177-100-0180 Approval for Instate Manufacturing and Servicing of Gray Machines Shipped Out-of-State (1) General Approval: A manufacturer shall apply to the Director of the Oregon Lottery for approval to manufacture or service gray machines within Oregon. (a) Director’s Approval: The Director may authorize a manufacturer to manufacture or service gray machines within the state of Oregon only if the manufacturer intends to export the gray machines to another state or jurisdiction where the operation or possession of the machines is legal. The Director shall require a manufacturer to cite the law that authorizes the legal operation or possession of the machines in the state or jurisdiction, and may require additional evidence that the gray machines will be sold or otherwise provided to a person who is authorized to operate or possess the machines in that jurisdiction. The authorization includes approval to engage in ongoing research and development related to the improvement and development of Video LotterySM game terminals the manufacturer intends to manufacture. (b) Disclosure Requirements: The manufacturer is subject to the same disclosure and background investigation requirements as an applicant for a major procurement. The manufacturer may be required by the Director to reimburse the Lottery for the costs of background investigations. (c) Inspections and Audits: A manufacturer’s premises, and all production, shipping, service, and financial records, shall be made available for routine and unannounced inspections and audits by the Assistant Director of Security. A manufacturer shall provide to the Lottery, upon request of the Assistant Director for Security, a report listing: the types and numbers of gray machines manufactured; the types and number of machines in storage; the types and number of machines serviced; the name and address of each individual or entity who purchased, leased, or otherwise was provided gray machines or who agreed or expressed an intent to purchase, lease, or otherwise acquire gray machines, or who own, operate, or otherwise possess gray machines serviced by the manufacturer; the number of shipments; destinations of all shipments; and methods of shipment, including carrier used. The information in the report shall be for a time period designated by the Assistant Director for Security. Shipment or transport of gray machines to a destination outside of Oregon also must comply with OAR 177-100-0160. (2) Temporary Approval: The Director may temporarily authorize a manufacturer to manufacture or service gray machines within the state of Oregon that the manufacturer intends to export to another state or jurisdiction where the operation or possession of the machines is legal. The temporary authorization is subject to such terms, conditions, or limitations as the Director deems necessary. (a) The manufacturer must submit the following: (A) The information required by ORS 461.410(1); (B) A written description of the proposed use of the gray machines; (C) A cite for the law that authorizes the legal operation or possession of the gray machines in the state or jurisdiction where the machines will be used; and (D) The identity of the individuals or entities who have agreed to or have expressed an intent to purchase or otherwise acquire gray machines from the manufacturer, or who own, operate, or otherwise possess gray machines serviced by the manufacturer. (b) When the Lottery receives the above materials for temporary approval, the Lottery will conduct an abbreviated background investigation of the manufacturer. The investigation includes, but is not limited to: (A) A computerized criminal background check of all control persons and any employee deemed necessary by the Assistant Director for Security. (B) A credit check using the services of a commercial credit reporting company, and (C) An inspection of the manufacturer’s business premises where the gray machines will be manufactured or serviced. (c) If the Director issues a temporary approval, it is effective for no longer than 180 days. (3) Cancellation of Approval: The Director may cancel any general or temporary approval if the Director determines that the manufacturer has failed to adhere to the qualifications or conditions required for authorization of the manufacturer or otherwise poses a threat to the integrity, security, or honesty of the Lottery. Approval also may be cancelled if within a reasonable time from the date of production, the manufacturer is unable to show the machines have been purchased, leased, or otherwise acquired by a person or entity authorized to obtain or possess the machines. Statutory/Other Authority: OR Const. Art. XV, § 4(4) & ORS 461 Statutes/Other Implemented: ORS 167.117 & 167.164 History: LOTT 7-2008, f. 10-31-08, cert. ef. 11-1-08 LOTT 8-2005, f. & cert. ef. 9-1-05 LOTT 5-2005(Temp), f. & cert. ef. 5-20-05 thru 11-11-05 LOTT 14-2003, f. & cert. ef. 9-29-03 LOTT 6-2003(Temp), f. & cert. ef. 6-5-03 thru 11-28-03 LC 8-1991, f. & cert. ef. 11-25-91 LC 7-1991(Temp), f. & cert. ef. 10-28-91