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PA Bulletin, Doc. No. 07-1082a

[37 Pa.B. 2808]
[Saturday, June 23, 2007]

[Continued from previous Web Page]

CHAPTER 403. (Reserved)

§§ 403.1--403.7. (Reserved).

CHAPTER 403a. BOARD OPERATIONS AND ORGANIZATION

Sec.

403a.1.Definitions.
403a.2.Participation at meetings and voting.
403a.3.Meetings.
403a.4.Board office hours.
403a.5.Public communication.
403a.6.Delegation of powers.
403a.7.Temporary emergency orders.
403a.8Licensed entity representative meetings.

§ 403a.1. Definitions.

   The following words and terms, when used in this chapter, have the following meanings, unless the context clearly indicates otherwise:

   Financial interest--

   (i)  An ownership, property, leasehold or other beneficial interest in an entity.

   (ii)  The term does not include an interest which is held or deemed to be held in any of the following:

   (A)  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 (26 U.S.C.A. § 457), 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.

   (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.

   (B)  A tuition account plan organized and operated under section 529 of the Internal Revenue Code of 1986 (26 U.S.C.A. § 529) that is not self-directed by the individual.

   (C)  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.

§ 403a.2. Participation at meetings and voting.

   (a)  Qualified majority vote. An action by the Board, except as set forth in subsections (b) and (c), including the approval, issuance, denial or conditioning of a license or the making of an order or the ratification of a permissible act done or order made by one or more of the members of the Board will require a qualified majority vote consisting of at least one gubernatorial appointee and the four legislative appointees.

   (b)  Majority vote. An action by the Board to suspend, revoke, not renew, void or require forfeiture of a license, permit, certification or registration previously issued by the Board, to impose an administrative fine or penalty or to issue cease and desist will require a majority vote of all the Board members.

   (c)  Participation. A member may not participate in a hearing, proceeding or other matter in which the member, 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. For purposes of the subsection, the term ''immediate family'' means spouse, parent, brother, sister or child.

   (d)  Disqualifying interest. If a Board member has a disqualifying interest in a voting matter, the member shall disclose the nature of the disqualifying interest, disqualify himself and abstain from voting in a proceeding in which his objectivity, impartiality, integrity or independence of judgment may be reasonably questioned, including instances where he knows that he possesses a substantial financial interest in the subject matter of the proceeding or an interest that could be substantially affected by the outcome of the proceeding. If it is a legislative appointee member that has disqualified himself, the qualified majority will consist of the remaining three legislative appointees and at least two gubernatorial appointees.

   (e)  Member abstention. When a member has disqualified himself, the member's abstention from voting will apply only to the singular voting matter that led to the disqualification and not apply to other matters under consideration by the Board for which the member is otherwise qualified.

§ 403a.3. Meetings.

   (a)  Public sessions. The proceedings of all public sessions will be conducted in accordance with 65 Pa.C.S. Chapter 7 (relating to the Sunshine Act).

   (b)  Regularly scheduled meetings. The Board will meet once a month, and on other dates as the Board determines.

   (c)  Participation by means of telephone or video teleconference. A Board member may participate in a meeting by means of telephone or video teleconference when it is impractical for the Board member to attend the meeting in person.

   (d)  Record of proceedings. The Board will keep a record of all proceedings held at public meetings of the Board. A verbatim transcript of those proceedings will be prepared by and will be the property of the Board. The verbatim transcript will be available for inspection at the Board's office during normal business hours.

§ 403a.4. Board office hours.

   Board offices will be open from 8:30 a.m. to 5 p.m. on business days except Saturdays, Sundays, legal holidays and Commonwealth office closures declared by the Governor, unless otherwise directed by the Board.

§ 403a.5. Public communication.

   Requests for information regarding the Board may be directed to:

Office of Communications
Pennsylvania Gaming Control Board
P. O. Box 69060
Harrisburg, PA 17106-9060

§ 403a.6. Delegation of powers.

   (a)  The Board may, consistent with the act and this part, delegate its authority to perform any of its functions to a Board member or member of the Board's staff.

