Lawmakers send gov charities gambling fund-raisers bill
NASHVILLE (AP) — Lawmakers sent Gov. Phil Bredesen legislation Monday night that would allow Tennessee charities to have raffles and other gambling fund-raisers this year.
A compromise was reached last week by Senate and House members of a conference committee. Their report was adopted by the full chambers with little discussion.
Such fund-raisers have been outlawed since 1989, when the attorney general ruled they violated the state constitution’s ban on lotteries. However, a statewide vote in 2002 to remove that prohibition and allow a state lottery also authorized charitable games to resume.
The bill expressly prohibits casino games and bingo because lawmakers are hoping to prevent another “Rocky Top” scandal.
Investigators found in the late 1980s that unscrupulous third-party bingo operators were using state charters for legitimate Tennessee charities to run gambling operations.
Bredesen — who can sign, veto or let the bill become law without his signature — said he was satisfied with what he knows of the bill.
“The fundamental changes that I wanted, to get the third-party players out of the mix, require money to go to the non-profits, make some specifications as to what legitimate non-profits were and not just shells, I’m satisfied those basics have been taken care of,” Bredesen said.
“I think we’ll have a good bill that is not going to have the problems we had 20 years ago in Tennessee.”
Sen. Jim Kyle, D-Memphis, who sponsored the bill, said “if anything it is overprotective. For each possible option, the Legislature chose the most stringent.”
He said he hopes Bredesen will sign the bill later this week, so charities can resume the games this year. Several — including St. Jude Children’s Research Hospital and the Boys and Girls Clubs in Knoxville — have been pushing hard for the bill.
The hospital raises a lot of money by raffling off houses, but has been unable to do so in Tennessee. The Boys and Girls Clubs plan to resume their rubber duck races on the Tennessee River.
They’ll have until April 20 to apply, then the secretary of state’s office has until May 4 to determine which charities are eligible. Then lawmakers must vote by a two-thirds majority for the list of eligible charities.
Senators approved the bill 23-6; the House vote was 63-33.
A look at the bill allowing charity gambling fund-raisers
Some details of the legislation sent Monday night to Gov. Phil Bredesen that would allow charities to host gambling fund-raisers:
— Charities with the 501(c)3 IRS designation have until April 20 to apply to the Secretary of State’s office, which will determine whether they are eligible and provide a list to lawmakers by May 4.
— Legislators must vote by a two-thirds majority to approve that list in order for the charities to hold a fund-raising game of chance this year. Such a list must be approved each year.
— Charities can have raffles, cakewalks, rubber duck races and other such games, but are expressly prohibited from having casino games or bingo.
— At least 25 percent of gross proceeds from an event must be used for “charitable purposes.”
— Charities must run the events themselves; third-party operators are expressly prohibited.
— No charity can have more than one event per year, except that charities with a physical presence in more than one of the state’s three grand divisions can have simultaneous events in each area on the same day.
— Total value of prizes for each annual event is $250,000, excluding real property. For multiple location events, the limit is $150,000.
— No more than two events per month can be held at the same location in a county.
— Goods and services can not be purchased or leased from directors, officers or employees of a charity.
— The secretary of state’s office is authorized to investigate operations of participating charities and to assess civil penalties of up to $50,000.
The Tennessee Bureau of Investigation has jurisdiction concerning criminal violations and reports of official misconduct.
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On the Net:
See Senate bill 3212/House bill 3250 at http://www.legislature.state.tn.us/