Eligible uses

1. A use of net proceeds for erecting, acquiring, improving, maintaining, or repairing real property as authorized in subsection 3 of North Dakota Century Code section 53-06.1-11.1 or personal qualifying property owned by an organization is an eligible use provided the organization agrees that, upon abandoning the exclusive use of the property for an eligible use, it shall transfer the property to a governmental unit or to an organization that shall use it for an eligible use. However, if an organization sells the property, the portion of net receipts from the sale related to the original net proceeds must be deposited in the trust account and disbursed to an eligible use, or reinvested in property used for a similar purpose. 2. In applying subdivision a of subsection 2 of North Dakota Century Code section 53-06.1-11.1, net proceeds must be disbursed to or by a recognized nonprofit city or county job development authority or certified or noncertified local development corporation. 3. In applying subdivision b of subsection 2 of North Dakota Century Code section 53-06.1-11.1, net proceeds must be used to attract in-state and out-of-state visitors by publicizing attractions, promoting, planning, conducting, and sponsoring market research, trade shows, meetings, conventions, seminars, sporting events, and festivals, and by developing and promoting the state's attractions, recreational opportunities, shopping malls, and other tourism-related activities. Uses may not directly benefit a for-profit business. 4. In applying subdivision c of subsection 2 of North Dakota Century Code section 53-06.1-11.1, eligible uses include: a. A scholarship for a student. A scholarship may be based on criteria, including community service, patriotism, leadership, education, talent, athletic ability, course of study, or special disability. A scholarship award may not be decided by a donor organization, unless the organization administers an education program for special students or students inflicted with disease. Net proceeds may be disbursed to a scholarship board or to an educational institution. A majority of the members of a scholarship board may not be members of a donor organization. A disbursement must be payable to an educational institution and a recipient, scholarship board and a recipient, or to an educational institution or scholarship board. A student receiving a scholarship may apply it at a nonprofit public, or for-profit or nonprofit private, educational institution, including a trade or business school, registered with or accredited by any state board. A scholarship may be for housing, books, tuition, and meals that relate to a student's educational need. A scholarship may be awarded through a pageant, contest, or tournament; however, associated administrative and operating expenses do not qualify. A scholarship may not be based on criteria that includes a person's physical appearance; b. Supplemental assistance to a primary, secondary, or postsecondary nonprofit educational institution, including affiliated alumni associations, booster clubs, parent-teacher councils, and college sororities and fraternities. Net proceeds may be used for youth activities, educational equipment, musical instruments, playground equipment, extracurricular activities, sporting events, field trips, cultural exchanges, maintenance of buildings, remodeling, fixed assets, administrative and operating expenses, and supplies; c. Assistance to a library for maintenance of buildings, remodeling, fixed assets, administrative and operating expenses, supplies, program services, special events, promotions, educational material, books, computer systems, information services, exhibits, story hours, film showings, and discussion groups. A disbursement to a museum may be for maintaining buildings, remodeling, fixed assets, administrative and operating expenses, and assembly of exhibits for preservation, collection, education, and interpretation; d. Assistance to a nonprofit performing arts and humanities organization for studio and auditorium rental, speaker fees, equipment, travel, administrative and operating expenses, and uniforms. Functions may include children's theater, summer camps, and developing art parks; e. Preservation of cultural heritage, including restoring, reconstructing, improving, or preserving public buildings in North Dakota which are listed in the state historic sites registry or the national registry of historic places. Net proceeds may be used for programs of nonprofit organizations that provide historical information or tell a story about a local region, North Dakota, or the nation and which primarily educate and inspire the public, elderly, disabled, schoolchildren, teachers, and foreign visitors. Qualifying programs include the lifestyles and human experiences of homesteaders, immigrants, Indian culture, frontier army, and fur trade. Net proceeds may be used for interpretive programming, including exhibits, publications, simulations of life, classroom outreach services, audiovisual presentations, special events, and tours. Special events such as chautauquas and community celebrations of Norskfest, threshing bees, and Octoberfest qualify for expenses of parades, displays, equipment, educational materials, and awards. School reunion expenses do not qualify; f. Youth community and athletic activities open to all youth. Disbursement must be made to a youth group, school, or booster club, not to an individual participant. An organization shall disburse, to the extent possible, equal amounts to activities for each gender. Net proceeds may be used for uniforms, equipment, tournament fees, private and public ground