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| Montana Administrative Register Notice 23-16-214 | No. 21 11/12/2009 | |
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BEFORE THE DEPARTMENT OF JUSTICE OF THE STATE OF
TO: All Concerned Persons 1. On December 3, 2009, at 9:00 a.m., the Montana Department of Justice will hold a public hearing in the conference room at the Gambling Control Division, 2. The Department of Justice will make reasonable accommodations for persons with disabilities who wish to participate in this public hearing or need an alternative accessible format of this notice. If you require an accommodation, contact the department no later than 5:00 p.m. on November 24, 2009, to advise us of the nature of the accommodation that you need. Please contact Rick Ask, Gambling Control Division, 3. The rules proposed to be amended provide as follows, stricken matter interlined, new matter underlined: 23.16.101 DEFINITIONS As used throughout this subchapter, the following definitions apply: (1) through (14) remain the same. (a) a person other than an institutional lender as defined in (b) through (20) remain the same. IMP: 23-5-112, 23-5-118, 23-5-176, 23-5-629, 23-5-637, MCA RATIONALE AND JUSTIFICATION: The department is proposing to amend ARM 23.16.101 because, due to a prior amendment to the definitions, the numbers assigned to the subsections were changed, and the internal reference to the definition of "institutional lender" requires correction. This is a clerical correction and is not intended to have a substantive effect on the rule itself. 23.16.116 TRANSFER OF INTEREST AMONG LICENSEES (1) Except as provided in (2) Gambling activity may continue pending the outcome of a license investigation for a proposed transfer of ownership due to the death of a licensee under joint tenancy with right of survivorship as long as the person to whom the interest is transferred is already listed as an owner in the licensed operation and joint tenancy had been documented and approved in the original license application. The transfers must be reported on Form 37 along with the following documents: (a) death certificate; (b) will of the deceased, if any; and (c) copy of the licensee's most recent financial statements or tax return. (3) Gambling activity may continue pending the outcome of a license investigation for the proposed transfer of ownership in a licensed operation resulting from divorce as long as the spouse to whom an interest is transferred has already been approved and listed as an owner of that license. These types of proposed transfers must be reported on Form 37 along with the following documents: (a) court decree of dissolution of marriage; (b) source of funding documents, if any, if the transfer requires a buyout, e.g., bank statements supporting cash payments, loan and security agreements, installment payment agreement, etc.; (c) copy of the licensee's most recent financial statements or tax return; (d) if the transferring spouse will no longer be a licensee, copies of letters or other documents from lenders, landlords, or other parties to whom the licensee is obligated, which release the spouse from primary responsibility for the obligation, although the transferring spouse may still guarantee the obligation; and (e) if the transferring spouse is no longer a licensee, an updated bank signature card. (4) Gambling activity may continue pending the outcome of a license investigation for a proposed transfer of ownership in a licensed operation by gift among licensees. This type of proposed transfer must be reported on Form 37 along with the following documents: (a) gifting statement which provides the names of the parties, the intent of the parties, and the percentage ownership to be transferred through the gift; and (b) copy of the licensee's most recent financial statements or tax return. (2) through (5) remain the same but are renumbered (5) through (8). AUTH: 23-5-115, MCA IMP: 23-5-115, 23-5-118, 23-5-176, MCA RATIONALE AND JUSTIFICATION: This rule amendment is reasonable and necessary to implement a recommendation from the Gaming Advisory Council to create a streamlined process for licensees to report a change in ownership in certain limited circumstances. The Gaming Advisory Council noted special concern for licensees who, as the result of a death of a licensee, are otherwise required to complete and submit to the department a lengthy amended application form. These amendments, through the creation of a new application form (Form 37), will reduce the paperwork required to be filed with the department to report ownership changes brought about by: the death of a licensee where the ownership interests were held as joint tenants with right of survivorship; divorce where both spouses are identified as owners of the license; or gifting of an ownership interest where the beneficiary is already an owner of the license. For each of these ownership changes, the rule amendments identify the documents that are required to be filed with department in conjunction with Form 37, in order to establish the fact of ownership changes being reported. The amendments clarify that these licensees need not cease gambling activities pending department approval of the ownership changes reported on Form 37. As provided by these amendments, the abbreviated process utilizing Form 37 may not be used when a change in ownership brings a stranger into ownership of the license. 23.16.117 TRANSFER OF INTEREST TO NEW OWNER (1) through (7) remain the same. (8) (a) (i) remains the same. (ii) the foreclosure takes place within five years or half the term of the contract, whichever is less; an amended license application is required up to two years following the sale; after two years, a new license application is required including all applicable fees, but the business will be allowed to operate as long as the owner meets the criteria contained in (8)(a)(i), (iii), and (v); (iii) through (8)(b) remain the same. (9) Transfers of ownership control of a licensed gambling operation into a receivership, trust, or an estate mandated by court order require an amended application to be filed. The transfer of ownership interest to an estate that results from the death of a licensee may be reported on Form 37. (a) remains the same. (i) documentation of the event precipitating the transfer of the licensed gambling operation into a receivership, trust, or estate, (ii) documents naming/appointing a person to exercise ownership control, (iii) and (iv) remain the same. (v) (vi) the department determines the receiver is suitable to hold or own a license. (b) Upon the dissolution of a receivership, trust, or estate licensed under (c) If ownership interests are transferred to existing owners following the dissolution of a receivership, trust, or estate, an amended license application must be filed.
