendments to Chapter 901 to incorporate legislative changes made to the act by the act of December 19, 1990 (P. L. 812, No. 195) (Act 195) and the act of October 18, 2000 (P. L. 602, No. 79) (Act 79). This proposed rulemaking also codifies policy and administrative changes regarding games of chance.
Explanation of Regulatory Requirements
The Department is proposing numerous global changes to Chapter 901 to reflect changes in terminology, including the deletion of the term ''small'' in conjunction with the phrase ''games of chance.'' This amendment will make the regulation more consistent with the enabling statute. Examples of other changes include: the replacement of ''club'' with ''eligible organization'' to be consistent with the change made in Act 195; the replacement of ''county'' with ''licensing authority''; the replacement of ''registration'' with ''certificate'' and the replacement of ''special permit'' with ''special raffle permit.'' Numerous minor additions, revisions and deletions are being proposed to sections throughout Chapter 901 for clarity (including changes from passive to active voice) and readability.
Subchapter A. General Provisions
Definitions
Numerous revisions to § 901.1 (relating to definitions) are proposed to bring the definitions into conformity with statutory changes and to codify policy and administrative changes. An explanation of each definition addition or change is as follows:
The following definitions are added for clarity: ''applicant,'' ''application,'' ''license,'' ''licensee,'' ''manufacturer registration certificate or certificate,'' ''nonoperating day,'' ''Office of Attorney General,'' ''pull-tab game,'' ''punch,'' ''registrant,'' ''registration,'' ''special raffle permit'' and ''State lottery law.''
The following terms are referenced in Act 195 and the definitions are added to the explain terms: ''auxiliary group,'' ''normal business or operating site'' and ''operating day.''
''Bona fide member'' is amended to delete references to ''club'' and add references to ''eligible organization.''
''Civic and service association'' is defined in section 3 of Act 195 (10 P. S. § 313) and is added for use in the regulation. Within the definition the term ''bona fide'' is used. For purposes of these regulations, ''bona fide'' shall be interpreted according to its common usage: in or with good faith; honestly, openly, and sincerely; without deceit or fraud.
''Club'' was amended in section 3 of Act 195.
The following terms are defined in section 3 of Act 195 and are added for use in the regulation: ''daily drawing,'' ''dispensing machine,'' ''eligible organization,'' ''fraternal organization'' and ''passive selection device.''
The following definitions amended for clarity: ''deal,'' ''flare,'' ''manufacturer,'' ''petition,'' ''petitioner'' and ''punchboard.''
''Distributor'' is amended to delete references to ''small'' and ''club'' and add reference to ''eligible organization.''
The following definitions are amended to delete reference to ''small'': ''distributor's representative'' and ''manufacturer's representative.''
''Games of chance'' is amended for clarity and because of revisions to section 3 of Act 195 and section 3 of Act 79 (10 P. S. § 313).
The following definitions added for use in the regulation: ''hold ticket'' and ''seal card.''
''Legitimate club purposes'' is deleted in accordance with amendments to section 3 of Act 195. The term is replaced with ''public interest purpose.''
Although ''licensed premises'' was used in the original enabling statute, it was not defined in the original regulations. The term is again used in Act 195 and a definition is added for clarity.
''Limited occasion license'' is added to explain a new type of license authorized in section 10(b.3) of Act 195 (10 P. S. § 320(b.3)).
''Lottery'' is deleted in accordance with amendments in section 3 of Act 195.
''Operating week'' is added for clarity and use in the regulation. The term replaces the phrase ''7-day period.''
''Public interest purposes'' is defined in amendments to section 3 of Act 195. The term replaces ''legitimate club purpose'' and is added for use in the regulation.
''Pull-tab'' and ''raffle'' are amended because of revisions to section 3 Act 195.
The definition of ''responsible person''--is being amended for clarity, to update references from ''club'' to ''eligible organization'' and delete references to ''small.''
''Veterans organization'' added because of revisions to section 3 of Act 195.
''Weekly drawing'' is added because of revisions to section 3 of Act 79.
General Applicability
Section 901.21 (relating to applicability) is amended by adding a subsection which provides that to provide uniform practices, procedures and standards, the Department is promulgating certain enumerated regulatory sections for the benefit of and suggested use by the licensing authorities. However, the governing body of each county, on behalf of its licensing authority, must adopt the sections by independent act for the sections to have legal force and effect. With the addition of this language to § 901.21, §§ 901.181 and 901.211 (relating to local rules) are deleted.
