PENNSYLVANIA GAMING CONTROL BOARD
[58 PA. CODE CH. 441]
Temporary Regulations; Slot Machine Licensing Hearings
[36 Pa.B. 3413]
[Saturday, July 1, 2006]The Pennsylvania Gaming Control Board (Board), under 4 Pa.C.S. § 1203(a) (relating to temporary regulations), adopts a temporary regulation to facilitate implementation of 4 Pa.C.S. Part II (relating to gaming), enacted by the act of July 5, 2004 (P. L. 572, No. 71) (Act 71). The Board's temporary regulation will be added to Part VII (relating to Gaming Control Board). Section 441.19, entitled slot machine licensing hearings, is added to Chapter 441, entitled slot machine licenses, under Subpart C, entitle slot machine licensing.
Purpose and Background
Under 4 Pa.C.S. § 1203(a), the Board is authorized to promulgate temporary regulations to facilitate the prompt implementation of Act 71. The regulations are necessary to enhance the credibility of the licensed operation of slot machines and associated equipment within this Commonwealth and to carry out the policy and purposes of the Board. To invite public input, the Board published draft regulations on the Board's website and 10-day public comment period was provided.
Under 4 Pa.C.S. § 1203(b), the temporary regulations adopted by the Board expire no later than 3 years following the effective date of Act 71 or upon promulgation of regulations as generally provided by the law. These temporary regulations are not subject to sections 201--205 of the act of July 31, 1968 (P. L. 769, No. 240) (45 P. S. §§ 1201--1208), known as the Commonwealth Documents Law (CDL), or to the Regulatory Review Act (71 P. S. §§ 745.1--745.15).
Financial Impact
Act 71 and the regulations will provide for the implementation and management of gaming within this Commonwealth and the collection of fees and taxes from entities and individuals authorized by the Board to be employed by, provide gaming related services to or operate gaming facilities. The appropriations from the Commonwealth for the implementation of Act 71 and costs of administering 4 Pa.C.S. Part II will be reimbursed by the licensed entities as specified within Act 71. Individuals and entities that wish to obtain licenses as gaming entities shall pay to the Gaming Fund significant licensing fees to obtain the authority to do business within this Commonwealth. Part of these fees shall reimburse the Board and the Pennsylvania State Police for licensing processes and background investigations. The licensing, registration, certification and permitting of individuals and other classes of applicants will be reimbursed by the applicants through fees established by the Board. It is anticipated that all expenses of the Board and all associated activities shall be reimbursed by the applicants and gaming entities as previously specified. The Board shall have no financial impact on the State budget.
Statutory Authority
The Board is authorized under 4 Pa.C.S. § 1203(a) to adopt and publish temporary regulations to implement the policies and purposes of Act 71.
Regulatory Review
Under 4 Pa.C.S. § 1203(b), the Board's authority to adopt temporary regulations expires 2 years from the effective date of Act 71.
Findings
The Board finds that:
(1) Under 4 Pa.C.S. § 1203(a), the temporary regulation is exempt from the requirements of the Regulatory Review Act and sections 201--205 of the CDL.
(2) A 10-day public comment period was held prior to the adoption of the temporary regulation.
(3) The adoption of the temporary regulation provided by this order is necessary and appropriate for the administration of the authorizing statute.
Order
The Board, acting under the authorizing statute, orders that:
(a) The Board, acting under the authority of the Act 71, adopts as its final-form temporary regulation, the draft regulation as amended by resolution at the June 15, 2006, public meeting. The temporary regulations pertain to slot machine licensing hearings.
(b) The temporary regulations of the Board, 58 Pa. Code Chapter 441, are amended by adding § 441.19 to read as set forth in Annex A.
(c) The temporary regulation is effective June 15, 2006.
(d) The temporary regulation shall be posted in their entirety on the Board's website and published in the Pennsylvania Bulletin.
(e) The temporary regulation shall be subject to amendment as deemed necessary by the Board in accordance with the purpose of Act 71 and to further the intent of Act 71.