AUTH: 23-5-115, MCA IMP: 16-4-414, 23-5-115, 23-5-118, 23-5-176, MCA RATIONALE AND JUSTIFICATION: This rule amendment is reasonable and necessary to implement a recommendation from the Gaming Advisory Council to create a streamlined process for licensees to report a change in ownership of a licensed gambling operation due to the death of a licensee. The Gaming Advisory Council noted special concern for licensees who, as the result of a death of a licensee, are required to complete and submit to the department a lengthy amended application form. These amendments, through the creation of a new application form (Form 37), will reduce the paperwork required to be filed with the department to report the transfer of ownership interests into an estate following the death of a licensee. These rule amendments clarify the documents required to be filed with the department whenever an ownership interest is transferred into an estate, trust, or receivership. The amendments also clarify that a separate amended license application must be filed with the department where, upon the close or dissolution of an estate, trust, or receivership, ownership is transferred to an existing owner of the license. 23.16.120 LOANS AND OTHER FORMS OF FINANCING (1) through (8)(d) remain the same.
(9) remains the same but is renumbered (10). AUTH: 23-5-115, MCA IMP: 23-5-115, 23-5-118, 23-5-176, MCA RATIONALE AND JUSTIFICATION: The department is proposing a minor clerical correction to ARM 23.16.120 for clarification purposes, and is not intended to have a substantive effect on the rule itself. 23.16.125 CHANGE OF LIQUOR LICENSE TYPE (1) Except as (2) and (3) remain the same. AUTH: 23-5-115, MCA IMP: 23-5-115, MCA RATIONALE AND JUSTIFICATION: The department is proposing a minor clerical correction to ARM 23.16.125 for clarification purposes, and is not intended to have a substantive effect on the rule itself. 23.16.126 CHANGE OF LOCATION (1) Except as (2)
AUTH: 23-5-115, MCA IMP: 23-5-117, MCA RATIONALE AND JUSTIFICATION: The department is proposing minor clerical corrections to ARM 23.16.126 for clarification purposes, and is not intended to have a substantive effect on the rule itself. 23.16.1304 APPROVED VARIATIONS OF KENO (1) through (1)(c) remain the same. (d) A combination way ticket in which a player simultaneously combines any or all of the variations described in (1)(a), (b), and (c). (e) and (2) remain the same. AUTH: 23-5-115, MCA IMP: 23-5-412, MCA RATIONALE AND JUSTIFICATION: The department is proposing a minor clerical correction to ARM 23.16.1304 for clarification purposes, and is not intended to have a substantive effect on the rule itself. 23.16.1826 QUARTERLY REPORTING REQUIREMENTS (1) remains the same. (2) If a machine owner shares machine ownership, or a machine's revenues with another person or business entity, the machine owner or his designated representative must provide upon the same quarterly tax form prescribed by the department in (1) (a) through (6) remain the same. AUTH: 23-5-115, 23-5-605, 23-5-621, MCA IMP: 23-5-115, 23-5-136, 23-5-605, 23-5-610, 23-5-621, 23-5-637, MCA RATIONALE AND JUSTIFICATION: The department is proposing a minor clerical correction to ARM 23.16.1826 for clarification purposes, and is not intended to have a substantive effect on the rule itself. 23.16.1826A REPORTING FREQUENCY FOR APPROVED AUTOMATED ACCOUNTING SYSTEMS – EXCEPTIONS (1) through (3) remain the same. (4) When the explanation for the reporting failure does not demonstrate the inability of the machine owner or a designated representative to physically access the machine in order to meet the reporting interval, or when multiple reporting failures demonstrate an inability to physically access the machine, the department may require more frequent reporting intervals, require longer periods of record retention, or take any action authorized under AUTH: 23-5-621, MCA RATIONALE AND JUSTIFICATION: The department is proposing to amend ARM 23.16.1826A because the rule incorrectly identifies the statute, 23-5-136, MCA, as an administrative rule. This is a clerical correction and is not intended to have a substantive effect on the rule itself. 