transportation, coaches' salaries and mileage, judges, field trips, speaker fees, father-son and mother-daughter banquets provided the meals for these banquets are provided free, meals, and lodging. Meals and mileage may not exceed the state per diem rate and lodging expenses must be documented with a receipt; g. Adult amateur athletic activities within North Dakota. Net proceeds may be used for sponsorship and league fees for entire teams, uniforms, umpire fees, use and maintenance of a sports complex, and team equipment. Uniforms and equipment must be owned by the team or league association and the uniforms must include the name of the sponsoring charitable organization. A charitable organization may only sponsor and provide uniforms and equipment to one team per sport per gender or one coed team per quarter. Tournament expenses, team and individual player fees, food and drink, lodging, trophies, prizes, yearbook, advertising, and private or public transportation expenses do not qualify, except transportation expenses for a disabled player. Unless specifically allowed in this section, net proceeds may not be used for adult hobby and recreational activities that personally benefit adult individuals. Rodeos, car, or horse racing, car or gun shows, shooting events, fishing derbies, tractor or pickup pulls, and similar activities do not qualify; h. Maintenance of religious buildings, remodeling, fixed assets, administrative and operating expenses, gospel outreach programs, youth church activities, uniforms for a choir, furnishings, and supplies for church groups and services; and i. Scientific research for a cure to relieve human beings of disease and suffering. 5. In applying subdivision d of subsection 2 of North Dakota Century Code section 53-06.1-11.1, eligible uses include: a. Food, temporary housing, clothing, utilities, medical services, and fuel for private and public transportation for an individual or family suffering from poverty or homelessness, or financial distress due to a natural disaster or medical problem, which includes relief of the sick, diseased, and terminally ill, and their physical well-being; (1) Payments for items in this category for pending or upcoming expenses are eligible if made to the provider of the services and not the individual. Examples include rent and utilities paid to the landlord or utility company on behalf of the individual; payment to a business for gift cards for fuel, groceries, or clothing; and medical payments paid directly to a medical facility for an individual. (2) Payments made for reimbursements of past expenses may be made to an individual. The donating organization shall obtain and maintain documentation to support the payment was made by the individual for an eligible use. b. Purchase and maintenance of a ground transportation vehicle for the elderly. c. Services for abused persons, including to: (1) Provide emotional support, guidance, and counseling to victims of crimes of rape and sexual assault and encourage prosecution of perpetrators; (2) Establish educational programs about rape, sexual assault and incest, the dramatic effects it has on victims and their families, and the cost to society; (3) Establish and direct services for abused spouses and their children in the community, including advocacy, emergency shelter and food, information services, referrals, and peer support; and (4) Develop and coordinate programs to encourage and assist development of a strong volunteer advocate network. d. Services for addiction to alcohol, gambling, or drugs. e. Recognition of an individual or group of people who volunteer their time to community services, nursing homes, or hospitals, if a gift, prize, or other gratuity does not exceed one hundred dollars per person per calendar year. f. Public or private nonprofit nursing homes, day care centers, and medical facilities for maintaining buildings, remodeling, fixed assets, administrative and operating services, supplies, reading programs, and craft activities for patients. g. Compliance with the Americans with Disabilities Act of 1990 by remodeling a publicly owned facility. h. To remodel or improve a veterans' organization's owned facility to make it accessible or usable to youth, senior citizens, people with disabilities, and nonmembers of the organization, for community programs, services, or functions. The community shall use a building for free or a reasonable fee. To make a building accessible, net proceeds may be used to widen doorways and hallways, remodel bathroom fixtures and facilities, install chair lifts, wheelchair ramps, elevators, handrails, and automatic door openers. To make a building usable, net proceeds may be used to repair a building to meet a building code or make it structurally fit for use, to enlarge a facility, replace a furnace, water heater, and air-conditioner, and to make it safe. Net proceeds may not be used to remodel or improve an area of a facility where alcoholic beverages are prepared. 6. In applying subdivision e of subsection 2 of North Dakota Century Code section 53-06.1-11.1, eligible uses include burial expenses and flowers provided an organization does not discriminate between members and nonmembers. 7. In applying subdivision f of subsection 2 of North Dakota Century Code section 53-06.1-11.1, eligible uses include promotion and celebration of civil rights, nondiscrimination, patriotism, and freedom. Net proceeds may not be used for social or recreational activities or for events, activities, programs, or expenses that are of a direct benefit to the organization and are primarily beneficial to organization members and their families. This includes state and national convention expenses; recognition nights that may include a banquet, program, and dance for past commanders or past members; and ceremonial and ritual activities. 