Section 901.22 (relating to use of proceeds) is deleted because the subject matter is adequately addressed in § 901.701 (relating to games of chance permitted).
The existing text of § 901.23 (relating to restriction of sales) is deleted and replaced with more explanatory language regarding the restrictions on sales by a registered manufacturer and licensed distributor and the purchase of games of chance by an eligible organization. Subchapter I (relating to enforcement) is proposed and will include all enforcement provisions. Therefore, § 901.24 (relating to enforcement) is deleted.
Section 901.28(a)(2) (relating to inspection of premises) is amended to allow inspection when a reasonable belief exists that a violation of the act or Chapter 901 has occurred, is occurring or will occur. Paragraph (3) is amended to specifically provide that an inspection shall be limited to the inspection of matters, areas and records associated with games of chance to insure compliance with the act and this part. Subsection (b) is amended to allow the licensing authority or their authorized representatives to make annual inspections for compliance purposes.
Section 901.31 (relating to examination of records) is amended to clarify that an examination of records can be made apart from the examination made during an inspection of the premises. Subsections regarding actions by the district attorney and other law enforcement officials are deleted because they are beyond the scope of these regulations.
Section 901.34 (relating to disputes) is amended to clarify that the retention period for records regarding a dispute about whether the play or ticket is a winning play or ticket starts at the date of the dispute rather than the date of resolution.
Section 901.40 (relating to prohibition of gambling facilities) is added in accordance with section 10(b.4) of Act 195. Section 901.41 (relating to operating days, nonoperating days and operating weeks) is added to provide guidance regarding the concept for purposes of game operations.
Administration
The introductory language in § 901.51(a) and (b) (relating to power and duties) is amended to clarify that the lists of powers and duties are not all inclusive. In addition, subsections (a)(10) and (b)(7) are added to specifically state that the Department and licensing authority have the power and authority to initiate legal proceedings, in law or equity, before any court or tribunal, for purposes of administering or enforcing the provisions of the act or Chapter 901. Other provisions are amended or added for clarity. Subsection (c) regarding the powers and duties of the district attorney and other law enforcement officials is deleted because it is beyond the scope of these regulations.
Subchapter B. Licensing and Registration
Manufacturer Registration
Sections 901.101 and 901.102 (relating to manufacturer registration and game approval required; and registration and game approval forms) are amended by adding language outlining the game approval process.
Section 901.103 (relating to manufacturer registration application form contents) is amended by adding new text to existing paragraph (12) to reflect the Department's current requirement that dispensing machine manufacturers provide the Department with a notarized affidavit indicating that its dispensing machines comply with the act and Chapter 901. Exiting paragraph (12) was renumbered accordingly.
New § 901.103a (relating to change of application information) provides that a manufacturer shall report any changes to the information supplied in its application to the Department within 15 days of the change.
Section 901.106 (relating to registration term) is amended to more specifically detail the manufacturer registration term. Section 901.107 (relating to annual applications) is amended to give the Department 60 days to process registration applications prior to the end of the registration term as permitted under § 901.118 (relating to registration decision time limit). With this amendment, a manufacturer that complies should not have a break in its registration coverage.
Section 901.112 (relating to prohibited sales) is deleted because the topic is addressed in proposed § 901.23(a)(2).
Section 901.113(a) (relating to representative of manufacturer) is deleted because the topic is addressed in proposed § 901.23(a)(2). To bring § 901.114 (relating to dissolutions, terminations, mergers and bankruptcies) into conformity with § 901.148 (relating to dissolutions, terminations, mergers and bankruptcies), the section is amended by adding subsection (b) to provide that a notice of the decision to dissolve is required even if filing is not required.
Consistent with amendments to §§ 901.101 and 901.102 regarding game approval, § 901.117(a) (relating to denial, suspension and revocation) is amended by adding to the enumerated acts for which the Department has the authority to deny an application for a certificate, or suspend or revoke a certificate. The act of selling or offering for sale in this Commonwealth a game of chance that has not been approved by the Department. Subsection (b) is added to provide that the Department may deny an application for a game of chance approval and may suspend or revoke an approved game of chance if the game fails to meet the requirements of the act or Chapter 901. New subsection (c) sets forth the rules governing suspensions and new subsection (d) describes the contents of a written notice of a denial, suspension, lifting of suspension or revocation as well as the procedure by which it will be mailed.
