§ 23-115-502 - Vendor -- Performance bond or letter of credit.
23-115-502. Vendor -- Performance bond or letter of credit.
(a) (1) At the execution of the major procurement contract with the Arkansas Lottery Commission, each vendor shall post a performance bond or letter of credit from a bank or credit provider acceptable to the commission in an amount as deemed necessary by the commission for that particular bid or major procurement contract.
(2) In lieu of the bond, to assure the faithful performance of its obligations, a vendor may deposit and maintain with the commission securities that are:
(A) Interest bearing or accruing; and
(B) Rated in one (1) of the three (3) highest classifications by an established, nationally recognized investment rating service.
(3) Securities eligible under this section are limited to:
(A) Certificates of deposit in an amount fully insured by the Federal Deposit Insurance Corporation issued by solvent banks or savings associations, if the solvent banks or savings associations are:
(i) Approved by the commission; and
(ii) Organized and existing under the laws of this state or under the laws of the United States;
(B) United States Government bonds, notes, and bills for which the full faith and credit of the United States Government is pledged for the payment of principal and interest;
(C) Federal agency securities by an agency or instrumentality of the United States Government; and
(D) (i) Corporate bonds approved by the commission.
(ii) The entity that issued the bonds shall not be an affiliate or subsidiary of the depositor.
(4) The securities shall be held in trust and shall at all times be in an amount as deemed necessary by the commission for the particular bid or major procurement contract.
(b) (1) Each vendor shall be qualified to do business in this state and shall file appropriate tax returns as provided by the laws of this state.
(2) All major procurement contracts under this section shall be governed by the laws of this state except as provided in this chapter.