316 Neb. Admin. Code, 35, § 301 - Nonprofit Organizations, Nonprofit Corporations, Volunteer Fire Companies, or Volunteer First - aid, Rescue, Ambulance, or Emergency Squads - Qualification for a License to Conduct a Lottery by the Sale of Pickle Cards

301.01 A nonprofit organization or nonprofit corporation holding a certificate of exemption under Internal Revenue Code (IRC) § 501(c) ( 3), (4), (5), (7), (8), (10), or (19), a volunteer fire company, or a volunteer first - aid, rescue, ambulance, or emergency squad (eligible organization) may apply for a license to conduct a lottery by the sale of pickle cards.

301.01A Any eligible organization applying for a license to conduct a lottery by the sales of pickle cards must be incorporated or established in this state. An organization incorporated in a foreign state holding a certificate of authority to conduct affairs, or which has domesticated in Nebraska, does not qualify for a license.

301.01B An eligible organization must have been in existence in this state for five years immediately preceding its application for a license and have had an active, bona fide membership engaged in furthering a lawful purpose during that period. This requirement does not apply to a volunteer fire company, a volunteer first - aid, rescue, ambulance, or emergency squad, or a nonprofit corporation whose primary purpose is to support a volunteer fire company, or a volunteer first - aid, rescue, ambulance, or emergency squad.

301.01C When applying for its initial license, a nonprofit organization or nonprofit corporation holding a certificate of exemption under IRC § 501(c) (3), (4), (5), (7), (8), (10), or (19) (organization) is considered exempt under IRC § 501 if it provides a copy of the exemption ruling or exemption determination letter issued by the Internal Revenue Service (IRS). Subsequent applications to renew an existing license to conduct a lottery by the sale of pickle cards are not required to be accompanied by the proof of exemption unless the circumstances under which the exemption was issued, or the nature of the organization have changed substantially so that the exempt status may no longer be applicable. The Department may specifically request the exemption determination documentation on any subsequent application.

301.01C(1) An organization may be exempt under a group exemption letter issued by the IRS. A group exemption letter is a ruling or determination letter issued to a parent organization or parent corporation (parent), recognizing on a group basis, the exemption under IRC § 501(c) of the subordinate entities on whose behalf the parent has applied for recognition of exemption. A parent is an organization or corporation that has one or more subordinates under its general supervision or control. A subordinate is a chapter, local, post, or unit of a parent (for example, the American Legion, Veterans of Foreign Wars, and Fraternal Order of Eagles). Under these circumstances, a subordinate organization or corporation applying for an initial license must provide the Department with a copy of the group exemption letter issued to the parent or indicate the Group Exemption Number.

301.01C(2) An organization defined in Neb. Rev. Stat. § 21 - 608 which is chartered in Nebraska under a state, grand, supreme, national, or other governing body, may use the charter date of its parent to satisfy the five - year existence requirement.

301.01C(3) This requirement does not apply to a volunteer fire company, or a volunteer first - aid, rescue, ambulance, or emergency squad which is applying for its initial license.

301.02 Additional Documentation

To verify the applicant organization's five - year existence, the Department may require the organization to provide additional documentation about the organization which includes, but is not limited to, any of the following:

301.02A Dated bylaws of the organization;

301.02B Dated Articles of Incorporation of the organization;

301.02C Dated minutes of the organization's meetings;

301.02D Dated charter of the organization; or

301.02E Other dated documents of the organization which would provide evidence of the organization's existence and the purposes for which it was organized.

301.02F This requirement does not apply to a volunteer fire company, or a volunteer first - aid, rescue, ambulance, or emergency squad.

301.03 Charity or Community Betterment Documentation

The Department may also require the organization to produce evidence of charitable or community betterment activities conducted by the organization's membership during the five - year period preceding the application. Some examples of evidence include, but are not limited to, the following:

301.03A Filings with any governmental agencies regarding charitable activities of the organization;

301.03B Internal documents, including membership lists, dues statements, minutes of meetings of directors of the organization, copies of corporate resolutions of the organization, or correspondence and memoranda relating to nonprofit, charitable activities conducted by the organization or its membership;

301.03C Documents regarding day to day activities of the organization, for example, bank account statements, bills, receipts, leases, documents affecting title to property, ledgers, account books, tax returns, employee lists, or any other documents pertaining to the organization's administrative activities;

301.03D The names, addresses, and telephone numbers of persons, firms, and organizations the organization has dealt with in conducting its activities; or

301.03E Other documentation showing participation by the organization and its membership in charitable or community betterment activities.

301.03F This requirement does not apply to a volunteer fire company, or a volunteer first - aid, rescue, ambulance, or emergency squad

301.04 Limitations on Licenses Between Related Eligible Organizations

Each eligible organization wishing to conduct a lottery by the sale of pickle cards must obtain its own license to do so. Related eligible organizations may not use a license to conduct a lottery by the sale of pickle cards obtained by one licensee to conduct a lottery by the sale of pickle cards on behalf of one or more related eligible organizations. This does not preclude a licensed organization from becoming licensed as a pickle card operator to sell pickle cards on behalf of another licensed organization. In this instance, the eligible organization seeking the operator's license must meet the statutory requirements for obtaining a license as a pickle card operator. Related eligible organizations, each conducting separate lotteries by the sale of pickle cards, must obtain separate licenses to do so. For the purposes of this section, a related eligible organization means:

301.04A An eligible organization affiliated with, and organized in accordance with, the bylaws and regulations formulated by a companion or parent eligible organization; and

301.04B At least 75% of the members of one eligible organization are either: members of a parent or companion eligible organization; spouses of members of its parent or companion eligible organization; or are the parents, children, brothers, sisters, grandparents, or grandchildren of a member of the parent or companion eligible organization.

301.05 The Department may also require the organization seeking a license to produce evidence of charitable or community betterment activities conducted by the organization's membership during the five-year period preceding the application. Some examples of such evidence may include, but are not limited to the following:

301.05A Filings with any governmental agencies regarding charitable activities of the organization;

301.05B Internal documents, including membership lists, dues statements, minutes of meetings of directors of the organization, copies of corporate resolutions of the organization, and/or correspondence and memoranda relating to nonprofit, charitable activities conducted by the organization or its membership;

301.05C Documents regarding day to day activities of the organization such as bank statements of organization bank accounts, bills, statements, receipts, leases, documents affecting title to property, ledgers, account books, tax returns, employee lists, and/or any other documents pertaining to the organization's administrative activities;

301.05D The names, addresses, and telephone numbers of persons, firms, and organizations with whom the nonprofit organization applying for a license has dealt in conducting its activities; or

301.05E Other documentation showing participation by the organization and its membership in charitable or community betterment activities.

Notes

316 Neb. Admin. Code, 35, § 301

Neb. Rev. Stat. §§ 9 - 321.03, 9 - 326, and 9 - 327. July 3, 2013.