2018 Tennessee Code
Title 3 - Legislature
Chapter 17 - Tennessee Nonprofit Gaming Law
§ 3-17-103. Annual events -- Application -- Organizational requirements and restrictions -- Proceeds -- Omnibus list of qualifying applicants -- Submission of financial accounting.
(a) (1) (A) (i) A nonprofit organization seeking to operate an annual event for the benefit of that organization located in this state shall submit an annual event application to the secretary by January 31 each year for the annual event period beginning July 1 of that calendar year and ending June 30 of the subsequent calendar year.
(ii) In addition to the submission deadline described in subdivision (a)(1)(A)(i), a 501 (c)(3) organization seeking to operate an annual event for the benefit of that organization located in this state may submit an annual event application to the secretary within three (3) calendar days after April 14, 2015, for the annual event period beginning July 1, 2015, and ending June 30, 2016.
(iii) In addition to the submission deadline described in subdivision (a)(1)(A)(i), a nonprofit organization seeking to operate an annual event for the benefit of that organization located in this state may submit an annual event application to the secretary within five (5) calendar days after March 20, 2018, for the annual event period beginning July 1, 2017, and ending June 30, 2018.
(B) For purposes of the submission deadline, the postmark date on the annual event application is deemed to be the date of submission; provided, that, for the purposes of the submission deadline pursuant to subdivisions (a)(1)(A)(ii) and (iii), an annual event application is not deemed to be submitted to the secretary until in the physical possession of the secretary as evidenced by the secretary's date and time endorsement on such documentation.
(2) The organization shall be a nonprofit organization as defined in § 3-17-102.
(3)
(A) A nonprofit organization, including chapters or affiliates operating under the same tax exemption, shall not operate more than one (1) annual event within any twelve-month period beginning July 1 and ending June 30.
(B)
(i) An annual event shall be operated at a single location within a county in Tennessee where the nonprofit organization has a physical presence or in a county that is contiguous to a county where the organization maintains a physical presence, as disclosed pursuant to § 3-17-104(e)(1), or a nonprofit organization may operate an annual event on the same day in one (1) county where it has a physical presence in each grand division of the state as described in §§ 4-1-201 -- 4-1-204. Such location, or locations, shall be listed as the location of the annual event in the annual event application pursuant to § 3-17-104(e)(4).
(ii) Nothing in this subdivision (a)(3)(B) shall be construed to limit the ability of an organization to sell tickets, shares, chances or similar records for an authorized annual event in any political subdivision of this state.
(iii) No more than two (2) annual events per calendar month shall be held at the same location in each county during any annual event period. For the purpose of this subdivision (a)(3)(B), "location" means a single physical site in a county identified by an address or unique descriptive feature.
(C) Notwithstanding any provision of this chapter to the contrary, a nonprofit organization authorized to conduct an annual event may change the location of the annual event if the location listed on the annual event application is subsequently unavailable during the time in which the annual event was to be conducted and if the following conditions are satisfied:
(i) Written notice is given to the secretary of state, Tennessee bureau of investigation and district attorney general for the judicial district in which the annual event is to be conducted, stating that the listed location is unavailable, the reason for unavailability, and the new location;
(ii) Sufficient public notice is given by means of posting notice on the organization's web site, if any, and by publication in a newspaper of general circulation in the county in which the annual event will be conducted; and
(iii) The new location complies with subdivision (a)(3)(B)(iii).
(4) (A) A nonprofit organization may operate an annual event in conjunction with one (1) or more nonprofit organizations under the following circumstances:
(i) Each nonprofit organization files an independent annual event application including, but not limited to, the appropriate application fee, in accordance with this chapter;
(ii) Each nonprofit organization submits, with the annual event application, a joint statement of authorization indicating the intention to conduct a joint annual event and listing all organizations participating in such joint event; and
(iii) Each nonprofit organization applicant is in compliance with this chapter and is eligible for inclusion on the omnibus list.
(B) If one (1) or more nonprofit organizations are not eligible for inclusion on the omnibus list, or fail to timely file an annual event application, all applicants for a joint annual event shall be excluded from the omnibus list. No provision of this subdivision (a)(4) shall be construed as authorizing a nonprofit organization participating in a joint event to operate, participate or conduct, jointly or otherwise, more than one (1) annual event within any twelve-month period beginning July 1 and ending June 30.
(5) (A) (i) Except as otherwise provided in this subdivision (a)(5), a nonprofit organization authorized to conduct an annual event pursuant to this chapter shall not employ, contract with, or otherwise utilize the services of any person including, but not limited to, any management company, consultant or other entity, to manage, conduct or operate any aspect of an annual event. An authorized annual event shall be managed, conducted and operated only by bona fide directors, officers or employees of a nonprofit organization who:
(a) Manage, conduct or operate only one (1) such annual event in any twelve-month period beginning on July 1 and ending on June 30 each year for any nonprofit organization; and
(b) Receive no compensation for duties associated with the annual event from the proceeds of the annual event except compensation otherwise due to such person in the normal course of business. In no event shall such person's normal compensation, or any other form of compensation or benefit including, but not limited to, any bonus payment or any other form of supplemental payment, be based upon or determined by reference to a percentage of the proceeds derived from the operation of the annual event, the number of people participating in the annual event or any other factor related to the annual event.
