316 Neb. Admin. Code, 35, § 307 - UTILIZATION OF FUNDS MEMBER; LICENSING REQUIREMENTS AND DUTIES

307.01 Each licensed organization must have at least one of its members licensed as a utilization of funds member. To be eligible for a utilization of funds member license, an individual must have been an active and bona fide member of the organization for at least one year prior to applying for the license.

307.01A If a licensed organization can provide evidence that the one - year membership requirement will impose an undue hardship, the Department may waive the requirement. An officer of the organization must provide a written explanation of the nature of the hardship with the utilization of funds member's license application.

307.01B An individual may act as a utilization of funds member for more than one gaming activity of a licensed organization by paying only one licensing fee per licensing period.

307.01C An individual may be licensed as a utilization of funds member for more than one licensed organization by applying for a separate license for each organization and paying a separate licensing fee for each organization

307.01D A utilization of funds member may not be licensed as a sales agent for any licensed organization or hold any other type of license issued under the Nebraska Bingo Act, the Nebraska Lottery and Raffle Act, or the Nebraska Pickle Card Lottery Act.

307.02 An individual is not considered to be licensed as a utilization of funds member and shall not conduct any activity for which a license is required until he or she has obtained physical possession of the printed license issued by the Department. The licensed organization must apply for the license on a form supplied by the Department. The application must contain the following information:

307.02A The name and state identification number of the licensed organization on whose behalf the individual is seeking the utilization of funds member license;

307.02B The name, address, social security number, and date of birth of the individual applying for the utilization of funds member license;

307.02C The date the individual became a member of the licensed organization;

307.02D The signature of the individual applying for the license;

307.02E A statement signed by an officer of the licensed organization indicating the organization's approval of the individual to act as the utilization of funds member on behalf of the organization; and

307.02F The statutorily required license fee. The fee may be paid by the licensed organization.

307.03 The information contained in the application must be kept current. An individual licensed as a utilization of funds member must notify the Department within 30 days of any changes to his or her most recent application filing. Changes must be reported in writing and the Department may require the filing of a new application.

307.04 A utilization of funds member license expires and may be renewed as provided in Regulation 35-302.08.

307.05 The licensed organization is not required to post the utilization of funds member's license.

307.06 A utilization of funds member for an organization licensed to conduct a lottery by pickle cards has the following responsibilities:

307.06A Preparing all applications, reports, and documents filed with any governmental agency by the licensed organization in connection with its lottery by the sale of pickle cards. If the utilization of funds member is assisted in the preparation of the applications, reports, and documents by any other individual or business, the utilization of funds member shall ensure that the information contained in those reports is true, accurate, and kept up to date;

307.06B Ensuring that pickle card units purchased by the licensed organization are paid for by a check written from the licensed organization's pickle card checking account either in advance of or upon delivery of the pickle card units;

307.06C Ordering, purchasing, and accepting delivery of pickle card units from licensed distributors on behalf of the licensed organization;

307.06D Approving individuals to act as sales agents for the licensed organization, authorizing pickle card operators to sell pickle cards on behalf of the licensed organization, and signing any release the licensed organization may be obligated to give a former sales agent seeking to be licensed with another organization in the case of a Class II licensee;

307.06E Ensuring that the licensed organization complies with the 30 percent of definite profit limitation on commissions paid to pickle card operators, the 12 percent of definite profit limitation for allowable expenses, and within that 12 percent allowable expense limitation, ensuring that no sales agent of the organization receives more than six percent of definite profit as a commission for marketing pickle card units;

307.06F Ensuring that his or her signature is on each check written from the organization's pickle card checking account. If an electronic funds transfer is utilized in lieu of a check, the transfer must be authorized by a utilization of funds member;

307.06F(1) A licensed organization may require that checks written by the utilization of funds member be co-signed by one or more parties.

