2014 North Dakota Century Code Title 11 Counties Chapter 11-37 Commerce Authorities
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CHAPTER 11-37
COMMERCE AUTHORITIES
11-37-01. Definitions.
As used in this chapter, unless the context requires otherwise:
1. "Bonds" means any bonds, notes, interim certificates, debentures, or similar
obligations issued by a commerce authority.
2. "Commerce authority" means an authority created under section 11-37-03.
3. "Political subdivision" means any county, city, or other unit of local government. The
term includes a job development authority created under chapter 11-11.1 or 40-57.4.
4. "Project" means facilities, including all real and personal property, structures,
equipment, and appurtenances owned or operated by a commerce authority.
11-37-02. Purposes of commerce authority.
A commerce authority may be created to:
1. Promote, stimulate, develop, and advance commerce, economic development, and
general prosperity within its jurisdiction and this state;
2. Endeavor to increase the volume of commerce within its jurisdiction and this state
through planning, advertising, acquisition, development, construction, improvement,
maintenance, operation, and regulation of transportation, storage, or other facilities
that promote the safe, efficient, and economical handling of commerce;
3. Cooperate and act in conjunction with other organizations in the development and
promotion of commerce, industry, manufacturing, services, natural resources,
agriculture, livestock, recreation, tourism, health care, and other economic activity; and
4. Support the creation, expansion, modernization, retention, and relocation of new and
existing businesses and industries and otherwise stimulate, assist in, and support
growth of all kinds of economic activity that promote commerce and business
development, maintain economic stability and prosperity of its jurisdiction and this
state, and thus provide maximum opportunities for employment and improvement in
the standard of living of citizens of its jurisdiction and this state.
11-37-03. (Effective through July 31, 2013) Creation of commerce authority.
One or more political subdivisions may form a commerce authority as follows:
1. Any political subdivision may create, by resolution of its governing body, a public body
corporate and politic to be known as a commerce authority that may exercise its
functions upon the appointment and qualification of the first commissioners of the
commerce authority. The governing body by resolution may determine to exercise any
powers granted to a commerce authority until the powers have been conferred upon a
commerce authority. Upon the adoption of a resolution creating a commerce authority,
the governing body of the political subdivision shall appoint, pursuant to the resolution,
no fewer than five individuals as commissioners of the commerce authority.
2. Two or more political subdivisions, whether in this state or in an adjoining state
provided that at least one political subdivision is in this state, may create by execution
of a joint agreement authorized by resolution of the governing body of each
participating subdivision, a commerce authority that may exercise its functions upon
the issuance by the secretary of state of a certificate of incorporation. Two or more
political subdivisions, which are parties to a joint powers agreement under chapter
54-40 or 54-40.3, may convert an existing joint powers entity to a commerce authority
by execution of a joint agreement authorized by resolution of the governing body of
each participating political subdivision. The governing bodies of the participating
political subdivisions shall appoint, pursuant to the joint agreement, no fewer than five
persons as commissioners of the commerce authority.
3. A commerce authority may be increased to serve one or more additional political
subdivisions if each additional political subdivision and each of the political
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subdivisions then participating in the authority adopt a resolution consenting to the
addition.
4. A commerce authority may be decreased if each of the political subdivisions in the
commerce authority consent to the decrease and make provisions for the retention or
disposition of its assets and liabilities. If the commerce authority has any bonds
outstanding, no decrease may be effected unless all of the holders of the bonds
consent to the decrease.
(Effective after July 31, 2013) Creation of commerce authority. One or more political
subdivisions may form a commerce authority as follows:
1. Any political subdivision may create, by resolution of its governing body, a public body
corporate and politic to be known as a commerce authority that may exercise its
functions upon the appointment and qualification of the first commissioners of the
commerce authority. The governing body by resolution may determine to exercise any
powers granted to a commerce authority until the powers have been conferred upon a
commerce authority. Upon the adoption of a resolution creating a commerce authority,
the governing body of the political subdivision shall appoint, pursuant to the resolution,
no fewer than five individuals as commissioners of the commerce authority.
2. Two or more political subdivisions, whether in this state or in an adjoining state
provided that at least one political subdivision is in this state, may create by execution
of a joint agreement authorized by resolution of the governing body of each
participating subdivision, a commerce authority that may exercise its functions upon
the issuance by the secretary of state of a certificate of incorporation. The governing
bodies of the participating political subdivisions shall appoint, pursuant to the joint
agreement, no fewer than five persons as commissioners of the commerce authority.
3. A commerce authority may be increased to serve one or more additional political
subdivisions if each additional political subdivision and each of the political
subdivisions then participating in the authority adopt a resolution consenting to the
addition.
4. A commerce authority may be decreased if each of the political subdivisions in the
commerce authority consent to the decrease and make provisions for the retention or
disposition of its assets and liabilities. If the commerce authority has any bonds
outstanding, no decrease may be effected unless all of the holders of the bonds
consent to the decrease.
11-37-04. Filing of agreement and resolutions - Certificate of incorporation Beginning of corporate existence.
