RULES AND REGULATIONS
Title 61--REVENUE
DEPARTMENT OF REVENUE
[61 PA. CODE CH. 901]
Local Option Small Games of Chance
[36 Pa.B. 4475]
[Saturday, August 12, 2006]The Department of Revenue (Department), under section 9 of the Local Option Small Games of Chance Act (act) (10 P. S. § 319), amends Chapter 901 (relating to small games of chance) to read as set forth in Annex A.
Purpose of this Final-Form Rulemaking
This final-form 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 final-form rulemaking also codifies policy and administrative changes regarding games of chance.
Explanation of Regulatory Requirements
The Department made numerous global changes to Chapter 901 to amend terminology, including deletion of the term ''small'' in conjunction with the phrase ''games of chance.'' This change amends the regulations to be 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 (including changes from passive to active voice) are made for clarity and readability throughout Chapter 901.
Subchapter A. General Provisions
Definitions
Several amendments to § 901.1 (relating to definitions) bring the definitions into conformity with statutory changes and codify policy and administrative changes. An explanation of each addition or amendment is provided and definitions of the following terms are added for clarity: ''applicant,'' ''application,'' ''chance,'' ''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 provisions are referenced in Act 195 and definitions are added to explain the terms: ''auxiliary group,'' ''normal business or operating site'' and ''operating day.''
''Bona fide member'' is amended to delete references to ''club'' and adds reference to the term ''eligible organization.'' ''Civic and service association'' is defined in section 3 of Act 195 (10 P. S. § 313) and is added for use in this chapter. Within this definition, the term ''bona fide'' is used. For purposes of this chapter, ''bona fide'' is interpreted according to its common usage that is defined as follows: ''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 added for use in this chapter: ''daily drawing,'' ''dispensing machine,'' ''eligible organization,'' ''fraternal organization'' and ''passive selection device.''
The following definitions are amended for clarity: ''deal,'' ''flare,'' ''manufacturer,'' ''petition,'' ''petitioner'' and ''punchboard.''
''Distributor'' is amended to delete references to ''small'' and ''club'' and adds reference to ''eligible organization.''
The following definitions are amended to delete references to ''small'': ''distributor's representative,'' ''manufacturer'' and ''manufacturer's representative.''
''Game of chance or game'' 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 are added for use in this chapter: ''hold ticket,'' ''home association'' 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 purposes.''
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 this chapter. The term replaces the phrase ''7-day period.''
''Public interest purposes'' is defined within the amendments in section 3 of Act 195. The term replaces ''legitimate club purpose'' and the definition is added for use in this chapter.
''Pull-tab'' and ''raffle'' are amended because of amendments to section 3 of Act 195.
The definition of ''responsible person'' is amended for clarity, to update references of the term ''club'' to ''eligible organization'' and delete references to the term ''small.''
''Veterans organization'' is added because of amendments to section 3 of Act 195.
''Weekly drawing'' is added because of amendments to section 3 of Act 79.
General applicability
Section 901.22 is rescinded 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, a licensed distributor and the purchase of games of chance by an eligible organization. Section 901.23(a) is added to explain that a certificate, license or game of chance that has been denied, suspended, revoked or expired is not valid.
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 must 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 Department or its 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 chance is a winning chance, starts at the date of the dispute rather than at the date of resolution.
Proposed § 901.40 is not added in this final-form rulemaking because the language was duplicative of § 901.513 (relating to gambling facilities prohibited).
Proposed § 901.41 is renumbered as § 901.40 (relating to operating days, nonoperating days and operating weeks) as a result of the previous change. This section is added to provide guidance regarding the concept for purposes of game operations.
Administration
The introductory language in § 901.51 (relating to power and duties) is amended to clarify that the lists of powers and duties are not all inclusive. In addition, paragraph (10) is added to specifically state that the Department has 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. Subsections (b) and (c) are deleted because they are beyond the scope of these regulations.
Subchapter B. Licensing and Registration
Manufacturer registration
Sections 901.101, 901.102 and 901.103(5) (relating to manufacturer registration and game approval required; registration and game approval forms; and manufacturer registration application form contents) are amended by adding language outlining the game approval process.
Section 901.103(2) is deleted and replaced with more explanatory language regarding the application requirements for games of chance manufacturers.