   (b)  A delegation of Board authority will be effected by promulgation of a regulation or the adoption of a formal resolution at a public meeting of the Board. The regulation or resolution will specify:

   (1)  The specific authority delegated.

   (2)  The Board member or Board staff members to whom the authority is delegated.

   (3)  Limitations or conditions imposed on the authority delegated.

   (c)  Delegations of authority made under this section will remain in effect indefinitely unless otherwise specified in the implementing regulation or resolution.

   (d)  A delegation of authority adopted by the Board may be modified or rescinded by the Board through promulgation of a regulation or the adoption of a subsequent formal resolution at a public meeting of the Board.

   (e)  Notwithstanding any other provision of this section, a matter that has been delegated to the Board staff may alternatively be presented to and determined by the Board on its own motion, at the discretion of the Chairperson or at the request of the Board staff.

§ 403a.7. Temporary emergency orders.

   (a)  Upon request of the Office of Enforcement Counsel in accordance with subsection (d), a temporary emergency order may be issued by, or on behalf of, the Executive Director of the Board. A temporary emergency order may be issued without a hearing and without advanced notice and will notify the person to whom the temporary emergency order is issued that he may request a hearing to be held by the Executive Director within 72 hours of the request being filed with the Board.

   (b)  A temporary emergency order may be issued to suspend a license, certification, permit or registration or to direct that a person refrain from engaging in, or cease and desist engaging in, specific conduct.

   (c)  A temporary emergency order may be issued if there is insufficient time to provide notice and hearing prior to the issuance of the order; the order is necessary to preserve the public health, welfare, or safety or the integrity of gaming in the Commonwealth; and determination of one of the following has occurred:

   (1)  A person holding a license, certification, permit or registration issued by the Board has been charged with or convicted of a felony, a criminal gaming offense, or crime of dishonesty or false statement or other offense that would make the person ineligible or unsuitable to hold a license, permit, certification or registration.

   (2)  A licensee has failed to pay required assessments or to satisfy its tax obligations under the act.

   (3)  The action is necessary to prevent or cure a violation of any provision of the act, this part or other Federal or State laws or regulations.

   (d)  If the Office of Enforcement Counsel determines that circumstances exist which require that immediate action be taken on behalf of the Board, it may submit a request for a temporary emergency order. The request will include:

   (1)  The circumstances upon which the determination to request the order was made.

   (2)  The grounds upon which the order is being requested.

   (3)  The specific relief sought in the order.

   (e)  A temporary emergency order will be issued in writing and filed, together with the request for a temporary emergency order required by subsection (d), with the Clerk no later than the close of the next business day following its issuance.

   (f)  A temporary emergency order will specify that the person subject to the temporary emergency order may request an informal hearing before the Executive Director within 72 hours of filing the request with the Clerk.

   (g)  The Bureau will cause the temporary emergency order and the request for a temporary emergency order required by subsection (d) to be served upon the person named in the temporary emergency order. Service required by this subsection will be made as expeditiously as practicable following the issuance of the order and the request. Service will be made in the manner prescribed by § 491.3 (relating to service by the Board).

   (h)  Within 72 hours of the filing a request for an informal hearing with the Board, an informal hearing before the Executive Director or a designee will be held at the Board headquarters.

   (i)  The Executive Director or a designee may sign subpoenas to secure the attendance of witnesses and the production of documents.

   (j)  The procedure for the informal hearing will be as follows:

   (1)  The Executive Director or a designee will call the hearing to order and present the request for a temporary emergency order filed by the Office of Enforcement Counsel under subsection (d).

   (2)  The person named in the temporary emergency order may respond by submitting evidence and witnesses supporting the position that the temporary emergency order should be dissolved or modified.

   (3)  The Executive Director or a designee may require that witnesses testify under oath. All relevant evidence is admissible. The Executive Director or a designee may question witnesses.

   (4)  The licensee may make a concluding argument as to why the temporary emergency order should be dissolved or modified.

