N.Y. Comp. Codes R. & Regs. tit. 9 § 4624.21

Current through Register Vol. 46, No. 43, October 23, 2024

Section 4624.21 - Lawful expenditures

(a) Expenditures solely and directly applicable to games of chance. The expenditures listed in this subdivision do not require the prior approval of the commission and must simply be reported in part B on form GC-7 and GC-7R, where applicable.

(1) Equipment and supplies. Purchase and rental of games of chance equipment, tables and chairs, dice, cards, games of chance currency, etc.

(2) Rent. Rent paid to licensed games of chance lessors.

(3) Services. Janitorial and custodial services, guard service, preparation of GC-7's and GC-7R's and maintaining a monthly bookkeeping system.

(4) License fees. All amounts paid to the municipality. Additional license fees must be reported in part C on form GC-7 and GC-7R, and part B on form GC-7Q.

(5) Other expenses. Printing of games of chance forms; house rules, postage for games of chance purposes; fidelity bonds for persons responsible for games of chance funds; repairs to games of chance equipment; advertising expenses; bank charges, etc.

(b) Expenditures for worthy causes. Expenditures for the following items, which do not require prior commission approval, shall be reported in part E on form GC-7 and part D on forms GC-7Q and GC-7R.

(1) Charitable. Donations to nationally or locally recognized charitable organizations.

(2) Patriotic. Contributions to or participation in patriotic, civic and community projects, such as Veterans' Day activities, Memorial Day and Independence Day observances, memorials, etc.; uniforms, instruments and traveling expenses for bands that participate in civic, patriotic and community activities.

(3) Youth activities. Donations for nationally or locally recognized youth athletic, recreational and civic programs.

(4) Educational. Contributions for open scholarships, where recipients are not limited to children of the licensee, its auxiliary or affiliate and the selection committee is not dominated by members of the licensee, its auxiliary or affiliate; teachers' salaries; exchange student funds; books for libraries and equipment for schools or other educational organizations.

(5) Religious. Contributions or expenditures for religious purposes and activities such as clerics' salaries, maintenance of religious buildings, and the purchase of religious supplies.

(6) Fire-fighting activities and volunteer ambulance corps. Expenditures incurred in providing services in case of fire, accidents, sudden severe illness, public calamity or other emergencies; purchase of vehicles, apparatus, equipment and uniforms; attending training schools and inspections; participation in drills and exhibitions; membership fees of licensee organization in fire-fighting and emergency medical technician associations.

(7) Veterans activities that initiate, perform or foster the provision of services to veterans by encouraging the gathering of such veterans and enable or further the erection or maintenance of facilities for use by such veterans that shall be used primarily for charitable or patriotic purposes or those purposes that shall be authorized by a bona fide organization of veterans, provided however that such proceeds are disbursed pursuant to section 189 of the General Municipal Law and the commission's rules.

(c) Guidelines for all other expenditures. All expenditures must be reasonable, justifiable and directly related to carrying out one or more of the licensee organization's lawful purposes, as defined in section 186, subsection 5 of the General Municipal Law.

(1) An organization exclusively engaged in any of the above enumerated "worthy causes" does not need prior written approval from the commission regarding expenses directly related to carrying out one or more of its lawful purposes, with the exception of those expenses listed in paragraph (4) of this subdivision.#

(2) Regarding certain types of licensee organizations, such as fraternal and service organizations, the commission requires that at least one third of the net profits derived from games of chance be expended for the above enumerated "worthy causes" before any games of chance funds may be disbursed for the licensee organization's operating expenses. This one-third donation rate is calculated on a calendar-year basis and any deficiency will be cumulative. It is incumbent upon each licensee to periodically review its contribution record. If the provisions of this Subtitle are not strictly adhered to, the licensed organization shall be prohibited from disbursing any of its games of chance funds for other than "worthy causes" without obtaining the prior written approval of the commission.