Section 901.103a (relating to change of application information) is added to provide that a manufacturer shall report 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 specifically detail the manufacturer's 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 registration coverage.
Section 901.109 (relating to certificate) is amended to explain that a manufacturer's certificate must be maintained on the manufacture's premises and available for inspection upon request of certificate.
Section 901.112 is rescinded because the topic is addressed in § 901.23(a)(2).
Section 901.113(a) (relating to representatives of manufacturer) is deleted because the topic is addressed in § 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), which provides 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, notice of violation and revocation) is amended by adding to the enumerated acts for which the Department has the authority to deny an application for a certificate, provide a notice of violation or revoke a certificate. Subsection (b) is added to provide that the Department may deny an application for a game of chance approval and may provide a notice of violation or revoke an approved game of chance if the game fails to meet the requirements of the act or Chapter 901. The addition of subsection (c) sets forth that a manufacturer in violation with the act or this part will be notified of the violation and has an opportunity to remedy the violation.
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 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.
Section 901.133(a) (relating to distributor license application form contents) is added to provide that a distributor shall report any 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 amended to provide a more accurate description of a distributor license term.
Section 901.137 (relating to annual application) is also completely amended 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 licensing coverage.
Section 901.142(a) (relating to distributor's representative) is deleted because the topic is addressed in § 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, notice of violation and revocation of licenses) is amended by adding clarifying language to new subsection (a) and by adding subsections (b) and (c), regarding notice of violation and notice. The notice of violation 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
Sections 901.181--901.190 are rescinded.
Section 901.191 (relating to license application form) is amended 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.
Sections 901.192--901.194 are rescinded.
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.
Sections 901.211--901.219 are rescinded.
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 and the county board of elections.
Subchapter D. Recordkeeping
County records and reports
Sections 901.401--901.404 and 901.406 are rescinded.
The Department is deviating from standard drafting rules in §§ 901.405 and 901.407 (relating to list of licensed eligible organizations; and list of municipalities) in that when ''shall'' would normally be used, it is instead using ''will,'' since the provisions are those of the licensing authority and the use of ''will'' is appropriate when the licensing authority is pledging to act. To bring § 901.405 into conformity with the enabling statute, the section is amended to state that the licensing authority will submit, on a biannual 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 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.
Manufacturing records and reports
Section 901.423 (relating to annual records) adds clarification language for maintaining annual records for no less than 5 years.
The existing text of § 901.425(1)(iv) (relating to records) is amended to include that each game listed on the invoice which the Department has approved for sale must be clearly noted.
Distributor records and reports
Section 901.443 (relating to annual records) adds clarification language for maintaining annual records for no less than 5 years.
Licensed eligible organization records
Section 901.461 (relating to annual records) adds language to conform to the statutory requirement of a 2-year record retention requirement for annual records of licensed eligible organizations.
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) to require 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 recordkeeping 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 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 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 (10 P. S. § 315(f) and (g)) and section 5(g) and (h) of Act 79 (10 P. S. § 315(g) and (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 is added to address the provisions of 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 publication regarding manufacturing standards for pull-tab games and to provide clarity with regard to the application of the standards.
Section 901.601(c) is added to provide guidance for the randomization of pull-tabs in a deal so as to eliminate any pattern in the location of winning pull-tabs.
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 regulations 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.
Section 901.631 (relating to subcontracting and manufacturer responsibility) is added to provide guidance to subcontractors of games of chance and registered manufacturers who elect to subcontract the manufacturing or production of games of chance.
Section 901.632 (relating to predetermination of rules, winning chances and prizes) is added to provide that a manufacturer of pull-tab games or punchboards must predetermine the rules and prizes.
Section 901.633 (relating to the prohibitions against participant control of winning chances or prizes) is added to explain that a participant who purchases a chance in the game is prohibited from controlling, effecting or choosing the winning chances or the corresponding prizes.
Subchapter G. Operation of Games
Eligible organization operation of games
Section 901.701(c) is added to explain that a participant who purchases a chance in a game is prohibited from controlling, effecting or choosing the winning chances or corresponding prizes.
Section 901.701a (relating to license required) reflects various licensing revisions. Subsection (a) is added to explain that an eligible organization may not conduct or operate games of chance without a valid license. Subsection (b) is added to explain the licensing requirements pertinent to auxiliary groups.