(ii) Unpaid volunteer personnel, including members of a nonprofit organization, may be utilized by a nonprofit organization to manage, conduct or operate an annual event.
(B)
(i) Nothing in this subdivision (a)(5) or § 39-17-654(b) shall be construed as prohibiting a nonprofit organization from purchasing, leasing or accepting donations of prizes, facilities, locations, advertising services, printing services, telephone services and any records, devices or other supplies necessary to conduct an authorized annual event; provided, that the compensation paid for such purchases or leases shall not be at a price greater than fair market value and shall not be based on a percentage of the proceeds of an annual event or by any other contingency agreement based on the proceeds of an annual event.
(ii) No nonprofit organization shall purchase or lease prizes, facilities, locations, advertising services, printing services, telephone services and any records, devices or other supplies necessary to conduct an authorized annual event from any director, officer or employee of the nonprofit organization.
(6)
(A) Except as provided in subdivision (a)(6)(B), a nonprofit organization authorized to conduct an annual event pursuant to this chapter shall return all of the gross proceeds, less any amount expended pursuant to subdivision (a)(5)(B), to the organization for the purposes or programs described in § 3-17-104(e)(6), but in any event, a nonprofit organization shall return at least twenty-five percent (25%) of gross proceeds to the organization for the purposes or programs described in § 3-17-104(e)(6).
(B) A nonprofit organization that fails to return at least twenty-five percent (25%) of gross proceeds from the annual event to the purposes or programs described in § 3-17-104(e)(6) in any year shall file notice with the secretary on a form prescribed by the secretary. If, in the sound discretion of the secretary, the organization was not at fault in failing to return the required percentage, the organization shall be allowed to file an annual event application for the next annual event period; provided, that if an organization fails to return the required percentage in two (2) consecutive annual event periods, the organization shall be disqualified from filing annual event applications for a period of five (5) years. If an organization is not permitted by the secretary to file an event application pursuant to this subdivision (a)(6)(B), the organization may request a review pursuant to the procedure set forth in § 3-17-105(g).
(C) As used in this subdivision (a)(6), gross proceeds shall not include revenue disclosed as the fair market value of any donated prizes, goods and services.
(7) A nonprofit organization seeking authorization to conduct an annual event pursuant to this chapter shall be in compliance with the registration requirements for charitable organizations set forth in title 48, chapter 101, part 5, or be exempt from annual registration pursuant to § 48-101-502.
(b)
(1) The secretary shall review all annual event applications timely submitted and shall transmit an omnibus list of qualifying applicants to the clerk of the senate and the clerk of the house of representatives in an electronic format, as is required by the respective clerks, on or before March 1 of each year. The omnibus list shall include, at a minimum, the name of the nonprofit organization, the name of the event, the type of lottery game, the event date for the event and the location or locations of the event. The omnibus list shall list nonprofit organizations alphabetically by county in which the annual event is proposed to be operated.
(2) In addition to the omnibus lists transferred to the clerk of the senate and the clerk of the house of representatives pursuant to subdivision (b)(1), the secretary shall transfer an additional omnibus listing of any organizations approved pursuant to subdivision (a)(1)(A)(ii) for the annual event period beginning July 1, 2015, and ending June 30, 2016. The list shall be transferred in a manner consistent with subdivision (b)(1) by twelve o'clock (12:00) noon central daylight time (CDT) within five (5) calendar days after April 14, 2015.
(3) In addition to the omnibus lists transferred to the clerk of the senate and the clerk of the house of representatives pursuant to subdivision (b)(1), the secretary shall transfer an additional omnibus listing of any organizations approved pursuant to subdivision (a)(1)(A)(iii) for the annual event period beginning July 1, 2017, and ending June 30, 2018. The list must be transferred in a manner consistent with subdivision (b)(1) by twelve o'clock (12:00) noon central daylight time (CDT) within seven (7) calendar days after March 20, 2018.
(c) Upon authorization by the general assembly, the clerk of the house last approving such authorization shall transmit a copy of such authorization to the secretary and to each district attorney general. The secretary shall transmit such authorization to each authorized nonprofit organization at the mailing address listed in such organization's annual event application; provided, that in the case of an organization with multiple chapters, branches or affiliates in Tennessee, such authorization shall be transmitted only to the primary mailing address of the applicant. Such authorization shall be posted on the web site of the secretary with such additional information as the secretary deems appropriate. At a minimum, the secretary shall post the name of the nonprofit organization, the name of the event, the type of lottery game, the event date for the event and the location, or locations, of the event.