23.16.1828 GENERAL REQUIREMENTS OF OPERATORS, MANUFACTURERS, MANUFACTURERS OF ILLEGAL DEVICES, DISTRIBUTORS, AND ROUTE OPERATORS OF VIDEO GAMBLING MACHINES OR PRODUCERS OF ASSOCIATED EQUIPMENT (1) Every operator, manufacturer, manufacturer of illegal devices, distributor, or route operator must retain for a period of three years all records relating to the possession, destruction, purchase, lease, rental, or sale of any gambling device. For purpose of this rule, three years means a minimum of 12 full quarters from the previous quarterly tax return due date. The information detailed in (2)(a), (b), (c), and (d) (2) through (4) remain the same. IMP: 23-5-115, 23-5-605, 23-5-611, 23-5-614, 23-5-621, 23-5-625, 23-5-626, 23-5-631, MCA RATIONALE AND JUSTIFICATION: The department is proposing a minor clerical correction to ARM 23.16.1828 for clarification purposes, and is not intended to have a substantive effect on the rule itself. 23.16.2402 LIVE KENO AND BINGO RECORD KEEPING (1) remains the same. (2) (a) through (f) remain the same. (g) the ending bank balance less the day's gross proceeds and any other adjustments must be used as the beginning balance for the next day; and (h) remains the same. (3) (a) and (b) remain the same. (c) payout slips must be maintained by bingo callers for each work shift. Prizes awarded for promotional games must be recorded on the payout slips but so designated for the purpose of calculating gross proceeds. The payout slips must be initialed by the caller at the end of his/her shift. The slips must also be maintained as part of the operator's records for a period of three months (d) the day's gross proceeds must be reconciled with the ending bank balance. If, in the bank reconciliation process, the operator experiences a net cash overage or shortage in excess of 1% of the gross game income for a one-month period, the overage or shortage must be investigated. A record detailing the findings of the investigation must be maintained with other required records. For the purposes of calculating gross proceeds, promotional game prizes must be subtracted from the total payouts (e) and (f) remain the same. AUTH: 23-5-115, MCA IMP: 23-5-409, MCA RATIONALE AND JUSTIFICATION: The department is proposing minor clerical corrections to ARM 23.16.2402 for clarification purposes, and is not intended to have a substantive effect on the rule itself. 4. Concerned persons may submit their data, views, or arguments either orally or in writing at the hearing. Written data, views, or arguments may also be submitted to Rick Ask, Gambling Control Division, 5. An electronic copy of this Notice of Proposed Amendment is available through the Department of Justice's web site at http://doj.mt.gov/resources/administrativerules.asp. The department strives to make the electronic copy of the Notice conform to the official version of the Notice, as printed in the Montana Administrative Register, but advises all concerned persons that in the event of a discrepancy between the official printed text of the Notice and the electronic version of the Notice, only the official printed text will be considered. In addition, although the Department of Justice works to keep its web site accessible at all times, concerned persons should be aware that the web site may be unavailable during some periods, due to system maintenance or technical problems. 6. The Department of Justice maintains a list of interested persons who wish to receive notices of rulemaking actions proposed by this agency. Persons who wish to have their name added to the list shall make a written request which includes the name and mailing address of the person to receive notices and specifies that the person wishes to receive notices of rules regarding the Crime Control Division, the Central Services Division, the Forensic Sciences Division, the Gambling Control Division, the Highway Patrol Division, the Law Enforcement Academy, the Division of Criminal Investigation, the Legal Services Division, the Consumer Protection Division, the Motor Vehicle Division, the Justice Information Systems Division, or any combination thereof. Such written request may be mailed or delivered to Rick Ask, 7. Cregg Coughlin, Assistant Attorney General, Gambling Control Division, has been designated to preside over and conduct the hearing. 8. The bill sponsor contact requirements of 2-4-302, MCA, do not apply. By: /s/ Steve Bullock /s/ J. Stuart Segrest STEVE BULLOCK J. STUART SEGREST Attorney General, Department of Justice Rule Reviewer Certified to the Secretary of State November 2, 2009.
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