RULES AND REGULATIONS
PENNSYLVANIA GAMING CONTROL BOARD
[ 58 PA. CODE CHS. 401a, 434a, 438a AND 441a ]
Preliminary Provisions; Onsite Shopkeeper Certification, Labor Organizations; and Slot Machine Licenses
[40 Pa.B. 2533]
[Saturday, May 15, 2010]
The Pennsylvania Gaming Control Board (Board), under its general authority in 4 Pa.C.S. § 1202(b)(15) and (30) (relating to general and specific powers) and the authority in 4 Pa.C.S. §§ 1102(8) and (9) and 1313 (relating to legislative intent; and slot machine license application financial fitness requirements), amends Chapters 438a and 441a (relating to labor organizations; and slot machine licenses), to read as set forth in Annex A.
Purpose of the Final-Form Rulemaking
This final-form rulemaking replaces the permitting requirements for individuals in labor organizations with registration requirements and makes minor revisions to provisions in Chapter 441a relating to agreements. At proposed, this rulemaking also would have added a new Chapter 434a (relating to onsite shopkeeper certification) setting forth the requirements for certification of onsite shopkeepers and their regulatory responsibilities. Those provisions have been deleted from the final-form rulemaking.
Explanation of Amendments to Chapters 438a and 441a
Chapter 438a has been amended to replace the permitting requirement for labor organization officers, agents and management employees with a requirement that these individuals seek registration. These individuals typically do not work in a licensed facility and rarely would need to be in a restricted area. Accordingly, the Board has determined that registration, rather than obtaining a permit, is more appropriate for these individuals.
More specifically, § 438a.3 (relating to registration of labor organization officers, agents and management employees) has been amended to replace all references to permits with references to registration. Additionally, since registrations do not require renewals, subsection (d) has been revised to reflect that a registration will be valid for as long as the individual holds his current position and subsections (e) and (f) have been deleted.
Minor revisions were made to Chapter 441a in §§ 441a.12 and 441a.13 (relating to maintaining agreements; filing of agreements; and Board review of agreements and records of agreements). The amendments to § 441a.12 will require slot machine licensees to submit to the Board copies of all written agreements or a written description of any oral agreement with a person which involves or may involve payments of $500,000 or more per year to a slot machine licensee. This will allow the Board to review the appropriateness of these significant financial transactions to determine their impact on the slot machine licensees and the integrity of gaming.
The addition to § 441a.13 will require slot machine licensees to include a provision in all contracts requiring that a person who has contracted with a slot machine applicant or licensee comply with 4 Pa.C.S. Part II (relating to gaming) and regulations promulgated thereunder, including obtaining all required licenses, permits, certifications and registrations. This will allow slot machine licensees to void contracts with parties that should, but refuse to, file an application for a license, permit, certification or registration.
Comment and Response Summary
Notice of proposed rulemaking was published at 38 Pa.B. 3980 (July 26, 2008).
The Board received comments from Downs Racing, L.P. (Downs), Greenwood Gaming and Entertainment, Inc. (Greenwood) and Washington Trotting Association, Inc. (WTA) during the public comment period. On September 24, 2008, the Independent Regulatory Review Commission (IRRC) also filed comments on the proposed rulemaking. All of these comments were reviewed by the Board and are discussed in detail as follows.
The bulk of the comments received raised questions and concerns with the proposed Chapter 434a relating to shopkeepers. Because of the comments received, the Board elected not to proceed with this final-form rulemaking until the Board revised its regulations pertaining to vendors which was done in Regulation #125-100, which was published as final at 40 Pa.B. 975 (February 20, 2010). However, on January 7, 2010, Act 1 of 2010 went in to effect. One of the changes in Act 1 was the addition of new provisions related to gaming service providers which will encompass both vendors and shopkeepers. The Board will be promulgating regulations to amend its existing vendor regulations to reflect the changes in Act 1 in the near future; however, there is no longer any need to promulgate separate regulations for shopkeepers. Accordingly, the Board has withdrawn the proposed revisions to Chapter 401a and withdrawn the proposed Chapter 434a in its entirety. Since these provisions have been deleted, the Board's discussion of the comments it received will be confined to the remaining amendments for Chapters 438a and 441a.
