PUBLIC PROTECTION CABINET
Department of Charitable Gaming
RELATES TO: KRS 238.535
AUTHORITY: KRS 238.515(3), (9), 238.535(2), (13)[
NECESSITY, FUNCTION, AND CONFORMITY: KRS 238.535(2) authorizes issuance of an exemption from licensing requirements to organizations meeting all licensing requirements if no special limited charitable games are played and annual gross receipts do not exceed $25,000. KRS 238.535(2) requires charitable organizations to complete a form notifying the department of its exemption and requires completion of an annual financial report. This administrative regulation establishes the requirements for filing for an exemption and the annual reporting requirements.
Section 1. Form for Exemption. (1) An organization shall submit a complete, accurate, and verifiable Form CG-Exempt, Organization Grossing Under $25,000 Application for Exemption, at least thirty (30) days prior to the expected date of gaming.
(2) The form shall not be considered complete until all deficiencies are resolved.
(3) If the organization does not respond to a deficiency request within thirty (30) days, the form shall be deemed withdrawn, and the organization shall not game.
(4) If the organization has submitted a complete form, and meets the requirements for licensure prescribed in KRS Chapter 238, the department shall issue a Notification of Exemption.
(5) The organization shall not be required to file an additional exemption request form with the department if the gaming activities of the charitable organization remain exempt.
(6) The organization shall notify the department of any changes in the information contained on the form within thirty (30) days.
An organization possessing a Notice of Exemption shall file an annual report
with the department before January[
December] 31 of each year.
This report shall be filed on Form CG-EFR, Annual Financial Report For Exempt
Organization. The report may be filed electronically.
Section 2. Incorporation by Reference. (1) The following material is incorporated by reference:
Form CG-Exempt, "Organization Grossing Under $25,000 Application for
Form CG-EFR, "Annual Financial Report For Exempt Organization", 5/15[
(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 identifies the forms to be filed and provides instructions for organizations seeking to be exempt from the usual licensing requirements for charitable gaming.
(b) The necessity of this administrative regulation: This regulation is necessary in order for the Department of Charitable Gaming to ensure that only those organizations that properly qualify be granted exempt status.
(c) How this administrative regulation conforms to the content of the authorizing statutes: KRS 238.515(9) authorizes the department to promulgate administrative regulations in order to carry out and implement KRS Chapter 238. KRS 238.535(2) provides the requirements that an organization must comply with in terms of notifying the department, on a form issued by the department, of its intention to be exempt from ordinary licensing requirements. KRS 238.535 requires an exempt organization to file an annual financial report.
(d) How this administrative regulation currently assists or will assist in the effective administration of the statutes: The Department of Charitable Gaming is charged with the responsibility of licensing and regulating charitable gaming in Kentucky. The department must be able to ensure that only those organizations that properly qualify be granted exempt status. Only those organizations that meet certain standards can be granted exempt status. This regulation sets out the requirement that those organizations file the proper form and report with the department.
(2) If this is an amendment to an existing regulation, provide a brief summary of:
(a) How the amendment will change this existing administrative regulation: This amendment to the regulation updates the exemption application by fixing a statute reference and the date the annual financial report is due. This regulation is also changed to reflect the correct annual financial report date. The annual financial report is also updated.
(b) The necessity of the amendment to this administrative regulation: This amendment is necessary in order to update the exemption application to fix a statute reference and to fix the date the annual financial report is due, pursuant to statute changes during the past legislative session. It is also necessary to update the annual financial report to add banking account information.
(c) How the amendment conforms to the content of the authorizing statutes: KRS 238.515(9) authorizes the department to promulgate administrative regulations in accordance with KRS Chapter 13A which are necessary to carry out the purposes and intent of KRS Chapter 238. In order to have an exemption the organization must have an accurate application form the annual report must provide all information the department needs to renew the exemption. This amendment therefore conforms to the content of the authorizing statute.
(d) How the amendment will assist in the effective administration of the statutes: The statutes require that organizations that are seeking exempt status notify the department on a form issued by the department. That form must be up to date based on the current statute. The statute was changed during the last legislative session and this amendment fixes the form and the regulation language to reflect those changes. The updated financial report will provide necessary banking information to the department without the department needing to contact the organization for clarification or additional information.
(3) List the type and number of individuals, businesses, organizations, or state and local governments that will be affected by this administrative regulation: Organizations seeking to be granted exempt status from ordinary licensing requirements. Currently, there are 792 organizations that have been granted exempt status.
(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: Organizations will be required to use the updated application and financial report.
(b) In complying with this administrative regulation or amendment, how much will it cost each of the identities involved in Question (3): None.
(c) As a result of compliance, what benefits will accrue to the entities identified in Question (3): Exempt organizations will be granted an exemption and be allowed to game, up to $25,000 gross receipts, in the Commonwealth.
(5) Provide an estimate of how much it will cost to implement this administrative regulation:
(a) Initially: There should 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.
(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: No increase in fees or funding will be necessary.
(8) State whether or not this administrative regulation establishes any fees or directly or indirectly increases any fees: This amendment does not establish or change any fees.
(9) TIERING: Is tiering applied? No. All organizations are being treated the same.
FISCAL NOTE ON STATE AND LOCAL GOVERNMENT
1. What units, parts, or divisions of state or local governments (including cities, counties, fire departments, or school districts) will be impacted by this administrative regulation: The Kentucky Department of Charitable Gaming is the agency responsible for implementing 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(3), (9) and KRS 238.535(2), (13).
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.) None.
(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? None.
(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? None.
(c) How much will it cost to administer this program for the first year? No additional administrative cost.
(d) How much will it cost to administer this program for subsequent years? No additional administrative cost.
Note: If specific dollar estimates cannot be determined, provide a brief narrative to explain the fiscal impact of the administrative regulation.
Other explanation: See above.