(f) The Chairperson of the Board shall certify this order and deposit the regulation with the Legislative Reference Bureau as required by law.
THOMAS A. DECKER,
ChairpersonFiscal Note: 125-29. No fiscal impact; (8) recommends adoption.
Annex A
TITLE 58. RECREATION
PART VII. GAMING CONTROL BOARD
Subpart C. SLOT MACHINE LICENSING
CHAPTER 441. SLOT MACHINE LICENSES § 441.19. Licensing hearings for slot machine licenses.
(a) Definitions. The following words and terms, when used in this section, have the following meanings, unless the context clearly indicates otherwise.
Licensing hearing--A hearing before the Board in which an applicant for an initial grant of a permanent slot machine license or a Conditional Category 1 slot machine license will have an opportunity to present to the Board:
(1) Evidence concerning its eligibility for a license.
(2) Evidence concerning its suitability for a license.
(3) Evidence of how its proposed facility and operation addresses the criteria identified in section 1325(c) of the act (relating to license or permit issuance).
(4) For applicants seeking licensure under section 1304 of the Act (relating to Category 2 slot machine license), evidence which sets forth a comparison between the applicant and other applicants within the same category of licensure on the standards and criteria set forth in the act.
(b) A schedule of licensing hearings will be published by the Executive Director for all slot machine license applicants.
(c) Applicants shall be scheduled for licensing hearings in the following order:
(1) Applicants seeking licensure under section 1315, of the act (relating to conditional category 1 licenses).
(2) Applicants seeking licensure under section 1305 of the act (relating to Category 3 slot machine license).
(3) Applicants seeking licensure under section 1304 of the act (relating to Category 2 slot machine license).
(4) Applicants seeking licensure under section 1302 of the act (relating to Category 1 slot machine license).
(d) The Board will allot each applicant a specified time for its presentation. The length of the presentations will be established at the prehearing conferences.
(e) At the licensing hearing, the applicant shall appear before the Board and at all times have the burden to establish and demonstrate, by clear and convincing evidence, its eligibility and suitability for licensure and to address the criteria identified in section 1325(c) of the act.
(f) For the purposes of this section, an applicant's demonstration of eligibility shall include a showing of:
(1) Compliance with section 1302, 1303, 1304 or 1305 of the act, as applicable.
(2) Compliance with the application requirements in § 441.4 (relating to slot machine license application).
(3) Compliance with the license fee payment bond or letter of credit requirements in § 441.10 (relating to license fee payment bond or letter of credit requirements).
(4) Compliance with the diversity requirements in Chapter 481 (relating to general provisions) and section 1325(b) of the act.
(g) For the purposes of this section, an applicant's demonstration of suitability shall include a showing of:
(1) Good character, honesty and integrity in compliance with the standards in § 441.6 (relating to character requirements).
(2) Financial fitness in compliance with the standards in § 441.5 (relating to financial fitness requirements).
(3) Operational viability, including:
(i) The quality of the proposed licensed facility, and temporary facility, if applicable, including the number of slot machines proposed and the ability of the proposed licensed facility to comply with statutory, regulatory and technical standards applicable to the design of the proposed licensed facility and the conduct of slot machine operations therein.
(ii) The projected date of the start of operations of the proposed licensed facility and any accessory uses such as hotel, convention and restaurant space proposed in conjunction therewith. Applicants shall provide the Board with a time line on the deliverability of any proposed temporary or phased permanent licensed facilities and the accessory uses proposed in conjunction therewith.
(iii) The ability of the applicant's proposed licensed facility to generate and sustain an acceptable level and growth of revenue.
(h) For the purposes of this section, an applicant's demonstration of how it addresses the criteria identified in section 1325(c) of the act shall include:
(1) The location and quality of the proposed facility, including, but not limited to, road and transit access, parking and the facility's centrality to its anticipated market service area.
(2) The potential for new job creation and economic development which are expected to result from granting a license to an applicant.
(3) The applicant's good faith plan to recruit, train and upgrade diversity in all employment classifications in the facility.
