2013 North Dakota Century Code Title 17 Energy Chapter 17-05 Transmission Authority
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CHAPTER 17-05
TRANSMISSION AUTHORITY
17-05-01. Declaration of findings and public purpose.
The legislative assembly finds and declares that:
1. North Dakota has twenty-five billion tons of abundant, recoverable lignite coal
reserves, enough to last eight hundred years at today's thirty million tons of annual
production.
2. The lignite industry presently generates electricity for more than two million people in
the northern great plains region and there is increased regional demand for
development of North Dakota's lignite resources.
3. North Dakota has enormous wind resources, providing additional economic
opportunity to broaden and diversify the state's economy and diversify the region's
energy supply, and that timely development of these resources will stabilize and
increase revenues to the state.
4. Transmission constraints impede the development of the state's lignite and wind
resources.
5. An essential governmental function and public purpose is to assist with the removal of
electric transmission export constraints and to assist with upgrading and expansion of
the region's electrical transmission grid to facilitate the development of the state's
abundant natural resources.
6. Developing and exporting our natural resources will promote the public interest by
increasing employment, stimulating economic activity, augmenting sources of tax
revenue, fostering economic stability, and improving the state's economy.
7. State ownership of electrical transmission facilities may not exceed the extent and
duration necessary or useful to promote the public interest.
17-05-02. North Dakota transmission authority.
There is created the North Dakota transmission authority, which shall be governed by the
industrial commission.
17-05-03. Definitions.
As used in this chapter:
1. "Authority" means the industrial commission acting as the North Dakota transmission
authority.
2. "Commission" means the industrial commission.
3. "Notice of intent" means the notice a person delivers to the authority indicating
willingness to construct transmission facilities contemplated by the authority or to
provide services fulfilling the need for such transmission facilities.
4. "Project area" means the geographic area in which construction of a transmission
facility contemplated by the authority is likely to occur.
5. "Transmission facilities" means electric transmission lines and substations, and related
structures, equipment, rights of way, and works of public improvement, located within
and outside this state, excluding electric generating facilities.
17-05-04. Purposes.
The purpose for which the authority is created is to diversify and expand the North Dakota
economy by facilitating development of transmission facilities to support the production,
transportation, and utilization of North Dakota electric energy.
17-05-05. Powers.
The authority has all powers necessary to carry out the purposes of this chapter, including
the power to:
1. Make grants or loans and to provide other forms of financial assistance as necessary
or appropriate for the purposes of this chapter;
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Make and execute contracts and all other instruments necessary or convenient for the
performance of its powers and functions under this chapter;
Borrow money and issue evidences of indebtedness as provided in this chapter;
Receive and accept aid, grants, or contributions of money or other things of value from
any source, including aid, grants, or contributions from any department, agency, or
instrumentality of the United States, subject to the conditions upon which the aid,
grants, or contributions are made and consistent with the provisions of this chapter;
Issue and sell evidences of indebtedness in an amount or amounts as the authority
may determine, but not to exceed eight hundred million dollars, plus costs of issuance,
credit enhancement, and any reserve funds required by agreements with or for the
benefit of holders of the evidences of indebtedness for the purposes for which the
authority is created under this chapter, provided that the amount of any refinancing
shall not be counted toward such eight hundred million dollar limitation to the extent it
does not exceed the outstanding amount of the obligations being refinanced;
Refund and refinance its evidences of indebtedness;
Make and execute interest rate exchange contracts;
Enter lease-sale contracts;
Pledge any and all revenues derived by the authority under this chapter or from a
transmission facility, service, or activity funded under this chapter to secure payment or
redemption of the evidences of indebtedness;
To the extent and for the period of time necessary for the accomplishment of the
purposes for which the authority was created, plan, finance, develop, acquire, own in
whole or in part, lease, rent, and dispose of transmission facilities;
Enter contracts to construct, maintain, and operate transmission facilities;
Consult with the public service commission, regional organizations, and any other
relevant state or federal authority or persons as necessary and establish reasonable
fees, rates, tariffs, or other charges for transmission facilities and all services rendered
by the authority;
Lease, rent, and dispose of transmission facilities owned pursuant to this chapter;
Investigate, plan, prioritize, and propose corridors of the transmission of electricity;
Participate in and join regional transmission organizations; and
Do any and all things necessary or expedient for the purposes of the authority
provided in this chapter.
17-05-06. Authority may act.
1. The authority shall coordinate its plans for transmission facilities with regional
organizations having transmission planning responsibilities for the project area.
2. Before exercising its powers to construct transmission facilities granted to it in this
chapter, the authority shall publish, in a newspaper of general circulation in North
Dakota and in a newspaper in the project area, a notice describing the need for
transmission facilities contemplated by the authority. Persons willing to construct the
transmission facilities or furnish services to satisfy the needs described in the notice
have a period of one hundred eighty days from the date of last publication of the notice
within which to deliver to the authority a notice of intent. After receipt of a notice of
intent, the authority may not exercise its powers to construct transmission facilities
unless the authority finds that exercising its authority would be in the public interest. In
making such a finding the authority shall consider factors including economic impact to
the state, economic feasibility, technical performance, reliability, past performance, and
the likelihood of successful completion and ongoing operation.
