PUBLIC PROTECTION CABINET
Department of Charitable Gaming
(Amendment)
820 KAR 1:016. Distributor and
manufacturer licensees.
RELATES
TO: KRS 238.525, 238.530, 238.555(3)(h)
STATUTORY
AUTHORITY: KRS 238.515(1), (2), (3), (4), (9), 238.530(1), (2), (4), (5), (6)
NECESSITY,
FUNCTION, AND CONFORMITY: KRS 238.515(2) requires the Department of Charitable
Gaming to establish reasonable standards for the conduct of charitable gaming.
KRS 238.525(1) requires the department to issue an annual or biennial license
to a qualified applicant and to establish fees not to exceed the amounts
established in KRS 238.530(1) and (2). KRS 238.530(4) requires applicants for
licensure to complete a required application form and KRS 238.530(1) and (2)
requires the department to establish licensure fees, not to exceed $1,000. This
administrative regulation establishes the fees and procedures for annual
licensure of distributors and manufacturers.
Section
1. Application for Licensure. (1) An applicant for a distributor’s or manufacturer’s
license shall submit a complete, accurate, and verifiable application on either
Form CG-2, Distributor License Application, or Form CG-3, Manufacturer License
Application, at least sixty (60) days prior to the expiration of its license or
expected date of operation.
(2)
An application shall not be considered complete until all deficiencies are
resolved.
(3)
If the applicant does not file a written response to a deficiency request
within thirty (30) days or does not provide a requested document, the
application shall be deemed withdrawn.
(4)
Once the department has received a complete application, it shall grant or deny
the license within sixty (60) days.
(5)
The department shall issue a license if the applicant has:
(a)
Met the requirements for licensure set forth in KRS 238.530;
(b)
Paid all fees and fines;
(c)
Filed all reports required;
(d)
Filed a financial plan if required; and
(e)
Complied with all terms and conditions of any applicable settlement agreement
or probationary terms.
(6)
Fingerprints shall be required for the chief executive officer, the chief
financial officer, and anyone with a ten (10) percent or greater financial
interest in the licensee.
(7)
If the licensee wishes to change any information printed on the license, the
request shall be submitted prior to the date of the change being made along
with a fee of twenty-five (25) dollars. The request shall be signed by an
officer. The licensee shall receive the new license before making the requested
change.
Section
2. Information Required on License. A license issued by the Department of
Charitable Gaming shall clearly state the:
(1)
Name of the licensee;
(2)
Physical address of the licensee;
(3)
Date of issuance of the license;
(4)
Expiration date of the license;
(5)
Type of license issued (manufacturer or distributor); and
(6)
Address of the Department of Charitable Gaming.
Section
3. Fees for Licensure. (1) The annual license fee for each distributor or
manufacturer license issued shall be $1,000.
(2)
A nonrefundable processing fee of twenty-five (25) dollars shall:
(a)
Accompany each application for licensure; and
(b)
Be credited against the amount of the annual license fee.
(3)
An annual license shall not be issued until the annual license fee is paid in
full.
(4)
The annual license shall be effective for one (1) year from the date of
issuance.
Section
4. Requirements of a Distributor. (1) Pulltabs or bingo papers that are damaged
shall not be sold and shall be destroyed by burning, shredding, or defacing in
some manner to prevent their reuse.
(2)
A distributor shall maintain a separate bank account for the operation of the
distributorship that is not commingled with a personal account or another
business account. If the licensee owns multiple distributorships, separate bank
accounts shall be maintained for each distributorship.
(3)
Any payments received from a licensed charitable organization shall be by check
drawn on the charitable gaming account or electronic fund transfer from the
charitable gaming account.
Section
5. Requirements of a Manufacturer. A licensee who does not receive payment in
full from a distributor within sixty (60) days of the delivery of charitable
gaming supplies and equipment shall notify the department of the delinquency in
writing by letter stating the name and license number of the delinquent
distributor.
Section
6. Incorporation by Reference. (1) The following material is incorporated by
reference:
(a)
Form CG-2, "Distributor License Application" 5/15[11/13];
and
(b)
Form CG-3, "Manufacturer License Application" 5/15[11/13].
(2)
This material may be inspected, copied, or obtained, subject to applicable
copyright law, at the Department of Charitable Gaming, Public Protection
Cabinet, 132 Brighton Park Boulevard, Frankfort, Kentucky 40601, Monday through
Friday, 8 a.m. to 4:30 p.m.
