316 Neb. Admin. Code, 35, § 304 - DISTRIBUTOR OF PICKLE CARD UNITS: LICENSE; REQUIREMENTS; AND DUTIES

304.01 To qualify for a distributor's license, an applicant must be authorized to conduct business in Nebraska and have its principal office located within this state.

304.01A Authorization to do business in Nebraska requires:

304.01A(1) A domestic corporation to file Articles of Incorporation with the Nebraska Secretary of State's office;

304.01A(2) A domestic limited liability company to file Articles of Organization with the Nebraska Secretary of State's office;

304.01A(3) A foreign corporation or foreign limited liability company to obtain a certificate of authority to transact business in Nebraska from the Nebraska Secretary of State's office or to become domesticated by filing the requisite documents with the Nebraska Secretary of State's office and paying any required fees; or

304.01A(4) A domestic partnership, foreign partnership, or limited liability partnership to file any forms that may be required by the Nebraska Secretary of State's office.

304.01B Applicants seeking a distributor's license who intend to be engaged in business in this state as defined in section 77 - 27 02.06 of the Nebraska Revised Statutes, as amended, shall also submit a Nebraska Tax Application, Form 20, to obtain a Nebraska Sales and Use Tax Permit.

304.02 Any individual or business which intends to sell or otherwise provide pickle card units in this state to a licensed organization must first apply for and obtain a distributor's license from the Department. An individual or business applying for a distributor's license shall do so on a form prescribed by the Department. The applicant shall include with the application form the statutorily required license fee and, at a minimum, the following information:

304.02A The business name and address of the applicant and the name and address of each of the applicant's separate locations warehousing pickle cards or pickle card units;

304.02B The type of ownership of the business and the name, social security number, home address, and date of birth of:

304.02B(1) If a sole proprietorship, the individual owner;

304.02B(2) If a partnership, each partner and spouse;

304.02B(3) If a limited liability company, each member and spouse; or

304.02B(4) If a corporation, each officer and spouse, each director or board member, and each individual or entity holding ten percent or more of the debt or equity of the corporation. If an entity holding ten percent or more of the debt or equity of the applicant corporation is a partnership, limited liability company, or corporation, the information required in Regulation 35 - 304.02B must be supplied for each partner of the partnership, each member of the limited liability company, or each officer of the corporation and every individual or entity holding ten percent or more of the debt or equity of the partnership or corporation.

304.02C A completed and notarized Personal History Record and Background Disclosure form supplied by the Department for each individual listed pursuant to Regulation 35 - 304.02B, except for spouses who have completed and had notarized the Affidavit by Spouse for Waiver of Fingerprinting and/or Personal History Record and Background Disclosure form; and

304.02D Two sets of fingerprints on cards supplied by the Department and the requisite fees established by the Nebraska State Patrol and the Federal Bureau of Investigation for each person listed pursuant to Regulation 35 - 304.02B, except for spouses who have completed and had notarized the Affidavit by Spouse for Waiver of Fingerprinting and/or Personal History Record and Background Disclosure form. Fingerprint cards and the required fees must be submitted to the Nebraska State Patrol, Criminal Identification Division.

304.03 The applicant or licensee shall notify the Department within thirty (30) days of any change in the information submitted on or with the application form. Changes must be reported in writing and the Department may require the filing of a new application.

304.03A Changes shall be confirmed by the signature of an owner, partner, member, or officer of the distributor. Any individual signing the most current application shall obligate the distributor to comply with the Nebraska Pickle Card Lottery Act and regulations for that licensing period.

304.04 A distributor's license shall expire on September 30 of every odd - numbered year and may be renewed biennially. A n application for license renewal shall be due August 15 of each odd - numbered year. A distributor's license is not transferable.

304.05 A distributor is not considered licensed until it has physical possession of the printed license issued by the Department.

304.05A Any individual or business licensed as a distributor pursuant to section 9 - 235 of the Nebraska Bingo Act may act as a distributor pursuant to the Nebraska Pickle Card Lottery Act without submitting an additional licensing fee. Such individual or business shall comply in every other respect with the Nebraska Bingo Act, the Nebraska Pickle Card Lottery Act, and all rules and regulations adopted and promulgated pursuant to such Acts.

304.05B A distributor which no longer desires to be licensed shall notify the Department, in writing, of its intention to cancel its license. Such notification shall be signed by an owner, officer, member, or partner of the distributorship. A notification of cancellation shall be accompanied by the original license issued by the Department.

