California Code of Regulations
Title 9 - Rehabilitative and Developmental Services
Division 3 - Department of Rehabilitation
Chapter 6 - Business Enterprises Program for the Blind
Article 7.5 - Vending Facility Equipment
Section 7218 - Vendor-Owned Vending Facility Equipment

Universal Citation: 9 CA Code of Regs 7218

Current through Register 2024 Notice Reg. No. 38, September 20, 2024

(a) Vendors may choose to purchase all or part of the equipment for a vending facility, rather than exclusively using equipment owned by the Business Enterprises Program for the Blind, hereafter BEP.

(b) When vendors choose to purchase vending facility equipment, such equipment may be amortized and included as an operating expense when preparing the DR 478, Vendor's Monthly Operating Report (Rev. 06/16), incorporated by reference herein, in accordance with the following:

(1) Vending facility equipment costing less than $1,000 may be charged as an expense during the first month it is in service.

(2) Vending facility equipment costing $1,000 or more but less than $5,000 shall be purchased only with the prior written approval of the BEP Manager or the Supervising Business Enterprises Consultant, hereafter SBEC, and charged as an expense using conventional, straight line depreciation over the first 12 months of service.

(3) Vending facility equipment costing $5,000 or more shall be purchased only with the prior written approval of the BEP Manager or the SBEC. The vendor shall also propose to the BEP Manager or the SBEC, the method for amortizing the cost of the equipment. The prior written approval shall document the method the vendor is to use for amortizing the cost of the equipment

(c) The vendor shall maintain, repair, and replace any vendor-owned vending facility equipment at his or her expense and may include the expense as a cost of doing business when preparing the DR 478, Vendor's Monthly Operating Report (Rev. 06/16).

(d) If the vendor fails to properly maintain, repair, or replace vending facility equipment that the vendor purchased, the BEP shall charge the vendor for the actual costs incurred by the BEP to maintain, repair, or replace the equipment or the BEP shall provide written notice to the vendor that the equipment must be removed from the vending facility within 10 working days at the vendor's expense. The BEP shall send a written invoice to the vendor for the actual costs incurred by the BEP and the vendor shall remit payment to the BEP for the charges by the date stated in the invoice.

(e) The BEP retains the first option to purchase all or part of vendor-owned equipment if vendor wishes to dispose of his or her vendor-owed equipment and vendor moves to another vending facility, his or her vendor license or operating agreement is terminated, or he or she resigns from the vending facility or the BEP. If the BEP declines to purchase all or part of the vendor-owned equipment, the vendor shall remove the vendor-owned equipment at his or her expense within 10 working days of receiving written notice that the BEP declines to purchase the equipment or prior to vacating the facility.

(f) If a vendor has an outstanding financial obligation owed to the BEP for set aside fees, payment for liability or workers' compensation coverage, penalties, or other BEP related matters, the BEP retains the right to the first option to take possession of the vendor-owned equipment and the fair market value of the vendor-owned equipment shall be applied to satisfy all or part of the debt owed to the BEP. If the BEP exercises this option, the vendor shall transfer ownership of the vendor owned equipment to the BEP within five working days of receiving written notice that the BEP is exercising its option.

1. Renumbering of former section 7216 to section 7218 and amendment of NOTE and renumbering of former section 7218 to section 7220 filed 2-4-93; operative 3-8-93 (Register 93, No. 6).
2. New article 7.5 heading, 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).
3. 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).
4. Amendment of subsections (b) and (c) 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).

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 Section 107b(2); 34 CFR Sections 395.3(a)(5) and 395.6; and Section 19011, Welfare and Institutions Code.

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