The joint agreement, if applicable, and a certified copy of the resolution of each political
subdivision creating or agreeing to participate in a commerce authority, must be filed with the
secretary of state. If the agreement and resolutions conform to the requirements of section
11-37-03, the secretary of state shall issue a certificate of incorporation that states the name of
the commerce authority and the date of incorporation. The existence of the commerce authority
as a political subdivision of this state begins upon the issuance of the certificate of incorporation.
The certificate of incorporation is conclusive evidence of the existence of the commerce
authority.
11-37-05. Commissioners - Compensation - Officers.
1. The power of each commerce authority is vested in its commissioners. A commerce
authority may adopt and amend rules for its own operation subject to the agreement of
the participating political subdivisions and this chapter.
2. The appointing authority shall establish the rate of compensation for commissioners
and actual expenses incurred by commissioners may be reimbursed at the official
reimbursement rates of the appointing authority.
3. The commissioners of a commerce authority shall elect a chairman, a vice chairman,
and a secretary-treasurer from among the commissioners.
4. The commissioners of a commerce authority may appoint or elect an executive
director, and any other officers, agents, and employees determined to be necessary
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and shall determine their qualifications, duties, and compensation. The commissioners
of a commerce authority may delegate powers and duties of the commerce authority to
one or more of its officers, agents, or employees.
11-37-06. Powers of political subdivisions in aid of a commerce authority.
A political subdivision creating or participating in a commerce authority may:
1. Lend or donate money to the commerce authority.
2. Provide that all or a portion of the taxes or funds available to the political subdivision
for economic development purposes be transferred or paid directly to the commerce
authority.
3. Cause water, sewer, drainage, or any other facilities that the political subdivision is
authorized to provide to be furnished adjacent to or in connection with a project.
4. Dedicate, sell, convey, or lease any of the political subdivision's interest in any
property or grant easements, licenses, or any other rights or privileges therein to the
commerce authority.
5. Plan, dedicate, close, pave, install, grade, or regrade, to the extent allowed by title 24,
streets, roadways, and walks from established streets or roads to a project.
6. Aid and cooperate with the commerce authority in the planning, construction, or
operation of a project.
7. Enter agreements with the commerce authority regarding action to be taken by the
political subdivision under this section.
8. Establish the geographical boundaries of the commerce authority within or coextensive
with the geographical boundaries of one or more of the participating political
subdivisions.
9. Establish the extent to which the financial incentives provided under this chapter will
apply to the commerce authority.
10. Acquire property to carry out the purposes of this chapter by condemnation and the
exercise of eminent domain in the manner provided in chapter 32-15 and other laws
applicable to political subdivisions in exercising the right of eminent domain.
11-37-07. Powers of commerce authority.
A commerce authority has all the powers necessary or convenient to carry out the purposes
of this chapter, including the power to:
1. Execute contracts and other instruments.
2. Sue and be sued.
3. Plan, acquire, develop, construct, improve, maintain, equip, operate, and regulate
transportation, storage, or other facilities.
4. Acquire by lease, purchase, gift, or other lawful means and to hold in its name for its
use and control both real and personal property and easements and rights of way
within or without the limits of the commerce authority.
5. Convey, sell, dispose of, or lease personal and real property.
6. Employ or procure services of engineers, attorneys, technical experts, and other
persons to assist, advise, and act for the commerce authority.
7. Accept, receive, disburse, and expend federal, state, local, and other moneys, public
or private, made available by grant or loan.
8. Cooperate and contract with this state or any other governmental entity to obtain
infrastructure and services.
9. Develop, obtain, and furnish water supply, treatment, storage, and transportation
facilities and electric, natural gas, and telecommunications facilities and services.
10. Obtain local, state, and federal permits necessary to develop resources and
infrastructure authorized by this chapter.
11. Issue warrants in anticipation of taxes levied to pay current and anticipated expenses
relative to the development and operation of its assets.
12. Create a debt service fund and accumulate in the fund a sum determined by the
commerce authority, together with interest on that sum, for the use, repair,
maintenance, and capital outlays of the commerce authority.
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13.
Adopt, amend, and repeal such reasonable resolutions, regulations, and orders as
necessary for the management and use of a project owned or operated by the
commerce authority.
11-37-08. Bonds and other obligations.
1. A commerce authority may borrow money and issue bonds, including refunding bonds,
in the form and upon the terms as it may determine, payable out of any revenues of
the commerce authority.
2. Any bonds issued under this section are payable, as to principal and interest, solely
from revenues of the commerce authority, and must so state on the face of the bond. If
any issue of bonds constitutes an indebtedness within the meaning of any
constitutional or statutory debt limitation or restriction, each bond of the issue is,
subject to the requirements of subsection 8, an equally valid and binding special
obligation of the commerce authority or participating political subdivision, as the case
may be, in accordance with its terms, in an amount proportionate to the total amount of
the issue which is within the limitation or restriction. A commissioner of a commerce
authority or an individual executing the bonds is not liable personally on the bonds by
reason of the issuance of the bonds, except to the extent that the bonds, if constituting
an indebtedness, exceed any applicable limitation or restriction.