304.05C A distributor which has had its license lost, stolen or destroyed must notify the Department as soon as possible. The distributor shall send a written statement to the Department signed by an owner, officer, member, or partner confirming the loss, theft or destruction of the license. A duplicate license will be issued for no additional fee under such circumstances.

304.06 A licensed distributor, or any individual or business having a substantial interest the rein, is prohibited from holding any other licenses issued pursuant to the Nebraska Bingo Act, the Nebraska Pickle Card Lottery Act, the Nebraska Lottery and Raffle Act, or the Nebraska County and City Lottery Act, except as provided in section 9 - 235 of the Nebraska Bingo Act, and section 9 - 632 of the Nebraska County and City Lottery Act.

304.06A A licensed distributor, or employee or spouse of a licensed distributor, shall not have a substantial interest, as defined in Regulation 35-300.09, in any other distributor, manufacturer, licensed organization, pickle card operator, or lottery operator conducting gaming activities under the Nebraska Bingo Act, the Nebraska Pickle Card Lottery Act, the Nebraska Lottery and Raffle Act, or the Nebraska County and City Lottery Act.

A licensed distributor or employee or spouse of a licensed distributor shall not participate in the operation or conduct of any kind of gaming activity regulated under Chapter 9 of the Nebraska Revised Statutes, as amended, except to the exclusive extent of his or her duties as a licensed distributor or employee thereof.

304.07 A licensed distributor shall purchase or otherwise obtain pickle card units only from a licensed manufacturer. A licensed distributor shall sell or otherwise provide pickle card units only to an organization licensed to conduct a lottery by the sale of pickle cards.

304.07A A distributor shall not sell pickle card units to an organization unless and until such organization can provide a copy of its current license to the distributor, or the distributor has confirmed through the Department that such organization has a current license.

304.07B A distributor shall not sell pickle card units to another licensed distributor without prior approval by the Department.

304.07C A distributor shall not sell any pickle card units to a pickle card operator.

304.07D Only a licensed utilization of funds member, a licensed sales agent, licensed gaming manager, bingo chairperson, or a club manager for a organization which is exempt under section 501(c)(8), (10), or (19) and holding a lottery by the sale of pickle cards license may order pickle card units from a distributor.

304.07E Only a licensed utilization of funds member may pay for the purchase of pickle card units.

304.07F Nothing in this regulation shall be construed to prohibit a licensed distributor from selling or otherwise providing pickle card units to a federally recognized Indian tribe for use in a Class II Indian gaming activity as provided i n the Indian Gaming Regulatory Act.

304.08 Only licensed distributors or manufacturers may possess unmarked pickle cards. For purposes of this regulation, an unmarked pickle card is one which has not been imprinted with the name and state identification number of a licensed organization. Only a licensed manufacturer or distributor or agent thereof may imprint individual pickle cards with a licensed organization's name and state identification number. A licensed distributor or manufacturer shall notify the Department in writing of the name and address of any person or business other than the licensed manufacturer or distributor, designated as an agent for imprinting purposes.

304.08A A licensed distributor shall affix a state identification stamp to each flare card of each pickle card unit sold for use in Nebraska. Such stamp must be placed on the face or information side of a flare card, in the lower right - hand corner of the flare card, unless such placement would obscure pertinent game information such as a form number or serial number.

304.08A(1) With respect to punchboards, the stamp may be placed either on the face or reverse side of the board.

304.08B The licensed distributor shall ensure that the proper flare card is provided with each pickle card unit and that the flare card contains the correct and corresponding serial number and unit count to the unit being sold.

304.08C The serial number and unit count of a pickle card unit is required to be listed on the flare card by the licensed manufacturer. However, if the flare card information has not been completed by the manufacturer, or if a request has been received for a replacement flare card, a licensed distributor may fill in the information, provided that the distributor ensures the accuracy of the unit count, and that the flare card is the proper flare card for such game. A licensed distributor shall not be permitted to write a serial number on a punchboard. In addition, a licensed distributor shall notify the Department when the above information has not been completed by the manufacturer.

304.09 A licensed distributor shall deliver pickle card units only to a licensed utilization of funds member, a licensed sales agent, a licensed gaming manager, a bingo chairperson or, in the case of a licensed organization which is exempt under section 501(c) (8), (10), or (19) of the Internal Revenue Code, a club manager.

304.09A A licensed distributor shall immediately report to the Department any pickle card unit which is discovered to b e missing from their inventory or which has been lost in shipping or delivery.

304.10 The price charged by a licensed distributor for a pickle card unit shall not be fixed or set by agreement among licensed distributors in any manner, either expressed or implied.

304.10A No distributor shall offer or agree to offer anything of value to any individual or licensee in exchange for an agreement or commitment by such individual or licensee to exclusively buy, sell, or use pickle card units sold by such distributor.

