PUBLIC PROTECTION CABINET

Department of Charitable Gaming

(Amendment)

 

      820 KAR 1:055. Charity fundraising event standards.

 

      RELATES TO: KRS 238.505, 238.515(2), (4), (9), 238.535, 238.545, 238.547

      STATUTORY AUTHORITY: KRS 238.515(2), (4), (9), 238.545(4)

      NECESSITY, FUNCTION, AND CONFORMITY: The Department of Charitable Gaming is authorized by KRS 238.515(2) to establish reasonable standards for the conduct of charitable gaming. KRS 238.545(4) requires a license in order to conduct a charity fundraising event. This administrative regulation establishes standards for the conduct of charity fundraising events.

 

      Section 1. Issuance of License. (1) An organization shall submit a complete, accurate, and verifiable application on Form CG-Schedule A, Charity Fundraising Event or Special Limited Charity Fundraising Event License Application, for a charity fundraising event at least thirty (30) days prior to the scheduled date for the charity fundraising event.

      (2) A processing fee of twenty-five (25) dollars shall accompany each application for licensure.

      (3) When the application is filed, the organization shall provide the department with a copy of the executed lease, if applicable.

      (4) All information requested by the department shall be submitted and reviewed before a license may be granted.

      (5) The department shall issue a license if the applicant possesses a regular charitable gaming license and has met the requirements for licensure set forth in KRS 238.505(8) and 238.545(4).

      (6) The event shall not be advertised nor preregistrations taken until a license is issued.

      (7) Once a license is issued, players may preregister for the event prior to the day of the event only if payment is received by credit card, check, or electronic fund transfer.

      (8) Pursuant to its discretion under KRS 238.505(8), the department has determined that charity game tickets, or pulltabs, shall not be an approved game of chance at a charity fundraising event held by an exempt organization.

 

      Section 2. Special Limited Games Played at a Charity Fundraising Event. The department shall grant approval to play special limited games at a charity fundraising event if the information contained in the application and the totality of the circumstances show that the event meets the requirements of KRS 238.545(4)(d).

 

      Section 3. Volunteers. (1) All individuals involved in the conduct of a charity fundraising event shall be trained in the proper conduct of the game and the control of funds.

      (2) The chairperson shall:

      (a) Be in charge of the licensed gaming occasion;

      (b) Supervise and direct all volunteers; and

      (c) Be responsible for assuring the proper receipt and recording of gaming funds.

 

      Section 4. Equipment Used for Events. (1) Poker tables, blackjack tables, prize wheels, and chips, scrip, or imitation money shall not be considered charitable gaming supplies or equipment and may be purchased from ordinary sources of supply. The organization shall not pay for poker tables, blackjack tables, prize wheels or chips, scrip, or imitation money from the charitable gaming account.

      (2) Roulette wheels and craps tables shall be considered charitable gaming supplies and shall be obtained from a licensed distributor. The organization shall pay for roulette wheels and craps tables from the charitable gaming account.

      (3) If special limited charity games are played, the organization shall provide the department with a copy of the executed contract for the use of those supplies no later than thirty (30) days following the event. This contract shall specify exactly the items provided, at what cost, and from whom.

 

      Section 5. Expenses. (1) The organization shall pay the gaming expenses for the event from the gaming account. All other expenses shall be paid from the general account.

      (2) If an expense is both a gaming expense and a general expense, the expense shall be prorated pursuant to the amount of gross receipts obtained from gaming and nongaming events. The full amount shall be paid from the general account and the amount attributable to gaming shall be reimbursed from the gaming account to the general account.

 

      Section 6. Incorporation by Reference. (1) Form CG-Schedule A, "Charity Fundraising Event or Special Limited Charity Fundraising Event License Application", 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 establishes standards for the conduct of charity fundraising events and requires organizations use a specific form to apply for a license to conduct a Charity Fundraising Event ("CFE") or Special Limited Charity Fundraising Event ("SLCFE"). The application form is incorporated by reference.

      (b) The necessity of this administrative regulation: This regulation is necessary to establish a standardized procedure and application for licensed charitable organizations to apply for and conduct a CFE.

      (c) How this administrative regulation conforms to the content of the authorizing statutes: The statutory authorities for this regulation are KRS 238.515(2), (4), (9) and 238.545(4). KRS 238.515 (2), (4), and (9) set forth the powers of the department to establish and enforce reasonable standards for the conduct of charitable gaming and the operation of charitable gaming facilities; to establish standards of accounting, recordkeeping, and reporting to insure charitable gaming receipts are properly accounted for; and, to "promulgate administrative regulations which are necessary to carry out the purposes and intent of [KRS Chapter 238]." KRS 238.545(4) sets forth the limits to a licensed charitable organization conducting a CFE or SLCFE. It requires an organization obtain a license to conduct a CFE or SLCFE. This regulation is necessary for the department to uniformly and efficiently collect the information necessary to issue or deny a license to an organization to conduct a CFE.

      (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 licensed charitable organizations to apply for licensure and to conduct a CFE, 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 updated CG-Schedule A, Charity Fundraising Event or Special Limited Charity Fundraising Event License Application.

      (b) The necessity of the amendment to this administrative regulation: This amendment is necessary to incorporate the updated CG-Schedule A, Charity Fundraising Event or Special Limited Charity Fundraising Event License Application. The application was updated to incorporate changes made necessary by the passage of SB 33 and HB 91 relating to electronic pulltab devices and types of CFE events, respectively.

      (c) How the amendment conforms to the content of the authorizing statutes: The statutory authorities for this regulation are KRS 238.515(2), (4), (9) and 238.545(4). KRS 238.515 (2), (4), and (9) set forth the powers of the department to establish and enforce reasonable standards for the conduct of charitable gaming and the operation of charitable gaming facilities; to establish standards of accounting, recordkeeping, and reporting to insure charitable gaming receipts are properly accounted for; and, to "promulgate administrative regulations which are necessary to carry out the purposes and intent of [KRS Chapter 238]." KRS 238.545(4) sets forth the limits to a licensed charitable organization conducting a CFE or SLCFE. It requires an organization obtain a license to conduct a CFE or SLCFE. This regulation amendment incorporates the updated CG-Schedule A, Charity Fundraising Event or Special Limited Charity Fundraising Event License Application, as required by the statute changes.

      (d) How the amendment will assist in the effective administration of the statutes: The amendment will bring the new application form in line with the new law from the past legislative session.

      (3) List the type and number of individuals, businesses, organizations, or state and local governments affected by this administrative regulation: This amendment will impact charitable organizations attempting to obtain a license to conduct a CFE. There are currently 603 licensed charitable organizations.

      (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: The applicants for a CFE will be required to use the updated CG-Schedule A application when applying for a license. The organizations will be allows to have electronic pulltabs at CFE events and will also be allowed to conduct a banquet as a form of CFE event.

      (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 updated CG-Schedule A application for CFE’s and SLCFE’s. Licensed charitable organizations are already required to fill out an application form to conduct a CFE 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): Charitable organizations will be able to use electronic pulltabs at CFE events and will be able to conduct a banquet as a type of CFE event.

      (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 will 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 applications.

      (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 licensed charitable organizations 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 and KRS 238.545.

      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 likely will 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 little to no fiscal impact as the amendment merely updates certain information in the application and does not require any new or additional procedures or actions.