(d) (1) (A) An authorized annual event shall be held within twenty-eight (28) calendar days of the event date listed in the annual event application; provided, that nothing in this subdivision (d)(1) shall be construed as allowing two (2) annual events in any one-year period or as allowing a nonprofit organization to operate an annual event at authorized multiple locations on separate days.
(B) A nonprofit organization shall give notice to each chief law enforcement officer of the county or municipality in which the annual event shall be conducted one hundred thirty (130) days prior to the event date listed in the annual event application; provided, that if the event date is within one hundred thirty (130) days from notification of authorization to conduct an annual event, the nonprofit organization shall immediately, upon receipt of such notification and prior to the commencement of selling any tickets, shares, chances or similar records, give notice to the chief law enforcement officer of each county or municipality in which the annual event shall be conducted. In accordance with subdivision (d)(1)(A), if the actual event date is different than the event date listed in the annual event application, a nonprofit organization shall give an additional notice to each chief law enforcement officer of the county or municipality in which the annual event shall be conducted prior to conducting the annual event. For the purposes of this subdivision (d)(1)(B), "notice" means a letter sent by certified mail, or by actual physical delivery of a letter to the chief law enforcement officer or such officer's designee, containing, at a minimum, the following information:
(i) The name of the nonprofit organization;
(ii) The name of the event;
(iii) The location of the event, including the physical address where the annual event will be conducted;
(iv) The type of lottery game to be conducted;
(v) The event date for the event listed in the annual event application;
(vi) If applicable, the actual event date for the annual event if different than the event date listed in the annual event application;
(vii) If applicable, additional locations of the event, including the physical address where the annual event will be conducted, if such event will be operated at authorized multiple locations;
(viii) The name, address and telephone number of the nonprofit organization's chair, president or chief administrative officer; and
(ix) If applicable, the name, address and telephone number of the person responsible for the operation of the annual event for the nonprofit organization, if different than the organization's chair, president or chief administrative officer.
(2) Except as provided in subdivision (d)(3), upon receipt of authorization from the secretary pursuant to subsection (c), a nonprofit organization may conduct all necessary activities for such event including, but not limited to, planning, advertising, promoting, printing of materials and tickets, shares, chances or similar records and the transportation of such records and other devices.
(3) A nonprofit organization, or any person authorized pursuant to subdivision (a)(5)(A) on behalf of the nonprofit organization, may sell tickets, shares, chances or similar records on the actual date of the annual event and for one hundred twenty (120) days immediately preceding the event date listed in the application and for any period after the event date listed in the annual event application but prior to the actual date of the annual event if such actual date is after the event date in accordance with subdivision (d)(1). No person shall sell tickets, shares, chances or similar records outside of the period authorized by this subdivision (d)(3). Notwithstanding any provision of this chapter to the contrary, the secretary shall establish rules and regulations concerning modification of the actual dollar amounts at which a ticket, share, chance or other similar record shall be sold by a nonprofit organization authorized to conduct an annual event; provided, that only one (1) such modification shall be made prior to the sale of any ticket, share, chance or other similar record and only in amounts within fifty dollars ($50.00) of the actual dollar amounts disclosed pursuant to § 3-17-104(e)(5). Tickets, shares, chances or other similar records may be sold at a single price or at different value levels or tiers. If tickets, shares, chances or other similar records are sold at different value levels or tiers, then the organization shall keep a written or electronic record of each sale, which shall include the name, the amount paid, the mailing address, and the contact information of the purchaser for the purpose of issuing refunds if a cancellation of the annual event occurs.
(e)
(1) Within ninety (90) days following the event date listed in the annual event application, a financial accounting as required pursuant to § 3-17-106 shall be submitted by the organization to the secretary.
(2) For purposes of this chapter, the postmark date on the financial accounting shall be considered the date of submission.
(3) The secretary shall post such accounting, or a synopsis of such accounting, on the web page of the secretary.
(f) [Deleted by 2014 amendment, effective July 1, 2014.]
(g)
(1) Notwithstanding any provision of this chapter to the contrary, for the annual event period beginning July 1, 2015, and ending June 30, 2016, a nonprofit organization described in § 501 (c)(19) of the Internal Revenue Code (26 U.S. C. § 501 (c)(19) seeking to operate an annual event for the benefit of that organization located in this state may submit an annual event application to the secretary within three (3) calendar days after April 14, 2015. For purposes of this submission deadline, an annual event application shall not be considered submitted to the secretary until in the physical possession of the secretary as evidenced by the secretary's date and time endorsement on such documentation.
(2) In addition to the omnibus list transferred to the clerk of the senate and the clerk of the house of representatives by March 1, 2015, the secretary shall transfer an additional omnibus list listing any organizations approved pursuant to subdivision (g)(1) for the annual event period beginning July 1, 2015, and ending June 30, 2016. This list shall be transferred in a manner consistent with subsection (b) by twelve o'clock noon central daylight time (CDT) within five (5) calendar days after April 14, 2015.
