SENATE COMMERCE COMMITTEE

STATEMENT TO

SENATE, No. 1080

STATE OF NEW JERSEY

DATED: OCTOBER 28, 1996

      The Senate Commerce Committee reports favorably Senate Bill No. 1080.

      This bill allows certain types of nonprofit student loan funds to hold raffles. It provides that a nonprofit corporation organized for the sole purpose of making loans to students from a single New Jersey school district in order to defray the costs of post-secondary education shall be deemed to be a bona fide educational organization which may conduct raffles and that the net proceeds thereof shall be deemed to be devoted to educational uses.

      The State Constitution provides that the Legislature, by law, may authorize certain types of charitable and civic organizations to conduct raffles. Among the groups which may hold raffles are bona fide educational organizations when the net proceeds of such raffles are devoted to educational uses. N.J. Const. Art. IV, Sec. VII, par. 2 (copy attached). The Legalized Games of Chance Control Commission, which administers the "Raffles Licensing Law," N.J.S.A.5:8-50 et seq., permits scholarship funds to hold raffles but has declined to recognize nonprofit student loan funds as bona fide educational organizations which are eligible to conduct raffles.