RULES AND REGULATIONS
PENNSYLVANIA GAMING CONTROL BOARD
[58 PA. CODE CH. 429]
Manufacturer Designees
[37 Pa.B. 1862]
[Saturday, April 21, 2007]The Pennsylvania Gaming Control Board (Board), under 4 Pa.C.S. § 1203(a) (relating to temporary regulations), adopts temporary regulations 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), as amended by the act of November 1, 2006 (P. L. 1243, No. 135). The Board's temporary regulations will be added to Part VII (relating to Gaming Control Board). Chapter 429, entitled Manufacture Designees, is added to Subpart B, entitled Licensing, Registering, Certifying and Permitting.
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 establish licensing requirements for manufacturer designees within this Commonwealth and to carry out the policy and purposes of the Board.
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 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 the Regulatory Review Act (71 P. S. §§ 745.1--745.15).
Financial Impact
Act 71 and the regulations 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 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 April 15, 2007.
Findings
The Board finds that:
(1) Under 4 Pa.C.S. § 1203(a), the temporary regulations are exempt from the requirements of the Regulatory Review Act and sections 201--205 of the CDL.
(2) The adoption of the temporary regulations 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 Act 71, adopts as its temporary regulations, the proposed regulations by resolution at the March 27, 2007, public meeting. The temporary regulations pertain to manufacturer designees.
(b) The temporary regulations of the Board, 58 Pa. Code Chapter 429, are amended by adding §§ 429.1--429.7 to read as set forth in Annex A.
(c) The temporary regulations are effective March 27, 2007.
(d) The temporary regulations shall be posted in their entirety on the Board's website and published in the Pennsylvania Bulletin.
(e) The temporary regulations 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 regulations with the Legislative Reference Bureau as required by law.
THOMAS A. DECKER,
ChairpersonFiscal Note: 125-66. No fiscal impact; (8) recommends adoption.
Annex A
TITLE 58. RECREATION
PART VII. GAMING CONTROL BOARD
Subpart B. LICENSING, REGISTERING, CERTIFYING AND PERMITTING
CHAPTER 429. MANUFACTURER DESIGNEES Sec.
429.1. Manufacturer designee general requirements. 429.2. Manufacturer designee license applications and standards. 429.3. Additional manufacturer designee licenses. 429.4. Manufacturer designee license term and renewal. 429.5. Responsibilities of a manufacturer designee. 429.6. Manufacturer designee as agent. 429.7. Manufacturer designee agreements. § 429.1. Manufacturer designee general requirements.
(a) A manufacturer designee seeking to supply or repair slot machines and associated equipment for use in this Commonwealth shall apply to the Board for a manufacturer designee license.
(b) In accordance with section 1317.1 of the act (relating to manufacturer licenses), an applicant for or the holder of a manufacturer designee license or any of the applicant's or holder's affiliates, intermediaries, subsidiaries or holding companies, may not apply for or hold a slot machine license or supplier license.
(c) A licensed manufacturer designee may supply or repair slot machines or associated equipment manufactured by a manufacturer with whom the manufacturer designee has an agreement or has executed a contract authorizing the manufacturer designee to do so.
(d) Limitations may not be placed on the number of manufacturer designee licenses issued or when an application for a manufacturer designee license may be filed.
§ 429.2. Manufacturer designee license applications and standards.
(a) An applicant for a manufacturer designee license shall submit:
(1) An original and three copies of the Manufacturer Designee Application and Disclosure Information Form unless otherwise directed by the Board.
(2) A nonrefundable application fee.
(3) A diversity plan as set forth in section 1325(b) of the act (relating to license or permit issuance) and Chapter 481 (relating to general provisions).
(4) An application from every key employee under § 435.2 (relating to key employee license) and principal under Chapter 433 (relating to principal licenses) as specified by the Manufacturer Designee Application and Disclosure Information Form.
(5) If applicable, copies of all filings required by the Securities and Exchange Commission during the 2 immediately preceding fiscal years, including all annual reports filed with the Securities and Exchange Commission, under sections 13 or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C.A. §§ 78m and 78o-6), quarterly reports filed with the Securities and Exchange Commission, under sections 13 or 15(d) of the Securities Exchange Act of 1934, current reports filed with the Securities and Exchange Commission, under sections 13 or 15(d) of the Securities Exchange Act of 1934, and proxy statements issued by the applicant.
(6) An affirmation that neither the applicant nor any of its affiliates, intermediaries, subsidiaries or holding companies, holds any direct or indirect ownership interest in any applicant for or holder of a slot machine license or supplier license, or employs, directly or indirectly, any person who satisfies the definition of a principal or key employee of a slot machine applicant or licensee or supplier applicant or licensee. In applying this provision to an applicant for a manufacturer designee license, the Board will not include interests that are held by individuals in any of the following manners:
(i) In mutual funds when the value of the interest owned does not exceed 1% of the total fair market value of the applicant or licensee and provided that the mutual fund is not a nondiversified fund invested primarily in entities operating in, or connected with, the gaming industry.
(ii) Through defined benefit pension plans.
(iii) Through deferred compensation plans organized and operated under section 457 of the Internal Revenue Code of 1986 (26 U.S.C.A. § 457).
(iv) In blind trusts over which the holder may not exercise any managerial control or receive income during the time period the holder is subject to these provisions.
(v) Through tuition account plans organized and operated under section 529 of the Internal Revenue Code of 1986 (26 U.S.C.A. § 529).
