§ 3A-719. Fidelity Revolving Fund – Payment of claims – Reserve account – Posting of bond or deposit of securities by retailers.

A.  There is hereby created in the State Treasury a revolving fund for the Oklahoma Lottery Commission to be designated the "Fidelity Revolving Fund".  The fund shall be a continuing fund, not subject to fiscal year limitations.  All monies accruing to the credit of the fund are hereby appropriated and may be budgeted and expended by the Commission as provided in this section.  Expenditures from the fund shall be made upon warrants issued by the State Treasurer against claims filed as prescribed by law with the Director of the Office of Management and Enterprise Services for approval and payment.  The Commission shall assess each retailer an annual fee not to exceed One Hundred Dollars ($100.00) per sales location, to be deposited to the Fidelity Revolving Fund.  The monies in the fund shall be invested by the State Treasurer in accordance with state investment practices.  All earnings attributable to such investments shall likewise accrue to the credit of the fund.  Monies deposited to the fund shall be used to contract with the Oklahoma State Bureau of Investigation and the State Auditor and Inspector for the investigations, reviews and audits provided for herein.  Any full-time employees retained by the Oklahoma State Bureau of Investigation or the State Auditor and Inspector for the purpose of performing duties pursuant to such contracts shall not be counted against any limits on full-time employees for such agencies.  Monies deposited to the fund may also be used to cover losses the Commission experiences due to nonfeasance, misfeasance, or malfeasance of a lottery retailer.  In addition, the funds may be used to purchase blanket bonds covering the Commission against losses from all retailers.  At the end of each fiscal year, the Commission shall pay to the Oklahoma Education Lottery Trust Fund any amount in the Fidelity Revolving Fund which exceeds the budgeted expenses from the fund for the next fiscal year plus Five Hundred Thousand Dollars ($500,000.00), and such funds shall be commingled with and treated as net proceeds from the lottery.

B.  A reserve account may be established as a general operating expense to cover amounts deemed uncollectible.  The Commission shall establish procedures for minimizing any losses that may be experienced for the foregoing reason and shall exercise and exhaust all available options in such procedures prior to amounts being written off to this account.

C.  Except as otherwise provided in subsection D of this section, the Commission shall require all retailers to post an appropriate bond, as determined by the Commission, using an insurance company acceptable to the Commission.

D.  1.  In its discretion, in lieu of the bond required in subsection C of this section, the Commission may allow a retailer to deposit and maintain with the Commission securities that are interest bearing or accruing.  Securities eligible under this paragraph shall be 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 issued by an agency or instrumentality of the United States government.

2.  The securities shall be held in trust in the name of the Oklahoma Lottery Commission.

Added by Laws 2003, c. 58, § 20, adopted at election held on Nov. 2, 2004.  Amended by Laws 2012, c. 304, § 28.