SCOTT
JONES, Commissioner
AMBROSE
WILSON IV, Secretary
APPROVED
BY AGENCY: August 12, 2015
FILED
WITH LRC: August 14, 2015 at 11 a.m.
PUBLIC
HEARING AND PUBLIC COMMENT PERIOD: A public hearing on this administrative
regulation shall be held on September 24, 2015 at 10:30 a.m., Eastern Time at
the Department of Charitable Gaming, 132 Brighton Park Boulevard, Frankfort,
Kentucky 40601. Individuals interested in being heard at this hearing shall notify
this agency in writing by five (5) workdays prior to the hearing of their
intent to attend. If no notification of intent to attend the hearing is
received by that date, the hearing may be canceled. This hearing is open to the
public. Any person who wishes to be heard will be given an opportunity to
comment on the proposed administrative regulation. A transcript of the public
hearing will not be made unless a written request for a transcript is made. If
you do not wish to be heard at the public hearing, you may submit written
comments on the proposed administrative regulation. Written comments shall be
accepted until the end of the calendar day on September 30, 2015. Send written
notification of intent to be heard at the public hearing or written comments on
the proposed administrative regulation to the contact person.
CONTACT
PERSON: Noelle J. Bailey, General Counsel, Department of Charitable Gaming, 132
Brighton Park Boulevard, Frankfort, Kentucky 40601, phone (502) 573-5528, fax
(502) 573-6625.
REGULATORY IMPACT ANALYSIS AND TIERING STATEMENT
Contact
person: Noelle J. Bailey
(1)
Provide a brief summary of:
(a)
What this administrative regulation does: This administrative regulation
provides the procedure for distributors and manufacturers to apply for a
charitable gaming license and specific requirements for the same to be granted.
The application forms are incorporated by reference.
(b)
The necessity of this administrative regulation: This regulation is necessary
to establish a standardized procedure and application for distributors and
manufacturers to apply for a charitable gaming license.
(c)
How this administrative regulation conforms to the content of the authorizing
statutes: This statutory authorities for this regulation are KRS 238.515(1),
(2), (3), (4), (9) and KRS 238.530(1), (2), (4), (5), and (6). KRS 238.515(2)
requires the department to establish reasonable standards for the conduct of
charitable gaming. KRS 238.515(1) requires the department to issue an annual or
biennial license to a qualified applicant and to establish fees not to exceed
the amounts established in KRS 238.530(1) and (2). KRS 238.530(4) requires
applicants for licensure to complete a required application form and KRS
238.530(1) and (2) requires the department to establish licensure fees, not to
exceed $1,000. This administrative regulation establishes the fees and
procedures for annual licensure of distributors and manufacturers.
(d)
How this administrative regulation currently assists or will assist in the
effective administration of the statutes: This administrative regulation
facilitates effective administration of the statutes by providing a
standardized form and procedure for distributors and manufacturers to apply for
licensure and for the department to collect the necessary information to
determine if a license can be granted per the statutes.
(2)
If this is an amendment to an existing administrative regulation, provide a
brief summary of:
(a)
How the amendment will change this existing administrative regulation: This
amendment incorporates an amended CG-2, Distributor License Application 05/15,
and amended CG-3, Manufacturer License Application 05/15. The purpose of the
amendment is to add information regarding whether the manufacturer or
distributor will provide electronic pulltabs and electronic pulltab devices to
licensed organizations in Kentucky. It also adds a space for manufacturers to
list what distributors they are distributing their product to for use in
Kentucky.
(b)
The necessity of the amendment to this administrative regulation: This
amendment is necessary to incorporate the amended CG-2 and CG-3 applications
for a distributor’s license and manufacturer’s license. The amended
applications were necessary due to the statutory change allowing for use of
electronic pulltab devices.
(c)
How the amendment conforms to the content of the authorizing statutes: The statutory
authorities for this regulation are KRS 238.515(1), (2), (3), (4), (9) and KRS
238.530(1), (2), (4), (5), and (6). KRS 238.515(2) requires the department to
establish reasonable standards for the conduct of charitable gaming. KRS
238.515(1) requires the department to issue an annual or biennial license to a
qualified applicant and to establish fees not to exceed the amounts established
in KRS 238.530(1) and (2). KRS 238.530(4) requires applicants for licensure to
complete a required application form and KRS 238.530(1) and (2) requires the
department to establish licensure fees, not to exceed $1,000. This
administrative regulation establishes the fees and procedures for annual
licensure of distributors and manufacturers. This regulation amendment incorporates the amended CG-2, Distributor License
Application 05/15, and CG-3, Manufacturer License Application 05/15,
pursuant to changes to KRS 238.505, KRS 238.545, and proposed amendments to 820
KAR 1:001, 032, and 033.