Section 901.117a (relating to registration following revocation) is added to provide guidance on the length of time a manufacturer whose certificate is revoked is ineligible to apply for and receive another certificate for a first, second, third and subsequent revocation.
Section 901.119 (relating to raffle, daily drawing and weekly drawing ticket manufacturers) is amended to clarify that §§ 901.101--901.118 do not apply to the manufacturers who only produce and sell raffle, daily drawing and weekly drawing tickets.
Distributor Licensing
Section § 901.132 (relating to license application form) is amended to clarify that to obtain a license, a distributor must submit a license application to the Department.
New § 901.133a (relating to change of application information) provides that a distributor shall report changes to the information supplied in its application to the Department within 15 days of the change.
Section 901.136 (relating to license term) is revised to provide a more accurate description of a distributor license term and to create a 60-day gap between the end of the registration term and licensing term to allow the Department adequate processing time. Section 901.137 (relating to annual application) is also completely revised to give the Department 60 days to process license applications prior to the end of the licensing term as permitted under § 901.152 (relating to licensing decision time limits). Thus, a distributor that complies with the licensing terms should not have a break in its licensing coverage.
Section 901.142(a) (relating to distributor's representative) is deleted because the topic is addressed in proposed § 901.23(b)(2). The remaining text is reformatted accordingly.
Section 901.150 (relating to changes in ownership or personnel) is amended by requiring changes in responsible persons to be reported to the Department within 15 days of the deletion or addition. The time period in which to make the report is amended to provide the Department with more current information.
Section 901.151 (relating to denial, suspension and revocation of licenses) is amended by adding clarifying language to new subsection (a) and by adding subsections (b) and (c) regarding suspensions and notice. The suspension and notice provisions are consistent with those added to § 901.117 for manufacturers. Section 901.151a (relating to licensing following revocation) is added to provide guidance on the length of time a distributor whose license is revoked is ineligible to apply for and receive another license for a first, second, third and subsequent revocation.
Section 901.153 (relating to raffle, daily drawing and weekly drawing ticket distributors) is amended to clarify that §§ 901.131--901.152 do not apply to distributors who only sell raffle, daily drawing and weekly drawing tickets.
Board Procedures
Sections 901.161, 901.165 and 901.168 (relating to jurisdiction and purpose; board practice and procedure; and stay of appeal) are amended to revise the wording to make it consistent with amendments being made throughout Chapter 901.
Eligible Organization Licensing
Section 901.182 (relating to license requirements) is amended to reflect the change in section 10(a) of Act 195 which allows auxiliary groups within an eligible organization to conduct games of chance. Additional amendment to the section provide guidelines for the operation of games of chance by auxiliary groups.
Section 901.183 (relating to filing) is amended to explain the filing requirements for license applications when an eligible organization does and does not own or lease a normal business site. With the addition of limited occasion licenses in Act 195, § 901.184 (relating to license fee) is amended to state the fee for a limited occasion license shall be $10.
In response to feedback from both the licensing authorities and eligible organizations, the Department amended § 901.185 (relating to license term and annual applications) to provide for a rolling renewal date instead a fixed date.
To bring § 901.186 (relating to display) into conformity with the provisions of Act 195 regarding the playing of games of chance at a location off its premises, the section is amended to provide that a licensed eligible organization shall at all times publicly display its license at the site where it conducts games of chance.
Section 10(b.1), (b.2) and (d)(8) of Act 195 significantly revised the rules for eligible organizations regarding where games of chance can be played. Section 901.188 (relating to location) is amended to address these new rules. Section 901.189 (relating to transfer) is amended to clarify that a licensed eligible organization is prohibited from transferring or assigning its license.
In accordance with the changes in Act 195 regarding auxiliary groups, § 901.190 (relating to joint license prohibition) is amended to indicate that an auxiliary group may operate under its parent organization's license without violating the joint license prohibition. Minor amendments were made to § 901.191 (relating to license application form) to reflect the changes to section 10 of Act 195, including the addition of paragraph (20) requiring a list of the eligible organization's auxiliary groups which may operate games of chance under the eligible organization's license.
The current text of § 901.192 (relating to denial of application, revocation, suspension and refusal to renew club licenses) is deleted and replaced with a more logically organized section regarding denial, suspension and revocation of an eligible organization license. Section 901.194 (relating to change of personnel) is amended by requiring changes in personnel to be reported to the licensing authority within 15 days of the deletion or addition. The time period in which to make the report is amended to provide the licensing authority with more current information.