The only comments filed relating to the remaining provisions in this final-form rulemaking were from WTA. WTA asked that the Board clarify whether or not the requirement to file copies of any agreements involving payments of $500,000 was intended to apply to agreements with just shopkeepers or apply to all agreements. This comment appears to have been prompted by WTA's misunderstanding that this provision had been included in Chapter 434a as § 434a.12.
It was, and is, the Board's intent that this provision apply to all agreements. That is why this provision was added to § 441a.12, instead of being part of the proposed Chapter 434a.
As proposed, § 438a.3(b) would have required submission of an original and two copies of the Labor Organization Registration Application. The Board only needs one copy of this application, so this provision has been revised to only require submission of one copy with the original.
This final-form rulemaking will affect slot machine licensees, labor organization officers, agents and management employees.
These amendments will eliminate the requirement that annual renewal applications be filed for labor organization officers, agents and management employees. This will reduce the number of permit renewal applications that will have to be processed by the Bureau of Licensing and the Bureau of Investigations and Enforcement.
This final-form rulemaking will have no fiscal impact on political subdivisions of this Commonwealth.
Labor organization officers, agents and management employees will experience some cost savings because the application fee and investigation costs for registrations are less than they are for permits and registrations do not require annual renewals.
Slot machine licensees will be required to file copies of agreements under which the slot machine licensee may receive payments of $500,000 or more.
This final-form rulemaking will have no fiscal impact on the general public.
Labor organization officers, agents and management employees will no longer have to file annual renewal applications.
Slot machine licensees will be required to file copies of agreements under which the slot machine licensee may receive payments of $500,000 or more.
The final-form rulemaking will become effective upon final-form 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 July 16, 2008, the Board submitted a copy of the proposed rulemaking, published at 38 Pa.B. 3980 and a copy of the Regulatory Analysis Form to IRRC and to the House Gaming Oversight Committee and the Senate Community, Economic and Recreational Development Committee (Committees).
Under section 5(c) of the Regulatory Review Act, 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 April 7, 2010. Under section 5.1(e) of the Regulatory Review Act, IRRC met on April 8, 2010, and approved the final-form rulemaking.
The Board finds that:
(1) Public notice of intention to adopt these amendments 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.
(2) The final-form rulemaking is necessary and appropriate for the administration and enforcement of 4 Pa.C.S. Part II.
The Board, acting under 4 Pa.C.S. Part II, orders that:
(a) The regulations of the Board, 58 Pa. Code Chapters 438a and 441a, are amended by amending §§ 438a.3, 441a.12 and 441a.13 to read as set forth in Annex A with ellipses.
(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.
GREGORY C. FAJT
(Editor's Note: The proposal to amend § 401a.3 and the addition of §§ 434a.1—434a.8 included in the proposed rulemaking at 38 Pa.B. 3980, has been withdrawn by the Board.)
(Editor's Note: For the text of the order of the Independent Regulatory Review Commission relating to this document, see 40 Pa.B. 2194 (April 24, 2010).)
Fiscal Note: Fiscal Note 125-91 remains valid for the final adoption of the subject regulations.
TITLE 58. RECREATION
PART VII. GAMING CONTROL BOARD
Subpart B. LICENSING, PERMITTING, CERTIFICATION, AND REGISTRAION
CHAPTER 438a. LABOR ORGANIZATIONS
§ 438a.3. Registration of labor organization officers, agents and management employees.
(a) Every labor organization officer, agent and management employee shall be registered in accordance with this section.
(b) Every labor organization officer, agent and management employee shall file an original and one copy of a completed Labor Organization Registration Application Form with the registration fee posted on the Board's web site (pgcb.state.pa.us).
(c) Applicants and registrants under this section shall be subject to the general application requirements of Chapters 421a and 423a (relating to general provisions; and applications).
