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LEGISLATIVE BILL 1204
Approved by the Governor April 2, 2024
Introduced by Cavanaugh, J., 9.
A BILL FOR AN ACT relating to law; to amend sections 9-402, 9-422, 9-426,
9-427, 9-429, 9-502, 9-511, 9-823, 28-1105.01, 28-1422, 28-1429,
53-123.01, 59-1523, 77-4003, 77-4005, 77-4006, 77-4012, 77-4013, 77-4017,
77-4019, and 77-4020, Reissue Revised Statutes of Nebraska, sections
28-1418.01, 28-1420, 28-1425, and 84-712.05, Revised Statutes Cumulative Supplement, 2022, and sections 53-101, 53-103, 53-123.16, 77-4001, and
77-4025, Revised Statutes Supplement, 2023; to define and redefine terms;
to change provisions relating to the Nebraska Lottery and Raffle Act and the Nebraska Small Lottery and Raffle Act; to provide for the anonymity of
winners of certain prizes under the State Lottery Act; to prohibit actions relating to unlicensed tobacco products manufacturers, wholesalers, and retailers; to change provisions relating to issuance, revocation, and forfeiture of certain tobacco licenses; to prohibit conduct relating to
controlled or counterfeit controlled substances; to prohibit delivery sales of electronic nicotine delivery systems and provide requirements for packaging and advertising of such systems; to provide requirements for e-
liquid containers; to authorize a holder of a microdistillery license and
a holder of a manufacturer's license to operate a rickhouse under the Nebraska Liquor Control Act; to require certification of manufacturers of
electronic nicotine delivery systems under the Tobacco Products Tax Act;
to provide duties for such manufacturers; to provide powers and duties for the Tax Commissioner; to provide penalties; to change public records disclosure provisions as prescribed; to harmonize provisions; to eliminate provisions relating to a small lottery; to repeal the original sections;
and to outright repeal section 9-510, Reissue Revised Statutes of
Nebraska.
Be it enacted by the people of the State of Nebraska,
Section 1. Section 9-402, Reissue Revised Statutes of Nebraska, is amended to read:
9-402 (1) The purpose of the Nebraska Lottery and Raffle Act is to protect the health and welfare of the public, to protect the economic welfare and interest in certain lotteries and raffles with gross proceeds greater than fifteen one thousand dollars and certain raffles with gross proceeds greater than five thousand dollars, to insure that the profits derived from the operation of any such lottery or raffle are accurately reported in order that their revenue-raising potential be fully exposed, to insure that the profits are used for legitimate purposes, and to prevent the purposes for which the profits of any such lottery or raffle are to be used from being subverted by
improper elements.
(2) The purpose of the Nebraska Lottery and Raffle Act is also to
completely and fairly regulate each level of the traditional marketing scheme of tickets or stubs for such lotteries and raffles to insure fairness, quality,
and compliance with the Constitution of Nebraska. To accomplish such purpose,
the regulation and licensure of nonprofit organizations and any other person involved in the marketing scheme are necessary.
(3) The Nebraska Lottery and Raffle Act shall apply to all lotteries and raffles with gross proceeds greater than fifteen in excess of one thousand dollars, except for lotteries by the sale of pickle cards conducted in
accordance with the Nebraska Pickle Card Lottery Act, lotteries conducted by a county, city, or village in accordance with the Nebraska County and City Lottery Act, and lottery games conducted in accordance with the State Lottery Act, and to all raffles with gross proceeds in excess of five thousand dollars.
(4) All such lotteries and raffles shall be played and conducted only by
the methods permitted in the Nebraska Lottery and Raffle Act act. No other form, means of selection, or method of play shall be allowed.
Sec. 2. Section 9-422, Reissue Revised Statutes of Nebraska, is amended to
read:
9-422 No person, except a licensed organization operating pursuant to the Nebraska Lottery and Raffle Act, shall conduct any lottery or raffle with gross proceeds greater than fifteen in excess of one thousand dollars or any raffle with gross proceeds in excess of five thousand dollars. Any lottery or raffle conducted in violation of this section is hereby declared to be a public nuisance. Any person who violates this section shall be guilty of a Class III
misdemeanor. Nothing in this section shall be construed to apply to any lottery conducted in accordance with the Nebraska County and City Lottery Act, any lottery by the sale of pickle cards conducted in accordance with the Nebraska Pickle Card Lottery Act, or any lottery game conducted pursuant to the State Lottery Act.
Sec. 3. Section 9-426, Reissue Revised Statutes of Nebraska, is amended to
read:
9-426 (1) A licensed organization may obtain from the department a special permit to conduct one raffle and one lottery. The cost of the special permit
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shall be ten dollars. The special permit shall exempt the licensed organization from subsection (2) subsections (2) and (3) of section 9-427 and from section
9-430. The organization shall comply with all other requirements of the Nebraska Lottery and Raffle Act.
(2) The special permit shall be valid for one year and shall be issued by
the department upon the proper application by the licensed organization. The special permit shall become invalid upon termination, revocation, or cancellation of the organization's license to conduct a lottery or raffle. The application shall be in such form and contain such information as the department may prescribe.