With the addition of the limited occasion license under section 10(b.3) of Act 195, the Department added § 901.195 (relating to types of licenses) to distinguish between a game of chance and limited occasion license and to clarify that an eligible organization may only hold one type of license at a time. Section 901.196 (relating to limited occasion license requirements, limits and restrictions) is also added to provide information on the use of a limited occasion license and related restrictions. Section 901.197 (relating to change of application information) is added to provide that an eligible organization shall report any changes to the information supplied on its license application to the licensing authority within 15 days of the change.
County Licensing Authority Procedures
In accordance with the amendment to section 10(b) of Act 195, § 901.213 (relating to actions with respect to eligible organization licenses and applications) is amended by revising the time period for a licensing authority to approve or deny a license application in subsection (a) from 60 to 30 days. Also, in accordance with changes in section 10(g) of Act 195, subsection (b)(1) is amended to provide that the licensing authority shall send the license and notice of approval to the applicant along with an up-to-date listing of all municipalities within the licensing county that have approved games of chance by referendum.
Section 901.214 (relating to procedure for denial, suspension or revocation of eligible organization licenses) is amended in a number of areas. Minor wording changes are made to subsection (a) and the existing text of subsections (b), (c) and (e) is deleted because the subject matter is addressed in Subchapter I. Existing subsection (d) is deleted and replaced with subsection (b) that provides that the notice issued by the licensing authority will be dated, explains the action taken by the licensing authority, the reason for the action and the licensee or applicant's appeal rights. The licensing authority will serve the notice by certified or first-class mail. Subsection (c) is added to provide the rules governing suspensions. New subsection (d) describes the effect an appeal of a revocation has on an eligible organization.
Subchapter C. Local Option
Local Option Requirement and Local Option Reporting
Consistent with section 10(g) of Act 195, § 901.309 (relating to public information) is amended to acknowledge that information regarding the approval or disapproval of games of chance by local referendum can be obtained from the licensing authority as well as the county board of elections.
Subchapter D. Recordkeeping
County Records and Reports
Section 901.21(b) states that to provide uniform practices, procedures and standards, certain enumerated sections are promulgated for the benefit of and suggested use by the licensing authorities. If the governing body of a county, on behalf of its licensing authority, adopts the sections by independent act, those sections will in effect be regulations of the licensing authority. Because of this unique scenario, the Department is deviating from standard drafting rules in §§ 901.401--901.407 in that where ''shall'' would normally be used, it is instead using ''will'' since the provisions will be those of the licensing authority and the use of will is appropriate when the licensing authority is pledging to act.
In as much as there are now two types of licenses as a result of the addition of the limited occasion license by Act 195, § 901.401 (relating to application register) is amended so that the register or list will indicate the type of license for which each organization applied. Likewise, § 901.402 (relating to docket) is amended to require the docket to list which type of license was granted to the organization. Section 901.404 (relating to violation report) is deleted because the subject matter is addressed in the Subchapter I.
To bring § 901.405 (relating to list of licensed eligible organizations) into conformity with the enabling statute, the section is amended to state that the licensing authority will submit, on a semiannual basis, a copy of all information regarding licensees to the Department. The section is further amended to require the information to include the type of license and any special raffle permit serial number.
Although some of these rules are noted elsewhere, new § 901.407 (relating to list of municipalities) provides the licensing authority with a central place to reference the rules regarding the maintenance of a list of municipalities that have approved the referendum question on games of chance.
Licensed Eligible Organization Records
For consistency with the rules regarding record requirements for raffles and daily drawings, paragraph (9) is added to § 901.464 (relating to punchboard and pull-tab records) requiring a list of winners' names and addresses for prizes in excess of $100.
The definition of ''games of chance'' was broadened by section 3 of Act 195 to include daily drawings and by section 3 of Act 79 to include weekly drawings. Section 901.464a (relating to daily and weekly drawing records) is added to provide guidance regarding record keeping requirements for each of these games.
Subchapter E. Prohibited Activities/Penalties
Prohibited Activities
In accordance with section 15 of Act 195 (10 P. S. § 325), § 901.501 (relating to advertising) is amended to provide that an eligible organization may advertise prizes and values thereof in periodic publications that are limited in their circulation to members of the eligible organization.
Section 901.502(c) (relating to persons) is amended to reflect changes to section 10(d)(2) of Act 195 regarding conviction of a felony or of a violation of the Bingo Law (10 P. S. §§ 301--308.1).