   (5)  Upon receiving all evidence presented by the person named in the order and hearing the person's final argument, the Executive Director or a designee will render a decision as to whether or not the temporary emergency order will continue, be modified or dissolved within 72 hours. Service of the decision will be made in the manner prescribed by § 491.3. Unless the Executive Director dissolves the temporary emergency order, the matter will be scheduled for a hearing before the Board as provided in subsection (k).

   (k)  Once a temporary emergency order has been issued under this section, unless it has been subsequently dissolved by the Executive Director, the temporary emergency order will be presented to the Board at its next meeting or within 10 business days, whichever is longer at which time the Board may do one of the following:

   (1)  Conduct a hearing to determine the validity of the issuance of the order.

   (2)  Refer the matter to the Office of Hearings and Appeals under § 492.6 (relating to hearings generally) and direct that a hearing be conducted by a hearing officer and a report submitted to the Board.

   (l)  In all hearings relating to the disposition of a temporary emergency order, whether the hearing is conducted by the Board or by a hearing officer, the following procedure will occur:

   (1)  The temporary emergency order, the request for the temporary order and any modifications to the temporary order will be made a part of the evidentiary record of the proceeding.

   (2)  The Office of Enforcement Counsel will present evidence to the Board or the hearing officer in support of the temporary emergency order.

   (3)  The person named in the order shall have the burden of rebutting the evidence presented by the Office of Enforcement Counsel.

   (m)  If the hearing is conducted by the Board, the Board may take one of the following actions upon conclusion of oral arguments and evidentiary presentations:

   (1)  If the Board finds that the unrebutted facts and circumstances presented are sufficient to support the issuance of the temporary emergency order, that dissolution of the temporary emergency order would pose an immediate threat to the public health, safety or welfare, or the public's interest in the effective regulation of gaming demands the action, it may adopt a resolution ratifying or modifying the temporary emergency order. This order may be appealed under § 494.11 (relating to appeals).

   (2)  If the Board finds that there is insufficient cause to continue the temporary emergency order, it may adopt a resolution dissolving the emergency order and the privileges of the person named in the order will be reinstated.

   (3)  If the Board finds that further hearing is necessary, it may refer the matter to the Office of Hearings and Appeals for additional presentation of evidence and testimony of witnesses. If the matter is referred to the Office of Hearings and Appeals, the temporary emergency order will remain in effect, with or without modification as the Board deems appropriate.

   (n)  If the Board adopts a resolution, the resolution may establish the length of term for the order by establishing an expiration date, dependent on the completion of specified remedial actions or dependent on the filing of, or final resolution of, a complaint alleging the person violated a provision of the act or this part. If the expiration date is dependent upon specific remedial actions, the Board will provide a detailed description of the remedies in the resolution and will establish procedures whereby the person can demonstrate that it has complied with the required remedies.

   (o)  Any resolution adopted is a final order of the Board for purposes of appeal.

   (p)  Resolutions ratifying or dissolving temporary emergency orders adopted by the Board under this section will have no effect upon the power and duty of the Office of Enforcement Counsel to initiate, in its sole discretion, proceedings for violations of the act or this part or upon the outcome of any proceeding so initiated.

   (q)  Copies of the Board's final order will be served on the person named in the order by certified or overnight express mail, postage prepaid; or by personal delivery in accordance with § 491.3.

   (r)  If the Board refers the matter to the Office of Hearings and Appeals, the hearing will be subject to the following requirements:

   (1)  The Chairperson will designate a presiding officer to direct the hearing and rule on evidentiary matters.

   (2)  The hearing before the presiding officer will occur no more than 10 business days after the Board refers the matter to the Office of Hearings and Appeals, unless a delay is requested by the person named in the temporary emergency order.

   (3)  Within 10 days following the conclusion of hearing, the presiding officer will forward a recommendation for action on the temporary emergency order to the Board. A copy of the recommendation will be served on the person named in the temporary order by certified or overnight express mail or by personal delivery in accordance with § 491.3.

§ 403a.8. Licensed entity representative meetings.

   (a)  If a Board member conducts a meeting with a licensed entity representative under section 1201.1(c)(7) of the act (relating to code of conduct), the Board member will record the following in the log:

   (1)  The names of individuals with whom the Board member met.