(3) No licensed organization conducting a raffle or lottery pursuant to a special permit shall pay persons selling tickets or stubs for the raffle or
lottery, except that nothing in this subsection shall prohibit the awarding of
prizes to such persons based on ticket or stub sales.
Sec. 4. Section 9-427, Reissue Revised Statutes of Nebraska, is amended to
read:
9-427 (1) The gross proceeds of any lottery or raffle shall be used solely for lawful purposes, awarding of prizes, and allowable expenses.
(2) Not less than sixty-five percent of the gross proceeds of any lottery shall be used for the awarding of prizes, and not more than ten percent of the gross proceeds shall be used to pay the allowable expenses of operating such scheme.
(2) (3) Not less than sixty-five percent of the gross proceeds of any lottery or raffle shall be used for the awarding of prizes, and not more than ten percent of the gross proceeds of a lottery or raffle shall be used to pay the allowable expenses of operating such scheme, except that if prizes are donated to the licensed organization to be awarded in connection with a such raffle, the prizes awarded shall have a fair market value equal to at least sixty-five percent of the gross proceeds of the raffle and the licensed organization shall use the proceeds for allowable expenses, optional additional prizes, and a lawful purpose.
Sec. 5. Section 9-429, Reissue Revised Statutes of Nebraska, is amended to
read:
9-429 Any licensed organization or any other organization or person conducting a lottery or raffle activity required to be licensed pursuant to the Nebraska Lottery and Raffle Act shall pay to the department a tax of two percent of the gross proceeds of each lottery or raffle having gross proceeds greater of more than fifteen one thousand dollars or raffle having gross proceeds of more than five thousand dollars. Such tax shall be remitted annually by September 30 each year on forms approved and provided by the department. The department shall remit the tax to the State Treasurer for credit to the Charitable Gaming Operations Fund. All deficiencies of the tax imposed by this section shall accrue interest and be subject to a penalty as
provided for sales and use taxes in the Nebraska Revenue Act of 1967.
Sec. 6. Section 9-502, Reissue Revised Statutes of Nebraska, is amended to
read:
9-502 (1) The purpose of the Nebraska Small Lottery and Raffle Act is to allow qualifying nonprofit organizations to conduct lotteries and raffles with gross proceeds not greater than fifteen one thousand dollars or raffles with gross proceeds not greater than five thousand dollars subject to minimal regulation.
(2) The Nebraska Small Lottery and Raffle Act shall apply to all lotteries and raffles with gross proceeds not greater than fifteen one thousand dollars,
except for lotteries by the sale of pickle cards conducted in accordance with the Nebraska Pickle Card Lottery Act, lotteries conducted by a county, city, or village in accordance with the Nebraska County and City Lottery Act, and lottery games conducted pursuant to the State Lottery Act, and to all raffles with gross proceeds not greater than five thousand dollars.
(3) All such lotteries and raffles shall be played and conducted only by
the methods permitted in the Nebraska Small Lottery and Raffle Act act. No other form or method shall be authorized or permitted.
Sec. 7. Section 9-511, Reissue Revised Statutes of Nebraska, is amended to
read:
9-511 Any qualifying nonprofit organization may conduct a lottery or
raffle that has gross proceeds not greater than fifteen five thousand dollars.
Each chance in such lottery or raffle shall have an equal likelihood of being a winning chance. The gross proceeds shall be used solely for charitable or
community betterment purposes, awarding of prizes, and expenses. Any qualifying nonprofit organization may conduct one lottery per calendar month that has gross proceeds not greater than fifteen thousand dollars. Any qualifying nonprofit organization may conduct one or more raffles in a calendar month if
the total gross proceeds from such raffles do not exceed fifteen five thousand dollars during such month.