(4) The applicant's good faith plan for enhancing the representation of diverse groups in the operation of its facility through the ownership and operation of business enterprises associated with or utilized by its facility or through the provision of goods or services utilized by its facility and through the participation in the ownership of the applicant.
(5) The applicant's good faith effort to assure that all persons are accorded equality of opportunity in employment and contracting by it and any contractors, subcontractors, assignees, lessees, agents, vendors and suppliers it may employ directly or indirectly.
(6) The potential for enhancing tourism which is expected to result from granting a license to the applicant.
(7) The history and success of the applicant in developing tourism facilities ancillary to gaming development in other locations if applicable to the applicant.
(8) The degree to which the applicant presents a plan for the project which will likely lead to the creation of quality, living-wage jobs and full-time permanent jobs for residents of this Commonwealth generally and for residents of the host political subdivision in particular.
(9) The record of the applicant and its developer in meeting commitments to local agencies, community-based organizations and employees in other locations.
(10) The degree to which potential adverse effects which might result from the project, including costs of meeting the increased demand for public health care, child care, public transportation, affordable housing and social services, will be mitigated.
(11) The record of the applicant and its developer regarding compliance with:
(i) Federal, State and local discrimination, wage and hour, disability and occupational and environmental health and safety laws.
(ii) State and local labor relations and employment laws.
(12) The record of the applicant in dealing with its employees and their representatives at other locations.
(13) The applicant's business probity, experience and ability.
(14) Any areas of deficiency in the applicant's application previously identified by the Bureau of Licensing or Chief Enforcement Counsel that have not been resolved.
(i) The applicant's demonstration of how it addresses section 1325(c) of the act and subsection (h) may include information relating to its affiliates, intermediaries, subsidiaries or holding companies.
(j) No later than 30 days before the first scheduled licensing hearing in the category of license for which the applicant has filed an application, the applicant shall file with the Board a memorandum identifying all evidence it intends to use in support of its presentation before the Board. At the same time, Category 1 and Category 3 applicants shall serve the memorandum on the other applicants in the same category. At the same time, Category 2 applicants shall serve the memorandum on all other applicants whose proposed facility meets the same location criteria as the applicant's proposed facility as specified in subsection (o)(1)(i)--(iii). The memorandum shall include the following:
(1) The name of the applicant and docket number of the applicant's application to which the evidence will relate.
(2) Identification of each standard and criterion set forth in subsections (f)--(i) to which the evidence will relate.
(3) As to each criterion identified, whether the evidence will be presented through oral testimony or, the proffer of documents, or both. If any portion of the evidence will be presented through oral testimony, the notice must include the name, address and telephone number of each testifying witness, the identified criteria about which the witness will testify and a detailed summary of the witness' testimony. If any portion of the evidence will be presented through the proffer of documents, including reports and exhibits, the memorandum must include a copy of each document to be proffered and the name, address and telephone number of the persons who prepared the document.
(4) If any person identified in paragraph (3) will testify as an expert, the person's qualifications, including the person's education, experience and training, and a listing of the other jurisdictions where the person has been qualified as an expert witness, within the last 5 years, shall be attached to the notice. A copy of the results or reports of any tests, experiments, examinations, studies or documents prepared or conducted by the expert or about which the expert will testify or which will be relied upon by the expert to render an opinion shall be attached to the notice.
(k) The Board will serve on all applicants within that category any expert reports developed for and requested by the Board that pertains to the applicants.
(l) Applicants, at the time of filing, shall provide the Board with an electronic version, in a format prescribed by the Board, of the reports and exhibits provided in paper form.
(m) If an applicant designates any submitted report or exhibit as confidential under § 401.4 (relating to definitions) or section 1206(f) of the act (relating to Board minutes and records), the applicant shall:
(1) Clearly and conspicuously indicate that the report or exhibit is confidential in both the paper and electronic format and provide these exhibits separately from the nonconfidential exhibits.