   (2)  The date and time of the meeting.

   (b)  The Board member will include a memorandum of the content of the discussion in the log.

   (c)  The log will be available for public inspection.

CHAPTER 405. (Reserved)

§§ 405.1--405.7. (Reserved).

CHAPTER 405a. BUREAU OF INVESTIGATIONS AND ENFORCEMENT

Sec.

405a.1.General duties and powers.
405a.2.Information.
405a.3.Office of Enforcement Counsel.
405a.4.Conduct.
405a.5.Investigatory subpoena.
405a.6.Enforcement action.

§ 405a.1. General duties and powers.

   The Bureau has the powers and duties set forth in section 1517 of the act (relating to enforcement) including:

   (1)  The investigation and review of applicants seeking a license, permit, certification or registration.

   (2)  The investigation of licensees, permittees, registrants, certified vendors and other persons for potential violations of the act, including potential violations referred to the Bureau by the Board or other persons.

   (3)  The monitoring of slot machine operations to ensure compliance with the act, this part and the integrity of gaming, including internal controls, exclusion list enforcement, underage gaming and drinking, individual complaints, information systems, integrity and security issues.

   (4)  The inspection and examination of all premises where slot machine operations are conducted, gaming devices or equipment are manufactured, sold, distributed or serviced or where records of these activities are prepared or maintained as provided in section 1517(e) of the act. Inspections may include the review and reproduction of any document or record.

   (5)  The conduct of audits of slot machine operations as necessary to ensure compliance with the act and this part. An audit may include, but is not limited to, reviews, examinations and inspections of:

   (i)  Accounting, administrative and financial records and procedures utilized by the licensed entity.

   (ii)  Internal control procedures and management control procedures.

   (iii)  Security and surveillance departments.

   (iv)  Corrective action taken by the licensee to resolve reported deficiencies.

   (v)  Reports issued by an independent certified public accountant or independently registered public accounting firm pertaining to the adequacy of the licensee's system of internal controls over financial reporting.

   (vi)  The licensee's responses, if any, to the reports noted in paragraph (v).

   (vii)  Other matters required by the Board or the Bureau.

   (6)  The referral of possible criminal violations under the act to the Pennsylvania State Police.

   (7)  Be a criminal justice agency under 18 Pa.C.S. Chapter 91 (relating to criminal history record information).

§ 405a.2. Information.

   (a)  An applicant for or holder of a license, permit, certification or registration shall provide all information, data and documents requested by the Bureau under section 1517(a) of the act (relating to enforcement).

   (b)  The Director of the Bureau, the Chief Enforcement Counsel, and their designees, will have the power and authority to administer oaths and affirmations for the purpose of obtaining voluntary sworn statements with regard to any matter or thing which may properly fall within the jurisdiction of the Board. Any person so designated will have the power and authority to obtain by subpoena the sworn statement of a person deemed to have information relevant to an investigation that the Board is authorized to conduct. Designation pursuant to this section will be made in writing, filed with the Clerk, and remain in effect until revoked.

   (c)  A State or local law enforcement agency, including the Pennsylvania State Police and the Office of Attorney General, the Department or other executive agency may provide information, data and documents requested by the Bureau relating to an applicant for or holder of a license, permit, certification or registration.

   (d)  The Bureau may, upon request, provide pertinent information relating to an applicant for or holder of a license, permit, certification or registration to law enforcement agencies, including the Federal Bureau of Investigation or other domestic or foreign agencies or jurisdictions.

   (e)  Information under this section may be provided or received by electronic distribution.

§ 405a.3. Office of Enforcement Counsel.

   (a)  The Office of Enforcement Counsel within the Bureau has the following powers and duties:

   (1)  Advise the Bureau on all matters, including the granting of licenses, permits, certifications or registrations, the conduct of background investigations, audits and inspections and the investigation of potential violations of the act or this part.

   (2)  Make recommendations and objections relating to the issuance of licenses, permits, certifications and registrations.