(3) Expenditures requiring no written approval. The following regulations apply to the operating expenses of licensed fraternal and service organizations:

(i) materials and labor for repairs that are necessary for normal maintenance, including electrical, roofing, heating, hardware, paint, lumber, etc. However, such expenditures are limited to $10,000 in the aggregate in a calendar year. Such expenditures, when in excess of $10,000, require prior written permission from the commission;

(ii) janitorial and custodial salaries, including all payroll taxes;

(iii) supplies, such as cleaning materials, brooms, shovels, floor wax, paper supplies, etc.;

(iv) utilities, including light, heat, power and water;

(v) rubbish removal;

(vi) insurance, including fire, workers' compensation, public liability, burglary, robbery and property damage;

(vii) real estate taxes;

(viii) snow removal charges;

(ix) telephone charges;

(x) printing and mailing charges; and

(xi) legal, accounting fees or other professional fees not exceeding $5,000 per calendar year.

(4) Expenditures requiring prior written approval (submit "Application for Permission to Disburse Net Proceeds of Games of Chance" GC-317 to commission's office). Organizations of veterans shall file with the commission a copy of the minutes of the meeting of the membership authorizing any of the expenditures below in lieu of filing a GC-317:

(i) mortgages;

(ii) rent paid by licensee organization for use of property for its activities;

(iii) new buildings, additions, renovations or repairs in excess of $10,000 per calendar year;

(iv) purchase of air conditioning units, furniture, furnishings, office and kitchen equipment and motor vehicles;

(v) repair, maintenance and acquisition of parking lots;

(vi) salaries, other than those authorized in paragraphs (a)(3) and (b)(5) of this section and subparagraph (3)(ii) of this subdivision; and

(vii) legal, accounting or other professional fees exceeding $5,000 per calendar year.

(d) Disapproved expenditures. All types of licensee organizations may not use games of chance funds for the following, except that organizations of veterans shall file with the commission a copy of the minutes of the meeting of membership authorizing any of the expenditures below:

(1) entertainment or social activities for the benefit of members of a licensee organization, its auxiliary or affiliate. At all times it should be borne in mind that the use of games of chance funds for the exclusive benefit of members of the licensee organization, its auxiliary or affiliate is unlawful and prohibited;

(2) welfare, sick or death benefit funds for members and families;

(3) dues and assessments;

(4) gifts or loans to members of licensee organization, its auxiliary or affiliate;

(5) convention expenses for delegates of licensee organization, its auxiliary or affiliate;

(6) any and all expenses connected with bars and the dispensing of alcoholic beverages;

(7) TV or other amusement devices for use of licensee organization, its auxiliary or affiliate;

(8) expenses and salaries connected with other fundraising activities, such as the operation of food service facilities and concessions; or

(9) tickets purchased from profit or not-for-profit organizations, such as raffle or theatre tickets, for use by members.

(e) Interest-bearing accounts.

(1) Pending disbursement, games of chance funds may be transferred from the special games of chance checking account into one or more interest-bearing accounts. The commission allows transfer only into savings accounts, money market accounts and certificates of deposit insured by the U.S. Government, and U.S. Treasury Bills. Monies transferred remain part of the unexpended balance of games of chance funds and any account into which games of chance funds are transferred shall be designated a "special games of chance account." Advance approval by the commission of such transfers is not required, however, a memo covering each transfer shall accompany the appropriate financial statement. Such memo shall reflect the date, check number, amount and a complete description of the account into which the games of chance funds have been transferred, including the bank name, address, telephone number and account number.

(2) No expenditure shall be made directly from an interest-bearing account. The funds must be redeposited into the special games of chance account, and disbursed in accordance with section 4624.9 of this Part.

(3) Establishment of a building fund. Such building fund must be established in accordance with provisions of paragraph (1) of this subdivision. Before the monies in such building fund can be used, it is required that the licensee submit form GC-317 and receive approval from the commission. Organizations of veterans shall file with the commission a copy of the minutes of the meeting of the membership authorizing the establishment of a building fund in lieu of filing a GC-317. The funds must be redeposited into the special games of chance checking account before being disbursed.

(4) All interest earned by interest-bearing accounts shall be considered part of the unexpended games of chance balance and shall be reported at least once a year in part E-4 of form GC-7, part C-3 on form GC-7Q and part D-4 of form GC-7R.

N.Y. Comp. Codes R. & Regs. Tit. 9 § 4624.21