(d)
How the amendment will assist in the effective administration of the statutes:
The amendment will allow the department to determine what manufacturers and
distributors will be offering electronic pulltabs and electronic pulltab
devices to licensed organizations in Kentucky. It will also enable the
department to cross reference what distributors are receiving product from what
manufacturers.
(3)
List the type and number of individuals, businesses, organizations, or state
and local governments affected by this administrative regulation: This
amendment will impact manufacturers and distributors obtaining or renewing a
license. Currently there are sixteen (16) licensed distributors and
twenty-three (23) licensed manufacturers.
(4)
Provide an analysis of how the entities identified in Question (3) above will
be impacted by either the implementation of this administrative regulation, if
new, or by the change, if it is an amendment, including:
(a)
List the actions that each of the regulated entities identified in Question (3)
will have to take to comply with this administrative regulation or amendment:
Distributors will be required to use the amended CG-2 application, and manufacturers
will be required to use the amended CG-3 application, when applying for a
license or a renewal of a license. The department will need to update the web
site with the new CG-2 and CG-3 applications and otherwise make the forms
available for applicants.
(b)
In complying with this administrative regulation or amendment, how much will it
cost each of the entities identified in Question (3): The main function of this
amendment is to incorporate the amended CG-2 and CG-3 applications. The
distributors and manufacturers are already required to fill out an application
form and the department is already required to process the applications and either
grant or deny a license. As such, the amendment to this regulation will not
cost any of the entities identified in Question (3).
(c)
As a result of compliance, what benefits will accrue to the entities identified
in Question (3): Distributors and manufacturers wishing to offer electronic
pulltabs and electronic pulltab devices to licensed organizations in Kentucky
will benefit by obtaining a license to do so.
(5)
Provide an estimate of how much it will cost to implement this administrative
regulation:
(a)
Initially: There will be no cost to implement this amendment to the
administrative regulation.
(b)
On a continuing basis: There should be no additional cost on a continuing
basis.
(6)
What is the source of the funding to be used in the implementation and
enforcement of this administrative regulation: There is no additional funding
necessary to implement this amendment to the administrative regulation. There
will be no additional funding necessary to enforce the provisions of the
amended regulation. The licensing department is already processing a CG-2 and
CG-3 application.
(7)
Provide an assessment of whether an increase in fees or funding will be
necessary to implement this administrative regulation, if new, or by change, if
it is an amendment: There will be no increase in fees or funding necessary to
implement this amendment to the administrative regulation.
(8)
State whether or not this administrative regulation establishes any fees or
directly or indirectly increases any fees: This amendment to the regulation
does not establish any new fees or directly or indirectly increase any fees.
(9)
TIERING: Is tiering applied? No. Only distributors and manufacturers are
affected by this regulation and it applies equally to all.
FISCAL NOTE ON STATE AND LOCAL GOVERNMENT
1.
What units, parts, or divisions of state or local government (including cities,
counties, fire departments, or school districts) will be impacted by this
administrative regulation? The Kentucky Department of Charitable Gaming as
implementer of this regulation.
2.
Identify each state or federal statute or regulation that requires or
authorizes the action taken by the administrative regulation. KRS 238.515(1)
and (9); 238.525(1); and 238.535(9).
3.
Estimate the effect of this administrative regulation on the expenditures and
revenues of a state or local government agency (including cities, counties,
fire departments, or school districts) for the first full year the
administrative regulation is to be in effect. There should be no effect on the
expenditures or revenues of any government agency.
(a)
How much revenue will this administrative regulation generate for the state or
local government (including cities, counties, fire departments, or school
districts) for the first year? The amendment to the regulation should not
generate revenue in the first year or in subsequent years.
(b)
How much revenue will this administrative regulation generate for the state or
local government (including cities, counties, fire departments, or school
districts) for subsequent years? See response to (a) above.
(c)
How much will it cost to administer this program this program for the first
year? It is not anticipated that that there will be any cost in administering
the program that this regulation relates to.
(d)
How much will it cost to administer this program in subsequent years? See
response to (c) above.
Note: If specific dollar estimates
cannot be determined, provide a brief narrative to explain the fiscal impact of
this administrative regulation.
Revenues
(+/-): Not applicable; see response to (c) above.
Expenditures
(+/-): Not applicable; see response to (c) above.
Other
explanation: There should be no fiscal impact as the amendment merely updates
certain information and does not require any new or additional procedures or
actions.