   (3)  Initiate, in its sole discretion, proceedings for violations of the act or this part by filing a complaint or other pleading with the Board seeking civil fines or penalties, the imposition of conditions on a license, permit, certification or registration, or the suspension or revocation of a license, permit, certification or registration.

   (4)  Act as the prosecutor in enforcement actions under the act.

   (5)  Seek a settlement that may include fines, penalties or other actions subject to approval by the Board.

   (6)  Appear at administrative hearings and other proceedings before the Board.

   (b)  The Director of the Office of Enforcement Counsel will report to the Executive Director of the Board on administrative and operational matters.

   (c)  The Director of the Office of Enforcement Counsel may be removed by the Board only for good cause shown.

§ 405a.4. Conduct.

   (a)  An attorney representing the Bureau or Office of Enforcement Counsel, or an employee involved in the hearing process, may not discuss the case ex parte with a presiding officer assigned to the case, the Chief Counsel or an attorney assigned to the case from the Office of Chief Counsel or a Board member.

   (b)  A presiding officer, the Chief Counsel or an attorney assigned to the case from the Office of Chief Counsel or a Board member may not discuss or exercise a supervisory responsibility over any employee with respect to an enforcement hearing with which the employee is involved.

   (c)  If it becomes necessary for the Chief Counsel or an attorney from the Office of Chief Counsel or a Board member to become involved on behalf of the Board in any enforcement proceeding, the Chief Counsel or the attorney from the Office of Chief Counsel or the Board member involved shall be prohibited from participating in the adjudication of that matter.

§ 405a.5. Investigatory subpoena.

   (a)  The Director of the Office of Enforcement Counsel is authorized to require the attendance and testimony of witnesses and the production of books, accounts, papers, records, documents, files, computer files and photographs in original or electronic format necessary for all action within the authority of the Bureau under the act or this part.

   (b)  The Director of the Office of Enforcement Counsel or his representative may issue subpoenas.

   (c)  In case of disobedience of any subpoena or the contumacy of any witness appearing before the Director of the Office of Enforcement Counsel or a representative, the Director of the Office of Enforcement Counsel or a representative may invoke the aid of Commonwealth Court or any court of record of this Commonwealth to require the person subpoenaed to obey the subpoena or to give evidence or to produce books, accounts, papers, records, documents, files, computer files and photographs in original or electronic format relative to the matter in question.

   (d)  The issuance of a subpoena under this section will not be required to secure the cooperation of a person who is an applicant for, or the holder of, a license, permit, certification or registration issued by the Board, or to secure the voluntary cooperation of any person.

§ 405a.6. Enforcement action.

   (a)  Upon a determination by the Office of Enforcement Counsel that sufficient facts exist to support enforcement action against a person holding a license, permit, certification or registration issued by the Board, the Office of Enforcement Counsel will initiate a complaint in accordance with § 493.2 (relating to complaints), including a proposed order for an enforcement action and serve the complaint in accordance with § 491.3 (relating to service by the Board).

   (b)  The complaint for an enforcement action will include a statement of the facts, the statute, regulation or statement of conditions that the person is being charged with violating and the remedy sought. The proposed order will be accompanied by a certificate of service demonstrating the date of service.

   (c)  Within 15 days from the date of service of complaint for an enforcement action, the person may file a notice of defense in accordance with § 493.2(d) and serve a copy of the request on the Office of Enforcement Counsel. Failure to file a notice of defense for an enforcement action complaint within 15 days will be deemed:

   (1)  A waiver by the person of any right to an administrative hearing before the Board.

   (2)  An admission by the person of all matters and facts alleged in the proposed order for enforcement action.

   (3)  Consent by the person to the entry of a final order by the Board disposing of the enforcement matter.

   (d)  Upon the person's failure to request a hearing within the prescribed 15 days, the Office of Enforcement Counsel will present the proposed enforcement order to the Board. The Board may, by resolution, adopt the proposed enforcement order.

   (e)  The Clerk will send a copy of the Board's final order to the person by certified mail.

CHAPTER 407. (Reserved)

§§ 407.1--407.3. (Reserved).