3. The authority may require a person giving a notice of intent to provide a bond and to
submit a plan for completion of the transmission facilities or commencement of
services within a period of time acceptable to the authority. If no person submits an
adequate plan or bond as required by the authority, the authority may proceed with
contracting for construction of the facility described in the authority's published notice.
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17-05-07. Authority may participate upon request.
The authority may participate in a transmission facility through financing, planning, joint
ownership, or other arrangements at the request of a person giving a notice of intent.
17-05-08. Evidences of indebtedness.
1. Evidences of indebtedness of the authority must be authorized by resolution of the
industrial commission and may be issued in one or more series and must bear such
date or dates, mature at such time or times, bear interest at such rate or rates of
interest per year, be in such denomination or denominations, be in such form, either
coupon or registered, carry such conversion or registration privileges, have such rank
or priority, be executed in such manner, be payable from such sources in such medium
of payment at such place or places within or without the state, and be subject to such
terms of redemption, with or without premium, as such resolution or resolutions may
provide. Evidences of indebtedness of the authority are to mature not more than forty
years from the date of issue. Evidences of indebtedness of the authority may be sold
at such time or times and at such price or prices as the authority determines.
2. Evidences of indebtedness and grants, loans, or other forms of financial assistance
issued by the authority are payable solely from:
a. Revenues that may be received by the authority from transmission facilities,
services, or activities funded under this chapter with the proceeds of the
authority's evidences of indebtedness, subject only to prior payment of the
reasonable and necessary expenses of operating and maintaining such
transmission facilities except depreciation.
b. Amounts received by the authority under loans authorized under this chapter.
c. Revenues received by the authority under this chapter from any source other
than general tax revenues.
3. The evidences of indebtedness are not subject to taxation by the state or any of its
political subdivisions and do not constitute a debt of the state of North Dakota within
the meaning of any statutory or constitutional provision and must contain a statement
to that effect on their face.
4. The authority may establish and maintain a reserve fund for evidences of
indebtedness issued under this chapter. There must be deposited in the reserve fund:
a. All moneys appropriated by the legislative assembly to the authority for the
purpose of the reserve fund.
b. All proceeds of evidences of indebtedness issued under this chapter required to
be deposited in the reserve fund by the terms of any contract between the
authority and the holders of its evidences of indebtedness or any resolution of the
authority.
c. Any lawfully available moneys of the authority which it may determine to deposit
in the reserve fund.
d. Any moneys from any other source made available to the authority for deposit in
the reserve fund or any contractual right to the receipt of moneys by the authority
for the purpose of the fund, including a letter of credit, surety bond, or similar
instrument.
5. The authority must include in its biennial request to the office of the budget the
amount, if any, necessary to restore any reserve fund established under this section to
an amount equal to the amount required to be deposited in the fund by the terms of
any contract or resolution approved by the commission.
6. The commission may approve a resolution for the issuance of bonds as provided in
this section which states in substance that this subsection is applicable to any required
debt service reserve for bonds issued under that resolution in an aggregate amount
not to exceed two hundred forty million dollars plus costs of issuance, credit
enhancement, and any reserve funds required by agreements with or for the benefit of
holders of the evidences of indebtedness for the purposes for which the authority is
created under this chapter. The amount of any refinancing, however, may not be
counted toward the two hundred forty million dollar limitation to the extent the amount
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does not exceed the outstanding amount of the obligations being refinanced. No more
than thirty percent of the total project costs for any single transmission facility project
may be financed by bonds issued under this section which are supported by the debt
service reserve fund approved by the commission under this subsection. To ensure the
maintenance of the required debt service reserve fund approved by the commission
under this subsection, the legislative assembly shall appropriate and pay to the
authority for deposit in the reserve fund any sum, certified by the commission as
necessary to restore the reserve fund to an amount equal to the required debt service
reserve fund approved by the commission.
Any pledge of revenue made by the industrial commission as security for the
authority's evidences of indebtedness is valid and binding from time to time when the
pledge is made. The revenues or other moneys so pledged and thereafter received by
the authority are immediately subject to the lien of any such pledge without any
physical delivery thereof or further act, and the lien of any such pledge is valid and
binding as against all parties having claims of any kind in tort, contract or otherwise
against the authority, regardless of whether such parties have notice thereof. Neither
the resolution nor any other instrument by which a pledge is created need be filed or
recorded, except in the records of the authority.
The authority is authorized and empowered to obtain from any entity of the state, any
department or agency of the United States, or any nongovernmental insurer any
insurance, guaranty, or liquidity facility, or from a financial institution a letter of credit to
the extent such insurance, guaranty, liquidity facility, or letter of credit now or hereafter
available, as to, or for, the payment or repayment of, interest or principal, or both, or
any part thereof, on any evidences of indebtedness issued by the authority pursuant to
this chapter, and to enter into any agreement or contract with respect to any such
insurance, guaranty, letter of credit, or liquidity facility, and pay any required fee,
unless the same would impair or interfere with the ability of the authority to fulfill the
terms of any agreement made with the holders of its evidences of indebtedness.
