820 KAR 1:016. Distributor and manufacturer licensees

Link to law: http://www.lrc.ky.gov/kar/820/001/016reg.htm
Published: 2015

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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application shall be deemed withdrawn.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.