(d) Registrations issued under this section will be valid for as long as the individual holds the position which required the individual to seek registration.
Subpart C. SLOT MACHINE LICENSING
CHAPTER 441a. SLOT MACHINE LICENSES
§ 441a.12. Maintaining agreements; filing of agreements.
(a) Maintaining agreements. Each slot machine applicant and licensee shall maintain the following:
(1) A fully signed copy of every written agreement.
(2) Records with respect to any oral agreement.
(b) Changes or amendments to agreements. Slot machine applicants and licensees shall maintain changes or amendments to the terms of the agreements subject to subsection (a).
(c) Filing agreements. Each slot machine licensee shall submit the following to the Board:
(1) A fully signed copy of written agreements with manufacturer applicants or licensees, manufacturer designee applicants or licensees, supplier applicants or licensees and with vendors subject to certification under § 437a.1(b) (relating to general vendor requirements).
(2) A precise written description of any oral agreement, in accordance with subsection (f), with manufacturer applicants or licensees, manufacturer designee applicants or licensees, supplier applicants or licensees and vendors subject to certification under § 437a.1(b).
(3) A fully signed copy of all written agreements relating to land and real estate.
(4) A fully signed copy of all written agreements or a written description of any oral agreement with a person which involves or may involve payments of $500,000 or more per year to a slot machine licensee.
(d) Changes or amendments to filed agreements. Slot machine applicants and licensees shall file all changes or amendments to the terms of the agreements subject to subsection (c).
(e) Additional agreements. Notwithstanding the requirements of subsections (c) and (d), slot machine applicants or licensees may be required to submit a copy of any other written agreement, change or amendment or a precise written description of any other oral agreement, change or amendment as requested by the Board.
(f) Oral agreements. A written description submitted under this section must provide, at a minimum, the following:
(1) The nature of the goods or services to be provided to or by the slot machine licensee or applicant.
(2) The full name and business address of the nonslot machine licensee or applicant party to the agreement.
(3) The duration of the agreement, or if provided in the agreement, the specific date or dates of performance.
(4) The financial terms of the agreement.
(5) A description of the goods or services provided, including the expected duration and compensation.
§ 441a.13. Board review of agreements and records of agreements.
(a) The Board may review an agreement and record maintained or filed under § 441a.12 (relating to maintaining agreements; filing of agreements) to determine the following:
(1) The reasonableness of the terms of the agreement, including the terms of compensation.
(2) The qualifications of the persons involved in and associated with the agreement, after which the Board may make a finding as to the suitability of the persons to be involved or associated with the slot machine applicant or licensee.
(3) Whether any person involved therein or associated therewith is providing or likely to provide goods or services to, or conducting or likely to conduct business with, a slot machine applicant or licensee or its employees which requires a license, permit, certification, registration or notification under the act or this part, in which case the Board will direct that the appropriate application be promptly filed by the person.
(4) Whether any action is desirable or necessary to regulate, control or prevent economic concentration in any vendor industry or to encourage or preserve competition in any vendor industry.
(b) If the Board finds that an agreement is not in the public interest or is inimical to the interest of gaming in this Commonwealth, the Board may, by order, require the termination of the agreement or association of any person associated therewith or pursue any remedy or combination of remedies provided for in the act or this part. If the agreement or association is not thereafter promptly terminated, the Board may pursue any remedy or combination of remedies provided for in the act or this part.
(c) Each agreement maintained or filed under § 441a.12 shall be deemed to include a provision for its termination without liability on the part of the slot machine applicant or licensee, or on the part of any qualified party to the agreement or any related agreement the performance of which is dependent upon the agreement, if the Board orders that the agreement be terminated in accordance with subsection (b).
(d) Each agreement maintained or filed under § 441a.12 must include a provision requiring that the person who has contracted with the slot machine applicant or licensee comply with the act and this part, including obtaining required licenses, permits, certifications and registrations.
[Pa.B. Doc. No. 10-866. Filed for public inspection May 14, 2010, 9:00 a.m.]
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