North Dakota Administrative Code › Title 99 - State Gaming Commission › Article 99-01.3 - Games of Chance › Chapter 99-01.3-03 - Accounting Rules › Section 99-01.3-03-03 - Trust account

Current through Supplement No. 393, July, 2024
1. An organization
				shall maintain all trust accounts at financial institutions located in North
				Dakota. If an organization only conducts a calcutta, raffle, sports pool,
				paddlewheel described by subsection 1 of section
				99-01.3-11-01, or poker or a
				combination of these games, or is involved in conducting no more than two
				events during a fiscal year and each event lasts no more than fourteen calendar
				days, an organization is not required to maintain a separate trust account and
				may use the gaming account for the disbursement of eligible uses. Trust
				accounts are used only to disburse net proceeds to eligible uses and must
				receive only funds from a gaming account, except to reimburse the account as
				required by section
				99-01.3-03-05 and as provided by
				subsections 5 and 13 of section
				99-01.3-14-01. Interest earned and
				service fees incurred by trust checking and savings accounts must be reported
				as adjustments to the trust account on a tax return. A transfer of net proceeds
				to another trust account or to a closely related organization is not a
				disbursement of net proceeds. Net proceeds cannot be pledged as collateral for
				any loan.
2. An organization shall
				disburse net proceeds within a reasonable time period.
3. An organization may not transfer funds
				from a trust account to any other bank account, except for transferring funds
				to another trust account or to reimburse its general account for compensation
				that qualifies as an eligible use. A reimbursement must be documented by a
				supporting schedule. If a disbursement of net proceeds is for an expense item
				that includes both nongaming (an eligible use) and gaming functions, only the
				nongaming eligible use portion can be paid with trust account money. The
				organization shall maintain complete, accurate, and current documentation
				detailing the proration of the expense between nongaming and gaming. A
				disbursement must be payable directly to the ultimate use or recipient.
				However, an organization may make a payment directly to a credit card company
				for charges on a credit card provided that an organization can identify
				purchases that qualify as an eligible use from other purchases. A payment may
				be made by electronic transfer.
4.
				If an organization invests net proceeds in a certificate of deposit, bond,
				stock, mutual fund, or other marketable securities, all income earned,
				including interest, dividends, and capital gains, must be reported each quarter
				as a positive adjustment on a tax return and be disbursed to an eligible use.
				If the net effect of the investment in marketable securities results in an
				actual loss, the organization may not deduct the loss on a tax return. A
				service fee is an adjustment to the account's balance.
5. For reporting purposes, an organization
				may elect to report the gain in market value of the accounts outlined in
				subsection 4. Adjustments can be made for decreases in market value; however,
				such decreases cannot reduce the account's value below its adjusted basis.
				Electing to report securities at market value must be consistently applied each
				quarter.
General Authority:
NDCC 53-06.1-01.1
Law Implemented:
NDCC 53-06.1-01.1,
					 53-06.1-06