8. In applying subdivision g of subsection 2 of North Dakota Century Code section 53-06.1-11.1, eligible uses include maintaining parks and perpetual trust funds for public cemeteries. 9. In applying subdivision j of subsection 2 of North Dakota Century Code section 53-06.1-11.1, net proceeds may be used for subsistence for a family member traveling with an ill family member to an out-of-town medical facility. Rules for payment of this subsection are the same as subdivision a of subsection 5. 10. In applying subdivision l of subsection 2 of North Dakota Century Code section 53-06.1-11.1, eligible uses include: a. Adult and city bands, choirs, drum and bugle corps, and color and honor guards; parade floats; director fees; rent of storage; postage; insurance; laundry; utilities; uniforms; gun safe; firearm; sheet music; audio system and instruments owned by a band, choir, or organization; transportation vehicle owned by the organization; in-state lodging, and private and public ground transportation for performances at community concerts, homecomings, open houses, parades, festivals, funerals, nursing homes, hospitals, and special events. For only a color or honor guard, net proceeds may be used to pay a member a maximum per diem not to exceed the daily funeral service rate paid to members of the armed forces ready reserve; b. Community celebrations that recognize or honor the military service of individuals in the armed services; c. Educational agricultural trade shows and conventions held in North Dakota. Meals and entertainment do not qualify; d. Nonprofit organizations that protect animals. Uses include: (1) Hatcheries and wildlife preserves, wetlands, and sanctuaries; (2) Teaching and promoting ecology, game and wildlife management, and outdoor interests involving animals, fish, and birds; and (3) Spay and neuter programs, pet placement, lost and found pet services, educational programs, investigations of animal abuse, and information services; e. Preserving and cleaning up the environment, including air quality, water quality, waste and recycling programs, and conservation of natural resources; and f. Outreach public medical care. 11. In applying subdivision m of subsection 2 of North Dakota Century Code section 53-06.1-11.1, a special trust fund: a. Must be managed and controlled by trustees, who may be board members, appointed by an organization. However, if an organization dissolves, it must establish a nonprofit corporation limited to the primary purpose stated in its declaration of trust. A trust may be revocable or irrevocable; and b. Must be comprised only of net proceeds which can be disbursed to the trust periodically or in a lump sum. Net proceeds must be invested only in marketable securities. A trust's principal, interest, dividends, and gains on sales of investments must be applied toward the trust's primary purpose. A trust's principal may not be disbursed until a donor organization has permanently discontinued conducting games or dissolved. 12. In applying subdivision o of subsection 2 of North Dakota Century Code section 53-06.1-11.1, net proceeds may be used for the administrative and program management expenses of a statewide veterans' organization to include payroll, supplies, and administration of a statewide veterans' program. 13. In applying subsection 3 of North Dakota Century Code section 53-06.1-11.1 for licensed organizations, net proceeds may be used for the erection, acquisition, property taxes, special assessments, improvement, maintenance, or repair of any real property, as defined in North Dakota Century Code chapter 47-01, used exclusively for an eligible use when owned or leased by an organization. 14. In applying subsection 3 of North Dakota Century Code section 53-06.1-11.1 for licensed fraternal or veterans' organizations, net proceeds may be used for the erection, acquisition, property taxes, special assessments, improvement, maintenance, or repair of real property. For veterans' and fraternal licensed organizations eligible uses do not include the erection, acquisition, improvement, maintenance, or repair of any portion of a facility that includes a gaming or alcoholic beverage establishment area. For purposes of this section, the gaming or alcoholic beverage establishment area may be defined differently than as identified on a site authorization or floor plan for an alcoholic beverage establishment. Real property does not include personal property or items that are not affixed to the land as defined in North Dakota Century Code section 47-01-05. 15. In applying subsection 5 of North Dakota Century Code section 53-06.1-11.1, veterans' organizations may use up to twenty percent of the organization's net proceeds for costs of food and beverages. A veterans' organization may use up to twenty percent of net proceeds per quarter for the costs of food and beverages, including alcoholic beverages, incurred operating the veterans' organization's club. A veterans' organization may only apply this subsection to one club site where an alcoholic beverage establishment, restaurant, or both, are operated by the veterans' organization. The allowable amount must be calculated using the prior quarter's net proceeds for the veterans' organization's club only. The calculated net proceeds must be used by the end of the following quarter, in which the calculated amount was generated. These net proceeds must be disbursed directly to the food and beverage vendors and invoices must be retained which reconcile to the amount claimed on the gaming tax return as being disbursed.