RULES AND REGULATIONS
PENNSYLVANIA GAMING CONTROL BOARD
[ 58 PA. CODE CH. 441a ]
Slot Machine Licensing
[39 Pa.B. 3451]
[Saturday, July 11, 2009]
The Pennsylvania Gaming Control Board (Board), under the general authority in 4 Pa.C.S. § 1202(b)(30) (relating to general and specific powers) and the specific authority in 4 Pa.C.S. §§ 1205 and 1206 (relating to license or permit application hearing process; public input hearings; and Board minutes and records) amends Chapter 441a (relating to slot machine licenses) to read as set forth in Annex A.
Purpose of the Final-Form Rulemaking
This final-form rulemaking amends the provisions related to licensing hearings for applicants for slot machine licenses.
Explanation of Amendment to Chapter 441a
Section 441a.7 (relating to licensing hearings for slot machine licenses) lays out the procedures for the conduct of slot machine licensing hearings. Through this final-form rulemaking, the Board is expanding these provisions.
Specifically, the Board will require the Bureau of Investigations and Enforcement (BIE) to report any information concerning an applicant, which was obtained from sources in the public domain, at the licensing hearing.
Additionally, the Board may request that an applicant respond to questions that may relate to confidential information at the licensing hearing. The applicant will have the option of waiving the right to confidentiality and answering the questions at the public hearing or requesting that the matter be heard in executive session. The applicant will be required to state, on the record, the reasons why it believes the information is confidential and should be heard in executive session.
The final-form rulemaking also makes it clear that under no circumstances will an applicant be required to waive the right to confidentiality as a condition to receiving a slot machine license.
Adoption of these new provisions will provide additional guidance to applicants for slot machine licenses on the conduct of the licensing hearings and ensure that all information permitted by law will be contained in the public record.
Comment and Response Summary
Notice of proposed rulemaking was published at 38 Pa.B. 2269 (May 17, 2008).
The Board received comments from Sands Casino Resort Bethlehem (Sands) during the public comment period. On July 16, 2008, the Independent Regulatory Review Commission (IRRC) also filed comments. Both of these comments were considered by the Board and are discussed as follows.
Sands and IRRC expressed concerns that requiring an applicant to provide a ''sufficient reason'' as to why information should be treated as confidential could be perceived to be coercive and may conflict with 4 Pa.C.S. § 1206(f).
The Board believes that the proposal was consistent with the act. The proposed provision stated that information obtained by the Board or BIE from sources, not in the public domain, is considered to be confidential. It also repeat the provision in 4 Pa.C.S. § 1206(f) that the Board may not require an applicant to waive any confidentiality as a condition for approval of a license. This language was included in the regulation to emphasize an applicant's right to have certain information treated as confidential. All this regulation does is clarify that an applicant has a choice as to how to proceed during a licensing hearing if a question arises that may involve confidential information. The applicant may elect to waive the confidentiality privilege or request that the matter be heard in executive session. However, because not all information provided as part of a licensing application is considered confidential, it is entirely appropriate for the Board to require an applicant to describe how the information requested would fall into one of the categories of protected information in 4 Pa.C.S. § 1310(a) (relating to application) or the Board's regulations.
IRRC asked how the Board would determine what is a ''sufficient'' reason. IRRC believe the term is vague and should be defined or that criteria for determining what is sufficient should be added to the regulation.
The Board's intention in this provision is simply to have the applicant state the reason, on the record, why the information should be treated as confidential. In essence what the Board expects an applicant to do is to state how the information falls into one of the categories of protected information listed in 4 Pa.C.S. § 1310(a) or the Board's regulations. To clarify this intent, § 441a.7(r)(2) (relating to licensing hearings for slot machine licenses) has been revised and the term ''sufficient'' has been deleted.
IRRC also asked that with the deletion of 4 Pa.C.S. § 1206(a), what the Board's authority is to hear confidential information in executive session.
