RULES AND REGULATIONS
PENNSYLVANIA GAMING CONTROL BOARD
[ 58 PA. CODE CHS. 401a AND 405a ]
Preliminary Provisions; Bureau of Investigations and Enforcement
[41 Pa.B. 5368]
[Saturday, October 8, 2011]The Pennsylvania Gaming Control Board (Board), under the general authority in 4 Pa.C.S. § 1202(b)(25) (relating to general and specific powers) and the specific authority in 4 Pa.C.S. §§ 1202.1 and 1516.1 (relating to code of conduct; and prosecutorial and adjudicatory functions) amends Chapters 401a and 405a (relating to preliminary provisions; and Bureau of Investigations and Enforcement) to read as set forth in Annex A.
Purpose of the Final-Form Rulemaking
In accordance with revisions made to 4 Pa.C.S. Part II (relating to gaming) as part of the act of January 7, 2010 (P. L. 1, No. 1) (Act 1), the Board amends Chapters 401a and 405a regarding ex parte communications and the separation of the adjudicatory functions of the Board or a presiding officer of the Board from the investigatory and prosecutorial functions of the Office of Enforcement Counsel (OEC) and the Bureau of Investigations and Enforcement (Bureau).
Explanation of Chapter 401a
Section 401a.3 (relating to definitions) amends the definition of ''ex parte communication'' for consistency with 4 Pa.C.S. Part II.
Section 401a.5 (relating to adjudicatory function of the Board; ex parte communications) was added to specify that the adjudicatory capacity of the Board or presiding officer may not be commingled with the prosecutorial or investigatory functions of the Bureau or the OEC.
This section also addresses the prohibition on a Board member, presiding officer or an attorney from the Office of Chief Counsel who is advising the Board from engaging in ex parte communications with any person including an applicant, licensee, the Bureau or an attorney for the OEC. If a Board member, presiding officer or attorney from the Office of Chief Counsel does engage in an ex parte communication, the communication shall be documented and notification of the communication and an opportunity to respond shall be given to all parties. In addition to documenting the ex parte communication in a log, a member or presiding officer may be required to recuse himself. Section 401a.5(e) addresses the procedure for recusal of a presiding officer or Board member who engages in an ex parte communication that creates substantial reasonable doubt as to the individual's ability to act objectively, independently or impartially.
Explanation of Chapter 405a
Section 405a.1 (relating to general duties and powers) is amended to reiterate that the Bureau is independent of the Board, the Office of Hearings and Appeals and the Office of Chief Counsel and that the Bureau alone will dictate the scope and course of a background investigation without direction or limitation by the Executive Director or the Chief Counsel of the Board.
Section 405a.3(a)(7) (relating to Office of Enforcement Counsel) is added to reflect the additional authority given to the OEC to petition the Board for the appointment of a trustee in accordance with 4 Pa.C.S. § 1332 (relating to appointment of trustee).
Comment and Response Summary
Notice of proposed rulemaking was published at 41 Pa.B. 1018 (February 26, 2011).
During the comment period, the Board received a joint letter from Downs Racing, L.P. d/b/a Mohegan Sun at Pocono Downs (Downs) and Greenwood Gaming and Entertainment, Inc. d/b/a Parx Casino (Greenwood) and a letter from the Independent Regulatory Review Commission (IRRC) providing comment on the proposed rulemaking.
In § 401a.5(a), Greenwood, Downs and IRRC commented that on-the-record proceedings are not the only context in which an agency acts in an adjudicatory capacity. IRRC suggests distinguishing between on-the-record and off-the-record proceedings. The Board does agree that the language could be clearer by specifying that the Board acts in an adjudicatory capacity not only during an on-the-record proceeding but also in matters relating to the on-the-record proceeding. The Board has therefore added a definition of ''on-the-record proceeding'' in § 401a.3 to include matters that come to the Board by way of application, complaint, motion, petition, exception, appeal of staff decision regarding a licensing, disciplinary or other matter. Additional language was also added in § 401a.5(a) stating that the Board acts in an adjudicatory capacity when considering matters presented for a decision by the Board in relation to the on-the-record proceeding.
Greenwood, Downs and IRRC also commented that the language in § 401a.5(d) requiring that notice and an opportunity to respond to an ex parte communication be provided to all parties directly affected by the anticipated vote of the Board should be amended to provide parties with notice and an opportunity to respond without the need for the qualitative assessment of participation.
