(A) The provisions of this section apply to the licensed nonprofit organization which is responsible for the special checking and savings accounts established by this section. The provisions of this section do not apply to the holder of a Class D fair bingo license.

(B) The organization shall control all deposits, transfers, and disbursements from these accounts, including the payment of compensation to the promoter and employees of the promoter or organization working the bingo games.

(C) An organization receiving an annual license to conduct bingo shall establish and maintain one regular checking account designated the "bingo account" and also may maintain an interest-bearing savings account designated the "bingo savings account". All funds derived from the conduct of bingo, less the amount awarded as cash prizes, must be deposited in the bingo account. Other funds may not be deposited in the bingo account, unless there is a deficit, and then both the organization and promoter shall deposit a loan equal to fifty percent of the deficit. If the organization is unable to make the fifty percent contribution, the promoter may deposit one hundred percent of the deficit which the balance must be, at the election of the promoter and with the consent of the nonprofit organization, carried as either a loan or a charitable donation to the organization from the promoter. Each loan to an organization from the promoter must be authorized in writing by a duly authorized officer of the licensed nonprofit organization. The promoter only may have recourse to these loans from the funds in the charitable bingo account. Each loan deposited into the bingo checking account must be accounted for on the quarterly financial reports filed with the department. Detailed information substantiating these loans must be maintained by the organization. Deposits must be made no later than the next business day following the day of the bingo occasion on which the receipts were obtained. All accounts must be maintained in a financial institution in this State.

(D) All expenses related to the charitable bingo operation must be paid from the operations bingo account. Funds from the bingo account must be withdrawn by preprinted, consecutively numbered checks or withdrawal slips, jointly signed by a properly authorized representative of the licensed nonprofit organization and promoter and made payable to a person or organization or by electronic methods or recurring online payments. Electronic payments must be authorized by a duly authorized representative of the licensed nonprofit organization and promoter in writing. Checks must be imprinted with the words "Bingo Account" and must contain the organization's bingo license number on the face of the check. There also must be noted on the face of the check or withdrawal slip the nature of the payment made. No check or slip may be made payable to "cash", "bearer", or a fictitious payee. All checks, including voided checks and slips, must be kept and accounted for.

(E) Funds received by the nonprofit organization from the department as a result of the sale of bingo cards must be deposited into a separate account and maintained separately from bingo funds and the bingo account referenced in this section.

(F) Checks drawn on the bingo account must be for one or more of the following purposes:

(1) payment of necessary and reasonable bona fide expenses incurred and paid in connection with the conduct of bingo;

(2) payment of necessary and reasonable compensation incurred and paid in connection with the conduct of bingo for personnel and promoters managing and conducting the game;

(3) disbursement of net proceeds derived from the conduct of bingo to charitable purposes or the purpose for which the organization was established;

(4) transfer of net proceeds derived from the conduct of bingo to the bingo savings account pending a disbursement to a charitable purpose.

(G) The disbursement of net proceeds on deposit in the bingo savings account to a charitable purpose must be made by transferring the intended disbursement back into the bingo account and then withdrawing the amount by a check drawn on that account as prescribed in this section.

(H) Proceeds given to a person or an organization for a charitable purpose must not be used by the donee:

(1) to pay for services rendered or materials purchased in connection with the conducting of bingo by the donor organization; or

(2) for a cause, an act, or an activity that does not constitute a charitable purpose or other purpose for which the organization was established if the activity is conducted by the donor organization.

(I) Gross proceeds derived from the conduct of bingo must not be commingled with other funds of the licensed organization.

(J) A licensed organization that has stopped conducting bingo and has unexpended bingo funds shall disburse those funds to a charitable purpose or other purposes for which the organization was established within one year after the date it ceases to conduct bingo. However, unexpended funds to be used for a building fund may be retained for this purpose. The organization shall file a report with the department showing the establishment of a building fund, the amount of money from the special account to be retained for that purpose, and other information the department may consider necessary. If the organization is identified as a fictitious charity after originally licensed, any payments due the charity revert to the general fund.

(K) Net proceeds must not be used directly or indirectly by a licensed authorized nonprofit organization to support or oppose a candidate or slate of candidates for public office, to support or oppose a measure submitted to a vote of the people, or to influence or attempt to influence legislation. The records of these accounts are available for inspection, upon demand, by the department.

HISTORY: 1996 Act No. 449, Section 1; 1998 Act No. 340, Section 5; 1998 Act No. 387, Section 7; 2002 Act No. 334, Section 16H, eff October 1, 2002; 2016 Act No. 254 (H.5034), Section 6, eff June 7, 2016.

Effect of Amendment

2016 Act No. 254, Section 6, amended (C) and (D), allowing the promoter to make certain contributions, requiring that all expenses related to the bingo operation must be paid from the operations bingo account, and allowing for electronic payments.