The statutory basis for the Board to hear information protected under 4 Pa.C.S. § 1206(f) in executive session is found in 65 Pa.C.S. § 708 (relating to executive sessions), which allows an agency to hold an executive session to ''discuss agency business which, if conducted in public, would violate a lawful privilege or lead to the disclosure of information or confidentiality protected by law. . . '' Because the confidentiality of this information is protected by law, it can by heard in executive session.
Next, IRRC asked if the Board had intended to cite 4 Pa.C.S. § 1206(f) in the proposed rulemaking instead of 4 Pa.C.S. § 1310(a).
That was the Board's intent and the citation has been corrected in the final-form rulemaking.
IRRC asked if a transcript would be made of an executive session, and if so, would the transcript be made available for release in accordance with 4 Pa.C.S. § 1206(f). IRRC also asked that if a transcript is not prepared, how would an applicant's meaningful appellate rights be protected.
A transcript will be prepared for any executive session and the transcript will be released under the circumstances outlined in 4 Pa.C.S. § 1206(f) pertaining to the release of confidential information. In the case of an appeal, the transcripts of any executive sessions will be released upon the lawful order of a court of competent jurisdiction.
IRRC also inquired how the Board will publish an order, when the Board renders a decision which is based on confidential information, without revealing the confidential information.
The Board's order does not have to contain the confidential information; it only needs to state that the Board has reviewed the information and state if any of the information was the basis for the Board's approval or disapproval.
Lastly, IRRC suggested that the Board include detailed administrative procedures for conducting an executive session.
The Board has not adopted this suggestion. Based on past experience with licensing hearings, the Board does not see a need to add detailed procedures for the conduct of executive sessions.
On March 19, 2009, IRRC voted to disapprove final-form Regulation No. 125-86. IRRC was concerned that the final-form rulemaking might not fully preserve a slot machine license applicant's right under the act to protect certain information as confidential.
On April 22, 2009, the Board adopted and submitted to IRRC, a revised final-form rulemaking. While it was never the Board's intent to abridge an applicant's right to have confidential information protected the Board agreed that the language of the final-form rulemaking could be improved by incorporating additional revisions as suggested by IRRC. More specifically, the Board has made two additional changes.
First, subsection (r)(1) has been revised by deleting the phrase ''Request, at the licensing hearing, that the matter be heard in executive session.'' and replacing it with ''Invoke the protection afforded the applicant by 4 Pa.C.S. § 1206(f) and have the matter heard in executive session.'' This more appropriately reflects the protection afforded by the statute.
Second, also subsection (r)(2) has been amended by adding a reference to § 407a.3(a) (relating to confidential information) of the Board's regulations. This section describes in detail the types of information that the Board deems to be confidential. By adding this reference, slot machine applicants will be provided additional guidance as to what the Board considers to be confidential information.
Applicants for slot machine licenses will be affected by this final-form rulemaking.
There will be no new costs or savings to the Board or other Commonwealth agencies as a result of this final-form rulemaking.
This final-form rulemaking will have no fiscal impact on political subdivisions of this Commonwealth.
Applicants for slot machine licenses will not experience any increased costs or savings as a result of this final-form rulemaking.
This final-form rulemaking will have no fiscal impact on the general public.
There are no new paperwork or reporting requirements associated with this final-form rulemaking.
The final-form rulemaking will become effective upon publication in the Pennsylvania Bulletin.
The contact person for questions about this final-form rulemaking is Richard Sandusky, Director of Regulatory Review at (717) 214-8111.
Under section 5(a) of the Regulatory Review Act (71 P. S. § 745.5(a)), on May 1, 2008, the Board submitted a copy of this proposed rulemaking, published at 38 Pa.B. 2269 and a copy of the Regulatory Analysis Form to IRRC and to the Chairpersons of the House Gaming Oversight Committee and the Senate Community, Economic and Recreational Development Committee (Committees).