Act 195 amended section 10(d)(3) by deleting the requirement that the persons conducting the games of chance be bona fide members of the club for at least 1 year. Therefore, § 901.504 (relating to persons who may conduct games) is amended to delete the 1 year requirement.
To be consistent with the prize limitation exceptions for both a daily drawing and weekly drawing in section 5(f) and (g) of Act 195 and section 5(g) and (h) of Act 79 (10 P. S. § 315(f)--(h)), §§ 901.507 and 901.508 (relating to prizes in excess of $500; and prizes in excess of $5,000) are amended.
Act 195 amended section 10(d)(7) regarding the use of a licensed eligible organization's premises by another licensed eligible organization. Section 901.510 (relating to use of licensed premises by more than one organization) is amended to incorporate the new statutory guidelines in this area.
Section 901.512 (relating to oral and written leases) is added to address the provisions of section 10(b.1) and (d) (5) of Act 195. Section 901.513 (relating to gambling facilities prohibited) is added to address section 10(b.4) of Act 195.
Penalties
To be consistent with the amendments to section 17 of Act 195 (10 P. S. § 327) regarding penalties for violations of the provisions of the act by eligible organizations and individuals, §§ 901.531 and 901.532 (relating to eligible organizations; and individuals) are amended.
Subchapter F. Manufacturing Standards
Pull-Tab Manufacturing Standards
Section 901.601(a) (relating to uniform minimum quality standards) is amended to correct the reference to the North American Gaming Regulations Association (N. A. G. R. A.) publication regarding manufacturing standards for pull-tab games and to provide clarity with regard to the application of the standards.
Sections 901.602 and 901.621 (relating to flares) are amended to clarify who can make a flare and who can alter a flare. Sections 901.608 and 901.627 (relating to standards for flares) are amended to clarify the rules regarding flares.
Punchboard Manufacturing Standards
Section 901.622 (relating to standards for construction) is amended by adding paragraph (1) to describe four general construction guidelines regarding the punchboard face sheet, flare, serial numbers and punches. The existing paragraphs are renumbered accordingly.
Subchapter G. Operation of Games
Eligible Organization Operation of Games
Section 901.702 (relating to prize limits) is amended to reflect various statutory revisions. The total cash value of prizes that can be awarded under special raffle permits in § 901.702(d) is amended to reflect the statutory change in section 5(d)(4) of Act 79. Subsection (e) is added to explain the prize limit exceptions for daily drawings in section 5(e)--(g) of Act 79. Subsection (f) is added to explain the prize limit exceptions for weekly drawings in section 5(g) and (h) of Act 79.
Section 901.703 (relating to place of conduct) is amended to reflect the statutory changes in section 10(b.1) and (b.2) of Act 195 regarding where games of chance can be conducted. Section 901.704 (relating to licensed premises) is amended to reflect the new statutory provisions regarding the location of games of chance in section 10(b.1) and (d)(5) of Act 195.
Section 901.705 (relating to purchase of games) is amended to incorporate the statutory change in section 10(d)(6) of Act 79 (10 P. S. § 320(d)(6)) regarding the purchase of weekly drawings.
Section 901.706 (relating to persons who may not operate or play games of chance) is amended to reflect the changes in section 10(d)(1) and (2) of Act 195 regarding persons permitted to operate or play games of chance and the conviction of a felony or of a violation of the Bingo Law.
The 1-year membership requirement in § 901.708 (relating to persons who may conduct games of chance) is deleted in accordance with the amendment to section 10(d)(3) of Act 195. Section 901.709 (relating to one eligible organization per premise) is amended to reflect section 10(b.1) of Act 195 regarding the use of a premise by more than one eligible organization. With the deletion of section 11(c) in Act 195 (10 P. S. § 321(c)) regarding the prohibition of use of a licensed premises by more than one licensed club for a special raffle permit in a calendar year, § 901.711 (relating to location for special permit raffles) is deleted.
Punchboards and Pull-Tab Operation Procedures
Section 901.731(b) (relating to punchboard and pull-tab operation) is amended by placing the current text in paragraph (1) and adding paragraph (2) to describe under what conditions a licensed eligible organization may alter a flare.
Raffles
With the removal of the restriction on sales of raffle tickets in section 10(d)(4) in Act 195, § 901.742 (relating to drawing dates) is amended to provide guidance on the new rules relating to raffle drawing dates consistent with the definition of ''raffle'' as amended in section 3 of Act 195.
