3-17-103 - Annual events Application Organizational requirements and restrictions Proceeds Omnibus list of qualifying applicants Submission of financial accounting.
3-17-103. Annual events Application Organizational requirements and restrictions Proceeds Omnibus list of qualifying applicants Submission of financial accounting.
(a) (1) (A) A 501(c)(3) 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:
(i) By December 31, 2008, for the annual event period beginning July 1, 2009, and ending June 30, 2010, and by December 31 in subsequent years, for subsequent annual event periods; and
(ii) Notwithstanding any provision of this chapter to the contrary, within fifteen (15) calendar days after May 7, 2009, for the annual event period beginning July 1, 2009, and ending June 30, 2010.
(B) For purposes of the submission deadline, the postmark date on the annual event application shall be considered the date of submission.
(2) The organization shall be a 501(c)(3) organization as defined in § 3-17-102.
(3) (A) A 501(c)(3) 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 501(c)(3) 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(a)(2)(A), or a 501(c)(3) 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(a)(16).
(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 501(c)(3) 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 give 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 501(c)(3) organization may operate an annual event in conjunction with one (1) or more 501(c)(3) organizations under the following circumstances:
(i) Each 501(c)(3) organization files an independent annual event application including, but not limited to, the appropriate application fee, in accordance with the provisions of this chapter;
(ii) Each 501(c)(3) 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 501(c)(3) applicant is in compliance with the provisions of this chapter and is eligible for inclusion on the omnibus list.
(B) If one (1) or more 501(c)(3) 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 501(c)(3) 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 501(c)(3) organization authorized to conduct an annual event pursuant to the provisions of 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 501(c)(3) 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 501(c)(3) 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 501(c)(3) organization, may be utilized by a 501(c)(3) 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 501(c)(3) 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 501(c)(3) 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 501(c)(3) organization.
(iii) [Deleted by 2005 amendment.]
(6) (A) Except as provided in subdivision (a)(6)(B), a 501(c)(3) organization authorized to conduct an annual event pursuant to the provisions of 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(a)(19), but in any event, a 501(c)(3) 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(a)(19).
(B) A 501(c)(3) 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(a)(19) 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 permanently disqualified from filing annual event applications. 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 and appeal pursuant to the procedures set forth in § 3-17-105(g) and (h).
(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.
(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 May 4, 2004, and by March 1 in any subsequent year. The omnibus list shall include, at a minimum, the name of the 501(c)(3) 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 501(c)(3) organizations alphabetically by county in which the annual event is proposed to be operated.
(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, 2009, the secretary shall transfer an additional omnibus list listing any organizations approved pursuant to subdivision (a)(1)(A)(ii) and subsection (f) for the annual event period beginning July 1, 2009, and ending June 30, 2010. 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 thirty (30) calendar days after May 7, 2009.
(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 501(c)(3) 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 501(c)(3) 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 501(c)(3) organization to operate an annual event at authorized multiple locations on separate days.
(B) A 501(c)(3) 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 501(c)(3) 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 501(c)(3) 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 501(c)(3) 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 501(c)(3) 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 501(c)(3) 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 501(c)(3) 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 501(c)(3) organization, or any person authorized pursuant to subdivision (a)(5)(A) on behalf of the 501(c)(3) 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 the provisions of 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 amount at which a ticket, share, chance or other similar record shall be sold by a 501(c)(3) 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 an amount within fifty dollars ($50.00) of the actual dollar amount disclosed pursuant to § 3-17-104(a)(14)(B).
(e) (1) Within ninety (90) days following the event date listed in the annual event application, a financial accounting as required pursuant to the provisions of § 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) (1) Notwithstanding any provision of this chapter to the contrary, a 501(c)(3) organization seeking to operate an annual event for the benefit of that organization located in this state that does not intend to raise gross revenue from the annual event exceeding five thousand dollars ($5,000) shall submit an annual event application to the secretary:
(A) By December 31, 2008, for the annual event period beginning July 1, 2009, and ending June 30, 2010, and by December 31 in subsequent years, for subsequent annual event periods; and
(B) Notwithstanding any provision of this chapter to the contrary, within fifteen (15) calendar days after May 7, 2009, for the annual event period beginning July 1, 2009, and ending June 30, 2010.
(2) For purposes of the submission deadline provided in subdivision (f)(1)(A), 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.
(3) For purposes of the submission deadline provided in subdivision (f)(1)(B), the postmark date on the annual event application shall be considered the date of filing.
[Acts 2004, ch. 476, § 2; 2004, ch. 620, §§ 1-3; 2004, ch. 890, § 1; 2005, ch. 207, §§ 1-8; 2006, ch. 508, §§ 1-3; 2007, ch. 18, §§ 1-8; 2008, ch. 997, § 2; 2009, ch. 177, §§ 2-5.]