Under section 5(c) of the Regulatory Review Act (71 P. S. § 745.5(c)), IRRC and the Committees were provided with copies of the comments received during the public comment period, as well as other documents when requested. In preparing the final-form rulemaking, the Board has considered all comments received from IRRC, the Committees and the public.
Under section 5.1(j.2) of the Regulatory Review Act (71 P. S. § 745.5a(j.2)), the final-form rulemaking was deemed approved by the Committees on May 20, 2009. Under section 5.1(e) of the Regulatory Review Act (71 P. S. § 745.5a(e)) IRRC met on May 21, 2009, and approved the final-form rulemaking.
The Board finds that:
(1) Public notice of intention to adopt this amendment was given under sections 201 and 202 of the act of July 31, 1968 (P. L. 769, No. 240) (45 P. S. §§ 1201 and 1202) and the regulations thereunder, 1 Pa. Code §§ 7.1 and 7.2 (relating to notice of proposed rulemaking required; and adoption of regulations).
(2) The final-form rulemaking is necessary and appropriate for the administration and enforcement of 4 Pa.C.S. Part II (relating to gaming).
The Board, acting under 4 Pa.C.S. Part II, orders that:
(a) The regulations of the Board, 58 Pa. Code Chapter 441a, are amended by amending § 441a.7 to read as set forth in Annex A, with the ellipses referring to the existing text of the regulation.
(b) The Chairperson of the Board shall certify this order and Annex A and deposit them with the Legislative Reference Bureau as required by law.
(c) This order shall take effect upon publication in the Pennsylvania Bulletin.
(Editor's Note: For the text of the order of the Independent Regulatory Review Commission relating to this document, see 39 Pa.B. 2902 (June 6, 2009).)
Fiscal Note: Fiscal Note 125-86 remains valid for the final adoption of the subject regulation.
TITLE 58. RECREATION
PART VII. GAMING CONTROL BOARD
Subpart C. SLOT MACHINE LICENSING
CHAPTER 441a. SLOT MACHINE LICENSES
§ 441a.7. Licensing hearings for slot machine licensees.
* * * * *
(r) Information obtained by BIE during an applicant's background investigation based upon public record or upon information otherwise in the public domain will be heard by the Board during the licensing hearing. Information submitted by an applicant under 4 Pa.C.S. § 1310(a) (relating to slot machine license application character requirements) or obtained by the Board or BIE as part of a background investigation from any source not in the public domain is considered confidential. The Board may not require an applicant to waive any confidentiality provided for in 4 Pa.C.S. §§ 1206(f) and 1310(a) as a condition for the approval of a slot machine license or any other action of the Board. The Board may request that an applicant respond to inquiries related to confidential information during a licensing hearing to promote transparency in the regulation of gaming in this Commonwealth. An applicant who does not waive the right to confidentiality shall:
(1) Invoke the protection afforded the applicant under 4 Pa.C.S. § 1206(f) and have the matter heard in executive session.
(2) Provide the reason on the record explaining the basis for the invocation of confidentiality under § 407a.3(a) (relating to confidential information).
(s) At its discretion, the Board may terminate, recess, reconvene and continue the licensing hearing.
(t) An applicant may raise an objection to the conduct of the hearing, procedure, process or rulings of the Board as it relates to its own hearing or to the hearing of a competitive applicant as follows:
(1) An objection may be raised orally by stating the objection during the hearing of an applicant and the objection shall be stenographically recorded upon the record. The Board may request written briefing of the basis of the objection prior to issuing a ruling.
(2) An objection relating to the hearing of an applicant or to a hearing of a competitive applicant may be raised by means of written objection filed with the Clerk no later than 2 business days after the action or event giving rise to the objection. A written objection must clearly and concisely set forth the factual basis for the objection and be accompanied by a legal brief addressing the legal basis supporting the objection.