Section 901.701b (relating to display) is added to explain that a licensed eligible organization is required to display its license at the site where it conducts games of chance.
Section 901.701c (relating to location of games) is added to provide guidance to eligible organizations regarding the location 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 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 premises) is amended to reflect section 10(b.1) of Act 195 regarding the use of a premises 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 is rescinded.
Section 901.712 (relating to raffle, daily drawing and weekly drawing game rules and prizes) is added to describe the guidelines an eligible organization must establish prior to conducting a raffle, daily drawing or weekly drawing.
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. Subsection (e)(3) is deleted and replaced with more explanatory language regarding the procedure that will be used to preserve the randomization of a pull-tab deal. Subsection (e)(5) is added to explain that deals may not be commingled.
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 regarding 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 must be imprinted with sequential numbers beginning 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 Pennsylvania 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 regarding 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 amendments to the definitions of ''games of chance,'' ''lottery'' and ''raffle'' in section 3 of Act 195, §§ 901.761--901.778 are rescinded.
Daily drawings
Sections 901.781--901.786 (relating to daily drawings) are added to provide guidance regarding the rules for daily drawings, which were authorized by Act 195.
Weekly drawings
Sections 901.791--901.796 (relating to weekly drawings) 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 (relating to prize limits) 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 of all special raffle permit prizes for the calendar year.
In accordance with the repeal of section 12(a)(13) 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 an eligible organization 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 in eligibility.
Section 901.806 (relating to required permit) is amended to clarify the special raffle permit requirements.
Sections 901.807 and 901.811 are rescinded.
Affected Parties
Manufacturers and distributors of games of chance doing business in this Commonwealth, licensing authorities and eligible organizations may be affected by the final-form rulemaking.
Comment and Response Summary
Notice of proposed rulemaking was published at 34 Pa. B. 5563 (October 9, 2004).
The Department has prepared a comment and response document that is available to interested parties by contacting Mary R. Sprunk, Office of Chief Counsel, Department of Revenue, Dept. 281061, Harrisburg, PA 17128-1061.
In response to the proposed rulemaking, the Department received numerous comments. In their evaluation of the proposed rulemaking, the Independent Regulatory Review Commission (IRRC) provided a majority of the comments. In addition, the Department received various comments from both the public and the Senate Finance Committee. The Department did not receive any comments from the House Finance Committee. Following is a summary of the Department's reaction to the key issues referenced in the comments:
Provisions for ''licensing authorities'' have been deleted from this final-form rulemaking. To provide guidance to licensing authorities, the Department has developed ''SGOC Licensing Authority Model Rules'' for county treasurers.
Proposed Subchapter I was deleted from this final-form rulemaking. The Department agreed with IRRC and recognized that the purpose of a regulation is to place specific duties or obligations on an agency and the regulated community. The intent of Subchapter I was merely informational and will be published through Department informational systems and publications.
In accordance with §§ 901.117 and 901.151, rather than suspending a manufacturer or distributor's license, the Department will send a notice of violation, describing the infraction and providing a time limit for its correction.
For purposes of clarity, numerous definitions have been added to § 901.1 in this final-form rulemaking.
Fiscal Impact
The Department has determined that the final-form rulemaking, which provides clarification of existing policy, will have no significant fiscal impact on the Commonwealth.
Paperwork
The final-form rulemaking will not generate additional paperwork for the public or the Commonwealth.
Effectiveness/Sunset Date
The regulations will become effective upon final-form publication in the Pennsylvania Bulletin. The regulations are scheduled for review within 5 years of publication. No sunset date has been assigned.
Contact Person
The contact person for an explanation of this final-form rulemaking is Mary R. Sprunk, Office of Chief Counsel, Department of Revenue, Dept. 281061, Harrisburg, PA 17128-1061.
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 the notice of proposed rulemaking, published at 34 Pa.B. 5563, to IRRC and the Chairpersons of the House Committee on Finance and the Senate Committee on Finance for review and comment.
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 Department has considered all comments from IRRC, the House and Senate Committees and the public.
Under section 5.1(j.2) of the Regulatory Review Act (71 P. S. § 745.5a(j.2)), on July 5, 2006, the final-form rulemaking was deemed approved by the House and Senate Committees. Under section 5.1(e) of the Regulatory Review Act, IRRC met on July 6, 2006, and approved the final-form rulemaking.