Section 901.743(b) (relating to raffle tickets) provides that generally each part of a raffle ticket shall be imprinted with sequential numbers commencing with the number ''1'' through the maximum number of tickets to be sold. Subsection (b) is amended to clarify that when a raffle winner is determined by a drawing of the Pennsylvania State Lottery, the universe of eligible ticket numbers shall correspond to the universe of eligible numbers in the State Lottery drawing.
Consistent with the change to the definition of ''raffle'' in section 3 of Act 195, § 901.745 (relating to printing requirements) is amended to provide that dates, times and locations of the drawings shall be printed on each raffle ticket sold.
Section 901.751 (relating to ticket sales) is amended to incorporate the new rules relating to the sale of raffle tickets in a municipality located in a county other than the county in which the eligible organization is licensed in section 10(d)(8) of Act 195.
In accordance with the provisions in the definitions of ''passive selection device'' and ''raffle'' in section 3 of Act 195, § 901.753 (relating to means of determining winning numbers) is added to provide guidance in this area.
Lotteries
Because lotteries are no longer considered a separate game of chance but rather a type of raffle under the revisions to the definitions of ''games of chance,'' ''lottery'' and ''raffle'' in section 3 of Act 195, §§ 901.761--901.778 are deleted.
Daily Drawings
Section 901.781--901.786 are added to provide guidance regarding the rules for daily drawings, which were authorized by Act 195.
Weekly Drawings
Sections 901.791--901.796 are added to provide guidance regarding the rules for weekly drawings, which were authorized by Act 79.
Subchapter H. Special Raffle Permits
Special Raffle Permits
The heading of § 901.801, currently listed as ''(relating to price limit)'' is corrected to reference ''prize limit'' and the section is amended to reflect the amendment to section 5(d)(4) of Act 79 regarding the total cash value permitted for all prizes for the calendar year.
In accordance with the deletion of paragraph (13) in section 12(a) of Act 195 (10 P. S. § 322(a)(13)), § 901.802 (relating to raffle number limit) is amended to delete the second sentence which provided that a club may hold only one raffle per month including a special permit raffle.
Section 5(d)(2) was amended by Act 195 to provide an exception to the general rule that an eligible organization shall be eligible to receive no more than two special permits in any licensed year for volunteer fire, ambulance and rescue organizations. Section 901.803 (relating to special raffle permit limit) is amended to reflect this change. Section 901.806 (relating to required permit) is amended to clarify the special raffle permit requirements.
In accordance with section 11(a) of Act 195, § 901.807 (relating to fees) is amended to provide that the fee for the issuance of a special raffle permit shall not exceed $25.
Section 901.811 (relating to location limits) is deleted because of the amendments to section 10(b.1) and (d)(7) of Act 195 regarding the use of a licensed premises by more than one eligible organization.
Subchapter I. Enforcement
Sections 901.901--901.908 are added to address specific enforcement issues.
Affected Parties
Manufacturers and distributors of games of chance doing business in this Commonwealth, licensing authorities and eligible organizations may be affected by the proposed rulemaking.
Fiscal Impact
The Department has determined that the proposed rulemaking, which provide clarification of existing policy, will have no significant fiscal impact on the Commonwealth.
Paperwork
The proposed rulemaking will not generate additional paperwork for the public or the Commonwealth.
Effectiveness/Sunset Date
The proposed rulemaking will become effective upon final-form publication in the Pennsylvania Bulletin. The regulations are scheduled for review within 5 years of final-form publication. No sunset date has been assigned.
Contact Person
Interested persons are invited to submit in writing comments, suggestions or objections regarding the proposed rulemaking to Mary R. Sprunk, Office of Chief Counsel, Department of Revenue, Dept. 281061, Harrisburg, PA 17128-1061, within 30 days after the date of the publication of this notice in the Pennsylvania Bulletin.
Regulatory Review
Under section 5(a) of the Regulatory Review Act (71 P. S. § 745.5(a)), on September 29, 2004, the Department submitted a copy of this proposed rulemaking and a copy of a Regulatory Analysis Form to the Independent Regulatory Review Commission (IRRC) and to the Chairpersons of the House Committee on Finance and the Senate Committee on Finance. A copy of this material is available to the public upon request.