After issuance, all evidences of indebtedness of the authority are conclusively
presumed to be fully authorized and issued under the laws of the state, and any
person or governmental unit is estopped from questioning their authorization, sale,
issuance, execution, or delivery by the authority.
When the authority has issued evidences of indebtedness and pledged the revenues
of the transmission facilities for the payment thereof as herein provided, the authority
shall operate and maintain the transmission facilities and shall impose and collect fees
and charges for the services furnished by the transmission facilities, including those
furnished to the authority itself, in the amounts and at the rates as are fully sufficient at
all times to:
a. Pay the expenses of operating and maintaining the transmission facilities;
b. Provide a debt service fund sufficient to assure the prompt payment of principal
and interest on the evidences of indebtedness at maturity; and
c. Provide a reasonable fund for contingencies as may be required by the resolution
authorizing the evidences of indebtedness.
17-05-09. Public service commission jurisdiction and consultation.
1. The authority and the transmission facilities built under this chapter, until sold or
disposed of by the authority, are exempt from the provisions of title 49 except for
chapter 49-22. Upon sale or disposal by the authority, transmission facilities built under
this chapter are subject to the provisions of title 49.
2. The authority shall consult with the public service commission with respect to the rates
charged by the authority for use of its transmission facilities and such rates must
thereafter be considered just and reasonable in proceedings before the public service
commission pursuant to section 49-05-06.
3. The authority shall conduct its activities in consultation with transmission providers,
wind interests, the lignite research council, and other persons having relevant
expertise.
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17-05-10. Bonds as legal investments.
The bonds of the authority are legal investments which may be used as collateral for public
funds of the state, insurance companies, banks, savings and loan associations, investment
companies, trustees, and other fiduciaries which may properly and legally invest funds in their
control or belonging to them in bonds of the authority. The state investment board may invest in
bonds of the authority in an amount specified by the state investment board.
17-05-11. Disposal of transmission facilities.
1. Before becoming an owner or partial owner of a transmission facility, the authority shall
develop a plan identifying:
a. The public purposes of the authority's ownership;
b. Conditions that would make the authority's ownership no longer necessary for
accomplishing those public purposes; and
c. A plan to divest the authority's ownership interest as soon as economically
prudent once those conditions occur.
2. For transmission facilities that are leased to another entity by the authority, at the end
of the lease, absent default by the lessee, the authority shall convey its interest in the
transmission facilities to the lessee.
3. For transmission facilities that are owned by the authority without a lessee, the
authority shall divest itself of ownership as soon as economically prudent in
accordance with the divestiture plan developed pursuant to subsection 1.
17-05-12. Exemption from property taxes.
Transmission facilities built under this chapter are exempt from property taxes for a period
determined by the authority not to exceed the first five taxable years of operation; after this initial
period, transmission lines of two hundred thirty kilovolts or larger and the transmission lines'
associated transmission substations remain exempt from property taxes but are subject to a per
mile tax at the full per mile rate and subject to the same manner of imposition and allocation as
the per mile tax imposed by section 57-33.2-02 without application of the discounts provided in
that section.
17-05-13. Reporting requirements.
The authority shall deliver a written report on its activities to the legislative council each
biennium. Notwithstanding chapter 54-60.1, the authority shall provide an annual report to the
industrial commission detailing activities and expenditures incurred during the preceding year.
17-05-14. Access to authority records - Confidentiality.
1. Materials and data submitted to, or made or received by, the authority, to the extent
that the authority determines the materials or data consist of trade secrets or
commercial, financial, or proprietary information of individuals or entities applying to or
contracting with the authority or receiving authority services under this chapter are
subject to section 44-04-18.4.
2. A person or entity must file a request with the authority to have material designated as
confidential under subsection 1. A request to have material designated as confidential
is exempt as defined in section 44-04-17.1. The request must contain any information
required by the authority and must include at least:
a. A general description of the nature of the information sought to be protected.
b. An explanation of why the information derives independent economic value,
actual or potential, from not being generally known to other persons.
c. An explanation of why the information is not readily ascertainable by proper
means by other persons.
d. A general description of any person or entity that may obtain economic value from
disclosure or use of the information and how the person or entity may obtain this
value.
e. A description of the efforts used to maintain the secrecy of the information.
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The information submitted under subsection 2 is confidential. The authority shall
examine the request and determine whether the information is relevant to the matter at
hand and is a trade secret under the definition in section 47-25.1-01 or 44-04-18.4. If
the authority determines the information is either not relevant or not a trade secret, the
authority shall notify the requester and the requester may ask for the return of the
information and request within ten days of the notice. If no return is sought, the
information and request are a public record.
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