§ 59-150-170 — Fidelity fund; reserve account; lottery retailer bond; deposit of securities with commission.

(A) The commission shall establish a fidelity fund separate from all other funds and shall assess each lottery retailer a one-time fee not to exceed one hundred dollars for each sales location. Monies deposited into the fund may be used to cover losses the commission may experience due to nonfeasance, misfeasance, or malfeasance of a lottery retailer. The monies may be invested by the commission pursuant to state investment practices. All earnings attributable to the investments accrue to the fund. In addition, the funds may be used to purchase blanket bonds covering the commission against losses from all lottery retailers. At the end of each fiscal year, the commission shall pay to the Education Lottery Account any amount in the fidelity fund which exceeds five hundred thousand dollars, and the funds paid must be treated as net proceeds from the lottery. (B) A reserve account may be established as a general operating expense to cover amounts considered uncollectible from a lottery retailer. The commission shall establish procedures for minimizing losses that may be experienced by reason of nonfeasance, misfeasance, or malfeasance of a lottery retailer, and shall exercise and exhaust all available options in the procedures before amounts are written off to this account. (C) The commission may require a lottery retailer to post an appropriate bond, as determined by the commission, using an insurance company acceptable to the commission. The amount must not exceed the applicable district sales average of lottery game tickets for two billing periods. (D)(1) In its discretion, the commission may allow a lottery retailer to deposit and maintain with the commission securities that are interest bearing or accruing. Securities eligible pursuant to this item are limited to: (a) certificates of deposit issued by solvent banks or savings associations organized and existing under the laws of this State or under the laws of the United States; (b) United States bonds, notes, and bills for which the full faith and credit of the United States is pledged for the payment of principal and interest; and (c) federal agency securities by an agency or instrumentality of the United States government. (2) The securities must be held in trust in the name of the commission.

Legislative History

HISTORY: 2001 Act No. 59, SECTION 2.