Under section 5(g) of the Regulatory Review Act, IRRC may convey any comments, recommendations or objections to the proposed rulemaking within 30 days of the close of the public comment period. The comments, recommendations or objections must specify the regulatory review criteria which have not been met. The Regulatory Review Act specifies detailed procedures for review, prior to final publication of the rulemaking, by the Department, the General Assembly and the Governor of comments, recommendations or objections raised.
GREGORY C. FAJT,
SecretaryFiscal Note: 15-425. No fiscal impact; (8) recommends adoption.
Annex A
TITLE 61. REVENUE
PART VII. LOCAL OPTION SMALL GAMES OF CHANCE
CHAPTER 901. LOCAL OPTION SMALL GAMES OF CHANCE
Subchapter A. GENERAL PROVISIONS
DEFINITIONS § 901.1. Definitions.
The following words and terms, when used in this part, have the following meanings, unless the context clearly indicates otherwise:
* * * * * Applicant--A person who prepares and files an application.
Application--A form prescribed by the Department that a manufacturer, distributor or eligible organization must complete and file to obtain a license or certificate.
Auxiliary group--A subsidiary or affiliated organization of an eligible organization established for the purpose of aiding or assisting the eligible organization and its members in the fulfillment of the eligible organization's purposes.
* * * * * Bona fide [club] member--An individual who holds a [full] membership in the [club] eligible organization as defined by [the club's] that organization's constitution, charter, articles of incorporation or bylaws.
* * * * * Civic and service association--
(i) Any Statewide or a branch, lodge or chapter of a nonprofit National or State organization which is authorized by its written constitution, charter, articles of incorporation or bylaws to engage in a civic or service purpose within this Commonwealth, which shall have existed in this Commonwealth for 1 year.
(ii) The term also means a similar local nonprofit organization, not affiliated with a National or State organization, which is recognized by a resolution adopted by the governing body of the municipality in which the organization conducts its principal activities.
(iii) The term includes:
(A) Bona fide sportsmen's and wildlife associations, federations or clubs, Statewide or local in nature.
(B) Volunteer fire companies.
(C) Volunteer rescue squads.
(D) Volunteer ambulance associations.
(E) Bona fide senior citizens organizations.
(F) Nonprofit organizations that are recognized by a resolution adopted by the appropriate governing body and which are established to promote and encourage participation and support for extracurricular activities within the established primary and secondary public, private and parochial school systems.
Club--[An entity which has been in existence and fulfilling its purposes for 2 years prior to the date of application for a license and is one of the following:
(i) An incorporated unit of a national veterans' organization, as defined in section 461.1 of the Liquor Code (47 P. S. § 4-461.1), and licensed to sell liquor at retail under that act.
(ii) A club, as defined in section 102 of the Liquor Code (47 P. S. § 1-102), that qualifies as an exempt organization under section 501(c) or 527 of the Internal Revenue Code (26 U.S.C.A. § 501(c) or § 527), and is licensed to sell liquor at retail and has a charitable, religious or civic purpose or is organized to benefit a political party.
(iii) An organized fraternal society created and carried on for the mutual benefit of its members, not-for-profit and not issuing capital stock, having a limited membership and a representative form of government and licensed to sell liquor at retail under the Liquor Code (47 P. S. §§ 1-101--8-803).
(iv) A not-for-profit religious organization conducting business under the express purpose of a written constitution, charter, articles of incorporation or bylaws.
(v) A charitable organization conducting business under the express purpose of a written constitution, charter, articles of incorporation or bylaws.
(vi) A volunteer fire company.
(vii) A volunteer rescue squad.
(viii) A volunteer ambulance association.] A club, as defined in section 102 of the Liquor Code (47 P. S. § 1-102), that qualifies as an exempt organization under section 501(c) or 527 of the Internal Revenue Code of 1954 (26 U.S.C.A. § 501(c) or § 527) and is licensed to sell liquor at retail and has a charitable, religious or civic purpose or is organized to benefit a political party.
Daily drawing--
(i) A game in which a bona fide member selects or is assigned a number in exchange for consideration for a chance at a prize with the winner determined by a random drawing to take place on the eligible organization's premises during the same operating day that the chances for the drawing are sold.
(ii) The term includes games commonly known as ''member sign-in lotteries'' and ''half-and-half lotteries.''
Deal--[Pull-tab tickets of a game bearing the same serial number as well as a flare for the game.] A set of pull-tabs bearing the same serial number.
