(a) For the purposes of this section, “tuition raffle” means a raffle in which the prize is payment of the tuition or part of the tuition at an educational institution or payment of a student loan or part of a student loan for a student recipient designated by the raffle winner, and “municipal official” means the chief of police of the municipality, or if there is no police department, the chief executive officer of the municipality, where the tuition raffle is to be conducted or is conducted.

(b) Notwithstanding the provisions of sections 7-170 to 7-186, inclusive, any organization qualified to conduct a bazaar or raffle under § 7-172 may conduct a tuition raffle once each calendar year. The municipality where the tuition raffle is to be conducted may, by ordinance, (1) allow any organization permitted to conduct a tuition raffle to fund all or a part of a student recipient’s education or to pay all or part of a student recipient’s student loan each year for a period not to exceed four years, (2) permit the student recipient to be the actual tuition raffle winner, a relative of the raffle winner or a student chosen by the raffle winner, (3) give authority to the sponsoring organization to permit the tuition prize to be divided among student recipients designated by the raffle winner, (4) provide that the tuition prize be paid each consecutive year, commencing with the first year of the student recipient’s education at an accredited private or parochial school, or public or independent institution of higher education selected by the student recipient, (5) provide that the tuition prize be paid directly to the educational institution or financial institution that made the student loan designated by the student recipient, and no tuition prize shall be redeemed or redeemable for cash, and (6) provide that the tuition raffle winner have a period not to exceed four years to designate a student recipient. For the purposes of this section, “financial institution” means a bank, as defined in § 36a-2, an out-of-state bank, as defined in § 36a-2, a Connecticut credit union, as defined in § 36a-2, an out-of-state credit union, as defined in § 36a-2, an institutional lender, any subsidiary or affiliate of such bank, out-of-state bank, Connecticut credit union, out-of-state credit union or institutional lender, or other lender licensed by the Department of Banking.

(c) All proceeds of the tuition raffle shall be deposited in a special dedicated bank account approved by the municipal official, and all tuition raffle expenses shall be paid from such account. The municipal official shall prescribe the maintenance of tuition raffle accounts by any sponsoring organization and such accounts shall be subject to audit by the municipal official. The municipal official may require any organization conducting a tuition raffle to post a performance bond in an amount sufficient to fully fund the tuition raffle prize to be awarded.

(d) Any organization permitted to conduct a tuition raffle shall file a tuition raffle financial report in a manner prescribed by the municipal official. Such report shall detail the status of the tuition prize money or the raffle and any other information that the municipal official may require, on a quarterly basis, during the months of January, April, July and October, until all tuition or student loan payments for each tuition raffle have been paid.