In response to the suggestion, the Board has amended this section so that parties to a hearing or other proceeding which is the subject of the ex parte communication will be provided with notice and an opportunity to respond.
IRRC pointed out a grammatical error in § 405a.1(a) which has been corrected in the final-form rulemaking.
IRRC also requested clarity on what was meant by the ''exerting influence'' language in § 405a.4(b) (relating to conduct). The Board amended this provision for consistency with the provisions which separate the adjudicatory functions of the Board from the prosecutorial and investigatory functions of the Bureau and the OEC. The provision now mandates that the Board, presiding officer, an attorney advising the Board and the Chief Counsel may not direct, restrict or influence any employee of the Bureau or the Board with respect to the conduct and scope of an enforcement proceeding or hearing with which the employee is involved.
Additional Revisions
Language was added in §§ 405a.3 and 405a.4 for consistency with the revisions made to 4 Pa.C.S. Part II with the passage of Act 1. Specifically, in 4 Pa.C.S. § 1517 (relating to investigations and enforcement), the OEC was tasked with preparing the final background investigation report (BIR) for inclusion in an applicant's suitability report to the Board and a portion of a background investigation may not be disclosed until the OEC prepares the final BIR. The content and scope of the information included in the BIR is solely within the OEC's discretion in accordance with law. The language in §§ 405a.3(a)(8) and (9) and 405a.4(d) was added to reflect these changes.
Affected Parties
This final-form rulemaking affects presiding officers and members of the Board, the Office of Chief Counsel advising the Board as well as employees of the Bureau or the OEC.
Fiscal Impact
Commonwealth. It is not anticipated that this final-form rulemaking will have a fiscal impact on the Board.
Political subdivisions. This final-form rulemaking will not have fiscal impact on political subdivisions of this Commonwealth.
Private sector. This final-form rulemaking will not have fiscal impact on the private sector.
General public. This final-form rulemaking will not have fiscal impact on the general public.
Paperwork Requirements
There are no paperwork requirements associated with this final-form rulemaking.
Effective Date
The final-form rulemaking will become effective upon publication in the Pennsylvania Bulletin.
Regulatory Review
Under section 5(a) of the Regulatory Review Act (71 P. S. § 745.5(a)), on July 21, 2011, the Board submitted a copy of the notice of proposed rulemaking, published at 41 Pa.B. 1018, to IRRC and the Chairpersons of the House Gaming Oversight Committee and the Senate Community, Economic and Recreational Development Committee for review and comment.
Under section 5(c) of the Regulatory Review Act, IRRC and the House and Senate 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 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 August 24, 2011, 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 August 25, 2011, 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.
(2) The final-form rulemaking is necessary and appropriate for the administration and enforcement of 4 Pa.C.S. Part II.
Order
The Board, acting under 4 Pa.C.S. Part II, orders that:
(a) The regulations of the Board, 58 Pa. Code Chapters 401a and 405a, are amended by adding § 401a.5 and by amending §§ 401a.3, 405a.1, 405a.3 and 405a.4 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 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.
GREGORY C. FAJT,
Chairperson(Editor's Note: For the text of the order of the Independent Regulatory Review Commission relating to this document, see 41 Pa.B. 4923 (September 10, 2011).)
Fiscal Note: Fiscal Note 125-141 remains valid for the final adoption of the subject regulations.
Annex A
TITLE 58. RECREATION
PART VII. GAMING CONTROL BOARD
Subpart A. GENERAL PROVISIONS
CHAPTER 401a. PRELIMINARY PROVISIONS § 401a.3. Definitions.
The following words and terms, when used in this part, have the following meanings, unless the context clearly indicates otherwise:
* * * * * Ex parte communication—
(i) Any off-the-record communication engaged in or received by a member or presiding officer of the Board regarding the merits of or any fact in issue relating to a pending matter before the Board or presiding officer or which may reasonably be expected to come before the Board or presiding officer in a contested on-the-record proceeding.
(ii) The term does not include the following:
(A) Off-the-record communications by or between a member or presiding officer of the Board, the Department, the Pennsylvania State Police, the Attorney General or other law enforcement official prior to the beginning of the proceeding solely for the purpose of seeking clarification or correction to evidentiary materials intended for use in the proceedings.
