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NEW JERSEY REGISTER
VOLUME 37, ISSUE 16
ISSUE DATE: AUGUST 15, 2005
RULE PROPOSALS
COMMERCE, ECONOMIC GROWTH AND TOURISM
DIVISION OF CONSUMER AFFAIRS
LEGALIZED GAMES OF CHANCE CONTROL COMMISSION

Proposed Amendments: N.J.A.C. 13:47-1.1, 2.3, 6.20 and 8.7

Raffles and Bingos

Authorized By: Legalized Games of Chance Control Commission, William J. Yorke, Executive Director.

Authority: N.J.S.A. 5:8-6, 51, and 61.

Calendar Reference: See Summary below for explanation of exception to calendar requirement.

Proposal Number: PRN 2005-295.

Submit comments by October 14, 2005 to:
William J. Yorke, Executive Director
Legalized Games of Chance Control Commission
124 Halsey Street
PO Box 46000
Newark, New Jersey 07101

The agency proposal follows:

Summary

The Legalized Games of Chance Control Commission (the Commission) has determined that amendments are necessary to the raffles and bingos rules at N.J.A.C. 13:47-1.1, 2.3, 6.20 and 8.7. The Commission proposes to amend the definition of qualified organization at N.J.A.C. 13:47-1.1 to read: "'Qualified organization' means a bona fide organization or association of veterans, religious congregation, religious organization, charitable organization, educational organization, fraternal organization, civic and service club, officially recognized volunteer fire company, officially recognized first aid squad, and officially recognized rescue squad, and senior citizens association or club which:

1. Is organized as a non-profit or religious organization and is authorized by its certificate or articles of incorporation, bylaws or other written authority to support one of the authorized purposes;

2. Appoints the Executive Officer of the Control Commission as agent for the service of process; and

3. Is constituted of not less than five individuals."

The proposed amendment will allow a greater number of organizations to qualify for registration since membership organizations will only need to have five members, instead of 25 as is currently required, and non-membership organizations would qualify to apply for registration as long as they are constituted of at least five individuals and satisfy the other registration requirements in the rules. Moreover, foreign corporations that are registered to conduct business in New Jersey would also be permitted to register if all other requirements are met. Requiring that the Executive Officer of the Control Commission be appointed as agent for service of process ensures that every organization can be legally served in New Jersey. In addition, the Commission proposes to delete the requirement that the organization be engaged in serving an authorized purpose for at least one year prior to applying for registration; and that the organization has received, used and expects to continue to receive and use, funds from sources other than games of chances for the furtherance of an authorized purpose.

The proposed amendment to N.J.A.C. 13:47-2.3 deletes the requirement that the organization applying for registration submit a detailed financial summary covering a period of at least one year prior to the date of application. The amendment also deletes the requirement that a complete list of the organization's members be submitted and instead requires that the applicant organization submit the names and addresses of five individuals over the age of 18. The five individuals submitted will have the dual role of being primarily responsible for the conduct of the games of chance as well as being responsible for ensuring that the net proceeds of those games of chance are utilized properly. The rule is further amended so that the articles of incorporation need no longer be filed solely with the New Jersey Secretary of State. The amendments require that such documents be filed with the proper governmental body in the state in which the organization is incorporated.

The Commission proposes to amend N.J.A.C. 13:47-6.20 to remove alcoholic beverages from the list of prizes prohibited from being awarded for winning a game of chance. The proposed amendment to N.J.A.C. 13:47-8.7 requires that whenever a licensee offers alcoholic beverages as a raffle prize, the statement "Winner must be at least 21 years of age" must be printed on the raffle ticket. As the Commission has provided a 60-day comment period on this notice of proposal, this notice is excepted from the rulemaking calendar requirement pursuant to N.J.A.C. 1:30-3.3(a)5.

