(A) At the execution of the contract with the commission, a lottery vendor shall post a performance bond or letter of credit from a bank or credit provider acceptable to the commission in an amount determined by the commission for that particular bid or contract. Instead of the bond, a lottery vendor, to assure the faithful performance of its obligations, may deposit and maintain with the commission securities that are interest bearing or accruing and that are rated in one of the three highest classifications by an established nationally recognized investment rating service. Securities eligible pursuant to this section are limited to:

(1) certificates of deposit issued by solvent banks or savings associations which are organized and existing under the laws of this State or under the laws of the United States and are approved by the commission;

(2) United States bonds, notes, and bills for which the full faith and credit of the government of the United States is pledged for the payment of principal and interest; and

(3) corporate bonds approved by the commission. The corporation that issued the bonds must not be an affiliate or subsidiary of the depositor. The securities must be held in trust and must have at all times a market value equal at least to the full amount estimated to be paid annually to the lottery vendor under contract.

(B) Each lottery vendor must be qualified to do business in this State and shall file appropriate tax returns as provided by the laws of this State. All contracts pursuant to this section are governed by the laws of this State.

(C) A contract must not be let with a lottery vendor in which a public official has an ownership interest unless the letting of the contract complies with Section 8-13-775.

(D) Procurement contracts must be handled in accordance with the South Carolina Consolidated Procurement Code.

(E) In all contracts entered into in connection with this chapter, the resident lottery vendor preference provided in Section 11-35-1524 must apply to procurements made by the commission, except that the following additional provisions apply:

(1) the preference also must apply to the procurement of services, as defined in Section 11-35-310(29), and advertising;

(2) with respect to the procurement of services or advertising, the definition of the term "resident lottery vendor" must be modified as provided in this item. Section 11-35-1524(B)(6)(c) does not apply to a lottery vendor providing services or advertising. Instead of Section 11-35-1524(B)(6)(c), the lottery vendor shall provide services or advertising which are representative of the general type of services or advertising on which the bid is submitted;

(3) with respect to the procurement of services or advertising, instead of providing the certifications provided in Section 11-35-1524(C), the lottery vendor shall certify in writing in the bid:

(a) that he is a resident of the State;

(b) the services or advertising is available; and

(c) the cost of the services or advertising is not unreasonable.

HISTORY: 2001 Act No. 59, Section 2.