PUBLIC PROTECTION CABINET

Department of Charitable Gaming

(Amendment)

 

      820 KAR 1:027. Quarterly reports of a licensed distributor and a licensed manufacturer.

 

      RELATES TO: KRS 238.530, 238.560(3)

STATUTORY AUTHORITY: KRS 238.515(4), (9), 238.530(5), 238.560(3)

NECESSITY, FUNCTION, AND CONFORMITY: KRS 238.530(5) authorizes the department to promulgate an administrative regulation to require a licensed distributor and a licensed manufacturer to report all activities relating to the sale, rental, lease, or furnishing of charitable gaming supplies and equipment[furnished]. This administrative regulation establishes the method and time of filing the required reports.

 

      Section 1. Quarterly Reports. A quarterly report shall:

      (1) Be submitted on Form CG-DIS for a licensed distributor, or Form CG-MAN for a licensed manufacturer;

      (2) Be submitted for each quarter that the distributor or manufacturer is licensed;

      (3) Be completed in ink or typed;

      (4) Include the original signature and printed name or, if submitted electronically, the typewritten name of the chief executive officer of the license holder; and

      (5) Include the original signature and printed name or, if submitted electronically, the typewritten name of the preparer, if prepared by an individual other than the chief executive officer.

 

      Section 2. Reporting Period Defined. (1)(a) A complete, accurate, legible, and verifiable quarterly report, in accordance with Section 1 of this administrative regulation, shall be submitted by a licensed distributor or licensed manufacturer on or before the following dates:

      1. April 30, for the quarter January 1 to March 31;

      2. July 31, for the quarter April 1 to June 30;

      3. October 31, for the quarter July 1 to September 30; and

      4. January 31, for the quarter October 1 to December 31.

      (b) If the due date is on a Saturday, Sunday, or legal holiday, the report shall be due on the first business day thereafter.

      (2) The report shall be considered filed when due if it has been:

      (a) Mailed to the department by first class mail, postage prepaid, to the correct address and postmarked by the due date;

      (b) Received in the department by hand-delivery on or before the due date; or

      (c) Received by the department electronically on or before the due date.

 

      Section 3. Incorporation by Reference. (1) The following material is incorporated by reference:

      (a) Form CG-DIS, "Licensed Charitable Gaming Distributor Quarterly Report", 5/15; and

      (b) Form CG-MAN, "Licensed Charitable Gaming Manufacturer Quarterly Report", 5/15[11/13, is incorporated by reference].

      (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 requires licensed charitable gaming distributors and manufacturers to file quarterly financial reports with the Department of Charitable Gaming in order for the department to be specifically apprised of all charitable gaming supplies being distributed in the state and which organizations they are going to.

      (b) The necessity of this administrative regulation: This administrative regulation is necessary in order to enable the department to be accurately and currently apprised of precisely what charitable gaming supplies are being distributed to distributors and licensed charitable organizations in Kentucky. Organizations are prohibited by law from purchasing charitable gaming supplies from non-licensed entities. All charitable gaming supplies are inventoried and contain identifying and tracking information. Quarterly reports by manufacturers and distributors enable the department to track charitable gaming supplies and ensure all gaming supplies utilized in the state are legal.

      (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 238.530(5) authorizes the department to require licensed manufacturers and distributors to report on their activities, with the frequency and content of those reports to be determined by administrative regulation.

      (d) How this administrative regulation currently assists or will assist in the effective administration of the statutes: The department is charged with the responsibility of licensing and regulating charitable gaming in Kentucky. In order to meet that responsibility, the department must have the means to monitor and track what gaming supplies are being distributed and to whom.

      (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 requires manufacturers to file quarterly reports whereas previously only distributors were required to file. The new manufacturer’s quarterly report is incorporated by reference. The distributor report is also updated to include electronic pulltabs.

      (b) The necessity of the amendment to this administrative regulation: This amendment is necessary in order to fully monitor the gaming supplies coming into the Commonwealth and to update the reports to include electronic pulltabs.

      (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. KRS 238.530(5) authorizes the department to require licensed manufacturers and distributors to report on their activities, with the frequency and content of those reports to be determined by administrative regulation. This amendment therefore conforms to the content of the authorizing statute.

      (d) How the amendment will assist in the effective administration of the statutes: This amendment to the regulation will assist the department in knowing and tracking charitable gaming supplies and equipment being used in the Commonwealth in order to make sure the supplies and equipment being used in the state are from licensed manufacturers and distributors. Further, the statute clearly contemplated manufacturers reporting their activities to the department, but no form had ever been provided for the manufacturer to do so. The amendment will also allow reporting on electronic pulltab distribution.

      (3) List the type and number of individuals, businesses, organizations, or state and local governments that will be affected by this administrative regulation: The twenty-three (23) licensed manufacturers and sixteen (16) licensed distributors of charitable gaming supplies that are currently licensed in Kentucky.

      (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: Manufacturers will now have to file a quarterly financial report detailing the charitable gaming supplies and equipment they sell to distributors for use in Kentucky. Distributors will file the same report but will be required to report on electronic pulltabs as well.

      (b) In complying with this administrative regulation or amendment, how much will it cost each of the identities involved in Question (3): Manufacturers should already maintain this information and are required to provide it to other states, therefore it is not anticipated this will cost the manufacturers anything other than the cost of the time to compile the report. There should be no additional cost to distributors.

      (c) As a result of compliance, what benefits will accrue to the entities identified in Question (3): Licensed manufacturers will simply meet their obligations under the law. They will also be protected from illegal supplies and equipment coming into the state.

      (5) Provide an estimate of how much it will cost to implement this administrative regulation:

      (a) Initially: There will be some cost to the department to implement this amendment to the administrative regulation as it will be required to review the manufacturer quarterly reports as they come in.

      (b) On a continuing basis: The cost will be the same on a continuing basis.

      (6) What is the source of the funding to be used in the implementation and enforcement of this administrative regulation: Currently there is no additional funding requested to implement the amendment to the administrative regulation, however the department does believe an increase in manufacturer and distributor licensing fees is warranted based on the fees of other states and the disproportionate fee paid by organizations in comparison to manufacturers and distributors who, because of budgetary constraints, are not as monitored as they should be. A change in fees would need to be done by statute.

      (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: See (6) above.

      (8) State whether or not this administrative regulation establishes any fees or directly or indirectly increases any fees: This administrative regulation does not establish any new fees.

      (9) TIERING: Is tiering applied? No. All licensed manufacturers 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 as 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(9); KRS 238.550(6), (7); and KRS 238.530(5).

      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. This amendment to the administrative regulation will have no effect on the expenditures or revenues of any state or local 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? This amendment to the regulation will not generate any new or additional revenues.

      (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? This amendment to the regulation will not generate any new or additional revenues.

      (c) How much will it cost to administer this program for the first year? There will be some cost associated with reviewing the information contained in the manufacturer report, but the exact cost is unknown.

      (d) How much will it cost to administer this program in subsequent years? Same as (c) above.

      Note: If specific dollar estimates cannot be determined, provide a brief narrative to explain the fiscal impact of the administrative regulation.

      Revenues (+/-): (n/a);

      Expenditures (+/-): (n/a);

      Other explanation: This amendment requires licensed manufacturers to submit quarterly financial reports. Those reports will need to be reviewed by the department which will cost the department resources. The exact time and amount of resources is unknown.