(3) If an applicant objects to an action or event in the hearing of another applicant, the caption of the objection must include the docket numbers of both proceedings conspicuously displayed and shall be served upon counsel for the other applicant by electronic means.
(4) In the event an objection is filed to the hearing of another applicant, counsel for that applicant may file a responsive brief within 2 business days of electronic service.
(5) An objection not raised as provided in paragraphs (1)--(3) will be deemed waived.
(u) Each Category 1 and Category 3 applicant may file a brief up to 25 pages in length within 10 days of the completion of the hearing with respect to all applications within its category. Each Category 2 applicant may file a brief up to 25 pages in length within 10 days of the completion of the hearing with respect to all applications that meet the same location criteria as the applicant as specified in subsection (n)(1)(i)--(iii). At the prehearing conferences, applicants in any category may waive the opportunity to file briefs.
(v) At the conclusion of the presentation of all testimony and evidence, the Board will cause the record to be transcribed. The transcript and evidence shall become part of the evidentiary record for the Board's consideration. For good cause shown, the Board may seal portions of the record.
(w) Following submission of the applicants' briefs, all applicants will have an opportunity to make final remarks in the form of oral argument before the Board in a manner and time prescribed by the Board. At the prehearing conferences, applicants in any category may waive the opportunity for oral argument.
(x) Upon the conclusion of the licensing hearings and upon review of the evidentiary record in its entirety, the Board will consider, approve, condition or deny the slot machine license applications. A final order, accompanied by the Board's written decision, will be served on the applicants for slot machine licenses.
(y) An applicant may appeal the denial of a slot machine license to the Pennsylvania Supreme Court as provided in the act.
(z) This subsection pertains exclusively to intervention in a licensing hearing for a slot machine license under this section and is not applicable to other hearings before the Board. The right to intervene in a hearing under this section is within the sole discretion of the Board.
(1) A person wishing to intervene in a licensing hearing for a slot machine license shall file a petition in accordance with this subsection.
(2) A person may file a petition to intervene under this subsection if the person has an interest in the proceeding which is substantial, direct and immediate and if the interest is not adequately represented in a licensing hearing.
(3) Petitions to intervene in a licensing hearing may be filed no later than 45 days prior to the commencement of the first scheduled licensing hearing, in the category of license for which the applicant, in whose hearing the petitioner seeks to intervene, has filed an application unless, in extraordinary circumstances for good cause shown, the Board authorizes a late filing. At the same time the petitioner files its petition with the Board, a complete copy of the petition to intervene shall be served on the Chief Enforcement Counsel and the applicant in whose licensing hearing the petitioner seeks to intervene.
(4) Petitions to intervene must set out clearly and concisely the facts demonstrating the nature of the alleged right or interest of the petitioner, the grounds of the proposed intervention, the position of the petitioner in the proceeding and a copy of the written statement to be offered under paragraph (6). The petitioner shall fully and completely advise the applicant and the Board of the specific issues of fact or law to be raised or controverted and cite provisions or other authority relied on.
(5) The applicant may file an answer to a petition to intervene, and in default thereof, will be deemed to have waived any objection to the granting of the petition. If made, answers shall be filed within 10 days after the date the petition is filed with the Board, unless for cause the Board prescribes a different time. A complete copy of the answer to the petition to intervene shall be served on the Chief Enforcement Counsel and the petitioner who seeks to intervene.
(6) Except when the Board determines that it is necessary to develop a comprehensive evidentiary record, the participation of a person granted the right to intervene in a licensing hearing will be limited to the presentation of evidence through the submission of written statements attested to under oath. The written statements shall be part of the evidentiary record.
(aa) This section supersedes any conflicting provisions of Subpart H (relating to practice and procedure) and 1 Pa. Code Part II (relating to General Rules of Administrative Practice and Procedure).
[Pa.B. Doc. No. 09-1219. Filed for public inspection July 10, 2009, 9:00 a.m.]
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