Findings
The Department finds that:
(1) Public notice of intention to amend the regulations 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 amendments are necessary and appropriate for the administration and enforcement of the authorizing statute.
Order
The Department, acting under the authorizing statute, orders that:
(a) The regulations of the Department, 61 Pa. Code, are amended by:
1) Amending §§ 901.1, 901.21, 901.23, 901.25, 901.26, 901.28, 901.30--901.32, 901.34--901.38, 901.51, 901.52, 901.101--901.103, 901.104, 901.106, 901.107--901.111, 901.113, 901.114, 901.117, 901.119, 901.131--901.133, 901.136--901.144, 901.146--901.151, 901.153, 901.161, 901.165, 901.168, 901.191, 901.307--901.309, 901.405, 901.421, 901.423, 901.425, 901.441, 901.443, 901.445, 901.461, 901.462, 901.464, 901.465, 901.466, 901.501--901.511, 901.531--901.533, 901.535, 901.601, 901.602, 901.608, 901.621, 901.622, 901.627, 901.701, 901.702--901.710, 901.731, 901.733, 901.734, 901.741--901.746, 901.748, 901.749, 901.751, 901.752, 901.801--901.806, 901.808 and 901.810; by
2) Deleting §§ 901.22, 901.24, 901.112, 901.181--901.190, 901.192--901.194, 901.211--901.219, 901.401--901.404, 901.406, 901.711, 901.761--901.778, 901.807 and 901.811; and by
3) Adding §§ 901.23a, 901.40, 901.103a, 901.117a, 901.133a, 901.151a, 901.195--901.197, 901.407, 901.464a, 901.512, 901.513, 901.631--901.633, 901.701a--901.701c, 901.712, 901.753, 901.781--901.786 and 901.791--901.796 to read as set forth in Annex A.
(b) The Secretary of the Department shall submit this order and Annex A to the Office of General Counsel and the Office of Attorney General for approval as to form and legality as required by law.
(c) The Secretary of the Department shall certify this order and Annex A and deposit them with the Legislative Reference Bureau as required by law.
(d) This order shall take effect upon publication in the Pennsylvania Bulletin.
GREGORY C. FAJT,
Secretary(Editor's Note: For the text of the order of the Independent Regulatory Review Commission, relating to this document, see 36 Pa.B. 3919 (July 22, 2006).)
Fiscal Note: Fiscal Note 15-425 remains valid for the final adoption of the subject regulations.
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:
Act--The Local Option Small Games of Chance Act (10 P. S. §§ 311--327).
Applicant--A person who prepares and files an application.
Application--A form prescribed by the Department that a manufacturer, distributor or eligible organization shall complete and file to obtain a license or certificate.
Auxiliary group--
(i) A division, subsidiary or affiliated organization or association, incorporated or unincorporated, of an eligible organization whose business and operation is subject to and restricted by the bylaws, rules, regulations and procedures of the eligible organization and that is established solely for the purpose of aiding or assisting the eligible organization and its members in the fulfillment of the eligible organization's purposes.
(ii) The term does not include home associations.
Bingo Law--The Bingo Law (10 P. S. §§ 301--308.1).
Board--The Small Games of Chance Board of the Department.
Bona fide member--An individual who holds a membership in the eligible organization as defined by that organization's constitution, charter, articles of incorporation or bylaws.
Chance--A right purchased for consideration to participate in a game for a prize offered in the game, which right is represented by a tangible item such as a ticket, document, paper or other item.
Charitable organization--A not-for-profit group or body of persons which is created and exists for the purpose of performing a humane service; promoting the welfare of the aged, poor, infirm or distressed; combating juvenile delinquency or advancing the spiritual, mental, social and physical improvement of young men and women. The term includes the YMCA and YWCA.
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 has existed in this Commonwealth for 1 year.
(ii) The term also includes 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--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--A set of pull-tabs or punches bearing the same serial number.
Department--The Department of Revenue of the Commonwealth.
Deputy Secretary--A deputy secretary of the Department.
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'' or any device that contains as one of its components a video display monitor that is capable of displaying numbers, letters, symbols or characters in winning or losing combinations.