(B) Communications between the Board or a member and the Office of Chief Counsel.
* * * * * On-the-record proceeding—A matter that comes before the Board or a presiding officer by way of application, complaint, petition, exception, appeal of staff decision, consent agreement or other motion relating to a licensing, disciplinary or other proceeding for which a formal record is maintained and upon which the Board bases its order and adjudication.
* * * * * § 401a.5. Adjudicatory function of the Board; ex parte communications.
(a) The Board or a presiding officer acts in an adjudicatory capacity when considering any matter presented for a decision by the Board or presiding officer in relation to an on-the-record proceeding. To ensure the integrity and impartiality of the Board or presiding officer acting in an adjudicatory capacity, there will be no commingling of the adjudicatory functions of the Board or presiding officer and the investigatory or prosecutorial functions of the Bureau or Office of Enforcement Counsel.
(b) When acting in an adjudicatory capacity regarding the facts at issue or merits of a matter pending before the Board or presiding officer, or which may reasonably be expected to come before the Board or presiding officer in a contested on-the-record proceeding, a member or presiding officer of the Board or an attorney from the Office of Chief Counsel who is advising the Board on the matter may not engage in an ex parte communication with any person including the Bureau or the Office of Enforcement Counsel.
(c) An ex parte communication received or engaged in by a member or presiding officer of the Board will be recorded in a log which will be available for public inspection at the Board's office during normal business hours and will be posted on the Board's web site. The log must include:
(1) The name of the individual documenting the ex parte communication.
(2) The date and time of the ex parte communication.
(3) The names of all individuals involved in the ex parte communication.
(4) The subject discussed.
(d) In addition to documenting an ex parte communication in accordance with subsection (c), notification of the substance of the communication and an opportunity to respond will be provided to all parties to the hearing or other proceeding that is the subject of the ex parte communication.
(e) A member or presiding officer of the Board may be required to recuse himself if substantial reasonable doubt exists as to the individual's ability to act objectively, independently or impartially in a hearing or proceeding as follows:
(1) A member or presiding officer of the Board who engaged in or received an ex parte communication will recuse himself from any hearing or other proceeding related to the ex parte communication if the context and substance of the ex parte communication creates substantial reasonable doubt as to the individual's ability to act objectively, independently or impartially.
(2) A member or presiding officer of the Board who engaged in or received an ex parte communication who elects not to recuse himself from a hearing or other proceeding will state his reasons for not recusing himself on the record prior to the commencement of the hearing or proceeding.
(3) A member or presiding officer of the Board who has identified any other reason which creates substantial reasonable doubt as to the individual's ability to act objectively, independently or impartially will recuse himself from any hearing or other proceeding related thereto.
(4) If a legislative appointee recuses himself from any hearing or other proceeding under this section, any qualified majority vote required under this part will consist of all of the remaining legislative appointees and at least two gubernatorial appointees.
(5) Failure of a presiding officer, for whom substantial reasonable doubt as to the individual's ability to act objectively, independently or impartially exists, to recuse himself from a hearing or other proceeding when required under paragraph (1) shall be grounds for appeal to the Board.
(6) Failure of a member, for whom substantial reasonable doubt as to the individual's ability to act objectively, independently or impartially exists, to recuse himself from a hearing or other proceeding when required shall be grounds for appeal to a court of competent jurisdiction if the Board action being appealed could not have occurred without the participation of the member.
(f) Nothing in this subsection will preclude a member of the Board from consulting with other members individually if the consultation complies with 65 Pa.C.S. §§ 701—716 (relating to Sunshine Act) or with employees or independent contractors whose functions are to assist the Board in carrying out its adjudicative functions.
CHAPTER 405a. BUREAU OF INVESTIGATIONS AND ENFORCEMENT § 405a.1. General duties and powers.
(a) Except for administrative purposes, the Bureau is a distinct entity, independent of the Board, the Office of Chief Counsel and the Office of Hearings and Appeals.
(b) The Bureau has the powers and duties set forth in section 1517 of the act (relating to investigations and enforcement) including:
(1) The investigation and review of applicants seeking a license, permit, certification or registration.
(2) The investigation of licensees, permittees, registrants, certified gaming service providers and other persons for potential violations of the act, including potential violations referred to the Bureau by the Board or other persons.