CHAPTER 407a. PUBLIC ACCESS TO BOARD FILES

Sec.

407a.1.Case files.
407a.2.Minutes of public meeting and annual report.
407a.3.Confidential information.

§ 407a.1. Case files.

   (a)  Formal records. The Board will maintain a nonconfidential file and a confidential file for all formal records.

   (b)  Access. Access to formal records will be governed by the following:

   (1)  Nonconfidential files will be available for inspection during normal Board business hours.

   (2)  Upon receipt of a request for access to confidential files, the Board or the Bureau will review the request and provide its determination as to whether the material may be released for inspection within 30 days of the request.

   (3)  For good cause, the Board may extend the time limits applicable to requests for access to confidential files.

   (c)  The Board may issue protective orders or establish standards governing the protection of proprietary or confidential documents for a given proceeding or a given type of proceeding. All parties to a proceeding shall submit, classify and mark documents in accordance with the directives of the Board or its designee. In the absence of any protective order or standard, parties shall clearly mark documents that are deemed to be proprietary or confidential. The documents will be treated as marked by the Board.

   (d)  Any party or member of the public may dispute the designation of a document as submitted by filing a notice of dispute with the Board. The Board will determine the proper classification of documents subject to a notice of dispute as soon as administratively possible.

§ 407a.2. Minutes of public meeting and annual report.

   Minutes of the public meeting and annual reports will be available for public inspection upon request to the Secretary during normal Board business hours. Copies will be provided upon request and payment of the cost for copying as the Board may establish through a schedule published in the Pennsylvania Bulletin.

§ 407a.3. Confidential information.

   (a)  Confidential information may include background investigation information, including information provided under section 1310(a) of the act (relating to slot machine license application character requirements), submitted in connection with an application required for the issuance of any license, permit, certification or registration under this part, discovery procedures, or cross-examination or that is provided as a courtesy to a party in a formal proceeding received by the Board or the Department as well as records obtained or developed by the Board or the Department as part of an investigation related to an applicant or holder of a license, permit, certification or registration containing any of the following:

   (1)  Personal information, including home addresses, telephone numbers, Social Security numbers, educational records, memberships, medical records, tax returns and declarations, actual or proposed compensation, financial account records, credit-worthiness or financial condition relating to an applicant, licensee or permittee or the immediate family thereof.

   (2)  Documents and information relating to proprietary information, trade secrets, patents or exclusive licenses, architectural and engineering plans and information relating to competitive marketing materials and strategies which may include customer-identifying information or customer prospects for services subject to competition.

   (3)  Security information including risk prevention plans, detection and countermeasures, emergency management plans, security and surveillance plans, equipment and usage protocols and theft and fraud prevention plans and countermeasures.

   (4)  Information with respect to which there is a reasonable possibility that public release or inspection of the information would constitute an unwarranted invasion into personal privacy as determined by the Board.

   (5)  Records or information that is designated confidential by statute or the Board.

   (6)  Records of an applicant or licensee not required to be filed with the SEC by issuers that either have securities registered under section 12 of the Securities Exchange Act of 1934 (15 U.S.C.A. § 781) or are required to file reports under section 15(d) of that act (15 U.S.C.A. § 78o(d)).

   (7)  Records considered nonpublic matters or information by the SEC as provided by 17 CFR 200.80 (relating to commission records information).

   (b)  Confidential information may be released by the Board under the following circumstances:

   (1)  To State or Federal law enforcement agencies or entities upon approval of the Attorney General or pursuant to a lawful order issued by court of competent jurisdiction.

   (2)  To the public, in whole or in part, if one of the following occurs:

   (i)  Upon written request from the applicant or holder of a license, permit, certification or registration, to the extent that the information does not contain otherwise confidential information about another person.

   (ii)  If the information subsequently becomes a part of the public domain by an action by the applicant or holder of a license, permit, certification or registration.

   (3)  To a person with the written consent of the applicant or holder of a license, permit, certification or registration.

[Pa.B. Doc. No. 07-1082. Filed for public inspection June 22, 2007, 9:00 a.m.]



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