RULES AND REGULATIONS
PENNSYLVANIA GAMING CONTROL BOARD
[ 58 PA. CODE CHS. 431a, 435a, 437a,
451a AND 465a ]
Suppliers' Principal Place of Business; Temporary Credentials and Recordkeeping
[39 Pa.B. 2588]
[Saturday, May 23, 2009]The Pennsylvania Gaming Control Board (Board), under its general authority in 4 Pa.C.S. § 1202(b)(30) (relating to general and specific powers) and the specific authority in 4 Pa.C.S. §§ 1311, 1311.1, 1311.2, 1317 and 1322, amends Chapters 431a, 435a, 437a, 451a and 465a to read as set forth in Annex A.
Purpose of the Final-Form Rulemaking
This final-form rulemaking sets forth requirements for suppliers' principal place of business; extends, from 120 days to 180 days, the time period for which a temporary credential issued to an applicant for a principal or key employee license is valid; corrects wording in § 437a.8 (relating to approved vendors list; prohibited vendors) and limits the requirement that records be maintained in this Commonwealth to suppliers and slot machine licensees.
Explanation of Amendments to Chapters 431a, 435a, 437a, 451a and 465a
Section 1317(b)(1.2) of the act (relating to supplier licenses) requires each supplier to establish and maintain a principal place of business in this Commonwealth. There has been some confusion on the part of suppliers as to what constitutes a principal place of business. To eliminate that confusion, the Board has amended § 431a.4 (relating to responsibilities of a supplier) to establish minimum requirements that must be met by a supplier when it establishes its principal place of business in this Commonwealth.
Under § 435a.8 (relating to temporary credentials for principals and key employees), applicants for a principal or key employee license whose presence is necessary at a licensed facility may be issued a temporary credential. These temporary credentials were valid for 120 days and could be extended if the Board determines that additional time was needed to complete the investigation of the applicant. While many investigations are completed in 120 days, a significant number are not. This has resulted in the Board having to issue a large number of extensions, which requires the issuance of a new temporary credential.
To reduce the need to issue a large number of new temporary credentials, the Board amended § 435a.8 to extend the time period for which a temporary credential for an applicant for a principal or key employee license will be valid from 120 days to 180 days.
In § 437a.8(b), the Board replaced the word ''vendor'' with ''vendors'' to make the usage consistent with the rest of this section.
In § 451a.1 (relating to recordkeeping generally), amendments have been made which eliminate the requirement that records be maintained in this Commonwealth for all entities regulated by the Board, except suppliers and slot machine licensees.
In § 465a.6 (relating to retention, storage and destruction of books, records and documents) a cross-reference to § 451a.1 has been added.
Comment and Response Summary
Notice of proposed rulemaking was published at 38 Pa.B. 6496 (November 29, 2008).
The Board received comments from International Game Technology (IGT) during the public comment period. On January 28, 2009, the Independent Regulatory Review Commission (IRRC) also filed comments on the proposed rulemaking. All of these comments were reviewed by the Board and are discussed in detail as follows.
In its comments, IGT stated that it supports the Board's efforts to provide a process for out-of-State companies to request approval for alternate locations to store their records.
The Board appreciates IGT's expression of support.
IRRC noted that § 431a.4(a)(2) requires supplier licensees to keep all agreements, contracts and records at their principal place of business in this Commonwealth. In contrast, § 451a.1(c) allows licensees, including suppliers, to file a request for a waiver that would allow the licensee to store its records outside of this Commonwealth. To resolve this apparent conflict, IRRC recommended that language be added to § 431a.4(a)(2) that would allow a supplier to file a waiver request under § 451a.1(c).
The Board has not adopted this recommendation. Section 1317 requires each supplier to establish a principal place of business in this Commonwealth. Given this specific statutory requirement, the Board believes that it is also appropriate to require that suppliers maintain their records at this location.
Additional Revisions
Under the revisions contained in the proposed rulemaking, the Board was delegating the authority to review requests for maintaining records outside of this Commonwealth to the Bureau of Licensing. Based on further review and evaluation of the need for the Board to access records for audit and other purposes, the Board no longer believes that it is necessary for most entities regulated by the Board to maintain these records in this Commonwealth.
Under Chapters 441a and 465a (relating to slot machine licenses; and accounting and internal controls), slot machine licensees are required to keep extensive financial and operational records and copies of all agreements and contacts at the site of the licensed facility. The availability of these records and the reports that slot machine licensees are required to file with the Board should provide the Board with access to any information that it may need. Accordingly, the Board is deleting the existing and proposed provisions in Chapter 451a that require most entities regulated by the Board to maintain records in this Commonwealth and the provisions related to requests to maintain records outside of this Commonwealth. It should be noted, however, that if the Board does need records from a regulated entity that does not maintain their records in this Commonwealth, the entity will still be required to make them available to the Board upon request.
The Board is also deleting the references to supplier and slot machine licensees in § 451a.1(a). As stated previously, since suppliers are required by statute to have a principal place of business in the Commonwealth, the Board does not believe it is unreasonable to require that suppliers keep their records at that location. Because Chapter 451a (relating to recordkeeping requirements) will no longer require that records be maintained in this Commonwealth and because recordkeeping requirements for slot machine licensees are addressed in Chapter 465a, there is no need to reference slot machine licensees in Chapter 451a.
Finally, to insure that slot machine licensees maintain all of the records that they have been required to maintain under § 451a.1 a cross-reference to that section has been added to § 465a.6.
Affected Parties
This final-form rulemaking will affect suppliers, applicants for a principal or key employee license and all regulated entities required to keep records and the Board.