Distributor--A person who purchases or otherwise obtains games of chance, including punchboards or pull-tabs, from a manufacturer and sells or otherwise furnishes the 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 games of chance by a licensed eligible organization.
Distributor's representative--
(i) A natural person who represents a distributor in connection with the sale or furnishing of 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 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--A card, graphic, illustration or other document that is part of a pull-tab game or punchboard and satisfies the requirements of § 901.608 or § 901.627 (re- lating to standards for flares), respectively.
Fraternal organization--An organization within this Commonwealth created and carried on for the mutual benefit of its members, has a limited membership and a representative form of government and is a branch, lodge or chapter of a National or State organization.
Game of chance or game--
(i) The following games: punchboards, daily drawings, weekly drawings, raffles and pull-tab games.
(ii) The term includes all of the parts, accessories and items necessary to play such 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 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.
(iv) This definition does not 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 pull-tab or punch in a subset of pull-tabs or punches in a deal one or more of which are designated in advance as a winning pull-tab or punch for a specific prize. The winning pull-tab or punch is revealed after all hold tickets are purchased. Hold tickets are typically used in conjunction with seal cards.
Home association--A corporation, association or other organization organized under the laws of the Commonwealth by a veterans organization in conformity with its local, State or National bylaws and meets all of the following:
(i) Affiliated with the veterans organization.
(ii) Has a separate legal existence from the veterans organization.
(iii) Accepts into its membership persons who are not eligible for membership in the veterans organization.
(iv) The board of directors, officers and members with voting rights or other controlling interests consist solely of bona fide veterans organization members.
Ideal prizes--The maximum amount to be awarded in prizes if the game of chance is played to its fullest, all plays are sold and all potential prizes are awarded.
Law enforcement official--A municipal police officer, a member of the State Police, the sheriff of a county or a deputy sheriff.
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, on a yearly basis, known as a game of chance license, or on a limited basis, known as a limited occasion 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.
Licensing authority--The county treasurer, or in a home rule county or city of the first class, where there is no elected treasurer, the designee of the governing authority.
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.
Manufacturer--
(i) A person who assembles from raw materials or subparts a completed game of chance for use in authorized activities, and who sells or otherwise furnishes the same to a licensed distributor.
(ii) The term does not include printers of only raffle, daily drawing or weekly drawing tickets.
Manufacturer registration certificate or certificate--A document issued by the Department, upon application, to a manufacturer authorizing the manufacturer to sell games of chance that the Department has approved to distributors licensed to sell games of chance in this Commonwealth.
Manufacturer's representative--
(i) A natural person who represents a manufacturer in connection with the sale or furnishing of games of chance for use in authorized activities.
(ii) The term includes the manufacturer's sales personnel.
(iii) The term does not include warehouse personnel, delivery personnel and other employees who only have incidental contact with the customers.
NAGRA--The North American Gaming Regulators Association or its successors.
Nonoperating day--A period of time equivalent to an eligible organization's operating day except that the eligible organization is closed to normal activities or to its members during that period of time.
Normal business or operating site--The location at which an eligible organization conducts its activities as permitted and enumerated in its constitution, charter, articles of incorporation, bylaws or other document of formation.
Office of Attorney General--The Attorney General of the Commonwealth of Pennsylvania.
Operating day--The period of time during any 24 hour period during which an eligible organization conducts its normal activities or holds itself open to its members.
Operating week--Seven consecutive operating days or nonoperating days.
Passive selection device--A device that is used to hold or denote all of the possible winning numbers or entrants in a daily drawing, weekly drawing or raffle. The device may not have the capability of being utilized to conduct or aid in unauthorized or illegal forms of gambling.
Person--A natural person, unincorporated association, company, corporation, joint stock company, group, agency, syndicate, trust or trustee, receiver, fiduciary, partnership, conservator, the Commonwealth or a political subdivision or instrumentality of the Commonwealth or of another state or the Federal government or officers thereof.
Petition--A written statement of facts, under oath, submitted by one of the following:
(i) A manufacturer or distributor who disagrees with the Department's decision to deny or refuse to renew its application.
(ii) A registered manufacturer or licensed distributor who disagrees with the Department's decision to revoke his certificate or license.
Petitioner--A manufacturer or distributor who files a petition.