* * * * * Dispensing machine--
(i) A device designed exclusively for the dispensing of games of chance authorized by the act, including ticket jars, fish bowls and stamp machines.
(ii) The term does not include any device commonly known as a ''slot machine'' or ''video poker.''
Distributor--A person who purchases or otherwise obtains [small] games of chance, including [lottery tickets,] punchboards or pull-tabs, from a manufacturer and sells or otherwise furnishes the [small] games of chance, with or without merchandise to be awarded as prizes in connection therewith, to another person for the resale, display or operation of the [small] games of chance by [a club] a licensed eligible organization.
Distributor's representative--
(i) A natural person who represents a distributor in connection with the sale or furnishing of [small] games of chance for use in authorized activities.
(ii) The term includes the distributor's sales personnel.
(iii) The term does not include warehouse personnel, delivery personnel and other [employes] employees who only have incidental contact with customers.
Eligible organization--An organization that meets all of the following:
(i) Nonprofit.
(ii) Charitable organization, religious organization, fraternal organization, veterans organization, club or civic and service association.
(iii) In existence and fulfilling its purposes for 1 year prior to the date of application for a license.
Flare--[Sets forth the number of tickets and prizes contained in a deal, as well as the winning numbers, colors and symbols.] A card, graphic, illustration or other document that accompanies a deal or punchboard and satisfies all of the following:
(i) Sets forth the number of pull-tabs or punches in a pull-tab game or punchboard.
(ii) Describes the nature of and rules for conducting a pull-tab game or punchboard.
(iii) Sets forth the winning numbers, colors and symbols and prizes to be won in a pull-tab game or punchboard.
Fraternal organization--A branch, lodge or chapter of a National or State nonprofit organization with its branch, lodge or chapter located within this Commonwealth that is created and carried on for the mutual benefit of its members, has a limited membership and representative form of government.
Games of chance--[Punchboards, lotteries]
(i) The following games: punchboards, daily drawings, weekly drawings, raffles and [pull-tabs] pull-tab games.
(ii) The term includes all of the parts, accessories and items necessary to play the games. The term also includes dispensing machines and passive selection devices.
(iii) The term does not include a game played by or with the assistance of mechanical, electronic or electrical devices or media[. The term does not include] or a game in which the particular chance taken by a person in the game is made contingent upon another occurrence or the winning of another contest. [The term includes a game in which the chance is determined solely at the discretion of the purchaser.]
(iv) This paragraph will not be construed to authorize another form of gambling currently prohibited under 18 Pa.C.S. (relating to the Crimes Code).
(v) The term does not include games commonly known, as ''slot machines'' or ''video poker.''
Hold ticket--A ticket in a subset of pull-tabs in a deal or punches in a punchboard one or more of which are designated in advance as a winning tab or punch for a specific prize. The winning ticket or tickets are revealed after all hold tickets are purchased. Hold tickets are typically used in conjunction with seal cards.
* * * * * [Legitimate club purposes--
(i) One or more of the following:
(A) Benefiting persons by enhancing their opportunity for religious or education advancement, by relieving or protecting them from disease, suffering or distress, by contributing to their physical, emotional or social well-being, by assisting them in establishing themselves in life as worthy and useful citizens, or by increasing their comprehension of and devotion to the principles upon which this nation was founded.
(B) Initiating, performing or fostering worthy public works or enabling or furthering the erection or maintenance of public structures.
(C) Lessening the burdens borne by government or voluntarily supporting, augmenting or supplementing services which government would normally render to the people.
(D) Improving, expanding, maintaining or repairing real property owned or leased by a club and used for purposes specified in clauses (A)--(C).
(ii) The term does not include the erection or acquisition of real property, unless the property will be used exclusively for one or more of the purposes specified in this paragraph.]
License--A document issued by:
(i) The Department, upon application, to a distributor authorizing the distributor to purchase games of chance from a registered manufacturer and sell games of chance in this Commonwealth to licensed eligible organizations, also known as a distributor's license.
(ii) A licensing authority, upon application, to an eligible organization authorizing the eligible organization to purchase games of chance from licensed distributors and conduct games of chance in this Commonwealth, also known as a small games of chance or games of chance license.
Licensed premises--The specific location upon which a licensed eligible organization is authorized to conduct games of chance.
Licensee--A distributor or eligible organization that has been issued a license.
* * * * * Limited occasion license--A license issued by a licensing authority to an eligible organization authorizing the organization to conduct games of chance on a limited basis.
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