Fiscal Impact
Commonwealth
Under this final-form rulemaking, the Board will have to issue fewer temporary credentials. While this will result in some reduction of costs for the Board, the amount is not anticipated to be significant. The Board issued approximately 300 temporary credentials to principal and key employee applicants last fiscal year. The Board will also no longer have to review requests to approval alternate record retention locations. However, because such requests are rare, this change is not expected to have a significant cost impact on the Board.
Political Subdivisions
This final-form rulemaking will have no fiscal impact on political subdivisions of this Commonwealth.
Private Sector
Suppliers will have to meet the minimum standards for their principal place of business in this Commonwealth. Since these requirements are minimal, the Board does not anticipate that they will impose any new significant costs on the four currently licensed suppliers. A few entities may experience some savings from the elimination of the requirement that they must store their records.
General Public
This final-form rulemaking will have no fiscal impact on the general public.
Paperwork Requirements
As stated previously, the Board will be less likely to need to issue a second temporary credential and entities will not have to file a request to store their records outside of this Commonwealth.
Effective Date
This final-form rulemaking will become effective upon publication in the Pennsylvania Bulletin.
Contact Person
The contact person for questions about this final-form rulemaking is Richard Sandusky, Director of Regulatory Review at (717) 214-8111.
Regulatory Review
Under section 5(a) of the Regulatory Review Act (71 P. S. § 745.5(a)), on November 14, 2008, the Board submitted a copy of this proposed rulemaking, published at 38 Pa.B. 6496 (November 29, 2008) and a copy of the Regulatory Analysis Form to IRRC and to the Chairpersons of the House Gaming Oversight Committee and the Senate Community, Economic and Recreational Development Committee (Committees).
Under section 5(c) of the Regulatory Review Act, IRRC and the Committees were provided with copies of the comments received during the public comment period, as well as other documents when requested. In preparing the final-form rulemaking, the Board has considered all comments received from IRRC, the 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)), the final-form rulemaking was deemed approved by the Committees on April 1, 2009. Under section 5.1(e) of the Regulatory Review Act (71 P. S. § 745.5a(e)) IRRC met on April 2, 2009 and approved the final-form rulemaking.
Findings
The Board finds that:
(1) Public notice of intention to adopt these amendments was given under sections 201 and 202 of the act of July 31, 1968 (P. L. 769, No. 240) (45 P. S. §§ 1201 and 1202) and the regulations thereunder, 1 Pa. Code §§ 7.1 and 7.2 (relating to notice of proposed rulemaking rquired; and adoption of regulations).
(2) The final-form rulemaking is necessary and appropriate for the administration and enforcement of 4 Pa.C.S. Part II (relating to gaming).
Order
The Board, acting under 4 Pa.C.S. Part II, orders that:
(a) The regulations of the Board, 58 Pa. Code Chapters 431a, 435a, 437a, 451a and 465a, are amended by amending §§ 431a.4, 435a.8 and 437a.8 to read as set forth at 38 Pa.B. 6496; and by amending §§ 451a.1 and 465a.6 to read as set forth in Annex A, with ellipses referring to the existing text of the regulations.
(b) The Chairperson of the Board shall certify this order, 38 Pa.B. 6496 and Annex A and deposit them with the Legislative Reference Bureau as required by law.
(c) This order shall take effect upon publication in the Pennsylvania Bulletin.
MARY DIGIACOMO COLINS,
Chairperson(Editor's Note: The amendment of § 465a.6 was not included in the proposal at 38 Pa.B. 6496 (November 29, 2008).)
(Editor's Note: For the text of the order of the Independent Regulatory Review Commission relating to this document, see 39 Pa.B. 2064 (April 18, 2009).)
Fiscal Note: Fiscal Note 125-95 remains valid for the final adoption of the subject regulations.
Annex A
TITLE 58. RECREATION
PART VII. GAMING CONTROL BOARD
Subpart B. LICENSING, PERMITTING, CERTIFICATION AND REGISTRATION
CHAPTER 451a. RECORDKEEPING REQUIREMENTS § 451a.1. Recordkeeping generally.
(a) All manufacturer, junket enterprise, and management company licensees and all registered and certified vendors shall maintain adequate records of business operations which shall be made available to the Board upon request. These records include:
(1) Correspondence with the Board and other local, Commonwealth and Federal governmental agencies.
(2) Correspondence concerning gaming equipment with a manufacturer, supplier, management company or slot machine licensee.
(3) Copies of all promotional material and advertising.
(4) A personnel file on each current and former employee.
(5) Financial records of all transactions concerning slot machines and associated equipment with a manufacturer, supplier, management company or slot machine licensee.
(6) Copies of all tax returns, reports and other tax documents filed with a taxing entity of the Federal government, the Commonwealth or local taxing entity within this Commonwealth for 7 years or a longer period as prescribed by the taxing entity.
(7) Copies of all general accounting records.
(b) Except as provided in subsection (a)(6) regarding tax documents, the records listed in subsection (a) shall be maintained for at least 5 years.
(c) The records required to be maintained under subsection (a) shall be kept in a location secure from theft, loss or destruction.
Subpart E. SLOT MACHINES AND ASSOCIATED EQUIPMENT
CHAPTER 465a. ACCOUNTING AND INTERNAL CONTROLS § 465a.6. Retention, storage and destruction of books, records and documents.
(a) For the purposes of this section, ''books, records and documents'' means any book, record or document pertaining to, prepared in or generated by the operation of the licensed facility including all forms, reports, accounting records, ledgers, subsidiary records, computer generated data, internal audit records, correspondence and personnel records required to be generated and maintained under § 451a.1 (relating to recordkeeping generally) or this part. This definition applies without regard to the medium through which the record is generated or maintained, for example, paper, magnetic media or encoded disk.
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[Pa.B. Doc. No. 09-927. Filed for public inspection May 22, 2009, 9:00 a.m.]
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