Public interest purposes--
(i) Any of the following:
(A) Benefiting persons by enhancing their opportunity for religious or educational 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 the government would normally render to the people.
(D) Improving, expanding, maintaining or repairing real property owned or leased by an eligible organization and used for purposes specified in clauses (A)--(C).
(ii) The term does not include the erection or acquisition of any real property, unless the property will be used exclusively for one or more of the purposes specified in this definition.
Pull-tab--A game piece in a pull-tab game made completely of paper or paper products with concealed numbers or symbols that must be exposed by the player to determine wins or losses.
Pull-tab game--A deal of pull-tabs and its corresponding flare.
Punch--A crimped strip of paper or similar material that is enclosed in a punchboard receptacle and contains either a winning or losing number or symbol printed on one side and a serial number printed on the other.
Punchboard--A board, placard or other device comprised of receptacles, usually laid out in a grid or column pattern, containing a deal of hidden punches and its corresponding flare. Upon the payment of consideration, a player may select and remove the punches contained in a receptacle. A prize is awarded to a player who selects a receptacle containing a punch with a predetermined winning number or symbol.
Raffle--
(i) A game in which a participant buys a ticket for a chance at a prize with the winner determined by a random drawing of corresponding ticket stubs to take place at a location and date or dates printed upon each ticket.
(ii) The term includes lotteries but not daily or weekly drawings.
(iii) The term does not include the paying of money or merchandise at roulette wheels, at cards, dice, other tables or another form of gambling not specifically authorized by law.
Registrant--A manufacturer who is issued a manufacturer registration certificate.
Registration--The process of applying to the Department for a manufacturer registration certificate.
Religious organization--A not-for-profit group or body of persons which is created and exists for the predominant purpose of regularly holding or conducting religious activities or religious education, without pecuniary benefit to an officer, member or shareholder, except as reasonable compensation for actual services rendered to the organization.
Responsible person--A person who is connected or associated with an eligible organization, distributor or manufacturer in a manner that meets at least one of the following criteria:
(i) Has the control, receipt, custody or disposal of or pays the compensation of an employee.
(ii) Has the control, receipt, custody or disposal of the games of chance proceeds.
(iii) Has the control, receipt, custody and disposal of available cash on hand or other quick or liquid assets or pays the liabilities of the eligible organization, manufacturer or distributor.
(iv) Has the duty, power or authority to do one of the following:
(A) Direct the deduction and withholding of tax.
(B) Direct the collection and payment of sales and use tax.
(C) Control the financial affairs of the entity.
(D) Direct the payment of the entity's liabilities.
(E) Direct the payment of the tax deducted and withheld from the compensation of an employee.
(F) Direct the disposition and use of games of chance proceeds.
(G) Account for and report tax deducted and withheld from the compensation of an employee.
(H) Direct the filing of State tax reports and returns.
(I) Direct the payment of State taxes.
(J) Direct the transaction involved with the sale, manufacture or use of games of chance.
(v) Is an eligible organization's manager, officer, director or bar personnel involved with the conduct of games of chance.
Seal card--A board or placard that contains a seal or seals that, when removed or opened, reveal predesignated winning numbers, letters or symbols.
Secretary--The Secretary of the Department.
Seven-day period--The period of days Monday through Sunday.
Special raffle permit--A document issued by a licensing authority to a licensed eligible organization that authorizes the eligible organization to conduct a raffle with prize limits exceeding the standard prize limits for raffles.
Stamp machine--A device designed exclusively to dispense preprinted pull-tab tickets which does not make a change to, mark on or alter in any way the ticket placed in the device. The device may not print or produce tickets in any manner. The term is also known as a vending machine for pull-tab tickets.
State Lottery Law--The State Lottery Law (72 P. S. §§ 3761-101--3761-2102).
Veterans organization--
(i) A Congressionally chartered organization within this Commonwealth, or any branch or lodge or chapter of a nonprofit National or State organization within this Commonwealth, the membership of which consists of individuals who were members of the armed services or armed forces of the United States.
(ii) The term includes home associations.
Weekly drawing--A game in which a bona fide member selects or receives a number or numbers in exchange for consideration during an operating week for a chance at a prize with the winner determined by a random drawing to take place on the eligible organization's premises on the last operating day of the eligible organization's operating week.
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