3. If any commissioner or officer of a commerce authority whose signature appears on
any bonds or coupons ceases to be a commissioner or officer after authorization but
before the delivery of the bonds, the signature, is valid and sufficient for all purposes,
the same as if the commissioner or officer had remained in office until delivery.
4. Any bond reciting in substance that the bond has been issued by the commerce
authority under this section and for a purpose authorized by this chapter is
conclusively deemed, in any proceeding involving the validity or enforceability of the
bond or the security of the bond to have been issued under this section and for that
purpose.
5. Bonds issued by a commerce authority under this section are declared to be issued for
an essential public government purpose, and together with interest and income on the
bonds, are exempt from all individual and corporate taxes imposed under sections
57-38-30 and 57-38-30.3.
6. For the security of the bonds, the commerce authority by resolution may make any
covenant, agreement, or indenture authorized to be made as security for revenue
bonds issued under chapter 40-35. The sums required to pay principal and interest
and to create and maintain a reserve for the bonds may be payable from any revenues
referred to in this chapter, before the payment of current costs of operation and
maintenance of the facilities.
7. When bonds are issued under this section and made payable from revenues of a
commerce authority involving political subdivisions with a population over ten
thousand, subject to the requirements of subsection 8, the governing bodies of the
political subdivisions, if at any time all revenues, including taxes, appropriated and to
that time collected for the bonds are insufficient to pay the principal or interest then
due, shall levy a general tax upon all of the taxable property in the political
subdivisions for the payment of the deficiency. If a deficiency is likely to occur within
one year for the payment of principal and interest due on the bonds, the governing
bodies, in their declaration, may levy a general tax upon all the taxable property in the
political subdivisions for the payment of the deficiency. The taxes are not subject to
any limitation of rate or amount applicable to other political subdivisions taxes.
8. For bonds issued under this section to be an obligation of a political subdivision or
commerce authority, the issuance of the bonds must be approved by a majority vote of
the governing body of each political subdivision involved or, within thirty days after the
commerce authority decides to issue the bonds, the political subdivision or commerce
authority must put the question, specifying the amount of the bond at issue, to the
electors at any primary, general, or special election. If a majority of the qualified
electors voting on the issue vote in favor of issuing the bonds, the commerce authority
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or political subdivision, to the amount authorized in the election, may pledge the
general obligation of the commerce authority or political subdivision to guarantee the
repayment of the principal and interest on the bonds.
11-37-09. Operation and use privileges.
1. In connection with the operation of a project owned or controlled by a commerce
authority, the commerce authority may enter a contract, lease, and other arrangement
with any person:
a. Granting the privilege of using or improving the project or any portion or space in
the project for commercial purposes.
b. Conferring the privilege of supplying goods or services at the project.
c. Making available services to be furnished by the commerce authority or its agents
at the project.
2. The commerce authority may establish the terms and conditions and fix the charges,
rentals, or fees for the privileges or services, which must be reasonable and uniform
for the same class or privilege or service.
11-37-10. Sales and use tax incentives.
The elected governing body of a participating political subdivision may offer sales and use
tax exemptions from sales and use taxes the participating political subdivision has imposed for
tangible personal property purchased and made a part of the commerce authority's
infrastructure if the tangible personal property is placed within the geographic boundaries of the
political subdivision and is necessary and directly services infrastructure needs of the commerce
authority.
11-37-11. Commerce authority property and income exempt from taxation.
Any property in this state acquired by a commerce authority for the purposes of the
commerce authority, and any income derived by the commerce authority from the ownership,
operation, or control of the property, is exempt from taxation to the same extent as other
property used for public purposes.
11-37-12. Out-of-state jurisdiction authorized - Reciprocity with adjoining
governmental agencies.
A political subdivision creating a commerce authority may exercise those powers within any
political subdivision or jurisdiction adjoining this state, subject to the laws of that political
subdivision.
11-37-13. Tax levy by political subdivision.
The commerce authority may certify annually to the governing bodies the amount of tax
requested to be levied by each political subdivision participating in the commerce authority. The
governing body of each political subdivision shall consider the levy request of the commerce
authority and determine the amount to be levied. The levy may not exceed the maximum levy
permitted for commerce authority purposes. Each political subdivision shall collect the taxes
levied on behalf of a commerce authority in the same manner as other taxes are levied and
collected. The proceeds of the taxes must be deposited in a special account or accounts in
which other revenues of the commerce authority are deposited and may be expended by the
commerce authority as provided in this chapter. Before issuance of bonds under section
11-37-09, the commerce authority by resolution may covenant and agree that the total amount
of the taxes authorized by law, or the portion of the taxes specified by the resolution, will be
certified and deposited annually until the bonds and interest are fully paid.
11-37-14. Maximum tax levy - County levy not applied in political subdivision making
levy.
In a political subdivision that is a party to an agreement creating a commerce authority, a
levy, not exceeding four mills, may be made for the purposes of the commerce authority. A
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county levy under section 57-15-06.7 does not apply to any other political subdivision within that
county making a levy for the purposes of the commerce authority.
11-37-15. Favorable rates.
A commerce authority may charge favorable rates for services provided by the commerce
authority to persons taxed for the commerce authority.
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