Social Impact

The Commission anticipates that licensees will experience a positive impact from the proposed amendments to the rules as the amendments will make it easier for organizations to register as well as increase their fundraising opportunities. The Commission expects that this impact will spill over into the communities that the licensees serve as the organizations should experience an increase in funds raised. The proposed amendments to the definition of "qualified organization" at N.J.A.C. 13:47-1.1 permit both member and non-member corporations and organizations to obtain a games of chance registration. Rather than registering only organizations that have at least 25 members organizations constituted of five individuals would now be able to register. In addition, by deleting paragraphs 4 and 5 from the definition, the Commission has opted to allow organizations to apply that have not been in existence for at least one year and organizations that have not yet raised and used any funds and that meet the other registration requirements. Coupled with the amendments to N.J.A.C. 13:47-2.3, which are discussed in the Summary above, the Commission has elected to expand the pool of "qualified organizations." The proposed amendments will allow more organizations to qualify for registration, thereby expanding their fundraising opportunities and enabling the organization to spend these additional funds in the furtherance of their authorized purposes.

The proposed amendment to N.J.A.C. 13:47-6.20 which remove alcoholic beverages from the list of prizes that are prohibited for games of chance expands the prize pool that organizations can offer and thus increases the potential for fundraising. The Commission is amending N.J.A.C. 13:47-8.7 to require organizations offering alcoholic beverages as a raffle prize to have the raffle tickets bear the statement "Winner must be at least 21 years of age." This is to alert those under the age of 21 that they are ineligible to win the alcoholic beverage as a prize.

Economic Impact

Revenues generated from legalized games of chance enable qualified organizations to continue their support of educational, charitable, religious and community programs. The proposed amendments do not impose any new fees on licensees. The proposed amendments to N.J.A.C. 13:47-1.1 and 2.3, which are discussed in the Summary above, enable more organizations to qualify for registration and therefore expand the fundraising opportunities of organizations that were not previously eligible for registration but are eligible under the new standards. The proposed amendment to N.J.A.C. 13:47-6.20 that permits alcoholic beverages to be offered as a games of chance prize expands the type of prizes that organizations can offer and may expand the pool of potential game players.

Federal Standards Statement

A Federal standards analysis is not necessary as there are no applicable Federal laws or standards. The Commission proposes the amendments to the rules pursuant to the rulemaking authority set forth in the State statute governing raffles and bingos at N.J.S.A. 5:8-1.1 et seq.

Jobs Impact

The Commission does not expect that the proposed amendments will result in the generation or loss of jobs in New Jersey.

Agriculture Industry Impact

The proposed amendments will not have any impact on the agriculture industry in the State.

Regulatory Flexibility Analysis

The Regulatory Flexibility Act (the Act), N.J.S.A. 52:14B-16 et seq., requires the Commission to give a description of the types and an estimate of the number of small businesses to which the proposed amendments will apply. When each license is looked at individually, all of the more than 7,000 registered organizations come within the Regulatory Flexibility Act's definition of "small business" as defined in N.J.S.A. 52:14B-17.

The Act requires the Commission to set forth the reporting, recordkeeping and other compliance requirements of the amendments proposed including the kinds of professional services likely to be needed to comply with the requirements. The Act further requires the Commission to estimate the initial and annual compliance costs of the proposed amendments to the rules with an indication of the varying impact on small businesses of differing types and sizes. In addition, the Act requires the Commission to outline the manner in which it has designed the rules to minimize any adverse economic impact upon small businesses.

The proposed amendments do not impose any reporting or recordkeeping requirements. The following compliance requirements are imposed. N.J.A.C. 13:47-2.3 requires an applicant for registration to submit a registration fee and proofs that the organization is eligible for registration. The proofs that are to be submitted are the by-laws and constitution or any other written authority under which the organization operates, the names and addresses of five individuals over the age of eighteen who are to be primarily responsible for the conduct of the games of chance and the proper utilization of the net proceeds of the games of chance, and, if incorporated, a copy of the applicant organization's articles of incorporation.

