1. (a) Vending machine commissions shall be collected and disbursed from vending machines located on federal property as specified in 34 Code of Federal Regulations parts 395.8 and 395.32, unless the Business Enterprises Program for the Blind, herein BEP, has entered into a contract with the organization operating the vending machines on federal property.

2. (b) Commissions shall be collected from vending machines located on all state property as follows:

   1. (1) A commercial vending company operating vending machines on state property, where there is a BEP vending facility, shall pay commissions in accordance with a contract with the Department to BEP on a monthly basis. All such commissions from these vending machines shall be paid to the BEP for disbursement to the vendor. Vending machine commissions shall be reported by the vendor on the DR 478, Vendor's Monthly Operating Report (Rev. 06/16), incorporated by reference herein, when the commissions are received by the vendor.

      1. (A) Vending machine income received, pursuant to (b)(1) herein, must be forwarded to the appropriate vendor within 30 days of receipt by the BEP.
   2. (2) A commercial vending company operating vending machines on state property where there is no BEP vending facility shall enter into a contract with the Department and shall pay commissions from these vending machines to the BEP. These commissions shall be deposited into the Vending Machine Trust Fund and identified as “Unassigned Vending Machine Income.” Vending commissions received under this subsection shall be used for the purposes specified in Welfare and Institutions Code sections 19630(d) and (g), title 20 United States Code section 107d-3(c), 34 Code of Federal Regulations part 395.8(c), and subject to a vote of the vendors.
3. (c) This section does not apply to machines operated as of January 1, 1978, on state property by employee-operated, non-profit organizations.

4. (d) A vendor may be given approval by the BEP to contract with a private vending machine company for the operation of vending machines on-site at his or her vending facility if the vending machines are not owned by the BEP.

   1. (1) Such vending machine income shall be reported on the DR 478, Vendor's Monthly Operating Report (Rev. 06/16), incorporated by reference herein, as part of the net proceeds for the month in which the income was received.
   2. (2) A vendor shall not contract with a private vending machine company to operate vending machines purchased and owned by the BEP.

5. (e) The BEP may authorize a vendor to lease or purchase vending machines, pursuant to the conditions contained in section 7218 in these regulations.

   1. (1) Sales from leased or purchased machines shall be reported as part of gross receipts. Lease payments shall be the responsibility of the vendor and included as an expense item.
   2. (2) The cost of the vending machine(s) may be amortized pursuant to Section 7218 of these regulations. (f) The BEP shall provide the California Vendors Policy Committee, herein CVPC, with an annual accounting of the unassigned vending machine income collected during the previous calendar year, and the amount of unassigned vending machine income deposited into the vendor retirement account. This accounting shall be provided on or before April 15th of the subsequent calendar year.

Note: Authority cited: 20 USC Section 107b(5); 34 CFR Section 395.4; and Sections 19006, 19016 and 19639, Welfare and Institutions Code. Reference: 20 USC 107d-3; 34 CFR Sections 395.8 and 395.32; and Sections 19011 and 19630, Welfare and Institutions Code.

History

1. Renumbering of former section 7225 to section 7213.3 and amendment of Note filed 2-4-93; operative 3-8-93 (Register 93, No. 6).

2. New article 8 heading and renumbering and renumbering of former section 7220 to section 7225 and amendment of Note, and renumbering of former section 7225 to section 7213.3 filed 2-4-93; operative 3-8-93 (Register 93, No. 6).

3. Amendment of section heading, repealer and new section and amendment of Note filed 9-22-2009; operative upon the approval of the Secretary of the United States Department of Education, in accordance with title 34, Code of Federal Regulations, section 395.4(a) (Register 2009, No. 39).

4. Approved by the Secretary of the United States Department of Education in accordance with section 395.4(a) of title 34 of the Code of Federal Regulations on 6-2-2010; operative 9-15-2010 pursuant to section 7210(b)(2) of title 9 of the California Code of Regulations (Register 2010, No. 39).

5. Amendment of subsections (b)(1) and (d)(1) filed 10-18-2017; operative upon approval of the Secretary of the United States Department of Education in accordance with title 34 of the Code of Federal Regulations section 395.4(a) (Register 2017, No. 42).