(2) Request that the confidential information be presented to the Board in closed deliberations, under section 1206(a) of the act and provide an explanation of the need for the designation of confidentiality and closed deliberations or authorize the release of the report or exhibit in compliance with section 1206(f) of the act.
(n) Applicants are prohibited from relying upon or introducing evidence, including witnesses' testimony, reports or exhibits, not identified pursuant to subsections (j) or (o).
(o) For Category 2 applicants only, in addition to the applicant's presentation of evidence to the Board relative to its eligibility and suitability for a license, an applicant may, during its licensing hearing, present evidence which sets forth a comparison between the applicant and other applicants within the same category with respect to the standards and criteria in subsections (f)--(i).
(1) Comparisons shall be limited to:
(i) For applicants seeking to locate a licensed facility in a city of the first class, other applicants for a licensed facility in a city of the first class.
(ii) For applicants seeking to locate a licensed facility in a city of the second class, other applicants for a licensed facility in a city of the second class.
(iii) For applicants seeking to locate a licensed facility in a revenue-or tourism-enhanced location, other applicants for a licensed facility in a revenue-or tourism-enhanced location.
(2) If an applicant desires to present comparative evidence under to this subsection, the applicant shall, no later than 20 days prior to the commencement of the first scheduled licensing hearing in the category of license for which the applicant has filed an application, file a separate written notice evidencing the intent with the Board identifying each other applicant about whom the applicant desires to present evidence. A copy of the notice shall also be served on the applicants about whom the evidence will be presented and on the Chief Enforcement Counsel. The notice must include:
(i) The name of the applicant and docket number of the applicant's application to which the evidence will relate.
(ii) Identification of the standards and criteria in subsections (f)--(i) to which the evidence will relate.
(iii) As to each criterion identified, a copy of any document or evidence that will be used to support the comparison to be presented in compliance with subsection (j).
(3) An applicant served with notice under to paragraph (2) may present, during its licensing hearing, comparative evidence concerning it and the applicant from whom notice was received with respect to the standards and criteria in subsections (f)--(i). The applicant so served shall have 10 days following services to file a reply notice with the Board which shall contain the information required by paragraph (2). A complete copy of the reply notice shall be served on the applicant who initially served notice under paragraph (2) and on the Chief Enforcement Counsel.
(4) If the applicant plans to present evidence to the Board concerning another applicant in closed deliberations, the applicant shall provide notice to the other applicant and provide any report or exhibit relied upon to the other applicant. The other applicant may be represented in the closed deliberations.
(p) At the discretion of the Board, an applicant's presentation may include:
(1) Oral presentation.
(2) Documentary evidence submissions, including reports, photographs, audiovisual presentations, exhibits or testimony of witnesses.
(q) The Board, its designee and Chief Enforcement Counsel may:
(1) Examine or question the applicant and any witnesses called by the applicant or the Board regarding their testimony and any aspect of the applicant's application and relevant background.
(2) Recall the applicant and other witnesses called by the applicant or the Board during the licensing hearing for further questioning.
(r) A person who testifies at the licensing hearing shall be sworn and testify under oath.
(s) At its discretion, the Board may terminate, recess, reconvene and continue the licensing hearing.
(t) 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 (o)(1)(i)--(iii). At the prehearing conferences, applicants in any category may waive the opportunity to file briefs.
(u) At the conclusion of the presentation of all testimony and evidence, the Board will cause the record to be transcribed. The transcript and all 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.
(v) 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.
(w) With the exception of Conditional Category 1 licenses, 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 approval of all initial, permanent slot machine license applications for each and every category of slot machine license collectively and together in a comprehensive statewide manner in accordance with section 1301 of the act (relating to authorized slot machine licenses). A final order for initial, permanent slot machine licenses accompanied by the Board's written decision will be served on the applicants for slot machine licenses.
(x) An applicant may appeal the denial of a slot machine license to the Pennsylvania Supreme Court as provided in the act.
(y) 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 may 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.
(z) 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. 06-1252. Filed for public inspection June 30, 2006, 9:00 a.m.]
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