(3) The monitoring of slot machine operations to ensure compliance with the act, this part and the integrity of gaming, including internal controls, exclusion list enforcement, underage gaming and drinking, individual complaints, information systems, integrity and security issues.
(4) The inspection and examination of all premises where slot machine operations are conducted, gaming devices or equipment are manufactured, sold, distributed or serviced or where records of these activities are prepared or maintained as provided in section 1517(e) of the act. Inspections may include the review and reproduction of any document or record.
(5) The conduct of audits of slot machine operations as necessary to ensure compliance with the act and this part. An audit may include, but is not limited to, reviews, examinations and inspections of:
(i) Accounting, administrative and financial records and procedures utilized by the licensed entity.
(ii) Internal control procedures and management control procedures.
(iii) Security and surveillance departments.
(iv) Corrective action taken by the licensee to resolve reported deficiencies.
(v) Reports issued by an independent certified public accountant or independently registered public accounting firm pertaining to the adequacy of the licensee's system of internal controls over financial reporting.
(vi) The licensee's responses, if any, to the reports noted in paragraph (v).
(vii) Other matters required by the Board or the Bureau.
(6) The referral of possible criminal violations under the act to the Pennsylvania State Police.
(7) Being a criminal justice agency under 18 Pa.C.S. Chapter 91 (relating to criminal history record information).
(c) The Bureau will determine the scope of a background investigation, which may not be directed or limited by the Executive Director or Chief Counsel of the Board.
§ 405a.3. Office of Enforcement Counsel.
(a) The Office of Enforcement Counsel within the Bureau has the following powers and duties:
(1) Advise the Bureau on all matters, including the granting of licenses, permits, certifications or registrations, the conduct of background investigations, audits and inspections and the investigation of potential violations of the act or this part.
(2) Make recommendations and objections relating to the issuance of licenses, permits, certifications and registrations.
(3) Initiate, in its sole discretion, proceedings for violations of the act or this part by filing a complaint or other pleading with the Board seeking civil fines or penalties, the imposition of conditions on a license, permit, certification or registration, or the suspension or revocation of a license, permit, certification or registration.
(4) Act as the prosecutor in enforcement actions under the act.
(5) Seek a settlement that may include fines, penalties or other actions subject to approval by the Board.
(6) Appear at administrative hearings and other proceedings before the Board.
(7) Petition the Board for the appointment of a trustee under section 1332 of the act (relating to appointment of trustee).
(8) Review all information discovered during an investigation relating to an applicant's suitability and eligibility for a license, permit, certification or registration and, in accordance with law, independently determine the content and scope of that information to be included in the final background investigation report.
(9) Prepare a final background investigation report for inclusion in the applicant's suitability report to the Board relating to an applicant's suitability and eligibility for a license, permit, certification or registration.
(b) The Chief Enforcement Counsel will report to the Executive Director of the Board on administrative matters.
(c) The Chief Enforcement Counsel may be removed by the Board only for good cause shown.
§ 405a.4. Conduct.
(a) As provided in section 1202.1(c.1) of the act (relating to code of conduct), an attorney representing the Bureau or Office of Enforcement Counsel, or an employee involved in the hearing process, may not engage in an ex parte communication with a member or presiding officer of the Board, the Chief Counsel or an attorney from the Office of Chief Counsel who is advising the Board in relation to that matter.
(b) A member or presiding officer of the Board, the Chief Counsel or an attorney from the Office of Chief Counsel who advises the Board may not direct, restrict or influence any employee of the Board or Bureau with respect to the conduct and scope of an enforcement proceeding or hearing with which the employee is involved.
(c) If it becomes necessary for the Chief Counsel or an attorney from the Office of Chief Counsel or a Board member to become involved on behalf of the Board in any enforcement proceeding, the Chief Counsel or the attorney from the Office of Chief Counsel or the Board member involved shall be prohibited from participating in the adjudication of that matter.
(d) The Bureau may not disclose any portion of a background investigation report to a member of the Board, the Chief Counsel or an attorney from the Office of Chief Counsel who is advising the Board, prior to the Office of Enforcement Counsel's submission to the Board of the final background investigation report relating to an applicant's suitability and eligibility for a license, permit, certification or registration.
[Pa.B. Doc. No. 11-1728. Filed for public inspection October 7, 2011, 9:00 a.m.]
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