The proposed amendment to N.J.A.C. 13:47-8.7 requires that organizations include the following statement, "Winner must be at least 21 years of age." on raffle tickets when one of the offered prizes is an alcoholic beverage. The Commission does not expect any of the proposed amendments to result in any additional compliance costs for registered organizations. In fact, the amendments to N.J.A.C. 13:47-1.1 and 2.3 proposed by the Commission would require organizations to meet fewer and less stringent proofs when they seek to register. The Commission expects the amendments to make it easier for organizations to register as less paperwork will be required to be submitted as part of the registration process. The Commission does not expect that registered organizations will need to employ any professional services to comply with the requirements of the proposal.

Smart Growth Impact

The Commission believes the proposed amendments will not have any impact upon the achievement of smart growth or upon the implementation of the State Development and Redevelopment Plan.

Full text of the proposal follows (additions indicated in boldface thus; deletions indicated in brackets [thus]):

13:47-1.1 Words and phrases defined

The following words and terms, when used in this chapter, shall have the following meanings unless the context clearly indicates otherwise:

"Qualified organization" means a bona fide organization or association of veterans, religious congregation, religious organization, charitable organization, educational organization, fraternal organization, civic and service club, officially recognized volunteer fire company, officially recognized first aid squad, and officially recognized rescue squad, and senior citizens association or club which:

1. [If incorporated, is incorporated in New Jersey as a religious corporation or as an association not for pecuniary profit and is empowered by its articles of incorporation to further one or more of the authorized purposes;] Is organized as a non-profit or religious organization and is authorized by its certificate or articles of incorporation, bylaws or other written authority to support one of the authorized purposes;

2. [If unincorporated, is organized in New Jersey as a religious organization or as an organization not for pecuniary profit and is authorized by its written constitution, charter or by-laws, or by the written constitution, charter or by-laws of a parent organization of which it is a part, to further one or more of the authorized purposes;] Appoints the Executive Officer of the Control Commission as agent for the service of process; and

3. [Has a membership] Is constituted of not less than [25 persons;] five individuals.

[4. Has actively engaged prior to its initial application for registration in serving one or more of the authorized purposes in this State for a period of not less than one year; and

5. Has received and used and in good faith expects to continue to receive and use funds from sources other than the conducting of games of chance for the furtherance of an authorized purpose.]

13:47-2.3 Application for registration: renewal; fees

(a) Except as provided in [subsection] (b) below, each organization requesting registration shall remit by check or money order a non-refundable biennial registration fee of $ 50.00, payable to the Legalized Games of Chance Control Commission, and shall submit a completed application together with sufficient proof of the organization's eligibility for registration. Such proofs shall include at least the following:

1. (No change.)

[2. A detailed financial summary, showing all sources and amounts of income and expenditures, including the amounts, recipients and the purpose for which the expended funds were used, for a period of not less than one year prior to the date of application;

3. A complete list of the organization's members, including the name, address and age of each member]

2. The names and addresses of five individuals over the age of 18 who are to be primarily responsible for the conduct of the games of chance on each occasion and who are to ensure proper utilization of the net proceeds; and

[4.]3. If incorporated, a copy of the applicant organization's articles of incorporation which have been filed with the [Secretary of State of New Jersey] proper governmental body in the state of incorporation.

(b)-(e) (No change.)

13:47-6.20 Prohibited prizes

(a) No licensee shall offer or award any prize consisting of real estate or any interest therein, bonds, shares of stock, securities or evidences of indebtedness, weapons, live animals (except a gift certificate redeemable for live, edible seafood) [alcoholic beverages], foreign or domestic coins (except collector pieces or sets that are marketed as such and are clearly not intended for use as legal tender), tobacco products, motor vehicle leases, or any merchandise refundable in any of the foregoing or as money or cash.

(b) (No change.)

13:47-8.7 Contents of ticket; off-premises raffle awarding merchandise as a prize; additional requirement for alcoholic beverage as prize

(a)-(d) (No change.)

(e) In addition to the requirements of (a) through (d) above, a ticket for which one of the prizes is an alcoholic beverage shall bear the statement "Winner must be at least 21 years of age."



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