North Dakota Administrative Code › Title 99 - State Gaming Commission › Article 99-01.3 - Games of Chance › Chapter 99-01.3-14 - Eligible Uses › Section 99-01.3-14-01 - Restrictions and requirements

Current through Supplement No. 393, July, 2024
1. An organization
				may not accept, and a recipient or potential recipient of net proceeds may not
				give or offer to give, a payment, gift, service, loan, personal or real
				property, or other thing of material value, for disbursing or receiving net
				proceeds. However, a recipient or potential recipient of net proceeds that is
				an organization or group of people may initiate and transact a formal agreement
				with a donor organization to voluntarily provide a gaming or nongaming related
				service to the donor organization in exchange for receiving net proceeds;
				provided, the agreement is first approved by the attorney general or complies
				with guidelines prescribed by the attorney general. If the attorney general
				approves the service, the donor organization shall document the service by
				recording the location, names of volunteers, description of service, number of
				hours volunteered, and value of the service based on a reasonable hourly rate.
				The donor organization shall offset the value of these services against the
				amount of net proceeds disbursed to the recipient during a quarter by reporting
				the value of these services as an adjustment on a tax return.
2. A disbursement of net proceeds must be
				specific as to recipient and use. After an organization disburses net proceeds,
				it may not interfere with a recipient's control of the funds or attempt to own
				or influence the use or sale of personal or real property bought by or for a
				recipient of the funds.
3. Use of
				net proceeds for economic development or tourism programs may not directly
				benefit a member, employee, or board of directors' member of a donor or donee
				organization nor may this person have a financial interest in a funded economic
				development or tourism program.
4.
				No private athletic, social, hobby, trade, business, professional, or similar
				clubs or associations may receive net proceeds, unless the use of the funds
				complies with subsection 2 of North Dakota Century Code section 53-06.1-11.1 or
				section
				99-01.3-14-02. An
				expense related directly or indirectly with gaming is not an eligible
				use.
5. Restrictions on fundraising
				activities are:
a. An organization or
				recipient may not use net proceeds for a fundraising activity that relates
				directly to the conduct of gaming, including purchase of equipment or
				consumable goods for a cafe for a site or for direct or indirect expenses and
				capital costs for a business involving material unrelated business
				income;
b. An organization may only
				use net proceeds for expenses related to fundraising activities if the gross
				receipts from the fundraising activity are deposited into the trust account and
				the net income of the fundraising activity is used for a specific recipient or
				purpose that qualifies as an eligible use of net proceeds;
c. If an organization conducts a qualifying
				fundraising event and deposits the event's gross receipts in or pays the
				expenses from other than its trust account, it may not disburse net proceeds to
				the recipient unless it transfers the net income from the event to its trust
				account and makes a proper adjustment on a tax return; and
d. If a civic and service, fraternal, or
				veterans' organization uses net proceeds to conduct a fundraising activity and
				the amount spent on expenses exceed the net income generated by the activity,
				it shall reimburse the trust account for the difference between the expense
				amount and the net income amount with nongaming funds and make a proper
				adjustment on the tax return.