Sec. 8. Section 9-823, Reissue Revised Statutes of Nebraska, is amended to
read:
9-823 The Tax Commissioner shall adopt and promulgate rules and regulations necessary to carry out the State Lottery Act. The rules and regulations shall include provisions relating to the following:
(1) The lottery games to be conducted subject to the following conditions:
(a) No lottery game shall use the theme of dog racing or horseracing;
(b) In any lottery game utilizing tickets, each ticket in such game shall bear a unique number distinguishing it from every other ticket in such lottery game;
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(c) No name of an elected official shall appear on the tickets of any lottery game; and
(d) In any instant-win game, the overall estimated odds of winning some prize shall be printed on each ticket and shall also be available at the office of the division at the time such lottery game is offered for sale to the public;
(2) The retail sales price for lottery tickets;
(3) The types and manner of payment of prizes to be awarded for winning tickets in lottery games;
(4) The method for determining winners, the frequency of drawings, if any,
or other selection of winning tickets subject to the following conditions:
(a) No lottery game shall be based on the results of a dog race,
horserace, or other sports event;
(b) If the lottery game utilizes the drawing of winning numbers, a drawing among entries, or a drawing among finalists (i) the drawings shall be witnessed by an independent certified public accountant, (ii) any equipment used in the drawings shall be inspected by the independent certified public accountant and an employee of the division or designated agent both before and after the drawing, and (iii) the drawing shall be recorded on videotape with an audio track; and
(c) Drawings in an instant-win game, other than grand prize drawings or
other runoff drawings, shall not be held more often than weekly. Drawings or
selections in an online game shall not be held more often than daily;
(5) The validation and manner of payment of prizes to the holders of
winning tickets subject to the following conditions:
(a) The prize shall be given to the person who presents a winning ticket,
except that for awards in excess of five hundred dollars, the winner shall also provide his or her social security number or tax identification number;
(b) A prize may be given to only one person per winning ticket, except that a prize shall be divided between the holders of winning tickets if there is more than one winning ticket per prize;
(c) For the convenience of the public, the director may authorize lottery game retailers to pay winners of up to five hundred dollars after performing validation procedures on their premises appropriate to the lottery game involved;
(d) No prize shall be paid to any person under nineteen years of age, and any prize resulting from a lottery ticket held by a person under nineteen years of age shall be awarded to the parent or guardian or custodian of the person under the Nebraska Uniform Transfers to Minors Act;
(e) No prize shall be paid for tickets that are stolen, counterfeit,
altered, fraudulent, unissued, produced or issued in error, unreadable, not received or not recorded by the division by acceptable deadlines, lacking in
captions that confirm and agree with the lottery play symbols as appropriate to
the lottery game involved, or not in compliance with additional specific rules and regulations and public or confidential validation and security tests appropriate to the particular lottery game involved;
(f) No particular prize in any lottery game shall be paid more than once.
In the event of a binding determination by the director that more than one claimant is entitled to a particular prize, the sole right of such claimants shall be the award to each of them of an equal share in the prize; and
(g) After the expiration of the claim period for prizes for each lottery game, the director shall make available a detailed tabulation of the total number of tickets actually sold in the lottery game and the total number of
prizes of each prize denomination that were actually claimed and paid; and
(h) The division and any lottery contractor shall not publicly disclose the identity of any person awarded a prize of two hundred fifty thousand dollars or more except upon written authorization of such person;
(6) Requirements for eligibility for participation in grand prize drawings or other runoff drawings, including requirements for submission of evidence of
eligibility;
(7) The locations at which tickets may be sold except that no ticket may be sold at a retail liquor establishment holding a license for the sale of
alcoholic liquor at retail for consumption on the licensed premises unless the establishment holds a Class C liquor license with a sampling designation as
provided in subsection (6) of section 53-124;
(8) The method to be used in selling tickets;
(9) The contracting with persons as lottery game retailers to sell tickets and the manner and amount of compensation to be paid to such retailers;
(10)(a) The form and type of marketing of informational and educational material.
(b) Beginning on September 1, 2019, all lottery advertisements shall disclose the odds of winning the prize with the largest value for any lottery game in a clear and conspicuous manner. Such disclosure shall be in a font size of not less than thirty-five percent of the largest font used in the advertisement, except that for any online advertisement, such disclosure shall be in a font size of at least ten points. This subdivision (b) shall not apply to advertisements printed, distributed, broadcast, or otherwise disseminated or
conducted prior to September 1, 2019;
(11) Any arrangements or methods to be used in providing proper security in the storage and distribution of tickets or lottery games; and
(12) All other matters necessary or desirable for the efficient and economical operation and administration of lottery games and for the convenience of the purchasers of tickets and the holders of winning tickets.
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Sec. 9. Section 28-1105.01, Reissue Revised Statutes of Nebraska, is amended to read:
28-1105.01 (1) A person commits the offense of gambling debt collection if
he or she employs any force or intimidation or threatens force or intimidation in order to collect any debt which results from gambling as described in
defined by sections 9-510, 28-1101 to 28-1109, and 28-1117.
(2) Gambling debt collection is a Class III felony.
Sec. 10. Section 28-1418.01, Revised Statutes Cumulative Supplement, 2022,
is amended to read:
28-1418.01 For purposes of sections 28-1418 to 28-1429.03 and sections 15
to 18 of this act:
(1) Alternative nicotine product means any noncombustible product containing nicotine that is intended for human consumption, whether chewed,
absorbed, dissolved, or ingested by any other means. Alternative nicotine product does not include any electronic nicotine delivery system, cigarette,
cigar, or other tobacco product, or any product regulated as a drug or device by the United States Food and Drug Administration under Chapter V of the Federal Food, Drug, and Cosmetic Act;
(2) Cigarette means any product that contains nicotine, is intended to be burned or heated under ordinary conditions of use, and consists of or contains
(a) any roll of tobacco wrapped in paper or in any substance not containing tobacco, (b) tobacco, in any form, that is functional in the product which,
because of its appearance, the type of tobacco used in the filler, or its packaging and labeling, is likely to be offered to, or purchased by, consumers as a cigarette, or (c) any roll of tobacco wrapped in any substance containing tobacco which, because of its appearance, the type of tobacco used in the filler, or its packaging and labeling, is likely to be offered to, or purchased by, consumers as a cigarette described in subdivision (2)(a) of this section;
(3) Delivery sale means to sell, give, or furnish products (a) by mail or
delivery service, (b) through the Internet or a computer network, (c) by telephone, or (d) through an