307.06G Collecting all revenues received by sales agents from the sale of pickle card units to licensed pickle card operators;

307.06H Ensuring that complete and accurate records of the licensed organization's pickle card activities are kept, including the tracking of pickle card units sold and shipped or delivered to pickle card operators by the organization's sales agents. The records must include a description of the unit, the form number, serial n umber, and state identification stamp number of each pickle card unit as well as the pickle card operator to whom the unit was delivered, the gross proceeds from the sale of all pickle card units both to pickle card operators and sold internally by the organization at its designated premises, special function pickle card sales events, and bingo occasions, prizes paid, expenses incurred by the organization relating to its lottery by pickle cards, and taxes due and paid;

307.06I Depositing the proceeds from the sale of pickle cards and pickle card units, from the sale, lease, or rental of pickle card dispensing devices into the pickle card checking account of the licensed organization and ensuring that the revenues derived from the lottery by pickle cards are segregated from other income of the licensed organization;

307.06I(1) Ensuring that checks written by a pickle card operator for the purchase of pickle card units or for the sale, lease, or rental of a pickle card dispensing device are deposited within a commercially reasonable time after the pickle card operator issues the check.

307.06I(2) When determining whether checks written by a pickle card operator have been deposited within a commercially reasonable time, the following factors shall be taken into consideration:

307.06I(2)(a) The proximity of the licensed organization to the bank where it has its pickle card checking account;

307.06I(2)(b) The location of the organization's pickle card operators; and

307.06I(2)(c) The ability of the organization's sales agents to deliver the checks from the pickle card operators to the organization.

307.06I(3) When a licensed organization markets pickle cards through pickle card operators located in the same community as the organization and the organization maintains its pickle card checking account in that community, a commercially reasonable time for the depositing of a check received from a local pickle card operator is within three business days after the receipt of the check by the sales agent.

307.06I(4) When a licensed organization markets pickle cards through pickle card operators located in communities some distance from the location of the organization, and it is necessary for the sales agent to forward a check, either in person or by mail, to the organization, a commercially reasonable time for the sales agent to remit the check to the licensed organization is within three business days after the sales agent received the check and, upon receipt of the check, the utilization of funds member has three business days to deposit the check into the organization's pickle card checking account.

307.06I(5) The regular practice of the organization must be to make its deposits within the time frames set forth in this regulation. Failure to deposit checks within a commercially reasonable time or accepting post-dated checks shall be considered an illegal extension of credit from the organization to the pickle card operator.

307.06J Ensuring that any transfer of pickle card revenues to the licensed organization's general fund account or any other account of the licensed organization is done only by a check written from the pickle card checking account or by an electronic funds transfer from such account, and that pickle card revenues transferred are used only for a lawful purpose as defined in Regulation 35-303;

307.06K Ensuring that the gross proceeds received from the lottery by the sale of pickle cards of the licensed organization are spent only for lawful purposes as defined in Regulation 35-303, the awarding of prizes, payment of unit costs, pickle card operators' commissions and allowable expenses as identified in Regulation 35-314, bingo expenses if the organization is also licensed to conduct bingo, and ensuring that all lawful purpose donations and all expenses with the exception of prizes are paid only by a check written from the organization's pickle card checking account;

307.06K(1) It is the duty of the utilization of funds member to keep and maintain records sufficient to prove that pickle card revenues transferred from the pickle card checking account have been used only for a lawful purpose; and

307.06L Ensuring that upon proper request, all records and documents relating to the licensed organization's sale of pickle cards are made available to the Department or its representatives.

307.07 An individual licensed as a utilization of funds member may not have a substantial interest, as defined in Regulation 35-300.09, in any individual or business licensed as a manufacturer, distributor, or pickle card operator.

Notes

316 Neb. Admin. Code, 35, § 307

Sections 9 - 322, 9 - 327, 9 - 328, 9 - 329, 9 - 331, 9 - 340.02, 9 - 342, 9 - 348, 9 - 348.01, and 9 - 349, R.R.S. 2007 and sections 9 - 347, and 9 - 347.01, R.S. Supp., 2009. November 6, 2010.