304.10B No individual or licensee shall accept or agree to accept anything of value from a distributor in exchange for an agreement or commitment by such individual or licensee to exclusively buy, sell, or use pickle card units sold by such distributor.

304.11 A licensed distributor shall not sell or otherwise provide pickle card units to any licensed organization without first having been paid for those units with a check drawn on the pickle card bank account of that organization. Such payment can be made either in advance of or at the time of delivery of the pickle card units. Automatic bank transfers from the pickle card bank account of the licensed organization to the distributor shall be an acceptable form of payment. A licensed organization seeking to purchase pickle card units from a licensed distributor may set up a deposit or secured fund with the distributor upon which the distributor may draw payment for pickle card units ordered by the licensed organization. Such deposit or fun d shall be funded by a check with monies from the pickle card bank account of the licensed organization. No distributor shall extend credit in any form to any licensed organization seeking to purchase pickle card units, such as the use of credit or bank cards or any other method which does not require the expenditure of funds by the licensed organization prior to or at the time of purchase.

304.11A A distributor who fails to make a good faith effort to collect payment for an insufficient fund check writ ten by a licensed organization for the purchase of pickle card units shall be deemed in violation of this regulation. In addition, a distributor shall not further sell or otherwise provide pickle card units to a licensed organization who has not remitted sufficient payment, by check, to cover any outstanding debt owed by the organization to the distributor.

304.12 A licensed distributor shall not be prohibited from selling pickle card units to purchasers outside this state. Additionally, licensed distributors shall not be prohibited from selling pickle card units which may not be marketed in Nebraska to out - of - state purchasers. With respect to the sale of pickle card units to out - of - state purchasers, licensed distributors shall maintain the following records:

304.12A The name and complete address of the purchaser;

304.12B The date of the transaction;

304.12C The type of unit and serial number of each unit sold. For the purposes of this section, "type of unit" means the form number and name of a particular type of pickle card unit; and

304.12D The method of shipment, including the name, address, and telephone number of the entity transporting the units.

304.13 A licensed distributor shall pay for all purchases of pickle card units by check or automatic bank transfer within 30 days of delivery. A licensed distributor may by check set up a deposit with a licensed manufacturer upon which the manufacturer can draw payment for pickle card units ordered by the distributor.

304.14 A licensed distributor shall not market or sell any pickle card unit for use in this state:

304.14A Which offers prizes of less than 65 percent or more than 80 percent of the gross proceeds or which contains a prize pay - out structure designed by the manufacturer to vary;

304.14B Which has a card or play count exceeding 6,000;

304.14C Which contains an individual pickle card or punch whose purchase price is greater than $ 1.00;

304.14D Which contains a single pickle card or punch that awards a prize or prizes that exceeds $1, 000.00;

304.14E Which has not been approved and authorized by the Department; or

304.14F Which does not contain the appropriate flare card with a Nebraska state identification stamp as required by Regulation 35 - 315 affixed to such flare card.

304.15 The Department shall provide each licensed distributor with a listing of approved pickle card units. Such listing shall be updated by the Department on no less than a monthly basis, as required when additional games are approved. A distributor shall not sell any pickle card unit for use in this state unless and until they ensure that the game is a game which appears on the Department's Approved Product Listing.

304.16 A licensed distributor shall issue an invoice to the licensed organization for each purchase, exchange or return of pickle card units by the licensed organization. Every such invoice shall contain the following information:

304.16A The name, address, and state identification number of the licensed organization;

304.16B The individual placing the order or making the purchase, exchange or return on behalf of the licensed organization;

304.16C The date of the transaction;

304.16D A description of each pickle card unit to include the game name, serial number and form number;

304.16E The total number of pickle card units sold, exchanged, or returned;

304.16F The price of each pickle card unit, applicable taxes, and the total amount paid, exchanged, or returned by the licensed organization;

304.16G The manner of delivery or shipment, including the name, address, and telephone number of the entity with whom shipment is made;

304.16H The pickle card tax charged or credited for each unit; and

304.16I The state identification stamp number assigned to each unit.

Notes

316 Neb. Admin. Code, 35, § 304

Sections 9 - 302, 9 - 307, 9 - 330, 9 - 340, 9 - 340.01, 9 - 342, 9 - 343, 9 - 344, 9 - 351, and 9 - 632, R.R.S. 1997. Sections 9 - 1,104, 9 - 322, 9 - 331, 9 - 340.02, 9 - 346, and 9 - 347, R.S.Supp., 2004. September 5, 2005.