(vi) Through plans described in section 401(k) of the Internal Revenue Code of 1986 (26 U.S.C.A. § 401(k)).
(vii) An interest held by a spouse if an action seeking a divorce and dissolution of marital status has been initiated in any jurisdiction by either party to the marriage.
(7) A sworn or affirmed statement that the applicant has developed and implemented internal safeguards and policies to prevent a violation of section 1513 of the act (relating to political influence) and a copy of the safeguards and policies.
(b) In addition to the materials required under subsection (a), an applicant for a manufacturer designee license shall:
(1) Promptly provide information requested by the Board relating to its application or regulation and cooperate with the Board in investigations, hearings, and enforcement and disciplinary actions.
(2) Comply with the general application requirements in Chapters 421 and 423 (relating to general provisions; and applications).
(c) An applicant for a manufacturer designee license will be required to reimburse the Board for additional costs, based on the actual expenses incurred by the Board, in conducting the background investigation.
(d) In determining whether an applicant will be licensed as a manufacturer designee under this section, the Board will consider the following:
(1) The financial fitness, good character, honesty, integrity and responsibility of the applicant.
(2) If all principals of the applicant are individually eligible and suitable under the standards of section 1317.1 of the act (relating to manufacturer licenses).
(3) The integrity of all financial backers.
(4) The suitability of the applicant and all principals and key employees of the applicant based on the satisfactory results of:
(i) A background investigation of all principals and key employees or their equivalent in other jurisdictions.
(ii) A current tax clearance review performed by the Department.
(iii) A current Unemployment Compensation Tax clearance review and a Workers Compensation Tax clearance review performed by the Department of Labor and Industry.
§ 429.3. Additional manufacturer designee licenses.
(a) A licensed manufacturer designee whose license is in good standing may apply for an additional manufacturer designee license for a different licensed manufacturer by submitting:
(1) An original and three copies of the Additional Manufacturer Designee Application and Disclosure Information Form unless otherwise directed by the Board.
(2) A nonrefundable application fee.
(b) An applicant for an additional manufacturer designee license shall also comply with § 429.2(b)(1) and (2) and (c) (relating to manufacturer designee license applications and standards).
§ 429.4. Manufacturer designee license term and renewal.
(a) A manufacturer designee license or renewal shall be valid for 1 year from the date on which the license or renewal is approved by the Board.
(b) A renewal application and renewal fee shall be filed at least 2 months prior to the expiration of the current license.
(c) A manufacturer designee license for which a completed renewal application and fee has been received by the Board will continue in effect for an additional 6-month period or until acted upon by the Board, whichever occurs first.
§ 429.5. Responsibilities of a manufacturer designee.
(a) A holder of a manufacturer designee license shall have a continuing duty to:
(1) Provide information requested by the Board relating to licensing or regulation; cooperate with the Board in investigations, hearings and enforcement and disciplinary actions; and comply with conditions, restrictions, requirements, orders and rulings of the Board in accordance with the act.
(2) Report a change in circumstances that may render a holder of a manufacturer or manufacturer designee license ineligible, unqualified or unsuitable to hold a license under the standards and requirements of the act and of this part.
(3) Provide a copy of Securities and Exchange Commission filings listed in § 427.2(a)(5) (relating to manufacturer licensing standards and application) that are filed after the date of issuance of its license. The copy shall be submitted no later than 30 days after the date of filing with the Securities and Exchange Commission.
(b) A holder of a manufacturer designee license shall establish a place of business in this Commonwealth.
(c) An employee of a licensed manufacturer designee whose duties of employment or incidental activities related to employment require the employee to be on the gaming floor or in a restricted area shall be required to obtain an occupation permit under § 435.3 (relating to occupation permit).
§ 429.6. Manufacturer designee as agent.
(a) Notwithstanding any provision to the contrary in a contract between a licensed manufacturer and a licensed manufacturer designee, the licensed manufacturer designee shall be deemed to be an agent of the licensed manufacturer for the purposes of imposing liability for any act or omission of the licensed manufacturer designee in violation of the act or this part.
(b) Notwithstanding any provision to the contrary in a contract between a licensed manufacturer and a licensed manufacturer designee, the licensed manufacturer shall be jointly and severally liable for any act or omission by the licensed manufacturer designee in violation of the act or this part, regardless of actual knowledge by the licensed manufacturer of the act or omission.
§ 429.7. Manufacturer designee agreements.
(a) Agreements between a licensed manufacturer and a licensed manufacturer designee shall be submitted to the Bureau of Licensing for approval. An agreement between a licensed manufacturer and a licensed manufacturer designee may not become effective and a manufacturer designee license will not be issued until the Bureau of Licensing has reviewed and approved the terms and conditions of the agreement.
(b) Amendments to agreements between a licensed manufacturer and a licensed manufacturer designee shall be submitted to the Bureau of Licensing for approval at least 30 days prior to the effective date of the proposed amendment. The amendment may not become effective until the Bureau of Licensing has reviewed and approved the terms and conditions of the amendment.
(c) An agreement between a licensed manufacturer and a licensed manufacturer designee submitted for Bureau of Licensing review and approval must enumerate with specificity the responsibilities of the licensed manufacturer and the licensed manufacturer designee.
(d) Agreements must contain a provision that describes with particularity terms related to compensation of the licensed manufacturer or the licensed manufacturer designee.
[Pa.B. Doc. No. 07-682. Filed for public inspection April 20, 2007, 9:00 a.m.]
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